EXHIBIT 10.9
INDEMNITY AGREEMENT
THIS AGREEMENT is made as of March 8, 1999 by and between
Reynolds Metals Company, a Delaware corporation ("Company"), and
(Name) ("Indemnitee"), (OffDir) of the Company.
RECITALS
WHEREAS, highly competent persons have become more reluctant
to serve publicly-held corporations as directors or in other
capacities unless they are provided with adequate protection
through insurance or adequate indemnification against inordinate
risks of claims and actions against them arising out of their
service to and activities on behalf of the Company; and
WHEREAS, the Board of Directors of the Company (the "Board")
has determined that, in order to attract and retain qualified
individuals, the Company will attempt to maintain on an ongoing
basis, at its sole expense, liability insurance to protect
persons serving the Company and its subsidiaries from certain
liabilities. Although the furnishing of such insurance has been
a customary and widespread practice among United States-based
corporations and other business enterprises, the Company believes
that, given current market conditions and trends, such insurance
may be available to it in the future only at higher premiums and
with more exclusions. At the same time, directors, officers, and
other persons in service to corporations or business enterprises
are being increasingly subjected to expensive and time-consuming
litigation relating to, among other things, matters that
traditionally would have been brought only against the Company or
business enterprise itself. The By-laws of the Company require
indemnification of the officers and directors of the Company.
Indemnitee may also be entitled to indemnification pursuant to
the Delaware General Corporation Law ("DGCL"). The By-laws and
the DGCL expressly provide that the indemnification provisions
set forth therein are not exclusive, and thereby contemplate that
contracts may be entered into between the Company and members of
the board of directors and officers with respect to
indemnification of directors and officers.
WHEREAS, the uncertainties relating to such insurance and to
indemnification have increased the difficulty of attracting and
retaining such persons; and
WHEREAS, the Board has determined that the increased
difficulty in attracting and retaining such persons is
detrimental to the best interests of the Company's stockholders
and that the Company should act to assure such persons that there
will be increased certainty of such protection in the future; and
WHEREAS, it is reasonable, prudent and necessary for the
Company contractually to obligate itself to indemnify, and to
advance expenses on behalf of, such persons to the fullest extent
permitted by applicable law so that they will serve or continue
to serve the Company free from undue concern that they will not
be so indemnified; and
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WHEREAS, this Agreement is a supplement to and in
furtherance of the By-laws of the Company and any resolutions
adopted pursuant thereto, and shall not be deemed a substitute
therefor, nor to diminish or abrogate any rights of Indemnitee
thereunder; and
WHEREAS, Indemnitee does not regard the protection available
under the Company's By-laws and insurance adequate in the present
circumstances, and may not be willing to serve as an officer or
director without adequate protection, and the Company desires
Indemnitee to serve in such capacity. Indemnitee is willing to
serve, continue to serve and to take on additional service for or
on behalf of the Company on the condition that Indemnitee be so
indemnified;
NOW, THEREFORE, in consideration of the premises and the
covenants contained herein, the Company and Indemnitee do hereby
covenant and agree as follows:
1. Services to the Company. Indemnitee will serve or
continue to serve, at the will of the Company, as an officer or
director of the Company for so long as Indemnitee is duly elected
or appointed or until Indemnitee tenders Indemnitee's resignation
in writing.
2. Definitions. As used in this Agreement:
(a) A "Change in Control" shall be deemed to occur
upon the earliest to occur after the date of this Agreement of
any of the following events:
(i) Acquisition of Stock by Third Party. Any
Person (as defined below) is or becomes the Beneficial Owner (as
defined below), directly or indirectly, of securities of the
Company representing fifteen percent (15%) or more of the
combined voting power of the Company's then outstanding
securities;
(ii) Change in Board of Directors. During any
period of two (2) consecutive years (not including any period
prior to the execution of this Agreement), individuals who at the
beginning of such period constitute the Board, and any new
director (other than a director designated by a person who has
entered into an agreement with the Company to effect a
transaction described in Sections 2(a)(i), 2(a)(iii) or 2(a)(iv))
whose election by the Board or nomination for election by the
Company's shareholders was approved by a vote of at least two-
thirds 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 least a majority of the members of the
Board;
(iii) Corporate Transactions. The effective date
of a merger or consolidation of the Company with any other
entity, other than a merger or consolidation which would result
in the voting securities of the Company outstanding immediately
prior to such merger or consolidation continuing to represent
(either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than 51% of the
combined voting power of the voting securities of the surviving
entity outstanding immediately after such merger or consolidation
and with the power to elect at least a majority of the board of
directors or other governing body of such surviving entity;
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(iv) Liquidation. The approval by the
shareholders of the Company of a complete liquidation of the
Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets; and
(v) Other Events. There occurs any other event
of a nature that would be required to be reported in response to
Item 6(e) of Schedule 14A of Regulation 14A (or a response to any
similar item on any similar schedule or form) promulgated under
the Exchange Act (as defined below), whether or not the Company
is then subject to such reporting requirement.
