EXHIBIT 10.27
INDEMNIFICATION AGREEMENT
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This Agreement is made as of this __ day of _____ 2001 ("Agreement"), by
and between CIRCOR International, Inc., a Delaware corporation (the "Company,"
which term shall include, where appropriate, any Entity (as hereinafter defined)
controlled directly or indirectly by the Company) and _________ ("Indemnitee").
WHEREAS, it is essential to the Company that it be able to retain and
attract as officers and directors the most capable persons available;
WHEREAS, increased corporate litigation has subjected officers and
directors to litigation risks and expenses, and the limitations on the
availability of directors and officers liability insurance have made it
increasingly difficult for the Company to attract and retain such persons;
WHEREAS, the Company's Amended and Restated By-laws require it to indemnify
its officers and directors to the fullest extent permitted by law and permit it
to make other indemnification arrangements and agreements;
WHEREAS, the Company desires to provide Indemnitee with specific
contractual assurance of Indemnitee's rights to full indemnification against
litigation risks and expenses (regardless of, among other things, any amendment
to or revocation of any such By-laws or any change in the ownership of the
Company or the composition of its Board of Directors); and
WHEREAS, Indemnitee is relying upon the rights afforded under this
Agreement in continuing in Indemnitee's position as an officer or director of
the Company.
NOW, THEREFORE, in consideration of the promises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:
1. Definitions.
(a) "Corporate Status" describes the status of a person who is serving or has
served (i) as a director or officer of the Company, (ii) in any capacity
with respect to any employee benefit plan of the Company, or (iii) as a
director, partner, trustee, officer, employee or agent of any other Entity
at the request of the Company. For purposes of subsection (iii) of this
Section 1(a), an officer or director of the Company who is serving or has
served as a director, partner, trustee, officer, employee or agent of a
Subsidiary shall be deemed to be serving at the request of the Company.
(b) "Entity" shall mean any corporation, partnership, limited liability
company, joint venture, trust, foundation, association, organization or
other legal entity.
(c) "Expenses" shall mean all fees, costs and expenses incurred in connection
with any Proceeding (as defined below), including, without limitation,
attorneys' fees, disbursements and retainers (including, without
limitation, any such fees, disbursements and retainers incurred by
Indemnitee pursuant to Sections 10 and 11(c) of this Agreement), fees and
disbursements of expert witnesses, private investigators and
professional advisors (including, without limitation, accountants and
investment bankers), court costs, transcript costs, fees of experts, travel
expenses, duplicating, printing and binding costs, telephone and fax
transmission charges, postage, delivery services, secretarial services, and
other disbursements and expenses.
(d) "Indemnifiable Expenses," "Indemnifiable Liabilities" and "Indemnifiable
Amounts" shall have the meanings ascribed to those terms in Section 3(a)
below.
(e) "Liabilities" shall mean judgments, damages, liabilities, losses,
penalties, excise taxes, fines and amounts paid in settlement.
(f) "Proceeding" shall mean any threatened, pending or completed claim, action,
suit, arbitration, alternate dispute resolution process, investigation,
administrative hearing, appeal, or any other proceeding, whether civil,
criminal, administrative, arbitrative or investigative, whether formal or
informal, including a proceeding initiated by Indemnitee pursuant to
Section 10 of this Agreement to enforce Indemnitee's rights hereunder.
(g) "Subsidiary" shall mean any corporation, partnership, limited liability
company, joint venture, trust or other Entity of which the Company owns
(either directly or through or together with another Subsidiary of the
Company) either (i) a general partner, managing member or other similar
interest or (ii) (A) 50% or more of the voting power of the voting capital
equity interests of such corporation, partnership, limited liability
company, joint venture or other Entity, or (B) 50% or more of the
outstanding voting capital stock or other voting equity interests of such
corporation, partnership, limited liability company, joint venture or other
Entity.
