EXHIBIT 99(e)(2)
FORM OF INDEMNIFICATION AGREEMENT
THIS AGREEMENT is made as of this __ day of November 2003, by and
between Joule Inc., a Delaware corporation (the "Corporation"), and
__________________ ("Indemnitee").
WHEREAS, Indemnitee is a member of the Board of Directors of the
Corporation, has been appointed a member of the Special Committee of the Board
of Directors of the Corporation (the "Special Committee") formed to evaluate a
potential transaction that would result in the acquisition by a corporation
formed by a purchaser group consisting of Xxxxxxx Xxxxxxxxxx, members of his
immediate family and Xxxx Xxxxxxx of all the outstanding shares of the Company's
common stock not already owned by the members of such group and the transfer of
the Corporation to private ownership (the "Transaction");
WHEREAS, the shareholders of the Corporation have adopted by-laws (the
"By-laws") providing for the indemnification of the officers, directors, agents
and employees of the Corporation to the maximum extent authorized by applicable
law;
WHEREAS, the By-laws specifically provide that they are not exclusive,
and thereby contemplate that contracts may be entered into between the
Corporation and the members of its Board of Directors with respect to
indemnification of such directors;
WHEREAS, the Corporation has purchased and presently maintains a policy
or policies of directors and officers liability insurance, covering certain
liabilities which may be incurred by its directors and officers in the
performance of their services for the Corporation;
WHEREAS, in order to induce the Indemnitee to continue to serve as a
member of the Special Committee, the Corporation has determined and agreed to
enter into this Agreement with Indemnitee;
NOW, THEREFORE, in consideration of the Indemnitee's continued services
as a member of the Special Committee after the date hereof and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
Section 1. Agreement to Indemnify. The Corporation shall indemnify and
hold harmless Indemnitee, to the fullest extent authorized by the General
Corporation Law of the State of Delaware as it may be in effect from time to
time (but, in the case of any such amendment(s), only to the extent it permits a
Delaware corporation to provide, as a whole, broader indemnification rights than
said law permitted such corporation prior to such amendment(s)) (the "Delaware
Law"), from and against any expenses (including, but not limited to, expenses of
investigation and preparation and fees and disbursements of counsel, accountants
and other experts), judgments, fines, liability, losses and amounts paid in
settlement, actually and reasonably incurred by Indemnitee in connection with
any threatened, pending or completed action, suit, claim or proceeding
(hereinafter, a "proceeding"), including affirmative defenses raised therein,
whether civil, criminal, administrative or investigative, by reason of the fact
that Indemnitee is or was a director or officer of the Corporation (including,
without limitation, as a member of any committee of the Board of Directors) or
arising out of or in connection with the
Transaction, and whether or not the cause of such proceeding occurred before or
after the date of this Agreement.
Section 2. Limitation on Indemnification. It shall be a defense by the
Corporation to any claim for indemnification (other than a claim for expenses
incurred in defending any proceeding in advance of its final disposition where
the required undertaking, if any, has been tendered to the Corporation as set
forth in Section 5 of this Agreement) that Indemnitee has not met the standard
of conduct which make it permissible under Delaware Law for the Corporation to
indemnify Indemnitee for the amount claimed. The determination as to whether the
applicable standard of conduct has been met shall be made in accordance with
Delaware law. Unless the Corporation and the Indemnitee agree within ten (10)
business days of receipt of written notice of a request for indemnification
pursuant to Section 3 that the applicable standard has been met, the
determination shall be made by independent legal counsel licensed to practice in
Delaware recommended by the Corporation and approved by the Indemnitee, which
approval shall not be unreasonably withheld. The determination of counsel shall
be set forth in a written opinion. If the determination of such counsel is that
the standard of conduct was not met Indemnitee shall have the right to appeal to
a court of competent jurisdiction and all costs and expenses shall be
indemnified by the Corporation if the determination of such counsel is
overturned and the Corporation shall advance expenses in connection with any
such appeal in accordance with Section 5 hereof. The parties shall cooperate to
cause such determination to be made expeditiously. Notwithstanding the above, if
the Corporation has not recommended Delaware counsel within fifteen (15)
business days of receipt of the written notice of a request for indemnification,
the applicable standard of conduct shall be deemed to have been met; provided,
however, that if the Corporation can demonstrate that it has made a good faith,
diligent effort to find counsel willing to serve in such capacity but has been
unsuccessful in doing so, it shall have an additional 15 business days
(commencing at the expiration of the initial 15 business-day period) to retain
such independent counsel before the applicable standard shall be deemed to have
been met. All expenses related to the independent counsel shall be paid by the
Company. The failure to have made a determination prior to the commencement of
any such action that indemnification of Indemnitee is proper because the
applicable standard of conduct has been met shall not be a defense to such
action or create a presumption that Indemnitee has not met the applicable
standard of conduct. Once the determination has been made that the applicable
standard has been met, any indemnification payment then due or that thereafter
becomes due under Section 1 of this Agreement shall be made promptly, and in any
event within 20 days, after such determination or the date that a subsequent
payment becomes due, as the case may be.
