INDEMNIFICATION AGREEMENT
KAYNAR TECHNOLOGIES INC.
This Indemnification Agreement ("Agreement") is made as of February ,
1997 by and between KAYNAR TECHNOLOGIES INC., a Delaware corporation (the
"Company"), and ("Indemnitee").
WHEREAS, the Company and Indemnitee recognize the difficulty of obtaining
directors' and officers' liability insurance that fully and adequately covers
directors for their acts and omissions on behalf of the Company and its
subsidiaries;
WHEREAS, the Company and Indemnitee further recognize the substantial
increase in corporate litigation, subjecting directors to expensive litigation
risks;
WHEREAS, Indemnitee does not regard the current protection available as
adequate under the present circumstances and Indemnitee and other directors of
the Company may not be willing to continue to serve as directors without
additional protection; and
WHEREAS, the Company desires to attract and retain highly qualified
individuals, such as Indemnitee, to serve as directors of the Company and to
indemnify its directors so as to provide them with the maximum protection
permitted by law.
NOW, THEREFORE, the Company and Indemnitee hereby agree as follows:
1. INDEMNIFICATION.
(a) THIRD-PARTY PROCEEDINGS. The Company shall indemnify Indemnitee
in the event Indemnitee was or 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 Indemnitee is or was a
director, officer, employee or agent of the Company or is or was serving at the
request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement (if such settlement is approved in advance by the Company, whose
approval shall not be unreasonably withheld) actually and reasonably incurred by
Indemnitee in connection with such action, suit or proceeding unless the Company
shall
establish, in accordance with the procedures described in Section 3(c), that
Indemnitee did not act in good faith or 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, had reasonable cause to
believe Indemnitee's 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 Indemnitee did not act in good faith or 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 conduct was unlawful.
(b) PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY. The Company shall
indemnify Indemnitee if Indemnitee was or is a party or is threatened to be made
a party to any threatened, pending or completed action or suit by or in the
right of the Company to procure a judgment in its favor by reason of the fact
that Indemnitee is or was a director, officer, employee or agent of the Company,
or is or was serving at the request of the Company as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees) and amounts paid
in settlement actually and reasonably incurred by Indemnitee in connection with
the defense or settlement of such action or suit if Indemnitee acted in good
faith and in a manner Indemnitee 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 Indemnitee shall have
been adjudged to be liable to the Company unless and only to the extent that the
Court of Chancery of the State of Delaware or the court in which such action or
suit 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 expenses which the Court of
Chancery of the State of Delaware or such other court shall deem proper.
(c) MANDATORY PAYMENT OF EXPENSES. To the extent that Indemnitee has
been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in Subsections (a) and (b) of this Section 1 or in
defense of any claim, issue or matter therein, Indemnitee shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
Indemnitee in connection therewith.
(d) GOOD FAITH DEFINED. The provisions of this Section 1(d) shall
not be deemed to be exclusive or to limit in any way the circumstances in which
Indemnitee may be deemed to have met the applicable standard of conduct set
forth in
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Section 1. Indemnitee shall, in the performance of Indemnitee's duties, be
fully protected in relying in good faith upon the records of the Company and
upon such information, opinions, reports or statements presented to the
Company by any of the Company's officers or employees, or committees of the
Board of Directors, or by any other person as to matters Indemnitee
reasonably believes are within such other person's professional or expert
competence and who has been selected with reasonable care by or on behalf of
the Company.
2. AGREEMENT TO SERVE. In consideration of the protection afforded by
this Agreement, Indemnitee agrees to serve as a director in such capacity at the
will of the Company (or under separate agreement, if such agreement exists) so
long as Indemnitee is duly appointed or elected and qualified in accordance with
the applicable provisions of the By-laws of the Company or any subsidiary of the
Company or until such time as Indemnitee tenders a resignation in writing.
Nothing contained in this Agreement is intended to create in Indemnitee any
right to continued employment or directorship, whether during or after such
fiscal year.
