EXHIBIT 10.2
INDEMNIFICATION AGREEMENT
This Agreement is
made as of ___, by and between Kennametal Inc., a Pennsylvania
corporation (the “Corporation”) and ___ (the
“Indemnitee”), an officer of the
Corporation.
WHEREAS,
Indemnitee serves as an officer of the Corporation and in that
capacity is performing a valuable service for the Corporation;
and
WHEREAS, the
shareholders of the Corporation have adopted a bylaw (the
“Bylaw”) which provides for indemnification of and
advancement of expenses to the officers and directors of the
Corporation unless the act or failure to act giving rise to the
claim for indemnification is determined by a court to have
constituted willful misconduct or recklessness; and
WHEREAS, the
By-law and the applicable indemnification statutes of the
Commonwealth of Pennsylvania provide that they are not exclusive;
and
WHEREAS, the
Corporation has purchased and presently maintains a policy of
Directors and Officers Liability Insurance (“D & O
Insurance”)
covering certain liabilities
which may be incurred by its directors and officers in their
performance of services for the Corporation; and
WHEREAS,
developments with respect to the terms and availability of D &
O Insurance and with respect to the terms, amendment and
enforcement of statutory and by-law provisions concerning
indemnification and the advancement of expenses generally have
raised questions concerning the adequacy and reliability of the
protection that these provisions provide to corporate officers;
and
WHEREAS, the
Corporation desires to resolve these questions and induce the
Indemnitee to continue to serve as an officer of the Corporation by
entering into this Agreement with Indemnitee.
NOW, THEREFORE, in
consideration of Indemnitee’s continued service as an officer
after the date of this Agreement, and intending to be legally
bound, the parties agree as follows:
1.
Indemnity .
(a) The
Corporation shall hold harmless and indemnify the Indemnitee
against any and all reasonable expenses, including attorneys’
fees, and any and all liability and loss, including judgments,
fines, ERISA excise taxes or penalties and amounts paid or to be
paid in settlement,
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incurred or paid by Indemnitee in
connection with any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or
investigative (hereinafter “a proceeding”) and whether
or not by or in the right of the Corporation or otherwise, to which
the Indemnitee is, was or at any time becomes a party, or is
threatened to be made a party or is involved (as a witness or
otherwise) by reason of the fact that Indemnitee is or was a
director or officer of the Corporation or is or was serving at the
request of the Corporation as director, officer, trustee or
representative of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with respect
to employee benefit plans, whether the basis of such proceeding is
alleged action in an official capacity, or in any other capacity
while serving, as a director, officer, trustee or representative,
unless the act or failure to act giving rise to the claim for
indemnification is determined by a court to have constituted
willful misconduct or recklessness; provided, however, that the
Corporation shall indemnify the Indemnitee in connection with a
proceeding (or part thereof) initiated by the Indemnitee (other
than a proceeding to enforce the Indemnitee’s rights to
indemnification under
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this Agreement or otherwise) only
if such proceeding (or part thereof) was authorized by the Board of
Directors of the Corporation.
(b) The
Corporation shall pay the expenses (including attorneys’
fees) incurred or estimated to be incurred by Indemnitee in
connection with any proceeding in advance of the final disposition
thereof promptly after receipt by the Corporation of a request
therefor stating in reasonable detail the expenses incurred or to
be incurred.
(c) If a
claim under paragraph (a) or (b) of this section is not
paid in full by the Corporation within forty-five (45) days
after a written claim has been received by the Corporation, the
Indemnitee may, at any time thereafter, bring suit against the
Corporation to recover the unpaid amount of the claim. The burden
of proving that indemnification or advances are not appropriate
shall be on the Corporation. The Indemnitee shall also be entitled
to be paid the expenses of prosecuting such claim to the extent he
or she is successful in whole or in part on the merits or otherwise
in establishing his or her right to indemnification or to the
advancement of expenses. The Corporation shall pay such fees and
expenses in advance of the final disposition of such action on the
terms and conditions set forth in Section 1(b).
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2.
Maintenance of Insurance and Funding .
(a) The
Corporation represents that it presently has in force and effect
one or more D & O Insurance policies, underwritten by reputable
insurance companies and in such amounts as the Board of Directors
deems appropriate (the “Insurance Policies”). The
Corporation agrees that, so long as Indemnitee shall continue to
serve as an officer or director of the Corporation (or shall
continue at the request of the Corporation to serve as a director,
officer, trustee or representative of another corporation,
partnership, joint venture, trust or other enterprise, including
service with respect to an employee benefit plan) and thereafter
(but in no event longer than four (4) years) so long as
Indemnitee shall be subject to any possible claim or threatened,
pending or completed action, suit or proceeding, whether civil,
criminal or investigative, by reason of the fact that Indemnitee
was a director or officer of the Corporation (or served in any of
said other capacities), the Corporation shall purchase and maintain
in effect for the benefit of Indemnitee one or more valid, binding
or enforceable policy or policies of D & O Insurance providing
coverage in such amount as is deemed appropriate by the Board of
Directors.
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(b) The
Corporation shall not be required to maintain said policy or
policies of D & O Insurance in effect if, in the reasonable
business judgment of the then directors of the Corporation
(i) the premium cost for such insurance is substantially
disproportionate to the amount of coverage, (ii) the coverage
provided by such insurance is so limited by exclusions or otherwise
that there is insufficient benefit from such insurance or
(iii) said insurance is not otherwise reasonably available;
provided however, that in the event the then directors make such a
judgment, the Corporation shall purchase and maintain in force a
policy or policies of D & O Insurance in the amount and with
such coverage as the then directors determine to be reasonably
available.
(c) The Board
may create a fund of any nature, which may, but need not be,
irrevocable or under the control of a trustee, or otherwise secure
or insure in any manner its obligations to indemnify and advance
expenses to the Indemnitee and to other officers, directors,
trustees and representatives of the Corporation, whether
ar
