EXHIBIT 10.31
INDEMNIFICATION AGREEMENT
This INDEMNITY AGREEMENT made and entered into as of ________, 1995, by and
between Zygo Corporation, a Delaware corporation (the "Company"), and
_________________________ (the "Indemnitee");
WHEREAS, highly competent persons are becoming more reluctant to serve
corporations as directors, officers or in other capacities unless they are
provided with adequate protection through insurance and indemnification against
inordinate risks of claims and actions against them arising out of their service
to and activities on behalf of the Company; and
WHEREAS, the current difficulties of obtaining adequate insurance have
increased the difficulty of attracting and retaining such persons; and
WHEREAS, the Board of Directors has determined that the inability to
attract and retain such persons is detrimental to the best interests of the
Company's stockholders and that the Company should act to assure such persons
that there will be increased certainty of such protection in the future; and
WHEREAS, the Certificate of Incorporation and the bylaws of the Corporation
(collectively, the "Charter Documents") provide for the indemnification of the
officers and directors of the Corporation to the fullest extent permitted by the
General Corporation Law of the State of Delaware (the "GCL"); and
WHEREAS, in recognition of the foregoing, and in part to provide the
Indemnitee with specific contractual assurance that the protection promised by
such Charter Documents will be available to the Indemnitee (regardless of, among
other things, any amendment to or revocation of such Charter Documents or any
change in the composition of the Corporation's Board of Directors or acquisition
of the Corporation), the Corporation wishes to provide in this Agreement for the
indemnification of and the advancing of expenses to the Indemnitee to the full
extent permitted by law and as set forth in this Agreement; and
WHEREAS, the GCL specifically contemplates that agreements may be entered
into between the Corporation and its directors or officers with respect to their
indemnification; and
WHEREAS, it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify such persons to the fullest extent
permitted by applicable law so that they will serve or continue to serve the
Company free from undue concern that they will not be so indemnified; and
WHEREAS, the Indemnitee is willing to serve, continue to serve and take on
additional service for or on behalf of the Company on the condition that he or
she be so indemnified.
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and the Indemnitee do hereby covenant and agree as
follows:
SECTION 1. Indemnification. The Company shall indemnify the Indemnitee to
the fullest extent permitted by applicable law in effect on the date hereof or
to such greater extent as such laws may thereafter from time to time permit.
Without diminishing the scope of the indemnification provided by this Section 1,
the rights of indemnification of the Indemnitee provided hereunder shall include
but shall not be limited to those rights hereinafter set forth, except that no
indemnification shall be paid to the Indemnitee:
(a) on account of any suit in which judgment is rendered against the
Indemnitee for an accounting of profits made from the purchase or sale by
the Indemnitee of securities of the
Company pursuant to the provisions of Section 16(b) of the Securities
Exchange Act of 1934 and amendments thereto or similar provisions of any
federal, state or local statutory law;
(b) on account of the Indemnitee's conduct which is finally adjudged
to have been knowingly fraudulent or deliberately dishonest, or to
constitute willful misconduct;
(c) to the extent expressly prohibited by applicable law;
(d) for which payment is actually made to the Indemnitee under a valid
and collectible insurance policy or under a valid and enforceable indemnity
clause, Charter Document or agreement, except in respect of any excess
beyond payment under such insurance, clause, Charter Document or agreement;
(e) if a final decision by a court having jurisdiction in the matter
shall determine that such indemnification is not lawful (and, in this
respect, both the Company and the Indemnitee have been advised that the
Securities and Exchange Commission believes that indemnification for
liabilities arising under the federal securities laws is against public
policy and is, therefore, unenforceable and that claims for indemnification
should be submitted to the appropriate court for adjudication); or
(f) in connection with any proceeding (or part thereof) initiated by
the Indemnitee, or any proceeding by the Indemnitee against the Company or
its directors, officers, employees or other Indemnitees, unless (i) such
indemnification is expressly required to be made by law, (ii) the
proceeding was authorized by the Board of Directors of the Company, (iii)
such indemnification is provided by the Company, in its sole discretion,
pursuant to the powers vested in the Company under applicable law, or (iv)
except as provided in Sections 11 and 12 hereof.
