INDEMNIFICATION AGREEMENT
This Indemnity Agreement ("Agreement") is made as of ________________, 2002
by and between Xxxxxx, Inc., a Delaware corporation (the "Company"), and
________________________ ("Indemnitee").
RECITALS
WHEREAS, it is essential to the Company and its stockholders to attract and
retain highly qualified and capable directors, officers, employees, and agents;
WHEREAS, the Certificate of Incorporation of the Company (the "Certificate
of Incorporation") allows the Company to indemnify and advance expenses to its
directors and officers;
WHEREAS, this Agreement is a supplement to and in furtherance of the
Certificate of Incorporation of the Company and any resolutions adopted pursuant
thereto and shall not be deemed a substitute therefor, nor to diminish or
abrogate any rights of Indemnitee thereunder;
WHEREAS, in recognition of Indemnitee's need for protection against
personal liability in order to induce Indemnitee to serve the Company in an
effective manner, and to supplement the Company's directors' and officers'
liability insurance coverage, and, in part, to provide Indemnitee with specific
contractual assurance that the protection provided by the Certificate of
Incorporation will be available to Indemnitee (regardless of, among other
things, any amendment to or revocation of the Certificate of Incorporation), the
Company wishes to provide the Indemnitee with the benefits contemplated by this
Agreement; and
WHEREAS, as a result of the provision of such benefits Indemnitee has
agreed to serve or continue to serve the Company as a director, officer,
employee, or agent;
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:
1. DEFINITIONS. As used in this Agreement:
(a) "Beneficial Owner" shall have the meaning given to such term in
Rule l3d-3 under the Exchange Act; provided, however, that Beneficial Owner
shall exclude any Person otherwise becoming a Beneficial Owner by reason of the
stockholders of the Company approving a merger of the Company with another
entity.
(b) "Board" or "Board of Directors" shall mean the board of
directors or the Company from time to time.
(b) A "Change in Control" shall be deemed to occur upon the earliest
to occur after the date of this Agreement of any of the following events:
(i) Acquisition of Stock by Third Party. Any Person (as defined
below) is or becomes the Beneficial Owner (as defined below), directly or
indirectly, of securities of the Company representing thirty percent (30%) or
more of the combined voting power of the Company's then outstanding securities;
(ii) Change in Board of Directors. During any period of two (2)
consecutive years (not including any period prior to the execution of this
Agreement), individuals who at the beginning of such period constitute the
Board, and any new director (other than a director designated by a person who
has entered into an agreement with the Company to effect a transaction described
in Sections 1(b)(i), 1(b)(iii) or 1(b)(iv)) whose election by the Board or
nomination for election by the Company's stockholders was approved by a vote of
at least two-thirds of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute a least
a majority of the members of the Board;
(iii) Corporate Transactions. The effective date of a merger or
consolidation of the Company with any other entity, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior to such merger or consolidation continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 66.67% of the combined voting
power of the voting securities of the surviving entity outstanding immediately
after such merger or consolidation and with the power to elect at least a
majority of the board of directors or other governing body of such surviving
entity;
(iv) Liquidation. The approval by the stockholders of the Company
of a complete liquidation of the Company or an agreement or series of agreements
for the sale or disposition by the Company of all or substantially all of the
Company's assets; and
(v) Other Events. There occurs any other event of a nature that
would be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A (or a response to any similar item on any similar schedule or
form) promulgated under the Exchange Act (as defined below), whether or not the
Company is then subject to such reporting requirement.
(c) "Corporate Status" describes the status of a person who is or
was a director, officer, trustee, general partner, managing member, fiduciary,
employee or agent of the Company or of any other Enterprise (as defined below)
which such person is or was serving at the request of the Company.
(d) "DGCL" means the General Corporation Law of the State of Delaware,
as in effect from time to time.
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(e) "Disinterested Director" means a director of the Company who is
not and was not a party to the Proceeding in respect of which indemnification is
sought by Indemnitee.
(f) "Enterprise" shall mean the Company and any other corporation,
limited liability company, partnership, joint venture, trust, employee benefit
plan or other enterprise or entity of which Indemnitee is or was serving at the
request of the Company as a director, officer, trustee, general partner,
managing member, fiduciary, employee or agent.
