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Exhibit
10.2
INDEMNIFICATION
AGREEMENT
This Agreement, made and
entered into this 31st day of July, 2007 ("Agreement"), by and
between Lydall, Inc., a Delaware corporation ("Company"), and Dale
G. Barnhart("Indemnitee"):
WHEREAS, highly competent
persons are becoming more reluctant to serve publicly-held
corporations as directors or in other capacities unless they are
provided with adequate protection through insurance or adequate
indemnification against inordinate risks of claims and actions
against them arising out of their service to and activities on
behalf of the corporation; and
WHEREAS, the current
impracticability of obtaining adequate insurance and the
uncertainties relating to indemnification have increased the
difficulty of attracting and retaining such persons;
WHEREAS, the Board of
Directors of the Company has determined that the inability to
attract and retain such persons is detrimental to the best
interests of the Company's stockholders and that the Company should
act to assure such persons that there will be increased certainty
of such protection in the future; and
WHEREAS, it is reasonable,
prudent and necessary for the Company contractually to obligate
itself to indemnify such persons to the fullest extent permitted by
applicable law so that they will serve or continue to serve the
Company free from undue concern that they will not be so
indemnified; and
WHEREAS, Indemnitee is
willing to serve, continue to serve and to take on additional
service for or on behalf of the Company on the condition that he be
so indemnified;
NOW, THEREFORE, in
consideration of the premises and the covenants contained herein,
the Company and Indemnitee do hereby covenant and agree as
follows:
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Section 1. Services
by Indemnitee. Indemnitee agrees to serve (as a director,
officer, employee, agent of the Company) (at the request of the
Company, as a director, officer, employee, agent, fiduciary of
another corporation, partnership, joint venture, trust employee
benefit plan or other enterprise. Indemnitee may at any time and
for any reason resign from such position (subject to any other
contractual obligation or any obligation imposed by operation of
law), in which event the Company shall have no obligation under
this Agreement to continue Indemnitee in such position.
Section 2.
Indemnification—General. The Company shall indemnify,
and advance Expenses (as hereinafter defined) to, Indemnitee
(a) as provided in this Agreement and (b) to the fullest
extent permitted by applicable law in effect on the date hereof and
as amended from time to time. The rights of Indemnitee provided
under the preceding sentence shall include, but shall not be
limited to, the rights set forth in the other Sections of this
Agreement.
Section 3.
Proceedings Other than Proceedings by or in the Right of the
Company. Indemnitee shall be entitled to the rights of
indemnification provided in this Section 3 if, by reason of
his Corporate Status (as hereinafter defined), he is, or is
threatened to be made, a party to any threatened, pending, or
completed Proceeding (as hereinafter defined), other than a
Proceeding by or in the right of the Company. Pursuant to this
Section 3, Indemnitee shall be indemnified against all
expenses, judgements, penalties, fines, and amounts paid in
settlement actually and reasonably incurred by him or on his behalf
in connection with such Proceeding or any claim, issue or matter
therein, if he acted in good faith and in a manner be 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 conduct was unlawful.
Section 4.
Proceedings by or in the Right of the Company. Indemnitee
shall be entitled to the rights of indemnification provided in this
Section 4 if, by reason of his Corporate Status, he is, or is
threatened to be made, a party to any threatened, pending or
completed Proceeding brought by or in the right of the Company to
procure a judgment in its favor. Pursuant to this Section,
Indemnitee shall be indemnified against all Expenses
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actually and reasonably incurred by him
or on his behalf in connection with such Proceeding if he 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 if applicable law so provides, no indemnification against such
Expenses shall be made in respect of any claim, issue or matter in
such Proceeding as to which Indemnitee shall have been adjudged to
be liable to the Company unless and to the extent that the Court of
Chancery of the State of Delaware, or the court in which such
Proceeding shall have been brought or is pending, shall determine
that such indemnification may be made.
Section 5.
Indemnification for Expenses of a Party Who is Wholly or Partly
Successful. Notwithstanding any other provision of this
Agreement, to the extent that Indemnitee is, by reason of his
Corporate Status, a party to and is successful, on the merits or
otherwise, in any Proceeding, he shall be indemnified against all
Expenses actually and reasonably incurred by him or on his behalf
in connection therewith. If Indemnitee is not wholly successful in
such Proceeding but is successful, on the merits or otherwise, as
to one or more but less than all claims, issues or matters in such
Proceeding, the Company shall indemnify Indemnitee against all
expenses actually and reasonably incurred by him or on his behalf
in connection with each successfully resolved claim, issue or
matter. For purposes of this Section and without limitation, the
termination of any claim, issue or matter in such a Proceeding by
dismissal, with or without prejudice, shall be deemed to be a
successful result as to such claim, issue or matter.