(vi) Certain Definitions. For purposes of this
Section 2(a), the following terms shall have the following
meanings:
(A) "Exchange Act" shall mean
the Securities Exchange Act of
1934, as amended.
(B) "Person" shall have the
meaning as set forth in Sections
13(d) and 14(d) of the Exchange
Act; provided, however, that Person
shall exclude (i) the Company, (ii)
any trustee or other fiduciary
holding securities under an
employee benefit plan of the
Company, and (iii) any corporation
owned, directly or indirectly, by
the shareholders of the Company in
substantially the same proportions
as their ownership of stock of the
Company.
(C) "Beneficial Owner" shall
have the meaning given to such term
in Rule 13d-3 under the Exchange
Act; provided, however, that
Beneficial Owner shall exclude any
Person otherwise becoming a
Beneficial Owner by reason of the
shareholders of the Company
approving a merger of the Company
with another entity.
(b) "Corporate Status" describes the status of a
person who is or was a director, officer, employee or agent of
the Company or of any other corporation, partnership or joint
venture, trust, employee benefit plan or other enterprise which
such person is or was serving at the request of the Company.
(c) "Disinterested Director" means a director of the
Company who is not and was not a party to the Proceeding in
respect of which indemnification is sought by Indemnitee.
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(d) "Enterprise" shall mean the Company and any other
corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise of which Indemnitee is or was serving at
the request of the Company as a director, officer, employee,
agent or fiduciary.
(e) "Expenses" shall include all reasonable attorneys'
fees, retainers, court costs, transcript costs, fees of experts,
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, being or preparing to be a
witness in, or otherwise participating in, a Proceeding.
Expenses, however, shall not include amounts paid in settlement
by Indemnitee or the amount of judgments or fines against
Indemnitee.
(f) As to the Indemnitee, "good faith" shall mean
Indemnitee having 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, with respect to any criminal Proceeding,
having had no reasonable cause to believe Indemnitee's conduct
was unlawful.
(g) Reference to "other enterprise" shall include
employee benefit plans; references to "fines" shall include any
excise tax assessed with respect to any employee benefit plan;
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 a
person who acted in good faith and in a manner Indemnitee
reasonably believed to be in the best interests of the
participants and beneficiaries of an employee benefit plan shall
be deemed to have acted in manner "not opposed to the best
interests of the Company" as referred to in this Agreement.
(h) The term "Proceeding" shall include any
threatened, pending or completed action, suit, arbitration,
alternate dispute resolution mechanism, investigation, inquiry,
administrative hearing or any other actual, threatened or
completed proceeding, whether brought in the right of the Company
or otherwise and whether of a civil, criminal, administrative or
investigative nature, in which Indemnitee was, is or will be
involved as a party or otherwise by reason of the fact that
Indemnitee is or was a director or officer of the Company, by
reason of any action taken by Indemnitee or of any action on
Indemnitee's part while acting as director or officer of the
Company, or by reason of the fact that Indemnitee 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, in each case whether or not
serving in such capacity at the time any liability or expense is
incurred for which indemnification, reimbursement, or advancement
of expenses can be provided under this Agreement.
(i) "Independent Counsel" means a law firm, or a
member of a law firm, that is experienced in matters of
corporation law and neither presently is, nor in the past five
years has been, retained to represent: (i) the Company or
Indemnitee in any matter material to either such party (other
than with respect to matters concerning the Indemnitee under this
Agreement, or of other indemnitees under similar indemnification
agreements), or (ii) any other party to the
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Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term "Independent Counsel"
shall not include any person who, under the applicable standards
of professional conduct then prevailing, would have a conflict
of interest in representing either the Company or Indemnitee in
an action to determine Indemnitee's rights under this Agreement.
The Company agrees to pay the reasonable fees and expenses of
the Independent Counsel referred to above and to fully indemnify
such counsel against any and all Expenses, claims, liabilities
and damages arising out of or relating to this Agreement or its
engagement pursuant hereto.