(g) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(h) "Expenses" shall include all reasonable 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, or expenses
of the types customarily incurred in connection with prosecuting, defending,
preparing to prosecute or defend, investigating, being or preparing to be a
witness in, or otherwise participating in, a Proceeding. Expenses also shall
include Expenses incurred in connection with any appeal resulting from any
Proceeding, including without limitation the premium, security for, and other
costs relating to any cost bond, supersedes bond, or other appeal bond or its
equivalent. Expenses, however, shall not include amounts paid in settlement by
Indemnitee or the amount of judgments or fines against Indemnitee.
(i) "Independent Counsel" means a law firm, or a member of a law firm,
that is experienced in matters of corporation law and neither presently is, nor
in the past five years has been, retained to represent: (i) the Company or
Indemnitee in any matter material to either such party (other than with respect
to matters concerning the Indemnitee under this Agreement, or of other
indemnitees under similar indemnification agreements), or (ii) any other party
to the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term "Independent Counsel" shall not include
any person who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the Company
or Indemnitee in an action to determine Indemnitee's rights under this
Agreement. The Company agrees to pay the reasonable fees and expenses of the
Independent Counsel referred to above and to fully indemnify such counsel
against any and all Expenses, claims, liabilities and damages arising out of or
relating to this Agreement or its engagement pursuant hereto.
(j) "Loss" means all judgments, fines, penalties, damages,
liabilities, claims, and amounts paid in settlement (including all interest,
assessments and other charges paid or payable in connection with or in respect
of such judgments, fines, penalties, damages, liabilities, claims, and amounts
paid in settlement).
(k) Reference to "other enterprise" shall include employee benefit
plans; references to "fines" shall include any excise tax assessed with respect
to any employee benefit plan; references to "serving at the request of the
Company" shall include any service as a director, officer, employee or agent of
the Company which imposes duties on, or involves services by, such director,
officer, employee or agent with respect to an employee benefit plan, its
participants or beneficiaries;
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and a person who acted in good faith and in a manner he reasonably believed to
be in the best interests of the participants and beneficiaries of an employee
benefit plan shall be deemed to have acted in a manner "not opposed to the best
interests of the Company" as referred to in this Agreement.
(k) A "Potential Change in Control" shall occur if the Company (a)
enters into an agreement, the consummation of which would result in the
occurrence of a Change in Control or (b) the Board of Directors adopts a
resolution to the effect that, for purposes of this Agreement, a potential
Change in Control has occurred.
(l) "Person" shall have the meaning as set forth in Sections 13(d)
and 14(d) of the Exchange Act; provided, however, that Person shall exclude (i)
the Company and any of its direct and indirect subsidiaries, (ii) any trustee or
other fiduciary holding securities under an employee benefit plan of the
Company, and (iii) any corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company.
(m) The term "Proceeding" shall include any threatened, pending or
completed action, suit, arbitration, alternate dispute resolution mechanism,
investigation, inquiry, administrative hearing or any other actual, threatened
or completed proceeding, whether brought in the right of the Company or
otherwise and whether of a civil, criminal, administrative or investigative
nature, in which Indemnitee was, is or will be involved as a party or otherwise
by reason of the fact that Indemnitee is or was a director, officer, employee,
or agent of the Company, by reason of any action taken (or failure to act) by
him or of any action (or failure to act) on his part while acting as director or
officer of the Company, or by reason of the fact that he is or was serving at
the request of the Company as a director, officer, trustee, general partner,
managing member, fiduciary, employee or agent of any other Enterprise, in each
case whether or not serving in such capacity at the time any liability or
expense is incurred for which indemnification, reimbursement, or advancement of
expenses can be provided under this Agreement.
2. INDEMNITY IN THIRD-PARTY PROCEEDINGS. The Company shall indemnify
Indemnitee, his executors, and administrators in accordance with the provisions
of this Section 2 if Indemnitee is, or is threatened to be made, a party to or a
participant (as a witness or otherwise) in any Proceeding, other than a
Proceeding by or in the right of the Company to procure a judgment in its favor.
Pursuant to this Section 2, Indemnitee shall be indemnified against all Expenses
and Losses incurred by Indemnitee or on his behalf in connection with such
Proceeding or any claim, issue or matter therein, if Indemnitee acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Company and, in the case of a criminal action or proceeding had
no reasonable cause to believe that his conduct was unlawful.
