EXHIBIT 10.8
INDEMNIFICATION AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into as
of _________, 2003 between Advancis Pharmaceutical Corporation, a Delaware
corporation (the "Company"), and _____________________ ("Indemnitee").
WITNESSETH THAT:
WHEREAS, Indemnitee performs a valuable service for the
Company; and
WHEREAS, the Board of Directors of the Company (the "Board")
has adopted Bylaws (the "Bylaws") providing for the indemnification of the
officers and directors of the Company to the fullest extent authorized by the
Delaware General Corporation Law, as amended ("Law"); and
WHEREAS, the Bylaws and the Law, by their nonexclusive nature,
permit contracts between the Company and the officers or directors of the
Company with respect to indemnification of such officers or directors; and
WHEREAS, in accordance with the authorization as provided by
the Law, the Company may purchase and maintain a policy or policies of
directors' and officers' liability insurance ("D & O Insurance"), covering
certain liabilities which may be incurred by its officers or directors in the
performance of their obligations to the Company; and
WHEREAS, in order to induce Indemnitee to continue to serve as
an officer or director of the Company, the Company has determined and agreed to
enter into this contract with Indemnitee;
NOW, THEREFORE, in consideration of Indemnitee's service as an
officer or director after the date hereof, the parties hereto agree as follows:
1. Indemnity of Indemnitee. The Company hereby agrees to
hold harmless and indemnify Indemnitee to the fullest extent authorized or
permitted by the provisions of the Law, as such may be amended from time to
time, and Article VI of the Bylaws, as such may be amended. In furtherance of
the foregoing indemnification, and without limiting the generality thereof:
(a) Proceedings Other Than Proceedings by or in
the Right of the Company. Indemnitee shall be entitled to the rights of
indemnification provided in this Section l(a) if, by reason of his Corporate
Status (as hereinafter defined), he is, or is threatened to be made, a party to
or participant in any Proceeding (as hereinafter defined) other than a
Proceeding by or in the right of the Company. Pursuant to this Section 1(a),
Indemnitee shall be indemnified against all Expenses (as hereinafter defined),
judgments, penalties, fines and amounts paid in settlement actually and
reasonably incurred by him, or on his behalf, in connection with such Proceeding
or any claim, issue or matter therein, if he 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 with respect to any criminal Proceeding, had no reasonable cause to
believe his conduct was unlawful.
(b) Proceedings by or in the Right of the
Company. Indemnitee shall be entitled to the rights of indemnification provided
in this Section 1(b) if, by reason of his Corporate Status, he is, or is
threatened to be made, a party to or participant in any Proceeding brought by or
in the right of the Company. Pursuant to this Section 1(b), Indemnitee shall be
indemnified against all Expenses actually and reasonably incurred by him, or on
his behalf, in connection with such Proceeding if he acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interests of
the Company; provided, however, if applicable law so provides, no
indemnification against such Expenses shall be made in respect of any claim,
issue or matter in such Proceeding as to which Indemnitee shall have been
adjudged to be liable to the Company unless and to the extent that the Court of
Chancery of the State of Delaware shall determine that such indemnification may
be made.
(c) Indemnification for Expenses of a Party Who
is Wholly or Partly Successful. Notwithstanding any other provision of this
Agreement, to the extent that Indemnitee is, by reason of his Corporate Status,
a party to and is successful, on the merits or otherwise, in any Proceeding, he
shall be indemnified to the maximum extent permitted by law against all Expenses
actually and reasonably incurred by him or on his behalf in connection
therewith. If Indemnitee is not wholly successful in such Proceeding but is
successful, on the merits or otherwise, as to one or more but less than all
claims, issues or matters in such Proceeding, the Company shall indemnify
Indemnitee against all Expenses actually and reasonably incurred by him or on
his behalf in connection with each successfully resolved claim, issue or matter.
For purposes of this Section and without limitation, the termination of any
claim, issue or matter in such a Proceeding by dismissal, with or without
prejudice, shall be deemed to be a successful result as to such claim, issue or
matter.
