Exhibit 10.2
INDEMNIFICATION
AGREEMENT
This Agreement is made as of this
16 th day of September 2005
(“Agreement”), by and between CIRCOR International,
Inc., a Delaware corporation (the “Company,” which term
shall include, where appropriate, any Entity (as hereinafter
defined) controlled directly or indirectly by the Company) and John
F. Kober III (“Indemnitee”).
WHEREAS, it is essential to the
Company that it be able to retain and attract as officers and
directors the most capable persons available;
WHEREAS, increased corporate
litigation has subjected officers and directors to litigation risks
and expenses, and the limitations on the availability of directors
and officers liability insurance have made it increasingly
difficult for the Company to attract and retain such
persons;
WHEREAS, the Company’s Amended
and Restated By-laws require it to indemnify its officers and
directors to the fullest extent permitted by law and permit it to
make other indemnification arrangements and agreements;
WHEREAS, the Company desires to
provide Indemnitee with specific contractual assurance of
Indemnitee’s rights to full indemnification against
litigation risks and expenses (regardless of, among other things,
any amendment to or revocation of any such By-laws or any change in
the ownership of the Company or the composition of its Board of
Directors); and
WHEREAS, Indemnitee is relying upon
the rights afforded under this Agreement in continuing in
Indemnitee’s position as an officer or director of the
Company.
NOW, THEREFORE, in consideration of
the promises and the covenants contained herein, the Company and
Indemnitee do hereby covenant and agree as follows:
1. Definitions .
(a) “ Corporate Status
” describes the status of a person who is serving or has
served (i) as a director or officer of the Company,
(ii) in any capacity with respect to any employee benefit plan
of the Company, or (iii) as a director, partner, trustee,
officer, employee or agent of any other Entity at the request of
the Company. For purposes of subsection (iii) of this
Section 1(a), an officer or director of the Company who is
serving or has served as a director, partner, trustee, officer,
employee or agent of a Subsidiary shall be deemed to be serving at
the request of the Company.
(b) “ Entity ”
shall mean any corporation, partnership, limited liability company,
joint venture, trust, foundation, association, organization or
other legal entity.
(c) “ Expenses ”
shall mean all fees, costs and expenses incurred in connection with
any Proceeding (as defined below), including, without limitation,
attorneys’ fees, disbursements and retainers (including,
without limitation, any such fees,
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disbursements and retainers incurred by
Indemnitee pursuant to Sections 10 and 11(c) of this
Agreement), fees and disbursements of expert witnesses, private
investigators and professional advisors (including, without
limitation, accountants and investment bankers), court costs,
transcript costs, fees of experts, travel expenses, duplicating,
printing and binding costs, telephone and fax transmission charges,
postage, delivery services, secretarial services, and other
disbursements and expenses.
(d) “ Indemnifiable
Expenses ,” “ Indemnifiable Liabilities
” and “ Indemnifiable Amounts ” shall have
the meanings ascribed to those terms in Section 3(a)
below.
(e) “ Liabilities
” shall mean judgments, damages, liabilities, losses,
penalties, excise taxes, fines and amounts paid in
settlement.
(f) “ Proceeding
” shall mean any threatened, pending or completed claim,
action, suit, arbitration, alternate dispute resolution process,
investigation, administrative hearing, appeal, or any other
proceeding, whether civil, criminal, administrative, arbitrative or
investigative, whether formal or informal, including a proceeding
initiated by Indemnitee pursuant to Section 10 of this
Agreement to enforce Indemnitee’s rights
hereunder.
(g) “ Subsidiary
” shall mean any corporation, partnership, limited liability
company, joint venture, trust or other Entity of which the Company
owns (either directly or through or together with another
Subsidiary of the Company) either (i) a general partner,
managing member or other similar interest or (ii) (A) 50%
or more of the voting power of the voting capital equity interests
of such corporation, partnership, limited liability company, joint
venture or other Entity, or (B) 50% or more of the outstanding
voting capital stock or other voting equity interests of such
corporation, partnership, limited liability company, joint venture
or other Entity.
2. Services of Indemnitee .
In consideration of the Company’s covenants and commitments
hereunder, Indemnitee agrees to serve or continue to serve as a
director or officer of the Company. However, this Agreement shall
not impose any obligation on Indemnitee or the Company to continue
Indemnitee’s service to the Company beyond any period
otherwise required by law or by other agreements or commitments of
the parties, if any.
3. Agreement to Indemnify .
The Company agrees to indemnify Indemnitee as follows:
(a) Subject to the exceptions
contained in Section 4(a) below, if Indemnitee was or is a
party or is threatened to be made a party to any Proceeding (other
than an action by or in the right of the Company) by reason of
Indemnitee’s Corporate Status, Indemnitee shall be
indemnified by the Company against all Expenses and Liabilities
incurred or paid by Indemnitee in connection with such Proceeding
(referred to herein as “Indemnifiable Expenses” and
“Indemnifiable Liabilities,” respectively, and
collectively as “Indemnifiable Amounts”).
(b) Subject to the exceptions
contained in Section 4(b) below, if Indemnitee was or is a
party or is threatened to be made a party to any Proceeding by or
in the right of the Company to procure a judgment in its favor by
reason of Indemnitee’s Corporate Status, Indemnitee shall be
indemnified by the Company against all Indemnifiable
Expenses.
