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Exhibit 10.1
INDEMNIFICATION AGREEMENT
This Agreement is made as of this 18 th day of December 2006
("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 Richard A. Broughton
("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
terms of this Agreement, Indemnitee may petition the Court of
Chancery to enforce the Company’s o
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