2. Additional Indemnity. In addition to, and without
regard to any limitations on, the indemnification provided for in Section 1 of
this Agreement, the Company shall and hereby does indemnify and hold harmless
Indemnitee against all Expenses, judgments, penalties, fines and amounts paid in
settlement actually and reasonably incurred by him or on his behalf if, by
reason of his Corporate Status, he is, or is threatened to be made, a party to
or participant in any Proceeding (including a Proceeding by or in the right of
the Company), including, without limitation, all liability arising out of the
negligence or active or passive wrongdoing of Indemnitee. The only limitation
that shall exist upon the Company's obligations pursuant to this Agreement shall
be that the Company shall not be obligated to make any payment to Indemnitee
that is finally determined (under the procedures, and subject to the
presumptions, set forth in Sections 6 and 7 hereof) to be unlawful under
Delaware law.
3. Contribution in the Event of Joint Liability.
(a) Whether or not the indemnification provided
in Sections 1 and 2 hereof is available, in respect of any threatened, pending
or completed action, suit or proceeding in which the Company is jointly liable
with Indemnitee (or would be if joined in such action, suit or proceeding), the
Company shall pay, in the first instance, the entire amount of any judgment or
settlement of such action, suit or proceeding without requiring Indemnitee to
contribute to
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such payment and the Company hereby waives and relinquishes any right of
contribution it may have against Indemnitee. The Company shall not enter into
any settlement of any action, suit or proceeding in which the Company is jointly
liable with Indemnitee (or would be if joined in such action, suit or
proceeding) unless such settlement provides for a full and final release of all
claims asserted against Indemnitee.
(b) Without diminishing or impairing the
obligations of the Company set forth in the preceding subparagraph, if, for any
reason, Indemnitee shall elect or be required to pay all or any portion of any
judgment or settlement in any threatened, pending or completed action, suit or
proceeding in which the Company is jointly liable with Indemnitee (or would be
if joined in such action, suit or proceeding), the Company shall contribute to
the amount of expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred and paid or payable by
Indemnitee in proportion to the relative benefits received by the Company and
all officers, directors or employees of the Company, other than Indemnitee, who
are jointly liable with Indemnitee (or would be if joined in such action, suit
or proceeding), on the one hand, and Indemnitee, on the other hand, from the
transaction from which such action, suit or proceeding arose; provided, however,
that the proportion determined on the basis of relative benefit may, to the
extent necessary to conform to law, be further adjusted by reference to the
relative fault of the Company and all officers, directors or employees of the
Company other than Indemnitee who are jointly liable with Indemnitee (or would
be if joined in such action, suit or proceeding), on the one hand, and
Indemnitee, on the other hand, in connection with the events that resulted in
such expenses, judgments, fines or settlement amounts, as well as any other
equitable considerations which the Law may require to be considered. The
relative fault of the Company and all officers, directors or employees of the
Company, other than Indemnitee, who are jointly liable with Indemnitee (or would
be if joined in such action, suit or proceeding), on the one hand, and
Indemnitee, on the other hand, shall be determined by reference to, among other
things, the degree to which their actions were motivated by intent to gain
personal profit or advantage, the degree to which their liability is primary or
secondary and the degree to which their conduct is active or passive.
(c) The Company hereby agrees to fully indemnify
and hold Indemnitee harmless from any claims of contribution which may be
brought by officers, directors or employees of the Company, other than
Indemnitee, who may be jointly liable with Indemnitee.
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
actually and reasonably incurred by him or on his behalf in connection
therewith.
