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Exhibit M
DIRECTOR INDEMNIFICATION AGREEMENT
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This Director Indemnification Agreement, dated as of _______________
(this "Agreement"), is made by and between GenCorp Inc., an Ohio corporation
(the "Company"), and _________________ (the "Indemnitee"), a director of the
Company.
RECITALS
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A. The Indemnitee is presently serving as a director of the Company,
and the Company desires that the Indemnitee continue serving in such capacity.
The Indemnitee is willing, subject to certain conditions including the execution
and performance of this Agreement by the Company, to continue serving in such
capacity.
B. In addition to the indemnification to which the Indemnitee is
entitled under the Code of Regulations of the Company (the "Regulations"), the
Company has obtained, at its sole expense, insurance protecting the Company and
its officers and directors, including the Indemnitee, against certain losses
arising out of any threatened, pending or completed action, suit, or proceeding
to which such persons may be made or are threatened to be made parties.
NOW, THEREFORE, in order to induce the Indemnitee to continue to serve
in his present capacity, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Indemnitee agree as follows:
1. CONTINUED SERVICE
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The Indemnitee shall continue to serve at the will of the Company as a
director of the Company so long as he is duly elected in accordance with the
Regulations or until he resigns in writing in accordance with applicable law.
2. INITIAL INDEMNITY
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(a) The Company shall indemnify the Indemnitee if or when he is a party or is
threatened to be made a party to any threatened, pending, or completed action,
suit, or proceeding, whether civil, criminal, administrative, or investigative
(other than an action by or in the right of the Company), by reason of the fact
that he is or was a director of the Company or is or was serving at the request
of the Company as a director, trustee, officer, employee, member, manager or
agent of another corporation, domestic or foreign, nonprofit or for profit, a
limited liability company, or a partnership, joint venture,
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trust, or other enterprise, or by reason of any action alleged to have been
taken or omitted in any such capacity, against any and all costs, charges,
expenses (including fees and expenses of attorneys or others; all such costs,
charges and expenses being herein jointly referred to as "Expenses"), judgments,
fines, and amounts paid in settlement actually and reasonably incurred by the
Indemnitee in connection therewith, including any appeal of or from any judgment
or decision, unless it is proved by clear and convincing evidence in a court of
competent jurisdiction that the Indemnitee's action or failure to act involved
an act or omission undertaken with deliberate intent to cause injury to the
Company or undertaken with reckless disregard for the best interests of the
Company. In addition, with respect to any criminal action or proceeding,
indemnification hereunder shall be made only if the Indemnitee had no reasonable
cause to believe his conduct was unlawful. The termination of any action, suit
or proceeding by judgment, order, settlement, or conviction, or upon a plea of
nolo contendere or its equivalent, shall not, of itself, create a presumption
that the Indemnitee did not satisfy the foregoing standard of conduct to the
extent applicable thereto.
(b) The Company shall indemnify the Indemnitee if or when he is a party
or is threatened to be made a party, to any threatened, pending, or completed
action, suit, or proceeding by or in the right of the Company to procure a
judgment in its favor, by reason of the fact that the Indemnitee is or was a
director of the Company or is or was serving at the request of the Company as a
director, trustee, officer, employee, member, manager or agent of another
corporation, domestic or foreign, nonprofit or for profit, a limited liability
company, or a partnership, joint venture, trust, or other enterprise, against
any and all Expenses actually and reasonably incurred by the Indemnitee in
connection with the defense or settlement thereof or any appeal of or from any
judgment or decision, unless it is proved by clear and convincing evidence in a
court of competent jurisdiction that the Indemnitee's action or failure to act
involved an act or omission undertaken with deliberate intent to cause injury to
the Company or undertaken with reckless disregard for the best interests of the
Company, except that no indemnification pursuant to this Section 2(b) shall be
made in respect of any action or suit in which the only liability asserted
against the Indemnitee is pursuant to Section 1701.95 of the Ohio Revised Code
(the "ORC").