2. Services of Indemnitee. In consideration of the Company's covenants and
commitments hereunder, Indemnitee agrees to serve or continue to serve as a
director or officer of the Company. However, this Agreement shall not impose any
obligation on Indemnitee or the Company to continue Indemnitee's service to the
Company beyond any period otherwise required by law or by other agreements or
commitments of the parties, if any.
3. Agreement to Indemnify. The Company agrees to indemnify Indemnitee as
follows:
(a) Subject to the exceptions contained in Section 4(a) below, if Indemnitee
was or is a party or is threatened to be made a party to any Proceeding
(other than an action by or in the right of the Company) by reason of
Indemnitee's Corporate Status, Indemnitee shall be indemnified by the
Company against all Expenses and Liabilities incurred or paid by Indemnitee
in connection with such Proceeding (referred to herein as "Indemnifiable
Expenses" and "Indemnifiable Liabilities," respectively, and collectively
as "Indemnifiable Amounts").
(b) Subject to the exceptions contained in Section 4(b) below, if Indemnitee
was or is a party or is threatened to be made a party to any Proceeding by
or in the right of the Company to procure a judgment in its favor by reason
of Indemnitee's
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Corporate Status, Indemnitee shall be indemnified by the Company against
all Indemnifiable Expenses.
4. Exceptions to Indemnification. Indemnitee shall be entitled to
indemnification under Sections 3(a) and 3(b) above in all circumstances other
than the following:
(a) If indemnification is requested under Section 3(a) and it has been
adjudicated finally by a court of competent jurisdiction that, in
connection with the subject of the Proceeding out of which the claim for
indemnification has arisen, Indemnitee failed to act (i) in good faith and
(ii) in a manner Indemnitee reasonably believed to be in or not opposed to
the best interests of the Company, or, with respect to any criminal action
or proceeding, Indemnitee had reasonable cause to believe that Indemnitee's
conduct was unlawful, Indemnitee shall not be entitled to payment of
Indemnifiable Amounts hereunder.
(b) If indemnification is requested under Section 3(b) and
(i) it has been adjudicated finally by a court of competent
jurisdiction that, in connection with the subject of the Proceeding out of which
the claim for indemnification has arisen, Indemnitee failed to act (A) in good
faith and (B) in a manner Indemnitee reasonably believed to be in or not opposed
to the best interests of the Company, Indemnitee shall not be entitled to
payment of Indemnifiable Expenses hereunder; or
(ii) it has been adjudicated finally by a court of competent
jurisdiction that Indemnitee is liable to the Company with respect to any claim,
issue or matter involved in the Proceeding out of which the claim for
indemnification has arisen, including, without limitation, a claim that
Indemnitee received an improper personal benefit, no Indemnifiable Expenses
shall be paid with respect to such claim, issue or matter unless the Court of
Chancery or another court in which such Proceeding was brought shall determine
upon application that, despite the adjudication of liability, but in view of all
the circumstances of the case, Indemnitee is fairly and reasonably entitled to
indemnity for such Indemnifiable Expenses which such court shall deem proper.
5. Procedure for Payment of Indemnifiable Amounts. Indemnitee shall
submit to the Company a written request specifying the Indemnifiable Amounts for
which Indemnitee seeks payment under Section 3 of this Agreement and the basis
for the claim. The Company shall pay such Indemnifiable Amounts to Indemnitee
within twenty (20) calendar days of receipt of the request. At the request of
the Company, Indemnitee shall furnish such documentation and information as are
reasonably available to Indemnitee and necessary to establish that Indemnitee is
entitled to indemnification hereunder.
6. Indemnification for Expenses of a Party Who is Wholly or Partly
Successful. Notwithstanding any other provision of this Agreement, and without
limiting any such provision, to the extent that Indemnitee is, by reason of
Indemnitee's Corporate Status, a party to and is successful, on the merits or
otherwise, in any Proceeding, Indemnitee shall be indemnified against all
Expenses reasonably incurred by Indemnitee or on Indemnitee's behalf in
connection therewith. If Indemnitee is not wholly successful in such Proceeding
but is successful, on the merits or otherwise, as to one or more but less than
all claims, issues or matters in such Proceeding, the Company shall indemnify
Indemnitee against all
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Expenses reasonably incurred by Indemnitee or on Indemnitee's behalf in
connection with each successfully resolved claim, issue or matter. For purposes
of this Agreement, the termination of any claim, issue or matter in such a
Proceeding by dismissal, with or without prejudice, shall be deemed to be a
successful result as to such claim, issue or matter.