SECTION 2. Action or Proceeding Other Than an Action by or in the Right of
the Company. The Indemnitee shall be entitled to the indemnification rights
provided in this Section if he or she is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative in nature, other than
an action by or in the right of the Company, by reason of the fact that he or
she is or was a director, officer, employee, agent or fiduciary of the Company,
or is or was serving at the request of the Company as a director, officer,
employee, agent or fiduciary of any other entity, including, but not limited to,
another corporation, partnership, joint venture, trust, or by reason of anything
done or not done by him or her in any such capacity. Pursuant to this Section,
the Indemnitee shall be indemnified against all expenses (including attorneys'
fees), costs, judgments, penalties, fines and amounts paid in settlement
actually and reasonably incurred by him or her in connection with such action,
suit or proceeding (including, but not limited to, the investigation, defense or
appeal thereof), if he or she acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
Company, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful.
SECTION 3. Actions by or in the Right of the Company. The Indemnitee shall
be entitled to the indemnification rights provided in this Section if he or she
is a person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding brought by or in the
right of the Company to procure a judgment in its favor by reason of the fact
that he or she is or was a director, officer, employee, agent or fiduciary of
the Company, or is or was serving at the request of the Company as a director,
officer, employee, agent or fiduciary of another entity, including, but not
limited to, another corporation, partnership, joint venture, trust, or by reason
of anything done or not done by him or her in
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any such capacity. Pursuant to this Section, the Indemnitee shall be indemnified
against all expenses (including attorneys' fees), costs and amounts paid in
settlement actually and reasonably incurred by him or her in connection with
such action, suit or proceeding (including, but not limited to, the
investigation, defense or appeal thereof) if he or she acted in good faith and
in a manner he or she reasonably believed to be in or not opposed to the best
interests of the Company; provided, however, that no such indemnification shall
be made in respect of any claim, issue, or matter as to which applicable law
expressly prohibits such indemnification by reason of any adjudication of
liability of the Indemnitee to the Company, unless and only to the extent that,
the Court of Chancery of the State of Delaware or the court in which such action
or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, the
Indemnitee is fairly and reasonably entitled to indemnity for such expenses and
costs which such court shall deem proper.
SECTION 4. Indemnification for Costs, Charges and Expenses of Successful
Party. Notwithstanding the other provisions of this Agreement, to the extent
that the Indemnitee has served as a witness on behalf of the Company or has been
successful, on the merits or otherwise, in defense of any action, suit or
proceeding referred to in Sections 2 and 3 hereof, or in defense of any claim,
issue or matter therein, including, without limitation, the dismissal of any
action without prejudice, he or she shall be indemnified against all costs,
charges and expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
SECTION 5. Partial Indemnification. If the Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of the expenses (including attorneys' fees), costs, judgments, fines and
amounts paid in settlement actually and reasonably incurred by him or her in
connection with the investigation, defense, appeal or settlement of such suit,
action, investigation or proceeding described in Section 2 or 3 hereof, but not,
however, for all of the total amount thereof, the Company shall nevertheless
indemnify the Indemnitee for the portion of such expenses (including reasonable
attorneys' fees), costs, judgments, penalties, fines and amounts paid in
settlement actually and reasonably incurred by him or her to which the
Indemnitee is entitled.
