1
EXHIBIT 10.2
INDEMNITY AGREEMENT
This Agreement is made as of the day of April, 1999, by
and between IDEX CORPORATION, a Delaware corporation having an office at 630
Dundee Road, Suite 400, Northbrook, Illinois 60062 (the "Corporation"), and
DONALD N. BOYCE, an individual residing at 1251 N. Sheridan Road, Lake Forest,
Illinois 60045 ("Indemnitee").
WHEREAS, effective April 1, 1999, Indemnitee is entering into
a Consulting Agreement with the Corporation (the "Consulting Agreement")
pursuant to which Indemnitee agrees to provide consulting services to the
Corporation, and
WHEREAS, Indemnitee desires protection in addition to that
available under the Corporation's Restated Certificate of Incorporation, By-laws
and insurance and would not be willing to serve as a consultant without such
additional protection, and the Corporation desires Indemnitee to serve in such
capacity,
NOW, THEREFORE, in consideration of the mutual covenants set
forth herein, the Corporation and Indemnitee hereby agree as follows:
AGREEMENT
1. Agreement to Serve. Indemnitee agrees to serve as
consultant to the Corporation in accordance with the terms of the Consulting
Agreement.
2. Definitions. As used in this Agreement:
(1) The term "Proceeding" shall include any threatened,
pending or completed action, suit or proceeding, whether brought in the right of
the Corporation or otherwise and whether of a civil, criminal, administrative or
investigative nature, in which Indemnitee may be or may have been involved as
party, a witness or otherwise, by reason of the fact that Indemnitee is or was a
consultant to the Corporation, by reason of any action taken by him or of any
inaction on his part while acting as such consultant, or by reason of the fact
that he is or was serving at the request of the Corporation as a consultant to
another corporation, partnership, joint venture, trust or other enterprise,
whether or not he is serving in such capacity at the time any liability or
expense is incurred for which Agreement.
2
(2) The term "Expenses" includes, without limitation
thereto, expenses of investigations, judicial or administrative proceedings or
appeals, amounts paid in settlement by or on behalf of Indemnitee, attorneys'
fees and disbursements, and any expenses of establishing a right to
indemnification under Paragraph 9 of this Agreement, but shall not include the
amount of judgments, fines or penalties against Indemnitee.
(3) "Change in Control" means a change in control of the
corporation occurring after the date of this Agreement of a nature that would be
required to be reported under the Securities Exchange Act of 1934 or any
regulation or rule thereunder (collectively the "Act"), whether or not the
Corporation is then subject to such reporting requirement; provided, however,
that, without limitation, such a Change in Control shall be deemed to have
occurred if after the date of this Agreement (i) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Act), other than a person who is
presently a member of the board of directors of the Corporation, is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Act), directly or
indirectly of securities of the Corporation representing 20% or more of the
combined voting power of the Corporation's then outstanding securities; (ii) the
Corporation is a party to a merger, consolidation, sale of assets or other
reorganization, or a proxy contest, as a consequence of which members of the
board of directors of the Corporation in office immediately prior to such
transaction or event constitute less than a majority of the board of directors
thereafter; or (iii) during any period of two consecutive years, individuals who
at the beginning of such period constituted the board of directors (including
for this purpose any new director whose election or nomination for election by
the Corporation's stockholders was approved by a vote of a least two-thirds of
the directors then still in office who were directors at the beginning of such
period) cease for any reason to constitute a majority of the board of directors.
(4) "Corporate Status" means and describes the status of
a person who is or was a director, officer, employee, agent, consultant or
fiduciary of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee, agent, consultant or fiduciary of
any "Other Enterprise".
(5) The term "Disinterested Director" means a director of
the Corporation who is not and was not a party to the Proceeding in respect of
which indemnification is sought by Indemnitee.
(6) The term "Independent Legal 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 Corporation or Indemnitee in any matter material to either
such party, or (ii) any other party to the Proceeding giving rise to a claim for
indemnification hereunder. Notwithstanding the foregoing, the term "Independent
Legal Counsel" shall not include any person who, under the applicable standards
of professional conflict
3
-3-
of interest is representing either the Corporation or Indemnitee in an action
to determine Indemnitee's rights under this Agreement.
