1
EXHIBIT 10.01
FORM OF
INDEMNIFICATION AGREEMENT
BETWEEN EASTMAN CHEMICAL COMPANY AND CERTAIN OFFICERS
This Indemnification Agreement (this "Agreement"), made as of the 5th day of
May, 2000, by and between EASTMAN CHEMICAL COMPANY, a Delaware corporation (the
"Company"), and _______________, an employee of the Company and a resident of
the State of Tennessee (the "Indemnitee");
W I T N E S S E T H:
WHEREAS, the Company on the date hereof has an equity interest in
Genencor International, Inc. ("Genencor"), a Delaware corporation;
WHEREAS, the Company desires to induce the Indemnitee to serve as a
director or officer of Genencor; and
WHEREAS, the Indemnitee is willing, subject to certain conditions,
including, without limitation, the execution and performance of this Agreement
by the Company, to serve as a director of Genencor;
NOW, THEREFORE, in order to induce the Indemnitee to provide the
Services to Genencor (as defined below), and in consideration of the premises,
mutual covenants and obligations contained herein, the Company and Indemnitee,
intending to be legally bound, hereby agree as follows:
1. SERVICES. Effective on the date hereof, the Indemnitee agrees
to serve as a director or officer of Genencor and to provide Genencor with the
benefit of his experience, insight, knowledge and reputation in order to assist
Genencor in its management and governance of Genencor.
2. INDEMNIFICATION FOR PAST AND FUTURE SERVICES.
(a) The Company shall indemnify and hold harmless the
Indemnitee in the event he becomes a party or is threatened to be made a party
to any threatened, pending or completed action, suit, claim or proceeding, or
cause of action of whatever nature and description, whether known or unknown,
whether accrued or contingent, whether existing now or in the future, whether
civil, administrative or investigative, whether sounding in contract, tort or
equity or arising out of or relating to his agreement hereunder to be a
director, by reason of the fact that he performed Services as a director, or, by
agreement of Genencor and Indemnitee hereafter, an agent or employee of
Genencor, or by reason of any action taken or alleged to have been taken or
omitted or alleged to have been omitted in such capacities (a "Proceeding"),
against any and all costs, charges, claims, losses, liabilities, expenses,
damages, fees (including, without limitation, attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by the
Indemnitee in connection therewith or in connection with any appeal therefrom
(collectively,
93
2
"Expenses") if, subject to the provisions of sections 2 (b) and (c) below, the
Indemnitee acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the Company; provided, however, that the
Company shall not be obligated under this Section 2 to make any payment in
connection with any action, claim or proceeding against the Indemnitee to the
extent based upon or attributable to or in connection with any threatened,
pending or completed criminal action, suit, claim or proceeding ("Criminal
Proceeding") unless the Indemnitee had no reasonable cause to believe his
conduct giving rise to the Criminal Proceeding was unlawful. The termination of
any Proceeding by judgment, order, settlement or its equivalent shall not, of
itself, create a presumption that the Indemnitee did not satisfy the foregoing
standard of conduct to the extent applicable thereto. The determination of
whether the Indemnitee shall be entitled to indemnification under this Section 2
shall be made in accordance with Section 4 hereof. If that determination is so
made, it shall be binding upon the Company and the Indemnitee for all purposes
under this Agreement.
(b) The Company acknowledges that it may from time to
time have interests that conflict with those of Genencor as a result of the
Company's status as a stockholder, creditor, debtor, customer, supplier or
competitor of Genencor and agrees that any action by Indemnitee taken in good
faith in furtherance of Indemnitee's responsibilities as a director of Genencor
shall not constitute a basis for nullification or modification of the Company's
obligations to Indemnitee under this Agreement even if such action results in
harm or loss to the Company or is otherwise opposed to the best interests of the
Company.
(c) Indemnitee's entitlement to indemnification by the
Company under this Agreement is independent of any rights under Directors and
Officers Liability Insurance carried by either the Company or Genencor or right
of indemnification at law or by contract from Genencor or the Company.
Indemnitee's right to indemnification by the Company shall be determined by the
terms and conditions of this Agreement and shall not be nullified or modified in
whole or in part by any decision denying Indemnification to Indemnitee by
Genencor or any denial of coverage under Director & Officers Liability Insurance
carried by either the Company or Genencor. Subject to the provisions of Section
5 relating to subrogation and duplicate payments, Indemnitee may make claims for
indemnification under the Agreement at any time without any obligation to first
assert claims against others.