SECTION 6. Determination of Entitlement to Indemnification. Upon written
request by the Indemnitee for indemnification pursuant to Section 2 or 3 hereof,
the entitlement of the Indemnitee to indemnification pursuant to the terms of
this Agreement shall be determined by the following person or persons who shall
be empowered to make such determination: (a) the Board of Directors of the
Company by a majority vote of a quorum consisting of Disinterested Directors (as
defined in Section 17 below); (b) if such a quorum is not obtainable or, even if
obtainable, if the Board of Directors by the majority vote of Disinterested
Directors so directs, by Independent Counsel (as defined in Section 17 below) in
a written opinion to the Board of Directors, a copy of which shall be delivered
to the Indemnitee, or (c) by the stockholders. Such Independent Counsel shall be
selected by the Board of Directors and approved by the Indemnitee. Upon failure
of the Board to so select such Independent Counsel or upon failure of the
Indemnitee to so approve, such Independent Counsel shall be selected by the
Chancellor of the State of Delaware or such other person as the Chancellor shall
designate to make such selection. Such determination of entitlement to
indemnification shall be made not later than 45 days after receipt by the
Company of a written request for indemnification. Such request shall include
documentation or information which is necessary for such determination and which
is reasonably available to the Indemnitee. Any costs or expenses (including
attorneys' fees) incurred by the Indemnitee in connection with his or her
request for indemnification hereunder shall be borne by the Company. The Company
hereby indemnifies and agrees to hold the Indemnitee harmless therefrom
irrespective of the outcome of the determination of the Indemnitee's entitlement
to indemnification. If the person making such determination shall determine that
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the Indemnitee is entitled to indemnification as part (but not all) of the
application for indemnification, such person shall reasonably prorate such
partial indemnification among such claims, issues or matters.
SECTION 7. Presumptions and Effect of Certain Proceedings. The Secretary of
the Company shall, promptly upon receipt of the Indemnitee's request for
indemnification, advise in writing the Board of Directors or such other person
or persons empowered to make the determination as provided in Section 6 that the
Indemnitee has made such request for indemnification. Upon making such request
for indemnification, the Indemnitee shall be presumed to be entitled to
indemnification hereunder and the Company shall have the burden of proof in the
making of any determination contrary to such presumption. If the person or
persons so empowered to make such determination shall have failed to make the
requested indemnification within 45 days after receipt by the Company of such
request, the requisite determination of entitlement to indemnification shall be
deemed to have been made and the Indemnitee shall be absolutely entitled to such
indemnification, absent actual and material fraud in the request for
indemnification. The termination of any action, suit, investigation or
proceeding described in Section 2 or 3 hereof by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself: (a) create a presumption that the Indemnitee did not act in good faith
and in a manner which he or she reasonably believed to be in or not opposed to
the best interests of the Company, and, with respect to any criminal action or
proceeding, that the Indemnitee had reasonable cause to believe that his or her
conduct was unlawful; or (b) otherwise adversely affect the rights of the
Indemnitee to indemnification except as may be provided herein.
SECTION 8. Advancement of Expenses and Costs. All reasonable expenses and
costs incurred by the Indemnitee (including attorneys' fees, retainers and
advances of disbursements required of the Indemnitee) shall be paid by the
Company in advance of the final disposition of such action, suit or proceeding
at the request of the Indemnitee within twenty days after the receipt by the
Company of a statement or statements from the Indemnitee requesting such advance
or advances from time to time. The Indemnitee's entitlement to such expenses
shall include those incurred in connection with any proceeding by the Indemnitee
seeking an adjudication or award in arbitration pursuant to this Agreement. Such
statement or statements shall reasonably evidence the expenses and costs
incurred by him or her in connection therewith and shall include or be
accompanied by an undertaking by or on behalf of the Indemnitee to repay such
amount if it is ultimately determined that the Indemnitee is not entitled to be
indemnified against such expenses and costs by the Company as provided by this
Agreement or otherwise.
SECTION 9. Remedies of the Indemnitee in Cases of Determination not to
Indemnify or to Advance Expenses. In the event that a determination is made that
the Indemnitee is not entitled to indemnification hereunder or if payment has
not been timely made following a determination of entitlement to indemnification
pursuant to Sections 6 and 7, or if expenses are not advanced pursuant to
Section 8, the Indemnitee shall be entitled to a final adjudication in an
appropriate court of the State of Delaware or any other court of competent
jurisdiction of his or her entitlement to such indemnification or advance.
