DIRECTOR AND OFFICER INDEMNIFICATION AGREEMENT
THIS DIRECTOR AND OFFICER INDEMNIFICATION AGREEMENT (this
“Agreement”) is made as of this [____] day of [_________], 20__, by and between Rexnord
Corporation, a Delaware corporation (the “Company”), and [____________] (the “Indemnitee”).
WHEREAS, the Company desires to attract and retain the services of highly qualified
individuals to act as directors and officers;
WHEREAS, increased corporate litigation and investigations have subjected directors
and officers to litigation risks and expenses, and the limitations on the availability and terms of
director and officer liability insurance have made it increasingly difficult for the Company to
attract and retain such persons;
WHEREAS, the Company’s certificate of incorporation authorizes the Company to
provide indemnification and advancement rights to directors and officers through bylaw
provisions or through agreements with directors and officers, or otherwise, to the extent provided
therein;
WHEREAS, the Company’s bylaws require that the Company indemnify its directors
and officers as authorized by the General Corporation Law of the State of Delaware (“DGCL”),
as amended, under which the Company is incorporated, and such bylaws expressly provide that
the indemnification provided therein is not exclusive and contemplate that the Company may
enter into separate agreements with its directors, officers and other persons to set forth specific
indemnification provisions;
WHEREAS, in light of the fact that the certificate of incorporation and bylaws of the
Company are subject to change and do not contain all the provisions and protections set forth in
this Agreement, the Company has determined that the Indemnitee and other directors and
officers of the Company may not be willing to serve or continue to serve in such capacities
without additional protection;
WHEREAS, the Company desires and has requested the Indemnitee to serve or continue
to serve as a director or officer of the Company, as the case may be, and has proffered this
Agreement to the Indemnitee as an additional inducement to serve in such capacity; and
WHEREAS, the Indemnitee is willing to serve, or to continue to serve, as a director or
officer of the Company, as the case may be, if the Indemnitee is furnished the indemnity
provided for herein by the Company.
NOW, THEREFORE, in consideration of the promises and the covenants contained
herein, and for other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Company and the Indemnitee do hereby covenant and agree as
follows:
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1. Definitions.
(a) “Change in Control” means, and shall be deemed to have occurred if, (i)
any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended), other than a trustee or other fiduciary holding securities under
an employee benefit plan of the Company acting in such capacity or a corporation owned
directly or indirectly by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company, becomes the “beneficial owner”
(as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the
Company representing more than fifty percent (50%) of the total voting power
represented by the Company’s then outstanding voting stock, (ii) 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 of
Directors of the Company and any new director whose election by the Board of Directors
or nomination for election by the Company’s stockholders was approved by a vote of at
least a majority 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 majority thereof, (iii) the stockholders of
the Company approve a merger or consolidation of the Company with any other
corporation other than a merger or consolidation that would result in the voting stock of
the Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting stock of the surviving entity) at
least fifty percent (50%) of the total voting power represented by the voting stock of the
Company or such surviving entity outstanding immediately after such merger or
consolidation or with the power to elect at least a majority of the board of directors or
other governing body of the surviving entity, or (iv) the stockholders of the Company
approve a plan of complete liquidation of the Company or an agreement for the sale or
disposition by the Company (in one transaction or a series of related transactions) of all
or substantially all of the Company’s assets.
(b) “Corporate Status” describes the status of a person who is serving or has
served (i) as a director or officer of the Company, (ii) as a Company employee in a
fiduciary capacity with respect to an employee benefit plan of the Company or (iii) as a
director or officer of any other Entity at the request of the Company. For purposes of
subsection (iii) of this Section l(b), a director or officer of the Company who is serving or
has served as a director or officer of a Subsidiary shall be deemed to be serving at the
request of the Company.
(c) “Disinterested Director” means a director of the Company who (i) is not
and was not a party to the Proceeding in respect of which indemnification is sought by
the Indemnitee and (ii) is determined to be “disinterested” under applicable Delaware
state law.
(d) “Entity” shall mean any corporation, partnership (general or limited),
limited liability company, joint venture, trust, employee benefit plan, company,
foundation, association, organization or other legal entity, other than the Company.
