INDEMNIFICATION AGREEMENT
Exhibit 10.1
This Indemnification Agreement, dated as of ___, 200_, is made by and between Xxxxx
Xxxxxxxxxxx Company, a Delaware corporation (the “Corporation”) and (the “Indemnitee”).
RECITALS
A. The Corporation recognizes that competent and experienced persons are increasingly
reluctant to serve or to continue to serve as directors or officers of corporations unless they are
protected by comprehensive liability insurance or indemnification, or both, due to increased
exposure to litigation costs and risks resulting from their service to such corporations, and due
to the fact that the exposure frequently bears no reasonable relationship to the compensation of
such directors and officers;
B. The statutes and judicial decisions regarding the duties of directors and officers are
often difficult to apply, ambiguous, or conflicting, and therefore fail to provide such directors
and officers with adequate, reliable knowledge of legal risks to which they are exposed or
information regarding the proper course of action to take;
C. The Corporation and Indemnitee recognize that plaintiffs often seek damages in such large
amounts and the costs of litigation may be so enormous (whether or not the case is meritorious),
that the defense and/or settlement of such litigation is often beyond the personal resources of
directors and officers and the exposure from such litigation frequently bears no reasonable
relationship to the compensation of such directors and officers;
D. The Corporation believes that it is unfair for its directors and officers to assume the
risk of huge judgments and other expenses which may occur in cases in which the director or officer
received no personal profit and in cases where the director or officer was not culpable;
E. The Corporation, after reasonable investigation, has determined that the liability
insurance coverage presently available to the Corporation may be inadequate in certain
circumstances to cover all possible exposure for which Indemnitee should be protected. The
Corporation believes that the interests of the Corporation and its stockholders would best be
served by a combination of such insurance and the indemnification by the Corporation of the
directors and officers of the Corporation;
F. The Corporation’s ByLaws require the Corporation to indemnify its directors and officers to
the fullest extent permitted by the Delaware General Corporation Law (the “DGCL”). The ByLaws
expressly provide that the indemnification provisions set forth therein are not exclusive, and
contemplate that contracts may be entered into between the Corporation and its directors and
officers with respect to indemnification;
G. Section 145 of the DGCL (“Section 145”), under which the Corporation is organized, empowers
the Corporation to indemnify its officers, directors, employees and agents
by agreement and to indemnify persons who serve, at the request of the Corporation, as the
directors, officers, employees or agents of other corporations or enterprises, and expressly
provides that the indemnification provided by Section 145 is not exclusive;
H. Section 102(b)(7) of the DGCL allows a corporation to include in its certificate of
incorporation a provision limiting or eliminating the personal liability of a director for monetary
damages in respect of claims by shareholders and corporations for breach of certain fiduciary
duties, and the Corporation has so provided in its Certificate of Incorporation that each Director
shall be exculpated from such liability to the maximum extent permitted by law;
I. The Corporation desires to provide the Indemnitee with specific contractual assurances of
the Indemnitee’s rights to full indemnification against litigation risks and reasonable expenses
(regardless, among other things, of any amendment to or revocation of the Certificate of
Incorporation and ByLaws or any change in the ownership of the Corporation or the composition of
its Board of Directors) and, to the extent insurance is available, the coverage of the Indemnitee
under the Corporation’s directors’ and officers’ liability insurance policies;
J. The Board of Directors has determined that contractual indemnification as set forth herein
is not only reasonable and prudent but also promotes the best interests of the Corporation and its
stockholders;
K. The Corporation desires and has requested Indemnitee to serve or continue to serve as a
director or officer of the Corporation free from undue concern for unwarranted claims for damages
arising out of or related to such services to the Corporation; and
L. Indemnitee is willing to serve, continue to serve or to provide additional service for or
on behalf of the Corporation on the condition that he is furnished the indemnity provided for
herein.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth below, and
other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged,
the parties hereto, intending to be legally bound, hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the following
definitions shall apply:
(a) The term “Proceeding” shall be broadly construed and shall include, without limitation,
the investigation, preparation, prosecution, defense, settlement, arbitration and appeal of, and
the giving of testimony in, any threatened, pending or completed claim, action, suit, proceeding,
or arbitration, whether civil, criminal, administrative, investigative, appellate or arbitral, and
whether formal or informal.
(b) The term “by reason of the fact that Indemnitee is or was a director or officer, of the
Corporation, or while serving as a director or officer of the Corporation, is or was
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serving or has agreed to serve at the request of the Corporation as a director, officer,
employee or agent of any Other Enterprise” shall be broadly construed and shall include, without
limitation, any actual or alleged act or omission to act.