Alternatively, the Indemnitee at his or her option may seek an award in
arbitration to be conducted by a single arbitrator pursuant to the rules of the
American Arbitration Association, such award to be made within sixty days
following the filing of the demand for arbitration. The Company shall not oppose
the Indemnitee's right to seek any such adjudication or award in arbitration or
any other claim. Such judicial proceeding or arbitration shall be made de novo
and the Indemnitee shall not be prejudiced by reason of a determination (if so
made) that he or she is not entitled to indemnification. If a determination is
made or deemed to have been made pursuant to the terms of Section 6 or Section 7
hereof that the Indemnitee is entitled to indemnification, the Company shall be
bound by such determination and is precluded from asserting that such
determination has not been made or that the procedure by which such
determination was made is not
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valid, binding and enforceable. The Company further agrees to stipulate in any
such court or before any such arbitrator that the Company is bound by all the
provisions of this Agreement and is precluded from making any assertions to the
contrary. If the court or arbitrator shall determine that the Indemnitee is
entitled to any indemnification hereunder, the Company shall pay all reasonable
expenses (including attorneys' fees) and costs actually incurred by the
Indemnitee in connection with such adjudication or award in arbitration
(including, but not limited to, any appellant proceedings).
SECTION 10. Notification and Defense of Claim. Promptly after receipt by
the Indemnitee of notice of the commencement of any action, suit or proceeding,
the Indemnitee will, if a claim in respect thereof is to be made against the
Company under this Agreement, notify the Company in writing of the commencement
thereof; but the omission to so notify the Company will not relieve it from any
liability that it may have to the Indemnitee otherwise than under this Agreement
or, to the extent such failure has not materially prejudiced the rights of the
Company to defend any such claim, under this Agreement. Notwithstanding any
other provision of this Agreement, with respect to any such action, suit or
proceeding as to which the Indemnitee notifies the Company of the commencement
thereof:
(a) The Company will be entitled to participate therein at its own
expense; and
(b) Except as otherwise provided in this Section 10(b), to the extent
that it may wish, the Company, jointly with any other indemnifying party
similarly notified, shall be entitled to assume the defense thereof, with
counsel satisfactory to the Indemnitee. After notice from the Company to
the Indemnitee of its election to so assume the defense thereof, the
Company shall not be liable to the Indemnitee under this Agreement for any
legal or other expenses subsequently incurred by the Indemnitee in
connection with the defense thereof other than reasonable costs of
investigation or as otherwise provided below. The Indemnitee shall have the
right to employ his or her own counsel in such action, suit or proceeding,
but the fees and expense of such counsel incurred after notice from the
Company 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 Company, (ii) the Indemnitee shall have reasonably
concluded that there may be a conflict of interest between the Company and
the Indemnitee in the conduct of the defense of such action or (iii) the
Company shall not in fact have employed counsel to assume the defense of
the action, in each of which cases the fees and expenses of counsel shall
be at the expense of the Company. The Company shall not be entitled to
assume the defense of any action, suit or proceeding brought by or on
behalf of the Company or as to which the Indemnitee shall have made the
conclusion provided for in (ii) above.
(c) The Company shall not be liable to indemnify the Indemnitee under
this Agreement for any amounts paid in settlement of any action or claim
effected without its written consent. The Company shall not settle any
action or claim in any manner that would impose any penalty or limitation
on the Indemnitee without the Indemnitee's written consent. Neither the
Company nor the Indemnitee will unreasonably withhold their consent to any
proposed settlement.
SECTION 11. Other Rights to Indemnification. The indemnification and
advancement of expenses (including attorneys' fees) and costs provided by this
Agreement shall not be deemed exclusive of any other rights to which the
Indemnitee may now or in the future be entitled under any provision of a Charter
Document, agreement, vote of stockholders or Disinterested Directors, provision
of law or otherwise.
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SECTION 12. Attorneys' Fees and Other Expenses to Enforce Agreement. In the
event that the Indemnitee is subject to or intervenes in any proceeding in which
the validity or enforceability of this Agreement is at issue or seeks an
adjudication or award in arbitration to enforce his or her rights under, or to
recover damages for breach of, this Agreement, the Indemnitee, if he or she
prevails in whole or in part in such action, shall be entitled to recover from
the Company and shall be indemnified by the Company against any actual expenses
for attorneys' fees and disbursements reasonably incurred by him or her.