3. EXPENSES; INDEMNIFICATION PROCEDURE.
(a) ADVANCEMENT OF EXPENSES. Notwithstanding any other provision of
this Agreement (including the exceptions in Section 9), the Company shall
advance all expenses incurred by Indemnitee in connection with the
investigation, defense, settlement or appeal of any civil or criminal action,
suit or proceeding referenced in Section 1(a) or (b). Indemnitee hereby
undertakes to repay such amounts advanced only if, and to the extent that, it
shall ultimately be determined that Indemnitee is not entitled to be indemnified
by the Company. The advances for expenses shall be paid by the Company to
Indemnitee within twenty (20) days following delivery of a written request by
Indemnitee.
(b) NOTICE/COOPERATION BY INDEMNITEE. Indemnitee shall, as a
condition precedent to any rights under this Agreement, give the Company written
notice as soon as practicable of any claim for which indemnification will or
could be sought. All notices, requests, demands, and other communications
relating to indemnification or the advancement of expenses shall be in writing
and shall be deemed duly given (i) if delivered by hand and receipted for by the
Company, on the date of such receipt, or (ii) if mailed by domestic certified or
registered mail with postage prepaid on the third business day after the date
postmarked. Addresses for notice to either party are as shown on the signature
page of this Agreement or as subsequently modified by written notice. In
addition, Indemnitee shall give the Company such information and cooperation as
it may reasonably require and as shall be within Indemnitee's power.
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(c) PROCEDURE. Any indemnification and advances provided for in
Sections 1 and 3 shall be made no later than forty-five (45) days after
receipt of the written request of Indemnitee. If a claim under this
Agreement, under any statute, or under any provision of the Company's
Certificate of Incorporation or By-laws providing for indemnification, is not
paid in full by the Company within forty-five (45) days after a written
request for payment thereof has first been received by the Company,
Indemnitee may at any time thereafter bring an action against the Company to
recover the unpaid amount of the claim and, subject to Section 13 of this
Agreement, Indemnitee shall also be entitled to be paid for the expenses
(including attorneys' fees) of bringing such action. It shall be a defense
to any such action (other than an action brought to enforce a claim for
expenses incurred in connection with any action, suit or proceeding in
advance of its final disposition) that Indemnitee has not met the standards
of conduct which make it permissible under applicable law for the Company to
indemnify Indemnitee for the amount claimed, but the burden of proving such
defense shall be on the Company and Indemnitee shall be entitled to receive
interim payments of expenses pursuant to Subsection 3(a) unless and until
such defense may be finally adjudicated by judicial determination from which
no further right of appeal exists. It is the parties' intention that if the
Company contests Indemnitee's right to indemnification, the question of
Indemnitee's right to indemnification shall be for a court of competent
jurisdiction to decide and neither the failure of the Company (including its
Board of Directors or its independent legal counsel) to make a determination
that indemnification of Indemnitee is proper in the circumstances because
Indemnitee has met the applicable standard of conduct required by applicable
law nor an actual determination by the Company (including its Board of
Directors or its independent legal counsel) that Indemnitee has not met such
applicable standard of conduct, shall create a presumption that Indemnitee
has or has not met the applicable standard of conduct.
(d) NOTICE TO INSURERS. If, at the time of the receipt of a notice
of a claim pursuant to Section 3(b) hereof, the Company has directors' and
officers' liability insurance in effect, the Company shall give prompt notice of
the commencement of such proceeding to the insurers in accordance with the
procedures set forth in the respective policies. The Company shall thereafter
take all necessary or desirable actions to cause such insurers to pay, on behalf
of the Indemnitee, all amounts payable in accordance with the terms of such
policies.
(e) RELATIONSHIP TO OTHER SOURCES. Indemnitee shall not be required
to exercise any rights against any other parties (e.g., under any insurance
policy purchased by the Company, Indemnitee or any other person or entity)
before Indemnitee enforces this Agreement. To the extent that the Company
actually indemnifies Indemnitee or advances expenses, Indemnitee agrees to
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subrogate such rights against third parties to the Company to recover amounts
with respect to which the Company's payments were made. Indemnitee shall
assist the Company in enforcing those rights if the Company pays Indemnitee's
reasonable costs and expenses of doing so.
