Exhibit 10.9
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (the "Agreement") is made as of the day
of September, 1994, by and between Associated Materials Incorporated, a Delaware
corporation (the "Company") ,and (the "Indemnitee").
RECITALS
The Indemnitee is presently serving as a of the Company and the
Company desires the Indemnitee to continue in such capacity. The Indemnitee is
willing, subject to certain conditions including without limitation the
execution and performance of this Agreement by the Company, to continue in that
capacity. Accordingly, and in order to induce the Indemnitee to continue to
serve in his present capacity, the Company and Indemnitee agree as follows:
1. Continued Service. The Indemnitee will continue to serve as a
of the Company so long as he is duly elected or appointed and qualified in
accordance with the bylaws or until he resigns in writing in accordance with
applicable law.
2. Initial Indemnity. (a) The Company shall indemnify the Indemnitee when
he was or is a party or is threatened to be made a party to any pending,
threatened or completed action, suit or proceeding, whether civil,
administrative, investigative or criminal (other than an action by or in the
name of the Company), by reason of the fact that he is or was or had agreed to
become a director or officer of the Company, or is or was serving or had agreed
to serve at the request of the Company as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise,
or by reason of any action alleged to have been taken or omitted in such
capacity, against any and all costs, charges and expenses, including without
limitation, attorneys' and others' fees and expenses, judgments, fines and
amounts paid in settlement actually and reasonably incurred by the Indemnitee in
connection therewith and any appeal therefrom if the Indemnitee acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
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 when he was or 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 he is or was or had agreed to become a
director or officer of the Company, or is or was serving or had agreed to serve
at the request of the Company as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against costs, charges and expenses (including attorneys' or others' fees and
expenses) actually and reasonably incurred by him in connection with the defense
or settlement thereof or any appeal therefrom if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Company and except that no indemnification shall be made in respect of any
claim, issue or matter as to which the Indemnitee shall have been adjudged to be
liable to the Company unless and only to the extent that the Court of Chancery
or the court in which such action, suit or proceeding was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, the Indemnitee is fairly and
reasonably entitled to indemnity for such expenses which the Court of Chancery
or such other court shall deem proper.
(c) To the extent that the Indemnitee has been successful on the merits or
otherwise, including without limitation the dismissal of an action without
prejudice, in defense of any action, suit or proceeding referred to in Sections
2(a) and 2(b) hereof or in defense of any claim, issue or matter therein, he
shall be indemnified against costs, charges and expenses (including attorneys'
and others' fees and expenses) actually and reasonably incurred by him in
connection therewith.
(d) Any indemnification under Sections 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 in accordance with Section 4 hereof or any applicable provision
of the Certificate, the Bylaws, other agreements, resolutions or otherwise. Such
determination 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
parties to such action, suit or proceeding, or (ii) if such a quorum of
disinterested directors is not available or so directs, by independent legal
counsel (designated in the manner provided below in this subsection (d)) in a
written opinion, or (iii) by the stockholders of the Company (the
"Stockholders"). Independent legal counsel shall be designated by vote of a
majority of the disinterested directors; provided, however, that if the Board is
unable or fails to so designate, such designation shall be made by the
Indemnitee subject to the approval of the Company (which approval shall not be
unreasonably withheld). Independent legal counsel shall not be any person or
firm who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the Company
or the Indemnitee in an action to determine the Indemnitee's rights under this
Agreement. The Company agrees to pay the reasonable fees and expenses of such
independent legal counsel and to indemnify fully such counsel against costs,
charges and expenses (including attorneys' and others' fees and expenses)
actually and reasonably incurred by such counsel in connection with this
Agreement or the opinion of such counsel pursuant hereto.
(e) All expenses (including attorneys' and others' fees and expenses)
incurred by the Indemnitee in his capacity as a director or officer of the
Company in defending a civil or criminal action, suit or proceeding shall be
paid by the Company in advance of the final disposition of such action, suit or
proceeding subject to and in the manner prescribed by Section 4(b) hereof.
(f) The Company shall not adopt any amendment to the Certificate or the
Bylaws, the effect of which would be to deny, diminish or encumber the
Indemnitee's rights to indemnity pursuant to the Certificate, the Bylaws, the
General Corporation Law of the State of Delaware (the "DGCL") 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 Board or the Stockholders, as the case may be. In the event that
the Company shall adopt any amendment to the Certificate or the Bylaws, the
effect of which is to so deny, diminish or encumber the Indemnitee's rights to
indemnity, such amendment shall apply only to acts or failures to act occurring
entirely after the Effective Date thereof unless the Indemnitee shall have voted
in favor of such adoption as a director or holder of record of the Company's
voting stock, as the case may be.