SECTION 13. Duration of Agreement. This Agreement shall continue until and
terminate upon the later of: (a) ten years after the Indemnitee has ceased to
occupy any of the positions or have any relationships described in Sections 2
and 3 of this Agreement; and (b) the final termination of all pending or
threatened actions, suits, proceedings or investigations to which the Indemnitee
may be subject by reason of the fact that he or she is or was a director,
officer, employee, agent or fiduciary of the Company or is or was serving at the
request of the Company as a director, officer, employee, agent or fiduciary of
any other entity, including, but not limited to, another corporation,
partnership, joint venture or trust, or by reason of anything done or not done
by him or her in any such capacity. The indemnification provided under this
Agreement shall continue as to the Indemnitee even though he or she may have
ceased to be a director or officer of the Company. This Agreement shall be
binding upon the Company and its successors and assigns and shall inure to the
benefit of the Indemnitee and his or her spouse, assigns, heirs, devises,
executors, administrators or other legal representatives. Nothing in this
Agreement shall confer upon the Indemnitee the right to continue in the employ
of the Company or affect the right of the Company to terminate the Indemnitee's
employment at any time in the sole discretion of the Company, with or without
cause.
SECTION 14. Severability. If any provision or provisions of this Agreement
shall be held invalid, illegal or unenforceable for any reason whatsoever, (a)
the validity, legality and enforceability of the remaining provisions of this
Agreement (including, without limitation, all portions of any paragraphs of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or unenforceable) shall
not in any way be affected or impaired thereby, and (b) to the fullest extent
possible, the provisions of this Agreement (including, without limitation, all
portions of any paragraph of this Agreement containing any such provision held
to be invalid, illegal or unenforceable, that are not themselves invalid,
illegal or unenforceable) shall be construed so as to give effect to the intent
manifest by the provision held invalid, illegal or unenforceable.
SECTION 15. 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.
SECTION 16. 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.
SECTION 17. Definitions. For purposes of this Agreement:
(a) "Disinterested Director" shall mean a director of the Company who
is not or was not a party to the action, suit, investigation or proceeding
in respect of which indemnification is being sought by the Indemnitee.
(b) "Independent Counsel" shall mean a law firm or a member of a law
firm that neither is presently nor in the past five years has been retained
to represent: (i) the Company or the Indemnitee in any matter material to
either such party, or (ii) any other party to the action, suit,
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investigation or 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 the Indemnitee in an action to determine
the Indemnitee's right to indemnification under this Agreement.
SECTION 18. Modification and Waiver. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by both
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.
SECTION 19. Subrogation. In the event of payment under this Agreement, the
Corporation shall be subrogated to the extent of such payment to all the rights
of recovery of the Indemnitee, who shall execute all instruments and documents
required and shall do everything that may be necessary to secure such rights,
including the execution of such instruments and documents as may be necessary to
enable the Corporation effectively to bring suit to enforce such rights.
SECTION 20. No Duplicative Payment. The Corporation shall not be liable
under this Agreement to make any payment of amounts otherwise indemnifiable
hereunder if and to the extent that the Indemnitee has otherwise actually
received such payment under any insurance policy, contract, agreement or
otherwise.
SECTION 21. Notices. All notices, requests, demands or other communications
hereunder shall be in writing and shall be deemed to have been duly given if (i)
delivered by hand or courier, on the date of delivery, or (ii) if 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 the Indemnitee, to:
____________________
____________________
____________________
____________________
(b) If to the Company, to:
Zygo Corporation
Xxxxxx Xxxxx Xxxx
X.X. Xxx 000
Xxxxxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: President
with a copy to:
Xxxx Xxxxxx, Esq.
Fulbright & Xxxxxxxx L.L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
or to such other address as may be furnished to the Indemnitee by the Company or
to the Company by the Indemnitee, as the case may be.
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SECTION 22. Governing Law. The parties hereto agree that this Agreement
shall be governed by, construed and enforced in accordance with, the Laws of the
State of Delaware.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
ZYGO CORPORATION
By:____________________________
INDEMNITEE
_______________________________
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