EXHIBIT 10.17
FORM OF
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT ("Agreement"), dated as of
_____ ___, 2001, by and between Xxxxxx Medical Group, Inc., a Delaware
corporation (the "Corporation"), and _____________ (the "Indemnitee").
RECITALS
WHEREAS, the Fourth Amended and Restated Certificate of
Incorporation of the Corporation (the "Charter") and the Amended By-laws of the
Corporation (the "By-laws") provide for indemnification by the Corporation of
its directors and officers as provided therein, and the Indemnitee has agreed to
serve as a director and/or officer of the Corporation or has agreed to continue
to serve as a director and/or officer of the Corporation;
WHEREAS, to provide the Indemnitee with additional contractual
assurance of protection against personal liability in connection with certain
proceedings described below, the Corporation desires to enter into this
Agreement;
WHEREAS, the General Corporation Law of the State of Delaware
(the "DGCL") expressly recognizes that the indemnification provisions of the
DGCL are not exclusive of any other rights to which a person seeking
indemnification may be entitled under the Charter or By-laws, a resolution of
stockholders or directors, an agreement or otherwise, and this Agreement is
being entered into pursuant to and in furtherance of the Charter and By-laws, as
permitted by the DGCL and as authorized by the Charter and the Board of
Directors of the Corporation; and
WHEREAS, in order to induce the Indemnitee to serve or
continue to serve as a director and/or officer of the Corporation and in
consideration of the Indemnitee so serving, the Corporation desires to indemnify
the Indemnitee and to make arrangements pursuant to which the Indemnitee may be
advanced or reimbursed expenses incurred by the Indemnitee in certain
proceedings described below, according to the terms and conditions set forth
below.
NOW, THEREFORE, in consideration of the Indemnitee's agreement
to serve or continue to serve as a director and/or officer of the Corporation
and of other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Corporation has agreed to the covenants set
forth herein for the purpose of further securing to the Indemnitee the
indemnification provided by the Charter and the By-laws:
Section 1. Indemnification.
(a) In accordance with the provisions of paragraph (b) of this
Section 1, the Corporation shall hold harmless and indemnify the Indemnitee
against any and all expenses, liabilities and losses (including, without
limitation, investigation expenses, expert witnesses' and attorneys' fees and
expenses, judgments, penalties, fines, ERISA excise taxes, amounts paid or to be
paid in settlement and any federal, state, local or foreign taxes imposed on the
Indemnitee as a
result of the actual or deemed receipt of any payments under this Agreement,
including all interest, assessments and other charges paid or payable in
connection with or in respect of such expenses, liabilities and losses) actually
incurred by the Indemnitee (net of any related insurance proceeds or other
amounts received by the Indemnitee or paid by or on behalf of the Corporation on
the Indemnitee's behalf) in connection with any threatened, pending or completed
action, suit, arbitration or proceeding or any hearing, inquiry or
investigation, whether brought by or in the right of the Corporation or
otherwise, that the Indemnitee in good faith believes might lead to the
institution of any such action, suit, arbitration or proceeding, whether civil,
criminal, administrative, investigative or other, or any appeal therefrom, in
which the Indemnitee was, is or becomes a party, witness or other participant,
or was, is or becomes threatened to be made a party, witness or other
participant, (a "Proceeding") based upon, arising from, relating to, or by
reason of the fact that the Indemnitee is, was, shall be, or shall have been a
director and/or officer of the Corporation (or any subsidiary of the
Corporation) or is or was serving, shall serve, or shall have served at the
request of the Corporation as a director, officer, partner, trustee, employee,
fiduciary or agent ("Affiliate Indemnitee") of another foreign or domestic
corporation or non-profit corporation, cooperative, partnership, joint venture,
trust, or other incorporated or unincorporated enterprise (each, a "Corporation
Affiliate"). All amounts payable by the Corporation pursuant to this Section 1
and Section 2 hereof are herein referred to as "Indemnified Amounts."
(b) In providing the foregoing indemnification, the
Corporation shall, with respect to a Proceeding, hold harmless and indemnify the
Indemnitee to the fullest extent required by the DGCL (including, without
limitation, Section 145(c) of the DGCL) and to the fullest extent permitted by
the Express Permitted Indemnification Provisions (as hereinafter defined) of the
DGCL. For purposes of this Agreement, the Express Permitted Indemnification
Provisions of the DGCL shall mean indemnification as permitted by Section 145 of
the DGCL or by any amendment thereof or other statutory provisions expressly
permitting such indemnification which is adopted after the date hereof (but, in
the case of any such amendment, only to the extent that such amendment permits
the Corporation to provide broader indemnification rights than said law required
or permitted the Corporation to provide prior to such amendment).
(c) Without limiting the generality of the foregoing, the
Indemnitee shall be entitled to the rights of indemnification provided in this
Section 1 for any expenses actually incurred in any Proceeding initiated by or
in the right of the Corporation unless the Indemnitee shall have been adjudged
to be liable to the Corporation; provided, however, that, despite the
adjudication of liability but in view of all the circumstances of the case, the
Indemnitee shall be entitled to any indemnification by the Corporation that the
court or other decision maker of any Proceeding deems proper, as permitted by
Section 145(b) of the DGCL.