(7) The term "Other Enterprise" shall include any wholly or partly
owned subsidiary of the Corporation, any employee compensation or benefit plan
of any one or more of the Corporation and its subsidiaries and affiliates, and
any other corporation, partnership, joint venture, trust or enterprise of which
Indemnitee is or was serving at the request of the Corporation as a director,
officer, employee, agent, consultant or otherwise.
(8) Reference to "fines" shall include any excise tax
assessed with respect to any employee benefit plan; references to "serving at
the request of the Corporation" shall include any service as a director,
officer, employee, agent or consultant of the Corporation which imposes duties
on, or involves services by, such director, officer, employee, agent or
consultant with respect to an employee benefit plan, its participants, or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best of the Corporation" as referred to in this Agreement.
3. Indemnity and Advancement of Expenses to the Extent Permitted by
Law. The Corporation shall indemnify and advance Expenses to Indemnitee to the
fullest extent permitted by applicable law now or (to the extent that any change
in applicable law permits such advances or indemnification Expenses, judgments,
fines or penalties that are not presently indemnifiable) hereafter in effect.
Without limitation of the foregoing, indemnification shall be deemed to be
permitted by applicable law for purposes of this Agreement if indemnification is
required by Paragraph 4 or 5 hereof, and advancement of expenses shall be deemed
permitted by applicable law if required by Paragraph 8 hereof.
4. Indemnity in Third Party Proceedings. The Corporation shall
indemnify Indemnitee in accordance with the provisions of this Paragraph 4 if
Indemnitee is a party to or is threatened to be made a party to or is otherwise
involved in any Proceeding (other than a Proceeding by or in the right of the
Corporation to procure a judgment in its favor) against all Expenses,
liabilities, judgments, fines and penalties actually and reasonably incurred by
Indemnitee in connection with the defense or settlement of such Proceeding, but
only if Indemnitee acted in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Corporation and,
in the case of a criminal Proceeding, in addition, had no reasonable cause to
believe that his conduct was unlawful.
5. Indemnity in Proceedings By or In the Right of the Corporation. The
Corporation shall indemnify Indemnitee in accordance with the provisions of this
paragraph if Indemnitee is a party to or is threatened to be made a party to or
is otherwise involved in any Proceeding by or in the right of the Corporation to
procure a judgment in its favor (a
4
-4-
"Corporation Claim") against all Expenses actually and reasonably incurred by
Indemnitee in connection with the defense or settlement of such Proceeding, but
only if he acted in good faith and in a manner which he reasonably believed to
be in or not opposed to the best interests of the Corporation; provided,
however, that no indemnification shall be made under this Paragraph 5 for his
(i) judgments, fines, penalties or amounts paid in settlement by or on behalf of
Indemnitee, or (ii) other Expenses in respect of any claim, issue or matter as
to which Indemnitee shall have been adjudged to be liable to the Corporation,
unless and only to the extent that (A) any court in which such Proceeding was
brought shall determine upon application that, desppenalties or Expenses as such
court shall deem proper, or (B) Indemnitee provides the Corporation with an
opinion of counsel (which counsel not be Independent Legal Counsel) in form and
substance reasonably satisfactory to the Corporation, that such indemnification
is permissible pursuant to this Agreement without such court action under the
General Corporation Law of Delware. The Indemnitee shall haave the exclusive
right under the preceding sentence to elect whether to submit the issue of
indemnification to the Court of Chancery or to the opinion of counsel.
