Exhibit 10(q)
AGREEMENT, effective as of __________, 1995, between EMCOR GROUP, INC., a
Delaware corporation (the "Company"), and _____________ (the "Indemnitee").
WHEREAS, Indemnitee is a director or officer of the Company;
WHEREAS, both the Company and Indemnitee recognize the increased risk of
litigation and other claims being asserted against directors and officers of
public companies in today's environment;
WHEREAS, basic protection against undue risk of personal liability of
directors and officers heretofore has been provided through insurance coverage
providing reasonable protection at reasonable cost, and Indemnitee has relied on
the availability of such coverage; but as a result of substantial changes in the
marketplace for such insurance it has become increasingly more difficult to
obtain such insurance on terms providing reasonable protection at reasonable
cost;
WHEREAS, the By-laws of the Company require the Company to indemnify
expenses to its directors and officers to the full extent permitted by law and
Indemnitee has been serving and continues to serve as a director or officer of
the Company in part in reliance on such By-laws;
WHEREAS, in recognition of Indemnitee's need for substantial protection
against personal liability in order to enhance Indemnitee's continued service to
the Company in an effective manner, and Indemnitee's reliance on the aforesaid
By-laws, and in part to provide Indemnitee with specific contractual assurance
that the protection afforded by such By-laws will be available to Indemnitee
(regardless of, among other things, any amendment to or revocation of such By-
laws or any change in the composition of the Company's Board of Directors or
acquisition transaction relating to the Company), the Company wishes to provide
in this Agreement for the indemnification of and the advancing of expenses to
Indemnitee to the full extent (whether partial or complete) permitted by law and
as set forth in this Agreement, and, to the extent insurance is maintained, for
the continued coverage of Indemnitee under the Company's directors' and
officers' liability insurance policies;
NOW, THEREFORE, in consideration of the premises and of Indemnitee's
service to the Company, directly or indirectly, and intending to be legally
bound hereby, the parties hereto agree as follows:
1. In the event Indemnitee was, is or becomes a party to or a witness or
other participant in, or is threatened to be made a party to, or a witness or
other participant in, any
threatened, pending or completed action, suit or proceeding, or any inquiry or
investigation, whether conducted by the Company or any other party, that
Indemnitee in good faith believes might lead to any such action, suit or
proceeding, whether civil, criminal, administrative, investigative or otherwise
(a "Claim") by reason of (or arising in part out of) the fact that Indemnitee is
or was a director, officer, employee, agent or fiduciary of the Company, or is
or was serving at the request of the Company as a director, officer, employee,
trustee, agent or fiduciary of another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise, or by reason of anything done
or not done by Indemnitee in any such capacity (an "Indemnifiable Event"), the
Company shall indemnify Indemnitee, to the fullest extent permitted by law as
soon as practicable but in any event no later than ten days after written demand
is presented to the Company, against any and all expenses (including attorneys'
fees and all other costs, expenses and obligations paid or incurred by
Indemnitee in connection with investigating, preparing for and defending or
participating in the defense of (including an appeal) any Claim relating to any
Indemnifiable Event actually and reasonably incurred by Indemnitee)
(collectively "Expenses"), judgments, fines, penalties and amounts paid in
settlement (including all interest, assessments and other charges paid or
payable in connection with or in respect of such judgments, fines, penalties or
amounts paid in settlement) of such Claim. If so requested by Indemnitee, the
Company shall advance (within ten days of such request) any and all such
Expenses to Indemnitee; provided, however, that if, when and to the extent that
an appropriate person or body (the "Reviewing Party") determines that Indemnitee
would not be permitted to be so indemnified under applicable law, the Company
shall be entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse
the Company) for all such amounts theretofore paid and the Company shall cease
to advance expenses (unless Indemnitee has commenced or thereafter commences
legal proceedings in a court of competent jurisdiction to secure a determination
that Indemnitee should be indemnified under applicable law, in which event
Indemnitee shall be entitled to have his expenses advanced and shall not be
required to so reimburse the Company until a final judicial determination
requiring such reimbursement is made with respect thereto as to which all rights
of appeal therefrom have been exhausted or lapsed). If there has not been a
Change in Control of the Company (as hereinafter defined), the Reviewing Party
(which can, but does not have to, be the disinterested members of the Board of
Directors or a committee comprised of one or more disinterested members of the
Board of Directors) shall be selected by the Board of Directors. If there has
been a Change of Control of the Company (other than a Change in Control which
has been approved by a majority of the Company's Board of Directors who were
directors immediately prior to such Change in Control), the Reviewing Party
shall be the special,
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independent counsel referred to in Section 2 hereof. If, by the expiration of
the foregoing ten-day period, Indemnitee has not been indemnified or received
expense advances or the Reviewing Party determines that Indemnitee would not be
permitted to be indemnified or be entitled to expense advances in whole or in
part under applicable law, Indemnitee shall have the right to commence
litigation seeking from the court a finding that Indemnitee is entitled to
indemnification and expense advances or enforcement of Indemnitee's entitlement
to indemnification and expense advances or challenging any determination by the
Reviewing Party or any aspect thereof that Indemnitee is not entitled to be
indemnified or receive expense advances; any determination by the Reviewing
Party otherwise shall be conclusive and binding on the Company and Indemnitee.