3. ADVANCEMENT OF EXPENSES INCURRED IN DEFENSE OF PROCEEDING. The
Company shall promptly pay all Expenses as and when incurred by the Indemnitee
in advance of the final disposition of the Proceeding in connection with which
they were incurred, following receipt by the Company of the notice described in
Section 7(a) hereof, together with an Affirmation and Undertaking signed by
Indemnitee in the form of EXHIBIT A attached hereto, upon delivery of reasonable
evidence of such Expenses. Such Affirmation and Undertaking obligates Indemnitee
to repay all amounts advanced in the event it shall ultimately be determined in
accordance with the procedures specified in Sections 4 and 6 hereof that
Indemnitee is not entitled to be indemnified by the Company as authorized in
Section 2 above. The Company shall not require any security in connection with
the Affirmation and Undertaking.
4. CERTAIN PROCEDURES RELATING TO INDEMNIFICATION. For purposes
of pursuing his rights to indemnification under Section 2 hereof, the Indemnitee
(i) shall submit to the Company a sworn statement of a request for
indemnification substantially in the form of EXHIBIT B attached hereto and made
a part hereof (the "Indemnification Statement") and (ii) shall present to the
Company reasonable evidence of all Expenses for which payment is requested and
that are not subject to Section 5(b) hereof, with the Company receiving credit
for all Expenses advanced pursuant to Section 3 above. Submission of an
Indemnification Statement to the Company shall create a presumption that the
94
3
Indemnitee is entitled to indemnification under Section 2 hereof, and the
Company shall be deemed to have determined that the Indemnitee is entitled to
such indemnification unless, within thirty (30) calendar days after submission
of the Indemnification Statement, the Company shall determine by vote of a
majority of the Board of Directors of the Company (other than the Indemnitee),
based upon clear and convincing evidence (sufficient to rebut the foregoing
presumption), and the Indemnitee shall have received notice in writing within
such period of such determination, that the Indemnitee is not so entitled to
indemnification, which notice shall disclose with particularity the evidence in
support of the Company's determination. The foregoing notice shall be sworn to
by all directors of the Company who participated in the determination and voted
to deny indemnification. Any determination by the Company that the Indemnitee is
not entitled to indemnification and any failure to make the payments requested
in the Indemnification Statement shall be subject to judicial review as provided
in Section 6 hereof.
5. SUBROGATION; DUPLICATION OF PAYMENTS.
(a) Upon payment of any amounts under this Agreement to
which it is finally determined that Indemnitee is entitled, the Company shall be
subrogated to the extent of such amounts to all the rights of recovery of the
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.
(b) The Company shall not be liable under this Agreement
to make any payment in connection with any claim for indemnification made by the
Indemnitee to the extent the Indemnitee has actually received payment (under any
insurance policy or otherwise) of the amounts otherwise payable hereunder.
6. ENFORCEMENT.
(a) If a claim for advancement of Expenses or
indemnification made to the Company pursuant to Section 3 or Section 4 hereof is
not paid in full by the Company within thirty (30) calendar days after receipt
by the Company of all documentation required by such section, the Indemnitee may
at any time thereafter bring suit against the Company to recover the unpaid
amount of the claim.
(b) In any action for indemnification pursuant to Section
2 hereof, brought under Section 6(a) hereof, it shall be a defense to the claim
for indemnification that the Indemnitee has not met the standards of conduct
that constitute conditions to the Company's obligation to indemnify the
Indemnitee for the amount claimed, but the burden of proving such defense shall
be on the Company. The failure of the Company to have made a determination prior
to commencement of such action that indemnification of the Indemnitee is proper
in the circumstances because he has met the applicable standard of conduct set
forth in this Agreement shall not be a defense to the action or create a
presumption that the Indemnitee has not met the applicable standard of conduct.