3. INDEMNITY IN PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY. The
Company shall indemnify Indemnitee, his executors, and administrators in
accordance with the provisions of this Section 3 if Indemnitee is, or is
threatened to be made, a party to or a participant (as a witness or otherwise)
in any Proceeding by or in the right of the Company to procure a judgment in its
favor. Pursuant to this Section 3, Indemnitee shall be indemnified against all
Expenses incurred by him or
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on his behalf in connection with such Proceeding or any claim, issue or matter
therein, if Indemnitee acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Company. No
indemnification for Expenses shall be made under this Section 3 in respect of
any claim, issue or matter as to which Indemnitee shall have been finally
adjudged by a court to be liable to the Company, unless and only to the extent
that any court in which the Proceeding was brought or the Delaware Court of
Chancery shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, Indemnitee is fairly
and reasonably entitled to indemnification for such expenses which the Delaware
Court of Chancery or such other court shall deem proper.
4. INDEMNIFICATION FOR EXPENSES OF A WITNESS. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee is, by reason of his
Corporate Status, a witness in any Proceeding to which Indemnitee is not a
party, he shall be indemnified against all Expenses incurred by him or on his
behalf in connection therewith.
5. ADDITIONAL INDEMNIFICATION.
(a) Notwithstanding any limitation in Sections 2 or 3, the Company
shall indemnify Indemnitee to the fullest extent permitted by law if Indemnitee
is a party to or threatened to be made a party to any Proceeding (including a
Proceeding by or in the right of the Company to procure a judgment in its favor)
against all Expenses and Losses incurred by Indemnitee in connection with the
Proceeding. No indemnity shall be made under this Section 5(a) on account of
Indemnitee's conduct which constitutes a breach of Indemnitee's duty of loyalty
to the Company or its stockholders or is an act or omission not in good faith or
which involves intentional misconduct or a knowing violation of the law,
(b) For purposes of Section 5(a), the meaning of the phrase "to the
fullest extent permitted by law" shall include, but not be limited to:
(i) to the fullest extent permitted by the provision of the
DGCL that authorizes or contemplates additional indemnification by agreement, or
the corresponding provision of any amendment to or replacement of the DGCL, and
(ii) to the fullest extent authorized or permitted by any
amendments to or replacements of the DGCL adopted after the date of this
Agreement that increase the extent to which a corporation may indemnify its
officers and directors.
6. EXCLUSIONS. Notwithstanding any provision in this Agreement, the
Company shall not be obligated under this Agreement to make any indemnity in
connection with any claim made against Indemnitee:
(a) for which payment has actually been received by or on behalf of
Indemnitee under any insurance policy or other indemnity provision, except with
respect to any excess beyond the amount actually received under any insurance
policy or other indemnity provision;
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(b) for an accounting of profits made from the purchase and sale (or
sale and purchase) by Indemnitee of securities of the Company within the meaning
of Section 16(b) of the Exchange Act or similar provisions of state statutory
law or common law; or
(c) for any Loss which the Company is prohibited by applicable law
from paying as indemnity or for any other reason.
7. ADVANCES OF EXPENSES; DEFENSE OF CLAIM; SETTLEMENT
(a) Notwithstanding any provision of this Agreement to the contrary,
the Company shall advance the Expenses incurred by Indemnitee in connection with
any Proceeding within ten (10) days after the receipt by the Company of a
statement or statements requesting such advances from time to time, whether
prior to or after final disposition of any Proceeding. Advances shall be
unsecured and interest free. Advances shall be made without regard to
Indemnitee's ability to repay the expenses and without regard to Indemnitee's
ultimate entitlement to indemnification under the other provisions of this
Agreement. Advances shall include any and all Expenses incurred pursuing an
action to enforce this right of advancement, including Expenses incurred
preparing and forwarding statements to the Company to support the advances
claimed. The Indemnitee shall qualify for advances solely upon the execution and
delivery to the Company of an undertaking providing that the Indemnitee
undertakes to repay the advance to the extent that it is ultimately determined
that Indemnitee is not entitled to be indemnified by the Company. This Section
7(a) shall not apply to any claim made by Indemnitee for which indemnity is
excluded pursuant to Section 6.