6. Exceptions to Indemnitee's Rights. Notwithstanding any other
provisions of this Agreement, the Corporation shall not be liable to make any
payment in connection with any claim made against Indemnitee:
(1) to the extent that payment is actually made to Indemnitee
under a valid and collectible insurance policy; provided that the Corporation
shall remain liable for indemnification payments in excess of policy limits, as
well as deductibles and co-insurance amounts;
(2) to the extent that Indemnitee is indemnified and actually
paid otherwise than pursuant to this Agreement;
(3) if such claim is proven by final judgment in a court of law
or in any other adjudication to have been based upon or attributable to
Indemnitee's having gained any personal profit or advantage to which he was not
legally entitled;
(4) for a disgorgement of profits, made from the purchase and
sale by Indemnitee of securities, pursuant to Section 16(b) of the Securities
Exchange Act of 1934 and amendments thereto or similar provisions of any state
statutory law or common law; or
(5) brought about or contributed to by the dishonesty of
Indemnitee seeking payment hereunder; provided, however, that Indemnitee shall
be entitled to the benefit of this Agreement as to any claim upon which suit may
be brought against him by reason of any alleged dishonesty on his part, unless a
judgment or other final adjudication thereof adverse to
5
-5-
Indemnitee shall establish that he committed (i) acts of active and deliberate
dishonesty, (ii) with actual dishonest purpose and intent, (iii) which acts were
material to the cause of action so adjudicated
7. Indemnification of Expenses of Successful Party. Notwithstanding
any other provisions of this Agreement, to the extent that Indemnitee has been
successful, on the merits or otherwise, in defense of any Proceeding or in
defense of any claim, issue or matter therein, including the dismissal of an
action without prejudice, Indemnitee shall be indemnified against all Expenses
incurred in connection therewith.
8. Advancement of Expenses. The Expenses incurred by Indemnitee with
respect to any Proceeding governed by Paragraph 4 or 5 (including the opinion
provided for in clause (ii)(B) of Paragraph 5) shall be paid by the Corporation
at reasonable intervals in advance of any final resolution of such Proceeding,
in each case within 20 days after the Corporation receives Indemnitee's written
request therefor; provided, however, that Indemnitee shall undertake to repay
such amounts to the Corporation to the extent that it is ultimately determined
that Indemnitee was not entitled to indemnification of such Expenses.
9. Right of Indemnitee to Indemnification Upon Application;
Procedures Upon Application. Any indemnification under Paragraph 4 or 5 shall be
made no later than 45 days after receipt of the written request of Indemnitee
for indemnification together with documentation in support of such request,
unless the Corporation determines within such 45-day period that Indemnitee has
not met the relevant standards for indemnification set forth in Paragraph 4 or 5
as the case may be, and is not otherwise entitled to indemnification under
applicable law; provided, however, that if, within such 45-day period, the
Corporation has not reached any determination hereunder, the payment made to
Indemnitee pursuant to this Paragraph 9 may be made subject, at the request of
the Corporation, to the extent that the Corporation subsequently determines that
Indemnitee was not entitled to receive such payment.
The determination as to entitlement shall be made as follows.
If there has been no Change in Control prior to the date of determination of
entitlement to indemnification, the determination shall be made by (i) the Board
of Directors of the corporation by a majority vote of a quorum consisting of
Disinterested Directors, or (ii) if a quorum of Disinterested Directors is not
obtainable, by Independent Legal Counsel in a written opinion that
indemnification in the particular case is permissible (as more fully provided
hereafter in this Paragraph 9). If there has been a Change in Control prior to
the date of determination of entitlement to indemnification, the determination
as to entitlement shall be made by Independent Legal Counsel, unless Indemnitee
requests in writing that the determination be made by the Board of Directors of
the Corporation, and a quorum of Disinterested Directors is obtainable. The
Corporation agrees to be bound by the decision of Independent Legal Counsel as
to the entitlement of Indemnitee to indemnification and shall pay such
indemnification to Indemnitee within 30 days of the date of such written
6
-6-
opinion of such Independent Legal Counsel. Copies of the written opinion of
Independent Legal Counsel as to the entitlement of Indemnitee to the requested
indemnification shall be delivered to both the Corporation and Indemnitee. The
Corporation shall pay all costs and fees of Independent Legal Counsel incurred
in connection with its services pursuant to this Agreement, and the Corporation
shall also pay all expenses incurred in the selection of Independent Legal
Counsel. The criteria for determination of denial or entitlement to
indemnification shall be whether Indemnitee has met the relevant standards for
indemnification set forth in this Agreement, or is otherwise entitled to
indemnification under applicable law.
