EXHIBIT 10.1
INDEMNIFICATION AGREEMENT
This Agreement is made as of ____________ by and between
International Wire Group, Inc., a Delaware corporation (the "Company"), and the
undersigned member (a "Director") of the Board of Directors (also referred to as
the "Board") of the Company (such Director hereinafter referred to as the
"Indemnitee"), with reference to the following facts:
It is essential to the Company to retain and attract as directors the
most capable persons available. Highly competent persons have become more
reluctant to serve as directors or in other capacities unless they are provided
with adequate protection through insurance and/or other adequate indemnification
against inordinate risks of claims and actions against them arising out of their
service to and activities on behalf of a corporation.
The current difficulties of obtaining adequate insurance and
uncertainties relating to indemnification have increased the difficulty of
attracting and retaining such persons. Although Indemnitee may be entitled to
indemnification pursuant to the Company's Second Amended and Restated
Certificate of Incorporation (the "Certificate of Incorporation") and the
Delaware General Corporation Law (the "DGCL"), the DGCL expressly provides that
the indemnification provisions set forth therein are not exclusive, and thereby
contemplates that contracts may be entered into between the Company and members
of the Board, officers and other persons with respect to indemnification.
The Company has determined that the inability to attract and retain
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 protection in the future.
The Company believes it is reasonable, prudent and necessary for the
Company to contractually obligate itself to indemnify 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.
Indemnitee believes that this Agreement is desirable to augment the
protection available under the Certificate of Incorporation, and insurance, and
may not be willing to serve as a director without the additional protection
provided for under this Agreement. The Company desires Indemnitee to serve in
such capacity and Indemnitee is willing to serve and continue to serve and to
take on additional service for or on behalf of the Company on the condition that
he be so indemnified.
In order to induce the Indemnitee to continue to serve as a Director of the
Company and in consideration of his continued service, the Company hereby agrees
to indemnify the Indemnitee as follows:
1. Certain Definitions:
(a) Change in Control: 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 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, is or becomes "beneficial
owner" (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of the Company representing 50% or more of
the total voting power represented by the Company's then outstanding
Voting Securities, or (ii) during any one year period, 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 two-thirds (2/3) 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
approved, cease for any reason to constitute a majority thereof, or
(iii) the stockholders of the Company approve a merger or consolidation
of the Company with any other corporation, other than a merger or
consolidation which would result in the Voting Securities of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into Voting
Securities of the surviving entity) at least 50% of the total voting
power represented by the Voting Securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation, or if the events listed in this subsection (iii) occur
without such approval 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 of (in one transaction or a series
of transactions) all or substantially all of the Company's assets, or
if the events listed in this subsection (iv) occur without such
approval.
(b) Expense Advance: shall have the meaning ascribed thereto
in Section 2(a) hereof.
(c) Expenses: shall include, without limitation, attorneys'
fees, retainers, court costs, transcript costs, fees of experts,
witness fees, travel expenses, duplicating costs, printing and binding
costs, telephone charges, postage, delivery service fees, and all other
disbursements, costs, expenses and obligations actually and reasonably
paid or incurred in connection with investigating, defending,
prosecuting, being a witness in or participating in (including on
appeal), or preparing to defend, prosecute, be a witness in or
participate in, any Proceeding relating to any Indemnifiable Event.
(d) Indemnifiable Event: shall include any event or occurrence
related to the fact that the Indemnitee is or was a director, officer,
trustee, employee, agent or fiduciary of the Company, or is or was
serving at the request of the Company as a director, officer, employee,
trustee, agent or fiduciary of the Company, or is or was serving at the
request of the Company as a director, officer, employee, trustee, agent
or fiduciary of another corporation, partnership, joint venture,
employee benefit plan, trust or other enterprise (including employee
benefit plans and administrative committees thereof), or by reason of
anything done or not done by the Indemnitee in any such capacity.
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(e) Independent Legal Counsel: an attorney or firm of
attorneys, selected in accordance with the provisions of Section 3, who
shall not have otherwise performed services for the Company or the
Indemnitee within the last two years (other than with respect to
matters concerning the rights of the Indemnitee under this Agreement,
or of other indemnitees under similar indemnity agreements).