3. Indemnity in Third-Party Proceedings. The Company
shall indemnify Indemnitee in accordance with the provisions of
this Section 3 if Indemnitee is, or is threatened to be made, a
party to or a participant in any Proceeding, other than a
Proceeding by or in the right of the Company to procure a
judgment in its favor. Pursuant to this Section 3, Indemnitee
shall be indemnified against all Expenses, judgments, fines and
amounts paid in settlement actually and reasonably incurred by
Indemnitee or on Indemnitee's behalf in connection with such
Proceeding or any claim, issue or matter therein, 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, in the case of a criminal proceeding had no
reasonable cause to believe that Indemnitee's conduct was
unlawful.
4. Indemnity in Proceedings by or in the Right of the
Company. The Company shall indemnify Indemnitee in accordance
with the provisions of this Section 4 if Indemnitee is, or is
threatened to be made, a party to or a participant in any
Proceeding by or in the right of the Company to procure a
judgment in its favor. Pursuant to this Section 4, Indemnitee
shall be indemnified against all Expenses actually and reasonably
incurred by Indemnitee or on Indemnitee's behalf in connection
with such Proceeding or any claim, issue or matter therein, 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. No indemnification for Expenses shall be made
under this Section 4 in respect of any claim, issue or matter as
to which Indemnitee shall have been finally adjudged by a court
to be liable to the Company, unless and only to the extent that
any court in which the Proceeding 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 indemnification.
5. Indemnification for Expenses of a Party Who is Wholly
or Partly Successful. Notwithstanding any other provisions of
this Agreement, to the extent that Indemnitee is a party to (or a
participant in) and is successful, on the merits or otherwise, in
any Proceeding or in defense of any claim, issue or matter
therein, in whole or in part, the Company shall indemnify
Indemnitee against all Expenses actually and reasonably incurred
by Indemnitee in connection therewith. If Indemnitee is not
wholly successful in such Proceeding but is successful, on the
merits or otherwise, as to one or more but less than all claims,
issues or matters in such Proceeding, the Company shall indemnify
Indemnitee against all Expenses actually and reasonably incurred
by Indemnitee or on Indemnitee's behalf in connection with each
successfully resolved claim, issue or matter. If the Indemnitee
is not wholly successful in such Proceeding, the Company also
shall indemnify Indemnitee against all Expenses reasonably
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incurred in connection with a claim, issue or matter related to
any claim, issue, or matter on which the Indemnitee was
successful. For purposes of this Section and without limitation,
the termination of any claim, issue or matter in such a
Proceeding by dismissal, with or without prejudice, shall be
deemed to be a successful result as to such claim, issue or
matter.
6. Indemnification For Expenses of a Witness.
Notwithstanding any other provision of this Agreement, to the
extent that Indemnitee is, by reason of Indemnitee's Corporate
Status, a witness in any Proceeding to which Indemnitee is not a
party, Indemnitee shall be indemnified against all Expenses
actually and reasonably incurred by Indemnitee or on Indemnitee's
behalf in connection therewith.
7. Additional Indemnification.
(a) Notwithstanding any limitation in Sections 3, 4,
or 5, the Company shall indemnify Indemnitee to the fullest
extent permitted by law if Indemnitee is a party to or threatened
to be made a party to any Proceeding (including a Proceeding by
or in the right of the Company to procure a judgment in its
favor) against all Expenses, judgments, fines and amounts paid in
settlement actually and reasonably incurred by Indemnitee in
connection with the Proceeding. No indemnity shall be made under
this Section 7(a) on account of Indemnitee's conduct which
constitutes a breach of Indemnitee's duty of loyalty to the
Company or its shareholders or is an act or omission not in good
faith or which involves intentional misconduct or a knowing
violation of the law.
(b) Notwithstanding any limitation in Sections 3, 4, 5
or 7(a), the Company shall indemnify Indemnitee to the fullest
extent permitted by law if Indemnitee is a party to or threatened
to be made a party to any Proceeding (including a Proceeding by
or in the right of the Company to procure a judgement in its
favor) against all Expenses, judgments, fines and amounts paid in
settlement actually and reasonably incurred by Indemnitee in
connection with the Proceeding.
(c) For purposes of Sections 7(a) and 7(b), the
meaning of the phrase "to the fullest extent permitted by law"
shall include, but not be limited to:
(i) to the fullest extent permitted by the
provision of the Act that authorizes or contemplates additional
indemnification by agreement, or the corresponding provision of
any amendment to or replacement of the Act, and
(ii) to the fullest extent authorized or permitted
by any amendments to or replacements of the Act adopted after the
date of this Agreement that increase the extent to which a
corporation may indemnify its officers and directors.