(c) The term “Expenses” shall be broadly and reasonably construed and shall include, without
limitation, all direct and indirect expenses, costs or charges of any type or nature whatsoever
(including, without limitation, all attorneys’ fees and related disbursements, appeal bonds, other
out-of-pocket costs and reasonable compensation for time spent by Indemnitee for which Indemnitee
is not otherwise compensated by the Corporation or any third party, provided that the rate of
compensation and estimated time involved is approved by the Corporation’s Board of Directors, which
approval shall not be unreasonably withheld, conditioned or delayed), actually and reasonably
incurred by Indemnitee in connection with the investigation, preparation, prosecution, defense,
settlement, arbitration or appeal of, or the giving of testimony in, a Proceeding or establishing
or enforcing a right to indemnification under this Agreement, the
Corporation’s Certificate of Incorporation or ByLaws, Section 145 of the General Corporation
Law of the State of Delaware or otherwise.
(d) The term “judgments, fines and amounts paid in settlement” shall be broadly construed and
shall include, without limitation, all direct and indirect payments of any type or nature
whatsoever (including, without limitation, all penalties and amounts required to be forfeited or
reimbursed to the Corporation), as well as any penalties or excise taxes assessed on a person with
respect to an employee benefit plan.
(e) The term “Corporation” shall include, without limitation and in addition to the resulting
corporation, any constituent corporation or any Other Enterprise (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its directors, officers, and employees or agents,
so that any person who is or was a director, officer, employee or agent of such constituent
corporation or Other Enterprise, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of any Other Enterprise, shall stand in the
same position under the provisions of this Agreement with respect to the resulting or surviving
corporation as he or she would have with respect to such constituent corporation or Other
Enterprise as if its separate existence had continued.
(f) The term “Other Enterprises” shall include, without limitation, any other corporation,
partnership, joint venture, trust or employee benefit plan.
(g) The term “serving at the request of the Corporation” shall include, without limitation,
any service as a director, officer, employee or agent of the Corporation which imposes duties on,
or involves services by, such director, officer, employee or agent with respect to any Other
Enterprise, including any employee benefit plan or its participants or beneficiaries.
(h) A person who acted in good faith and in a manner such person reasonably believed to be in
the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to
have acted in a manner “not opposed to the best interests of the Corporation” as referred to in
this Agreement.
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(i) The term “defense” shall include investigations of any Proceeding, appeals of any
Proceeding and defensive assertion of any cross -claim or counterclaim.
(j) The term “Independent Counsel” means a law firm, or a member of a law firm, that is
experienced in matters of corporation law and neither presently is, nor in the past five years has
been, retained to represent: (i) the Corporation or Indemnitee in any matter material to either
such party (other than with respect to matters concerning Indemnitee under this Agreement, or of
other indemnitees under similar indemnification agreements), or (ii) any other party to the
Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing,
the term “Independent Counsel” shall not include any person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of interest in representing either the
Corporation or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. The
Corporation 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.
(k) The term “Change of Control” means (i) an acquisition by any person (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) of beneficial ownership of twenty percent (20%) or more of the combined voting power of the
Corporation’s then outstanding voting securities; (ii) during any period of two consecutive years,
individuals who at the beginning of such period constitute the Board of Directors of the
Corporation and any new director whose election by the Board of Directors or nomination for
election by the Corporation’s stockholders was approved by a vote of at least two-thirds (2/3) of
the directors then still in office who either were directors at the beginning of the period or
whose election or nomination for election was previously so approved, cease for any reason to
constitute a majority thereof; or (iii) the consummation of a merger or consolidation involving the
Corporation if the stockholders of the Corporation, immediately before such merger or
consolidation, do not own, immediately following such merger or consolidation, more than eighty
percent (80%) of the combined voting power of the outstanding voting securities of the resulting
entity in substantially the same proportion as their ownership of voting securities immediately
before such merger or consolidation, (iv) the consummation of the sale or other disposition of all
or substantially all of the assets of the Corporation, (v) approval by the stockholders of the
Corporation of a complete liquidation or dissolution of the Corporation or (vi) there occurs any
other event of a nature that would be required to be reported in response to either Item 5.01 of
Form 8-K or Item 6(e) of Schedule 14A of Regulation 14A (or a response to any similar item on any
similar schedule or form promulgated under the Exchange Act), whether or not the Corporation is
then subject to such reporting requirement. Notwithstanding the foregoing, a Change of Control
shall not be deemed to occur solely because twenty percent (20%) or more of the then outstanding
voting securities is acquired by (i) a trustee or other fiduciary holding securities under one or
more employee benefit plans maintained by the Corporation or any of its subsidiaries or (ii) any
entity that, immediately prior to such acquisition, is owned directly or indirectly by the
stockholders of the Corporation in the same proportion as their ownership of shares in the
Corporation immediately prior to such acquisition.
