Exhibit 10.2
SONUS NETWORKS, INC.
INDEMNITY AGREEMENT
This Indemnity Agreement (this "Agreement") is made and entered into
effective as of the ___ day of ______, 2003, by and between Sonus Networks,
Inc., a Delaware corporation (the "Corporation"), and _______________ (the
"Indemnitee"), a director and/or officer of the Corporation.
WHEREAS, it is essential to the Corporation to retain and attract as
directors and/or officers the most capable persons available;
WHEREAS, the possibility of corporate litigation subjects directors and
officers to expensive litigation risks at the same time that the availability of
directors' and officers' liability insurance is limited;
WHEREAS, the Corporation has agreed to indemnify its Directors and
officers so as to provide them with the maximum possible protection permitted by
law; and
WHEREAS, because the statutory indemnification provisions of the General
Corporation Law of the State of Delaware, Section 145, expressly provide that
they are non-exclusive, the Corporation is willing to agree to indemnify
directors and officers who have entered into settlements of derivative suits or
have paid judgments, fines or penalties therefor, provided they have not
breached the applicable statutory standard of conduct; and
WHEREAS, the General Corporation Law of the State of Delaware, Section
145, and the Corporation's Certificate of Incorporation and/or By-laws provide
that indemnification of the Directors and officers of the Corporation may be
authorized by agreement, and thereby contemplates that contracts of this nature
may be entered into between the Corporation and the Indemnitee with respect to
indemnification of the Indemnitee as a director and/or officer of the
Corporation.
NOW, THEREFORE, for good and valuable consideration, the sufficiency and
adequacy of which is hereby acknowledged, the Corporation and the Indemnitee do
hereby agree as follows:
1. AGREEMENT TO SERVE. The Indemnitee agrees to serve or continue to
serve as Director and/or officer of the Corporation for so long as he is duly
elected or appointed or until such time as he tenders his resignation in writing
or is otherwise terminated or removed from office.
2. DEFINITIONS. As used in this Agreement:
(a) The term "Proceeding" shall include any threatened, pending or
completed action, suit, arbitration, administrative hearing or other proceeding,
whether brought by or in the right of the Corporation or otherwise, whether
brought while the Indemnitee is acting or serving as a Director and/or officer
of the Corporation or subsequent to the Indemnitee serving in such capacity, and
whether of a civil, criminal, administrative or investigative nature, and any
appeal therefrom, in which the Indemnitee and/or the Corporation may be or may
have been involved as a party or otherwise, (i) by reason of the status of the
Indemnitee as a director and/or officer of the Corporation or as a director,
partner, trustee, officer, employee or agent of another corporation, domestic or
foreign, non-profit or for-profit, partnership, joint venture, trust or other
enterprise at the request of the Corporation ("Corporate Status"),
or (ii) by reason of any action alleged to have been taken by him or of any
alleged inaction on his part in such Corporate Status.
(b) The term "Expenses" shall include, without limitation,
attorneys' fees, retainers, court costs, transcript costs, fees and expenses of
experts, travel expenses, duplicating costs, printing and binding costs,
telephone charges, postage, delivery service fees and other disbursements or
expenses of the types customarily incurred in connection with investigations,
judicial or administrative proceedings or appeals, and any expenses of
establishing a right to indemnification under Paragraph 9 of this Agreement, in
each case to the extent actually and reasonably incurred by a person. The term
"Expenses" shall not include the amount of judgments, fines or penalties against
Indemnitee or amounts paid in settlement in connection with such matters.
(c) References to "other enterprise" shall include, without
limitation, employee benefit plans; references to "fines" shall include, without
limitation, any excise tax assessed with respect to any employee benefit plan;
references to "serving at the request of the Corporation" shall include, without
limitation, any service as a director and/or officer of the Corporation which
imposes duties on, or involves services by, such director and/or officer with
respect to an employee benefit plan, its participants or beneficiaries; and a
person who acted in good faith and in a manner he or she 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 be best
interests of the Corporation" as referred to in this Agreement.
