INDEMNIFICATION AGREEMENT
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INDEMNIFICATION AGREEMENT dated as of January 16, 2002, by and between
National Steel Corporation, a Delaware corporation (the "Company"), and
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(the "Indemnified Party").
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The Company's Restated Certificate of Incorporation (the "Certificate of
Incorporation") contains exculpatory provisions with respect to the personal
liability of the Company's directors. The Company's Amended and Restated Bylaws
(the "Bylaws") provide the Company's directors and officers with certain rights
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of indemnification and advancement of expenses. The Bylaws and Section 145(f) of
the Delaware General Corporation Law (as amended from time to time, the
"Delaware Law") also permit agreements between the Company and its directors and
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officers providing for indemnification and advancement rights, whether or not
such rights are expressly provided for in the Bylaws or the Delaware Law.
The Indemnified Party is a [director/executive officer] of the Company. In
order to induce the Indemnified Party to continue to serve as a
[director/executive officer], the Company has agreed to enter into this
Agreement granting to the Indemnified Party indemnification and advancement
rights to the fullest extent permitted by the Delaware Law.
NOW, THEREFORE, in consideration of the Indemnified Party's agreement to
continue to serve as a [director/executive officer] of the Company and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
Section 1. Definitions. For purposes of this Agreement:
"Expense" means any cost or expense, including attorneys' fees and
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expenses, experts' fees and expenses, retainers, court costs, transcript costs,
witness fees, travel expenses, duplicating costs, printing and binding costs,
telephone charges, postage, delivery service fees and all other disbursements or
expenses of the types customarily incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, participating in or
being or preparing to be a witness in a Proceeding.
"Independent Counsel" means a law firm, or a member of a law firm, that is
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experienced in matters of corporation law and neither presently is, nor in the
past three years has been, retained to represent (a) the Company, NKK
Corporation, United States Steel Corporation or any of their respective
affiliates, (b) the Indemnified Party or (c) any other party to the Proceeding
giving rise to a claim for indemnification under this Agreement. Notwithstanding
the foregoing, the term "Independent Counsel" will not include any person who,
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under the applicable standards of professional conduct then prevailing, would
have a conflict of interest in representing either the Company or the
Indemnified Party in an action to determine the Indemnified Party's rights under
this Agreement.
"Loss" means any liability, damage, fine, tax, penalty, judgment (including
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pre- and post-judgment interest), amount paid in settlement, obligation or loss.
"Proceeding" means any threatened, pending or completed action, suit,
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arbitration, mediation, alternate dispute resolution mechanism, investigation,
inquiry, administrative hearing or any other actual, threatened or completed
proceeding, whether brought by or in the right of the Company or otherwise, and
whether civil, criminal, administrative or investigative, in which the
Indemnified Party was, is or may be involved as a party, a witness or otherwise
by reason of the fact that the Indemnified Party is or was serving as a
director, officer or employee 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, trust or other enterprise (including an employee
benefit plan), in each case whether or not the Indemnified Party continues to
serve in the same capacity at the time any Expense is incurred or Loss is
suffered for which indemnification or advancement of expenses may be sought
under this Agreement, including any such proceeding based on events or
occurrences prior to the date of this Agreement.
Section 2. Indemnification. The Company agrees to indemnify and hold
harmless the Indemnified Party to the full extent authorized or permitted by the
Delaware Law and the Bylaws. In furtherance of the foregoing, and without
limiting the generality thereof, the Company agrees to indemnify the Indemnified
Party against all Expenses and Losses actually and reasonably incurred by him or
on his behalf in connection with any Proceeding, or any claim, issue or matter
therein, 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, with respect to any
criminal Proceeding, had no reasonable cause to believe his conduct was
unlawful; provided that in connection with any Proceeding by or in the right of
the Company to procure a judgment in its favor, no indemnification against such
Expenses or Losses will be made in respect of any claim, issue or matter in such
Proceeding as to which the Indemnified Party is adjudged to be liable to the
Company, unless and to the extent that the Court of Chancery of the State of the
Delaware or the court in which such Proceeding has been brought or is pending
determines that such indemnification may be made.