3. Additional Indemnification. (a) Pursuant to Section 145(f) of the DGCL,
without limiting any right which the Indemnitee may have pursuant to Section 2
hereof, the Certificate, the Bylaws, the DGCL, any policy of insurance or
otherwise, but subject to the limitations on the maximum permissible indemnity
which may exist under applicable law at the time of any request for indemnity
hereunder determined as contemplated by this Section 3(a), the Company shall
indemnify the Indemnitee against any amount which he is or becomes legally
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, which he commits,
suffers, permits or acquiesces in while acting in his capacity as a director or
officer of the Company, or, at the request of the Company, as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise. The payments which the Company is obligated to make
pursuant to this Section 3 shall include without limitation damages, judgments,
settlements and charges, costs, expenses, expenses of investigation and expenses
of defense of legal actions, suits, proceedings or claims and appeals therefrom,
and expenses of appeal, attachment or similar bonds; provided, however, that the
Company shall not be obligated under this Section 3(a) 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 in a
final, nonappealable order; or
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(ii) to the extent based upon or attributable to the Indemnitee gaining in
fact a personal profit to which he was not legally entitled, including without
limitation profits made 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, as amended, and profits
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, as amended, including Rule 10b-5 promulgated thereunder.
The determination of whether the Indemnitee shall be entitled to indemnification
under this Section 3(a) may be, but shall not be required to, be made in
accordance with Section 4(a) hereof. If that determination is so made, it shall
be binding upon the Company and the Indemnitee for all purposes.
(b) All expenses (including without limitation attorneys' and others' fees
and expenses) incurred by Indemnitee in his capacity as a director or officer of
the Company in defending any civil or criminal action, suit or proceeding shall
be paid by the Company in advance of the final disposition of such action, suit
or proceeding subject to and in the manner prescribed by Section 4(b) hereof.
4. Certain Procedures Relating to Indemnification and Advancement of
Expenses. (a) Except as otherwise permitted or required by the DGCL, for
purposes of pursuing his rights to indemnification under Sections 2(a), 2(b) or
3(a) hereof, as the case may be, the Indemnitee may, but shall not be required
to, (i) submit to the Board a sworn statement of request for indemnification
substantially in the form of Exhibit A 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 expenses
for which payment is requested. Submission of an Indemnification Statement to
the Board shall create a presumption that the Indemnitee is entitled to
indemnification under Sections 2(a), 2(b) or 3(a) hereof, as the case may be,
and the Board shall be deemed to have determined that the Indemnitee is entitled
to such indemnification unless within 30 calendar days after submission of the
Indemnification Statement the Board shall determine by vote of a majority of the
directors at a meeting at which a quorum is present that the Indemnitee is not
so entitled to indemnification and the Indemnitee shall have received notice
within such period in writing of such determination, which notice shall disclose
with particularity the evidence in support of the Board's determination. The
foregoing notice shall be sworn to by all persons who participated in the
determination 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 the
Indemnitee to indemnification under this Agreement and any determination by the
Board that the Indemnitee is not entitled to indemnification and any failure to
make the payments requested in the Indemnification Statement shall be subject to
judicial review as provided in Section 7 hereof.
(b) For purposes of determining whether to authorize advancement of
expenses pursuant to Section 2(e) or 3(b) hereof, the Indemnitee shall submit to
the Board a sworn statement of request for advancement of expenses substantially
in the form of Exhibit B hereto and made a part hereof (the "Undertaking"),
averring that (i) he has reasonably incurred or will reasonably incur actual
expenses in defending an actual civil or criminal action, suit, proceeding or
claim, and (ii) he undertakes to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the Company under this
Agreement or otherwise. Subject to the last sentence of this Section 4(b), upon
receipt of an Undertaking, the Board shall, within 40 calendar days after
receipt of the Indemnification Statement, authorize immediate payment of the
expenses stated in the Undertaking, whereupon such payments shall immediately be
made by the Company. No security shall be required in connection with any
Undertaking and any Undertaking shall be accepted without reference to the
Indemnitee's ability to make repayment. The Company shall have no obligation to
advance expenses to the Indemnitee (i) until the Indemnitee has submitted to the
Board the Indemnification Statement referred to in Section 4(a) hereof, and (ii)
in the event the Board determines that the Indemnitee is not entitled to
indemnification in accordance with the provisions of Section 4(a) hereof.
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5. Subrogation; Duplication of Payments. (a) In the event of any payment
under this Agreement, the Company shall be subrogated to the extent of such
payment to all of the rights of recovery of the 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 the Indemnitee to the extent
the Indemnitee has actually received payment (under any insurance policy, the
Certificate, the Bylaws or otherwise) of the amounts otherwise payable
hereunder.
6. Stockholder Ratification. The Company may, at its option, propose at any
future meeting of the Stockholders that this Agreement be ratified by the
Stockholders; 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; and provided further, however, that if such
ratification is sought and not obtained, the Company, in the discretion of and
upon action by the Board, may rescind this Agreement.