(b) In the event the Company shall be obligated hereunder to provide
indemnification for Expenses or Losses, or shall be required to make an advance
in accordance with Section 7(a) hereof, the Company, if appropriate, shall be
entitled to assume the defense of such Proceeding, with counsel reasonably
satisfactory to Indemnitee, upon the delivery to Indemnitee of reasonable
written notice of its election to do so. After delivery of such notice, the
Company will not be liable to Indemnitee under this Agreement for any legal or
other Expenses subsequently incurred by Indemnitee in connection with such
defense other than reasonable Expenses of investigation; provided that
Indemnitee shall have the right to employ its counsel in such Claim but the
Expenses of such counsel incurred after delivery of notice from the Company of
its assumption of such defense shall be at the Indemnitee's expense; provided
further that if: (i) the employment of counsel by Indemnitee has been previously
authorized by the Company, (ii) Indemnitee shall have reasonably concluded that
there will be a conflict of interest between the Company and Indemnitee in the
conduct of any such defense, or (iii) the Company shall not, in fact, have
employed counsel to assume the defense of such action or having employed
counsel, such counsel is not diligently prosecuting a defense on behalf of the
Indemnitee, the Expenses of counsel shall be at the expense of the Company.
(c) The Company shall not settle any action, claim or Proceeding (in
whole or in part) which would impose any Expense, Loss, or limitation on the
Indemnitee without the Indemnitee's prior written consent, and no settlement of
any Proceeding shall be entered into unless, if applicable, in the Indemnitee's
discretion, such settlement includes, as an unconditional term
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thereof, the delivery by the claimant or plaintiff in such Proceeding to
Indemnitee of a duly executed written release of Indemnitee from all liability
or obligation in respect of such Proceeding, which release shall be reasonably
satisfactory in form and substance to Indemnitee and Indemnitee's counsel. The
Company shall have no obligation to indemnify Indemnitee under this Agreement
for any amounts paid in settlement of any Proceeding effected without the
Company's prior written consent, which consent shall not be unreasonably
withheld, conditioned, or delayed.
8. PROCEDURE FOR NOTIFICATION AND APPLICATION FOR INDEMNIFICATION.
(a) Within forty-five (45) days after the actual receipt by Indemnitee
of notice that he or she is a party to or a participant (as a witness or
otherwise) in any Proceeding, Indemnitee shall submit to the Company a written
notice identifying the Proceeding. The omission by the Indemnitee to notify the
Company will not relieve the Company from any liability which it may have to
Indemnitee (i) otherwise than under this Agreement, and (ii) under this
Agreement only to the extent the Company can establish that such omission to
notify resulted in actual prejudice to the Company.
(b) Indemnitee shall thereafter deliver to the Company a written
application to indemnify Indemnitee in accordance with this Agreement. Such
application(s) may be delivered from time to time and at such time(s) as
Indemnitee deems appropriate in his or her sole discretion. Following such a
written application for indemnification by Indemnitee, the Indemnitee's
entitlement to indemnification shall be determined according to Section 9(a) of
this Agreement.
9. PROCEDURE UPON APPLICATION FOR INDEMNIFICATION.
(a) Upon written request by Indemnitee for indemnification pursuant to
Section 8(b), a determination, if required by law, with respect to Indemnitee's
entitlement to indemnification hereunder shall be made (i) by a majority vote of
the Disinterested Directors, even though less than a quorum of the Board, or if
there are no Disinterested Directors by a majority vote of the Board or (ii) if
so requested by the Indemnitee in his or her sole discretion, by Independent
Counsel in a written opinion to the Board and the Indemnitee, which shall
supersede any determination made by the Board. If (i) it is so determined that
Indemnitee is entitled to indemnification or (ii) a determination is not
required by applicable law, payment to Indemnitee shall be made within ten (10)
days after such determination. Indemnitee shall reasonably cooperate with the
person, persons or entity making such determination with respect to Indemnitee's
entitlement to indemnification, including providing to such person, persons or
entity upon reasonable advance request any documentation or information which is
not privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination. Any
Expenses incurred by Indemnitee in so cooperating with the person, persons or
entity making such determination shall be borne by the Company (irrespective of
the determination as to Indemnitee's entitlement to indemnification) and the
Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
(b) In the event the determination of entitlement to indemnification
is to be made by Independent Counsel pursuant to Section 9(a) hereof, the
Independent Counsel shall be selected
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as provided in this Section 9(b). If a Change in Control shall not have
occurred, the Independent Counsel shall be selected by the Board of Directors,
