FORM OF DIRECTOR INDEMNIFICATION AGREEMENT
EXHIBIT 10.1
THIS INDEMNIFICATION AGREEMENT (the “Agreement”) is made and entered into as of December 8,
2009 between Advanced Energy Industries, Inc., a Delaware corporation (the “Company”), and
(“Indemnitee”).
RECITALS:
WHEREAS, highly competent persons have become more reluctant to serve publicly held
corporations as directors, officers, or in other capacities unless they are provided with adequate
protection through insurance or adequate indemnification against inordinate risks of claims and
actions against them arising out of their service to and activities on behalf of the corporation;
WHEREAS, the Board of Directors of the Company (the “Board”) has determined that, in order to
attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis,
at its sole expense, liability insurance to protect persons serving the Company and its
subsidiaries from certain liabilities. Although the furnishing of such insurance has been a
customary and widespread practice among U.S.-based corporations and other business enterprises, the
Company believes that, given current market conditions and trends, such insurance may be available
to it in the future only at higher premiums and with more exclusions. At the same time, directors,
officers, and other persons in service to corporations or business enterprises are being
increasingly subjected to expensive and time-consuming litigation relating to, among other things,
matters that traditionally would have been brought only against the Company or business enterprise
itself. The Amended Bylaws (the “Bylaws”) and Restated Certificate of Incorporation (the
“Certificate”) of the Company require indemnification of the officers and directors of the Company.
Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the
State of Delaware (“DGCL”). The Bylaws, the Certificate, and the DGCL expressly provide that the
indemnification provisions set forth therein are not exclusive, and thereby contemplate that
contracts may be entered into between the Company and members of the Board, officers, and other
persons with respect to indemnification;
WHEREAS, the uncertainties relating to such insurance and to indemnification have increased
the difficulty of attracting and retaining such persons;
WHEREAS, the Board has determined that the increased difficulty in attracting and retaining
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;
WHEREAS, it is reasonable, prudent, and necessary for the Company contractually to obligate
itself to indemnify, and to advance expenses on behalf of, 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;
WHEREAS, this Agreement is a supplement to and in furtherance of the Bylaws and the
Certificate and any resolutions adopted pursuant thereto, and shall not be deemed a substitute
therefor, nor to diminish or abrogate any rights of Indemnitee thereunder;
WHEREAS, Indemnitee does not regard the protection available under the Bylaws, the
Certificate, and insurance as adequate in the present circumstances, and may not be willing to
serve as a director without adequate protection, and the Company desires Indemnitee to serve in
such capacity. Indemnitee is willing to serve, continue to serve, and to take on additional
service for or on behalf of the Company on the condition that he be so indemnified; and
WHEREAS, the Company and the Indemnitee intend for this Agreement to replace the prior
Indemnification Agreement entered into between the two parties.
NOW, THEREFORE, in consideration of Indemnitee’s agreement to serve and/or continue to serve
as a director after the date hereof, the parties hereto agree as follows:
1. Services to the Company. Indemnitee agrees to serve and/or continue to serve as a
director of the Company. Indemnitee may at any time and for any reason resign from such position
(subject to any other contractual obligation or any obligation imposed by operation of law), in
which event the Company shall have no obligation under this Agreement to continue Indemnitee in
such position. This Agreement shall not be deemed an employment contract between the Company (or
any of its subsidiaries or any Enterprise (as hereinafter defined)) and Indemnitee. Indemnitee
specifically acknowledges that Indemnitee’s position with the Company is at will, and Indemnitee
may be discharged at any time for any reason, with or without cause, subject to the Bylaws, the
Certificate, and the DGCL. The foregoing notwithstanding, this Agreement shall continue in force
after Indemnitee has ceased to serve as a director of the Company.