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Section 2. Indemnification.
(a) Subject to Sections 4, 6 and 8 of this Agreement, to the fullest extent not prohibited by
the laws of the State of Delaware, as the same now exists or may hereafter be amended (but only to
the extent any such amendment permits the Corporation to provide broader indemnification rights
than such law permitted the Corporation to provide prior to such amendment), the Corporation shall
indemnify, defend and hold harmless, Indemnitee if Indemnitee was or is a party or is threatened to
be made a party to, or a witness of, or is otherwise involved in, any Proceeding by reason of the
fact that Indemnitee is or was or has agreed to serve as a director or officer of the Corporation,
or is or was serving at the Corporation’s request as a director, officer, employee or agent of any
Other Enterprise, or by reason of any action taken or alleged to have been taken, or omitted to be
taken or alleged to be omitted to be taken, in such capacity.
(b) The indemnification provided by this Section 2 shall be from and against Expenses,
judgments, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee or
on Indemnitee’s behalf in connection with such Proceeding, but shall only be provided if Indemnitee
acted in good faith and in a manner Indemnitee 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 Indemnitee’s conduct was unlawful.
(c) Notwithstanding the foregoing provisions of this Section 2, in the case of any Proceeding
by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that
Indemnitee is or was a director or officer of the Corporation, or while serving at the
Corporation’s request as a director, officer, employee or agent of any Other Enterprise, no
indemnification shall be made in respect of any claim, issue or matter as to which Indemnitee shall
have been adjudged to be liable to the Corporation unless, and only to the extent that, the
Delaware Court of Chancery or the court in which such Proceeding was brought shall determine upon
application that, despite the adjudication of liability but in view of all the circumstances of the
case, Indemnitee is fairly and reasonably entitled to indemnity for such expenses which the
Delaware Court of Chancery or such other court shall deem proper.
(d) The termination of any Proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that
Indemnitee did not act in good faith and in a manner which Indemnitee reasonably believed to be in
or not opposed to the best interests of the Corporation, and, with respect to any Proceeding, had
reasonable cause to believe that Indemnitee’s conduct was unlawful.
Section 3. Successful Defense; Partial Indemnification. To the extent that Indemnitee
has been successful on the merits or otherwise in defense of any Proceeding referred to in Section
2 hereof or in defense of any claim, issue or matter therein, Indemnitee shall be indemnified
against Expenses actually and reasonably incurred in connection therewith. For purposes of this
Agreement and without limiting the foregoing, if any Proceeding is disposed of, on the merits or
otherwise (including a disposition without prejudice), without (i) the disposition being adverse to
Indemnitee, (ii) an adjudication that Indemnitee was liable to the Corporation, (iii) a plea of
guilty or nolo contendere by Indemnitee, (iv) an adjudication that Indemnitee did
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not act in good faith and in a manner 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 Indemnitee had reasonable cause to believe Indemnitee’s conduct was unlawful,
Indemnitee shall be considered for the purposes hereof to have been wholly successful with respect
thereto.
If Indemnitee is entitled under any provision of this Agreement to indemnification by the
Corporation for some or a portion of the Expenses, judgments, fines or amounts paid in settlement
actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with any
Proceeding, or in defense of any claim, issue or matter therein, and any appeal therefrom but not,
however, for the total amount thereof, the Corporation shall nevertheless indemnify Indemnitee for
the portion of such Expenses, judgments, fines or amounts paid in settlement to which Indemnitee is
entitled. Any necessary determination regarding allocation or apportionment of Expenses between
successful and unsuccessful claims, issues or matters shall be made by the person, persons or
entity empowered or selected under Section 4(a) to determine whether Indemnitee is entitled to
indemnification.
Section 4. Determination That Indemnification Is Proper.
(a) Any indemnification hereunder shall (unless otherwise ordered by a court) be made by the
Corporation unless a determination is made that indemnification of such person is not proper in the
circumstances because he or she has not met the applicable standard of conduct set forth in Section
2(b) hereof. Any such determination shall be made (i) by a majority vote of the directors who are
not parties to the Proceeding in question (“disinterested directors”), even if less than a quorum,
(ii) by a majority vote of a committee of disinterested directors designated by majority vote of
disinterested directors, even if less than a quorum, (iii) by a majority vote of a quorum of the
outstanding shares of stock of all classes entitled to vote on the matter, voting as a single
class, which quorum shall consist of stockholders who are not at that time parties to the
Proceeding in question, (iv) by Independent Counsel, or (v) by a court of competent jurisdiction;
provided, however, that following a Change of Control of the Corporation, with respect to all
matters thereafter arising out of acts, omissions or events occurring prior to or after the Change
of Control of the Corporation concerning the rights of Indemnitee to seek indemnification under
this Section 4, such determination shall be made by Independent Counsel selected in the manner
described in Section 4(b). Such Independent Counsel shall determine as promptly as practicable
whether and to what extent Indemnitee would be permitted to be indemnified under applicable law and
shall render a written opinion to the Corporation and to Indemnitee to such effect.