(c) Any indemnification under Section 2(a) or 2(b) (unless ordered by a
court) shall be made by the Company only as authorized in the specific case upon
a determination that indemnification of the Indemnitee is proper in the
circumstances because he has met the applicable standard of conduct set forth in
Section 2(a) or 2(b). Such authorization shall be made (i) by the Board of
Directors of the Company (the "Board") by a majority vote of a quorum consisting
of directors who were not and are not parties to or threatened with such action,
suit, or proceeding, or (ii) if such a quorum of disinterested directors is not
available or if a majority of such quorum so directs, in a written opinion by
independent legal counsel (designated for such purpose by the Board) which shall
not be an attorney, or a firm having associated with it an attorney, who has
been retained by or who has performed services for the Company, or any person to
be indemnified, within the five years preceding such determination, or (iii) by
the shareholders of the Company (the "Shareholders"), or (iv) by the court of
common pleas or other court in which such action, suit, or proceeding was
brought.
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(d) To the extent that the Indemnitee has been successful on the merits
or otherwise, including the dismissal of an action without prejudice, in defense
of any action, suit, or proceeding referred to in Section 2(a) or 2(b), or in
defense of any claim, issue, or matter therein, he shall be indemnified against
Expenses actually and reasonably incurred by him in connection therewith.
(e) Expenses actually and reasonably incurred by the Indemnitee in
defending any action, suit, or proceeding referred to in Section 2(a) or 2(b),
or in defense of any claim, issue or matter therein, shall be paid by the
Company as they are incurred in advance of the final disposition of such action,
suit, or proceeding under the procedure set forth in Section 4(b) hereof.
(f) For purposes of this Agreement, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include any
excise taxes assessed on the Indemnitee with respect to any employee benefit
plan; references to "serving at the request of the Company" shall include any
service as a director, officer, employee, member, manager or agent of the
Company which imposes duties on, or involves services by, the Indemnitee with
respect to an employee benefit plan, its participants or beneficiaries;
references to the masculine shall include the feminine; references to the
singular shall include the plural and vice versa; the word including is used by
way of illustration only and not by way of limitation.
(g) No amendment to the Amended Articles of Incorporation of the
Company (the "Articles") or the Regulations shall deny, diminish, or encumber
the Indemnitee's rights to indemnity pursuant to the Regulations, the ORC, or
any other applicable law as applied to any act or failure to act occurring in
whole or in part prior to the date (the "Effective Date") upon which the
amendment was approved by the Shareholders. In the event that the Company shall
purport to adopt any amendment to its Articles or Regulations or take any other
action the effect of which is to deny, diminish, or encumber the Indemnitee's
rights to indemnity pursuant to the Articles, the Regulations, the ORC, or any
such other law, such amendment shall apply only to acts or failures to act
occurring entirely after the Effective Date thereof.
3. ADDITIONAL INDEMNIFICATION
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(a) Pursuant to Section 1701.13(E)(6) of the ORC, without limiting any
right which the Indemnitee may have pursuant to Section 2 hereof or any other
provision of this Agreement or the Articles, the Regulations, the ORC, any
policy of insurance, or otherwise, but subject to any limitation on the maximum
permissible indemnity which may exist under applicable law at the time of any
request for indemnity hereunder and subject to the following provisions of this
Section 3, the Company shall indemnify the Indemnitee against any amount which
he is or becomes obligated to pay relating to or arising out of any claim made
against him because of any act, failure to act, or neglect or breach of duty,
including any actual or alleged error, misstatement, or misleading statement,
that he commits, suffers, permits, or acquiesces in while acting in his capacity
as a director of the Company. The payments which the Company is obligated to
make pursuant to this Section 3 shall include any and all Expenses, judgments,
fines, and amounts paid in settlement, actually and reasonably incurred by
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the Indemnitee in connection therewith including any appeal of or from any
judgment or decision; PROVIDED, HOWEVER, that the Company shall not be obligated
under this Section 3 to make any payment in connection with any claim against
the Indemnitee:
(i) to the extent of any fine or similar governmental
imposition which the Company is prohibited by
applicable law from paying which results from a
final, nonappealable order; or
(ii) to the extent based upon or attributable to the
Indemnitee having actually realized a personal gain
or profit to which he was not legally entitled,
including profit from the purchase and sale by the
Indemnitee of equity securities of the Company which
are recoverable by the Company pursuant to Section
16(b) of the Securities Exchange Act of 1934, or
profit arising from transactions in publicly traded
securities of the Company which were effected by the
Indemnitee in violation of Section 10(b) of the
Securities Exchange Act of 1934, or Rule 10b-5
promulgated thereunder.