Indemnitee agrees to bring any such litigation in any court in the states of New
York, Connecticut, or Delaware having subject matter jurisdiction thereof and in
which venue is proper, and the Company hereby consents to service of process and
to appear in any such proceeding.
2. The Company agrees that if there is a Change in Control of the Company
(other than a Change in Control which has been approved by a majority of the
Company's Board of Directors who were directors immediately prior to such Change
in Control) then with respect to all matters thereafter arising concerning the
rights of Indemnitee to indemnity payments and expense advances under this
Agreement or any other agreement or By-laws nor or hereafter in effect relating
to Claims for Indemnifiable Events (including any Claim for Indemnifiable Events
arising prior to such Change in Control), the Company shall seek legal advice
only from special, independent counsel selected by Indemnitee and approved by
the Company (which approval shall not be unreasonably withheld or delayed).
Unless Indemnitee has selected counsel pursuant to this Section 2 and such
counsel has been approved by the Company (which approval shall not be
unreasonably withheld or delayed), the firms in the attached Exhibit "A" shall
be deemed to satisfy the requirements set forth above. Such counsel, among
other things, shall determine whether and to what extent Indemnitee is permitted
to be indemnified, is entitled to expense advances under applicable law, or is
obligated to reimburse the Company for expenses advanced and shall render its
written opinion to the Company and Indemnitee to such effect. For purposes of
this Agreement, a "Change in Control of the Company" 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, is or becomes the beneficial owner (as defined in Rule 13d-3 under said
Act), directly or indirectly, of securities of the Company representing 20% or
more of the combined voting power of the Company's then outstanding securities,
or (ii) during any period
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of two consecutive years, individuals who at the beginning of such period
constitute the Board of Directors of the Company and any new director whose
election by the Board of Directors or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so approved,
cease for any reason to constitute a majority thereof, or (iii) the stockholders
of the Company approve a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least 80% of the combined
voting power of 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 (in one transaction or a
series of transactions) of all or substantially all the Company's assets. The
Company agrees to pay the reasonable fees of the special, independent counsel
referred to above and to fully indemnify such counsel against any and all
expenses (including attorneys' fees), claims, liabilities and damages arising
out of or relating to this Agreement or its engagement pursuant hereto except
for willful misconduct or gross negligence.
3. (a) In the event of a Potential Change in Control (as defined below)
which has not ceased to exist, the Company shall, upon written request by
Indemnitee, create a trust for the benefit of Indemnitee and from time to time
upon written request of Indemnitee shall fund such trust in an amount sufficient
to satisfy any and all Expenses reasonably anticipated at the time of each such
request to be incurred in connection with investigating, preparing for and
defending any Claim relating to an Indemnifiable Event, and any and all
judgments, fines, penalties and settlement amounts of any and all Claims
relating to an Indemnifiable Event from time to time actually paid or claimed,
reasonably anticipated or proposed to be paid. The amount or amounts to be
deposited in the trust pursuant to the foregoing funding obligation shall be
determined by the Reviewing Party, in any case in which the independent legal
counsel referred to above is involved. The terms of the trust shall provide
that upon a Change in Control (i) the trust shall not be revoked or the
principal thereof invaded, without the written consent of Indemnitee, (ii) the
trustee shall advance, within ten days of a request by Indemnitee, any and all
Expenses to Indemnitee (and Indemnitee hereby agrees to reimburse the trust
under the circumstances under which Indemnitee would be required to reimburse
the Company under
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Section 1 of this Agreement), (iii) the trust shall continue to be funded by the
Company in accordance with the funding obligation set forth above, (iv) the
trustee shall promptly pay to Indemnitee all amounts for which Indemnitee shall
be entitled to indemnification pursuant to this Agreement or otherwise, and (v)
all unexpended funds in such trust shall revert to the Company upon a final
determination by the Reviewing Party or a court of competent jurisdiction, as
the case may be, that Indemnitee has been fully indemnified under the terms of
this Agreement. The trustee shall be a bank organized under the laws of the
United States of America or of any state and having a combined capital surplus
of at least $50,000,000 and shall be chosen by Indemnitee. Nothing in this
Section 3 shall relieve the Company of any of its obligations under this
Agreement.