Notwithstanding the foregoing, the term "Independent Legal 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 the Indemnitee in an action to
determine the Indemnitee's rights to indemnification under this
Agreement.
(f) Proceeding: shall include any threatened, pending or
completed claim, action, suit or proceeding, or any inquiry or
investigation, whether instituted by the Company or any other party and
whether of a civil, criminal, administrative or investigative nature.
(g) Reviewing Party: any appropriate person or body consisting
of a member or members of the Board or any other person or body
appointed by the Board who is not a party to the particular Proceeding
for which the Indemnitee is seeking indemnification, or Independent
Legal Counsel.
(h) Voting Securities: any securities of the Company that vote
generally in the election of directors.
2. Indemnity.
(a) In the event the Indemnitee was, is or becomes a party to
or witness or other participant in, or is threatened to be made a party to or
witness or other participant in, a Proceeding by reason of (or arising in part
out of) an Indemnifiable Event, the Company will indemnify the Indemnitee, his
executors, administrators or assigns, to the fullest extent permitted by law, as
soon as practicable but in any event no later than sixty days after written
demand is presented to the Company, against any and all Expenses, judgments,
fines (including excise taxes), penalties and amounts paid in settlement
(including all interest, assessments and other charges paid or payable in
connection with or in respect of such Expenses, judgments, fines, penalties or
amounts paid in settlement) of such Proceeding. If so requested by the
Indemnitee, the Company shall advance (within two business days of such
request), to the fullest extent permitted by law, any and all Expenses to the
Indemnitee (an "Expense Advance"). Notwithstanding anything in this Agreement to
the contrary, the Indemnitee shall not be entitled to indemnification pursuant
to this Agreement in connection with any Proceeding initiated by the Indemnitee
unless the Board of Directors has authorized or consented to the initiation of
such Proceeding or such Proceeding seeks to enforce the Indemnitee's rights
hereunder; provided, that the foregoing shall not limit the Indemnitee's right
to indemnification hereunder in connection with the defense of any counterclaims
brought against the Indemnitee in a Proceeding initiated by the Indemnitee; and,
provided, further, that for purposes of this Agreement, non-frivolous
counterclaims, impleadings or other responsive or defensive actions by the
Indemnitee shall not be deemed Proceedings initiated by the Indemnitee.
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(b) Notwithstanding the foregoing, (i) the obligations of the
Company under Section 2(a) shall be subject to the condition that the Reviewing
Party shall not have determined (in a written opinion, in any case in which the
Independent Legal Counsel referred to in Section 3 hereof is involved) that the
Indemnitee would not be permitted to be indemnified with respect to a Proceeding
relating to the Indemnifiable Event under applicable law and (ii) the obligation
of the Company to make an Expense Advance pursuant to Section 2(a) shall be
subject to the condition that, if, when and to the extent that the Reviewing
Party determines that the Indemnitee would not be permitted under applicable law
to be so indemnified the Company shall be entitled to be reimbursed by the
Indemnitee (who hereby agrees to reimburse the Company) for all such amounts
theretofore paid to the Indemnitee; provided, however that if the Indemnitee has
commenced or thereafter commences legal proceedings in a court of competent
jurisdiction to secure a determination that the Indemnitee should be indemnified
under applicable law any determination made by the Reviewing Party that the
Indemnitee would not be permitted to be indemnified under applicable law shall
not be binding, and the Indemnitee shall not be required to reimburse the
Company for any Expense Advance until a final judicial determination is made
with respect thereto (as to which all rights of appeal therefrom have been
exhausted or lapsed). Until such time as there has been a Change in Control, the
Reviewing Party shall be selected by the Board of Directors, and following any
Change in Control after the date hereof and any successive Changes in Control
(other than a Change in Control which has been approved by a majority of the
Board who were Directors immediately prior to such Change in Control), the
Reviewing Party shall be the Independent Legal Counsel referred to in Section 3
hereof. If there has been no determination by the Reviewing Party or if the
Reviewing Party determines that the Indemnitee substantively would not be
permitted to be indemnified in whole or in part under applicable law, the
Indemnitee shall have the right to commence litigation in any court in the
States of New York or Delaware having subject matter jurisdiction thereof and in
which venue is proper, or if there are no courts in New York or Delaware which
have subject matter jurisdiction and in which venue is proper then a court in
any other state which has subject matter jurisdiction and where venue is proper,
seeking an initial determination by the court or challenging any such
determination by the Reviewing Party or any aspect thereof, including the legal
or factual bases therefor, and the Company hereby consents to service of process
and to appear in any such proceeding. Any determination by the Reviewing Party
otherwise shall be conclusive and binding on the Company and the Indemnitee.