(b) A determination as to whether the Indemnitee shall be entitled to
indemnification under this Section 3 shall be made in accordance with Section
4(a) hereof. Expenses incurred by the Indemnitee in defending any claim to which
this Section 3 applies shall be paid by the Company as they are actually and
reasonably incurred in advance of the final disposition of such claim under the
procedure set forth in Section 4(b) hereof.
4. CERTAIN PROCEDURES RELATING TO INDEMNIFICATION
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(a) For purposes of pursuing his rights to indemnification under
Section 3 hereof, the Indemnitee shall (i) submit to the Board a sworn statement
of request for indemnification substantially in the form of Exhibit l attached
hereto and made a part hereof (the "Indemnification Statement") averring that he
is entitled to indemnification hereunder; and (ii) present to the Company
reasonable evidence of all amounts for which indemnification is requested.
Submission of an Indemnification Statement to the Board shall create a
presumption that the Indemnitee is entitled to indemnification hereunder, and
the Company shall, within 60 calendar days after submission of the
Indemnification Statement, make the payments requested in the Indemnification
Statement to or for the benefit of the Indemnitee, unless (A) within such
60-calendar-day period the Board shall resolve by vote of a majority of the
directors at a meeting at which a quorum is present that the Indemnitee is not
entitled to indemnification under Section 3 hereof, (B) such vote shall be based
upon clear and convincing evidence (sufficient to rebut the foregoing
presumption), and (C) the Board shall notify Indemnitee within such period of
such vote, which notice shall disclose with particularity the evidence upon
which the vote is based. The foregoing notice shall be sworn to by all persons
who participated in the vote and voted to deny indemnification. The provisions
of this Section 4(a) are intended to be procedural only and shall not affect the
right of Indemnitee to indemnification under Section 3 of this Agreement so long
as Indemnitee follows the prescribed procedure, and any determination by the
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Board that Indemnitee is not entitled to indemnification and any failure to make
the payments requested in the Indemnification Statement shall be subject to
judicial review by any court of competent jurisdiction.
(b) For purposes of obtaining payments of Expenses in advance of final
disposition pursuant to the last sentence of Section 2(d) or the last sentence
of Section 3(b) hereof, the Indemnitee shall submit to the Company a sworn
request for advancement of Expenses substantially in the form of Exhibit 2
attached hereto and made a part hereof (the "Undertaking"), averring that he has
reasonably incurred or will reasonably incur actual Expenses in defending an
action, suit or proceeding referred to in Section 2(a) or 2(b) or any claim
referred to in Section 3, or pursuant to Section 8 hereof. Unless at the time of
the Indemnitee's act or omission at issue, the Articles or the Regulations
prohibit such advances by specific reference to ORC Section l701.13(E)(5)(a) or
unless the only liability asserted against the Indemnitee in the subject action,
suit or proceeding is pursuant to ORC Section 1701.95, the Indemnitee shall be
eligible to execute Part A of the Undertaking by which he undertakes to: (i)
repay such amount if it is proved by clear and convincing evidence in a court of
competent jurisdiction that the Indemnitee's action or failure to act involved
an act or omission undertaken with deliberate intent to cause injury to the
Company or undertaken with reckless disregard for the best interests of the
Company; and (ii) reasonably cooperate with the Company concerning the action,
suit, proceeding or claim. In all cases, the Indemnitee shall be eligible to
execute Part B of the Undertaking by which he undertakes to repay such amount if
it ultimately is determined that he is not entitled to be indemnified by the
Company under this Agreement or otherwise. In the event that the Indemnitee is
eligible to and does execute both Part A and Part B of the Undertaking, the
Expenses which are paid by the Company pursuant thereto shall be required to be
repaid by the Indemnitee only if he is required to do so under the terms of both
Part A and Part B of the Undertaking. Upon receipt of the Undertaking, the
Company shall thereafter promptly pay such Expenses of the Indemnitee as are
noticed to the Company in reasonable detail arising out of the matter described
in the Undertaking. No security shall be required in connection with any
Undertaking.
5. LIMITATION ON INDEMNITY
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Notwithstanding anything contained herein to the contrary, the Company
shall not be required hereby to indemnify the Indemnitee with respect to any
action, suit, or proceeding that was initiated by the Indemnitee unless (a) such
action, suit, or proceeding was initiated by the Indemnitee to enforce any
rights to indemnification arising hereunder and such person shall have been
formally adjudged to be entitled to indemnity by reason hereof, (b) authorized
by another agreement to which the Company is a party whether heretofore or
hereafter entered, or (c) otherwise ordered by the court in which the suit was
brought.