(b) If the determination of entitlement to indemnification is to be made by Independent
Counsel pursuant to Section 4(a) hereof, the Independent Counsel shall be selected as provided in
this Section 4(b). The Independent Counsel shall be selected by the Board of Directors.
Indemnitee may, within ten (10) days after such written notice of selection shall have been given,
deliver to the Corporation, as the case may be, a written objection to such selection; provided,
however, that such objection may be asserted only on the ground that the Independent Counsel so
selected does not meet the requirements of “Independent Counsel” as defined in Section 1 of this
Agreement, and the objection shall set forth with particularity the factual basis of such
assertion. Absent a proper and timely objection, the person so selected shall act as
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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 Corporation or
Indemnitee may petition the Court of Chancery of the State of Delaware or other court of competent
jurisdiction of resolution of any objection which shall have been made by the Indemnitee to the
Corporation’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 4(a) hereof. The Corporation shall pay any and all reasonable
fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with
acting pursuant to Section 4(a) hereof, and the Corporation shall pay all reasonable fees and
expenses incident to the procedures of this Section 4(b) regardless of the manner in which such
Independent Counsel was selected or appointed.
Section 5. Advance Payment of Expenses; Notification and Defense of Claim.
(a) In the event that the Corporation does not assume the defense pursuant to Section 5(c) of
any Proceeding of which the Corporation receives notice under this Agreement, any Expenses incurred
by Indemnitee in defending a Proceeding, or in connection with an enforcement action pursuant to
Section 6(b), shall be paid by the Corporation to Indemnitee in advance of the final disposition of
such Proceeding as soon as practicable but in any event no later than twenty (20) days after
receipt by the Corporation of (i) a statement or statements from Indemnitee requesting such advance
or advances from time to time, and (ii) an undertaking by or on behalf of Indemnitee to repay such
amount or amounts, only if, and to the extent that, there is a final judicial determination (as to
which all rights of appeal therefrom have been exhausted or lapsed) that Indemnitee is not entitled
to be indemnified by the Corporation as authorized by this Agreement or otherwise. Such
undertaking shall be accepted without reference to the financial ability of Indemnitee to make such
repayment. Advances shall be unsecured and interest-free. Notwithstanding the foregoing, the
obligation of the Corporation to advance Expenses pursuant to this Section 5 shall be subject to
the condition that, if, when and to the extent that the Corporation determines that Indemnitee
would not be permitted to be indemnified under applicable law, the Corporation shall be reimbursed
within sixty (60) days of such determination, by Indemnitee (who hereby agrees to reimburse the
Corporation) for such amounts previously paid by the Corporation pursuant to this Section 5;
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 Corporation 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 Corporation for any advance of Expenses until a final judicial
determination is made with respect thereto (as to which all rights of appeal therefrom have been
exhausted or lapsed).
(b) Promptly after receipt by Indemnitee of notice of the commencement of any Proceeding,
Indemnitee shall, if a claim thereof is to be made against the Corporation hereunder, notify the
Corporation of the commencement thereof. The failure to promptly notify
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the Corporation of the commencement of the Proceeding, or Indemnitee’s request for
indemnification, will not relieve the Corporation from any liability that it may have to Indemnitee
hereunder, except to the extent the Corporation is prejudiced in its defense of such Proceeding as
a result of such failure.
(c) In the event the Corporation shall be obligated to pay the Expenses of Indemnitee with
respect to a Proceeding, as provided in this Agreement, the Corporation, if appropriate, shall be
entitled to assume the defense of such Proceeding, with counsel reasonably acceptable to
Indemnitee, upon the delivery to Indemnitee of written notice of its election to do so. After
delivery of such notice, approval of such counsel by Indemnitee and the retention of such counsel
by the Corporation, the Corporation will not be liable to Indemnitee under this Agreement for any
fees of counsel subsequently incurred by Indemnitee with respect to the same Proceeding, provided
that (i) Indemnitee shall have the right to employ Indemnitee’s own counsel in Proceeding at
Indemnitee’s expense and (ii) if (1) the employment of counsel by Indemnitee has been previously
authorized in writing by the Corporation, (2) counsel to the Corporation or Indemnitee shall have
reasonably concluded that there may be a conflict of interest or position, or reasonably believes
that a conflict is likely to arise, on any significant issue between the Corporation and Indemnitee
in the conduct of any such defense, (3) after a Change of Control, the employment of counsel by
Indemnitee has been approved by the Independent Counsel or (4) the Corporation shall not, in fact,
have employed counsel to assume the defense of such Proceeding, then the fees and expenses of
Indemnitee’s counsel shall be at the Expense of the Corporation, except as otherwise provided by
this Agreement. The Corporation shall not be entitled, without the consent of Indemnitee, to
assume the defense of any claim brought by or in the right of the Corporation or as to which
counsel for the Corporation or Indemnitee shall have reasonably made the conclusion provided for in
clause (2) of the proviso in the immediately preceding sentence.