2. Indemnity of Indemnitee. The Company hereby agrees to hold harmless and indemnify
Indemnitee to the fullest extent permitted by law, as such may be amended from time to time. 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 2(a) if, by
reason of Indemnitee’s Corporate Status (as hereinafter defined), Indemnitee 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 2(a), Indemnitee
shall be indemnified against all Expenses (as hereinafter defined), judgments, penalties, fines,
and amounts paid in settlement actually and reasonably incurred by Indemnitee, or on Indemnitee’s
behalf, in connection with such Proceeding or any claim, issue, or matter therein, 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 Company, and with respect to any criminal Proceeding, had no reasonable cause
to believe Indemnitee’s 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 2(b) if, by reason of Indemnitee’s
Corporate Status, Indemnitee 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 2(b),
Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all
Expenses actually and reasonably incurred by Indemnitee, or on Indemnitee’s behalf, in connection
with such Proceeding or any claim, issue, or matter therein 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
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 finally adjudged to be liable to the Company unless and only to the extent that the
Court of Chancery of the State of Delaware or any court in which such Proceeding was brought shall
determine upon application that such indemnification may be made, despite the adjudication of
liability.
(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 Indemnitee’s Corporate Status, a party to and is successful, on the merits or otherwise, in any
Proceeding or in defense of any claim, issue, or matter therein, in whole or in part, Indemnitee
shall be indemnified to the maximum extent permitted by law, as such may be amended from time to
time, against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s 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 Indemnitee or on Indemnitee’s 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.
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(d) Indemnification for Expenses of a Witness. Notwithstanding any other provision of
this Agreement, to the fullest extent permitted by applicable law, to the extent that Indemnitee
is, by reason of Indemnitee’s 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
Indemnitee or on Indemnitee’s behalf in connection therewith.
3. Additional Indemnity. In addition to, and without regard to any limitations on,
the indemnification provided for in Section 2 of this Agreement, the Company shall and
hereby does indemnify and hold harmless to the fullest extent permitted by applicable law
Indemnitee against all Expenses, judgments, penalties, fines, and amounts paid in settlement
actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf if, by reason of
Indemnitee’s Corporate Status, Indemnitee is, or is threatened to be made, a party to or
participant in any Proceeding 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.
4. Contribution.
(a) Whether or not the indemnification provided in Sections 2 and 3 hereof is
available, in respect of any threatened, pending, or completed Proceeding in which the Company is
jointly liable with Indemnitee (or would be if joined in such Proceeding), the Company shall pay,
in the first instance, the entire amount of any judgment or settlement of such Proceeding without
requiring Indemnitee to contribute to 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 Proceeding in which the Company is jointly liable with Indemnitee (or would be if
joined in such 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 Proceeding in which the
Company is jointly liable with Indemnitee (or would be if joined in such 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 Proceeding), on the one hand, and Indemnitee, on the other hand, from the
transaction from which such 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
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 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.
(d) To the fullest extent permissible under applicable law, if the indemnification provided
for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu
of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee,
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whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in
settlement, and/or Expenses, in connection with any claim relating to an indemnifiable event under
this Agreement, in such proportion as is deemed fair and reasonable in light of all of the
circumstances of such Proceeding in order to reflect (i) the relative benefits received by the
Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such
Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees,
and agents) and Indemnitee in connection with such event(s) and/or transaction(s).
5. Advancement of Expenses. Notwithstanding any other provision of this Agreement,
the Company shall advance, to the extent not prohibited by law, all Expenses incurred by or on
behalf of Indemnitee in connection with any Proceeding by reason of Indemnitee’s Corporate Status
within thirty (30) 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. 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. Advances shall include
any and all reasonable Expenses incurred pursuing an action to enforce this right of advancement.
Any advances and undertakings to repay pursuant to this Section 5 shall be unsecured and
interest free. This Section 5 shall not apply to any claim made by Indemnitee for which
indemnity is excluded pursuant to Section 9.