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6. SUBROGATION; DUPLICATION OF PAYMENTS
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(a) In the event of payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee, who shall execute all papers required and shall do everything that
may be necessary to secure such rights, including the execution of such
documents necessary to enable the Company effectively to bring suit to enforce
such rights.
(b) The Company shall not be liable under this Agreement to make any
payment in connection with any claim made against Indemnitee to the extent
Indemnitee has actually received payment (under any insurance policy, the
Regulations or otherwise) of the amounts otherwise payable hereunder.
7. SHAREHOLDER RATIFICATION
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The Company may, at its option, propose at any future meeting of
Shareholders that this Agreement be ratified by the Shareholders; PROVIDED,
HOWEVER, that the Indemnitee's rights hereunder shall be fully enforceable in
accordance with the terms hereof whether or not such ratification is sought or
obtained.
8. FEES AND EXPENSES OF ENFORCEMENT
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It is the intent of the Company that the Indemnitee not be required to
incur the expenses associated with the enforcement of his rights under this
Agreement by litigation or other legal action because the cost and expense
thereof would substantially detract from the benefits intended to be extended to
the Indemnitee hereunder. Accordingly, if it should appear to the Indemnitee
that the Company has failed to comply with any of its obligations under this
Agreement or in the event that the Company or any other person takes any action
to declare this Agreement void or unenforceable, or institutes any action, suit
or proceeding to deny, or to recover from, the Indemnitee the benefits intended
to be provided to the Indemnitee hereunder, the Company irrevocably authorizes
the Indemnitee from time to time to retain counsel of his choice, at the expense
of the Company as hereafter provided, to represent the Indemnitee in connection
with the initiation or defense of any litigation or other legal action, whether
by or against the Company or any director, officer, shareholder, or other person
affiliated with the Company, in any jurisdiction. Regardless of the outcome
thereof, the Company shall pay and be solely responsible for any and all costs,
charges, and expenses, including fees and expenses of attorneys and others,
reasonably incurred by the Indemnitee pursuant to this Section 8.
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9. MERGER OR CONSOLIDATION
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In the event that the Company shall be a constituent corporation in a
consolidation, merger, or other reorganization, the Company, if it shall not be
the surviving, resulting, or acquiring corporation therein, shall require as a
condition thereto that the surviving, resulting, or acquiring corporation agree
to assume all of the obligations of the Company hereunder and to indemnify the
Indemnitee to the full extent provided herein. Whether or not the Company is the
resulting, surviving, or acquiring corporation in any such transaction, the
Indemnitee shall stand in the same position under this Agreement with respect to
the resulting, surviving, or acquiring corporation as he would have with respect
to the Company if its separate existence had continued.
10. NONEXCLUSIVITY; NO THIRD PARTY BENEFICIARIES; SEVERABILITY
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(a) The rights to indemnification provided by this Agreement shall not
be exclusive of any other rights of indemnification to which the Indemnitee may
be entitled under the Articles, the Regulations, the ORC or any other statute,
any insurance policy, agreement, or vote of shareholders or directors or
otherwise, as to any actions or failures to act by the Indemnitee, and shall
continue after he has ceased to be a director, officer, employee, or agent of
the Company or other entity for which his service gives rise to a right
hereunder, and shall inure to the benefit of his heirs, executors and
administrators.
(b) Except as provided in Section 10(a), the rights to indemnification
provided by this Agreement are personal to Indemnitee and are non-transferable
by Indemnitee, and no party other than the Indemnitee is entitled to
indemnification under this Agreement.
(c) If any provision of this Agreement or the application of any
provision hereof to any person or circumstances is held invalid, unenforceable
or otherwise illegal, the remainder of this Agreement and the application of
such provision to other persons or circumstances shall not be affected, and the
provision so held to be invalid, unenforceable or otherwise illegal shall be
reformed to the extent (and only to the extent) necessary to make it
enforceable, valid and legal.
11. SECURITY
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To ensure that the Company's obligations pursuant to this Agreement can
be enforced by Indemnitee, the Company may, at its option, establish a trust
pursuant to which the Company's obligations pursuant to this Agreement and other
similar agreements can be funded.
