EXHIBIT 10.3
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FORM OF INDEMNIFICATION AGREEMENT
This Agreement is made as of the day of _____________, 200_,
by and between Innovative Micro Technology, Inc., a Delaware corporation (the
"Company"), and the undersigned Director and/or Officer of the Company (the
"Indemnitee "), with reference to the following:
A. The Indemnitee is willing, under certain circumstances, to
serve as an Director and/or Officer of the Company. The Indemnitee has indicated
that he does not regard the indemnities available under the Company's By-laws as
adequate to protect him against the risks associated with his service to the
Company. In this connection, the Company and the Indemnitee now agree that they
should enter into this Indemnification Agreement in order to provide greater
protection to Indemnitee against such risks of service to the Company.
B. Section 145 of the General Corporation Law of the State of
Delaware, under which Law the Company is organized, empowers corporations to
indemnify a person serving as a director, officer, employee or agent of the
Company and a person who serves at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust, or other enterprise, and said Section 145 and the By-laws of the Company
specify that the indemnification set forth in said Section 145 and in the
By-laws, respectively, shall not be deemed exclusive of any other rights to
which those seeking indemnification may be entitled under any By-law, agreement,
vote of stockholders or disinterested directors or otherwise.
C. In order to induce the Indemnitee to serve as an Director
and/or Officer of the Company and in consideration of his continued service, the
Company hereby agrees, as of the date first set forth above, to indemnify the
Indemnitee as follows:
1. Indemnity. The Company will indemnify the Indemnitee, his executors,
administrators or assigns, for any Expenses (as defined below) which the
Indemnitee is or becomes legally obligated to pay in connection with any
Proceeding. As used in this Agreement the term "Proceeding" shall include any
threatened, pending or completed claim, action, suit or proceeding, whether
brought by or in the right of the Company and/or otherwise and whether of a
civil, criminal, administrative or investigative nature, in which the Indemnitee
may be or may have been involved as a party or otherwise, by reason of the fact
that Indemnitee is or was, or has agreed to become, a Director and/or Officer of
the Company, by reason of any actual or alleged error or misstatement or
misleading statement made or suffered by the Indemnitee, by reason of any action
taken by him or of any inaction on his part while acting as such Director and/or
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Officer, or by reason of the fact that he was serving at the request of the
Company as a director, trustee, officer, employee or agent of the Company or
another corporation, partnership, joint venture, trust or other enterprise;
provided, that in each such case Indemnitee acted in good faith and in a manner
which he reasonably believed to be in, or not opposed to, the best interests of
the Company, and, in the case of a criminal proceeding, in addition had no
reasonable cause to believe that his conduct was unlawful. As used in this
Agreement, the term "other enterprise" shall include (without limitation)
employee benefit plans and administrative committees thereof, and the term
"fines" shall include (without limitation) any excise tax assessed with respect
to any employee benefit plan.
2. Expenses. As used in this Agreement, the term "Expenses" shall
include (without limitation) damages, judgments, fines, penalties, settlements
and costs, attorneys' fees and disbursements and costs of attachment or similar
bonds, investigations, and any expenses of establishing a right to
indemnification under this Agreement.
3. Enforcement. If a claim or request under this Agreement is not paid
by the Company, or on its behalf, within thirty (30) days after a written claim
or request has been received by the Company, the Indemnitee may at any time
thereafter bring suit against the Company to recover the unpaid amount of the
claim or request and if successful in whole or in part, the Indemnitee shall
also be entitled to be paid the Expenses of prosecuting such suit. The Company
shall have the right to recoup from the Indemnitee the amount of any item or
items of Expenses theretofore paid by the Company pursuant to this Agreement, to
the extent such Expenses are not reasonable in nature or amounts.
4. 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 reasonably necessary to secure such rights, including
the execution of such documents necessary to enable the Company effectively to
bring suit to enforce such rights.