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 DGCL 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 under this Agreement, Indemnitee shall submit to the Company a
written request for indemnification or advancement of Expenses, 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, as soon as is
reasonably practicable following the receipt by Indemnitee of written notice thereof. Such written
request to the Company shall include a description of the nature of the Proceeding and the facts
underlying such Proceeding. The omission by Indemnitee to notify the Company hereunder will not
relieve the Company from any liability that it may have to Indemnitee hereunder or otherwise than
under this Agreement, and any delay in so notifying the Company shall not constitute a waiver by
Indemnitee of any rights under this Agreement. 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 Section 6(a)
hereof, a determination, if required by applicable law, with respect to Indemnitee’s entitlement
thereto shall be made in the specific case by one of the following four (4) methods, which shall be
at the election of the Board: (1) by a majority vote of the Disinterested Directors, even though
less than a quorum, (2) by a committee comprised of Disinterested Directors designated by a
majority vote of the Disinterested Directors, even though less than a quorum, (3) if there are no
Disinterested Directors or if the Disinterested Directors so direct, by Independent Counsel (as
hereinafter defined) in a written opinion to the Board, a copy of which shall be delivered to
Indemnitee, or (4) if so directed by the Board, by the stockholders of the Company; provided,
however, that if a Change in Control shall have occurred, such determination as to Indemnitee’s
entitlement to indemnification hereunder shall be made by Independent Counsel in a written opinion
to the Board, a copy of which shall be delivered to Indemnitee.
(c) If the determination of entitlement to indemnification is to be made by Independent
Counsel pursuant to Section 6(b) hereof, the Independent Counsel shall be selected as
provided in this Section 6(c). If a Change in Control shall not have occurred, the
Independent Counsel shall be selected by the Board, and the Board shall give written notice to
Indemnitee of the identity of such Independent Counsel. If a Change in Control shall have
occurred, the Independent Counsel shall
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be selected by Indemnitee (unless Indemnitee shall request that such selection be made by the
Board, in which event the preceding sentence shall apply) and Indemnitee shall give written notice
to the Company of the identity of such Independent Counsel. In either event, the Company or
Indemnitee, as the case may be, may, within 10 days after such written notice of selection shall
have been given, deliver to Indenitee or the Company, 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 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 Indemnitee or
the Company 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. Upon the
commencement of any Proceeding or arbitration pursuant to Section 7(a) hereof, the
Independent Counsel shall be discharged and relieved of any further responsibility in such capacity
(subject to the applicable standards of professional conduct then prevailing).
(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, to the fullest extent not prohibited by law if Indemnitee has
submitted a request for indemnification in accordance with this Agreement. Anyone seeking to
overcome this presumption, including the Company, shall have the burden of proof and the burden of
persuasion by clear and convincing evidence, to the fullest extent not prohibited by law. Neither
the failure of the Company (including by its directors or Independent Counsel) to have made a
determination prior to the commencement of any action pursuant to this Agreement that
indemnification is proper in the circumstances because Indemnitee has met the applicable standard
of conduct, nor an actual determination by the Company (including by its directors or Independent
Counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the
action or create a presumption that Indemnitee has not met the applicable standard of conduct.
(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 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
Indemnitee reasonably believed to be in or 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 this Section 6 to
determine whether Indemnitee is entitled to indemnification shall not have made a determination
within sixty (60) 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
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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 60-day period may be extended
for a reasonable time, not to exceed an additional thirty (30) 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 (1) 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, or (2) if the determination of entitlement to indemnification is to
be made by the Independent Counsel.
(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 that is not
privileged or otherwise protected from disclosure and that 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 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 Proceeding. Anyone seeking to overcome this presumption shall have the burden of
proof and the burden of persuasion by clear and convincing evidence.
(i) The termination of any Proceeding or of any claim, issue, or matter therein, by judgment,
order, settlement, or conviction, or upon a plea of nolo contendere or its equivalent, shall not
(except as otherwise expressly provided in this Agreement) of itself adversely affect the right of
Indemnitee to indemnification or 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 Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to
believe that Indemnitee’s conduct was unlawful.
