Exhibit 10(f)
INDEMNIFICATION AGREEMENT
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This Agreement is made as of the day of __________,_ _____, between
Ferro Corporation, an Ohio corporation (the "Company") and ___________, a
director, officer or representative (as hereinafter defined) of the Company (the
"Indemnitee");
WHEREAS, the Company and the Indemnitee are each aware of the exposure
to litigation of officers, directors and representatives of the Company as such
persons exercise their duties to the Company;
WHEREAS, the Company and the Indemnitee are also aware of conditions in
the insurance industry that have affected and may continue to affect the
Company's ability to obtain appropriate directors' and officers' liability
insurance on an economically acceptable basis;
WHEREAS, the Company desires to continue to benefit from the services
of highly qualified, experienced and otherwise competent persons such as the
Indemnitee;
WHEREAS, the Indemnitee desires to serve or to continue to serve the
Company as a director, officer or as a director, officer or trustee of another
corporation, joint venture, trust or other enterprise in which the Company has a
direct or indirect ownership interest, for so long as the Company continues to
provide on an acceptable basis adequate and reliable indemnification against
certain liabilities and expenses which may be incurred by the Indemnitee.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants herein contained, the parties hereto agree as follows:
1. INDEMNIFICATION
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Subject to the terms of this Agreement, the Company shall indemnify the
Indemnitee with respect to his/her activities as a director or officer
of the Company and/or as a person who is serving or has served on
behalf of the Company ("representative") as a director, officer, or
trustee of another corporation, joint venture, trust or other
enterprise, domestic or foreign, in which the Company has a direct or
indirect ownership interest (an "affiliated entity") against expenses
(including, without limitation, attorneys' fees, judgments, fines, and
amounts paid in settlement) actually and reasonably incurred by him/her
("Expenses") in connection with any claim against Indemnitee which is
the subject of any threatened, pending, or completed action, suit, or
proceeding, whether civil, criminal, administrative, investigative or
otherwise and whether formal or informal (a "Proceeding"), to which
Indemnitee was, is, or is threatened to be made a party by reason of
facts which include Indemnitee's being or having been such a director,
officer or representative, to the extent of the highest and most
advantageous to the Indemnitee, as determined by the Indemnitee, of one
or any combination of the following:
(a) The benefits provided by the Company's Regulations in effect
on the date hereof, as adopted by the shareholders of the
Company at the 1987 annual meeting of shareholders;
(b) The benefits provided by the Articles of Incorporation,
Regulations, or By-laws or their equivalent of the Company in
effect at the time Expenses are incurred by Indemnitee;
(c) The benefits allowable under Ohio law in effect at the date
hereof;
(d) The benefits allowable under the law of the jurisdiction under
which the Company exists at the time Expenses are incurred by
the Indemnitee;
(e) The benefits available under liability insurance obtained by
the Company;
(f) The benefits which would have been available to the Indemnitee
under the Directors and Officers Liability Insurance and
Reimbursement for Directors and Officers Liability Policy
issued by Harbor Insurance Company on April 8, 1985 which
expired on March 30, 1986 and which is designated as policy
number HI 211839 had such policy continued in effect and
unamended at the time Expenses are incurred by the Indemnitee;
and
(g) Such other benefits as are or may be otherwise available to
Indemnitee.
Combination of two or more of the benefits provided by (a) through (g)
shall be available to the extent that the Applicable Document, as
hereafter defined, does not require that the benefits provided therein
be exclusive of other benefits. The document or law providing for the
benefits listed in items (a) through (g) above is called the
"Applicable Document" in this Agreement. The Company hereby undertakes
to use its best efforts to assist Indemnitee, in all proper and legal
ways, to obtain the benefits selected by Indemnitee under items (a)
through (g) above.
For purposes of this Agreement, references to "other enterprises" shall
include employee benefit plans for employees of the Company or of any
affiliated entity without regard to ownership of such plans; references
to "fines" shall include any excise taxes assessed on the Indemnitee
with respect to any employee benefit plan; references to "serving on
behalf of the Company" shall include any service as a director,
officer, employee 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; and if the Indemnitee acted in good
faith and in a manner he reasonably believed to be in the interest of
the participants and beneficiaries of an employee benefit plan he shall
be deemed to have acted in a manner consistent with the standards
required for indemnification by the Company under the Applicable
Documents.
