INDEMNITY AGREEMENT
This Indemnification Agreement ("
Agreement ") is made as of ________, 20__ by and between
Carpenter Technology Corporation a Delaware corporation, and
______________ (" Indemnitee ").
RECITALS
WHEREAS , highly competent persons have become 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.
WHEREAS , the Restated Certificate of Incorporation and
Bylaws of the Company require indemnification of the officers and
directors of the Company, and Indemnitee may also be entitled to
indemnification pursuant to the Delaware General Corporation Law ("
DGCL ").
WHEREAS , the Board of Directors of the Company (the "Board")
has determined that, in order to attract and retain qualified
individuals, the Company will attempt to maintain on an ongoing
basis, at its sole expense, liability insurance to protect persons
serving the Company and its subsidiaries from certain
liabilities.
WHEREAS , the uncertainties relating to such insurance and to
indemnification have increased the difficulty of attracting and
retaining such persons.
WHEREAS , the Board has determined that the increased
difficulty in attracting and retaining 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.
WHEREAS , it is reasonable, prudent and necessary for the
Company contractually to obligate itself to indemnify, and to
advance expenses on behalf of, 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.
WHEREAS , this Agreement is a supplement to and in
furtherance of the Restated Certificate of Incorporation and Bylaws
of the Company and any resolutions adopted pursuant thereto and any
liability insurance, and shall not be deemed a substitute therefor,
nor to diminish or abrogate any rights of Indemnitee
thereunder.
WHEREAS , Indemnitee does not regard the protection available
under the Company's Restated Certificate of Incorporation, Bylaws
and insurance as adequate in the present circumstances, and may not
be willing to serve as an officer or director without adequate
protection, and the Company desires Indemnitee to serve in such
capacity. 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 promises and
the covenants contained herein, the Company and Indemnitee do
hereby covenant and agree as follows:
1. Services to the
Company . Indemnitee will serve or continue to serve, at
the will of the Company, as an officer, director or key employee of
the Company for so long as Indemnitee is duly elected or appointed
or until Indemnitee tenders his or her resignation; 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 or the parties, if any.
2. Definitions .
As used in this Agreement
(a) A "Change in Control"
shall be deemed to occur upon the earliest to occur after the date
of this Agreement of any of the following events:
(i) Acquisition of Stock
by Third Party . Any Person (as defined below) or group
(within the meaning of Section 13(d)(3) and Section 14(d)(2) of the
Exchange Act, or any successor provision) is or becomes the
Beneficial Owner (as defined below), directly or indirectly, of
securities of the Company representing twenty percent (20%) or more
of the combined voting power of the Company's then outstanding
securities;
(ii) Change in Board of
Directors . During any period of two (2) consecutive
years (not including any period prior to the execution of this
Agreement), individuals who at the beginning of such period
constitute the Board, and any director (other than a director
designated by a person who has entered into an agreement with the
Company to effect a transaction described in Sections 2(a)(i),
2(a)(iii) or 2(a)(iv)) whose election by the Board or nomination
for election by the Company's stockholders was approved by a vote
of at least two-thirds of the directors then still in office who
either were directors at the beginning of the period or whose
election or nomination for election was previously so approved,
cease for any reason to constitute a least a majority of the
members of the Board;
(iii) Corporate
Transactions . The effective date of a merger or
consolidation of the Company with any other entity, other than a
merger or consolidation which would result in the voting securities
of the Company outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of the
surviving entity), in substantially the same proportions as their
current ownership of stock, more than 51% of the combined voting
power of the voting securities of the surviving entity outstanding
immediately after such merger or consolidation and with the power
to elect at least a majority of the board of directors or other
governing body of such surviving entity;
(iv) Liquidation .
The approval by the stockholders of the Company of a complete
liquidation of the Company or an agreement for the sale or
disposition
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by the Company of all or substantially
all of the Company's assets other than such a sale or disposition
to an entity in which the Company or its shareholders continue to
own after such a sale at least 51% of the total voting power
represented by the voting securities of such entity in
substantially the same proportions as their then current ownership
of stock of the Company and have the power to elect at least a
majority of the board of directors or other governing body of such
surviving entity; and
(v) Other Events .
There occurs any other event of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A (or a response to any similar item on any similar
schedule or form) promulgated under the Exchange Act (as defined
below), whether or not the Company is then subject to such
reporting requirement.
For purposes of this Section 2(a), the
following terms shall have the following meanings:
A) "Exchange Act" shall mean
the Securities Exchange Act of 1934, as amended.