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(e) “Expenses” shall be construed broadly to mean all direct and indirect fees
of any type or nature whatsoever, costs and expenses incurred in connection with any
Proceeding, including, without limitation, all attorneys’ fees and costs, disbursements and
retainers (including, without limitation, any fees, disbursements and retainers incurred by
the Indemnitee pursuant to Section 10 of this Agreement), fees and disbursements of
experts, witnesses, private investigators and professional advisors (including, without
limitation, accountants and investment bankers), court costs, filing fees, transcript costs,
fees of experts, travel expenses, duplicating, imaging, printing and binding costs,
telephone and fax transmission charges, computer legal research costs, postage, delivery
service fees, secretarial services, fees and expenses of third party vendors; the premium,
security for, and other costs associated with any bond (including supersedeas or appeal
bonds, injunction bonds, cost bonds, appraisal bonds or their equivalents), in each case
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 (including, without limitation, any judicial or arbitration Proceeding brought
to enforce the Indemnitee’s rights under, or to recover damages for breach of, this
Agreement), as well as all other “expenses” within the meaning of that term as used in
Section 145 of the DGCL, any federal, state, local or foreign taxes imposed on
Indemnitee as a result of the actual or deemed receipt of any payments under this
Agreement, ERISA excise taxes and penalties, and all other disbursements or expenses of
types customarily and reasonably incurred in connection with prosecuting, defending,
preparing to prosecute or defend, investigating, being or preparing to be a witness in, or
otherwise participating in, actions, suits, or proceedings similar to or of the same type as
the Proceeding with respect to which such disbursements or expenses were incurred.
Expenses also shall include Expenses incurred in connection with any appeal resulting
from any Proceeding.
(f) “Indemnifiable Expenses,” “Indemnifiable Liabilities” and “Indemnifiable
Amounts” shall have the meanings ascribed to those terms in Section 3(a) below.
(g) “Independent Counsel” means a law firm, or a person admitted to practice
law in any State of the United States, that is experienced in matters of corporation law
and neither presently is, nor in the past three years has been, retained to represent: (i) the
Company or the Indemnitee in any matter material to either such party (other than with
respect to matters concerning the Indemnitee under this Agreement, or of other
indemnities 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 law firm or person who,
under the applicable standards of professional conduct then prevailing, would have a
conflict of interest in representing either the Company or the Indemnitee in an action to
determine the Indemnitee’s rights under this Agreement.
(h) “Liabilities” shall be broadly construed to mean, without limitation, all
judgments, damages, liabilities, losses, penalties, taxes, fines and amounts paid in
settlement, in each case, of any type whatsoever, in connection with a Proceeding.
References herein to “fines” shall include any excise tax assessed with respect to any
employee benefit plan.
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(i) “Proceeding” shall be construed broadly to mean, without limitation, any
threatened, pending or completed claim, government, regulatory and self-regulatory
action, suit, arbitration, mediation, alternate dispute resolution process, investigation
(including any internal investigation), inquiry, administrative hearing, appeal, or any
other actual, threatened or completed proceeding, whether brought in the right of the
Company or otherwise and whether of a civil (including intentional or unintentional tort
claims), criminal, administrative, arbitrative or investigative nature, whether formal or
informal, including a proceeding initiated by the Indemnitee pursuant to Section 10 of
this Agreement to enforce the Indemnitee’s rights hereunder.
(j) “Subsidiary” shall mean any Entity of which the Company owns (either
directly or indirectly) 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 Entity, or (B) 50% or more of the outstanding voting capital stock or other voting
equity interests of such Entity.
(k) References herein to a director of any other Entity shall include, in the
case of any Entity that is not managed by a board of directors, such other position, such
as manager or trustee or member of the governing body of such Entity, that entails
responsibility for the management and direction of such Entity’s affairs, including,
without limitation, the general partner of any partnership (general or limited) and the
manager or managing member of any limited liability company.
2. Services by the Indemnitee. In consideration of the Company’s covenants and
commitments hereunder, the Indemnitee agrees to serve or continue to serve as either a director
on the board of directors of the Company or as officer, as applicable, so long as the Indemnitee is
duly elected or appointed and until such time as the Indemnitee is removed, terminated, or
tenders a resignation. This Agreement is effective as of the date the Indemnitee became a
director or officer of the Company, as the case may be.
3. Agreement to Indemnify. The Company agrees to indemnify the Indemnitee to
the fullest extent permitted, and in the manner permitted, by applicable law as in effect as of the
date hereof or as such laws may, from time to time, be amended (but only if amended in a way
that broadens the right to indemnification and advancement of expenses) as follows:
(a) Indemnification for Third Party Proceedings. Subject to the exceptions
contained in Section 4(a) and Section 6 below, if the Indemnitee was or is a party or was
or is otherwise involved in or was or is threatened to be made a party or is otherwise
involved in any capacity to any Proceeding (other than an action by or in the right of the
Company) by reason of the Indemnitee’s Corporate Status, the Indemnitee shall be
indemnified by the Company to the fullest extent permitted by the DGCL, as the same
may be amended from time to time, against all Expenses and Liabilities actually and
reasonably incurred or paid by the Indemnitee or on the Indemnitee’s behalf in
connection with such a Proceeding (referred to herein as “Indemnifiable Expenses” and
“Indemnifiable Liabilities,” respectively, and collectively as “Indemnifiable Amounts”).