and the Company shall give written notice to Indemnitee advising him of the
identity of the Independent Counsel so selected. If a Change in Control shall
have occurred, the Independent Counsel shall be selected by Indemnitee (unless
Indemnitee shall request that such selection be made by the Board of Directors,
in which event the preceding sentence shall apply), and Indemnitee shall give
written notice to the Company advising it of the identity of the Independent
Counsel so selected. In either event, Indemnitee or the Company, as the case may
be, may, within 10 days after such written notice of selection shall have been
received, deliver to the Company or to 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 Independent Counsel so selected does not
meet the requirements of "Independent Counsel" as defined in Section 1 of this
Agreement, and the objection shall set forth with particularity the factual
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 Independent Counsel so selected may not serve as
Independent Counsel unless and until such objection is withdrawn or a court of
competent jurisdiction has determined that such objection is without merit. If,
within 20 days after submission by Indemnitee of a written request for
indemnification pursuant to Section 8(b) hereof, no Independent Counsel shall
have been selected and not objected to, either the Company or Indemnitee may
petition a court of competent jurisdiction for resolution of any objection which
shall have been made by the Company or Indemnitee to the other's selection of
Independent Counsel and/or for the appointment as Independent Counsel of a
person selected by the Court or by such other person as the Court shall
designate, and the person with respect to whom all objections are so resolved or
the person so appointed shall act as Independent Counsel under Section 9(a)
hereof. Upon the due commencement of any judicial proceeding or arbitration
pursuant to Section 12(a) of this Agreement, Independent Counsel shall be
discharged and relieved of any further responsibility in such capacity (subject
to the applicable standards of professional conduct then prevailing).
(c) The Company agrees to pay the reasonable fees of Independent
Counsel and to fully indemnify such Independent Counsel against any and all
Expenses and Losses arising out of or relating to this Agreement or its
engagement pursuant hereto.
10. ESTABLISHMENT OF TRUST. In the event of a Potential Change in Control,
the Company shall, upon written request by Indemnitee, create a trust (the
"Trust") for the benefit of Indemnitee and from time to time upon written
request of Indemnitee shall fund the Trust in an amount sufficient, in the
reasonable opinion of the Board or the Independent Counsel, as the case may be,
to satisfy any and all Losses and Expenses which are actually paid or which
Indemnitee reasonably determines from time to time may be payable by the Company
under this Agreement. The terms of the Trust shall provide that upon a Change in
Control: (i) the Trust shall not be revoked or the principal thereof invaded
without the written consent of Indemnitee; (ii) the trustee of the Trust shall
advance, within 20 days of a request by Indemnitee, any and all Expenses to
Indemnitee (and Indemnitee hereby agrees to reimburse the Trust under the
circumstances under which Indemnitee would be required to reimburse the Company
under Section 7(a) of this Agreement); (iii) the Company shall continue to fund
the Trust from time to time in accordance with the funding obligations set forth
above; (iv) the trustee of the Trust shall promptly pay to Indemnitee
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all Expenses and Losses for which Indemnitee shall be entitled to
indemnification pursuant to Sections 2 or 3 of this Agreement; and (v) all
unexpended funds in the Trust shall revert to the Company upon a final
determination by a court of competent jurisdiction in a final decision from
which there is no further right of appeal that Indemnitee has been fully
indemnified under the terms of this Agreement. The trustee of the Trust shall be
chosen by Indemnitee and shall be approved by the Company, which approval shall
not be unreasonably withheld, conditioned, or delayed.
11. PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS.
(a) In making a determination with respect to entitlement to
indemnification hereunder, the person or persons or entity making such
determination shall presume that Indemnitee is entitled to indemnification under
this Agreement if Indemnitee has submitted a request for indemnification in
accordance with Section 8(b) of this Agreement, and the Company shall have the
burden of proof to overcome that presumption in connection with the making by
any person, persons or entity of any determination contrary to that presumption.
Neither the failure of the Company (including by its directors or independent
legal counsel) to have made a determination prior to the commencement of any
action pursuant to this Agreement that indemnification is proper in the
circumstances because Indemnitee has met the applicable standard of conduct, nor
an actual determination by the Company (including by its directors or
independent legal counsel) that Indemnitee has not met such applicable standard
of conduct, shall be a defense to the action or create a presumption that
Indemnitee has not met the applicable standard of conduct.