Section 6.
Indemnification for Expenses of a Witness. Notwithstanding
any other provision of this Agreement, to the extent that
Indemnitee is, by reason of his Corporate Status, a witness in any
Proceeding to which Indemnitee is not a party, he shall be
indemnified against all Expenses actually and reasonably incurred
by him or on his behalf in connection therewith.
Section 7.
Advancement of Expenses. The Company shall advance all
reasonable Expenses incurred by or on behalf of Indemnitee in
connection with any Proceeding within ten days after the receipt by
the Company of a statement or statements from Indemnitee requesting
such advance or advances from time to time, whether prior to or
after final disposition of such
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Proceeding. Such statement or statements
shall reasonably evidence the Expenses incurred by Indemnitee and
shall include or be preceded or accompanied by an undertaking by or
on behalf of Indemnitee to repay any Expenses advanced if it shall
ultimately be determined that Indemnitee is not entitled to be
indemnified against such Expenses.
Section 8. Procedures
for Determination of Entitlement to Indemnification.
(a) To obtain indemnification
under this Agreement, Indemnitee shall submit to the Company a
written request, including therein or therewith such documentation
and information as is reasonably available to Indemnitee and is
reasonably necessary to determine whether and to what extent
Indemnitee is entitled to indemnification. The Secretary of the
Company shall, promptly upon receipt of such a request for
indemnification, advise the Board of Directors in writing that
Indemnitee has requested indemnification.
(b) Upon written request by
Indemnitee for indemnification pursuant to the first sentence of
Section 8(a) hereof, a determination, if required by
applicable law, with respect to Indemnitee's entitlement thereto
shall be made in the specific case; (i)if a Change in Control (as
hereinafter defined) shall be made in the Independent Counsel (as
hereinafter defined) in a written opinion to the Board of
Directors, a copy of which shall be delivered to Indemnitee; or
(ii) if a Change of Control shall not have occurred,
(A) by the Board of Directors by a majority vote of a quorum
consisting of Disinterested Directors (as hereinafter defined), or
(B) if a quorum of the Board of Directors consisting of
Disinterested Directors is not obtainable or, even if obtainable,
such quorum of Disinterested Directors so directs, by Independent
Counsel in a written opinion to the Board of Directors, a copy of
which shall be delivered to Indemnitee or (C) if so directed
by the Board of Directors, by the stockholders of the Company; and,
if it is so determined that Indemnitee is entitled to
indemnification, payment to Indemnitee shall be made within ten
(10) days after such determination. Indemnitee shall cooperate
with the person, persons or entity making such determination with
respect to Indemnitee's entitlement to indemnification, including
providing to such person, persons or entity upon reasonable advance
request any documentation or information which is not privileged or
otherwise protected from
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disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such
determination. Any costs or expenses (including attorneys' fees and
disbursements) incurred by Indemnitee in so cooperating with this
person, persons or entity making such determination shall be borne
by the Company (Irrespective of the determination as to
Indemnitee's entitlement to indemnification) and the Company hereby
indemnifies and agrees to hold Indemnitee harmless
therefrom.
(c) In the event the
determination of entitlement to indemnification is to be made by
Independent Counsel pursuant to Section 8(b) hereof, the
Independent Counsel shall be selected as provided in this
Section 8(c). If a Change of Control shall not have occurred,
the Independent Counsel shall be selected by the Board of
Directors, and the Company shall give written notice to Indemnitee
advising him of the identity of the Independent Counsel so
selected. If a Change of Control shall have occurred, the
Independent Counsel shall be selected by Indemnitee (unless
Indemnitee shall request that such selection be made by the Board
of Directors, in which event the preceding sentence shall apply),
and Indemnitee shall give written notice to the Company advising it
of the identity of the Independent Counsel so selected. In either
event, Indemnitee or the Company, as the case may be, may, within
10 days after such written notice of selection shall have been
given, deliver to the Company or to Indemnitee, as the case may be,
a written objection to such selection; provided ,
however , that such objection may be asserted only on the
ground that the Independent Counsel so selected does not meet the
requirements of "Independent Counsel" as defined in Section 17
of this Agreement, and the objection shall set forth with
particularity the factual basis of such assertion. If such written
objection is so made and substantiated, the Independent Counsel so
selected may not serve as Independent Counsel unless and until such
objection is withdrawn or a court has determined that such
objection is without merit. If, within 20 days after submission by
Indemnitee of a written request for indemnification pursuant to
Section 8(a) hereof, no Independent Counsel shall have been
selected and not objected to, either the Company or Indemnitee may
petition the Court of Chancery of the State of Delaware or other
court of competent jurisdiction for resolution of any objection
which sha
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