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12. NOTICES
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All notices and other communications hereunder shall be in writing and
shall be personally delivered or sent by recognized overnight courier service
(a) if to the Company, to the then-current principal executive offices of the
Company (Attention: General Counsel) or (b) if to the Indemnitee, to the last
known address of Indemnitee as reflected in the Company's records. Either party
may change its address for the delivery of notices or other communications
hereunder by providing notice to the other party as provided in this Section 12.
All notices shall be effective upon actual delivery by the methods specified in
this Section 12.
13. GOVERNING LAW
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This Agreement shall be governed by and construed in accordance with
the laws of the State of Ohio, without giving effect to the principles of
conflict of laws thereof.
14. MODIFICATION
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This Agreement and the rights and duties of the Indemnitee and the
Company hereunder may be modified only by an instrument in writing signed by
both parties hereto.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
GENCORP INC.
By:________________________________
Name:
Title:
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EXHIBIT 1
INDEMNIFICATION STATEMENT
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STATE OF ________________)
) SS
COUNTY OF ______________)
I, _______________ , being first duly sworn, do depose and say as
follows:
1. This Indemnification Statement is submitted pursuant to the
Indemnification Agreement, dated _________ __, 1999, between GenCorp, Inc., an
Ohio corporation (the "Company"), and the undersigned.
2. I am requesting indemnification against costs, charges, expenses
(which may include fees and expenses of attorneys and/or others), judgments,
fines, and amounts paid in settlement (collectively, "Liabilities"), which have
been actually and reasonably incurred by me in connection with a claim referred
to in Section 3 of the aforesaid Indemnification Agreement.
3. With respect to all matters related to any such claim, I am entitled
to be indemnified as herein contemplated pursuant to the aforesaid
Indemnification Agreement.
4. Without limiting any other rights which I have or may have, I am
requesting indemnification against Liabilities which have or may arise out of
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[Signature of Indemnitee]
Subscribed and sworn to before me, a Notary Public in and for said
County and State, this _____ day of _________, 199__.
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[Seal]
My commission expires the _____ day of __________, 19__ .
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EXHIBIT 2
UNDERTAKING
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STATE OF )
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) SS
COUNTY OF )
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I, _________________________________, being first duly sworn, do depose
and say as follows:
1. This Undertaking is submitted pursuant to the Indemnification
Agreement, dated ____________ , 1999, between GenCorp, Inc., an Ohio corporation
(the "Company") and the undersigned.
2. I am requesting payment of costs, charges, and expenses which I have
reasonably incurred or will reasonably incur in defending an action, suit or
proceeding, referred to in Section 2(a) or 2(b) or any claim referred to in
Section 3, or pursuant to Section 8, of the aforesaid Indemnification Agreement.
3. The costs, charges, and expenses for which payment is requested are,
in general, all expenses related to
4. PART A(1)
I hereby undertake to (a) repay all amounts paid pursuant hereto if it
is proved by clear and convincing evidence in a court of competent jurisdiction
that my action or failure to act which is the subject of the matter described
herein involved an act or omission undertaken with deliberate intent to cause
injury to the Company or undertaken with reckless disregard for the best
interests of the Company and (b)
reasonably cooperate with the Company concerning the action, suit, proceeding or
claim.
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(1) The Indemnitee shall not be eligible to execute Part A of this Undertaking
if, at the time of the Indemnitee's act or omission at issue, the Amended
Articles of Incorporation or the Amended Code of Regulations of the Company
prohibit such advances by specific reference to the Ohio Revised Code (the
"ORC") Section 1701.13(E)(5)(a), or if the only liability asserted against the
Indemnitee is in an action, suit or proceeding on the Company's behalf pursuant
to ORC Section 1701.95. In the event that the Indemnitee is eligible to and does
execute both Part A and Part B hereof, the costs, charges and expenses which are
paid by the Company pursuant hereto shall be required to be repaid by the
Indemnitee only if he is required to do so under the terms of both Part A and
Part B hereof.
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[Signature of Indemnitee]
4. PART B
I hereby undertake to repay all amounts paid pursuant hereto if it
ultimately is determined that I am not entitled to be indemnified by the Company
under the aforesaid Indemnification Agreement or otherwise.
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[Signature of Indemnitee]
Subscribed and sworn to before me, a Notary Public in and for
said County and State, this _____ day of _________ , 199__.
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[Seal]
My commission expires the ____ day of ___________ , 19__.