7. Effect of Certain Resolutions. Neither the settlement or termination
of any Proceeding nor the failure of the Company to award indemnification or to
determine that indemnification is payable shall create an adverse presumption
that Indemnitee is not entitled to indemnification hereunder. In addition, the
termination of any proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent shall not create a presumption
that Indemnitee did not act in good faith and in a manner which Indemnitee
reasonably believed to be in or not opposed to the best interests of the Company
or, with respect to any criminal action or proceeding, had reasonable cause to
believe that Indemnitee's action was unlawful.
8. Agreement to Advance Expenses; Conditions. The Company shall pay to
Indemnitee all Indemnifiable Expenses incurred by Indemnitee in connection with
any Proceeding, including a Proceeding by or in the right of the Company, in
advance of the final disposition of such Proceeding. To the extent required by
Delaware law, Indemnitee hereby undertakes to repay the amount of Indemnifiable
Expenses paid to Indemnitee if it is finally determined by a court of competent
jurisdiction that Indemnitee is not entitled under this Agreement to
indemnification with respect to such Expenses. This undertaking is an unlimited
general obligation of Indemnitee.
9. Procedure for Advance Payment of Expenses. Indemnitee shall submit to
the Company a written request specifying the Indemnifiable Expenses for which
Indemnitee seeks an advancement under Section 8 of this Agreement, together with
documentation evidencing that Indemnitee has incurred such Indemnifiable
Expenses. Payment of Indemnifiable Expenses under Section 8 shall be made no
later than twenty (20) calendar days after the Company's receipt of such
request.
10. Remedies of Indemnitee.
(c) Right to Petition Court. In the event that Indemnitee makes a request for
payment of Indemnifiable Amounts under Sections 3 and 5 above or a request
for an advancement of Indemnifiable Expenses under Sections 8 and 9 above
and the Company fails to make such payment or advancement in a timely
manner pursuant to the terms of this Agreement, Indemnitee may petition the
Court of Chancery to enforce the Company's obligations under this
Agreement.
(d) Burden of Proof. In any judicial proceeding brought under Section 10(a)
above, the Company shall have the burden of proving that Indemnitee is not
entitled to payment of Indemnifiable Amounts hereunder.
(e) Expenses. The Company agrees to reimburse Indemnitee in full for any
Expenses incurred by Indemnitee in connection with investigating, preparing
for, litigating, defending or settling any action brought by Indemnitee
under Section 10(a)
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above, or in connection with any claim or counterclaim brought by the
Company in connection therewith.
(f) Validity of Agreement. The Company shall be precluded from asserting in
any Proceeding, including, without limitation, an action under Section
10(a) above, that the provisions of this Agreement are not valid, binding
and enforceable or that there is insufficient consideration for this
Agreement and shall stipulate in court that the Company is bound by all the
provisions of this Agreement.
(g) Failure to Act Not a Defense. The failure of the Company (including its
Board of Directors or any committee thereof, independent legal counsel or
stockholders) to make a determination concerning the permissibility of the
payment of Indemnifiable Amounts or the advancement of Indemnifiable
Expenses under this Agreement shall not be a defense in any action brought
under Section 10(a) above, and shall not create a presumption that such
payment or advancement is not permissible.
11. Defense of the Underlying Proceeding.
(a) Notice by Indemnitee. Indemnitee agrees to notify the Company promptly
upon being served with any summons, citation, subpoena, complaint,
indictment, information, or other document relating to any Proceeding which
may result in the payment of Indemnifiable Amounts or the advancement of
Indemnifiable Expenses hereunder; provided, however, that the failure to
give any such notice shall not disqualify Indemnitee from the right to
receive payments of Indemnifiable Amounts or advancements of Indemnifiable
Expenses unless the Company's ability to defend in such Proceeding is
materially and adversely prejudiced thereby.