3. PROCEEDINGS OTHER THAN BY OR IN THE RIGHT OF THE CORPORATION. The
Corporation shall indemnify the Indemnitee in accordance with the provisions of
this Agreement if the Indemnitee was or is a party to or threatened to be made a
party to or otherwise involved in any Proceeding (other than a Proceeding by or
in the right of the Corporation), by reason of the Indemnitee's Corporate Status
or by reason of any action alleged to have been taken or omitted in such
capacity, against all Expenses, judgments, fines, penalties and amounts paid in
settlement actually and reasonably incurred by him or it on his or its behalf in
connection with such Proceeding, if the Indemnitee acted in good faith and in a
manner he or it reasonably believed to be in, or not opposed to, the best
interests of the Corporation, and, with respect to any criminal Proceeding, had
no reasonable cause to believe his or its conduct was unlawful, provided, that,
in no event shall the Indemnitee be entitled to indemnification hereunder to the
extent that such indemnification is prohibited by the General Corporation Law of
the State of Delaware. The termination of Proceeding by judgment, order,
settlement, conviction or upon a plea of NOLO CONTENDERE or its equivalent,
shall not, of itself, create a presumption that the Indemnitee did not act in
good faith and in a manner which he or it reasonably believed to be in, or not
opposed to, the best interests of the Corporation, and, with respect to any
criminal Proceeding, had reasonable cause to believe that his or its conduct was
unlawful. Notwithstanding anything to the contrary in this Paragraph, except as
set forth in Paragraph 9 below, the Corporation shall not indemnify the
Indemnitee in connection with a Proceeding (or part thereof) initiated by the
Indemnitee, as the case may be, unless the initiation thereof was approved by
the Board of Directors of the Corporation.
4. PROCEEDINGS BY OR IN THE RIGHT OF THE CORPORATION. The Corporation
shall indemnify the Indemnitee in accordance with the provisions of this
Agreement if the Indemnitee was or was or is a party to or threatened to be made
a party to or otherwise involved in any Proceeding by or in the right of the
Corporation to procure a judgment in its favor by reason of the Indemnitee's
Corporate Status or by
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reason of any action alleged to have been taken or omitted in such capacity,
against all Expenses and, to the extent permitted by law, amounts paid in
settlement actually and reasonably incurred by him or it or on his or its behalf
in connection with such Proceeding, if the Indemnitee acted in good faith and in
a manner he reasonably believed to be in, or not opposed to, the best interests
of the Corporation, except that no indemnification shall be made in respect of
any claim, issue or matter as to which the Indemnitee shall have been adjudged
to be liable to the Corporation unless and only to the extent that the Court of
Chancery of Delaware or the court in which such Proceeding was brought shall
determine upon application that, despite the adjudication of such liability but
in view of all the circumstances of the case, the Indemnitee is fairly and
reasonably entitled to indemnity for such Expenses which the Court of Chancery
of Delaware or such other court shall deem proper.
5. COSTS AND EXPENSES RELATING TO SERVICE AS A WITNESS. The Corporation
shall indemnify the Indemnitee in accordance with the provisions of this
Agreement with respect to all Expenses incurred or suffered by the Indemnitee as
a result of the service, attendance or appearance by the Indemnitee as a witness
(or in any other non-party capacity) in any Proceeding (including any part of a
Proceeding such as appearance at a hearing, deposition or trial or any actions
taken in response to any subpoena, order, discovery request or the like) if such
service, attendance or appearance relates to or results from the Indemnitee's
Corporate Status or by reason of any action alleged to have been taken or
omitted in such capacity.
6. INDEMNIFICATION FOR EXPENSES OF SUCCESSFUL PARTY. Notwithstanding
the other provisions 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, he shall be indemnified against
Expenses actually and reasonably incurred by him or it or on his or its behalf
in connection therewith. Without limiting the foregoing, if any Proceeding or
any claim, issue or matter therein is disposed of, on the merits or otherwise
(including a disposition without prejudice), without (i) the disposition being
adverse to the Indemnitee, (ii) an adjudication that the Indemnitee was liable
to the Corporation, (iii) a plea of guilty or nolo contendere by the Indemnitee,
(iv) an adjudication 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 Corporation, and (v) with respect to any criminal Proceeding,
an adjudication that the Indemnitee had reasonable cause to believe his conduct
was unlawful, the Indemnitee shall be considered for the purposes hereof to have
been wholly successful with respect thereto.