In addition, the Indemnitee’s Corporate Status may allow for indemnification under
certain agreements containing indemnity provisions with another Entity or protections
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under the organization documents of such other Entity. In those instances, the Company
is still wholly liable for making any indemnification payments for all Indemnifiable
Amounts notwithstanding the payment obligation of such amounts by a third party to the
Indemnitee; provided, however, that if and to the extent that the Indemnitee has otherwise
actually received such payment under any insurance policy, contract, agreement, or
otherwise, the Company shall not be liable under this Agreement to make any payment to
the Indemnitee with respect to such Indemnifiable Amounts that have been satisfied.
Nothing hereunder is intended to affect any right of contribution of or against the
Company in the event the Company and any other person or persons have co-equal
obligations to indemnify (or advance expenses to) the Indemnitee.
(b) Indemnification in Derivative Actions and Direct Actions by the
Company. Subject to the exceptions contained in Section 4(b) and Section 6 below, if the
Indemnitee was or is a party or was or is otherwise involved in or was or is threatened to
be made a party to or was or is otherwise involved in any capacity in any Proceeding by
or in the right of the Company to procure a judgment in its favor by reason of the
Indemnitee’s Corporate Status, the Indemnitee shall be indemnified by the Company
against all Indemnifiable Expenses. In addition, the Indemnitee’s Corporate Status may
allow for indemnification under certain agreements containing indemnity provisions with
another Entity or protections under the organization documents of such other Entity. In
those instances, the Company is still wholly liable for making any indemnification
payments for all Indemnifiable Expenses notwithstanding the payment obligation of such
amounts by a third party to the Indemnitee; provided, however, that if and to the extent
that the Indemnitee has otherwise actually received such payment under any insurance
policy, contract, agreement, or otherwise, the Company shall not be liable under this
Agreement to make any payment to the Indemnitee with respect to such Indemnifiable
Expenses that have been satisfied. Nothing hereunder is intended to affect any right of
contribution of or against the Company in the event the Company and any other person or
persons have co-equal obligations to indemnify (or advance expenses to) the Indemnitee.
4. Exceptions to Indemnification. The Indemnitee shall be entitled to
indemnification under Section 3(a) and Section 3(b) above in all circumstances other than the
following:
(a) Exceptions to Indemnification for Third Party Proceedings. If
indemnification is requested under Section 3(a) and there has been a final non-appealable
judgment by a court of competent jurisdiction that, in connection with the subject of the
Proceeding out of which the claim for indemnification has arisen, (x) the Indemnitee
failed to act (i) in good faith and (ii) in a manner the Indemnitee reasonably believed to
be in or not opposed to the best interests of the Company, or, (y) with respect to any
criminal action or proceeding, the Indemnitee had reasonable cause to believe that the
Indemnitee’s conduct was unlawful, the Indemnitee shall not be entitled to payment of
Indemnifiable Amounts hereunder.
(b) Exceptions to Indemnification in Derivative Actions and Direct Actions
by the Company. If indemnification is requested under Section 3(b) and
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(i) there has been a final non-appealable judgment by a court of
competent jurisdiction that, in connection with the subject of the Proceeding out
of which the claim for indemnification has arisen, the Indemnitee failed to act (A)
in good faith and (B) in a manner the Indemnitee believed to be in or not opposed
to the best interests of the Company, the Indemnitee shall not be entitled to
payment of Indemnifiable Expenses hereunder; or
(ii) there has been a final non-appealable judgment by a court of
competent jurisdiction that the 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,
then no Indemnifiable Expenses shall be paid with respect to such claim, issue or matter
unless the court of competent jurisdiction 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, the Indemnitee is fairly and reasonably entitled to indemnity
for such Indemnifiable Expenses which such court shall deem proper.
(c) For purposes of this Agreement, if the Indemnitee has acted in good faith
and in a manner the Indemnitee reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan, the Indemnitee shall be
deemed to have acted in a manner not opposed to the best interests of the Company.
5. Procedure for Payment of Indemnifiable Amounts.
(a) Subject to Section 9, the Indemnitee shall submit to the Company a written
request specifying in reasonable detail the Indemnifiable Amounts for which the Indemnitee
seeks payment under Section 3, Section 6, or Section 7 of this Agreement and a short description
of the basis for the claim. The Company shall pay such Indemnifiable Amounts to the
Indemnitee within sixty (60) calendar days of receipt of the request. At the request of the
Company, the Indemnitee shall furnish such documentation and information as are reasonably
available to the Indemnitee and necessary to establish that the Indemnitee is entitled to
indemnification hereunder.