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7. Remedies of Indemnitee.
(a) Subject to Section 7(f), 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 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, (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, or (vi) in the event that the Company or any other
person takes or threatens to take any action to declare this Agreement void or unenforceable, or
institutes any litigation or other action or Proceeding designed to deny, or to recover from,
Indemnitee the benefits provided or intended to be provided to Indemnitee hereunder, Indemnitee
shall be entitled to an adjudication in an appropriate court of the State of Delaware of
Indemnitee’s entitlement to such indemnification.
(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). In any judicial proceeding commenced pursuant to this Section 7, the
Company shall have the burden of proving Indemnitee is not entitled to indemnification or
advancement of Expenses, as the case may be.
(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 (i) a misstatement by
Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s
misstatement not materially misleading in connection with the application for indemnification, or
(ii) a prohibition of such indemnification under applicable law.
(d) In the event that Indemnitee, pursuant to this Section 7, seeks a judicial
adjudication of Indemnitee’s 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 Indemnitee’s behalf, in advance, any and all expenses (of the
types described in the definition of Expenses in Section 14(e) of this Agreement) actually
and reasonably incurred by Indemnitee ,to the maximum extent permitted by Delaware law .
(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. The Company shall indemnify Indemnitee against any and all
Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company
of a written request therefore) advance, to the extent not prohibited by law, such expenses to
Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee
for indemnification or advance of Expenses from the Company under this Agreement or under any
directors’ and officers’ liability insurance policies maintained by the Company,.
(f) Notwithstanding anything in this Agreement to the contrary, no determination as to
entitlement to indemnification under this Agreement shall be required to be made prior to the final
disposition of the Proceeding.
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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 under applicable law, the
Certificate, 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 Indemnitee’s Corporate Status prior to such amendment, alteration, or
repeal. To the extent that a change in the DGCL, whether by statute or judicial decision, permits
greater indemnification than would be afforded currently under the Certificate, 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. To the extent that a change in the
DGCL, whether by statute or judicial decision, limits the indemnification rights that would be
afforded currently under the Certificate, the Bylaws, and this Agreement, it is the intent of the
parties hereto that such change, to the extent not otherwise required by such law, statute, or rule
to be applied to this Agreement, shall have no effect on this Agreement or the parties’ rights and
obligations hereunder. 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, agents, or fiduciaries of the Company or of
any Enterprise, 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. If, at the time of the receipt of a notice of a
claim pursuant to the terms hereof, the Company has director and officer liability insurance in
effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers
in accordance with the procedures set forth in the respective policies. The Company shall
thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of
Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such
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.
(e) The Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is
or was serving at the request of the Company as a director, officer, employee, or agent of any
other corporation, partnership, joint venture, trust, employee benefit plan, or other enterprise
shall be reduced by any amount Indemnitee has actually received as indemnification or advancement
of expenses from such other corporation, partnership, joint venture, trust, employee benefit plan,
or other enterprise.
9. Exception to Right of Indemnification. Notwithstanding any provision in this
Agreement, the Company shall not be obligated under this Agreement to make any indemnity in
connection with any claim made against Indemnitee:
(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance
policy or other indemnity provision, except with respect to any excess beyond the amount paid under
any insurance policy or other indemnity provision; or
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(b) (i) for an accounting of profits made from the purchase and sale (or sale and purchase) by
Indemnitee of securities of the Company within the meaning of Section 16(b) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), or similar provisions of state
statutory law or common law, or (ii) any reimbursement of the Company by Indemnitee of any bonus or
other incentive-based or equity-based compensation or of any profits realized from the sale of the
Company’s securities, as required in each case under the Exchange Act (including any such
reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of
the Xxxxxxxx-Xxxxx Act of 2002 (the “Xxxxxxxx-Xxxxx Act”), or the payment to the Company of profits
arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the
Xxxxxxxx-Xxxxx Act); or
(c) in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee,
including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the
Company or its directors, officers, employees, or other indemnitees, unless (i) the Board
authorized the Proceeding (or any part of any Proceeding) prior to its initiation, (ii) the Company
provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company
under applicable law, (iii) the proceeding was initiated to establish or enforce a right to
indemnification under this Agreement, any other agreement or insurance policy, or under the Bylaws
or the Certificate, or (iv) as otherwise required under the laws of the State of Delaware.