(c) It is the intent of the Company that the Indemnitee
not be required to incur the expenses associated with the enforcement of his
rights under this Agreement by litigation or other legal action because the cost
and expense thereof would substantially detract from the benefits intended to be
extended to the Indemnitee hereunder for the Indemnitee to serve as a director
or officer of Genencor. Accordingly, if it should appear to the Indemnitee that
the Company has failed to comply with any of its
95
4
obligations under the Agreement, or in the event that the Company or any other
person takes any action to declare the Agreement void or unenforceable, or
institutes any action, suit or proceeding designed (or having the effect of
being designed) to deny, or to recover from, the Indemnitee the benefits
intended to be provided to the Indemnitee hereunder, the Company irrevocably
authorizes the Indemnitee from time to time to retain counsel of his choice, at
the expense of the Company as hereafter provided, to represent the Indemnitee in
connection with the initiation or defense of any litigation or other legal
action, whether by or against the Company, in any jurisdiction. The Company
shall pay and be solely responsible for any and all costs, charges and expenses,
including without limitation attorneys' and other fees and expenses, reasonably
incurred by the Indemnitee (i) as a result of the Company's failure to perform
this Agreement or any provision hereof, after the duty to perform has been
established or (ii) as a result of the Company or any person contesting the
validity or enforceability of this Agreement or any provision hereof as
aforesaid, after such validity and enforceability have been established.
7. NOTIFICATION AND DEFENSE OF CLAIM.
(a) Promptly after receipt by the Indemnitee of notice of
any pending or threatened Proceeding, the Indemnitee shall, if a claim in
respect thereof is to be made against the Company under this Agreement, notify
the Company of such threatened or pending Proceeding. To be effective, such
notice need only set forth the general basis upon which the Indemnitee became
aware of the Proceeding; PROVIDED, HOWEVER, if the Indemnitee shall have been
personally served with a subpoena, summons, complaint, interrogatories or other
papers, documents or materials, a copy thereof shall be attached to such notice
and such notice shall be delivered to the Company within two (2) business days
of the date on which the Indemnitee was so served. No indemnification provided
for in Section 2 of this Agreement shall be available to the Indemnitee if he
fails to give an appropriate and timely notice and, as a direct result thereof,
the Company was unaware of the Proceeding to which such notice would have
related and was prejudiced by the failure to give such notice.
(b) With respect to any Proceeding as to which the
Indemnitee notifies the Company of the commencement thereof, the Company shall
be entitled to participate in the Proceeding at its own expense and, except as
otherwise provided below, to the extent the Company so desires, it may assume
the defense thereof with counsel mutually satisfactory to the Indemnitee and to
the Company. After notice from the Company to the Indemnitee of its election to
assume the defense thereof, the Company shall not be liable to the Indemnitee
under this Agreement or otherwise for any fees, costs or expenses subsequently
incurred by the Indemnitee in connection with the defense of such Proceeding
other than reasonable costs of investigation or as otherwise provided below. The
Indemnitee shall have the right to employ his own counsel in such Proceeding,
but all fees, costs or expenses related thereto incurred after notice from the
Company of its assumption of the defense shall be at the Indemnitee's expense
unless: (i) the employment of counsel by the Indemnitee has been authorized by
the Company, (ii) the Indemnitee has determined in good faith that there may be
a conflict of interest between the Indemnitee and the Company in the defense of
the Proceeding, or (iii) the Company shall not have employed counsel promptly to
assume the defense of such Proceeding; in each of which cases, after prompt
notice to the Company, all fees, costs or expenses of the Proceeding shall be
borne by the Company subject to Sections 2, 3 and 4 of this Agreement. The
Company shall not be entitled to assume the defense of any Proceeding brought by
the Company against the Indemnitee or as to which the Indemnitee shall have made
the determination provided for in (ii) above.
96
5
(c) The Indemnitee shall do everything that the Company
reasonably believes is necessary to defend against, settle, or both, any such
Proceeding, including the execution of such documents necessary to enable the
Company to effectively defend against such Proceeding, and the Indemnitee shall
not make any admission without the Company's written consent unless the
Indemnitee shall have determined to undertake his own defense in such matter and
has waived the benefits of this Agreement.
(d) The Company shall not be liable to indemnify the
Indemnitee under this Agreement or otherwise for any amounts paid in settlement
of any Proceeding effected without the Company's written consent. The Company
shall not settle any Proceeding in any manner that would impose any penalty or
limitation on the Indemnitee without the Indemnitee's written consent. Neither
the Company nor the Indemnitee shall unreasonably withhold its or his consent to
any proposed settlement. The Company shall not be liable to indemnify the
Indemnitee under this Agreement with regard to any judicial award if the Company
was not given a reasonable and timely opportunity, at its expense, to
participate in the defense of such action; however, the Company's liability
hereunder shall not be excused if participation in the Proceeding by the Company
was barred by this Agreement or the order of any court.
(e) The terms and conditions of paragraphs 7 (a)-(d)
above not withstanding, any action in any Proceeding, including consent to the
settlement thereof, taken by Indemnitee pursuant to his responsibilities as a
past or continuing director of Genencor and upon the advice of counsel for
Genencor, shall not constitute a basis for the avoidance by the Company of its
indemnification obligation to Indemnitee under this Agreement.