(b) A "Potential Change In Control" shall be deemed to have occurred if
(i) the Company enters into an agreement, the consummation of which would result
in the occurrence of a Change in Control; (ii) any person (including the
Company) publicly announces an intention to take or to consider taking actions
which if consummated would constitute a Change in Control; (iii) any person,
other than a trustee or other fiduciary holding securities under an employee
benefit plan of the Company, who is or becomes the beneficial owner, directly or
indirectly, of securities of the Company representing 9.5% or more of the
combined voting power of the Company's then outstanding voting securities,
increases his beneficial ownership of such securities by five percentage points
(5%) or more over the percentage so owned by such person; or (iv) the Board
adopts a resolution to the effect that, for purposes of this Agreement, a
Potential Change in Control has occurred.
4. In the event the Company shall be obligated hereunder to pay Expenses
of any action, suit or proceeding against Indemnitee, the Company shall be
entitled to assume the defense of such proceeding, with counsel approved by
Indemnitee (such approval not to be unreasonably withheld or delayed) upon the
delivery to Indemnitee of written notice of its election to do so. After
delivery of such notice, approval of such counsel by Indemnitee and the
retention of such counsel by the Company, the Company will not be liable to
Indemnitee under this Agreement for any fees of counsel subsequently incurred by
Indemnitee with respect to the same proceeding; provided that (i) Indemnitee
shall have the right to employ his counsel in any such proceeding at
Indemnitee's expense and (ii) if (A) the employment of counsel by Indemnitee has
been previously authorized by the Company, (B) Indemnitee shall have reasonably
concluded that there may be a conflict of interest between the Company and
Indemnitee in the conduct of any such defense or (C) the Company shall not, in
fact, have employed counsel to assume the defense of such proceeding, then the
fees and expenses of Indemnitee's counsel shall be at the expense of the
Company.
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5. The Company shall indemnify Indemnitee against any and all expenses
(including attorneys' fees) and, if requested by Indemnitee, shall (within ten
days of such request) advance such expenses to Indemnitee, which are incurred by
Indemnitee in connection with any claim asserted or action brought by Indemnitee
for (i) indemnification or advance payment of Expenses by the Company under this
Agreement or any other agreement or Company By-laws now or hereafter in effect
relating to Claims for Indemnifiable Events and/or (ii) recovery under any
directors' and officers' liability insurance policies maintained by the Company,
regardless of whether the Indemnitee ultimately is determined to be entitled to
such indemnification, advance payment of Expenses or insurance recovery, as the
case may be.
6. If Indemnitee is entitled under any provision of this Agreement to
indemnification by the Company for some or a portion of the Expenses, judgments,
fines, penalties and amounts paid in settlement of a Claim but not, however, for
all of the total amount thereof, the Company shall nevertheless indemnify
Indemnitee for the portion thereof to which Indemnitee is entitled. Moreover,
notwithstanding any other provision of this Agreement, to the extent that
Indemnitee has been successful on the merits or otherwise in defense of any or
all Claims relating in whole or in part to an Indemnifiable Event or in defense
of any issue or matter therein, including dismissal without prejudice,
Indemnitee shall be indemnified against all Expenses incurred in connection
therewith. In connection with any determination by the Reviewing Party or
otherwise as to whether Indemnitee is entitled to be indemnified hereunder the
burden of proof shall be on the Company to establish that Indemnitee is not so
entitled.