5. Advancement of Expenses. Notwithstanding any other
provision of this Agreement, the Company shall advance all Expenses incurred by
or on behalf of Indemnitee in connection with any Proceeding by reason of
Indemnitee's Corporate Status within twenty (20) calendar days after the receipt
by the Company of a statement or statements from Indemnitee requesting such
advance or advances from time to time, whether prior to or after final
disposition of such Proceeding, provided that Indemnitee shall (i) affirm in
such written request that he acted in good faith and in a manner which he
reasonably believed to be in the best interests of the
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Company or not opposed to the best interests of the Company and (ii) undertake
to repay such amount to the extent that it is ultimately determined that
Indemnitee is not entitled to indemnification, and further provided that no
determination has been made that the facts then known would preclude
indemnification pursuant to the terms of this Agreement. Such statement or
statements shall reasonably evidence the Expenses incurred by Indemnitee and
shall include or be preceded or accompanied by an undertaking by or on behalf of
Indemnitee to repay any Expenses advanced if it shall ultimately be determined
that Indemnitee is not entitled to be indemnified against such Expenses. Any
advances and undertakings to repay pursuant to this Section 5 shall be unsecured
and interest free. Notwithstanding the foregoing, the obligation of the Company
to advance Expenses pursuant to this Section 5 shall be subject to the condition
that, if, when and to the extent that the Company determines that Indemnitee
would not be permitted to be indemnified under applicable law, the Company shall
be entitled to be reimbursed, within thirty (30) days of such determination, by
Indemnitee (who hereby agrees to reimburse the Company) for all such amounts
theretofore paid; provided, however, that if Indemnitee has commenced or
thereafter commences legal proceedings in a court of competent jurisdiction to
secure a determination that Indemnitee should be indemnified under applicable
law, any determination made by the Company that Indemnitee would not be
permitted to be indemnified under applicable law shall not be binding and
Indemnitee shall not be required to reimburse the Company for any advance of
Expenses until a final judicial determination is made with respect thereto (and
as to which all rights of appeal therefrom have been exhausted or lapsed).
6. Procedures and Presumptions for Determination of
Entitlement to Indemnification. It is the intent of this Agreement to secure for
Indemnitee rights of indemnity that are as favorable as may be permitted under
the Law and public policy of the State of Delaware. Accordingly, the parties
agree that the following procedures and presumptions shall apply in the event of
any question as to whether Indemnitee is entitled to indemnification under this
Agreement:
(a) To obtain indemnification (including, but
not limited to, the advancement of Expenses and contribution by the Company)
under this Agreement, Indemnitee shall submit to the Company a written request,
including therein or therewith such documentation and information as is
reasonably available to Indemnitee and is reasonably necessary to determine
whether and to what extent Indemnitee is entitled to indemnification. The
Secretary of the Company shall, promptly upon receipt of such a request for
indemnification, advise the Board in writing that Indemnitee has requested
indemnification.
(b) Upon written request by Indemnitee for
indemnification pursuant to the first sentence of Section 6(a) hereof, a
determination, if required by applicable law, with respect to Indemnitee's
entitlement thereto shall be made as follows: (1) if requested by the
Indemnitee, by Independent Counsel (as defined below); or (2) if no request is
made by the Indemnitee for a determination by Independent Counsel, (i) by the
Board by a majority vote of a quorum consisting of Disinterested Directors (as
defined below), or (ii) if a quorum of the Board consisting of Disinterested
Directors is not obtainable or, even if obtainable, such quorum of Disinterested
Directors so directs, by Independent Counsel in a written opinion to the Board,
a copy of which shall be delivered to the Indemnitee; or (3) if a quorum of
Disinterested Directors so directs, by the stockholders of the Company.
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(c) In the event the determination of
entitlement to indemnification or advancement of Expenses is to be made by
Independent Counsel at the request of the Indemnitee, the Independent Counsel
shall be selected by the Board, unless there shall have occurred within two (2)
years prior to the date of the commencement of the action, suit or proceeding
for which indemnification or advancement of Expenses is claimed a Change of
Control (as defined below), in which case the Independent Counsel shall be
selected by the Indemnitee unless the Indemnitee shall request that such
selection be made by the Board. Indemnitee or the Company, as the case may be,
may, within ten (10) days after such written notice of selection shall have been
given, 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 13 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 a written objection is made and
substantiated, the Independent Counsel selected may not serve as Independent
Counsel unless and until such objection is withdrawn or a court has determined
that such objection is without merit. If, within twenty (20) days after
submission by Indemnitee of a written request for indemnification pursuant to
Section 6(a) hereof, no Independent Counsel shall have been selected and not
objected to, either the Company or Indemnitee may petition the Court of Chancery
of the State of Delaware or other 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 6(b) hereof. The Company shall pay any and all reasonable fees and
expenses of Independent Counsel incurred by such Independent Counsel in
connection with acting pursuant to Section 6(b) hereof, and the Company shall
pay all reasonable fees and expenses incident to the procedures of this Section
6(c), regardless of the manner in which such Independent Counsel was selected or
appointed.