7. Enforcement. (a) If a claim for indemnification made to the Company
pursuant to Section 4 hereof is not paid in full by the Company within 30
calendar days after a written claim has been received by the Company, the
Indemnitee may at any time thereafter bring suit against the Company to recover
the unpaid amount of the claim.
(b) In any action brought under Section 5(a) hereof, it shall be a defense
to a claim for indemnification pursuant to Sections 2(a) or 2(b) hereof that the
Indemnitee has not met the standards of conduct which make it permissible under
the DGCL for the Company to indemnify the Indemnitee for the amount claimed, but
the burden of proving such defense shall be on the Company. Neither the failure
of the Company (including the Board, independent legal counsel or the
Stockholders) to have made a determination prior to commencement of such action
that indemnification of the Indemnitee is proper in the circumstances because he
has met the applicable standard of conduct set forth in the DGCL, nor an actual
determination by the Company (including the Board, independent legal counsel or
the Stockholders) that the Indemnitee has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that the
Indemnitee has not met the applicable standard of conduct.
(c) 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 the
Agreement or in the event that the Company or any other person takes any action
to declare the Agreement void or unenforceable, or institutes any action, suit
or proceeding designed (or having the effect of being designed, 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, stockholder 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 without limitation attorneys' and others' fees
and expenses, reasonably incurred by the Indemnitee (i) as a result of the
Company's failure to perform this Agreement or any provision thereof, or (ii) as
a result of the Company or any person contesting the validity or enforceability
of this Agreement or any provision thereof as aforesaid.
8. Merger or Consolidation. 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
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surviving, resulting or acquiring corporation therein, shall require as a
condition thereto the surviving, resulting or acquiring corporation to agree to
indemnify the Indemnitee to the full extent provided in Section 3 hereof.
Whether or not the Company is the surviving, resulting or acquiring corporation
in any such transaction, the Indemnitee shall also 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.
9. Nonexclusivity and Severability. (a) The right to indemnification
provided by this Agreement shall not be exclusive of any other rights to which
the Indemnitee may be entitled under the Certificate, the Bylaws, the DGCL, any
other statute, insurance policy, agreement, vote of Stockholders or the Board or
otherwise, both as to actions in his official capacity and as to actions in
another capacity while holding such office, and shall continue after the
Indemnitee has ceased to be a director, officer, employee or agent and shall
inure to the benefit of his heirs, executors and administrators.
(b) 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.
10. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to the
principles of conflict of laws thereof.
11. Modification; Survival. This Agreement contains the entire agreement of
the parties relating to the subject matter hereof and supersedes any prior
agreement between the Indemnitee and the Company relating to the subject matter
hereof. This Agreement may be modified only by an instrument in writing signed
by both parties hereto. The provisions of this Agreement shall survive the
death, disability, or incapacity of the Indemnitee or the termination of the
Indemnitee's service as a director or officer of the Company and shall inure to
the benefit of the Indemnitee's heirs, executors and administrators.
12. Certain Terms. For purposes of this Agreement, references to "other
enterprises" shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on Indemnitee with respect to any employee
benefit plan; and references to "serving at the request 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 "not opposed to the best interests of the Company" as referred to herein.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date first above written.
ASSOCIATED MATERIALS INCORPORATED
By
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[Name and Title]
INDEMNITEE
By
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[Name]
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EXHIBIT A
INDEMNIFICATION STATEMENT
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 as of , 19 , between Associated Materials
Incorporated, a Delaware corporation (the "Company") and the undersigned.
2. I am requesting indemnification against charges, costs, expenses
(including attorneys' and others' fees and expenses), judgments, fines and
amounts paid in settlement, all of which (collectively, "Liabilities") have been
or will be incurred by me in connection with an actual or threatened action,
suit, proceeding or claim to which I am a party or am threatened to be made a
party.
3. With respect to all matters related to any such action, suit, proceeding
or 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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Subscribed and sworn to before me, a Notary Public in and for said County
and State, this day of , 19 .
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[Seal]
My commission expires the day of , 19 .
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EXHIBIT B
UNDERTAKING
STATE OF )
) SS
COUNTY OF )
I, being first duly sworn do depose and say as follows:
1. This Undertaking is submitted pursuant to the Indemnification Agreement,
dated as of , 19 , between Associated Materials Incorporated, a Delaware
corporation (the "Company"), and the undersigned.
2. I am requesting advancement of certain costs, charges and expenses which
I have incurred or will incur in defending an actual or pending civil or
criminal action, suit, proceeding or claim.
3. I hereby undertake to repay this advancement of expenses if it shall
ultimately be determined that I am not entitled to be indemnified by the Company
under the aforesaid Indemnification Agreement or otherwise.
4. The costs, charges and expenses for which advancement is requested are,
in general, all expenses related to
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Subscribed and sworn to before me, a Notary Public in and for said
County and State, this day of , 19 .
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[Seal]
My commission expires the day of , 19 .
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