2. INSURANCE
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The Company shall maintain directors' and officers' liability insurance
for so long as Indemnitee's services are covered hereunder, provided
and only to the extent that such insurance is available in amounts and
on terms and conditions determined by the Company to be acceptable.
However, the Company agrees that the provisions hereof shall remain in
effect regardless of whether liability or other insurance coverage is
at any time obtained or retained by the Company; except that any
payments in fact made to Indemnitee under an insurance policy obtained
or retained by the Company shall reduce the obligation of the Company
to make payments hereunder by the amount of the payments made under any
such insurance policy.
3. PAYMENT OF EXPENSES
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At Indemnitee's request, the Company shall pay the Expenses as and when
incurred by Indemnitee, after receipt of written notice pursuant to
Section 6 hereof and an undertaking in the form of Exhibit I attached
hereto by or on behalf of Indemnitee (i) to repay such amounts so paid
on Indemnitee's behalf if it shall ultimately be determined under the
Applicable Document that Indemnitee is required to repay such amounts
and (ii) to reasonably cooperate with the Company concerning such
Proceeding. That portion of Expenses which represents attorneys' fees
and other costs incurred in defending any Proceeding shall be paid by
the Company within thirty (30) days of its receipt of such request,
together with reasonable documentation (consistent, in the case of
attorneys' fees, with Company practice in payment of legal fees for
outside counsel generally) evidencing the amount and nature of such
Expenses, subject to its also having received such a notice and
undertaking.
4. ESCROW
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The Company shall dedicate an aggregate of TWO AND ONE-HALF MILLION
DOLLARS ($2,500,000) as collateral security for the funding of its
obligations hereunder and under similar and predecessor agreements with
other directors, officers and representatives by depositing assets or
bank letters of credit in escrow or reserving lines of credit that may
be drawn down by an escrow agent in the dedicated amount (the "Escrow
Reserve"). Attached hereto as Exhibit II is the form of escrow
agreement relating to the establishment and operation of the Escrow
Reserve. The Company shall have the rights of substitution with respect
to the funding in escrow of its obligations hereunder, as provided in
such Exhibit II. The Company shall, upon request, promptly provide to
Indemnitee such additional documentation or information with respect to
the escrow as Indemnitee may from time to time reasonably request. The
Company shall promptly deliver an executed copy of this Agreement to
the escrow agent for the Escrow Reserve to evidence to that agent that
Indemnitee is a beneficiary of that Escrow Reserve and shall deliver to
Indemnitee the escrow agent's signed receipt evidencing that delivery.
5. ADDITIONAL RIGHTS
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The indemnification provided in this Agreement shall not be exclusive
of any other indemnification or right to which Indemnitee may be
entitled and shall continue after
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Indemnitee has ceased to occupy a position as an officer, director or
representative as described in Paragraph 1 above with respect to
Proceedings relating to or arising out of Indemnitee's acts or
omissions during his/her service in such position.
6. NOTICE TO COMPANY
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Indemnitee shall provide to the Company prompt written notice of any
Proceeding brought, threatened, asserted or commenced against
Indemnitee with respect to which Indemnitee may assert a right to
indemnification hereunder; provided that failure to provide such notice
shall not in any way limit Indemnitee's rights under this Agreement.
7. COOPERATION IN DEFENSE AND SETTLEMENT
-------------------------------------
Indemnitee shall not make any admission or effect any settlement of any
Proceeding without the Company's written consent unless Indemnitee
shall have determined to undertake his/her own defense in such matter
and has waived the benefits of this Agreement. The Company shall not
settle any Proceeding to which Indemnitee is a party in any manner
which would impose any Expense on Indemnitee without his/her written
consent. Neither Indemnitee nor the Company will unreasonably withhold
consent to any proposed settlement. Indemnitee and the Company shall
cooperate to the extent reasonably possible with each other and with
the Company's insurers, in attempts to defend and/or settle such
Proceeding.