(d) 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. Anyone seeking to overcome this presumption shall have the
burden of proof and the burden of persuasion by clear and convincing evidence.
(e) 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 (as hereinafter defined) 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 accountant or by an appraiser or other expert
selected with reasonable care by the Enterprise. In addition, the knowledge
and/or actions, or failure to act, of any director, officer, agent or employee
of the Enterprise shall not be imputed to Indemnitee for purposes of determining
the right to indemnification under this Agreement. Whether or not the foregoing
provisions of this Section 6(e) are satisfied, it shall in any event be presumed
that Indemnitee has at all times acted in good faith and in a manner he
reasonably believed to be in or
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not opposed to the best interests of the Company. Anyone seeking to overcome
this presumption shall have the burden of proof and the burden of persuasion by
clear and convincing evidence.
(f) If the person, persons or entity empowered
or selected under Section 6 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 (i) a
misstatement by Indemnitee of a material fact, or an omission of a material fact
necessary to make Indemnitee's statement not materially misleading, in
connection with the request for indemnification, or (ii) 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 such determination with respect to
entitlement to indemnification in good faith requires such additional time to
obtain or evaluate documentation and/or information relating thereto; and
provided, further, that the foregoing provisions of this Section 6(f) shall not
apply if the determination of entitlement to indemnification is to be made by
the stockholders pursuant to Section 6(b) of this Agreement and if (A) within
fifteen (15) days after receipt by the Company of the request for such
determination, the Board or the Disinterested Directors, if appropriate, resolve
to submit such determination to the stockholders for their consideration at an
annual meeting thereof to be held within seventy-five (75) days after such
receipt and such determination is made thereat, or (B) a special meeting of
stockholders is called within fifteen (15) days after such receipt for the
purpose of making such determination, such meeting is held for such purpose
within sixty (60) days after having been so called and such determination is
made thereat.
(g) Indemnitee shall 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
Independent Counsel, member of the Board or stockholder of the Company shall act
reasonably and in good faith in making a determination regarding the
Indemnitee's entitlement to indemnification under this Agreement. Any costs or
expenses (including attorneys' fees and disbursements) 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.
(h) The Company acknowledges that a settlement
or other disposition short of final judgment may be successful if it permits a
party to avoid expense, delay, distraction, disruption and uncertainty. In the
event that any action, claim or proceeding to which Indemnitee is a party is
resolved in any manner other than by adverse judgment against Indemnitee
(including, without limitation, settlement of such action, claim or proceeding
with or without payment of money or other consideration) it shall be presumed
that Indemnitee has been successful on the merits or otherwise in such action,
suit or proceeding. Anyone seeking to overcome this presumption shall have the
burden of proof and the burden of persuasion by clear and convincing evidence.
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7. Remedies of Indemnitee.
(a) In the event that (i) a determination is
made pursuant to Section 6 of this Agreement that Indemnitee is not entitled to
indemnification under this Agreement, (ii) advancement of Expenses is not timely
made pursuant to Section 5 of this Agreement, (iii) no determination of
entitlement to indemnification is made pursuant to Section 6(b) of this
Agreement within ninety (90) days after receipt by the Company of the request
for indemnification, (iv) payment of indemnification is not made pursuant to
this Agreement within ten (10) days after receipt by the Company of a written
request therefor or (v) payment of indemnification is not made within ten (10)
days after a determination has been made that Indemnitee is entitled to
indemnification or such determination is deemed to have been made pursuant to
Section 6 of this Agreement, Indemnitee shall be entitled to an adjudication in
an appropriate court of the State of Delaware, or in any other court of
competent jurisdiction, of his entitlement to such indemnification. Indemnitee
shall commence such proceeding seeking an adjudication within one hundred eighty
(180) days following the date on which Indemnitee first has the right to
commence such proceeding pursuant to this Section 7(a). The Company shall not
oppose Indemnitee's right to seek any such adjudication.