(b) If the person, persons or entity empowered or selected under
Section 9 of this Agreement to determine whether Indemnitee is entitled to
indemnification shall not have made a determination within thirty (30) days
after receipt by the Company of the request therefor, the requisite
determination of entitlement to indemnification shall be deemed to have been
made and Indemnitee shall be entitled to such indemnification, absent a
prohibition of such indemnification under applicable law; provided, however,
that such 30-day period may be extended for a reasonable time, not to exceed an
additional fifteen (15) days, if the person, persons or entity making the
determination with respect to entitlement to indemnification in good faith
requires such additional time for the obtaining or evaluating of documentation
and/or information relating thereto.
(c) The termination of any Proceeding or of any claim, issue or matter
therein, by judgment, order, settlement or conviction, or upon a plea of nolo
contendere or its equivalent, shall not of itself adversely affect the right of
Indemnitee to indemnification or create a presumption that Indemnitee did not
act in good faith and in a manner which the Indemnitee reasonably believed to be
in or not opposed to the best interests of the Company or, with respect to any
criminal Proceeding, that Indemnitee had reasonable cause to believe that the
Indemnitee's conduct was unlawful.
(d) For purposes of any determination of good faith, Indemnitee shall
be deemed to have acted in good faith if Indemnitee's action is based on the
records or books of account of the Enterprise, including financial statements,
or on information supplied to Indemnitee by the officers of the Enterprise in
the course of their duties, or on the advice of legal counsel for the Enterprise
or on information or records given or reports made to the Enterprise by an
independent certified public
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accountant or by an appraiser or other expert selected by the Enterprise. The
provisions of this Section 11(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, trustee, partner, managing member, fiduciary, officer, agent or
employee of the Enterprise shall not be imputed to Indemnitee for purposes of
determining the right to indemnification under this Agreement.
12. REMEDIES OF INDEMNITEE.
(a) In the event that (i) a determination is made pursuant to
Section 9 of this Agreement that Indemnitee is not entitled to indemnification
under this Agreement, (ii) advancement of Expenses is not timely made pursuant
to Section 7 of this Agreement, (iii) no determination of entitlement to
indemnification shall have been made pursuant to Section 9(a) of this Agreement
within forty-five (45) days after receipt by the Company of the request for
indemnification, (iv) payment of indemnification is not made pursuant to Section
4 or 5 or the last sentence of Section 9(a) of this Agreement within ten (10)
days after receipt by the Company of a written request therefor, or (v) payment
of indemnification pursuant to Section 2 or 3 of this Agreement is not made
within ten (10) days after a determination has been made that Indemnitee is
entitled to indemnification, Indemnitee shall be entitled to an adjudication by
a court of his entitlement to such indemnification or advancement of Expenses.
Alternatively, Indemnitee, at his option, may seek an award in arbitration to be
conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of
the American Arbitration Association. The Company shall not oppose Indemnitee's
right to seek any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made pursuant to
Section 9(a) of this Agreement that Indemnitee is not entitled to
indemnification, any judicial proceeding or arbitration commenced pursuant to
this Section 12 shall be conducted in all respects as a de novo trial, or
arbitration, on the merits and Indemnitee shall not be prejudiced by reason of
that adverse determination. In any judicial proceeding or arbitration commenced
pursuant to this Section 12 the Company shall have the burden of proving
Indemnitee is not entitled to indemnification or advancement of Expenses, as the
case may be, and the Company may not refer to or introduce into evidence any
determination pursuant to Section 9(a) of this Agreement adverse to Indemnitee
for any purpose. If Indemnitee commences a judicial proceeding or arbitration
pursuant to this Section 12, Indemnitee shall not be required to reimburse the
Company for any advances pursuant to Section 7 until a final determination is
made with respect to Indemnitee's entitlement to indemnification (as to which
all rights of appeal have been exhausted or lapsed).
(c) If a determination shall have been made pursuant to Section 9(a)
of this Agreement that Indemnitee is entitled to indemnification, the Company
shall be bound by such determination in any judicial proceeding or arbitration
commenced pursuant to this Section 12, absent a prohibition of such
indemnification under applicable law.
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(d) In the event that Indemnitee, pursuant to this Section 12, seeks a
judicial adjudication of or an award in arbitration to enforce his rights under,
or to recover damages for breach of, this Agreement, Indemnitee shall be
entitled to recover from the Company, and shall be indemnified by the Company
against, any and all Expenses incurred by him in such judicial adjudication or
arbitration. If it shall be determined in said judicial adjudication or
arbitration that Indemnitee is entitled to receive part but not all of the
indemnification or advancement of Expenses sought, the Indemnitee shall be
entitled to recover from the Company, and shall be indemnified by the Company
against, any and all Expenses incurred by Indemnitee in connection with such
judicial adjudication or arbitration.