(b) Defense by Company. Subject to the provisions of the last sentence of
this Section 11(b) and of Section 11(c) below, the Company shall have the
right to defend Indemnitee in any Proceeding which may give rise to the
payment of Indemnifiable Amounts hereunder; provided, however that the
Company shall notify Indemnitee of any such decision to defend within ten
(10) days of receipt of notice of any such Proceeding under Section 11(a)
above. The Company shall not, without the prior written consent of
Indemnitee, consent to the entry of any judgment against Indemnitee or
enter into any settlement or compromise which (i) includes an admission of
fault of Indemnitee or (ii) does not include, as an unconditional term
thereof, the full release of Indemnitee from all liability in respect of
such Proceeding, which release shall be in form and substance reasonably
satisfactory to Indemnitee. This Section 11(b) shall not apply to a
Proceeding brought by Indemnitee under Section 10(a) above or pursuant to
Section 19 below.
(c) Indemnitee's Right to Counsel. Notwithstanding the provisions of
Section 11(b) above, if in a Proceeding to which Indemnitee is a party by
reason of Indemnitee's Corporate Status, Indemnitee reasonably concludes
that it may have separate defenses or counterclaims to assert with respect
to any issue which may not be consistent with the position of other
defendants in such Proceeding, or if the Company fails to assume the
defense of such proceeding in a timely manner, Indemnitee shall be entitled
to be represented by separate legal counsel of Indemnitee's choice at the
expense of the Company. In addition, if the Company fails 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
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declare this Agreement void or unenforceable, or institutes any action, suit
or proceeding to deny or to recover from Indemnitee the benefits intended to be
provided to Indemnitee hereunder, Indemnitee shall have the right to retain
counsel of Indemnitee's choice, at the expense of the Company, to represent
Indemnitee in connection with any such matter.
12. Representations and Warranties of the Company. The Company hereby
represents and warrants to Indemnitee as follows:
(a) Authority. The Company has all necessary power and authority to enter
into, and be bound by the terms of, this Agreement, and the execution,
delivery and performance of the undertakings contemplated by this Agreement
have been duly authorized by the Company.
(b) Enforceability. This Agreement, when executed and delivered by the
Company in accordance with the provisions hereof, shall be a legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, moratorium, reorganization or similar
laws affecting the enforcement of creditors' rights generally.
13. Insurance. The Company shall, from time to time, make the good faith
determination whether or not it is practicable for the Company to obtain and
maintain a policy or policies of insurance with a reputable insurance company
providing Indemnitee with coverage for losses from wrongful acts, and to ensure
the Company's performance of its indemnification obligations under this
Agreement. Among other considerations, the Company will weigh the costs of
obtaining such insurance coverage against the protection afforded by such
coverage. In all policies of director and officer liability insurance,
Indemnitee shall be named as an insured in such a manner as to provide
Indemnitee the same rights and benefits as are accorded to the most favorably
insured of the Company's officers and directors. Notwithstanding the foregoing,
the Company shall have no obligation to obtain or maintain such insurance if the
Company determines in good faith that such insurance is not reasonably
available, if the premium costs for such insurance are disproportionate to the
amount of coverage provided, or if the coverage provided by such insurance is
limited by exclusions so as to provide an insufficient benefit. The Company
shall promptly notify Indemnitee of any good faith determination not to provide
such coverage.
14. Contract Rights Not Exclusive. The rights to payment of Indemnifiable
Amounts and advancement of Indemnifiable Expenses provided by this Agreement
shall be in addition to, but not exclusive of, any other rights which Indemnitee
may have at any time under applicable law, the Company's By-laws or Certificate
of Incorporation, or any other agreement, vote of stockholders or directors (or
a committee of directors), or otherwise, both as to action in Indemnitee's
official capacity and as to action in any other capacity as a result of
Indemnitee's serving as an officer or director of the Company.
