EXHIBIT 10.49
INDEMNIFICATION AGREEMENT
AGREEMENT, effective as of June 3, 2003 between Xxxxx Lemmerz
International, Inc., a Delaware corporation (the "Company"), and (Director's
name)__ (the "Indemnitee").
WHEREAS, it is essential to the Company to retain and attract
as directors the most capable persons available;
WHEREAS, Indemnitee is a director of the Company;
WHEREAS, both the Company and Indemnitee recognize the
increased risk of litigation and other claims being asserted against directors
of public companies in today's environment;
WHEREAS, the Certificate of Incorporation (the "Charter") of
the Company permits, and the By-laws (the "By-Laws") of the Company require, the
Company to indemnify its directors to the fullest extent permitted by law and
the Indemnitee has agreed to serve as a director of the Company in part in
reliance on such Charter and By-Laws;
WHEREAS, in recognition of Indemnitee's need for substantial
protection against personal liability in order to enhance Indemnitee's service
to the Company in an effective manner, the increasing difficulty in obtaining
satisfactory director liability insurance coverage and Indemnitee's reliance on
the aforesaid Charter and By-Laws, and in part to provide Indemnitee with
specific contractual assurance that the protection afforded by such Charter and
By-Laws will be available to Indemnitee (regardless of, among other things, any
amendment to or revocation of the Charter and By-Laws or any change in the
composition of the Company's Board of Directors or acquisition transaction
relating to the Company), the Company wishes to provide in this Agreement for
the indemnification of and the advancing of expenses to Indemnitee to the
fullest extent (whether partial or complete) permitted by law and as set forth
in this Agreement, and, to the extent insurance is maintained, for the continued
coverage of Indemnitee under the Company's directors' liability insurance
policies;
NOW, THEREFORE, in consideration of the premises and of
Indemnitee continuing to serve the Company directly or, at its request, another
enterprise, and intending to be legally bound hereby, the parties hereto agree
as follows:
1. Certain Definitions:
(a) Change in Control: shall be deemed to have occurred if (i) any
"person" (as such term is used in Sections 13(d) and 14(d) of
the Securities
1
Exchange Act of 1934, as amended), other than a trustee or
other fiduciary holding securities under an employee benefit
plan of the Company or a corporation owned directly or
indirectly by the stockholders of the Company in substantially
the same proportions as their ownership of stock of the
Company, is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under said Act), directly or indirectly, of
securities of the Company representing 35% or more of the
total voting power represented by the Company's then
outstanding Voting Securities, or (ii) during any period of
two consecutive years, individuals who at the beginning of
such period constitute the Board of Directors of the Company
and any new director whose election by the Board of Directors
or nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at
the beginning of the period or whose election or nomination
for election was previously so approved, cease for any reason
to constitute a majority thereof, or (iii) the stockholders of
the Company approve a merger or consolidation of the Company
with any other corporation, other than a merger or
consolidation which would result in the Voting Securities of
the Company outstanding immediately prior thereto continuing
to represent (either by remaining outstanding or by being
converted into Voting Securities of the surviving entity) at
least 80% of the total voting power represented by the Voting
Securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or the
stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or
disposition by the Company of (in one transaction or a series
of transactions) all or substantially all the Company's
assets.
(b) Claim: any threatened, pending or completed action, suit or
proceeding, or any inquiry or investigation, whether
instituted by the Company or any other party, that Indemnitee
in good faith believes might lead to the institution of any
such action, suit or proceeding, whether civil, criminal,
administrative, investigative or other.
(c) Expenses: include attorneys' fees and all other costs,
expenses and obligations paid or incurred in connection with
investigating, defending, being a witness in or participating
in (including on appeal), or preparing to defend, be a witness
in or participate in any Claim relating to any Indemnifiable
Event.
(d) Indemnifiable Event: any event or occurrence related to the
fact that Indemnitee is or was a director, officer, employee,
agent or fiduciary of the Company, or is or was serving at the
request of the Company as a director, officer, employee,
trustee, agent or fiduciary of another corporation,
partnership, joint venture, employee benefit plan, trust or
other enterprise, or by reason of anything done or not done by
Indemnitee in any such capacity.
2
(e) Independent Legal Counsel: an attorney or firm of attorneys,
selected in accordance with the provisions of Section 3, who
shall not have otherwise performed services for the Company,
any of its subsidiaries or Indemnitee within the last two
years (other than with respect to matters concerning the
rights of Indemnitee under this Agreement, or of other
indemnitees under similar indemnity agreements).
(f) Reviewing Party: any appropriate person or body consisting of
a member or members of the Company's Board of Directors or any
other person or body appointed by the Board who is not a party
to the particular Claim for which Indemnitee is seeking
indemnification, or Independent Legal Counsel.