(d) Notwithstanding any other provision of this Agreement to the contrary, to the extent that
Indemnitee is, by reason of Indemnitee’s corporate status with respect to the Corporation or any
Other Enterprise which Indemnitee is or was serving or has agreed to serve at the request of the
Corporation, a witness or otherwise participates in any Proceeding at a time when Indemnitee is not
a party in the Proceeding, the Corporation shall indemnify Indemnitee against all Expenses actually
and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith.
Section 6. Procedure for Indemnification.
(a) To obtain indemnification (other than as provided otherwise herein) under this Agreement,
Indemnitee shall promptly submit to the Corporation 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 Corporation shall, promptly upon receipt of such a request for
indemnification, advise the Board of Directors in writing that Indemnitee has requested
indemnification.
(b) The determination whether to grant Indemnitee’s indemnification request (whether made by
the Board of Directors or one of its committees, Independent Counsel, or the
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Corporation’s stockholders) shall be made promptly, and in any event within sixty (60) days
following receipt of a request for indemnification pursuant to Section 6(a). The right to
indemnification as granted by Section 2 of this Agreement shall be enforceable by Indemnitee in any
court of competent jurisdiction if the Corporation denies such request, in whole or in part, or
fails to respond within such sixty-day (60) period. It shall be a defense to any such action
(other than an action brought to enforce a claim for the advance of Expenses under Section 5 hereof
where the required undertaking, if any, has been received by the Corporation) that Indemnitee has
not met the standard of conduct set forth in Section 2 hereof, but the burden of proving such
defense by clear and convincing evidence shall be on the Corporation. Neither the failure of the
Corporation (including its Board of Directors or one of its committees, its Independent Counsel,
and its stockholders) to have made a determination prior to the commencement of such action that
indemnification of Indemnitee is proper in the circumstances because Indemnitee has met the
applicable standard of conduct set forth in Section 2 hereof, nor the fact that there has been an
actual determination by the Corporation (including its Board of Directors or one of its committees,
its Independent Counsel, and its stockholders) that Indemnitee has not met such applicable standard
of conduct, shall be a defense to the action or create a presumption that Indemnitee has or has not
met the applicable standard of conduct. The Indemnitee’s Expenses incurred in connection with
successfully establishing Indemnitee’s right to indemnification, in whole or in part, in any such
Proceeding or otherwise shall also be indemnified by the Corporation.
(c) The Indemnitee shall be presumed to be entitled to indemnification under this Agreement
upon submission of a request for indemnification pursuant to this Section 6, and the Corporation
shall have the burden of proof in overcoming that presumption in reaching a determination contrary
to that presumption. Such presumption shall be used as a basis for a determination of entitlement
to indemnification unless the Corporation overcomes such presumption by clear and convincing
evidence.
(d) The knowledge and/or actions, or failure to act, of any director, officer, agent or
employee of the Corporation shall not be imputed to Indemnitee for purposes of determining the
right to indemnification under this Agreement.
Section 7. Insurance and Subrogation.
(a) The Corporation represents that it currently has in effect the following policy or
policies of director and officer liability insurance (the “Insurance Policies”) which names or
covers Indemnitee as an insured:
| Insurer | Policy No. | Amount | Deductible | |||
(b) So long as Indemnitee shall continue to serve as a director or officer of the Corporation,
or shall continue at the request of the Corporation to serve as a director or officer, employee or
agent of any Other Enterprise, and thereafter so long as Indemnitee shall be subject to any
possible claim or is a party or is threatened to be made a party to any Proceeding, by
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reason of the fact that Indemnitee is or was a director or officer of the Corporation, or is
or was serving in any of said other capacities at the request of the Corporation, the Corporation
shall be required to maintain the Insurance Policies in effect or to obtain policies of directors’
and officers’ liability insurance from established and reputable insurers with coverage in at least
the amount or amounts as prescribed by the Insurance Policies and which provides the Indemnitee
with substantially the same rights and benefits as the Insurance Policies, and which coverage,
rights and benefits shall, in any event, be as favorable to Indemnitee as are accorded to the most
favorably insured of the Corporation’s directors or officers, as the case may be (“Comparable D&O
Insurance”) unless, in the reasonable business judgment of the Board of Directors of the
Corporation as it may exist from time to time, either (i) the premium cost for such Insurance
Policies or Comparable D&O Insurance is disproportionate to the amount of coverage provided, or
(ii) the coverage provided by such Insurance Policies or Comparable D&O Insurance is so limited by
exclusions that there is insufficient benefit provided by such director and officer liability
insurance; provided, however, that in the event that the Board of Directors makes such a
determination, the Corporation shall provide notice to Indemnitee no less than ninety (90) days
prior to the lapse or termination of coverage under the Insurance Policies or Comparable D&O
Insurance.