5. Exclusions. The Company shall not be liable under this Agreement to
pay any Expenses in connection with any claim made against the Indemnitee:
(a) to the extent that payment is actually made to the Indemnitee
under a valid, enforceable and collectible insurance policy;
(b) to the extent that the Indemnitee is indemnified and actually
paid otherwise than pursuant to this Agreement;
(c) in connection with a judicial action by or in the right of the
Company, in respect of any claim, issue or matter as to which the Indemnitee
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shall have been adjudged to be liable for negligence or misconduct in the
performance of his duty to the Company unless and only to the extent that any
court in which such action 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
expenses as such court shall deem proper;
(d) if it is proved by final judgment in a court of law or other
final adjudication to have been based upon or attributable to the Indemnitee's
in fact having gained any personal profit or advantage to which he was not
legally entitled;
(e) for a disgorgement of profits made from the purchase and sale by
the Indemnitee of securities pursuant to Section 16(b) of the Securities
Exchange Act of 1934 and amendments thereto or similar provisions of any state
statutory law or common law;
(f) brought about or contributed to by the dishonesty of the
Indemnitee seeking payment hereunder; however, notwithstanding the foregoing,
the Indemnitee shall be protected under this Agreement as to any claims upon
which suit may be brought against him by reason of any alleged dishonesty on his
part, unless a judgment or other final adjudication thereof adverse to the
Indemnitee shall establish that he committed (i) acts of active and deliberate
dishonesty, (ii) such acts with actual dishonest purpose and intent, (iii) acts
which were material to the cause of action so adjudicated; or
(g) for any judgment, fine or penalty which the Company is
prohibited by applicable law from paying as indemnity or for any other reason.
6. Indemnification of Expenses of Successful Party. Notwithstanding any
other provision of this Agreement, to the extent that the Indemnitee has been
successful on the merits or otherwise in defense of any Proceeding or in defense
of any claim, issue or matter therein, including dismissal without prejudice,
Indemnitee shall be indemnified against any and all Expenses incurred in
connection therewith.
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, but not, however, for the total amount thereof, the Company
shall nevertheless indemnify the Indemnitee for the portion of such Expenses to
which the Indemnitee is entitled.
8. Advance of Expenses. Expenses incurred by the Indemnitee in
connection with any Proceeding, except the amount of any settlement, shall be
paid by the Company in advance upon request of the Indemnitee that the Company
pay such Expenses. The Indemnitee hereby undertakes to repay to the Company the
amount of any Expenses theretofore paid by the Company to the extent that it is
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ultimately determined that such Expenses were not reasonable or that the
Indemnitee is not entitled to indemnification.
9. Approval of Expenses. No Expenses for which indemnity shall be
sought under this Agreement, other than those in respect of judgments and
verdicts actually rendered, shall be incurred without the prior consent of the
Company, which consent shall not be unreasonably withheld.
10. Notice of Claim. The Indemnitee, as a condition precedent to his
right to be indemnified under this Agreement, shall give to the Company notice
in writing as soon as practicable of any claim made against him for which
indemnity will or could be sought under this Agreement. Notice to the Company
shall be given at its principal office and shall be directed to the Corporate
Secretary (or such other address as the Company shall designate in writing to
the Indemnitee); notice shall be deemed received if sent by prepaid U.S.
certified mail, return receipt requested, properly addressed, the date of such
notice being the date postmarked. In addition, the Indemnitee shall give the
Company such information and cooperation as it may reasonably require and as
shall be within the Indemnitee's power.
11. Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one instrument.
12. Indemnification Hereunder Not Exclusive. Nothing herein shall be
deemed to diminish or otherwise restrict the Indemnitee's right to
indemnification under any provision of the Certificate of Incorporation or
Bylaws of the Company and amendments thereto or under law.
13. Governing Law. This Agreement shall be governed by and construed in
accordance with Delaware law, without regard to the conflicts of law provisions
thereof.
14. Saving Clause. Wherever there is conflict between any provision of
this Agreement and any applicable present or future statute, law or regulation
contrary to which the Company and the Indemnitee have no legal right to
contract, the latter shall prevail, but in such event the affected provisions of
this Agreement shall be curtailed and restricted only to the extent necessary to
bring them within applicable legal requirements.
15. Coverage. The provisions of this Agreement shall apply with respect
to the Indemnitee's service as a Director and/or Officer of the Company or any
subsidiary of the Company 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 and/or Officer of the Company.
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(Signature Page Follows)
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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.
INNOVATIVE MICRO TECHNOLOGY, INC.
By: __________________________________
Xxxx Xxxxxx, President
"INDEMNITEE"
By: ___________________________________
Name: ____________________________
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