(g) Voting Securities: any securities of the Company which vote
generally in the election of directors.
2. Basic Indemnification Arrangement.
(a) In the event Indemnitee was, is or becomes a party to or
witness or other participant in, or is threatened to be made a
party to or witness or other participant in, a Claim by reason
of (or arising in part out of) an Indemnifiable Event, the
Company shall indemnify Indemnitee to the fullest extent
permitted by law as soon as practicable, but in any event no
later than thirty days after written demand is presented to
the Company, against any and all Expenses, judgments, fines,
penalties and amounts paid in settlement (including all
interest, assessments and other charges paid or payable in
connection with or in respect of such Expenses, judgments,
fines, penalties or amounts paid in settlement) of such Claim.
If so requested by Indemnitee, the Company shall advance
(within two business days of such request) any and all
Expenses to Indemnitee (an "Expense Advance"). Notwithstanding
anything in this Agreement to the contrary, except as provided
in Section 5 hereof, prior to a Change in Control, Indemnitee
shall not be entitled to indemnification or Expense Advances
pursuant to this Agreement in connection with any Claim
initiated by Indemnitee unless the Board of Directors has
authorized or consented to the initiation of such Claim.
(b) Notwithstanding the foregoing, (i) the obligations of the
Company under Section 2(a) shall be subject to the condition
that the Reviewing Party shall not have determined (in a
written opinion, in any case in which the Independent Legal
Counsel referred to in Section 3 hereof is involved) that
Indemnitee would not be permitted to be indemnified under
applicable law, and (ii) the obligation of the Company to make
an Expense Advance pursuant to Section 2(a) shall be subject
to the condition that, if, when and to the extent that the
Reviewing Party determines that Indemnitee would not be
permitted to be so indemnified under applicable law, the
Company shall be entitled to be reimbursed by Indemnitee (who
hereby agrees to
3
reimburse the Company) for all such amounts theretofore paid;
provided, however, that if Indemnitee has commenced or
thereafter commences legal proceedings in a court of competent
jurisdiction to secure a determination that Indemnitee should
be indemnified under applicable law, any determination made by
the Reviewing Party that Indemnitee would not be permitted to
be indemnified under applicable law shall not be binding and
Indemnitee shall not be required to reimburse the Company for
any Expense Advance until a final judicial determination is
made with respect thereto (as to which all rights of appeal
therefrom have been exhausted or lapsed). If there has not
been a Change in Control, the Reviewing Party shall be
selected by the Board of Directors, and, if there has been
such a Change in Control (other than a Change in Control which
has been approved by a majority of the Company's Board of
Directors who were directors immediately prior to such Change
in Control), the Reviewing Party shall be the Independent
Legal Counsel referred to in Section 3 hereof. If there has
been no determination by the Reviewing Party or if the
Reviewing Party determines that Indemnitee substantively would
not be permitted to be indemnified in whole or in part under
applicable law, Indemnitee shall have the right to commence
litigation in any court in the State of Delaware having
subject matter jurisdiction thereof and in which venue is
proper seeking an initial determination by the court or
challenging any such determination by the Reviewing Party or
any aspect thereof, including the legal or factual bases
therefor, and the Company hereby consents to service of
process and to appear in any such proceeding. Any
determination by the Reviewing Party otherwise shall be
conclusive and binding on the Company and Indemnitee.
3. Change in Control. The Company agrees that, if there is a Change in
Control of the Company (other than a Change in Control which has been
approved by a majority of the Company's Board of Directors who were
directors immediately prior to such Change in Control), then with
respect to all matters thereafter arising concerning the rights of
Indemnitee to indemnity payments and Expense Advances under this
Agreement or any other agreement or Charter or By-law provision now or
hereafter in effect relating to Claims for Indemnifiable Events, the
Company shall seek legal advice only from Independent Legal Counsel
selected by Indemnitee and approved by the Company (which approval
shall not be unreasonably withheld). Such counsel, among other things,
shall render its written opinion to the Company and Indemnitee as to
whether and to what extent the Indemnitee would be permitted to be
indemnified under applicable law. The Company agrees to pay the
reasonable fees of the Independent Legal Counsel referred to above and
to fully indemnify such counsel against any and all expenses (including
attorneys' fees), claims, liabilities and damages arising out of or
relating to this Agreement or its engagement pursuant hereto.
4. Indemnification for Additional Expenses. The Company shall indemnify
Indemnitee against any and all expenses (including attorneys' fees)
and, if requested by Indemnitee, shall (within two business days of
such request) advance
4
such expenses to Indemnitee, which are incurred by Indemnitee in
connection with any action brought by Indemnitee for (i)
indemnification or advance payment of Expenses by the Company under
this Agreement or any other agreement or Charter or By-Law provision
now or hereafter in effect relating to Claims for Indemnifiable Events
and/or (ii) recovery under any directors' liability insurance policies
maintained by the Company, regardless of whether Indemnitee ultimately
is determined to be entitled to such indemnification, advance expense
payment or insurance recovery, as the case may be.