(c) If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the
Corporation has director and officer liability insurance in effect, the Corporation shall give
prompt notice of the commencement of such claim, and any Proceeding in which such claim is
asserted, to the insurers in accordance with the procedures set forth in the respective policies.
The Corporation shall thereafter take all necessary or desirable action to cause such insurers to
pay, on behalf of the Indemnitee, all amounts payable as a result of such claim or Proceeding in
accordance with the terms of such policies. The failure or refusal of any such insurer to pay any
such amount shall not affect or impair the obligations of the Corporation under this Agreement.
(d) In the event of any payment by the Corporation under this Agreement, the Corporation shall
be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee with
respect to any insurance policy, 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 Corporation to bring suit to enforce such rights in accordance with the terms of such insurance
policy. The Corporation shall pay or reimburse all expenses actually and reasonably incurred by
Indemnitee in connection with such subrogation.
(e) The Corporation shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable hereunder (including, but not limited to, Expenses, judgments, fines, ERISA
excise taxes or penalties, and amounts paid in settlement) if and to the extent that Indemnitee has
otherwise actually received such payment under the Corporation’s Certificate of Incorporation or
ByLaws, or any insurance policy, contract, agreement or otherwise.
(f) The Corporation’s obligation to indemnify or advance Expenses hereunder to Indemnitee who
is or was serving at the request of the Corporation as a director, officer, employee or agent of
any Other Enterprise shall be reduced by any amount Indemnitee has actually received as
indemnification or advancement of Expenses from such Other Enterprise.
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Section 8. Limitation on Indemnification. Notwithstanding any other provision herein
to the contrary, the Corporation shall not be obligated pursuant to this Agreement:
(a) Claims Initiated by Indemnitee. To indemnify or advance expenses to Indemnitee
with respect to a Proceeding (or part thereof) initiated by Indemnitee, except with respect to a
Proceeding brought to establish or enforce a right to indemnification (which shall be governed by
the provisions of Sections 6(b) and 8(b) of this Agreement), unless such Proceeding (or part
thereof) was authorized or consented to by the Board of Directors of the Corporation or the
Proceeding was commenced following a Change of Control.
(b) Action for Indemnification. To indemnify Indemnitee for any expenses incurred by
Indemnitee with respect to any Proceeding instituted by Indemnitee to enforce or interpret this
Agreement, unless Indemnitee is successful in establishing Indemnitee’s right to indemnification in
such Proceeding, in whole or in part, or unless and to the extent that the court in such Proceeding
shall determine that, despite Indemnitee’s failure to establish his or her right to
indemnification, Indemnitee is entitled to indemnity for such expenses; provided, however, that
nothing in this Section 8(b) is intended to limit the Corporation’s obligation with respect to the
advancement of expenses to Indemnitee in connection with any such Proceeding instituted by
Indemnitee to enforce or interpret this Agreement, as provided in Section 5 hereof.
(c) Certain Statutory Violations. To indemnify Indemnitee on account of any Proceeding
with respect to which final judgment is rendered against Indemnitee for (i) payment or an
accounting of profits arising from the purchase or sale by Indemnitee of securities in violation of
Section 16(b) of the Exchange Act or any similar successor statute, or (ii) any reimbursement of
the Corporation by the Indemnitee of any bonus or other incentive-based or equity-based
compensation or of any profits realized by the Indemnitee from the sale of securities of the
Corporation, as required in each case under the Exchange Act (including any such reimbursements
that arise from an accounting restatement of the Corporation pursuant to Section 304 of the
Xxxxxxxx-Xxxxx Act of 2002 (the “Xxxxxxxx-Xxxxx Act”), or the payment to the Corporation of profits
arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the
Xxxxxxxx-Xxxxx Act).
(d) Non-compete and Non-disclosure. To indemnify Indemnitee in connection with
Proceedings or claims involving the enforcement of non-compete and/or non-disclosure agreements or
the non-compete and/or non-disclosure provisions of employment, consulting or similar agreements
the Indemnitee may be a party to with the Corporation, or any subsidiary of the Corporation or any
Other Enterprise.