(b) Upon written request by the Indemnitee for indemnification pursuant to the first
sentence of Section 5(a) hereof, if required by applicable law and to the extent not otherwise
provided pursuant to the terms of this Agreement, a determination with respect to the
Indemnitee’s entitlement to indemnification shall be made in the specific case as follows: (i) if a
Change in Control shall have occurred and if so requested in writing by the Indemnitee, by
Independent Counsel in a written opinion to the Board of Directors; or (ii) if a Change in Control
shall not have occurred (or if a Change in Control shall have occurred but the Indemnitee shall
not have requested that indemnification be determined by Independent Counsel as provided in
subpart (i) of this Section 5(b)), (A) by a majority vote of the Disinterested Directors, even
though less than a quorum of the Board of Directors, or (B) by a committee of Disinterested
Directors designated by majority vote of the Disinterested Directors, even though less than a
quorum of the Board of Directors, (C) if there are no such Disinterested Directors or, if such
Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board of
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Directors, or (D) by the Company’s stockholders in accordance with applicable law. Notice in
writing of any determination as to the Indemnitee’s entitlement to indemnification shall be
delivered to the Indemnitee promptly after such determination is made, and if such determination
of entitlement to indemnification has been made by Independent Counsel in a written opinion to
the Board of Directors, then such notice shall be accompanied by a copy of such written opinion.
If it is determined that the Indemnitee is entitled to indemnification, then payment to the
Indemnitee of all amounts to which the Indemnitee is determined to be entitled (other than sums
that were already advanced) shall be made within sixty (60) calendar days after such
determination. If it is determined that the Indemnitee is not entitled to indemnification, then the
written notice to the Indemnitee (or, if such determination has been made by Independent
Counsel in a written opinion, the copy of such written opinion delivered to the Indemnitee) shall
disclose the basis upon which such determination is based. The Indemnitee shall cooperate with
the person, persons, or entity making the determination with respect to the Indemnitee’s
entitlement to indemnification, including providing to such person, persons, or entity upon
reasonable advance request any documentation or information that is not privileged or otherwise
protected from disclosure and that is reasonably available to the Indemnitee and reasonably
necessary to determine whether and to what extent the Indemnitee is entitled to indemnification.
(c) If the determination of entitlement to indemnification is to be made by
Independent Counsel pursuant to Section 5(b) hereof, the Independent Counsel shall be selected
as provided in this Section 5(c). If a Change in Control shall not have occurred (or if a Change
in Control shall have occurred but the Indemnitee shall not have requested that indemnification
be determined by Independent Counsel as provided in subpart (i) of Section 5(b)), then the
Independent Counsel shall be selected by the Board of Directors, and the Company shall give
written notice to the Indemnitee advising the Indemnitee of the identity of the Independent
Counsel so selected. If a Change in Control shall have occurred and the Indemnitee shall have
requested that indemnification be determined by Independent Counsel, then the Independent
Counsel shall be selected by the Indemnitee (unless the Indemnitee shall request that such
selection be made by the Board of Directors, in which event the preceding sentence shall apply),
and the Indemnitee shall give written notice to the Company advising it of the identity of the
Independent Counsel so selected. In either event, the Indemnitee or the Company, as the case
may be, may, within thirty (30) calendar days after such written notice of selection has been
given, deliver to the Company or to the 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 law firm or person so selected does not meet the requirements of “Independent Counsel” as
defined in Section 1 of this Agreement, and the objection shall set forth the basis of such
assertion. Absent a proper and timely objection, the person so selected shall act as Independent
Counsel. If such written objection is so made and substantiated, the law firm or person so
selected may not serve as Independent Counsel unless and until such objection is withdrawn or
the Court of Chancery of the State of Delaware or another court of competent jurisdiction in the
State of Delaware has determined that such objection is without merit. If the determination of
entitlement to indemnification is to be made by Independent Counsel pursuant to Section 5(b)
hereof and, following the expiration of sixty (60) calendar days after submission by the
Indemnitee of a written request for indemnification pursuant to Section 5(a) hereof, Independent
Counsel shall not have been selected, or an objection thereto has been made and not withdrawn,
then either the Company or the Indemnitee may petition the Court of Chancery of the State of
Delaware or other court of competent jurisdiction in the State of Delaware for resolution of any
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objection that shall have been made by the Company or the Indemnitee to the other’s selection of
Independent Counsel and/or for appointment as Independent Counsel of a law firm or person
selected by such court (or selected by such person as the court shall designate), and the law firm
or person with respect to whom all objections are so resolved or the law firm or person so
appointed shall act as Independent Counsel under Section 5(b) hereof. Upon the due
commencement of any Proceeding pursuant to Section 11(e) hereof, Independent Counsel shall
be discharged and relieved of any further responsibility in such capacity (subject to the
applicable standards of professional conduct then prevailing). If the determination of entitlement
to indemnification is to be made by Independent Counsel pursuant to Section 5(b) hereof, then
the Company agrees to pay the reasonable fees and expenses of such Independent Counsel and to
fully indemnify and hold harmless such Independent Counsel against any and all expenses,
claims, liabilities, and damages arising out of or relating to this Agreement or its engagement
pursuant hereto.
6. Indemnification for Expenses if the Indemnitee is Wholly or Partly
Successful. Notwithstanding anything contained in this Agreement to the contrary, to the extent
that the Indemnitee is or was, or is or was threatened to be made, by reason of the Indemnitee’s
Corporate Status, a party to and is successful, on the merits or otherwise, in defending any
Proceeding, the Indemnitee shall be indemnified against all Indemnifiable Expenses incurred by
the Indemnitee or on the Indemnitee’s behalf in connection with the defense of such Proceeding.
