Exhibit 10(k)
INDEMNIFICATION AGREEMENT
This Agreement made and entered into effective the ____day of _____, ____,
by and between CHEMFIRST INC., a Mississippi corporation, (hereinafter "the
COMPANY"), and ___________________________, (hereinafter "the INDEMNITEE").
WHEREAS, competent and experienced persons are becoming more reluctant to
serve as directors or officers of publicly-held corporations, or as directors or
officers of their subsidiaries or affiliates, unless they are provided with
adequate protection against claims asserted against them for their activities on
behalf of such corporations, generally through insurance and indemnification;
and
WHEREAS, uncertainty in the interpretation of statutes, regulations, case
law and public policies relating to indemnification of corporate directors and
officers makes difficult an adequate and reliable assessment of the risks to
which such directors and officers may be exposed particularly in light of the
proliferation of lawsuits against directors and officers; and
WHEREAS, the Board of Directors of the COMPANY, based upon its business
experience, has concluded that the continuation of present trends in litigation
against corporate directors and officers inevitably makes it more difficult for
the COMPANY to attract and retain directors and officers of the highest degree
of competence committed to the active and effective direction and supervision of
the business of the COMPANY, its subsidiaries, or affiliates, and the Board
deems such consequences to be so detrimental to the best interests of the
COMPANY's stockholders that it has concluded that the COMPANY should act to
provide its directors, officers and certain officers of its subsidiaries with
enhanced protection against inordinate risks attendant with their positions to
assure that the most capable persons otherwise available will be attracted to
such positions and, in such connection, said Board of Directors has further
concluded that it is reasonable, prudent and necessary for the COMPANY to
obligate itself contractually to indemnify its directors, officers, and certain
officers of its subsidiaries to the maximum extent permitted by applicable law,
for expenses and liabilities that might be incurred by such directors and
officers in connection with claims lodged against them for their decisions and
actions as directors or officers; and
WHEREAS, the Mississippi Business Corporation Act authorizes a corporation
to indemnify any director or officer or former director or officer or any person
who may have served at its request as a director or officer in another
corporation in which it owns shares of capital stock against expenses actually
and reasonably incurred by him in connection with any defense of any action,
suit or proceeding, civil, criminal, administrative, arbitrative or
investigative, in which he is made a party by reason of having been such a
director or officer, with certain exceptions set forth therein; and
WHEREAS, the Mississippi Business Corporation Act also authorizes the
corporation to obligate itself in advance to provide indemnification to the
fullest extent permitted by law by a provision in its Articles of Incorporation
or by any Bylaw or resolution adopted or contract approved by its Board of
Directors or by its stockholders after notice; and
WHEREAS, Article XI of the COMPANY's Amended and Restated Articles of
Incorporation limits certain personal liabilities of directors, and further,
Article VII "Indemnification" of the COMPANY's Bylaws provide for indemnifying
directors, officers and employees (such provisions attached hereto as Exhibit A
(hereinafter, the "Indemnification Policy")); and
WHEREAS, the COMPANY desires INDEMNITEE to serve or continue to serve as a
director or officer of the COMPANY or as a director or officer of a subsidiary,
of which he has been or is serving, or will serve, at the request of the
COMPANY, free from undue concern for unpredictable, inappropriate or
unreasonable claims for damages by reason of his being a director or officer of
the COMPANY or of a subsidiary; and
WHEREAS, INDEMNITEE is willing to serve, or to continue to serve, or to
take on additional service for, the COMPANY or its subsidiaries in such
capacities if he be indemnified as provided for herein;
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the COMPANY and INDEMNITEE do hereby covenant and agree that
the INDEMNITEE shall be indemnified to the fullest extent permitted by
applicable law and the Indemnification Policy as follows:
1. Agreement to Serve. INDEMNITEE will serve and continue to serve at
the will of the COMPANY as a director or officer of the COMPANY or
any other company, partnership, joint venture, trust, employee
benefit plan at the request of the COMPANY, faithfully and to the
best of his ability so long as he is duly elected and qualified in
accordance with the provisions of the Bylaws; provided that
INDEMNITEE may at any time and for any reason resign from such
position (subject to any contractual obligations which INDEMNITEE
shall have assumed apart from this Agreement) and provided further
that the COMPANY shall have no obligation to continue the INDEMNITEE
in any such position.