8. Exclusions. Notwithstanding any provision in this
Agreement, the Company shall not be obligated under this
Agreement to make any indemnity in connection with any claim made
against Indemnitee:
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(a) for which payment has actually been made to or on
behalf of Indemnitee under any insurance policy or other
indemnity provision, except with respect to any excess beyond the
amount paid under any insurance policy or other indemnity
provision;
(b) for an accounting of profits made from the
purchase and sale (or sale and purchase) by Indemnitee of
securities of the Company within the meaning of Section 16(b) of
the Securities Exchange Act of 1934, as amended, or similar
provisions of state statutory law or common law; or
(c) in connection with any Proceeding (or part of any
Proceeding) initiated by Indemnitee prior to a Change in Control,
or any Proceeding initiated by Indemnitee against the Company or
its directors, officers, employees or other indemnitees prior to
a Change in Control, unless (i) the Company is expressly required
by law to make the indemnification, (ii) the Company provides the
indemnification, in its sole discretion, pursuant to the powers
vested in the Company under applicable law, (iii) Indemnitee
initiated the Proceeding pursuant to Section 13 of this Agreement
and Indemnitee is successful in whole or in part in the
Proceeding, or (iv) the Proceeding was authorized by the Board of
Directors of the Company.
9. Advances of Expenses. Notwithstanding any provision
of this Agreement to the contrary, the Company shall advance the
expenses incurred by Indemnitee in connection with any Proceeding
within 30 days after the receipt by the Company of a statement or
statements requesting such advances from time to time, whether
prior to or after final disposition of any Proceeding. Advances
shall be unsecured and interest free. Advances shall be made
without regard to Indemnitee's ability to repay the expenses and
without regard to Indemnitee's ultimate entitlement to
indemnification under the other provisions of this Agreement.
Advances shall include any and all reasonable Expenses incurred
pursuing an action to enforce this right of advancement,
including Expenses incurred preparing and forwarding statements
to the Company to support the advances claimed. The Indemnitee
shall qualify for advances solely upon the execution and delivery
to the Company of an undertaking providing that the Indemnitee
undertakes to repay the advance to the extent that it is
ultimately determined that Indemnitee is not entitled to be
indemnified by the Company.
10. Procedure for Notification and Defense of Claim.
(a) To obtain indemnification under this Agreement,
Indemnitee shall submit to the Company a written request,
including therein or therewith such documentation and information
as is reasonably available to Indemnitee and is reasonably
necessary to determine whether and to what extent Indemnitee is
entitled to indemnification, not later than thirty (30) days
after receipt by Indemnitee of notice of the commencement of any
Proceeding. The omission to notify the Company will not relieve
the Company from any liability which it may have to Indemnitee
otherwise than under this Agreement. The Secretary of the
Company shall, promptly upon receipt of such a request for
indemnification, advise the Board in writing that Indemnitee has
requested indemnification.
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(b) The Company will be entitled to participate in the
Proceeding at its own expense.
11. Procedure Upon Application for Indemnification.
(a) Upon written request by Indemnitee for
indemnification pursuant to the first sentence of Section 10(a),
a determination, if required by applicable law, with respect to
Indemnitee's entitlement thereto shall be made in the specific
case: (i) if a Change in Control shall have occurred, by
Independent Counsel in a written opinion to the Board of
Directors, a copy of which shall be delivered to Indemnitee; or
(ii) if a Change in Control shall not have occurred, (A) by a
majority vote of the Disinterested Directors, even though less
than a quorum of the Board, or (B) if there are no such
Disinterested Directors or, if such Disinterested Directors so
direct, by Independent Counsel in a written opinion to the Board,
a copy of which shall be delivered to Indemnitee or (C) if so
directed by the Board, by the stockholders of the Company; and,
if it is so determined that Indemnitee is entitled to
indemnification, payment to Indemnitee shall be made within ten
(10) days after such determination. Indemnitee shall cooperate
with the person, persons or entity making such determination with
respect to Indemnitee's entitlement to indemnification, including
providing to such person, persons or entity upon reasonable
advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is
reasonably available to Indemnitee and reasonably necessary to
such determination. Any costs or expenses (including attorneys'
fees and disbursements) incurred by Indemnitee in so cooperating
with the person, persons or entity making such determination
shall be borne by the Company (irrespective of the determination
as to Indemnitee's entitlement to indemnification) and the
Company hereby indemnifies and agrees to hold Indemnitee harmless
therefrom.