8. ASSUMPTION OF DEFENSE
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Except as otherwise provided below, to the extent that it may wish, the
Company jointly with any other indemnifying party similarly notified
will be entitled to assume Indemnitee's defense in any Proceeding, with
counsel mutually satisfactory to Indemnitee and the Company. After
notice from the Company to Indemnitee of the Company's election so to
assume such defense, the Company will not be liable to Indemnitee under
this Agreement for Expenses subsequently incurred by Indemnitee in
connection with the defense thereof other than reasonable costs of
investigation or as otherwise provided below. Indemnitee shall have the
right to employ counsel in such Proceeding, but the fees and expenses
of such counsel incurred after notice from the Company of its
assumption of the defense thereof shall be at Indemnitee's expense
unless:
(a) The employment of counsel by Indemnitee has been authorized by
the Company;
(b) Counsel employed by the Company initially is unacceptable or
later becomes unacceptable to Indemnitee and such
unacceptability is reasonable under then existing
circumstances;
(c) Indemnitee shall have reasonably concluded that there may be a
conflict of interest between Indemnitee and the Company in the
conduct of the defense of such Proceeding; or
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(d) The Company shall not have employed counsel promptly to assume
the defense of such Proceeding,
in each of which cases the fees and expenses of counsel shall be at the
expense of the Company and subject to payment pursuant to this
Agreement. The Company shall not be entitled to assume the defense of
Indemnitee in any Proceeding brought by or on behalf of the Company or
as to which Indemnitee shall have made either of the conclusions
provided for in clauses (b) or (c) above.
9. ENFORCEMENT
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In the event that any dispute or controversy shall arise under this
Agreement between Indemnitee and the Company with respect to whether
the Indemnitee is entitled to indemnification in connection with any
Proceeding or with respect to the amount of Expenses incurred, then
with respect to each such dispute or controversy Indemnitee may seek to
enforce the Agreement through legal action or, at Indemnitee's sole
option and written request, through arbitration. If arbitration is
requested, such dispute or controversy shall be submitted by the
parties to binding arbitration in the City of Cleveland, State of Ohio,
before a single arbitrator agreeable to both parties. If the parties
cannot agree on a designated arbitrator within 15 days after
arbitration is requested in writing by Indemnitee, the arbitration
shall proceed in the City of Cleveland, State of Ohio, before an
arbitrator appointed by the American Arbitration Association. In either
case, the arbitration proceeding shall commence promptly under the
rules then in effect of that Association and the arbitrator agreed to
by the parties or appointed by that Association shall be an attorney
other than an attorney who has, or is associated with a firm having
associated with it an attorney which has, been retained by or performed
services for the Company or Indemnitee at any time during the five
years preceding the commencement of arbitration. The award shall be
rendered in such form that judgment may be entered thereon in any court
having jurisdiction thereof. The prevailing party shall be entitled to
prompt reimbursement of any costs and expenses (including, without
limitation, reasonable attorneys' fees) incurred in connection with
such legal action or arbitration; provided that Indemnitee shall not be
obligated to reimburse the Company unless the arbitrator or court which
resolves the dispute determines that Indemnitee acted in bad faith in
bringing such action or arbitration.
10. EXCLUSIONS
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Notwithstanding the scope of indemnification which may be available to
Indemnitee from time to time under any Applicable Document, no
indemnification, reimbursement or payment shall be required of the
Company hereunder with respect to:
(a) Any claim or any part thereof as to which Indemnitee shall
have been determined by a court of competent jurisdiction from
which no appeal is or can be taken, by clear and convincing
evidence, to have acted or failed to act with deliberate
intent to cause injury to the Company or with reckless
disregard for the best interests of the Company;
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(b) Any claim or any part thereof arising under Section 16(b) of
the Securities Exchange Act of 1934 pursuant to which
Indemnitee shall be obligated to pay any penalty, fine,
settlement or judgment;
(c) Any obligation of Indemnitee based upon or attributable to the
Indemnitee gaining in fact any personal gain, profit or
advantage to which he was not entitled; or
(d) Any Proceeding initiated by Indemnitee without the consent or
authorization of the Board of Directors of the Company,
provided that this exclusion shall not apply with respect to
any claims brought by Indemnitee (i) to enforce his/her rights
under this Agreement or (ii) in any Proceeding initiated by
another person or entity whether or not such claims were
brought by Indemnitee against a person or entity who was
otherwise a party to such Proceeding.