7. NOTIFICATIONS AND DEFENSE OF CLAIM. As a condition precedent to his or
its right to be indemnified, the Indemnitee must notify the Corporation in
writing as soon as practicable of any Proceeding for which indemnity will or
could be sought. With respect to any Proceeding of which the Corporation is so
notified, the Corporation will be entitled to participate therein at its own
expense and/or to assume the defense thereof at its own expense, with legal
counsel reasonably acceptable to the Indemnitee. After notice from the
Corporation to the Indemnitee of its election to assume such defense, the
Corporation shall not be liable to the Indemnitee for any Expenses subsequently
incurred by the Indemnitee in connection with such Proceeding, other than as
provided below in this Paragraph 7. The Indemnitee shall have the right to
employ his or its own counsel in connection with such Proceeding, but the
Expenses of such counsel incurred after notice from the Corporation of its
assumption of the defense thereof shall be at the expense of the Indemnitee
unless (i) the employment of counsel by the Indemnitee has been authorized by
the Corporation, (ii) counsel to the Indemnitee and to the Corporation shall
have
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reasonably concluded that there may be a conflict of interest or position on any
significant issue between the Corporation and the Indemnitee in the conduct of
the defense of such Proceeding or (iii) the Corporation shall not in fact have
employed counsel to assume the defense of such Proceeding, in each of which
cases the Expenses of counsel for the Indemnitee shall be at the expense of the
Corporation, except as otherwise expressly provided by this Agreement. The
Corporation shall not be entitled, without the prior written consent of the
Indemnitee, to assume the defense of any Proceeding brought by or in the right
of the Corporation or as to which counsel for the Indemnitee shall have
reasonably made the conclusion provided for in clause (ii) above. The
Corporation shall not be required to indemnify the Indemnitee under this
Agreement for any amounts paid in settlement of any Proceeding affected without
its written consent. The Corporation shall not settle any Proceeding in any
manner that would impose any penalty or limitation on the Indemnitee without the
Indemnitee's written consent. Neither the Corporation nor the Indemnitee will
unreasonably withhold or delay its consent to any proposed settlement.
8. ADVANCE OF EXPENSES. Subject to the provisions of Paragraph 9 below,
in the event that the Corporation does not assume the defense pursuant to
Paragraph 9 of this Agreement of any Proceeding of which the Corporation
receives notice under this Agreement, any Expenses incurred by or on behalf of
the Indemnitee in connection with any such Proceeding shall be paid by the
Corporation in advance of the final disposition of such Proceeding, PROVIDED,
HOWEVER, that the payment of such Expenses incurred by or on behalf of the
Indemnitee in advance of the final disposition of such Proceeding shall be made
only upon receipt of an undertaking by or on behalf of the Indemnitee to repay
all amounts so advanced in the event that it shall ultimately be determined that
the Indemnitee is not entitled to be indemnified by the Corporation as
authorized in this Agreement. Such undertaking shall be accepted without
reference to the financial ability of the Indemnitee to make repayment.
9. PROCEDURE FOR INDEMNIFICATION. Any indemnification or advancement of
Expenses pursuant to Paragraphs 3, 4, 6, or 8 of this Agreement shall be made
promptly, and in any event within 60 days after receipt by the Corporation of
the written request of the Indemnitee unless with respect to requests under
Paragraphs 3, 4 or 8 the Corporation determines within such 60-day period that
the Indemnitee did not meet the applicable standard of conduct set forth in
Paragraph 3 or 4, as the case may be. Such determination shall be made in each
instance by (a) a majority vote of the directors of the Corporation consisting
of persons who are not at that time parties to the Proceeding in question
("DISINTERESTED DIRECTORS"), (b) a committee of two or more Disinterested
Directors designated by a majority vote of the Disinterested Directors, (c) if
there are no Disinterested Directors or if appointed by a majority vote of the
Disinterested Directors, independent legal counsel (who may be regular legal
counsel to the Corporation) or (d) by a majority vote of the stockholders of the
Corporation. The right to indemnification or advances of Expenses as granted by
this Agreement shall be enforceable by the Indemnitee in any court of competent
jurisdiction if the Corporation denies such request, in whole or in part, or if
no disposition thereof is made within the 60-day period referred to above. The
Indemnitee's Expenses incurred in connection with successfully establishing his
or its right to indemnification, in whole or in part, in any such Proceeding
shall also be indemnified by the Corporation. Unless otherwise provided by law,
the burden of proving that the Indemnitee is not entitled to indemnification or
advancement of Expenses under this Agreement shall be on the Corporation.