(b) In the event the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to
Section 11(a) hereof, the Independent Counsel shall be selected
as provided in this Section 11(b). If a Change in Control shall
not have occurred, the Independent Counsel shall be selected by
the Board of Directors, and the Company shall give written notice
to Indemnitee advising Indemnitee of the identity of the
Independent Counsel so selected. If a Change in Control shall
have occurred, the Independent Counsel shall be selected by
Indemnitee (unless Indemnitee shall request that such selection
be made by the Board of Directors, in which event the preceding
sentence shall apply), and Indemnitee shall give written notice
to the Company advising it of the identity of the Independent
Counsel so selected. In either event, Indemnitee or the Company,
as the case may be, may, within 10 days after such written notice
of selection shall have been given, deliver to the Company or to
Indemnitee, as the case may be, a written objection to such
selection; provided, however, 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 2 of this Agreement, and the objection shall set forth
with particularity the factual basis of such assertion. Absent a
proper and timely objection, the person so selected shall act as
Independent Counsel. If such written objection is so made and
substantiated, the Independent Counsel so 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 Indemnitee
of a written
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request for indemnification pursuant to Section 10(a) hereof,
no Independent Counsel shall have been selected and not objected
to, either the Company or Indemnitee may petition a court of
competent jurisdiction for resolution of any objection which
shall have been made by the Company or Indemnitee to the other's
selection of Independent Counsel and/or for the appointment as
Independent Counsel of a person selected by the Court or by
such other person as the Court shall designate, and the person
with respect to whom all objections are so resolved or the
person so appointed shall act as Independent Counsel under
Section 11(a) hereof. Upon the due commencement of
any judicial proceeding or arbitration pursuant to Section 13(a)
of this Agreement, Independent Counsel shall be discharged and
relieved of any further responsibility in such capacity (subject
to the applicable standards of professional conduct then
prevailing).
12. Presumptions and Effect of Certain Proceedings.
(a) In making a determination with respect to
entitlement to indemnification hereunder, the person or persons
or entity making such determination shall presume that Indemnitee
is entitled to indemnification under this Agreement if Indemnitee
has submitted a request for indemnification in accordance with
Section 10(a) of this Agreement, and the Company shall have the
burden of proof to overcome that presumption in connection with
the making by any person, persons or entity of any determination
contrary to that presumption. Neither the failure of the Company
(including by its directors or independent legal counsel) to have
made a determination prior to the commencement of any action
pursuant to this Agreement that indemnification is proper in the
circumstances because Indemnitee has met the applicable standard
of conduct, nor an actual determination by the Company (including
by its directors or independent legal counsel) that Indemnitee
has not met such applicable standard of conduct, shall be a
defense to the action or create a presumption that Indemnitee has
not met the applicable standard of conduct.
(b) If the person, persons or entity empowered or
selected under Section 11 of this Agreement to determine whether
Indemnitee is entitled to indemnification shall not have made a
determination within sixty (60) days after receipt by the Company
of the request therefor, the requisite determination of
entitlement to indemnification shall be deemed to have been made
and Indemnitee shall be entitled to such indemnification, absent
(i) a misstatement by Indemnitee of a material fact, or an
omission of a material fact necessary to make Indemnitee's
statement not materially misleading, in connection with the
request for indemnification, or (ii) a prohibition of such
indemnification under applicable law; provided, however, that
such 60-day period may be extended for a reasonable time, not to
exceed an additional thirty (30) days, if the person, persons or
entity making the determination with respect to entitlement to
indemnification in good faith requires such additional time for
the obtaining or evaluating of documentation and/or information
relating thereto; and provided, further, that the foregoing
provisions of this Section 12(b) shall not apply (i) if the
determination of entitlement to indemnification is to be made by
the stockholders pursuant to Section 11(a) of this Agreement and
if (A) within fifteen (15) days after receipt by the Company of
the request for such determination the Board of Directors has
resolved to submit such determination to the stockholders for
their consideration at an annual meeting thereof to be held
within seventy five (75) days after such receipt and such
determination is made thereat, or (B) a special meeting of
stockholders is called within fifteen (15) days after such
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receipt for the purpose of making such determination, such
meeting is held for such purpose within sixty (60) days after
having been so called and such determination is made thereat, or
(ii) if the determination of entitlement to indemnification is to
be made by Independent Counsel pursuant to Section 11(a) of this
Agreement.
(c) The termination of any Proceeding or of any claim,
issue or matter therein, by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent,
shall not (except as otherwise expressly provided in this
Agreement) of itself adversely affect the right of Indemnitee to
indemnification or create a presumption that Indemnitee did not
act in good faith and 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 Proceeding, that
Indemnitee had reasonable cause to believe that Indemnitee's
conduct was unlawful.