2. Indemnification.
(a) The COMPANY shall, as promptly as practicable, indemnify
to the fullest extent permitted by applicable law the INDEMNITEE as
a director or officer of the COMPANY or any other company,
partnership, joint venture, trust, employee benefit plan or other
enterprise for which INDEMNITEE is or was serving at the request of
the COMPANY, against any and all liabilities, expenses (including
attorney's fees), judgments,
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fines, penalties and amounts paid in settlement (including all
interest, assessments and other charges paid or payable in
connection with the foregoing), that may actually and reasonably be
incurred by the INDEMNITEE in connection with or resulting from or
arising out of any claim, action, suit or proceeding (actual or
threatened), in which the INDEMNITEE may be involved as a party or
otherwise, by reason of serving in his capacity as a director or
officer whether before or after adoption of this Agreement provided
that such INDEMNITEE (i) in the case of a former or present director
(A) is wholly successful, on the merits or otherwise, with respect
thereto, or (B) acted in good faith and, in the case of conduct in
his official capacity with the COMPANY, in a manner that such
INDEMNITEE reasonably believed to be in the best interests of the
COMPANY, or, in all other cases, not opposed to, the best interests
of the COMPANY, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe that such conduct was
unlawful or (ii) in the case of a former or present officer who is
not also a director or is also a director but is involved in the
proceeding only in his capacity as an officer, (A) meets the
standards of clause (i)(A) or (B) above and (B) has not been found
liable for (I) receipt of a financial benefit to which he is not
entitled, (II) an intentional infliction of harm on the COMPANY or
its shareholders, or (III) an intentional violation of criminal law.
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, in itself, create a presumption that the
INDEMNITEE did not meet the standard of conduct described above.
(b) With respect to any completed action or suit by or in the
right of the COMPANY to procure a judgment in its favor, any
INDEMNITEE otherwise entitled to indemnification shall not be
entitled to indemnification, except for reasonable expenses incurred
in connection with the proceeding if it is determined in accordance
with Paragraphs 2(d), 2(e) or 2(h), as applicable, that the
INDEMNITEE has met the relevant standard of conduct in Paragraph
(a), unless and only to the extent that the court in which the
action or suit was brought, or another court of competent
jurisdiction, shall determine upon application that either the
INDEMNITEE is entitled to indemnification or an advance of expenses
pursuant to applicable law or, in view of all circumstances of the
case, such INDEMNITEE is fairly and reasonably entitled to indemnity
for such liabilities and expenses which such court shall deem to be
proper.
(c) To the extent that the INDEMNITEE has been successful on
the merits or otherwise in the defense of any action, suit or
proceeding, or any claim, issue or matter therein, such INDEMNITEE
shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by such person in connection
therewith.
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(d) Indemnification hereunder shall be made by the COMPANY
only after a determination that it is proper in the circumstances
because the INDEMNITEE met the applicable standard of conduct in
Paragraph (a) above. That determination, subject to Paragraphs 2(e)
and 2(h) below, shall be made (i) by the Board of Directors by a
majority vote of a quorum consisting of directors not at the time
parties to or otherwise a subject of the proceeding or having a
familial, financial, professional or employment relationship with
the director whose indemnification or advance for expenses is the
subject of the decision being made, which relationship would, in the
circumstances, reasonably be expected to exert an influence on the
director's judgment when voting on the decision being made (each
such director meeting the foregoing criteria, a "Disinterested
Director"), or by a duly authorized committee thereof consisting of
two or more Disinterested Directors, (ii) by special legal counsel
selected in the manner prescribed in clause (i) or if such counsel
cannot be so selected, by special counsel selected by a majority
vote of the entire Board of Directors, or (iii) by the stockholders,
but shares owned by or voted under the control of directors who at
the time do not qualify as a Disinterested Director, may not be
voted in the determination.
(e) The COMPANY agrees that if there is a Change in Control
(as defined below) of the COMPANY then with respect to all matters
thereafter arising concerning the rights of the INDEMNITEE to
indemnity payments, including the advancement of expenses, under
this Agreement or any other agreement or COMPANY Bylaws now or
hereafter in effect, 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 and expenses of
the independent legal counsel referred to above and to indemnify
fully 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. 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 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
45% or more of the total voting power represented by the COMPANY's
then outstanding securities which vote generally in the election of
directors (the "Voting Securities"), (ii)
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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 50% 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.