Nothing in this Section 10 shall eliminate or diminish Company's
obligations to advance that portion of Indemnitee's Expenses which
represent attorneys' fees and other costs incurred in defending any
Proceeding pursuant to Section 3 of this Agreement.
11. EXTRAORDINARY TRANSACTIONS
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The Company covenants and agrees that, in the event of any merger,
consolidation or reorganization in which the Company is not the
surviving entity, any sale of all or substantially all of the assets of
the Company or any liquidation of the Company (each such event is
hereinafter referred to as an "extraordinary transaction"), the Company
shall:
(a) Have the obligations of the Company under this Agreement
expressly assumed by the survivor, purchaser or successor, as
the case may be, in such extraordinary transaction; or
(b) Otherwise adequately provide for the satisfaction of the
Company's obligations under this Agreement, in a manner
acceptable to Indemnitee.
12. NO PERSONAL LIABILITY
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Indemnitee agrees that neither the directors nor any officer, employee,
representative or agent of the Company shall be personally liable for
the satisfaction of the Company's obligations under this Agreement, and
Indemnitee shall look solely to the assets of the Company, proceeds of
insurance and the escrow referred to in Section 4 hereof for
satisfaction of any claims hereunder.
13. SEVERABILITY
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If any provision, phrase, or other portion of this Agreement should be
determined by any court of competent jurisdiction to be invalid,
illegal or unenforceable, in whole or in part, and such determination
should become final, such provision, phrase or other portion shall be
deemed to be severed or limited, but only to the extent required to
render the remaining provisions and portions of the Agreement
enforceable, and the Agreement as thus amended shall be enforced to
give effect to the intention of the parties insofar as that is
possible.
14. SUBROGATION
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In the event of any payment under this Agreement, the Company shall be
subrogated to the extent thereof to all rights to indemnification or
reimbursement against any insurer or other entity or person vested in
the Indemnitee, who shall execute all instruments and take all other
actions as shall be reasonably necessary for the Company to enforce
such rights.
15. GOVERNING LAW
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The parties hereto agree that this Agreement shall be construed and
enforced in accordance with and governed by the laws of the State of
Ohio.
16. NOTICES
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All notices, requests, demands and other communications hereunder shall
be in writing and shall be considered to have been duly given if
delivered by hand and receipted for by the party to whom the notice,
request, demand or other communication shall have been directed, or
mailed by certified mail, return receipt requested, with postage
prepaid:
(a) If to the Company, to: FERRO CORPORATION
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Vice President and
Chief Financial Officer
(b) If to Indemnitee, to:
or to such other or further address as shall be designated from time to
time by the Indemnitee or the Company to the other.
17. TERMINATION
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This Agreement may be terminated by either party upon not less than
sixty (60) days prior written notice delivered to the other party, but
such termination shall not in any way diminish the obligations of
Company hereunder (including the obligation to maintain the escrow
referred to in Section 4 hereof) with respect to Indemnitee's
activities prior to the effective date of termination.
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18. AMENDMENTS AND BINDING EFFECT
-----------------------------
This Agreement and the rights and duties of Indemnitee and the Company
hereunder may not be amended, modified or terminated except by written
instrument signed and delivered by the parties hereto. This Agreement
is and shall be binding upon and shall inure to the benefits of the
parties thereto and their respective heirs, executors, administrators,
successors and assigns.
IN WITNESS WHEREOF, the undersigned have executed this Agreement in
triplicate as of the date first above written.
INDEMNITEE FERRO CORPORATION
By:
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Title: Director Title:
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