10. Duration of Agreement. All agreements and obligations of the Company contained
herein shall continue during the period Indemnitee is a 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 commenced under
Section 7 hereof) by reason of Indemnitee’s 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.
11. Period of Limitations. No legal action shall be brought and no cause of action
shall be asserted by or in the right of the Company against Indemnitee, Indemnitee’s estate,
spouse, heirs, executors, or personal or legal representatives after the expiration of two (2)
years from the date of accrual of such cause of action, and any claim or cause of action of the
Company shall be extinguished and deemed released unless asserted by the timely filing of a legal
action within such two-year (2) period; provided, however, that if any shorter period of
limitations is otherwise applicable to any such cause of action, such shorter period shall govern.
12. Security. To the extent requested by Indemnitee and approved by the Board, the
Company may at any time and from time to time provide security to Indemnitee for the Company’s
obligations hereunder through an irrevocable bank line of credit, funded trust, or other
collateral. Any such security, once provided to Indemnitee, may not be revoked or released without
the prior written consent of Indemnitee.
13. 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, or continue to
serve, as a director of the Company, and the Company acknowledges that Indemnitee is relying upon
this Agreement in serving as a director of the Company.
(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; provided, however,
that this Agreement is a supplement to and in furtherance of the Certificate, the Bylaws, and any
applicable law, and shall not be deemed a substitute therefor, nor to diminish or abrogate any
rights of Indemnitee thereunder.
9
14. Definitions. For purposes of this Agreement:
(a) A “Change of Control” shall be deemed to have occurred upon the earliest to occur after
the date of this Agreement of any of the following events:
(i) Acquisition of Stock by Third Party. Any Person (as defined below) is or becomes the
Beneficial Owner (as defined below), directly or indirectly, of securities of the Company
representing twenty percent (20%) or more of the combined voting power of the Company’s then
outstanding securities;
(ii) Change in Board of Directors. During any period of two (2) consecutive years (not
including any period prior to the execution of this Agreement), individuals who at the beginning of
such period constitute the Board, and any new director (other than a director designated by a
person who has entered into an agreement with the Company to effect a transaction described in
Sections 14(a)(i), 14(a)(iii), or 14(a)(iv)) whose election by the Board or
nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds
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 at least a majority of the members of the Board;
(iii) Corporate Transactions. The effective date of a merger or consolidation of the Company
with any other entity, other than a merger or consolidation that would result in the voting
securities of the Company outstanding immediately prior to such merger or consolidation continuing
to represent (either by remaining outstanding or by being converted into voting securities of the
surviving entity) more than 51% of the combined voting power of the voting securities of the
surviving entity outstanding immediately after such merger or consolidation and with the power to
elect at least a majority of the board of directors or other governing body of such surviving
entity;
(iv) Liquidation. The approval by the stockholders of the Company of a complete liquidation
of the Company or an agreement for the sale or disposition by the Company of all or substantially
all of the Company’s assets; and
(v) Other Events. There occurs any other event of a nature that would be required to be
reported in response to 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 (as defined below),
whether or not the Company is then subject to such reporting requirement.
For purposes of this Section 14(a), the following terms shall have the following meanings:
(A) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
(B) “Person” shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange
Act; provided, however, that Person shall exclude (i) the Company, (ii) any trustee or other
fiduciary holding securities under an employee benefit plan of the Company, and (iii) any
corporation owned, directly or indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company.