(f) The INDEMNITEE seeking indemnity hereunder must promptly
notify the Board of Directors of the COMPANY of all relevant facts
after becoming aware of a claim or potential claim, and except in
the case of a claim by or on behalf of the COMPANY, must permit the
COMPANY, at its option, to participate in and jointly control the
defense of such claim and any resulting suit or action.
(g) Expenses incurred in connection with any claim, action,
suit or proceeding, actual or threatened, other than a direct action
by the COMPANY against the INDEMNITEE (1) may, prior to a Change in
Control, be paid by the COMPANY in advance of the final disposition
of such claim, action, suit or proceeding if authorized by (i) the
Board of Directors by a majority vote of a quorum consisting of
Disinterested Directors or by a duly authorized committee thereof
consisting of two or more Disinterested Directors, (ii) special
legal counsel selected in the manner prescribed in (i) above or if
such counsel cannot be so selected, by special counsel selected by a
majority vote of the entire Board of Directors or (iii) by the
stockholders, but shares owned by or voted under the control of
directors who at the time do not qualify as a Disinterested Director
may not be voted on the determination and upon receipt of (i) a
written affirmation by the INDEMNITEE of his good faith belief that
he has met the relevant standard of conduct described in Paragraph
2(a) above or that the proceeding involves conduct for which
liability has been eliminated under a provision of the COMPANY's
Amended and Restated Articles of Incorporation and (ii) a written
undertaking by or on behalf of the
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INDEMNITEE to repay such amount if he is not wholly successful on
the merits or otherwise in his defense which would entitle him to
mandatory indemnification under Paragraph 2(c) hereof and unless it
shall ultimately be determined in accordance with Paragraphs 2(d) or
2(h) that INDEMNITEE has not met the applicable standard of conduct
described in Paragraph 2(a) hereof or (2) shall, after a Change in
Control, be paid by the COMPANY in advance of the final disposition
of such claim, action, suit or proceeding upon receipt of (i) a
written affirmation by the INDEMNITEE of his good faith belief that
he has met the relevant standard of conduct described in Paragraph
2(a) above or that the proceeding involves conduct for which
liability has been eliminated under a provision of the COMPANY's
Amended and Restated Articles of Incorporation and (ii) a written
undertaking by or on behalf of the INDEMNITEE to repay such amounts
if he is not wholly successful on the merits or otherwise in his
defense which would entitle him to mandatory indemnification under
Paragraph 2(c) hereof and unless it shall ultimately be determinated
in accordance with Paragraphs 2(e) or 2(h) that INDEMNITEE has not
met the applicable standard of conduct described in Paragraph 2(a)
hereof.
(h) The applicable party reviewing the claim for
indemnification pursuant to Paragraph 2(d)(i), (ii) or (iii) or,
pursuant to Paragraph 2(e) or pursuant to Paragraph 2(g)(1) shall be
referred to herein as the "Reviewing Party." Any determination by
the applicable Reviewing Party that the INDEMNITEE is not (i)
entitled to an advancement of expenses pursuant to Paragraph 2(g) or
(ii) entitled to indemnification pursuant to Paragraph 2(d) shall
not become binding 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 been no determination by the
applicable Reviewing Party or if the Reviewing Party determines that
the INDEMNITEE substantively would not be permitted to be
indemnified in whole or in part under applicable law or would not be
entitled to the advancement of expenses, the INDEMNITEE shall have
the right to commence litigation in any court in the State of
Mississippi 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.
3. Enforcement.
(a) The COMPANY expressly confirms and agrees that it has
entered into this Agreement and assumed the obligations imposed on
the COMPANY to induce the INDEMNITEE to continue as a director or
officer of the COMPANY or of any other corporation, company,
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partnership, joint venture, trust, employee benefit plan, or other
enterprise for which INDEMNITEE was or is serving at the request of
the COMPANY, and acknowledges that the INDEMNITEE is relying upon
this Agreement in continuing in such capacity or capacities.