10. OTHER RIGHTS. The indemnification and advancement of Expenses
provided by this Agreement shall not be deemed exclusive of any other rights to
which the Indemnitee may be entitled
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under the Certificate of Incorporation of the Corporation, as amended and/or
restated from time to time, the By-laws of the Corporation, as amended and/or
restated from time to time, the General Corporation Law of the State of
Delaware, any other law (common or statutory), and other agreement or any vote
of stockholders or Disinterested Directors, or otherwise, both as to action in
the Indemnitee's official capacity and as to action in any other capacity while
holding office for the Corporation, and shall continue as to the Indemnitee even
though the Indemnitee shall have ceased to be a director or officer, and shall
inure to the benefit of the estate, heirs, executors and administrators of the
Indemnitee.
11. PARTIAL INDEMNIFICATION. If the Indemnitee is entitled under any
provision of this Agreement to indemnification by the Corporation for some or a
portion of the Expenses, judgments, fines, penalties or amounts paid in
settlement actually and reasonably incurred by him or it or on his or its behalf
in connection with any Proceeding but not, however, for the total amount
thereof, the Corporation shall nevertheless indemnify the Indemnitee for the
portion of such Expenses, judgments, fines, penalties or amounts paid in
settlement to which the Indemnitee is entitled.
12. ALLOWANCE FOR COMPLIANCE WITH SEC REQUIREMENTS. The Indemnitee
acknowledges that the Securities and Exchange Commission ("SEC") has expressed
the opinion that indemnification of directors and officers for liabilities under
the Securities Act of 1933 ("ACT") is against public policy as expressed in the
Act and is, therefore, unenforceable. The Indemnitee each hereby acknowledge and
agree that it will not be a breach of this Agreement for the Corporation to
undertake with the SEC in connection with the registration for sale of any
shares or other securities of the Corporation from time to time that, in the
event a claim for indemnification against such liabilities (other than the
payment by the Corporation of expenses incurred or paid by a director or officer
of the Corporation in the successful defense of any Proceeding) is asserted in
connection with such shares or other securities being registered, the
Corporation will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of competent jurisdiction on
the question of whether or not such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue. The Indemnitee further agree that such submission to a court of
competent jurisdiction shall not be a breach of this Agreement.
13. REIMBURSEMENT TO CORPORATION BY INDEMNITEE; LIMITATION ON AMOUNTS
PAID BY CORPORATION. To the extent the Indemnitee has been indemnified by the
Corporation hereunder and later receives payments from any insurance carrier
covering the same Expenses, judgments, fines, penalties, or amounts paid in
settlement so indemnified by the Corporation hereunder, the Indemnitee shall
immediately reimburse the Corporation hereunder for all such amounts received
from the insurer.
Notwithstanding anything contained herein to the contrary, the Indemnitee
shall not be entitled to recover amounts under this Agreement which, when added
to the amount of any insurance proceeds or indemnification payments made to, or
on behalf of, the Indemnitee under the Certificate of Incorporation or By-laws
of the Corporation, in the aggregate exceed the expenses, judgments, fines,
penalties and amounts paid in settlement actually and reasonably incurred by the
Indemnitee ("EXCESS AMOUNTS"). To the extent the Corporation or any insurance
carrier has paid Excess Amounts to the Indemnitee the Indemnitee shall be
obligated to immediately reimburse the Corporation for such Excess Amounts.
14. CONTINUATION OF RIGHTS AND OBLIGATIONS. All rights and obligations of
the Corporation, the Indemnitee hereunder shall continue in full force and
effect despite the subsequent amendment or
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modification of the Corporation's Certificate of Incorporation or By-laws, as
such are in effect on the date hereof, and such rights and obligations shall not
be affected by any such amendment or modification, any resolution of directors
or stockholders of the Corporation, or by any other corporate action which
conflicts with or purports to amend, modify, limit or eliminate any of the
rights or obligations of the Corporation, the Indemnitee hereunder.