If the 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 the Indemnitee for the portion thereof to which the Indemnitee is
entitled. If the Indemnitee is not wholly successful in such Proceeding, the Company also shall
indemnify, hold harmless and exonerate the Indemnitee against all Expenses reasonably incurred
in connection with a claim, issue or matter related to any claim, issue, or matter on which the
Indemnitee was successful. 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. Notwithstanding any of the foregoing, nothing
herein shall be construed to limit the Indemnitee’s right to indemnification which he or she
would otherwise be entitled to pursuant to Section 3 and Section 4 hereof, regardless of the
Indemnitee’s success in a Proceeding.
7. Indemnification for Expenses as a Witness. Anything in this Agreement to the
contrary notwithstanding, to the fullest extent permitted by applicable law, to the extent that the
Indemnitee, by reason of the Indemnitee’s Corporate Status, is or was, or is or was threatened to
be made, a witness in any Proceeding to which the Indemnitee is not a party, the Indemnitee
shall be indemnified against all Indemnifiable Expenses incurred by the Indemnitee or on the
Indemnitee’s behalf in connection therewith. To the extent permitted by applicable law, the
Indemnitee shall be entitled to indemnification for Expenses incurred in connection with being or
threatened to be made a witness, as provided in this Section 7, regardless of whether the
Indemnitee met the standards of conduct set forth in Sections 4(a) and 4(b) hereof.
8. Agreement to Advance Expenses; Conditions. The Company shall pay to the
Indemnitee all Indemnifiable Expenses incurred by or on behalf of the Indemnitee in connection
with any Proceeding to which the Indemnitee was or is a party or was or is otherwise involved or
was or is threatened to be made a party to or was or is otherwise involved in any capacity in any
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Proceeding by reason of the Indemnitee’s Corporate Status, including a Proceeding by or in the
right of the Company, in advance of the final disposition of such Proceeding. The Indemnitee
hereby undertakes to repay the amount of Indemnifiable Expenses paid to the Indemnitee if it
shall ultimately be determined by final judicial decision of a court of competent jurisdiction,
from which decision there is no further right to appeal, that the Indemnitee is not entitled under
this Agreement to, or is prohibited by applicable law from, indemnification with respect to such
Indemnifiable Expenses. Any advances and undertakings to repay pursuant to this Section 8
shall be unsecured and interest free. The Indemnitee shall be entitled to advancement of
Indemnifiable Expenses as provided in this Section 8 regardless of any determination by or on
behalf of the Company that the Indemnitee has not met the standards of conduct set forth in
Sections 4(a) and 4(b) hereof.
9. Procedure for Advance Payment of Expenses. The Indemnitee shall submit to
the Company a written request specifying in reasonable detail the Indemnifiable Expenses for
which the Indemnitee seeks an advancement under Section 8 of this Agreement, together with
documentation reasonably evidencing that the Indemnitee has incurred such Indemnifiable
Expenses. Payment of Indemnifiable Expenses under Section 8 shall be made no later than sixty
(60) calendar days after the Company’s receipt of such request.
10. Burden of Proof; Defenses; and Presumptions.
(a) In any Proceeding pursuant to Section 11 hereof brought by the
Indemnitee to enforce rights to indemnification or to an advancement of Indemnifiable Expenses
hereunder, or in any Proceeding brought by the Company to recover an advancement of
Indemnifiable Expenses (whether pursuant to the terms of an undertaking or otherwise), the
burden shall be on the Company to prove that the Indemnitee is not entitled to be indemnified, or
to such an advancement of Indemnifiable Expenses, as the case may be.
(b) It shall be a defense in any Proceeding pursuant to Section 11 hereof to
enforce rights to indemnification under Section 3(a) or Section 3(b) hereof (but not in any
Proceeding pursuant to Section 11 hereof to enforce a right to an advancement of Indemnifiable
Expenses under Sections 8 and 9 hereof) that the Indemnitee has not met the standards of
conduct set forth in Section 4(a) or Section 4(b), as the case may be, but the burden of proving
such defense shall be on the Company. With respect to any Proceeding pursuant to Section 11
hereof brought by the Indemnitee to enforce a right to indemnification hereunder, or any
Proceeding brought by the Company to recover an advancement of Indemnifiable Expenses
(whether pursuant to the terms of an undertaking or otherwise), neither (i) the failure of the
Company (including by its directors or independent legal counsel) to have made a determination
prior to the commencement of such Proceeding that indemnification is proper in the
circumstances because the Indemnitee has met the applicable standards of conduct, nor (ii) an
actual determination by the Company (including by its directors or independent legal counsel)
that the Indemnitee has not met such applicable standards of conduct, shall create a presumption
that the Indemnitee has not met the applicable standards of conduct or, in the case of a
Proceeding pursuant to Section 11 hereof brought by the Indemnitee seeking to enforce a right to
indemnification, be a defense to such Proceeding.