The following procedure shall be applicable with respect to
the selection of Independent Legal Counsel. If no Change in Control has occurred
prior to the date of determination of entitlement to indemnification,
Independent Legal Counsel shall be selected by the Board of Directors of the
Corporation, who shall notify Indemnitee of the counsel chosen. If a Change in
Control has occurred, Indemnitee shall select Independent Legal Counsel and
notify the Corporation of the selection. Either the Corporation or Indemnitee,
as applicable, may object in writing to the Independent Legal Counsel as
selected within twenty days after receipt of notification and identification of
the Independent Legal Counsel selected. Objection may be made only on the ground
that the Independent Legal Counsel initially selected does not meet the criteria
set forth in the definition of Independent Legal Counsel set forth in Paragraph
2 of this Agreement. If the parties are unable to resolve their differences
within twenty days following receipt by the objecting party of notice of the
initial selection of Independent Legal Counsel, then either party may petition
the Court of Chancery of the State of Delaware or any other court of competent
jurisdiction for resolution of such difference or for the appointment of
substitute Independent Legal Counsel to act as provided in this Agreement. The
Independent Legal Counsel initially selected shall not serve as such, pending
resolution of such objection or litigation.
The right to indemnification or advances as provided by this
Agreement shall be enforceable by Indemnitee at any time in any court of
competent jurisdiction after the expiration of the time periods provided herein
for payment of such indemnification or advances. The burden of proving that
indemnification or advances are not appropriate shall be on the Corporation.
Neither the failure of the Corporation (including the Board of Directors or
Independent Legal Counsel) to have made a determination prior to the
commencement of such action that indemnification or advances are proper in the
circumstances because Indemnitee has met the applicable standard of conduct, nor
an actual determination by the Corporation (including its Board of 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. Indemnitee's Expenses
incurred in connection with successfully establishing his right to
indemnification or advances, in whole or in part, in any such Proceeding shall
also be indemnified by the Corporation.
7
-7-
10. Presumptions As to Indemnitee's Conduct. For the purposes of this
Agreement, Indemnitee's conduct shall not be deemed to have been knowingly
fraudulent or deliberately dishonest, Indemnitee shall not be deemed to have had
any reasonable cause to believe Indemnitee's conduct was unlawful, nor shall any
presumption arise that Indemnitee did not meet any particular standard of
conduct or have any particular belief, if Indemnitee's conduct was based on (i)
the records or books of account of the Corporation or Other Enterprise, (ii)
information supplied to Indemnitee by an officer or officers of the Corporation
or Other Enterprise in the course of such individual's duties, (iii) the advice
of legal counsel for the Corporation or other Enterprise, or (iv) information or
records given or reports made to the Corporation or Other Enterprise by an
independent public accountant, by an appraiser or by other experts selected by
the Corporation or Other Enterprise. The knowledge, actions or failures to act
of any director, officer, employee or agent of the Corporation shall not be
imputed to Indemnitee for the purposes of determining the right to
indemnification under this Agreement. An Indemnitee who acted in good faith and
in a manner Indemnitee reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit or compensation plan shall
be deemed to have acted in a manner "not opposed to the best interests of the
Corporation." The termination of any Proceeding which is covered by this
Agreement by judgment, order, settlement (whether with or without court
approval) or conviction, or a plea of nolo contendere or its equivalent shall
not of itself create a presumption for the purposes of this Agreement 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 Corporation and,
with respect to any criminal Proceeding, had reasonable cause to believe the
conduct of Indemnitee was unlawful.
11. Indemnification Hereunder Not Exclusive. The indemnification
provided by this Agreement shall not be deemed exclusive of any other rights to
which Indemnitee may be entitled under the Corporation's Restated Certificate of
Incorporation or By-Laws, any agreement (including, without limitation, that
certain Indemnity Agreement entered into between Indemnitee and the Corporation
with respect to Indemnitee's status as an officer and director of the
Corporation), any vote of stockholders or Disinterested Directors, the General
Corporation Law of the State of Delaware, or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office. The indemnification under this Agreement shall continue as to Indemnitee
even though he may have ceased to be a consultant to the Corporation and shall
inure to the benefit of the heirs and personal representatives of Indemnitee.