Section 3. Indemnification for Expenses as Witness. To the extent the
Indemnified Party is, by reason of the fact that the Indemnified Party is or was
serving as a director, officer or employee 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, trust or other enterprise (including an
employee benefit plan), a witness in any Proceeding to which the Indemnified
Party is not a party, the Company agrees to indemnify the Indemnified Party
against all Expenses actually and reasonably incurred by him or on his behalf in
connection therewith.
Section 4. Advancement of Expenses. The Company agrees to advance all
Expenses actually and reasonably incurred by or on behalf of the Indemnified
Party in connection with any Proceeding within 10 days after the receipt by the
Company of a statement or statements from the Indemnified Party requesting such
advance or advances from time to time, whether prior to or after final
disposition of such Proceeding. Any promissory note required under Section 50 of
the Bylaws to be provided by the Indemnified Party to the Company to evidence
his obligation to repay advances of Expenses should the Indemnified Party be
determined not to be entitled to indemnification will be unsecured and interest
free. If, in accordance with the provisions of Section 5(e), a determination is
made that the Indemnified Party is not entitled to indemnification with respect
to a matter in connection with which the Company has previously advanced
Expenses to the Indemnified Party, the Indemnified Party will reimburse such
amounts within 90 days after receipt of written notice from the Company
requesting such reimbursement; provided that if the Indemnified Party has
commenced or thereafter commences legal proceedings in a court of competent
jurisdiction to secure a determination that the Indemnified Party should be
indemnified under applicable law, any determination made pursuant to Section
5(e) that the Indemnified Party would not be permitted to be indemnified under
applicable law will not be binding and the Indemnified Party will not be
required to reimburse the Company for any advancement of Expenses until a final
judicial determination is made with respect thereto (as to which all rights of
appeal therefrom have been exhausted or lapsed).
Section 5. Indemnification Procedures.
(a) The Indemnified Party agrees to notify the Company promptly in
writing upon being served with any summons, citation, subpoena, complaints,
indictment, information or other document relating to any Proceeding or
matter which may be subject to indemnification covered hereunder. The
failure of the Indemnified Party to so notify the Company will not relieve
the Company of any obligation which it may have to the Indemnified Party
under this Agreement or otherwise.
(b) The Indemnified Party will be entitled to control the defense of
any Proceeding with counsel of his own choosing reasonably acceptable to
the Company, and the Company will cooperate in the defense of such
Proceeding. If the Indemnified Party determines not to control the defense
of any Proceeding with counsel of his own choosing, the Indemnified Party
will promptly so notify the Company in writing and the Company will be
required to assume the defense of such Proceeding using counsel reasonably
acceptable to the Indemnified Party.
(c) The Company will not be liable for any settlement of any
Proceeding by the Indemnified Party effected without the Company's written
consent, which consent will not be unreasonably withheld, delayed or
conditioned. The Company may not settle or compromise any Proceeding to
which the Indemnified Party is a party without the Indemnified Party's
written consent, which consent will not be unreasonably withheld, delayed
or conditioned; provided that the Company will not be required to obtain
the consent of the Indemnified Party to the settlement of any Proceeding
that the Company has undertaken to defend if the Company assumes full and
sole responsibility for such settlement and the settlement grants the
Indemnified Party a complete and unqualified release with respect to all
potential liability.
(d) To obtain indemnification by the Company under this Agreement, the
Indemnified Party must submit to the Company a written request, including
therewith
such documentation and information as is reasonably available to the
Indemnified Party and is reasonably necessary to determine whether and to
what extent the Indemnified Party is entitled to indemnification. The
Corporate Secretary of the Company will, promptly upon receipt of such a
request for indemnification, advise the Board of Directors in writing that
the Indemnified Party has made such request.
(e) Upon written request by the Indemnified Party for indemnification,
a determination, if required by the Bylaws or the Delaware Law, with
respect to the Indemnified Party's entitlement thereto will be made in the
specific case by Independent Counsel in a written opinion to the Board of
Directors, a copy of which will be delivered to the Indemnified Party,
unless the Indemnified Party requests that such determination be made by
the disinterested members of the Board of Directors or the stockholders of
the Company, in which case the determination will be made in the manner
requested by the Indemnified Party. The Indemnified Party will cooperate
with the person or entity making such determination with respect to the
Indemnified Party's entitlement to indemnification, including providing to
such person or entity upon reasonable request with any documentation or
information that is not privileged or otherwise protected from disclosure
and that is reasonably available to the Indemnified Party and reasonably
necessary to such determination. Any Independent Counsel, member of the
Board of Directors or stockholders of the Company will act reasonably and
in good faith in making a determination under the Agreement of the
Indemnified Party's entitlement to indemnification. Any Expenses actually
and reasonably incurred by the Indemnified Party in so cooperating with the
person or entity making such determination will be borne by the Company
(irrespective of the determination as to the Indemnified Party's
entitlement to indemnification) and the Company hereby agrees to indemnify
and hold the Indemnified Party harmless therefrom. The Company agrees to
pay the reasonable fees and expenses of any Independent Counsel making such
determination and to fully indemnify such counsel against any and all
Losses suffered by the Independent Counsel arising out of or relating to
such determination, this Agreement or its engagement pursuant hereto.