15. Successors. This Agreement shall be (a) binding upon all successors
and assigns of the Company (including any transferee of all or a substantial
portion of the business, stock and/or assets of the Company and any direct or
indirect successor by
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merger or consolidation or otherwise by operation of law) and (b) binding on and
shall inure to the benefit of the heirs, personal representatives, executors and
administrators of Indemnitee. This Agreement shall continue for the benefit of
Indemnitee and such heirs, personal representatives, executors and
administrators after Indemnitee has ceased to have Corporate Status.
16. Subrogation. In the event of any payment of Indemnifiable Amounts
under this Agreement, the Company shall be subrogated to the extent of such
payment to all of the rights of contribution or recovery of Indemnitee against
other persons, and Indemnitee shall take, at the request of the Company, all
reasonable action necessary to secure such rights, including the execution of
such documents as are necessary to enable the Company to bring suit to enforce
such rights.
17. Change in Law. To the extent that a change in Delaware law (whether
by statute or judicial decision) shall permit broader indemnification or
advancement of expenses than is provided under the terms of the By-laws of the
Company and this Agreement, Indemnitee shall be entitled to such broader
indemnification and advancements, and this Agreement shall be deemed to be
amended to such extent.
18. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement, or any clause thereof,
shall be determined by a court of competent jurisdiction to be illegal, invalid
or unenforceable, in whole or in part, such provision or clause shall be limited
or modified in its application to the minimum extent necessary to make such
provision or clause valid, legal and enforceable, and the remaining provisions
and clauses of this Agreement shall remain fully enforceable and binding on the
parties.
19. Indemnitee as Plaintiff. Except as provided in Section 10(c) of this
Agreement and in the next sentence, Indemnitee shall not be entitled to payment
of Indemnifiable Amounts or advancement of Indemnifiable Expenses with respect
to any Proceeding brought by Indemnitee against the Company, any Entity which it
controls, any director or officer thereof, or any third party, unless such
Company has consented to the initiation of such Proceeding. This Section shall
not apply to counterclaims or affirmative defenses asserted by Indemnitee in an
action brought against Indemnitee.
20. Modifications and Waiver. Except as provided in Section 17 above with
respect to changes in Delaware law which broaden the right of Indemnitee to be
indemnified by the Company, no supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by each of the parties
hereto. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provisions of this Agreement (whether or
not similar), nor shall such waiver constitute a continuing waiver.
21. General Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given (a) when delivered by hand, (b) when transmitted by facsimile and
receipt is acknowledged, or (c) if
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mailed by certified or registered mail with postage prepaid, on the third
business day after the date on which it is so mailed:
(i) If to Indemnitee, to:
c/o CIRCOR International, Inc.
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00 Xxxxxxxxx Xxxxx
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Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
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(ii) If to the Company, to:
CIRCOR International, Inc.
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00 Xxxxxxxxx Xxxxx
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Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
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or to such other address as may have been furnished in the same manner by any
party to the others.
22. Governing Law. This Agreement shall be governed by and construed and
enforced under the laws of Delaware without giving effect to the provisions
thereof relating to conflicts of law.
23. Consent to Jurisdiction. The Company hereby irrevocably and
unconditionally consents to the jurisdiction of the courts of the State of
Delaware and the United States District Court for the District of Delaware. The
Company hereby irrevocably and unconditionally waives any objection to the
laying of venue of any Proceeding arising out of or relating to this Agreement
in the courts of the State of Delaware or the United States District Court for
the District of Delaware, and hereby irrevocably and unconditionally waives and
agrees not to plead or claim that any such Proceeding brought in any such court
has been brought in an inconvenient forum.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
CIRCOR INTERNATIONAL, INC.
By:_______________________________
Name: Xxxxx X. Xxxxx, Xx.
Title: Chairman, President & CEO
INDEMNITEE:
__________________________________
Name: (Enter Name Here)
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