(c) The termination of any Proceeding by judgment, order, settlement,
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conviction, or upon a plea of nolo contendre or its equivalent, shall not, in and of itself,
adversely affect the right of the Indemnitee to indemnification hereunder or create a presumption
that the Indemnitee did not act in good faith and in a manner the Indemnitee reasonably believed
to be in or not opposed to the best interests of the Company, and, with respect to any criminal
Proceeding, shall not create a presumption that the Indemnitee had reasonable cause to believe
that his or her conduct was unlawful.
(d) For purposes of any determination of good faith, the Indemnitee shall be
deemed to have acted in good faith if the Indemnitee’s action is reasonably based on the records
or books of account of the Company or other Entity, including financial statements, or on
information supplied to the Indemnitee by the officers of the Company or other Entity in the
course of their duties, or on the advice of legal counsel for the Company or other Entity or on
information or records given or reports made to the Company or other Entity by an independent
certified public accountant or by an appraiser or other expert selected by the Company or other
Entity. The provisions of this Section 10(d) shall not be deemed to be exclusive or to limit in
any way the other circumstances in which the Indemnitee may be deemed or found to have met
the applicable standard of conduct set forth in this Agreement.
(e) The knowledge and/or actions, or failure to act, of any other director,
officer, agent, or employee of the Company or of an other Entity shall not be imputed to the
Indemnitee for purposes of determining the Indemnitee’s right to indemnification or
advancement of Indemnifiable Expenses under this Agreement.
11. Remedies of the Indemnitees.
(a) Right to Petition Court. In the event that the Indemnitee makes a request
for payment of Indemnifiable Amounts under Section 3 or Section 5 herein or a request
for an advancement of Indemnifiable Expenses under Sections 8 or Section 9 herein and
the Company fails to make such payment or advancement in a timely manner pursuant to
the terms of this Agreement, the Indemnitee may petition a court to enforce the
Company’s obligations under this Agreement.
(b) Expenses. The Company agrees to reimburse the Indemnitee in full for
any Expenses actually and reasonably incurred by the Indemnitee in connection with
investigating, preparing for, litigating, defending or settling any action brought by the
Indemnitee under Section 11(a) above; provided, however, that to the extent the
Indemnitee is unsuccessful on the merits in such action then the Company shall have no
obligation to reimburse the Indemnitee under this Section 11(b)
(c) Validity of Agreement. The Company shall be precluded from asserting
in any Proceeding, including, without limitation, an action under Section 11(a) above,
that the provisions of this Agreement are not valid, binding and enforceable or that there
is insufficient consideration for this Agreement and shall stipulate in court that the
Company is bound by all the provisions of this Agreement.
(d) Failure to Act Not a Defense. The failure of the Company (including its
Board of Directors or any committee thereof, independent legal counsel, or stockholders)
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to make a determination concerning the permissibility of the payment of Indemnifiable
Amounts or the advancement of Indemnifiable Expenses under this Agreement shall not
be a defense in any action brought under Section 10(a) above, and shall not create a
presumption that such payment or advancement is not permissible
(e) Entitlement to Indemnification; Independent Counsel. In the event that (i)
a determination is made pursuant to Section 5 of this Agreement that the Indemnitee is
not entitled to indemnification under this Agreement, (ii) if the determination of
entitlement to indemnification is not to be made by Independent Counsel pursuant to
Section 5(b) hereof, no determination of entitlement to indemnification shall have been
made pursuant to Section 5(b) of this Agreement within sixty (60) calendar days after
receipt by the Company of the Indemnitee’s written request for indemnification, (iii) if
the determination of entitlement to indemnification is to be made by Independent Counsel
pursuant to Section 5(b) hereof, no determination of entitlement to indemnification shall
have been made pursuant to Section 5(b) hereof within eighty (80) calendar days after
receipt by the Company of the Indemnitee’s written request for indemnification, unless
an objection to the selection of such Independent Counsel has been made and
substantiated and not withdrawn, in which case the applicable time period shall be
seventy (70) calendar days after the Court of Chancery of the State of Delaware or
another court of competent jurisdiction in the State of Delaware (or such person
appointed by such court to make such determination) has determined or appointed the
person to act as Independent Counsel pursuant to Section 5(b) hereof, (iv) payment of
indemnification is not made pursuant to Section 6 or Section 7 of this Agreement within
sixty (60) calendar days after receipt by the Company of a written request therefor, or (v)
payment of indemnification pursuant to Section 6 or Section 7 of this Agreement is not
made within sixty (60) calendar days after a determination has been made pursuant to
Section 5(b) that the Indemnitee is entitled to indemnification, then the Indemnitee shall
be entitled to seek an adjudication by the Court of Chancery of the State of Delaware of
the Indemnitee’s entitlement to such indemnification or advancement of Indemnifiable
Expenses.