3. Change in Control. The Company agrees that if there is a Change in
Control after the date hereof and any successive Changes in Control (other than
a Change in Control which has been approved by a majority of the Board who were
directors immediately prior to such Change in Control), then with respect to all
matters thereafter arising concerning the rights of the Indemnitee to indemnity
payments and Expense Advances under this Agreement or any other agreement or
Company bylaw now or hereafter in effect with respect to Proceedings relating to
Indemnifiable Events, the Company shall seek legal advice only from Independent
Legal Counsel selected by the Indemnitee and approved by the Company (which
approval shall not be unreasonably withheld). Such counsel, among other things,
shall render its written opinion to the Company and the Indemnitee as to whether
and to what extent the Indemnitee would not be permitted under applicable law to
be indemnified with respect to Proceedings relating to the applicable
Indemnifiable Event. The Company agrees to pay the reasonable fees of the
Independent Legal Counsel referred to above and to indemnify fully such counsel
against any and all expenses (including attorneys' fees), claims, liabilities
and damages arising out of or relating to this Agreement or its engagement
pursuant hereto.
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4. Indemnification for Additional Expenses. The Company shall indemnify
the Indemnitee against any and all expenses (including attorneys' fees) actually
and reasonably incurred and, if requested by the Indemnitee, shall (within five
business days of such request) advance such expenses to the Indemnitee, which
are incurred by the Indemnitee in connection with any action brought in good
faith by the Indemnitee involving (i) the interpretation or enforcement of the
rights of the Indemnitee under this Agreement or any other agreement or Company
bylaw now or hereafter in effect relating to Proceedings for Indemnifiable
Events and/or (ii) recovery by the Indemnitee under any directors' and officers'
liability insurance policies maintained by the Company, regardless of whether
the Indemnitee ultimately is determined to be entitled to such indemnification,
advance expense payment or insurance recovery, as the case may be.
5. Subrogation. In the event of payment 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 shall
do everything that may be necessary to secure such rights, including the
execution of such documents necessary to enable the Company effectively to bring
suit to enforce such rights; provided, however, that the foregoing shall in no
way limit the ability of the Indemnitee to compromise or settle any Proceeding,
including waiving any claim that would otherwise be available to the Company
under or as a result of this Section, in accordance with the other provisions of
this Agreement.
6. No Duplication of Payment. The Company shall not be liable under
this Agreement to make any payment in connection with any Proceeding brought
against or involving the Indemnitee to the extent the Indemnitee has otherwise
actually received payment (under any insurance policy, bylaw or otherwise) of
the amounts otherwise indemnifiable hereunder.
7. Partial Indemnification. If the Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of Expenses, judgments, fines, penalties and amounts paid in settlement
of a Proceeding, but not, however, for the total amount thereof, the Company
shall nevertheless indemnify the Indemnitee for the portion thereof to which the
Indemnitee is entitled.
8. Notice and Defense of Proceeding.
(a) The Indemnitee shall give to the Company notice in writing as soon as
practicable of any Proceeding made against it for which indemnity will or could
be sought under this Agreement. Notice to the Company shall notify the Company
of the existence of the Proceeding, setting forth with reasonable specificity
the facts and circumstances relating to the Proceeding of which the Indemnitee
is aware. The foregoing notice shall be given at the Company's principal office,
shall be directed to the Corporate Secretary of the Company (or such other
address as the Company shall have designated in writing to the Indemnitee) and
shall be deemed received if sent by prepaid mail properly addressed, the date of
such notice being the date postmarked. In the event of any such Proceeding, the
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Company shall provide the Indemnitee with copies of all notices, pleading, and
other papers filed, served or received in connection with such Proceeding.