(b) The COMPANY shall reimburse the INDEMNITEE for all the
INDEMNITEE's costs and expenses incurred in connection with
successfully establishing his right to indemnification under this
Agreement in whole and in part.
4. Exclusivity. The indemnification provided hereunder shall not be
deemed exclusive of, or diminish or otherwise restrict, any other
rights to which those indemnified may be entitled under any
provision of law, the Articles of Incorporation or Bylaws of the
COMPANY, this Agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity
and as to action in another capacity referred to in Paragraph 2 of
this Agreement and shall continue after INDEMNITEE has ceased to
occupy such position or positions.
5. Multiplicity of Claims. If several claims, issues or courses of
action are involved, the INDEMNITEE may be entitled to
indemnification as to some matters even though such INDEMNITEE is
not entitled to indemnification as to other matters.
6. Purchase of Insurance. The COMPANY may purchase and maintain
insurance on behalf of any INDEMNITEE covered hereunder where
insurance is obtainable, against any liability, or part thereof,
asserted against such INDEMNITEE and incurred by such INDEMNITEE in
any capacity or arising out of such INDEMNITEE's status as such,
whether or not the COMPANY would have the power to indemnify
INDEMNITEE against such liability hereunder or otherwise.
7. Severability. If any of the provisions of this Agreement shall be
held to be invalid, illegal or unenforceable for any reason
whatsoever, the validity, legality or enforceability of the
remaining provisions of this Agreement (including without
limitation, all portions of any paragraph of this Agreement
containing any such provision held to be invalid, illegal or
unenforceable) shall not in anyway be affected or impaired thereby,
and to the fullest extent possible, the provisions of this Agreement
(including, without limitation, all portions of any paragraph of
this Agreement containing such provision to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or
unenforceable) shall be construed so as to give effect the intent
manifested by the provision held invalid, illegal or unenforceable.
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8. Binding Effect. This Agreement shall be binding upon the INDEMNITEE
and the COMPANY, its successors and assigns, (including any
transferees of all or substantially all of its assets and any
successor by merger or operation of law), and shall inure to the
benefit of the INDEMNITEE, his heirs, personal representatives,
estate or assigns.
9. Amendment and Termination. No amendments, modifications,
terminations or cancellations of this Agreement shall be effective
unless signed in writing by both the INDEMNITEE and the COMPANY.
10. Headings. The headings of the paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to constitute
a part of this Agreement or to affect the construction thereof.
11. Change in Law. To the extent that a change in the Mississippi
Business Corporation Act (whether by statute or judicial decision)
permits greater indemnification by agreement than would be afforded
currently under the COMPANY's Bylaws and this Agreement, it is the
intent of the parties hereto that the INDEMNITEE shall enjoy by this
Agreement the greater benefits so afforded by such change.
12. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Mississippi
applicable to contracts made and to be performed in such state
without giving effect to the principles of conflicts of laws.
13. Disputes. All claims and controversies arising out of or in
connection with this Agreement shall be subject to binding
arbitration by a single arbitrator in accordance with the commercial
arbitration rules of the American Arbitration Association ("AAA") or
the existing Rules of Practice and Procedures of the Judicial
Arbitration and Mediation Services, Inc. ("JAMS"). Any arbitration
shall occur in Jackson, Mississippi and any judgment on the award
rendered in such arbitration shall be entered in any state or
federal court having jurisdiction. The party filing the arbitration
shall have the right to select either AAA or JAMS.
14. Notification. The INDEMNITEE agrees to notify the COMPANY promptly
in writing upon being served any citation, complaint, indictment or
other document covered hereunder, either civil or criminal.
15. Notices. All notices, requests, demand and other communication
hereunder shall be in writing and shall be deemed to have been duly
given if delivered by hand and receipted for by the party to whom
said notice or other communication shall be directed, or by mail
certified or registered with postage prepaid on the third business
day after which so is mailed.
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If to INDEMNITEE: ___________________________
___________________________
___________________________
If to COMPANY: J. Xxxxx Xxxxxx, General Counsel
ChemFirst Inc.
Xxxx Xxxxxx Xxx 0000
Xxxxxxx, XX 00000-0000
IN WITNESS WHEREOF, the parties have caused this Agreement to be entered
into on the day and year first above written.
CHEMFIRST INC. INDEMNITEE
By:________________________ _______________________
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