Section 3. Notice to Corporation. Indemnitee shall notify the
Corporation in writing, directed to the Secretary of the Corporation at its
principal office or such other address as the Corporation may designate in
writing to the Indemnitee, of any matter with respect to which Indemnitee
intends to seek indemnification hereunder as soon as reasonably practicable
following the receipt by Indemnitee of written notice thereof; provided, that a
delay in notifying the Corporation shall not constitute a waiver by Indemnitee
of his rights hereunder except to the extent that the Corporation is materially
prejudiced thereby.
Section 4. Control of Defense. Indemnitee shall control the defense
(including the selection of qualified counsel) of any proceeding against him
which may give rise to a right of
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indemnification hereunder; provided, however, that if any insurance carrier
which shall have supplied any directors' and officers' insurance coverage shall
be willing to conduct such defense without any reservation as to coverage, then,
unless on written application by Indemnitee concurred with by the Board of
Directors of the Corporation, Indemnitee and the Board of Directors deem it
undesirable, such insurance carrier shall select counsel to conduct such
defense. Indemnitee shall conduct the defense of any such proceeding in good
faith and with diligence. Indemnitee shall timely notify the Corporation of any
significant developments in the proceeding and any significant decisions to be
made in respect thereto. Indemnitee shall give the Corporation the opportunity
to participate in (at the Corporation's expense), and shall actively cooperate
with the Corporation in, the defense and (subject to Section 6 below) the
settlement or compromise of any such proceeding.
Section 5. Expenses. Notwithstanding anything contained in Section 2 to
the contrary, in the event of any proceeding against Indemnitee which may give
rise to a right of indemnification pursuant to this Agreement, following a
written request to the Corporation by Indemnitee, the Corporation shall advance
to Indemnitee amounts equal to reasonable expenses incurred by Indemnitee in
defending such proceeding in advance of the final disposition thereof promptly
upon receipt of (i) an undertaking by or on behalf of Indemnitee to repay such
amount if it shall ultimately be determined by final judgment of a court of
competent jurisdiction that he is not entitled to be indemnified by the
Corporation hereunder, and (ii) satisfactory documentation as to the amount of
such expenses. Indemnitee's written certification together with a true and
correct copy of the statement paid or agreed to be paid by Indemnitee shall
constitute satisfactory documentation for purposes of subparagraph (ii) hereof.
Any advances and undertakings to repay pursuant to this Section 5 shall be
unsecured and interest free.
Section 6. Settlement. Indemnitee shall not settle or compromise any
proceeding covered by this Agreement without first obtaining written consent to
such settlement or compromise from the Corporation, which consent in no event
shall be unreasonably withheld or delayed.
Section 7. Collection Costs. The Corporation expressly confirms and
agrees that it has entered into this Agreement and assumed the obligations
imposed on the Corporation hereby in order to induce the Indemnitee to continue
as a member of the Special Committee, and acknowledges that the Indemnitee is
relying upon this Agreement in continuing in such capacity. The right to
indemnification or advances of expenses as granted by this Agreement shall be
enforceable by Indemnitee in any court of competent jurisdiction. In the event
that Indemnitee is required to bring any action to enforce rights or to collect
amounts due under this Agreement and is successful in such action, the
Corporation shall promptly reimburse Indemnitee for all of Indemnitee's costs
and expenses in bringing and pursuing such action. The Corporation shall be
precluded from asserting in any action that the provisions of this Agreement are
not valid, binding and enforceable or that there is insufficient consideration
for this Agreement.