15. ASSIGNMENT. This Agreement shall not be assigned by the
Corporation, the Indemnitee without the prior written consent of the other
parties hereto, except that the Corporation may freely assign its rights and
obligations under this Agreement to any subsidiary for whom the Indemnitee is
serving as a director and/or officer thereof; provided, however, that no
permitted assignment shall release the assignor from its obligations hereunder.
Subject to the foregoing, this Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their
respective heirs, executors, successors and assigns, including, without
limitation, any successor to the Corporation by way of merger, consolidation
and/or sale or disposition of all or substantially all of the shares of the
Corporation.
16. SAVING CLAUSE. If this Agreement or any portion thereof shall be
invalidated on any ground by any court of competent jurisdiction, the
Corporation shall nevertheless indemnify the Indemnitee as to Expenses,
judgments, fines, penalties and amounts paid in settlement with respect to any
proceeding to the full extent permitted by any applicable portion of this
Agreement that shall not have been invalidated or by any other applicable law.
17. COUNTERPARTS. This Agreement may be executed in two or more fully or
partially executed counterparts each of which shall be deemed an original
binding the signer thereof against the other signing parties, but all
counterparts together shall constitute one and the same instrument. Executed
signature pages may be removed from counterpart agreements and attached to one
or more fully executed copies of this Agreement.
18. GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with, the laws of the State of Delaware. The Indemnitee
may elect to have the right to indemnification or reimbursement or advancement
of Expenses interpreted on the basis of the applicable law in effect at the time
of the occurrence of the event or events giving rise to the applicable
Proceeding, to the extent permitted by law, or on the basis of the applicable
law in effect at the time such indemnification or reimbursement or advancement
of Expenses is sought. Such election shall be made, by a notice in writing to
the Corporation, at the time indemnification or reimbursement or advancement of
Expenses is sought; provided, however, that if no such notice is given, and if
the General Corporation Law of Delaware is amended, or other Delaware law is
enacted, to permit further indemnification of the directors and officers, then
the Indemnitee shall be indemnified to the fullest extent permitted under the
General Corporation Law, as so amended, or by such other Delaware law, as so
enacted.
19. NOTICES. Any and all notices or elections permitted or required to be
made under this Agreement shall be in writing, signed by the parties giving such
notice or election and shall be delivered personally, or sent by registered or
certified mail, return receipt requested, to the Company and the Indemnitee at
their respective addresses shown below.
20. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of
the parties hereto
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with respect to the subject matter contained herein and supersedes all prior
agreements whether oral or written by any officer, employee or representative of
any party hereto in respect of the subject matter contained herein; and any
prior agreement of the parties hereto in respect of the subject matter contained
herein is hereby terminated. For avoidance of doubt, the parties confirm that
the foregoing does not apply to or limit the Indemnitee's rights under Delaware
law or the Corporation's Certificate of Incorporation or By-Laws.
21. MODIFICATION AND WAIVER. This Agreement may be amended from time to
time to reflect changes in Delaware law or for other reasons. No supplement,
modification or amendment of this Agreement shall be binding unless executed in
writing by both 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
provision hereof nor shall any such waiver constitute a continuing waiver.
22. ENFORCEMENT. The Corporation expressly confirms and agrees that it
has entered into this Agreement in order to induce the Indemnitee to continue to
serve as an officer or director of the Corporation, and acknowledges that the
Indemnitee is relying upon this Agreement in continuing in such capacity.
23. PRONOUNS AND NOUNS. Whenever the context may require, any pronouns
used in this Agreement shall include the corresponding masculine, feminine or
neuter forms, and the singular forms of nouns and pronouns shall include the
pronouns shall include the plural and vice-versa.
24. CAPTIONS. Captions of paragraphs have been added for convenience only
and shall not be deemed to be a part of this Agreement.
IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be
duly executed and signed effective as of the day and year first above written.
SONUS NETWORKS, INC.
By:
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Name:
Title:
Address:
000 Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
INDEMNITEE
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Name:
Address:
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