(f) Not Prejudiced by Adverse Determination. In the event that a determination
shall have been made pursuant to Section 5(b) of this Agreement that the Indemnitee is not
entitled to indemnification, any Proceeding commenced pursuant to this Section 11 shall
be conducted in all respects as a de novo trial, or arbitration, on the merits and the
Indemnitee shall not be prejudiced by reason of that adverse determination.
12. Settlement of Proceedings.
(a) The Indemnitee agrees that it will not settle, compromise or consent to the
entry of any judgment as to the Indemnitee in any pending or threatened Proceeding
(whether or not the Indemnitee is an actual or potential party to such Proceeding) in
which Indemnitee has sought indemnification hereunder without the Company’s prior
written consent, which consent will not be unreasonably withheld, unless such settlement,
compromise or consent respecting such Proceeding includes an unconditional release of
you and does not (i) require or impose any injunctive or other non-monetary remedy on
the Company or its affiliates, (ii) require or impose an admission or consent as to any
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wrongdoing by the Company or its affiliates, or (iii) otherwise result in a direct or
indirect payment by or monetary cost to the Company or its affiliates.
(b) The Company agrees that it will not settle, compromise or consent to the
entry of any judgment as to the Indemnitee in any pending or threatened Proceeding
(whether or not the Indemnitee is an actual or potential party to such Proceeding) in
which the Indemnitee has sought indemnification hereunder without the Indemnitee’s
prior written consent, which consent shall not be unreasonably withheld, unless such
settlement, compromise or consent includes an unconditional release of the Indemnitee
and does not (i) require or impose any injunctive or other non-monetary remedy on the
Indemnitee, (ii) require or impose an admission or consent as to any wrongdoing by the
Indemnitee or (iii) otherwise result in a direct or indirect payment by or monetary cost to
the Indemnitee personally (as opposed to a payment to be made or cost to be paid by the
Company on the Indemnitee’s behalf).
13. Notice by the Indemnitee. The Indemnitee agrees to notify the Company
promptly upon being served with any summons, citation, subpoena, complaint, indictment,
information, or other document relating to any Proceeding which could reasonably be expected
to result in the payment of Indemnifiable Amounts or the advancement of Indemnifiable
Expenses hereunder; provided, however, that the failure to give any such notice shall not
disqualify the Indemnitee from the right to receive payments of Indemnifiable Amounts or
advancements of Indemnifiable Expenses.
14. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Indemnitee as follows:
(a) Authority. The Company has all necessary power and authority to enter
into, and be bound by the terms of, this Agreement, and the execution, delivery and
performance of the undertakings contemplated by this Agreement have been duly
authorized by the Company.
(b) Enforceability. This Agreement, when executed and delivered by the
Company in accordance with the provisions hereof, shall be a legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with its
terms, except as such enforceability may be limited by equitable principles and applicable
bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the
enforcement of creditors’ rights generally.
(c) No Conflicts. This Agreement, when executed and delivered by the
Company in accordance with the provisions hereof, does not, and the Company’s
performance of its obligations under the Agreement will not violate the Company’s
certificate of incorporation, bylaws, other agreements to which the Company is a party to
or applicable law.
(d) Insurance. The Company shall use its best efforts to cause the Indemnitee,
at the Company’s expense, to be covered by such insurance policies or policies providing
liability insurance for directors or officers of the Company or of any Subsidiary (“D&O
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Insurance”), if any, in accordance with its or their terms to the same extent as provided to
any then-current director or officer of the Company or any Subsidiary under such policy
or policies.
15. Contract Rights Not Exclusive; Subrogation. The rights to payment of
Indemnifiable Amounts and advancement of Indemnifiable Expenses provided by this
Agreement shall be in addition to, but not exclusive of, any other rights that the Indemnitee may
have at any time under applicable law, the Company’s bylaws or certificate of incorporation, or
any other agreement, vote of stockholders or directors (or a committee of directors), or
otherwise, both as to action in the Indemnitee’s official capacity and as to action in any other
capacity as a result of the Indemnitee’s serving in a Corporate Status. No right or remedy herein
conferred is intended to be exclusive of any other right or remedy, and every other right and
remedy shall be cumulative and in addition to every other right and remedy, given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other right or remedy. In the event of any payment to or on behalf of the
Indemnitee under this Agreement, the Company shall be subrogated to the extent of such
payment to all of the rights of recovery of the Indemnitee, who shall execute all papers required
and take all action necessary to secure such rights, including execution of such documents as are
necessary to enable the Company to bring suit to enforce such rights.