Section 9. Mutual Acknowledgement. Both the Corporation and the Indemnitee
acknowledge that in certain instances, federal law or applicable public policy may prohibit the
Corporation from indemnifying its directors, officers, employees, agents or fiduciaries under this
Agreement or otherwise. The Indemnitee understands and acknowledges that the Corporation has
undertaken or 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 Corporation’s right under public policy to indemnify the Indemnitee.
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Section 10. Certain Settlement Provisions. The Corporation shall have no obligation
to indemnify Indemnitee under this Agreement for amounts paid in settlement of any Proceeding
without the Corporation’s prior written consent, which shall not be unreasonably withheld,
conditioned or delayed; provided, however, that if a Change of Control has occurred, the
Corporation shall be liable for indemnification of Indemnitee for amounts paid in settlement if the
Independent Counsel has approved the settlement.. The Corporation shall not settle any Proceeding
in any manner that would impose any fine or other obligation on Indemnitee without Indemnitee’s
prior written consent, which shall not be unreasonably withheld, conditioned or delayed.
Section 11. Savings Clause. If any provision or provisions of this Agreement shall be
invalidated on any ground by any court of competent jurisdiction, then the Corporation shall
nevertheless indemnify Indemnitee as to Expenses, judgments, fines and amounts paid in settlement
with respect to any Proceeding, including an action by or in the right of the Corporation, to the
full extent permitted by any applicable portion of this Agreement that shall not have been
invalidated and to the full extent permitted by applicable law.
Section 12. Contribution. In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for herein is held by a court of competent
jurisdiction to be unavailable to Indemnitee in whole or in part, it is agreed that, in such event,
the Corporation shall, to the fullest extent permitted by law, contribute to the payment of
Indemnitee’s Expenses, judgments, fines and amounts paid in settlement with respect to any
Proceeding, or any claims, issues or matters in such Proceeding, in an amount that is just and
equitable in the circumstances, taking into account, among other things, contributions by other
directors and officers of the Corporation or others pursuant to indemnification agreements or
otherwise; provided, that, without limiting the generality of the foregoing, such contribution
shall not be required where such holding by the court is due to (i) the failure of Indemnitee to
meet the standard of conduct set forth in Section 2 hereof, or (ii) any limitation on
indemnification set forth in Section 7(c), 8, 9 or 10 hereof.
Section 13. Form and Delivery of Communications. All notices and other communications
given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given:
(i) upon personal delivery to the party to be notified, (ii) when sent by facsimile if sent during
normal business hours of the recipient, and if not so confirmed, then on the next business day,
(iii) five (5) days after having been sent by registered or certified mail, return receipt
requested, postage prepaid, or (iv) one (1) day after deposit with a nationally recognized
overnight courier, specifying next day delivery, with written verification of receipt. All
communications shall be sent to the address or facsimile number set forth below, or to such other
address or facsimile number as may have been furnished hereafter to Indemnitee by the Corporation
or to the Corporation by Indemnitee, as the case may be.
If to the Corporation:
Attn:
Facsimile:
Facsimile:
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If to Indemnitee:
Section 14. Subsequent Legislation. If the General Corporation Law of Delaware is
amended after adoption of this Agreement to expand further the indemnification of, or advancement
of Expenses to, or making permitted contribution to, directors or officers, then the Corporation
shall indemnify and advance Expenses and make contributions to Indemnitee to the fullest extent
permitted by the General Corporation Law of Delaware, as so amended.
Section 15. Nonexclusivity. The provisions for indemnification, advancement of
Expenses and contribution set forth in this Agreement shall not be deemed exclusive of any other
rights which Indemnitee may have under any provision of law, the Corporation’s Certificate of
Incorporation or ByLaws, in any court in which a Proceeding is brought, the vote of the
Corporation’s stockholders or disinterested directors, other agreements or otherwise, and
Indemnitee’s rights hereunder shall continue after Indemnitee has ceased acting as a director or
officer of the Corporation, or ceased serving at the Corporation’s request as a director, officer,
employee or agent of any Other Enterprise, and shall inure to the benefit of the heirs, executors,
administrators and legal representatives of Indemnitee. However, no amendment or alteration of the
Corporation’s Certificate of Incorporation or ByLaws or any other agreement shall adversely affect
the rights provided to Indemnitee under this Agreement.
Section 16. Enforcement. The Corporation shall be precluded from asserting in any
judicial Proceeding that the procedures and presumptions of this Agreement are not valid, binding
and enforceable. The Corporation agrees that its obligations set forth in this Agreement are
unique and special, and that failure of the Corporation to comply with the provisions of this
Agreement will cause irreparable and irremediable injury to Indemnitee, for which a remedy at law
will be inadequate. As a result, in addition to any other right or remedy Indemnitee may have at
law or in equity with respect to breach of this Agreement, Indemnitee shall be entitled to
injunctive or mandatory relief directing specific performance by the Corporation of its obligations
under this Agreement.