(f) SELECTION OF COUNSEL. In the event the Company shall be
obligated under Section 3(a) to pay the expenses of any proceeding against
Indemnitee, the Company, if appropriate, shall be entitled to assume the defense
of such proceeding, with counsel approved by Indemnitee, whose approval shall
not be unreasonably withheld, upon the delivery to Indemnitee of written notice
of its election so to do. After delivery of such notice, approval of such
counsel by Indemnitee, and the retention of such counsel by the Company, the
Company will not be liable to Indemnitee under this Agreement for any fees or
expenses of other counsel subsequently incurred by Indemnitee with respect to
the same proceeding, provided that (i) Indemnitee shall have the right to employ
his counsel in any such proceeding at Indemnitee's expense; and (ii) if (A) the
employment of counsel by Indemnitee has been previously authorized by the
Company, (B) Indemnitee has reasonably concluded that there is a conflict of
interest between the Company and Indemnitee in the conduct of any such defense
or (C) the Company has not, in fact, employed counsel to assume the defense of
such proceeding, the reasonable fees and expenses of Indemnitee's counsel shall
be at the expense of the Company.
4. ADDITIONAL INDEMNIFICATION RIGHTS; NONEXCLUSIVITY.
(a) SCOPE. Notwithstanding any other provision of this Agreement
(including the exceptions in Section 9), the Company hereby agrees to indemnify
Indemnitee to the fullest extent permitted by law, notwithstanding that separate
indemnification may or may not be independently authorized by other provisions
of this Agreement, the Company's Certificate of Incorporation, its By-laws, or
by statute. In the event of any change after the date of this Agreement in any
applicable law, statute, or rule which expands the right of a Delaware
corporation to indemnify a member of its board of directors, such changes shall
be, IPSO FACTO, within the purview of Indemnitee's rights and Company's
obligations under this Agreement. In the event of any change in any applicable
law, statute or rule which narrows the right of a Delaware corporation to
indemnify a member of its board of directors, such changes, to the extent not
otherwise required by such law, statute or rule to be applied to this Agreement,
shall have no effect on this Agreement or the parties' rights and obligations
hereunder.
(b) NONEXCLUSIVITY. The indemnification provided by this Agreement
shall not be deemed exclusive of any rights to which Indemnitee may be entitled
under the Company's Certificate of Incorporation, its By-laws, any other
agreement, any vote of
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stockholders or disinterested directors of the Company, or by statute, or
otherwise, both as to action in Indemnitee's official capacity and as to
action in another capacity while holding such office. The indemnification
provided under this Agreement shall continue as to Indemnitee for any action
taken or not taken while serving in an indemnified capacity even though he
may have ceased to serve in such capacity at the time of any action, suit or
other covered proceeding.
5. PARTIAL INDEMNIFICATION. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of the expenses, judgments, fines or penalties actually or reasonably
incurred in the investigation, defense, appeal or settlement of any civil or
criminal action, suit or proceeding, but not for the total amount thereof, the
Company shall indemnify Indemnitee for the portion of such expenses, judgments,
fines penalties to which Indemnitee is entitled.
6. MUTUAL ACKNOWLEDGEMENT. Both the Company and Indemnitee acknowledge
that in certain instances, federal law or public policy may override applicable
state law and prohibit the Company from indemnifying its directors under this
Agreement or otherwise. Indemnitee understands and acknowledges that the
Company may be required to submit the question of indemnification in certain
circumstances for judicial determination of the Company's ability to indemnify
Indemnitee.
7. DIRECTORS' AND OFFICERS' LIABILITY INSURANCE. The Company shall, from
time to time, make a good faith determination whether it is practicable for the
Company to obtain and maintain a policy or policies of insurance providing the
directors of the Company with coverage for losses from wrongful acts, or to
ensure the Company's performance of its obligations under this Agreement. Among
other considerations, the Company will weigh the costs of obtaining such
insurance against the protection afforded by such coverage. In all policies of
directors' and officers' liability insurance obtained by the Company, 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 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, the premium costs
for such insurance are disproportionate to the amount of coverage provided, the
coverage provided by such insurance is limited by exclusions so as to provide an
insufficient benefit, or Indemnitee is covered by similar insurance maintained
by a parent or subsidiary of the Company.