16. Successors. This Agreement shall be (a) binding upon all successors and assigns
of the Company (including any transferee of all or a substantial portion of the business, stock
and/or assets of the Company and any direct or indirect successor by merger or consolidation or
otherwise by operation of law) and (b) binding on and shall inure to the benefit of the heirs,
personal representatives, executors and administrators of the Indemnitee. This Agreement shall
continue for the benefit of the Indemnitee and such heirs, personal representatives, executors and
administrators after the Indemnitee has ceased to have Corporate Status.
17. Change in Law. To the extent that a change in Delaware law (whether by statute
or judicial decision) shall permit broader indemnification or advancement of expenses than is
provided under the terms of the bylaws of the Company and this Agreement, the Indemnitee
shall be entitled to such broader indemnification and advancements, and this Agreement shall be
deemed to be amended to such extent, but only to the extent such amendment permits the
Indemnitee to broader indemnification and advancement rights other than Delaware law
permitted prior to the adoption of such amendment.
18. Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable law, but if any
provision of this Agreement, or any clause thereof, shall be determined by a court of competent
jurisdiction to be illegal, invalid or unenforceable, in whole or in part, such provision or clause
shall be limited or modified in its application to the minimum extent necessary to make such
provision or clause valid, legal and enforceable, and the remaining provisions and clauses of this
Agreement shall remain fully enforceable and binding on the parties.
19. Modifications and Waiver. Except as provided in Section 17 above with respect
to changes in Delaware law which broaden the right of the Indemnitee to be indemnified by the
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Company, no supplement, modification or amendment of this Agreement shall be binding unless
executed in writing by each of the parties hereto. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provisions of this
Agreement (whether or not similar), nor shall such waiver constitute a continuing waiver.
20. General Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given (a) when delivered by
hand, (b) when transmitted by facsimile and receipt is acknowledged, or (c) if mailed by certified
or registered mail with postage prepaid, on the third business day after the date on which it is so
mailed
(i) If to the Indemnitee, to:
___________________
___________________
___________________
(ii) If to the Company, to:
Rexnord Corporation
Attn: Office of the General Counsel
247 Freshwater Way, Suite 300
Milwaukee, WI 53204
Facsimile: 513-826-6690
or to such other address as may have been furnished in the same manner by any party to the
others.
21. Contribution. To the fullest extent permissible under applicable law, if the
indemnification provided for in this Agreement is unavailable to Indemnitee for any reason
whatsoever other than any of those set forth in Section 4 or Section 6 hereof the Company, in
lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether
for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for
Expenses, in connection with any claim relating to an indemnifiable event under this Agreement,
in such proportion as is deemed fair and reasonable in light of all of the circumstances of such
Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee
as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the
relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee
in connection with such event(s) and/or transaction(s).
22. Governing Law. This Agreement shall be exclusively governed by and
construed and enforced under the laws of the State of Delaware without giving effect to the
provisions thereof relating to conflicts of law of such state.
23. Consent to Jurisdiction.
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(a) Each of the Company and the Indemnitee hereby irrevocably and
unconditionally (i) agrees and consents to the jurisdiction of the courts of the State of Delaware
for all purposes in connection with any action, suit, or proceeding that arises out of or relates to
this Agreement and agrees that any such action instituted under this Agreement shall be brought
only in the Court of Chancery of the State of Delaware (or in any other state court of the State of
Delaware if the Court of Chancery does not have subject matter jurisdiction over such action),
and not in any other state or federal court in the United States of America or any court or tribunal
in any other country; (ii) consents to submit to the exclusive jurisdiction of the courts of the State
of Delaware for purposes of any action or proceeding arising out of or in connection with this
Agreement; (iii) waives any objection to the laying of venue of any such action or proceeding in
the courts of the State of Delaware; and (iv) waives, and agrees not to plead or to make, any
claim that any such action or proceeding brought in the courts of the State of Delaware has been
brought in an improper or otherwise inconvenient forum.
(b) Each of the Company and the Indemnitee hereby consents to service of any
summons and complaint and any other process that may be served in any action, suit, or
proceeding arising out of or relating to this Agreement in any court of the State of Delaware by
mailing by certified or registered mail, with postage prepaid, copies of such process to such party
at its address for receiving notice pursuant to Section 20 hereof. Nothing herein shall preclude
service of process by any other means permitted by applicable law.
24. Counterparts. This Agreement may be executed in one or more counterparts
(including by PDF or facsimile), each of which shall for all purposes be deemed to be an original
but all of which together shall constitute but one and the same Agreement. Only one such
counterpart need be produced to evidence the existence of this Agreement.
25. Headings. The headings of the sections of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement or to affect the
construction hereof.
26. Entire Agreement. This Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior and contemporaneous
agreements, understandings and negotiations, written and oral, between the parties with respect
to the subject matter of this Agreement, provided, however, that this Agreement is supplement to
and in furtherance of the Company’s certificate of incorporation, bylaws, the DGCL and any
other applicable law, and shall not be deemed a substitute therefor, and does not diminish or
abrogate any rights of the Indemnitee thereunder.
[END OF TEXT]