Section 17. Interpretation of Agreement. It is understood that the parties hereto
intend this Agreement to be interpreted and enforced so as to provide indemnification of, and
advancement of Expenses and contribution to, Indemnitee to the fullest extent now or hereafter
permitted by law.
Section 18. Entire Agreement. This Agreement and the documents expressly referred to
herein constitute the entire agreement between the parties hereto with respect to the matters
covered hereby, and any other prior or contemporaneous oral or written understandings or agreements
with respect to the matters covered hereby are expressly superseded by this Agreement.
Section 19. Modification and Waiver. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both of the parties hereto. No
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waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver
of any other provision hereof (whether or not similar) nor shall such waiver constitute a
continuing waiver.
Section 20. Successor and Assigns. All of the terms and provisions of this Agreement
shall be binding upon, shall inure to the benefit of and shall be enforceable by the parties hereto
and their respective successors, assigns, heirs, executors, administrators and legal
representatives. The Corporation shall require and cause any direct or indirect successor (whether
by purchase, merger, consolidation or otherwise) to all or substantially all of the business or
assets of the Corporation, by written agreement in form and substance reasonably satisfactory to
Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the
same extent that the Corporation would be required to perform if no such succession had taken
place. This Agreement shall continue in effect regardless of whether Indemnitee continues to serve
as a director, officer, employee, agent of fiduciary (as applicable) of the Corporation or of any
Other Enterprise.
Section 21. Service of Process and Venue. For purposes of any Proceedings to enforce
this Agreement, the Corporation and Indemnitee hereby irrevocably and unconditionally (i) agree
that any Proceeding arising out of or in connection with this Agreement shall be brought only in
the Chancery Court of the State of Delaware (the “Delaware Court”), and not in any other state or
federal court in the United States of America or any court in any other country, (ii) consent to
submit to the exclusive jurisdiction of the Delaware Court for purposes of any Proceeding arising
out of or in connection with this Agreement, (iii) irrevocably appoint, to the extent such party is
not otherwise subject to service of process in the State of Delaware, CT Corporation as its agent
in the State of Delaware as such party’s agent for acceptance of legal process in connection with
any such Proceeding against such party with the same legal force and validity as if served upon
such party personally within the State of Delaware, (iv) waive any objection to the laying of venue
of any such Proceeding in the Delaware Court, and (v) waive, and agree not to plead or to make, any
claim that any such Proceeding brought in the Delaware Court has been brought in an improper or
inconvenient forum.
Section 22. Governing Law. This Agreement shall be governed exclusively by and
construed according to the laws of the State of Delaware, as applied to contracts between Delaware
residents entered into and to be performed entirely within Delaware. If a court of competent
jurisdiction shall make a final determination that the provisions of the law of any state other
than Delaware govern indemnification of, or advancement of Expenses or contribution to, its
officers and directors by the Corporation, then the indemnification, advancement of Expenses and
contribution provided under this Agreement shall in all instances be enforceable to the fullest
extent permitted under such law, notwithstanding any provision of this Agreement to the contrary.
Section 23. Employment Rights. Nothing in this Agreement is intended to create in
Indemnitee any right to employment or continued employment.
Section 24. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original and all of which together shall be
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deemed to be one and the same instrument, notwithstanding that both parties are not
signatories to the original or same counterpart.
Section 25. Headings. The section and subsection headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
Section 26. Section 409A. It is intended that any indemnification payment or
advancement of Expenses made hereunder shall be exempt from Section 409A of the Internal Revenue
Code of 1986, as amended, and the guidance issued thereunder (“Section 409A”) pursuant to Treasury
Regulation Section 1.409A-1(b)(10). Notwithstanding the foregoing, if any indemnification payment
or advancement of Expenses made hereunder shall be determined to be “nonqualified deferred
compensation” within the meaning of Section 409A, then (i) the amount of the indemnification
payment or advancement of Expenses during one taxable year shall not affect the amount of the
indemnification payments or advancement of Expenses during any other taxable year, (ii) the
indemnification payments or advancement of Expenses must be made on or before the last day of the
Indemnitee’s taxable year following the year in which the expense was incurred, and (iii) the right
to indemnification payments or advancement of Expenses hereunder is not subject to liquidation or
exchange for another benefit.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the parties hereto
to be effective as of the date first above written.
| XXXXX XXXXXXXXXXX COMPANY | ||||||
| By | ||||||
| Name: | ||||||
| Title: | ||||||
| INDEMNITEE: | ||||||
| By | ||||||
| Name: | ||||||
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