B) "Person" means an
individual, entity, partnership, limited liability company,
corporation, association, joint stock company, trust, joint
venture, unincorporated organization, and a governmental entity or
any department agency or political subdivision thereof; provided,
however, that Person shall exclude (i) the Company, (ii) any
trustee or other fiduciary holding securities under an employee
benefit plan of the Company, and (iii) any corporation owned,
directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of
the Company.
C) “Beneficial Owner"
shall have the meaning given to such term in Rule 13d-3 under the
Exchange Act.
(b) "Company" shall mean
Carpenter Technology Corporation, and shall include, in addition to
the resulting corporation, any constituent corporation (including
any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have
had power and authority to indemnify its directors, officers,
employees, trustees, fiduciaries or agents, so that if Indemnitee
is or was a director, officer, employee, trustee, fiduciary or
agent of such constituent corporation, or is or was serving at the
request of such constituent corporation as a director, officer,
employee. trustee, fiduciary or agent of another corporation,
partnership, joint venture, trust employee benefit program or other
enterprise, Indemnitee shall stand in the same position under the
provisions of this Agreement with respect to the resulting or
surviving corporation as Indemnitee would have with respect to such
constituent corporation if its separate existence had
continued.
(c) "Corporate Status"
describes the status of a person who is or was a director, officer,
employee, agent, trustee or fiduciary of the Company or of any
other corporation,
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partnership or joint venture, trust,
employee benefit plan or other enterprise which such person is or
was serving at the request of the Company.
(d) "Disinterested Director"
means a director of the Company who is not and was not a party to
the Proceeding in respect of which indemnification is sought by
Indemnitee.
(e) "Enterprise" shall mean
the Company and any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise of which
Indemnitee is or was serving at the request of the Company as a
director, officer, employee, agent, trustee or
fiduciary.
(f) "Expenses" shall mean all
retainers, court costs, transcript costs, fees of experts, witness
fees, private investigators, travel expenses, duplicating costs,
printing and binding costs, telephone charges, postage, fax
transmission charges, secretarial services, delivery service fees,
reasonable attorneys' fees, and all other disbursements or expenses
of the types customarily incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, being
or preparing to be a witness in, or otherwise participating in, a
Proceeding or in connection with seeking indemnification under this
Agreement. Expenses also shall include Expenses incurred in
connection with any appeal resulting from any Proceeding, including
without limitation the premium, security for, and other costs
relating to any cost bond, supersedeas bond, or other appeal bond
or its equivalent. Expenses, however, shall not include
amounts paid in settlement by Indemnitee or the amount of judgments
or fines against Indemnitee
(g) “Losses”
shall mean all loss, liability, judgments, damages, amounts paid in
settlement, fines, penalties, interest, assessments, other charges
or, with respect to an employee benefit plan, excise taxes or
penalties assessed with respect thereto.
(h) Reference to "other
enterprise" shall include employee benefit plans; references to
"fines" shall include any excise tax assessed with respect to any
employee benefit plan; references to "serving at the request of the
Company" shall include any service as a director, officer,
employee, trustee, fiduciary or agent of the Company which imposes
duties on, or involves services by, such director, officer,
employee, trustee, fiduciary or agent with respect to an employee
benefit plan, its participants or beneficiaries; and a person who
acted in good faith and in a manner he reasonably believed to be in
the best interests of the participants and beneficiaries of an
employee benefit plan shall be deemed to have acted in a manner
"not opposed to the best interests of the Company" as referred to
under applicable law.
(i) The term "Proceeding"
shall include any threatened, pending or completed action, suit,
arbitration, alternate dispute resolution mechanism, investigation,
inquiry, administrative hearing or any other actual, threatened or
completed proceeding, including any and all appeals, whether
brought in the right of the Company or otherwise and whether of a
civil, criminal, administrative or investigative nature and whether
formal or informal, in which Indemnitee was, is or will be involved
as a party or otherwise by reason of or relating to the fact that
Indemnitee is or was a director, officer, employee,
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agent, trustee or fiduciary of the
Company, by reason of or relating to any action taken by him or of
any action on his part while acting as director, officer, employee,
agent, trustee or fiduciary of the Company, or by reason of the
fact that he is or was serving at the request of the Company as a
director, officer, employee, agent or fiduciary of another
Enterprise, in each case whether or not serving in such capacity at
the time any Loss or Expense is incurred for which indemnification,
reimbursement, or advancement of Expenses can be provided under
this Agreement, including one initiated by a Indemnitee to enforce
his rights under this Agreement.
