INDEMNIFICATION AGREEMENT
This
Indemnification Agreement (“Agreement”) is made as of
the 17th day of October 2006, by and between A. Schulman,
Inc., a Delaware corporation (the “Company”), and Terry
L. Haines (the “Indemnitee”).
WHEREAS, the
Company’s Certificate of Incorporation and By-laws provide
for the indemnification of directors and officers of the Company to
the full extent permitted by law;
WHEREAS, the
Company recognizes that capable and qualified individuals are
becoming increasingly reluctant to serve as directors and officers
of public corporations as a result of the recent and ongoing
enactment of statutes and regulations pertaining to their
responsibilities and the increasing risk of lawsuits against
directors and officers in the current corporate climate in the
United States, unless such individuals are provided with more
certain and secure protection against exposure to unreasonable
personal risk arising from their service and activities on behalf
of a corporation;
WHEREAS, the
Company is aware that individuals recruited to serve as officers
and/or on the boards of public corporations are generally more
likely to agree to provide services to corporations that provide
for separate indemnification agreements with their directors and
officers because, unlike indemnification provisions contained in
the Company’s Certificate of Incorporation or By-laws, the
indemnification provisions contained in a separate agreement may
not be amended or rescinded without the consent of the director or
officer who is party to the agreement;
WHEREAS, the
Company recognizes that it is in the best interests of the Company
and its shareholders to attract and retain capable and qualified
individuals to serve as officers and/or on its Board of Directors
and to enable such directors and officers to exercise their
independent business judgment in their capacities as directors and
officers without being affected by the threat of exposure to
unreasonable personal risk;
WHEREAS, the
Company believes that Indemnitee’s service as a director
and/or officer of the Company is important to the Company and that
the protection afforded by this Agreement will enhance
Indemnitee’s ability to discharge his or her responsibilities
as a director and/or officer of the Company; and
WHEREAS, in order
to induce Indemnitee to serve and/or to continue to serve as a
director and/or officer of the Company, the Company desires
Indemnitee to be indemnified and advanced expenses as set forth
herein.
NOW, THEREFORE,
for and in consideration of the premises, the mutual promises and
covenants set forth in this Agreement, the parties agree as
follows:
1.1
Proceedings Not By or In Right of Compan y. Subject only to
the limitations set forth in this Agreement, the Company shall
indemnify and hold harmless the Indemnitee to the greatest extent
permitted by Delaware law, including but not limited to the
provisions of the By-laws, as such may be amended from time to
time, if Indemnitee was or is made a party to, is threatened to be
made a party to, or is otherwise involved in any manner (including,
without limitation, as a deponent or a witness) or is threatened to
be made so involved, in any threatened, pending or completed
action, suit or proceeding, whether civil, criminal,
administrative, arbitrative or investigative, formal or informal,
any appeals therefrom, and any inquiry or investigation that could
lead to such an action, suit or proceeding (each a
“Proceeding”), other than an action by or in the right
of the Company, by reason of the fact that the Indemnitee is or was
or agreed to become a director and/or officer of the Company, or is
or was serving or agreed to serve at the request of the Company as
a director, trustee, officer, partner, member, manager, employee,
advisor or agent (each an “Authorized Capacity”) of
another corporation, partnership, limited liability
company, joint
venture, trust or other enterprise (including, without limitation,
service with respect to employee benefit plans), or by reason of
any action alleged to have been taken or omitted in such capacity,
against any and all costs, charges and expenses (including
attorneys’ and others’ fees), judgments, fines and
amounts paid in settlement (if such settlement is approved in
advance by the Company, which approval shall not be unreasonably
withheld) (collectively, “Expenses”) actually and
reasonably incurred by Indemnitee in connection with such
Proceeding, if Indemnitee acted in good faith and in a manner he or
she reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal
Proceeding, had no reasonable cause to believe his or her conduct
was unlawful.
1.2.