(e) The Company shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section 12 that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
that the Company is bound by all the provisions of this Agreement.
(f) The Company shall indemnify Indemnitee to the fullest extent
permitted by law against all Expenses and, if requested by Indemnitee, shall
(within ten (10) days after the Company's receipt of such written request)
advance such Expenses to Indemnitee, which are incurred by Indemnitee in
connection with any judicial proceeding or arbitration brought by Indemnitee for
(i) indemnification or advances of Expenses by the Company under this Agreement
or any other agreement or provision of the Company's Certificate of
Incorporation or By-laws now or hereafter in effect or (ii) recovery or advances
under any insurance policy maintained by any person for the benefit of
Indemnitee, regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification, advance or insurance recovery, as the case
maybe.
13. NON-EXCLUSIVITY; SURVIVAL OF RIGHTS; INSURANCE; SUBROGATION.
(a) The rights of indemnification and to receive advancement of
Expenses as provided by this Agreement shall not be deemed exclusive of any
other rights to which Indemnitee may at any time be entitled under applicable
law, the Company's Certificate of Incorporation, the Company's By-laws, any
agreement, a vote of stockholders or a resolution of directors, or otherwise. No
amendment, alteration or repeal of this Agreement or of any provision hereof
shall limit or restrict any right of Indemnitee under this Agreement in respect
of any action taken or omitted by such Indemnitee in his Corporate Status prior
to such amendment, alteration or repeal. To the extent that a change in Delaware
law, whether by statute or judicial decision, permits greater indemnification or
advancement of Expenses than would be afforded currently under the Company's
By-laws and this Agreement, it is the intent of the parties hereto that
Indemnitee shall enjoy by this Agreement the greater benefits so afforded by
such change. 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.
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(b) To the extent that the Company maintains an insurance policy or
policies providing liability insurance for directors, officers, trustees,
partners, managing members, fiduciaries, employees, or agents of the Company or
of any other Enterprise which such person serves at the request of the Company,
Indemnitee shall be covered by such policy or policies in accordance with its or
their terms to the maximum extent of the coverage available for any such
director, trustee, partner, managing member, fiduciary, officer, employee or
agent under such policy or policies. If, at the time the Company receives notice
from any source of a Proceeding as to which Indemnitee is a party or a
participant (as a witness or otherwise), the Company has director and officer
liability insurance in effect, the Company shall give prompt notice of such
Proceeding to the insurers in accordance with the procedures set forth in the
respective policies. The Company shall thereafter take all necessary or
desirable action to cause such insurers to pay, on behalf of the Indemnitee, all
amounts payable as a result of such Proceeding in accordance with the terms of
such policies.
(c) In the event of any payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
recovery of 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.
(d) The Company shall not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable (or for which advancement is provided
hereunder) hereunder if and to the extent that Indemnitee has otherwise actually
received such payment under any insurance policy, contract, agreement or
otherwise.
(e) The Company's obligation to indemnify or advance Expenses
hereunder to Indemnitee who is or was serving at the request of the Company as a
director, officer, trustee, partner, managing member, fiduciary, employee or
agent of any other Enterprise shall be reduced by any amount Indemnitee has
actually received as indemnification or advancement of expenses from such
Enterprise.
14. DURATION OF AGREEMENT. This Agreement shall continue until and
terminate upon the later of: (a) ten (10) years after the date that Indemnitee
shall have ceased to serve as a director or officer of the Company or as a
director, officer, trustee, partner, managing member, fiduciary, employee or
agent of any other corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise which Indemnitee served at the request of the
Company; or (b) one (1) year after the final termination of any Proceeding
(including any rights of appeal thereto) then pending, or reasonably related to,
or arising out of the same facts of, any Proceeding then pending, in respect of
which Indemnitee is granted rights of indemnification or advancement of Expenses
hereunder and of any proceeding commenced by Indemnitee pursuant to Section 12
of this Agreement relating thereto (including any rights of appeal of any
Section 12 Proceeding).