Section 8. Insurance. The Corporation will maintain, at least through
the date that the Transaction is consummated or abandoned, the Corporation's
existing directors' and officers' insurance as set forth on Exhibit A hereto in
full force and effect without reduction of coverage. If the Transaction is
consummated, prior to canceling or reducing such coverage the Corporation
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shall purchase "tail" insurance providing coverage for a period of three (3)
years after such date on substantially the same terms as the current policies of
directors' and officers' liability insurance and indemnification maintained by
the Corporation (provided that the Corporation may substitute therefor policies
with reputable and financially sound carriers, which policies provide coverage
of the types, in the amounts and containing terms and conditions which are no
less advantageous to the beneficiaries thereof than those maintained by the
Corporation) with respect to claims arising from or related to facts or events
which occurred at or before cancellation or reduction of such coverage. In all
policies of director and officer liability insurance, Indemnitee shall be
included in the definitions of "insured" or "covered persons" in such a manner
as to provide Indemnitee at least the same rights and benefits as are accorded
to the most favorably insured of the Corporation's officers and directors.
Section 9. Subrogation. In the event of payment under this Agreement,
the Corporation shall be subrogated to the extent of such payment to all of the
rights of the Indemnitee to recovery against third parties. The Indemnitee shall
execute all papers reasonably required and shall take such acts as are
reasonably necessary to secure such rights, including the execution of such
documents necessary to enable the Corporation effectively to bring suit to
enforce such rights.
Section 10. Change in Law. To the extent that a change in applicable
law (whether by statute or judicial decision) shall permit broader
indemnification than is provided under the terms of the Certificate of
Incorporation or By-laws of the Corporation and this Agreement, Indemnitee shall
be entitled to such broader indemnification and this Agreement shall be deemed
to be amended to such extent.
Section 11. Non-Exclusive Rights. The rights to payment of
indemnification and advancement of expenses provided by this Agreement shall be
in addition to, but not exclusive of, any other rights which Indemnitee may have
at any time under applicable law, the Corporation's By-laws or Certificate of
Incorporation, each as amended from time to time, or any other agreement, vote
of stockholders or directors, or otherwise, both as to action in Indemnitee's
official capacity and as to action in any other capacity as a result of
Indemnitees's serving as a director (or member of committee) of the Corporation.
Section 12. Successors and Assigns. The rights granted to Indemnitee
hereunder shall inure to the benefit of Indemnitee, his personal
representatives, heirs, executors, administrators and beneficiaries, and this
Agreement shall be binding upon the Corporation, its successors and assigns
(including any transferee of all or a substantial portion of the business, stock
and/or assets of the Corporation and any direct or indirect successor by merger
or consolidation or otherwise by operation of law).
Section 13. Miscellaneous. This Agreement and the rights and
obligations of the parties hereunder shall be governed by the laws of the State
of Delaware without regard to the provisions thereof relating to conflicts of
law. The captions used in this Agreement are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit,
characterize or affect in any way any of the provisions of this Agreement, and
all of the provisions of this Agreement shall be enforced and construed as if no
captions had been used in
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this Agreement. Whenever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable law,
but if any provision of this Agreement, or any clause thereof, shall be
determined by a court of competent jurisdiction to be illegal, invalid or
unenforceable, in whole or in part, such provision or clause shall be limited or
modified in its application to the minimum extent necessary to make such
provision or clause valid, legal and enforceable, and the remaining provisions
and clauses of this Agreement shall remain fully enforceable and binding on the
parties. This Agreement may be executed in counterparts, each of which shall be
deemed to be an original, and all of which together shall constitute one and the
same instrument. No amendment, modification or alteration of the terms or
provisions of this Agreement or the Exhibits hereto shall be binding unless the
same shall be in writing and duly executed by the parties hereto. Any provision
of this Agreement may be waived if, and only if, such waiver is in writing and
signed by the party against whom the wavier is to be effective. No failure or
delay by any party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
JOULE INC.
By:
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Name:
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Title:
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[NAME]
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Exhibit A
Insurance Policies