(d) For purposes of any determination of good faith,
Indemnitee shall be deemed to have acted in good faith if
Indemnitee's action is based on the records or books of account
of the Enterprise, including financial statements, or on
information supplied to Indemnitee by the officers or managers of
the Enterprise in the course of their duties, or on the advice of
legal counsel for the Enterprise or on information or records
given or reports made to the Enterprise by an independent
certified public accountant or by an appraiser or other expert
selected with the reasonable care by the Enterprise. The
provisions of this Section 12(d) shall not be deemed to be
exclusive or to limit in any way the other circumstances in which
the Indemnitee may be deemed to have met the applicable standard
of conduct set forth in this Agreement.
(e) The knowledge and/or actions, or failure to act,
of any director, officer, agent or employee of the Enterprise
shall not be imputed to Indemnitee for purposes of determining
the right to indemnification under this Agreement.
13. Remedies of Indemnitee.
(a) In the event that (i) a determination is made
pursuant to Section 11 of this Agreement that Indemnitee is not
entitled to indemnification under this Agreement, (ii)
advancement of Expenses is not timely made pursuant to Section 9
of this Agreement, (iii) no determination of entitlement to
indemnification shall have been made pursuant to Section 11(a) of
this Agreement within 90 days after receipt by the Company of the
request for indemnification, (iv) payment of indemnification is
not made pursuant to Section 5, 6, 7 or the last sentence of
Section 11(a) of this Agreement within ten (10) days after
receipt by the Company of a written request therefor, or (v)
payment of indemnification pursuant to Section 3 or 4 of this
Agreement is not made within ten (10) days after a determination
has been made that Indemnitee is entitled to indemnification,
Indemnitee shall be entitled to an adjudication by a court of
Indemnitee's entitlement to such indemnification or advancement
of Expenses. Alternatively, Indemnitee, at Indemnitee's option,
may seek an award in arbitration to be conducted by a single
arbitrator pursuant to the Commercial Arbitration Rules of the
American Arbitration Association. The Company shall not oppose
Indemnitee's right to seek any such adjudication or award in
arbitration.
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(b) In the event that a determination shall have been
made pursuant to Section 11(a) of this Agreement that Indemnitee
is not entitled to indemnification, any judicial proceeding or
arbitration commenced pursuant to this Section 13 shall be
conducted in all respects as a de novo trial, or arbitration, on
the merits and Indemnitee shall not be prejudiced by reason of
that adverse determination. In any judicial proceeding or
arbitration commenced pursuant to this Section 13 the Company
shall have the burden of proving Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be.
(c) If a determination shall have been made pursuant
to Section 11(a) of this Agreement that Indemnitee is entitled to
indemnification, the Company shall be bound by such determination
in any judicial proceeding or arbitration commenced pursuant to
this Section 13, absent (i) a misstatement by Indemnitee of a
material fact, or an omission of a material fact necessary to
make Indemnitee'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 Indemnitee, pursuant to this
Section 13, seeks a judicial adjudication of or an award in
arbitration to enforce Indemnitee's rights under, or to recover
damages for breach of, this Agreement, Indemnitee shall be
entitled to recover from the Company, and shall be indemnified by
the Company against, any and all Expenses actually and reasonably
incurred by Indemnitee in such judicial adjudication or
arbitration. If it shall be determined in said judicial
adjudication or arbitration that Indemnitee is entitled to
receive part but not all of the indemnification or advancement of
Expenses sought, the Indemnitee shall be entitled to recover from
the Company, and shall be indemnified by the Company against, any
and all Expenses reasonably incurred by Indemnitee in connection
with such judicial adjudication or arbitration.
(e) The Company shall be precluded from asserting in
any judicial proceeding or arbitration commenced pursuant to this
Section 13 that the procedures and presumptions of this Agreement
are not valid, binding and enforceable and shall stipulate in any
such court or before any such arbitrator that the Company is
bound by all the provisions of this Agreement. The Company shall
indemnify Indemnitee against any and all Expenses and, if
requested by Indemnitee, shall (within ten (10) days after
receipt by the Company of a written request therefore) advance
such expenses to Indemnitee, which are incurred by Indemnitee in
connection with any action brought by Indemnitee for
indemnification or advance of Expenses from the Company under
this Agreement or under any directors' and officers' liability
insurance policies maintained by the Company, regardless of
whether Indemnitee ultimately is determined to be entitled to
such indemnification, advancement of Expenses or insurance
recovery, as the case may be.