7. For purposes of this Agreement, the termination of any Claim by
judgment, order, settlement (whether with or without court approval) or
conviction, or upon a plea of nolo contendere, or its equivalent, shall not
create a presumption that Indemnitee did not meet any particular standard of
conduct or have any particular belief or that a court has determined that
Indemnitee is not entitled to indemnification or expense advance or that
indemnification or expense advance is not permitted by applicable law. In
addition, neither the failure of the Reviewing Party to have made a
determination as to whether Indemnitee has met any particular standard of
conduct or had any particular belief, nor an actual determination by the
Reviewing Party that Indemnitee has not met such standard of conduct or did not
have such belief, prior to the commencement of legal proceedings by Indemnitee
to secure a judicial determination that Indemnitee should be indemnified under
applicable law shall be a defense to Indemnitee's claim or create a presumption
that Indemnitee has not met any particular standard of conduct or did not have
any particular belief.
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8. The rights of Indemnitee hereunder shall be in addition to any other
rights Indemnitee may have under the Company's By-laws as in effect on the date
of this Agreement or the Delaware General Corporation Law or otherwise. To the
extent a change in the Delaware General Corporation Law (whether by statute or
judicial decision) permits greater indemnification by agreement than would be
afforded currently under the 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.
9. Indemnitee shall notify the Company in writing of the institution of
any action, suit, proceeding, inquiry or investigation that is or may be subject
to this Agreement. Indemnitee shall give the Company such information and
cooperation as it may reasonably require and as shall be within Indemnitee's
power. No legal action under this Agreement shall be brought and no cause of
action under this Agreement shall be asserted by or in the right of the Company
against Indemnitee, Indemnitee's spouse, heirs, executors or personal or legal
representatives after the expiration of two years from the date of accrual of
such cause of action, and any claim or cause of action of the Company under this
Agreement shall be extinguished and deemed released unless asserted by the
timely filing of a legal action within such two-year period; provided, however,
that, if any shorter period of limitations is otherwise applicable to any such
cause of action, such shorter period shall govern.
10. To the extent the Company maintains an insurance policy or policies
providing directors' and officers' liability insurance. Indemnitee shall be
covered by such policy or policies, in accordance with its or their terms, to
the maximum extent of the coverage available for any Company director or
officer.
11. No supplement, modification or amendment of this Agreement shall be
binding unless executed in writing by both of the parties hereto. No waiver of
any of the provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provisions hereof (whether or not similar) nor shall such
waiver constitute a continuing waiver.
12. In the event of payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee, who shall execute all papers required and shall do everything that
may be necessary to secure such rights, including the execution of such
documents necessary to enable the Company effectively to bring suit to enforce
such rights.
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13. The Company shall not be liable under this Agreement to make any
payment in connection with any claim made against Indemnitee to the extent
Indemnitee has otherwise actually received payment (under any insurance policy,
By-laws or otherwise) of the amounts otherwise indemnifiable hereunder.
14. This Agreement shall be binding upon and inure to the benefit of and
be enforceable by the parties hereto and their respective successors, assigns,
including any direct or indirect successor by purchase, merger, consolidation or
otherwise to all or substantially all of the business and/or assets of the
Company, spouses, heirs, executors and personal and legal representatives. This
Agreement shall continue in effect regardless of whether Indemnitee continues to
serve as an officer or director of the Company or of any other enterprise at the
Company's request.
15. The provisions of this Agreement shall be severable in the event that
any of the provisions hereof (including any provision within a single section,
paragraph or sentence) are held by a court of competent jurisdiction to be
invalid, void or otherwise unenforceable, and the remaining provisions shall
remain enforceable to the fullest extent permitted by law.
16. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware applicable to contracts made
and to be performed in such state, but excluding any conflicts of law, rule or
principle which might refer such governance, construction or enforcement to the
laws of another state or country.
EMCOR GROUP, INC.
By:
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Frank T. MacInnis
Chairman, President and
Chief Executive Officer
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Exhibit A
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Milbank, Tweed, Hadley & McCloy
Paul, Weiss, Rifkind, Wharton & Garrison
Schulte Roth & Zabel
Simpson Thacher & Bartlett
Skadden, Arps, Slate, Meagher & Flom
Stroock & Stroock & Lavan
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