15. SEVERABILITY. If any provision or provisions of this Agreement shall
be held to be invalid, illegal or unenforceable for any reason whatsoever: (a)
the validity, legality and enforceability of the remaining provisions of this
Agreement (including without limitation, each portion of any Section of this
Agreement containing any such provision held to be invalid, illegal or
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unenforceable, that is not itself invalid, illegal or unenforceable) shall not
in any way be affected or impaired thereby and shall remain enforceable to the
fullest extent permitted by law; (b) such provision or provisions shall be
deemed reformed to the extent necessary to conform to applicable law and to give
the maximum effect to the intent of the parties hereto; and (c) to the fullest
extent possible, the provisions of this Agreement (including, without
limitation, each portion of any Section of this Agreement containing any such
provision held to be invalid, illegal or unenforceable, that is not itself
invalid, illegal or unenforceable) shall be construed so as to give effect to
the intent manifested thereby.
16. ENFORCEMENT AND BINDING EFFECT.
(a) The Company expressly confirms and agrees that it has entered into
this Agreement and assumed the obligations imposed on it hereby in order to
induce Indemnitee to serve as a director or officer of the Company, and the
Company acknowledges that Indemnitee is relying upon this Agreement in serving
as a director or officer of the Company.
(b) This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral, written and implied, between the
parties hereto with respect to the subject matter hereof.
(c) The indemnification and advancement of expenses provided by, or
granted pursuant to this Agreement shall continue as to a person who has ceased
to be a director, officer, employee or agent and shall inure to the benefit of
the heirs, executors and administrators of such a person.
17. MODIFICATION AND WAIVER. No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by 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 nor shall
any waiver constitute a continuing waiver.
18. NOTICE BY INDEMNITEE. Indemnitee agrees promptly to notify the
Company in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to any Proceeding
or matter which may be subject to indemnification or advancement of Expenses
covered hereunder. The failure of Indemnitee to so notify the Company shall not
relieve the Company of any obligation which it may have to the Indemnitee under
this Agreement or otherwise.
19. NOTICES. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given (a) if delivered by hand and receipted for by the party to whom said
notice or other communication shall have been directed, or (b) mailed by
certified or registered mail with postage prepaid, on the third business day
after the date on which it is so mailed:
(a) If to Indemnitee, at the address indicated on the signature page
of this Agreement, or such other address as Indemnitee shall provide in writing
to the Company.
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(b) If to the Company to:
Xxxxxx, Inc.
000 Xxxxxxx Xxxx
Xxxx Xxxx, XX 00000
Attn: Chief Executive Officer
or to any other address as may have been furnished to Indemnitee in writing by
the Company.
20. 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, the Company, in lieu of indemnifying
Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for
Expenses or Losses, 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).
21. APPLICABLE LAW AND CONSENT TO JURISDICTION. This Agreement and the
legal relations among the parties shall be governed by, and construed and
enforced in accordance with, the laws of the State of Delaware, without regard
to its conflict of laws rules. Except with respect to any arbitration commenced
by Indemnitee pursuant to Section 12(a) of this Agreement, the Company and
Indemnitee hereby irrevocably and unconditionally (i) agree that any action or
proceeding arising out of or in connection with this Agreement shall be brought
only in the Chancery Court of the State of Delaware (the "Delaware Court"), and
not in any other state or federal court in the United States of America or any
court in any other country, (ii) consent to submit to the exclusive jurisdiction
of the Delaware Court for purposes of any action or proceeding arising out of or
in connection with this Agreement, (iii) waive any objection to the laying of
venue of any such action or proceeding in the Delaware Court, and (iv) waive,
and agree not to plead or to make, any claim that any such action or proceeding
brought in the Delaware Court has been brought in an improper or inconvenient
forum.
22. IDENTICAL COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
but all of which together shall constitute one and the same Agreement. Only one
such counterpart signed by the party against whom enforceability is sought needs
to be produced to evidence the existence of this Agreement.
23. MISCELLANEOUS. Use of the masculine pronoun shall be deemed to
include usage of the feminine pronoun where appropriate. The headings of the
paragraphs of this Agreement are inserted for convenience only and shall not be
deemed to constitute part of this Agreement or to affect the construction
thereof.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
as of the day and year first above written.
Xxxxxx, Inc.
By: ______________________________
Name: ___________________________
Title: ___________________________
Indemnitee
By: ______________________________
Name: ___________________________
Address: ___________________________
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