(j) "Independent Counsel"
means a law firm, or a member of a law firm, that is experienced in
matters of relevant corporation law and neither presently is, nor
in the past five years has been, retained to represent: (i)
the Company or Indemnitee in any matter material to either such
party (other than with respect to matters concerning the Indemnitee
under this Agreement, or of other indemnitees under similar
indemnification agreements), or (ii) any other party to the
Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term "Independent Counsel"
shall not include any person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of
interest in representing either the Company or Indemnitee in an
action to determine Indemnitee's rights under this Agreement.
The Company agrees to pay the reasonable fees and expenses of
the Independent Counsel referred to above and to fully indemnify
such counsel against any and all Expenses and Losses arising out of
or relating to this Agreement or its engagement pursuant
hereto.
(k) For purposes of Sections
3 and 4, the meaning of the phrase "to the fullest extent permitted
by law" shall include, but not be limited to:
(i) to the fullest extent
permitted by Section 145 of the DGCL or any section that replaces
or succeeds Section 145 with respect to such matters of the DGCL,
and
(ii) to the fullest extent
authorized or permitted by any amendments to or replacements of the
DGCL adopted after the date of this Agreement that increase the
extent to which a corporation may indemnify its officers,
directors, employees, agents, trustees, fiduciaries and other
persons acting or serving at the Company’s
request.
3. Indemnity in
Third-Party Proceedings . The Company shall indemnify
Indemnitee in accordance with the provisions of this Section 3 if
Indemnitee was or is, or was or is threatened to be made, a party
to or a witness or participant in any Proceeding, other than a
Proceeding by or in the right of the Company to procure a judgment
in its favor. Pursuant to this Section 3, Indemnitee shall be
indemnified against all Expenses and Losses to the fullest extent
permitted under law.
4. Indemnity in
Proceedings by or in the Right of the Company . The
Company shall indemnify Indemnitee in accordance with the
provisions of this Section 4 if Indemnitee was or is, or was or is
threatened to be made, a party to or a participant in any
Proceeding by or in the right
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of the Company to procure a judgment in
its favor. Pursuant to this Section 4, Indemnitee shall be
indemnified against all Expenses and Losses actually and reasonably
incurred or suffered by him or on his behalf in connection with
such Proceeding or any claim, issue or matter therein to the
fullest extent permitted under law. No indemnification for
Expenses shall be made under this Section 4 in respect of any
claim, issue or matter as to which Indemnitee shall have been
finally adjudged by a court to be liable to the Company, unless and
only to the extent that the Delaware Court of Chancery or any court
in which the 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 indemnification.
5. Indemnification for
Expenses of a Party Who is Wholly or Partly Successful .
Notwithstanding any other provisions of this Agreement, to the
extent that Indemnitee was or is a party to (or a participant in)
and is successful, on the merits or otherwise, in any Proceeding or
in defense of any claim, issue or matter therein, in whole or in
part, the Company shall indemnify Indemnitee against all Expenses
actually and reasonably incurred by him 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 and any claim,
issue or matter related to any claim, issue, or matter on which the
Indemnitee was successful. 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.
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.
7. Exclusions .
Notwithstanding any provision in this Agreement, the
Company shall not be obligated under this Agreement to make any
indemnity in connection with any claim made against
Indemnitee:
(a) for which payment has
actually been made to or on behalf of Indemnitee under any
insurance policy or other indemnity provision, except with respect
to any excess beyond the amount paid under any insurance policy or
other indemnity provision; or
(b) for an accounting of
profits made from the purchase and sale (or sale and purchase) by
Indemnitee of securities of the Company within the meaning of
Section 16(b) of the Securities Exchange Act of 1934, as amended,
or similar provisions of state statutory law or common law;
or
(c) in connection with any
Proceeding (or any part of any Proceeding) initiated or brought
voluntarily by Indemnitee prior to a Change of Control against the
Company or its directors, officers, employees or other indemnitees,
unless (i) the Board of Directors of the Company authorized the
Proceeding (or any part of any Proceeding) prior to its
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initiation, (ii) the Company provides the
indemnification, in its sole discretion, pursuant to the powers
vested in the Company under applicable law.
8. Advances of
Expenses . Notwithstanding any provision of this
Agreement to the contrary, the Company shall advance the Expenses
incurred by Indemnitee in connection with any Proceeding for which
indemnification is or may be available pursuant to this Agreement
within 20 days after the receipt by the Company of a statement or
statements requesting such advances from time to time, whether
prior to or after final disposition of any Proceeding.
Advances shall be unsecured and interest free. Advances
shall be made without regard to Indemnitee's ability to
repa