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14. Non-exclusivity; Survival of Rights; Insurance;
Subrogation.
(a) The rights of indemnification and to receive
advancement of Expenses as provided by this Agreement shall not
be deemed exclusive of any other rights to which Indemnitee may
at any time be entitled under applicable law, the Company's
Articles of Incorporation, the Company's By-laws, any agreement,
a vote of stockholders or a resolution of directors, or
otherwise. No amendment, alteration or repeal of this Agreement
or of any provision hereof shall limit or restrict any right of
Indemnitee under this Agreement in respect of any action taken or
omitted by such Indemnitee in Indemnitee's Corporate Status prior
to such amendment, alteration or repeal. To the extent that a
change in Delaware law, whether by statute or judicial decision,
permits greater indemnification or advancement of Expenses than
would be afforded currently under the Company's By-laws and this
Agreement, it is the intent of the parties hereto that Indemnitee
shall 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 shall 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, shall not prevent
the concurrent assertion or employment of any other right or
remedy.
(b) To the extent that the Company maintains an
insurance policy or policies providing liability insurance for
directors, officers, employees, or agents of the Company or of
any other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise which such person
serves at the request of the Company, 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 such
director, officer, employee or agent under such policy or
policies. Notwithstanding any other provisions of this
Agreement, if a Change in Control shall have occurred, the
Company shall furnish Indemnitee with directors' and officers'
liability insurance insuring Indemnitee against insurable events
which occur or have occurred while Indemnitee was a director or
officer of the Company, such insurance to have policy limits
aggregating not less than the amount in effect immediately prior
to the Change in Control and otherwise to be in substantially the
same form and to contain substantially the same terms, conditions
and exceptions as the liability insurance policies provided for
officers and directors of the Company in force from time to time,
provided, however, that (i) such terms, conditions and exceptions
shall not be, in the aggregate, materially less favorable to
Indemnitee than those in effect on the date hereof and (ii) if
the aggregate annual premiums for such insurance at any time
during such period exceed two hundred percent (200%) of the per
annum rate of premium currently paid by the Company for such
insurance, then the Company shall provide the maximum coverage
that will then be available at an annual premium equal to two
hundred percent (200%) of such rate;
(c) In the event of any payment under this Agreement,
the Company shall be subrogated to the extent of such payment to
all of the rights of recovery of Indemnitee, who shall 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.
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(d) The Company shall not be liable under this
Agreement to make any payment of amounts otherwise indemnifiable
(or for which advancement is provided hereunder) hereunder if and
to the extent that Indemnitee has otherwise actually received
such payment under any insurance policy, contract, agreement or
otherwise.
(e) The Company's obligation to indemnify or advance
Expenses hereunder to Indemnitee who is or was serving at the
request of the Company as a director, officer, employee or agent
of any other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise shall be reduced by any
amount Indemnitee has actually received as indemnification or
advancement of expenses from such other corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise.
15. Duration of Agreement. This Agreement shall continue
until and terminate upon the later of: (a) 10 years after the
date that Indemnitee shall have ceased to serve as a director or
officer of the Company or as a director, officer, employee or
agent of any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise which Indemnitee
served at the request of the Company; or (b) 1 year after the
final termination of any Proceeding then pending in respect of
which Indemnitee is granted rights of indemnification or advance
ment of Expenses hereunder and of any proceeding commenced by
Indemnitee pursuant to Section 13 of this Agreement relating
thereto. This Agreement shall be binding upon the Company and
its successors and assigns and shall inure to the benefit of
Indemnitee and Indemnitee's heirs, executors and administrators.
16. Severability. If any provision or provisions of this
Agreement shall be held to be invalid, illegal or unenforceable
for any reason whatsoever: (a) the validity, legality and
enforceability of the remaining provisions of this Agreement
(including without limitation, each portion of any Section of
this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that is not itself invalid, illegal or
unenforceable) shall not in any way be affected or impaired
thereby and shall remain enforceable to the fullest extent
permitted by law; (b) such provision or provisions shall be
deemed reformed to the extent necessary to conform to applicable
law and to give the maximum effect to the intent of the parties
hereto; and (c) to the fullest extent possible, the provisions of
this Agreement (including, without limitation, each portion of
any Section of this Agreement containing any such provision held
to be invalid, illegal or unenforceable, that is not itself
invalid, illegal or unenforceable) shall be construed so as to
give effect to the intent manifested thereby.