8. SEVERABILITY. Nothing in this Agreement is intended to require or
shall be construed as requiring the Company to do or
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fail to do any act in violation of applicable law. The Company's inability,
pursuant to court order, to perform its obligations under this Agreement
shall not constitute a breach of this Agreement. The provisions of this
Agreement shall be severable as provided in this Section 8. If this
Agreement or any portion hereof shall be invalidated on any ground by any
court of competent jurisdiction, the Company shall nevertheless indemnify
Indemnitee to the full extent permitted by any applicable portion of this
Agreement that shall not have been invalidated and the balance of this
Agreement not so invalidated shall be enforceable in accordance with its
terms.
9. EXCEPTIONS. Any other provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:
(a) CLAIMS INITIATED BY INDEMNITEE. To indemnify or advance expenses
to Indemnitee with respect to proceedings or claims initiated or brought
voluntarily by Indemnitee and not by way of defense, except with respect to
proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other statute or law or otherwise as required under
Section 145 of the Delaware General Corporation Law, but such indemnification or
advancement of expenses may be provided by the Company in specific cases if the
Board of Directors finds it to be appropriate;
(b) LACK OF GOOD FAITH. To indemnify Indemnitee for any expenses
incurred by the Indemnitee with respect to any proceeding instituted by
Indemnitee to enforce or interpret this Agreement if a court of competent
jurisdiction determines that each of the material assertions made by the
Indemnitee in such proceeding was not made in good faith or was frivolous;
(c) INSURED CLAIMS. To indemnify Indemnitee for expenses or
liabilities of any type whatsoever (including, but not limited to, judgments,
fines, ERISA excise taxes or penalties, and amounts paid in settlement) which
have been paid directly to Indemnitee by an insurance carrier under a policy of
directors' liability insurance maintained by the Company.
(d) CLAIMS UNDER SECTION 16(b). To indemnify or advance expenses to
Indemnitee for expenses or the payment of profits arising from the purchase and
sale by Indemnitee of securities in violation of Section 16(b) of the Securities
Exchange Act of 1934, as amended, or any similar successor statute.
10. CONSTRUCTION OF CERTAIN PHRASES.
(a) For purposes of this Agreement, references to the "Company" shall
include, in addition to the resulting corporation, any constituent corporation
(including any
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constituent of a constituent) absorbed in a consolidation or merger which, if
its separate existence had continued, would have had power and authority to
indemnify its directors, officers, and employees or agent, so that if
Indemnitee is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such
constituent corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise,
Indemnitee shall stand in the same position under the provisions of this
Agreement with respect to the resulting or surviving corporation as
Indemnitee would have with respect to such constituent corporation if its
separate existence had continued.
(b) For purposes of this Agreement, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include any
excise taxes or penalties assessed on Indemnitee with respect to an 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, such director, officer,
employee or agent with respect to an employee benefit plan, its participants, or
beneficiaries; and if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan, Indemnitee shall be deemed to have acted in a
manner "not opposed to the best interests of the Company" as referred to in this
Agreement.
11. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original.
12. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Company and its successors and assigns, and shall inure to the benefit of
Indemnitee and Indemnitee's estate, heirs, legal representatives and assigns.
13. ATTORNEYS' FEES. In the event that any action is instituted by
Indemnitee under this Agreement to enforce or interpret any of the terms hereof,
Indemnitee shall be entitled to be paid all court costs and expenses, including
reasonable attorneys' fees, incurred by Indemnitee with respect to such action,
unless as a part of such action, the court of competent jurisdiction determines
that each of the material assertions made by Indemnitee as a basis for such
action was not made in good faith or was frivolous. In the event of an action
instituted by or in the name of the Company under this Agreement or to enforce
or interpret any of the terms of this Agreement, Indemnitee shall be entitled to
be paid all court costs and expenses, including attorneys' fees, incurred by
Indemnitee in defense of such action (including with respect to Indemnitee's
counterclaims and cross-claims made in such action), unless as a part of such
action the court determines that each of Indemnitee's material
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defenses to such action was not made in good faith or was frivolous.
14. CHOICE OF LAW. This Agreement shall be governed by and its provisions
construed in accordance with the laws of the State of Delaware as applied to
contracts between Delaware residents entered into and to be performed entirely
within the State of Delaware.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
KAYNAR TECHNOLOGIES INC.
By:
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Name:
Title:
000 X. Xxxxx Xxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
AGREED TO AND ACCEPTED:
INDEMNITEE:
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(Signature)
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(Print Name)
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(Address)
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