(C) “Beneficial Owner” shall have the meaning given to such term in Rule 13d-3 under the
Exchange Act; provided, however, that Beneficial Owner shall exclude any Person otherwise becoming
a Beneficial Owner by reason of the stockholders of the Company approving a merger of the Company
with another entity.
(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.
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(c) “Disinterested Director” means a director of the Company who is not and was not interested
in the transaction or conduct giving rise to the Proceeding in respect of which indemnification 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 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. Expenses also shall include Expenses incurred in connection with any appeal resulting
from any Proceeding, including without limitation the premium, security for and other costs
relating to any cost bond, supersede as bond or other appeal bond or its equivalent. Expenses,
however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or
fines against Indemnitee. Indemnitee agrees to instruct his or her attorney to provide the Company
with detailed monthly billing statements that provide a sufficient breakdown of hourly xxxxxxxx so
as to enable the Company to determine the reasonableness of such charges. Indemnitee’s attorney
may redact specific attorney-client privileged discussions or information in such submitted monthly
billing statements.
(f) “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 Company 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 Company or Indemnitee
in an action to determine 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.
(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 Indemnitee or of any inaction
on Indemnitee’s part while acting as a director of the Company, or by reason of the fact that
Indemnitee 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 Indemnitee pursuant
to Section 7 of this Agreement to enforce Indemnitee’s rights under this Agreement.
15. Severability. If any provision or provisions of this Agreement shall be held to
be invalid, illegal, or 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;
(b) such provision or provisions shall be deemed reformed to the extent necessary to conform to
applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the
fullest extent possible, the provisions of this Agreement
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(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.
16. 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.
17. Assignment. 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 and/or assets of the Company), assigns, spouses, heirs, and personal and legal
representatives. The Company shall require and cause any successor (whether direct or indirect by
purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of
the business and/or assets of the Company, by written agreement in form and substance satisfactory
to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to
the same extent that the Company 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, or agent of the Company or of any other enterprise at the
Company’s request.
18. 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.
19. Notices. All notices and other communications given or made pursuant to this
Agreement shall be in writing and shall be deemed effectively given: (a) upon personal delivery to
the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during
normal business hours of the recipient, and if not so confirmed, then on the next business day, (c)
five (5) days after having been sent by registered or certified mail, return receipt requested,
postage prepaid, or (d) 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:
(a) To Indemnitee at the address set forth below Indemnitee’s signature hereto.
(b) To the Company at:
Advanced Energy Industries, Inc.
0000 Xxxxx Xxxxx Xxxxx
Xxxx Xxxxxxx, Xxxxxxxx 00000
Attention: President
Xxxx Xxxxxxx, Xxxxxxxx 00000
Attention: President
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.
20. Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
Agreement. This Agreement may also be executed and delivered by facsimile signature and in two or
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more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
21. 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.
22. Governing Law and Consent to Jurisdiction. This Agreement and the legal relations
among the parties shall be governed by, and construed and enforced in accordance with, the laws of
the State of Delaware, without regard to its conflict of law rules. The Company and Indemnitee
hereby irrevocably and unconditionally (i) agree that any action or 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 action or proceeding arising out of or in connection with this
Agreement, (iii) appoint, to the extent such party is not otherwise subject to service of process
in the State of Delaware, irrevocably the Company’s agent for service of process in Delaware as
such party’s agent for acceptance of legal process in connection with any such action or 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 action or
proceeding in the Delaware Court and (v) waive, and agree not to plead or to make, any claim that
any such action or proceeding brought in the Delaware Court has been brought in an improper or
inconvenient forum.
[SIGNATURE PAGE TO FOLLOW]
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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.
| ADVANCED ENERGY INDUSTRIES, INC. (THE COMPANY) |
||||
| By: | ||||
| Name | ||||
| Title: | ||||
| INDEMNITEE |
||||
| Name: | ||||
| Address: |
||||
[SIGNATURE PAGE TO DIRECTOR INDEMNIFICATION AGREEMENT]
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