(b) In the event that a determination shall have
been made pursuant to Section 6(b) of this Agreement that Indemnitee is not
entitled to indemnification, any judicial proceeding commenced pursuant to this
Section 7 shall be conducted in all respects as a de novo trial on the merits,
and Indemnitee shall not be prejudiced by reason of the adverse determination
under Section 6(b).
(c) If a determination shall have been made
pursuant to Section 6(b) of this Agreement that Indemnitee is entitled to
indemnification, the Company shall be bound by such determination in any
judicial proceeding commenced pursuant to this Section 7, absent a prohibition
of such indemnification under applicable law.
(d) In the event that Indemnitee, pursuant to
this Section 7, seeks a judicial adjudication of his rights under, or to recover
damages for breach of, this Agreement, or to recover under any directors' and
officers' liability insurance policies maintained by the Company, the Company
shall pay on his behalf, in advance, any and all expenses (of the types
described in the definition of Expenses in Section 13 of this Agreement)
actually and reasonably incurred by him in such judicial adjudication,
regardless of whether Indemnitee ultimately is determined to be entitled to such
indemnification, advancement of expenses or insurance recovery.
(e) The Company shall be precluded from
asserting in any judicial proceeding commenced pursuant to this Section 7 that
the procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court that the Company is bound by
all the provisions of this Agreement.
8. Non-Exclusivity; Survival of Rights; Insurance;
Subrogation.
(a) The rights of indemnification as provided by
this Agreement shall not be deemed exclusive of any other rights to which
Indemnitee may at any time be entitled
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under applicable law, the certificate of incorporation of the Company, the
Bylaws, any agreement, a vote of stockholders, 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 the Law, whether by statute or judicial decision, permits
greater indemnification than would be afforded currently under the Bylaws 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.
(b) To the extent that the Company maintains an
insurance policy or policies providing liability insurance for directors,
officers, employees, or agents or fiduciaries of the Company or of any other
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise that 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 director, officer,
employee, agent or fiduciary under such policy or 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 hereunder if
and to the extent that Indemnitee has otherwise actually received such payment
under any insurance policy, contract, agreement or otherwise.
9. Mutual Acknowledgment. The Company and Indemnitee
acknowledge that in certain instances, Federal law or applicable public policy
(pursuant to the immediately following sentence) may prohibit the Company from
indemnifying its directors, officers, employees, controlling persons,
fiduciaries or other agents or affiliates under this Agreement or otherwise.
Indemnitee understands and acknowledges that the Company may be required in the
future to undertake with the Securities and Exchange Commission to submit the
question of indemnification to a court in certain circumstances for a
determination of the Company's rights under public policy to indemnify
Indemnitee.
10. Duration of Agreement. All agreements and obligations
of the Company contained herein shall continue during the period Indemnitee is
an officer or director of the Company (or is or was serving at the request of
the Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise) and shall continue
thereafter so long as Indemnitee shall be subject to any Proceeding (or any
proceeding
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commenced under Section 7 hereof) by reason of his Corporate Status, whether or
not he is acting or serving in any such capacity at the time any liability or
expense is incurred for which indemnification can be provided under this
Agreement. This Agreement shall be binding upon and inure to the benefit of and
be enforceable by the parties hereto and their respective successors (including
any direct or indirect successor by purchase, merger, consolidation or otherwise
to all or substantially all of the business or assets of the Company), assigns,
spouses, heirs, executors and personal and legal representatives.