5. Partial Indemnity, Etc. 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, penalties and amounts paid
in settlement of a Claim but not, however, for all of the total amount
thereof, the Company shall nevertheless indemnify Indemnitee for the
portion thereof to which Indemnitee is entitled. Moreover,
notwithstanding any other provision of this Agreement, to the extent
that Indemnitee has been successful on the merits or otherwise in
defense of any or all Claims relating in whole or in part to an
Indemnifiable Event or in defense of any issue or matter therein,
including dismissal without prejudice, Indemnitee shall be indemnified
against all Expenses incurred in connection therewith.
6. Burden of Proof. In connection with any determination by the Reviewing
Party or otherwise as to whether Indemnitee is entitled to be
indemnified hereunder the burden of proof shall be on the Company to
establish that Indemnitee is not so entitled.
7. No Presumptions. For purposes of this Agreement, the termination of any
claim, action, suit or proceeding, by judgment, order, settlement
(whether with or without court approval) or conviction, or upon a plea
of nolo contendere, or its equivalent, shall not create a presumption
that Indemnitee did not meet any particular standard of conduct or have
any particular belief or that a court has determined that
indemnification is not permitted by applicable law. In addition,
neither the failure of the Reviewing Party to have made a determination
as to whether Indemnitee has met any particular standard of conduct or
had any particular belief, nor an actual determination by the Reviewing
Party that Indemnitee has not met such standard of conduct or did not
have such belief, prior to the commencement of legal proceedings by
Indemnitee to secure a judicial determination that Indemnitee should be
indemnified under applicable law shall be a defense to Indemnitee's
claim or create a presumption that Indemnitee has not met any
particular standard of conduct or did not have any particular belief.
8. Nonexclusivity, Etc. The rights of the Indemnitee hereunder shall be in
addition to any other rights Indemnitee may have under the Charter,
By-Laws or the Delaware General Corporation Law or otherwise. To the
extent that a change in the Delaware General Corporation Law (whether
by statute or judicial decision) permits greater indemnification by
agreement than would be afforded currently under the Charter, By-Laws
and this Agreement, it is the intent of the parties
5
hereto that Indemnitee shall enjoy by this Agreement the greater
benefits so afforded by such change.
9. Liability Insurance. To the extent the Company maintains an insurance
policy or policies providing directors' liability insurance, Indemnitee
shall be covered by such policy or policies, in accordance with its or
their terms, to the maximum extent of the coverage available for any
Company director.
10. Period of Limitations. No legal action shall be brought and no cause of
action shall be asserted by or in the right of the Company against
Indemnitee, Indemnitee's spouse, heirs, executors or personal or legal
representatives after the expiration of two years from the date of
accrual of such cause of action, and any claim or cause of action of
the Company shall be extinguished and deemed released unless asserted
by the timely filing of a legal action within such two-year period;
provided, however, that if any shorter period of limitations is
otherwise applicable to any such cause of action such shorter period
shall govern.
11. Amendments, Etc. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both 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
hereof (whether or not similar) nor shall such waiver constitute a
continuing waiver.
12. Subrogation. In the event of payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee, who shall execute all papers required and
shall do everything that may be necessary to secure such rights,
including the execution of such documents necessary to enable the
Company effectively to bring suit to enforce such rights.
13. No Duplication of Payments. The Company shall not be liable under this
Agreement to make any payment in connection with any Claim made against
Indemnitee to the extent Indemnitee has otherwise actually received
payment (under any insurance policy, Charter or By-law provision or
otherwise) of the amounts otherwise indemnifiable hereunder.
14. Binding Effect, Etc. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their
respective successors, assigns, including any direct or indirect
successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Company,
spouses, heirs, executors and personal and legal representatives. This
Agreement shall continue in effect regardless of whether Indemnitee
continues to serve as a director of the Company or of any other
enterprise at the Company's request.
15. Severability. The provisions of this Agreement shall be severable in
the event that any of the provisions hereof (including any provision
within a single section,
6
paragraph or sentence) is held by a court of competent jurisdiction to
be invalid, void or otherwise unenforceable in any respect, and the
validity and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way
impaired and shall remain enforceable to the fullest extent permitted
by law.
16. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware
applicable to contracts made and to be performed in such state without
giving effect to the principles of conflicts of laws.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the ___ day of ___________, 2003.
XXXXX LEMMERZ INTERNATIONAL, INC.
By
--------------------------------
Name:
Title:
----------------------------------
(signature of Director)
7