8. NONEXCLUSIVITY AND SEVERABILITY.
(a) The right to indemnification provided by this
Agreement shall not be exclusive of any other greater indemnification rights to
which the Indemnitee may be entitled as to action in his capacity as a director,
officer, employee, or agent of the Company, and the rights of Indemnitee
hereunder shall continue after the Indemnitee has ceased to be a director of
Genencor.
(b) The right to indemnification provided by this
Agreement is in addition to, and not in lieu of, any rights conferred under the
bylaws of the Company as they may be amended from time to time and the Delaware
General Corporation Law as it may be amended from time to time.
(c) If any provision of this Agreement or the application
of any provision hereof to any person or circumstances is held invalid,
unenforceable or otherwise illegal, the remainder of this Agreement and the
application of such provision to other persons or circumstances shall not be
affected, and the provision so held to be invalid, unenforceable or otherwise
illegal shall be reformed to the extent (and only to the extent) necessary to
make it enforceable, valid and legal.
(d) This Agreement is not an agreement of employment, and
Indemnitee acknowledges that the Company has no obligation to employ Indemnitee
in any capacity by virtue hereof.
9. TERMINATION. The Company shall have no liability to Indemnitee
under Section 2 for Expenses related to Proceedings or Claims that are based
solely on acts or events that occur during Indemnitee's service, if any, as a
Director of Genencor after the Date of Termination of this Agreement. The Date
of Termination shall be the earliest date to occur of the following: (i) the
Date of Termination
97
6
agreed upon in writing by Indemnitee and the Company; (ii) the effective date of
Indemnitee's resignation from the board of directors of Genencor; (iii) sixty
(60) days after Indemnitee's termination of employment for any reason from the
Company unless the Agreement is extended by the Company in writing beyond such
termination date; (iv) indemnitee's death; (v) the termination date specified in
a written notice of termination from the Company which specified date shall not
be less than sixty (60) days after the date such notice is sent certified mail,
return receipt requested, to Indemnitee. The terms and conditions of this
Agreement and the Company's indemnification obligations to Indemnitee hereunder
with respect to any Proceedings, Claims and Expenses based in whole or in part
on acts or events that occurred prior to the Date of Termination, whether or not
then filed, made or known on the Date of Termination, shall survive the Date of
Termination.
10. GOVERNING LAW. This Agreement shall in all respects be
governed by and construed in accordance with (a) the provisions of the Delaware
General Corporation Law and judicial decisions thereunder as they apply to
indemnification of officers, directors, employees and agents and (b) the
internal laws of the State of New York, without giving effect to the principles
of conflict of laws thereof, as such laws apply to contract formation,
construction, interpretation and performance. Each party represents and warrants
to the other that this Agreement has been duly executed and delivered by such
party or on such party's behalf and constitutes the valid and binding obligation
of such party, enforceable against it or him in accordance with its terms..
11. MODIFICATION; SURVIVAL. Subject to Section 8(a) and 8(b)
above, this Agreement contains the entire agreement of the parties relating to
the subject matter hereof. This Agreement may be modified only by an instrument
in writing signed by all parties hereto that refers to this Agreement. The
provisions of this Agreement shall survive the death, disability or incapacity
of the Indemnitee or the termination of the Indemnitee's service as a director,
officer, employee or agent of Genencor and the Company and shall inure to the
benefit of the Indemnitee's heirs, executors and administrators.
12. NOTICES. Unless expressly provided to the contrary herein, all
notices or other communications required or permitted herein will be given in
writing (which may be in the form of an electronic facsimile transmission)
addressed as follows:
(e) If to the Company:
Theresa K. Lee
Vice President, General Counsel & Secretary
Eastman Chemical Company
P. O. Box 511, Kingsport, Tennessee 37662-5075
If to the Indemnitee:
-----------------------
Eastman Chemical Company
P. O. Box 511, Kingsport, Tennessee 37662-5075
Notice of change of address shall be effective only when provided in accordance
with this section. All notices complying with this section shall be deemed to
have been effective on actual receipt.
98
7
13. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
EASTMAN CHEMICAL COMPANY (the "Company")
By:
-----------------------------------------
Name: Earnest W. Deavenport, Jr.
Title: Chief Executive Officer
--------------------------------------------
("Indemnitee")
99