(b) In the event of any Proceeding for which indemnity will or could be sought
under this Agreement, the Company hereby agrees to assume the defense thereof
with counsel reasonably satisfactory to the Indemnitee, and the Company shall
not be liable to the Indemnitee for any legal expenses of other counsel or any
other expenses subsequently incurred by the Indemnitee in connection with the
defense thereof; provided, that, (i) the Indemnitee shall have the right at its
own expense to participate in any such Proceeding with counsel of its own
choosing and (ii) if (A) the retention of other counsel by the Indemnitee has
been previously authorized by the Company, (B) the Company shall not have
employed counsel to which Indemnitee has consented or the Company discontinues
the retention of Company's counsel to defend such Proceeding or (C) the
Indemnitee or counsel selected by the Company shall have reasonably concluded
that there may be a conflict of interest between the Company and the Indemnitee,
then the fees and expenses of the Indemnitee's other counsel shall be subject to
indemnification by the Company. The Company shall not be required to obtain the
consent of the Indemnitee to settle any Proceeding which the Company has
undertaken to defend if the Company assumes full and sole responsibility for
such settlement and such settlement grants the Indemnitee a complete and
unqualified release in respect of any potential liability.
9. Burden of Proof. In connection with any determination by the
Reviewing Party or otherwise as to whether the Indemnitee is entitled to be
indemnified hereunder, the burden of proof shall be on the Company to establish
that the Indemnitee is not so entitled.
10. No Presumptions. For purposes of this Agreement, the termination of
any Proceeding by judgment, order, settlement (whether with or without court
approval) or conviction, or upon a plea of nolo contendere, or its equivalent,
shall not create a presumption that the Indemnitee did not meet any particular
standard of conduct or have any particular belief or that a court has determined
that indemnification is not permitted by applicable law. In addition, neither
the failure of the Reviewing Party to have made a determination as to whether
the Indemnitee has met any particular standard of conduct or did not have such
belief, prior to the commencement of legal proceedings by the Indemnitee to
secure a judicial determination that indemnification of the Indemnitee is
permitted under applicable law shall be a defense to the Indemnitee's claim or
create a presumption that the Indemnitee has not met any particular standards of
conduct or did not have any particular belief.
11. Liability Insurance. To the extent the Company maintains an
insurance policy or policies providing directors' and officers' liability
insurance, the Indemnitee shall be covered by such policy or policies, in
accordance with its or their terms.
12. Amendments, Etc. 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 hereof (whether or not
similar) nor shall such waiver constitute a continuing waiver.
13. Binding Effect, Etc. This Agreement shall be binding upon and inure
to the benefit of and be enforceable by the parties hereto and their respective
successors, assigns, including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
and/or assets of the Company, spouses, heirs, executors and personal and legal
representatives. This Agreement shall continue in effect regardless of whether
the Indemnitee continues to serve as a Director of the Company or of any other
enterprise at the Company's request.
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14. Indemnification Hereunder Not Exclusive. The rights of the
Indemnitee hereunder shall be in addition to any other rights the Indemnitee may
have under the Certificate of Incorporation or Company bylaws (including any
amendments thereto), the DGCL or otherwise. To the extent that a change in the
DGCL (whether by statute or judicial decision) permits greater indemnification
by agreement than would be afforded currently under the Certificate of
Incorporation and this Agreement, it is the intent of the parties hereto that
the Indemnitee shall enjoy by this Agreement the greater benefits so afforded by
such change.
15. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed in such state without giving effect to the
principles of conflict of laws.
16. Severability. The provisions of this Agreement shall be severable
in the event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) are held by a court of competent
jurisdiction to be invalid, void, or otherwise unenforceable in any respect, and
the validity and enforceability of any such provisions in every other respect
and of the remaining provisions hereof shall not be in any way impaired and
shall remain enforceable to the fullest extent permitted by law.
17. Coverage. The provisions of this Agreement shall apply with respect
to the Indemnitee's service as a Director of the Company or in any other
capacity encompassed in an Indemnifiable Event prior to the date of this
Agreement and with respect to all periods of such service after the date of this
Agreement, even though the Indemnitee may have ceased to be a Director of the
Company and to hold every other office or position encompassed within an
Indemnifiable Event.
18. Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and signed as of the day and year first above written.
INTERNATIONAL WIRE GROUP, INC.
By:
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Name:
Title:
DIRECTOR:
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