11. Exceptions. Any other provision herein to the
contrary notwithstanding, the Company shall not be obligated pursuant to the
terms of this Agreement:
(a) Excluded Action or Omissions. To indemnify
the Indemnitee for any intentional malfeasance by the Indemnitee or any act
undertaken by the Indemnitee where the Indemnitee did not in good faith believe
the Indemnitee was acting in the best interests of the Company, or for any other
acts, omissions or transactions from which the Indemnitee may not be relieved of
liability under applicable law;
(b) Claims Initiated by Indemnitee. To indemnify
or advance expenses to Indemnitee with respect to Proceedings initiated or
brought voluntarily by Indemnitee and not by way of defense, except (i) with
respect to actions or proceedings to establish or enforce a right to indemnify
under this Agreement or any other agreement or insurance policy or under the
Company's Certificate of Incorporation or Bylaws now or hereafter in effect
relating to indemnification, (ii) in specific cases if the Board has approved
the initiation or bringing of such Proceeding, or (iii) as otherwise required
under Section 145 of the Delaware General Corporation Law, regardless of whether
such Indemnitee ultimately is determined to be entitled to such indemnification,
advance expense payment or insurance recovery, as the case may be;
(c) Lack of Good Faith. To indemnify Indemnitee
for any expenses incurred by Indemnitee with respect to any proceeding
instituted by Indemnitee to enforce or interpret this Agreement, if a court of
competent jurisdiction determines that each of the material assertions made by
the Indemnitee in such proceeding was not made in good faith or was frivolous;
or
(d) Claims Under Section 16(b). To indemnify
Indemnitee for expenses and the payment of profits arising from the purchase and
sale by Indemnitee of securities in violation of Section 16(b) of the Securities
Exchange Act of 1934, as amended or any similar successor statute.
12. Enforcement.
(a) The Company expressly confirms and agrees
that it has entered into this Agreement and assumes the obligations imposed on
it hereby in order to induce Indemnitee to serve as an officer or director of
the Company, and the Company acknowledges that Indemnitee is relying upon this
Agreement in serving as an officer or director of the Company.
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(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.
13. Definitions. For purposes of this Agreement:
(a) "Change of Control" means:
(i) The acquisition by any individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act) (a "Person") of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of twenty percent (20%) or more of
either (A) the then outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock"), or (B) the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally in
the election of directors (the "Outstanding Company Voting Securities");
provided, however, that for purposes of this subsection (i), the following
acquisitions shall not constitute a Change of Control: (I) any acquisition
directly from the Company or any acquisition from other stockholders where (aa)
such acquisition was approved in advance by the Board, and (bb) such acquisition
would not constitute a change of control under subsection (iii) of this
definition; (II) any acquisition by the Company; (III) any acquisition by an
employee benefit plan (or related trust) sponsored or maintained by the Company
or any corporation controlled by the Company; or (IV) any acquisition by any
corporation pursuant to a transaction which complies with subsections (A), (B)
or (C) of subsection (iii) of this definition; or
(ii) Individuals who, as of the date
hereof, constitute the Board (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the date hereof whose election, or
nomination for election by the stockholders, was approved by a vote of at least
a majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies by or on behalf of a Person other than the Board; or
(iii) Consummation of a reorganization,
merger or consolidation or sale or other disposition of all or substantially all
of the assets of the Company (a "Business Combination"), in each case, unless,
following such Business Combination, (A) all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than fifty percent (50%) of, respectively, the then outstanding
shares of common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors, as
the case may be, of the corporation resulting from such Business Combination
(including without limitation a corporation which as a result of such
transaction owns the Company or all or substantially all of the Company's assets
either directly or through one or more subsidiaries) in substantially the same
proportions as their ownership immediately
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prior to such Business Combination of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (B) no Person
(excluding any corporation resulting from such Business Combination or any
employee benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, twenty percent (20%) or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed
prior to the Business Combination, and (C) at least a majority of the members of
the board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the execution of
the initial agreement, or of the action of the board of directors, providing for
such Business Combination; or
(iv) Approval by the stockholders of a
complete liquidation or dissolution of the Company.