(f) If the determination of entitlement to indemnification is to be
made by Independent Counsel, the Independent Counsel will be selected by
the Indemnified Party and the Indemnified Party will give written notice to
the Company advising it of the identity of the Independent Counsel so
selected. The Company may, within 10 days after such written notice of
selection has been given, deliver to the Indemnified Party a written
objection to such selection; provided that such objection may be asserted
only on the ground that the Independent Counsel so selected does not meet
the requirements of "Independent Counsel" as defined in Section 1, and the
objection will set forth with particularity the factual basis of such
assertion. Absent a proper and timely objection, the person so selected by
the Indemnified Party will act as Independent Counsel. If a written
objection is made and substantiated, the Independent Counsel selected may
not serve as Independent Counsel unless and until such objection is
withdrawn or a court has determined that such objection is without merit.
If, within 20 days after submission by the Indemnified Party of a written
request for indemnification pursuant to Section 5(d),
no Independent Counsel has been selected and not objected to, the
Indemnified Party may petition any court of competent jurisdiction for
resolution of any objection which may have been made by the Company to the
Indemnified Party's selection of Independent Counsel or for the appointment
as Independent Counsel of a person selected by the court or by such other
person as the court may designate, and the person with respect to whom all
objections are so resolved or the person so appointed will act as
Independent Counsel under Section 5(e). The Company will pay all reasonable
fees and expenses incident to the procedures set forth in this Section
5(f), regardless of the manner in which such Independent Counsel was
selected or appointed.
(g) If it is determined that the Indemnified Party is entitled to
indemnification, payment to the Indemnified Party will be made within 10
days after such determination.
Section 6. Assumptions and Determination of Good Faith.
(a) In making a determination with respect to entitlement to
indemnification under this Agreement, the person or entity making such
determination will presume that the Indemnified Party is entitled to
indemnification under this Agreement if the Indemnified Party has submitted
a request for indemnification in accordance with Section 5(d) and the
Company will have the burden of proof to overcome that presumption in
connection with any determination contrary to that presumption.
(b) For purposes of any determination of good faith, the knowledge or
actions, or failure to act, of any other director, officer, agent or
employee of the Company will not be imputed to the Indemnified Party for
purposes of determining the right to indemnification under this Agreement.
The provisions of this Section 6(b) will not be deemed to be exclusive or
to limit in any way the other circumstances in which the Indemnified Party
may be deemed to have met the applicable standards of conduct set forth in
this Agreement.
Section 7. Remedies of Indemnified Party.
(a) In the event that (i) advancement of Expenses is not timely made
in accordance with Section 4, (ii) a determination is made pursuant to
Section 5(e) that the Indemnified Party is not entitled to indemnification
under this Agreement or (iii) a determination is made pursuant to Section
5(e) that the Indemnified Party is entitled to indemnification under this
Agreement and payment of indemnification is not made within 10 days after
such determination has been made, the Indemnified Party will be entitled to
an adjudication in an appropriate court of the State of Delaware, or in any
other court of competent jurisdiction, of his entitlement to such
indemnification. Alternatively, the Indemnified Party, at his option, may
seek an award in arbitration to be conducted in Wilmington, Delaware by a
single arbitrator pursuant to the Commercial Arbitration Rules of the
American Arbitration Association. The Indemnified Party will commence such
proceeding seeking an adjudication or an award in arbitration within 120
days following the date on which the Indemnified Party first has the right
to commence such proceeding pursuant to this Section 7(a). The Company will
not oppose the Indemnified Party's right to seek any such adjudication or
award in arbitration.
