[Form of]
Indemnification Agreement
This Agreement is
made this
day of
,
, be tween Ferro Corporation, an Ohio corporation (the
“Company”) and
, a director, officer or representative (as hereinafter defined) of
the Company (the “Indemnitee”).
WHEREAS, the
Company and the Indemnitee are each aware of the exposure to
litigation of officers, directors and representatives of the
Company as such persons exercise their duties to the
Company;
WHEREAS, the
Company and the Indemnitee are also aware of conditions in the
insurance industry that have affected and may continue to affect
the Company’s ability to obtain appropriate directors’
and officers’ liability insurance on an economically
acceptable basis;
WHEREAS, the
Company desires to continue to benefit from the services of highly
qualified, experienced and otherwise competent persons such as the
Indemnitee;
WHEREAS, the
Indemnitee desires to serve or to continue to serve the Company as
a director, officer or as a director, officer or trustee of another
corporation, joint venture, trust or other enterprise in which the
Company has a direct or indirect ownership interest, for so long as
the Company continues to provide on an acceptable basis adequate
and reliable indemnification against certain liabilities and
expenses which may be incurred by the Indemnitee.
NOW, THEREFORE, in
consideration of the foregoing premises and the mutual covenants
herein contained, the parties hereto agree as follows:
Subject to the
terms of this Agreement, the Company shall indemnify the Indemnitee
with respect to his/her activities as a director or officer of the
Company and/or as a person who is serving or has served on behalf
of the Company (“representative”) as a director,
officer, or trustee of another corporation, joint venture, trust or
other enterprise, domestic or foreign, in which the Company has a
direct or indirect ownership interest (an “affiliated
entity”) against expenses (including, without limitation,
attorneys’ fees, judgments, fines, and amounts paid in
settlement) actually and reasonably incurred by him/her
(“Expenses”) in connection with any claim against
Indemnitee which is the subject of any threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal,
administrative, investigative or otherwise and whether formal or
informal (a “Proceeding”), to which Indemnitee was, is,
or is threatened to be made a party by reason of facts which
include Indemnitee’s being or having been such a director,
officer or representative, to the extent of the highest and most
advantageous to the Indemnitee, as determined by the Indemnitee, of
one or any combination of the following:
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(a)
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The
benefits provided by the Company’s Regulations in effect on
the date hereof, as adopted by the shareholders of the Company at
the 1987 annual meeting of shareholders;
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(b)
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The
benefits provided by the Articles of Incorporation, Regulations, or
By-laws or their equivalent of the Company in effect at the time
Expenses are incurred by Indemnitee;
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(c)
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The
benefits allowable under Ohio law in effect at the date
hereof;
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(d)
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The
benefits allowable under the law of the jurisdiction under which
the Company exists at the time Expenses are incurred by the
Indemnitee;
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(e)
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The
benefits available under liability insurance obtained by the
Company;
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(f)
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The
benefits which would have been available to the Indemnitee under
the Directors and Officers Liability Insurance and Reimbursement
for Directors and Officers Liability Policy issued by Harbor
Insurance Company on April 8, 1985 which expired on
March 30, 1986 and which is designated as policy number HI
211839 had such policy continued in effect and unamended at the
time Expenses are incurred by the Indemnitee; and
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(g)
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Such other benefits as are or may be
otherwise available to Indemnitee.
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Combination of
two or more of the benefits provided by (a) through
(g) shall be available to the extent that the Applicable
Document, as hereafter defined, does not require that the benefits
provided therein be exclusive of other benefits. The document or
law providing for the benefits listed in items (a) through
(g) above is called the “Applicable Document” in
this Agreement. The Company hereby undertakes to use its best
efforts to assist Indemnitee, in all proper and legal ways, to
obtain the benefits selected by Indemnitee under items (a) through
(g) above.
For purposes of
this Agreement, references to “other enterprises” shall
include employee benefit plans for employees of the Company or of
any affiliated entity without regard to ownership of such plans;
references to “fines” shall include any excise taxes
assessed on the Indemnitee with respect to any employee benefit
plan; references to “serving on behalf of the Company”
shall include any service as a director, officer, employee or agent
of the Company which imposes duties on, or involves services by,
the Indemnitee with respect to an employee benefit plan, its
participants or beneficiaries; references to the masculine shall
include the feminine; references to the singular shall include the
plural and vice versa ; and if the Indemnitee acted
in good faith and in a manner he reasonably believed to be in the
interest of the participants and beneficiaries of an employee
benefit plan he shall be deemed to have acted in a manner
consistent with the standards required for indemnification by the
Company under the Applicable Documents.
The Company
shall maintain directors’ and officers’ liability
insurance for so long as Indemnitee’s services are covered
hereunder, provided and only to the extent that such insurance is
available in amounts and on terms and conditions determined by the
Company to be acceptable. However, the Company agrees that the
provisions hereof shall remain in effect regardless of whether
liability or other insurance coverage is at any time obtained or
retained by the Company; except that any payments in fact made to
Indemnitee under an insurance policy obtained or retained by the
Company shall reduce the obligation of the Company to make payments
hereunder by the amount of the payments made under any such
insurance policy.
At
Indemnitee’s request, the Company shall pay the Expenses as
and when incurred by Indemnitee, after receipt of written notice
pursuant to Section 6 hereof and an undertaking in the form of
Exhibit I attached hereto by or on behalf of Indemnitee
(i) to repay such amounts so paid on Indemnitee’s behalf
if it shall ultimately be determined under the Applicable Document
that Indemnitee is required to repay such amounts and (ii) to
reasonably cooperate with the Company concerning such Proceeding.
That portion of Expenses which
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represents
attorneys’ fees and other costs incurred in defending any
Proceeding shall be paid by the Company within thirty
(30) days of its receipt of such request, together with
reasonable documentation (consistent, in the case of
attorneys’ fees, with Company practice in payment of legal
fees for outside counsel generally) evidencing the amount and
nature of such Expenses, subject to its also having received such a
notice and undertaking.
The Company
shall dedicate an aggregate of TWO AND ONE-HALF MILLION DOLLARS
($2,500,000) as collateral security for the funding of its
obligations hereunder and under similar and predecessor agreements
with other directors, officers and representatives by depositing
assets or bank letters of credit in escrow or reserving lines of
credit that may be drawn down by an escrow agent in the
dedicated
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