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(c) If Indemnitee, in connection
with Indemnitee’s Corporate Status, is compelled or asked to
be a witness in connection with any Proceeding but is not otherwise
a Party or threatened to be made a party to such Proceeding,
Indemnitee shall be indemnified by the Company against all
Indemnifiable Expenses.
4. Exceptions to
Indemnification . Indemnitee shall be entitled to
indemnification under Sections 3(a) and 3(b) above in all
circumstances other than the following:
(a) If indemnification is requested
under Section 3(a) and it has been adjudicated finally by a
court of competent jurisdiction that, in connection with the
subject of the Proceeding out of which the claim for
indemnification has arisen, Indemnitee failed to act (i) in
good faith and (ii) in a manner Indemnitee reasonably believed
to be in or not opposed to the best interests of the Company, or,
with respect to any criminal action or proceeding, Indemnitee had
reasonable cause to believe that Indemnitee’s conduct was
unlawful, Indemnitee shall not be entitled to payment of
Indemnifiable Amounts hereunder.
(b) If indemnification is requested
under Section 3(b) and
(i) it has been adjudicated finally
by a court of competent jurisdiction that, in connection with the
subject of the Proceeding out of which the claim for
indemnification has arisen, Indemnitee failed to act (A) in
good faith and (B) in a manner Indemnitee reasonably believed
to be in or not opposed to the best interests of the Company,
Indemnitee shall not be entitled to payment of Indemnifiable
Expenses hereunder; or
(ii) it has been adjudicated finally
by a court of competent jurisdiction that Indemnitee is liable to
the Company with respect to any claim, issue or matter involved in
the Proceeding out of which the claim for indemnification has
arisen, including, without limitation, a claim that Indemnitee
received an improper personal benefit, no Indemnifiable Expenses
shall be paid with respect to such claim, issue or matter unless
the Court of Chancery or another court in which such Proceeding was
brought shall determine upon application that, despite the
adjudication of liability, but in view of all the circumstances of
the case, Indemnitee is fairly and reasonably entitled to indemnity
for such Indemnifiable Expenses which such court shall deem
proper.
5. Procedure for Payment of
Indemnifiable Amounts . Indemnitee shall submit to the Company
a written request specifying the Indemnifiable Amounts for which
Indemnitee seeks payment under Section 3 of this Agreement and
the basis for the claim. The Company shall pay such Indemnifiable
Amounts to Indemnitee within twenty (20) calendar days of
receipt of the request. At the request of the Company, Indemnitee
shall furnish such documentation and information as are reasonably
available to Indemnitee and necessary to establish that Indemnitee
is entitled to indemnification hereunder.
6. Indemnification for Expenses
of a Party Who is Wholly or Partly Successful . Notwithstanding
any other provision of this Agreement, and without limiting any
such provision, to the extent that Indemnitee is, by reason of
Indemnitee’s Corporate Status, a
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party to and is successful, on the merits or
otherwise, in any Proceeding, Indemnitee shall be indemnified
against all Expenses reasonably incurred by Indemnitee or on
Indemnitee’s 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 reasonably incurred by Indemnitee
or on Indemnitee’s behalf in connection with each
successfully resolved claim, issue or matter. For purposes of this
Agreement, 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.
7. Effect of Certain
Resolutions . Neither the settlement or termination of any
Proceeding nor the failure of the Company to award indemnification
or to determine that indemnification is payable shall create an
adverse presumption that Indemnitee is not entitled to
indemnification hereunder. In addition, the termination of any
proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent shall not create a
presumption 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 Company or, with respect to any
criminal action or proceeding, had reasonable cause to believe that
Indemnitee’s action was unlawful.
8. Agreement to Advance Expenses;
Conditions . The Company shall pay to Indemnitee all
Indemnifiable Expenses incurred by Indemnitee in connection with
any Proceeding, including a Proceeding by or in the right of the
Company, in advance of the final disposition of such Proceeding. To
the extent required by Delaware law, Indemnitee hereby undertakes
to repay the amount of Indemnifiable Expenses paid to Indemnitee if
it is finally determined by a court of competent jurisdiction that
Indemnitee is not entitled under this Agreement to indemnification
with respect to such Expenses. This undertaking is an unlimited
general obligation of Indemnitee.
9. Procedure for Advance Payment
of Expenses . Indemnitee shall submit to the Company a written
request specifying the Indemnifiable Expenses for which Indemnitee
seeks an advancement under Section 8 of this Agreement,
together with documentation evidencing that Indemnitee has incurred
such Indemnifiable Expenses. Payment of Indemnifiable Expenses
under Section 8 shall be made no later than twenty
(20) calendar days after the Company’s receipt of such
request.
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10. Remedies of Indemnitee
.
(a) Right to Petition Court. In the
event that Indemnitee makes a request for payment of Indemnifiable
Amounts under Sections 3 and 5 above or a request for an
advancement of Indemnifiable Expenses under Sections 8 and 9
above and the Company fails to make such payment or advancement in
a timely manner pursuant to the