(b) In the event that a determination has been made pursuant to
Section 5(e) that the Indemnified Party is not entitled to indemnification,
any judicial proceeding or arbitration commenced pursuant to this Section 7
will be conducted in all respects as a de novo trial or arbitration on the
merits and the Indemnified Party will not be prejudiced by reason of that
adverse determination.
(c) If a determination has been made pursuant to Section 5(e) that the
Indemnified Party is entitled to indemnification, the Company will be bound
by such determination in any judicial proceeding or arbitration commenced
pursuant to this Section 7 absent (i) a misstatement by the Indemnified
Party of a material fact, or an omission of a material fact necessary to
make the Indemnified Party's statement not materially misleading, in
connection with the request for indemnification or (ii) a prohibition of
such indemnification under applicable law.
(d) In the event that the Indemnified Party, pursuant to this Section
7, seeks a judicial adjudication of or an award in arbitration to enforce
his rights under, or to recover damages for breach of, this Agreement, the
Indemnified Party will be entitled to recover from the Company, and will be
indemnified by the Company against, any and all Expenses actually and
reasonably incurred by him in such judicial adjudication or arbitration,
but only if he prevails therein. If it is determined in such judicial
adjudication or arbitration that the Indemnified Party is entitled to
receive part but not all of the indemnification sought, the Expenses
incurred by the Indemnified Party in connection with such judicial
adjudication or arbitration will be appropriately prorated.
(e) The Company will indemnify the Indemnified Party against any and
all Expenses and, if requested by the Indemnified Party, will (within 10
days after receipt by
the Company of a written request therefor) advance such Expenses to the
Indemnified Party, which are incurred by the Indemnified Party in
connection with any action brought by the Indemnified Party to recover
under any directors' and officers' liability insurance policies maintained
by the Company, regardless of whether the Indemnified Party ultimately is
determined to be entitled to such insurance recovery.
(f) The Company will be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section 7 that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and will stipulate in any such court or before any such
arbitrator that the Company is bound by all the provisions of this
Agreement.
Section 8. Agreements Relating to Change in Control.
(a) For a period of six years after the date of the consummation of
any transaction involving the Company of a type required to be reported
pursuant to Item 1 of Form 8-K under the Securities Exchange Act of 1934,
as amended (a "Change in Control Transaction"), the Company will cause to
be maintained in effect the policies of directors and officers liability
insurance and fiduciary liability insurance currently maintained by the
Company with respect to claims arising from or relating to actions or
omissions, or alleged actions or omissions, occurring on or prior to the
date of the consummation of such Change in Control Transaction. The Company
may at its discretion substitute for such policies currently maintained by
the Company directors and officers liability insurance and fiduciary
liability insurance policies with reputable and financially sound carriers
providing for no less favorable coverage. Notwithstanding the provisions of
this Section 8(a), the Company will not be obligated to make annual premium
payments with respect to such policies of insurance to the extent such
premiums exceed 300 percent of the annual premiums paid by the Company as
of the date of this Agreement. If the annual premium costs necessary to
maintain such insurance coverage exceed the foregoing amount, the Company
will maintain the most advantageous policies of directors and officers
liability insurance and fiduciary liability insurance obtainable for an
annual premium equal to the foregoing amount.
(b) For a period of six years after the date of the consummation of
any Change in Control Transaction, the Company will maintain in effect such
provisions in its Certificate of Incorporation and Bylaws providing for
exculpation of director liability and indemnification of directors,
officers and employees to the fullest extent permitted from time to time
under the law of the State of Delaware, which provisions will not be
amended, except as required by applicable law or except to make changes
permitted by applicable law that would enlarge the scope of the Indemnified
Party's indemnification rights thereunder. The foregoing will not be deemed
to restrict the right of the Company to modify the provisions of its
Certificate of Incorporation or Bylaws relating to exculpation of director
liability and indemnification of directors, officers and employees with
respect to events or occurrences after the date of the consummation of a
Change in
Control Transaction so long as such modifications do not adversely affect
the rights of the Indemnified Party.
(c) Prior to the consummation of any Change in Control Transaction,
the Company will require the acquiring party or parties to agree in writing
to perform and comply with, or to cause and permit the Company to perform
and comply with, the provisions of this Section 8.
Section 9. Non-Exclusivity.