(b) "Corporate Status" describes the status of a
person who is or was a director, officer, employee, agent or fiduciary of the
Company or of any other corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise that such person is or was serving at the
express written request of the Company.
(c) "Disinterested Director" means a director of
the Company who is not and was not a party to the matter in respect of which
indemnification or advancement of Expenses is sought by Indemnitee.
(d) "Enterprise" shall mean the Company and any
other corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise that Indemnitee is or was serving at the express written
request of the Company as a director, officer, employee, agent or fiduciary.
(e) "Expenses" shall include all judgments,
fines, ERISA excise taxes or penalties, amounts paid in settlement, 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 or
expenses of the types customarily incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, participating, or
being or preparing to be a witness in a Proceeding.
(f) "Independent Counsel" means a law firm, a
member of a law firm or an independent practitioner that is experienced in
matters of corporation law and shall include any person who, under the
applicable standards of professional conduct then prevailing, would not have a
conflict of interest in representing either the Company or the Indemnitee in an
action to determine the Indemnitee's rights under this Agreement. The Company
agrees to pay the reasonable fees 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.
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(g) "Proceeding" includes 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 by or in the right of the
Company or otherwise and whether civil, criminal, administrative or
investigative, in which Indemnitee was, is or will be involved as a party or
otherwise, by reason of the fact that Indemnitee is or was an officer or
director of the Company, by reason of any action taken by him or of any inaction
on his part while acting as an officer or director 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, employee, agent or fiduciary of another corporation,
partnership, joint venture, trust or other Enterprise; in each case whether or
not he is acting or serving in any such capacity at the time any liability or
expense is incurred for which indemnification can be provided under this
Agreement; including one pending on or before the date of this Agreement, but
excluding one initiated by an Indemnitee pursuant to Section 7 of this Agreement
to enforce his rights under this Agreement.
14. Severability. If any provision or provisions of this
Agreement shall be held by a court of competent jurisdiction to be invalid,
void, illegal or otherwise 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
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; and (b) 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.
Without limiting the generality of the foregoing, this Agreement is intended to
confer upon Indemnitee indemnification rights to the fullest extent permitted by
applicable laws. In the event any provision hereof conflicts with any applicable
law, such provision shall be deemed modified, consistent with the aforementioned
intent, to the extent necessary to resolve such conflict.
15. Modification and Waiver. No supplement, modification,
termination 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
provisions hereof (whether or not similar) nor shall such waiver constitute a
continuing waiver.
16. Notice By Indemnitee. Indemnitee agrees promptly to
notify the Company in writing upon being served with or otherwise receiving any
summons, citation, subpoena, complaint, indictment, information or other
document relating to any Proceeding or matter which may be subject to
indemnification covered hereunder. The failure to so notify the Company shall
not relieve the Company of any obligation which it may have to Indemnitee under
this Agreement or otherwise unless and only to the extent that such failure or
delay materially prejudices the Company.
17. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if (i) delivered by
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hand and receipted for by the party to whom said notice or other communication
shall have been directed, or (ii) 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, to the address set forth
below Indemnitee's signature hereto.
(b) If to the Company, to:
Advancis Pharmaceutical Corporation
00000 Xxxxxx Xxxxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
or to such other address as may have been furnished to Indemnitee by the Company
or to the Company by Indemnitee, as the case may be.
18. 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.
19. Headings. 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.
20. Governing Law. The parties agree that this Agreement
shall be governed by, and construed and enforced in accordance with, the laws of
the State of Delaware without application of the conflict of laws principles
thereof.
21. Gender. Use of the masculine pronoun shall be deemed
to include usage of the feminine pronoun where appropriate.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on and as of the day and year first above written.
COMPANY:
ADVANCIS PHARMACEUTICAL CORPORATION
By:_________________________________
Name:
Title:
INDEMNITEE:
____________________________________
Name:
Address:
____________________________________
____________________________________
____________________________________
____________________________________