Proceedings By or In Right of Compan y. Subject only to the
limitations set forth in this Agreement, the Company shall
indemnify and hold harmless the Indemnitee to the greatest extent
permitted by Delaware law, including but not limited to the
provisions of the By-laws, as such may be amended from time to
time, if Indemnitee was or is made a party to, is threatened to be
made a party to, or is otherwise involved in any manner (including,
without limitation, as a deponent or a witness) or is threatened to
be made so involved, in any Proceeding brought by or in the right
of the Company, by reason of the fact that he or she is or was or
agreed to become a director and/or officer of the Company, or is or
was serving or agreed to serve at the request of the Company in an
Authorized Capacity of another corporation, partnership, limited
liability company, joint venture, trust or other enterprise
(including, without limitation, service with respect to employee
benefit plans), or by reason of any action alleged to have been
taken or omitted in such capacity, against any and all Expenses
actually and reasonably incurred by Indemnitee in connection with
such Proceeding if Indemnitee acted in good faith and in a manner
he or she reasonably believed to be in or not opposed to the best
interests of the Company; provided, however , that, if
applicable law so provides, no indemnification against such
Expenses shall be made in respect of any claim, issue or matter as
to which the Indemnitee shall have been adjudged to be liable to
the Company unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, the
Indemnitee is fairly and reasonably entitled to indemnity for such
Expenses as such court shall deem proper.
1.3.
Mandatory Payment of Expenses . Except as expressly excluded
in Section 2 of this Agreement, to the extent that the
Indemnitee has been successful on the merits or otherwise in
defense of any Proceeding referred to in Section 1.1 or 1.2 of
this Agreement, or in defense of any claim, issue or matter
therein, Indemnitee shall be indemnified against Expenses actually
and reasonably incurred by Indemnitee or on Indemnitee’s
behalf in connection therewith.
2. LIMITATIONS
ON INDEMNIFICATION OF INDEMNITEE. Any other provision herein to the
contrary notwithstanding, the Company shall not be obligated
pursuant to the terms of this Agreement to make any indemnification
payment to the Indemnitee:
(a) for
which payment is actually made to the Indemnitee under a valid and
collectible insurance policy, except in respect of any excess
beyond the amount of payment under such insurance;
(b) for
which payment the Indemnitee is indemnified by the Company
otherwise than pursuant to this Agreement;
(c) if
and to the extent that it shall be finally decided in a proceeding
that the Company is prohibited by applicable law from making such
indemnification payment or that such indemnification payment is
otherwise unlawful;
(d) on
account of Indemnitee’s conduct which is adjudged in a final,
unappealable Proceeding in a court of competent jurisdiction to
have been (i) knowingly fraudulent, deliberately dishonest or
willful misconduct, (ii) a violation of Section 174 of
the Delaware General Corporation Law or (iii) a transaction
from which the Indemnitee gained in fact any personal profit or
advantage to which he or she was not legally entitled;
or
(e) for
expenses and the payment of profits arising from the purchase and
sale by Indemnitee of securities in violation of Section 16(b) of
the Securities Exchange Act of 1934, as amended, or any similar
successor statute.
2
3. ADVANCEMENT
OF EXPENSES.
3.1
The Company shall advance all Expenses incurred by or on behalf of
Indemnitee, and, to the fullest extent permitted by law, amounts
paid in settlement by or on behalf of Indemnitee, in connection
with any Proceeding prior to the final disposition of such
Proceeding upon receipt of an undertaking by or on behalf of
Indemnitee to repay such amount if it shall ultimately be
determined that Indemnitee is not entitled to be indemnified by the
Company in a final, unappealable decision of a court of competent
jurisdiction. Any advances and undertakings to repay pursuant to
this Section 3.1 shall not be secured, shall not bear interest
and shall provide that, if 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 with respect to such Proceeding, Indemnitee shall
not be required to reimburse the Company for any advancement of
Expenses in respect of such Proceeding until a final judicial
determination is made with respect thereto (as to which all rights
of appeal therefrom have been exhausted or lapsed).
3.2
Any advancement of Expenses pursuant to Section 3.1 hereof
shall be made within ten (10) days after the receipt by the Company
of a written statement from Indemnitee requesting such advancement
from time to time and accompanied by or preceded by the undertaking
referred to in Section 3.1 above. Each statement requesting
advancement shall reasonably evidence the Expenses incurred by or
on behalf of the Indemnitee in connection with such Proceeding for
which advancement is being sought.
4. NOTIFICATION
AND DEFENSE OF PROCEEDING.
4.1
Notice to Company . Promptly after receipt by Indemnitee of
notice of the commencement of any Proceeding, Indemnitee shall, if
a claim in respect thereof is to be made against the Company under
this Agreement, notify the Company of the commencement thereof; but
the omission so to notify the Company will not relieve the Company
from any liability which it may have to Indemnitee under this
Agreement unless and only to the extent that such omission can be
shown to have prejudiced the Company’s ability to defend the
Proceeding. Notice t
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