(a) The rights of indemnification as provided by this Agreement will
not be deemed exclusive of any other rights to which the Indemnified Party
may at any time be entitled under applicable law, the Certificate of
Incorporation or Bylaws of the Company, any agreement, any vote of
stockholders or a resolution of directors, or otherwise. In the event of
any conflict or inconsistency between provisions of this Agreement and
those contained in any other agreement relating to indemnification or
advancement to which the Indemnified Party is or becomes a party (including
the Indemnification Agreement dated as of between the
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Indemnified Party and the Company), the provisions providing for
indemnification and advancement rights that are most favorable to the
Indemnified Party in the applicable circumstances will govern and control.
No amendment, alteration or repeal of this Agreement or of any provision
hereof will limit or restrict any right of the Indemnified Party under this
Agreement in respect of any action taken or omitted by such the Indemnified
Party prior to such amendment, alteration or repeal. To the extent that a
change in the Delaware Law, whether by statute or judicial decision,
permits greater indemnification than would be afforded currently under the
Bylaws and this Agreement, it is the intent of the parties hereto that the
Indemnified Party will enjoy by this Agreement the greater benefits so
afforded by such change. No right or remedy herein conferred is intended to
be exclusive of any other right or remedy, and every other right and remedy
will be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
will not prevent the concurrent or subsequent assertion or employment of
any other right or remedy.
(b) In the event of any payment under this Agreement, the Company will
be subrogated to the extent of such payment to all of the rights of
recovery of the Indemnified Party, who will execute all papers required and
take all action necessary to secure such rights, including execution of
such documents as are necessary to enable the Company to bring suit to
enforce such rights.
(c) The Company will not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable hereunder if and to the extent
that the Indemnified Party has otherwise actually received such payment
under any insurance policy, contract, agreement or otherwise.
Section 10. Duration of Agreement. All agreements and obligations of the
Company contained in this Agreement will continue during the period the
Indemnified Party is serving as a director, officer or employee of the Company,
or is serving at the request of the Company as a director, officer, employee or
agent of another corporation, partnership, trust or other enterprise (including
an employee benefit plan), and will continue thereafter so long as the
Indemnified Party may be subject to any Proceeding (or any proceeding commenced
under Section 7), whether or not he is acting or serving in any such capacity at
the time any Loss or Expense is incurred for which indemnification may be sought
under this Agreement. This Agreement will be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective
successors (including any direct or indirect successor by purchase, merger,
consolidation or otherwise to all or substantially all of the business or assets
of the Company), assigns, spouses, heirs, executors and personal and legal
representatives.
Section 11. Miscellaneous.
(a) No agreement modifying or amending this Agreement or extending or
waiving any provision of this Agreement will be valid or binding unless it
is in writing and is executed and delivered by or on behalf of the party
against which it is sought to be enforced.
(b) Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the
remainder of this Agreement.
(c) This Agreement may be executed simultaneously in two or more
counterparts, any one of which need not contain the signatures of more than
one party, but all such counterparts taken together will constitute one and
the same Agreement.
(d) The descriptive headings of this Agreement are inserted for
convenience only and do not constitute a part of this Agreement.
(e) All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement will be in
writing and will be deemed to have been given when delivered personally to
the recipient or when sent to the recipient by telecopy (receipt
confirmed), one business day after the date when sent to the recipient by
reputable express courier service (charges prepaid) or three business days
after the date when mailed to the recipient by certified or registered
mail, return receipt requested and postage prepaid. Such notices, demands
and other communications will be sent to the Company and the Indemnified
Party at the addresses indicated below:
If to the Company: National Steel Corporation
0000 Xxxxxx Xxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxx 00000-0000
Attention: Corporate Secretary
If to the Indemnified Party:
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or to such other address or to the attention of such other party as
the recipient party has specified by prior written notice to the sending
party.
(f) The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent and no rule
of strict construction will be applied against any party. The use of the
word "including" in this Agreement means "including without limitation" and
is intended by the parties to be by way of example rather than limitation.
(g) ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY AND
INTERPRETATION OF THIS AGREEMENT WILL BE GOVERNED BY THE INTERNAL LAW, AND
NOT THE LAW OF CONFLICTS, OF THE STATE OF DELAWARE.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
NATIONAL STEEL CORPORATION
By
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Vice President, General Counsel
and Secretary
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[Name of Indemnified Party]