17. Enforcement.
(a) The Company expressly confirms and agrees that it
has entered into this Agreement and assumed the obligations
imposed on it hereby in order to induce Indemnitee to serve as a
director or officer of the Company, and the Company acknowledges
that Indemnitee is relying upon this Agreement in serving as a
director or officer of the Company.
(b) This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and
14
understandings, oral, written and implied, between the parties
hereto with respect to the subject matter hereof.
18. Modification and Waiver. No supplement, modification
or amendment of this Agreement shall be binding unless executed
in writing by the parties thereto. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute
a waiver of any other provisions of this Agreement nor shall any
waiver constitute a continuing waiver.
19. Notice by Indemnitee. Indemnitee agrees promptly to
notify the Company in writing upon being served with any summons,
citation, subpoena, complaint, indictment, information or other
document relating to any Proceeding or matter which may be
subject to indemnification or advancement of Expenses covered
hereunder. The failure of Indemnitee to so notify the Company
shall not relieve the Company of any obligation which it may have
to the Indemnitee under this Agreement or otherwise.
20. Notices. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall
be deemed to have been duly given (a) if delivered by hand and
receipted for by the party to whom said notice or other
communication shall have been directed, or (b) mailed by
certified or registered mail with postage prepaid, on the third
business day after the date on which it is so mailed:
(a) If to Indemnitee, at the address indicated on the
signature page of this Agreement, or such other address as
Indemnitee shall provide to the Company.
(b) If to the Company to
Reynolds Metals Company
6601 W. Broad Street
Richmond, VA 23230
Attention: General Counsel
or to any other address as may have been furnished to Indemnitee
by the Company.
21. Contribution. To the fullest extent permissible under
applicable law, if the indemnification provided for in this
Agreement is unavailable to Indemnitee for any reason whatsoever,
the Company, in lieu of indemnifying Indemnitee, shall contribute
to the amount incurred by Indemnitee, whether for judgments,
fines, penalties, excise taxes, amounts paid or to be paid in
settlement and/or for Expenses, in connection with any claim
relating to an indemnifiable event under this Agreement, in such
proportion as is deemed fair and reasonable in light of all of
the circumstances of such Proceeding in order to reflect (i) the
relative benefits received by the Company and Indemnitee as a
result of the event(s) and/or transaction(s) giving cause to such
Proceeding; and/or (ii) the relative fault of the Company (and
its directors, officers, employees and agents) and Indemnitee in
connection with such event(s) and/or transaction(s).
15
22. Applicable Law. This Agreement and the legal relations
among the parties shall be governed by, and construed and
enforced in accordance with, the laws of the State of Delaware,
without regard to its conflict of laws rules. Except with respect
to any arbitration commenced by Indemnitee pursuant to Section
10(a) of this Agreement, the Company and Indemnitee hereby
irrevocably and unconditionally (i) agree that any action or
proceeding arising out of or in connection with this Agreement
shall be brought only in the Chancery Court of the State of
Delaware (the "Delaware Court"), and not in any other state or
federal court in the United States of America or any court in any
other country, (ii) consent to submit to the exclusive
jurisdiction of the Delaware Court for purposes of any action or
proceeding arising out of or in connection with this Agreement,
(iii) appoint, to the extent such party is not a resident of the
State of Delaware, irrevocably RL&F Service Corp., One Rodney
Square, 10th Floor, 10th and King Streets, Wilmington, Delaware
19801 as its agent in the State of Delaware as such party's agent
for acceptance of legal process in connection with any such
action or proceeding against such party with the same legal force
and validity as if served upon such party personally within the
State of Delaware, (iv) waive any objection to the laying of
venue of any such action or proceeding in the Delaware Court, and
(v) waive, and agree not to plead or to make, any claim that any
such action or proceeding brought in the Delaware Court has been
brought in an improper or inconvenient forum.
23. Identical Counterparts. This Agreement may be executed
in one or more counterparts, each of which shall for all purposes
be deemed to be an original but all of which together shall
constitute one and the same Agreement. Only one such counterpart
signed by the party against whom enforceability is sought needs
to be produced to evidence the existence of this Agreement.
24. Miscellaneous. Use of the masculine pronoun shall be
deemed to include usage of the feminine pronoun where
appropriate. The headings of the paragraphs of this Agreement
are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction
thereof.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be signed as of the day and year first above written.
REYNOLDS METALS COMPANY INDEMNITEE
By: ______________________ _______________________________
Chairman of the Board and Name: (Name)
Chief Executive Officer Address: (Address1)
(Address2)