12. Corporation Participation in Litigation. With respect to any
Proceeding for which indemnification is requested, the Corporation will be
entitled to participate therein at its own expense and, except as otherwise
provided below, to the extent that it may wish, the Corporation may assume the
defense thereof, with counsel satisfactory to Indemnitee. After notice from the
Corporation to Indemnitee of its election to assume the defense of a Proceeding,
the Corporation will not be 1iable to Indemnitee under this Agreement for any
Expenses subsequently incurred by Indemnitee in connection with the defense
thereof, other than as
8
-8-
provided below. The Corporation shall not settle any Proceeding in any manner
which would impose any penalty or limitation on Indemnitee without Indemnitee's
written consent. Indemnitee shall have the right to employ his counsel in any
Proceeding but the fees and expenses of such counsel incurred after notice from
the Corporation of its assumption of the defense of the Proceeding shall be at
the expense of Indemnitee, unless (i) the employment of counsel by Indemnitee
has been approved by a majority vote of a quorum consisting of Disinterested
Directors, (ii) Indemnitee shall have reasonably concluded that there may be a
conflict of interest between the Corporation and Indemnitee in the conduct of
the defense of a Proceeding and shall have communicated such conclusion, with a
full statement of the reasons, in writing to the Corporation or (iii) the
Corporation shall not in fact have employed counsel satisfactory to Indemnitee
to assume the defense of a Proceeding, in each of which cases the fees and
expenses of Indemnitee's counsel shall be advanced by the Corporation. The
Corporation shall not be entitled to assume the defense of any Corporation
Claim.
13. Continuation of Right of Indemnification and Advancement of
Expenses. The rights of Indemnitee under this Agreement shall continue as to
Indemnitee after termination for any reason of Corporate Status, and shall inure
to the benefit of the heirs, personal representatives, successors and assigns of
Indemnitee.
14. Partial Indemnification. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Corporation for some or a
portion of the Expenses, judgments, fines or penalties actually and reasonably
incurred by him in the investigation, defense, appeal or settlement of any
Proceeding but not for the total amount thereof, the Corporation shall
nevertheless provide indemnification to Indemnitee for that portion of such
Expenses, judgments, fines or penalties for which Indemnitee is entitled to be
indemnified hereunder.
15. Savings Clause. If this Agreement or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify Indemnitee as to Expenses, judgments,
fines and penalties with respect to any Proceeding to the fullest extent
permitted by (i) any applicable portion of this Agreement that shall not have
been so invalidated or (ii) any applicable law.
16. Notice. Indemnitee shall, as a condition precedent to his right
to be indemnified under this Agreement, give the Corporation notice in writing
as soon as practicable of any claim made against him for which indemnity will or
could be sought under this Agreement. In addition, Indemnitee shall give the
Corporation such information and cooperation as it may reasonably require and as
shall be within Indemnitee's power. Notice to the Corporation shall be directed
to IDEX Corporation, 630 Dundee Road, Suite 400, Northbrook, Illinois 60062,
Attention: President (or such other address as the Corporation shall designate
in
9
-9-
writing to Indemnitee). Notice to Indemnitee shall be directed to Indemnitee
at the address of Indemnitee as shown at the beginning of this Agreement (or
such other address as Indemnitee shall designate in writing to the Corporation).
A copy of any notice sent pursuant to this paragraph shall also be sent to
Hodgson, Russ, Andrews, Woods & Goodyear, LLP, 1800 One M & T Plaza, Buffalo,
New York 14203, Attention: Richard E. Heath, Esq., or Dianne Bennett, Esq.
Notices shall be deemed received three days after the date postmarked if sent by
prepaid mail, properly addressed.
17. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute one and the same original.
18. Applicable Law. This Agreement shall be governed by and construed
in accordance with Delaware law.
19. Successors and Assigns. This Agreement shall be binding upon the
Corporation and its successors and assigns.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and signed as of the day and year first above written.
IDEX CORPORATION
By:
--------------------------------------
Title:
-------------------------------
INDEMNITEE:
----------------------------------------
Donald N. Boyce