(d) If the Indemnitee is entitled under this Agreement to
indemnification by the Corporation for some or a portion of the Indemnified
Amounts but not, however, for all of the total amount thereof, the Corporation
shall nevertheless indemnify the Indemnitee for the portion thereof to which the
Indemnitee is entitled.
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Section 2. OTHER INDEMNIFICATION ARRANGEMENTS. The DGCL and the Charter and
By-laws permit the Corporation to purchase and maintain insurance or furnish
similar protection or make other arrangements, including, but not limited to,
providing a trust fund, letter of credit, or surety bond ("Indemnification
Arrangements") on behalf of the Indemnitee against any liability asserted
against him or her or incurred by or on behalf of him or her in such capacity as
a director or officer of the Corporation or an Affiliated Indemnitee, or arising
out of his or her status as such, whether or not the Corporation would have the
power to indemnify him or her against such liability under the provisions of
this Agreement or under the DGCL, as it may then be in effect. The purchase,
establishment and maintenance of any such Indemnification Arrangement shall not
in any way limit or affect the rights and obligations of the Corporation or of
the Indemnitee under this Agreement except as expressly provided herein, and the
execution and delivery of this Agreement by the Corporation and the Indemnitee
shall not in any way limit or affect the rights and obligations of the
Corporation or the other party or parties thereto under any such Indemnification
Arrangement.
Section 3. Advance Payment of Indemnified Amounts.
(a) The Indemnitee hereby is granted the right to receive in
advance of a final, non-appealable judgment or other final adjudication of a
Proceeding (a "Final Determination") the amount of any and all expenses,
including, without limitation, investigation expenses, expert witnesses' and
attorneys' fees and expenses and other expenses expended or incurred, or
expected to be expended or incurred, by the Indemnitee in connection with any
Proceeding or otherwise expended or incurred by the Indemnitee (such amounts so
expended or incurred, or expected to be expended or incurred, being referred to
as "Advanced Amounts").
(b) In making any written request for Advanced Amounts, the
Indemnitee shall submit to the Corporation a schedule setting forth in
reasonable detail the dollar amount expended or incurred and expected to be
expended or incurred. Each such listing shall be supported by the xxxx,
agreement, or other documentation relating thereto, each of which shall be
appended to the schedule as an exhibit. In addition, before the Indemnitee may
receive Advanced Amounts from the Corporation, the Indemnitee shall provide to
the Corporation (i) a written affirmation of the Indemnitee's good faith belief
that the applicable standard of conduct required for indemnification by the
Corporation has been satisfied by the Indemnitee, and (ii) a written undertaking
by or on behalf of the Indemnitee to repay the Advanced Amount if it shall
ultimately be determined that the Indemnitee has not satisfied any applicable
standard of conduct and is not entitled to be indemnified by the Corporation.
The written undertaking required from the Indemnitee shall be an unlimited
general obligation of the Indemnitee but need not be secured. The Corporation
shall pay to the Indemnitee all Advanced Amounts within twenty (20) days after
receipt by the Corporation of all information and documentation required to be
provided by the Indemnitee pursuant to this paragraph.
Section 4. Procedure for Payment of Indemnified Amounts.
(a) To obtain indemnification under this Agreement, the
Indemnitee shall submit to the Corporation a written request for payment of the
appropriate Indemnified Amounts, including with each request documentation and
information as is reasonably available to the
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Indemnitee and reasonably necessary to determine whether and to what extent the
Indemnitee is entitled to indemnification. The Secretary of the Corporation
shall, promptly upon receipt of such a request for indemnification, advise the
Board of Directors in writing that the Indemnitee has requested indemnification.
(b) The Corporation shall pay the Indemnitee the appropriate
Indemnified Amounts unless it is established that the Indemnitee has not met any
applicable standard of conduct of the Express Permitted Indemnification
Provisions. For purposes of determining whether the Indemnitee is entitled to
Indemnified Amounts, in order to deny indemnification to the Indemnitee the
Corporation has the burden of proof in establishing that the Indemnitee did not
meet the applicable standard of conduct. In this regard, a termination of any
Proceeding by judgment, order or settlement does not create a presumption that
the Indemnitee did not meet the requisite standard of conduct; provided,
however, that the termination of any criminal proceeding by a conviction, a plea
of nolo contendere or its equivalent or an entry of an order of probation prior
to judgment, creates a rebuttable presumption that the Indemnitee did not meet
the applicable standard of conduct.
(c) Any determination that the Indemnitee has not met the
applicable standard of conduct required to qualify for indemnification shall be
made (i) either by the Board of Directors by a majority vote of a quorum
consisting of directors who were not parties of such action, suit or proceeding;
or (ii) by independent legal counsel (who may be the outside counsel regularly
employed by the Corporation), provided that, the manner in which (and, if
applicable, the counsel by which) the right to indemnification is to be
determined shall be approved in advance in writing by both the highest ranking
executive officer of the Corporation who is not party to such action (sometimes
hereinafter referred to as "Senior Officer") and by the Indemnitee. In the event
that such parties are unable to agree on the manner in which any such
determination is to be made, such determination shall be made by independent
legal counsel retained by the Corporation especially for such purpose, provided
that such counsel be approved in advance in writing by both the said Senior
Officer and the Indemnitee and provided further, that such counsel shall not be
outside counsel regularly employed by the Corporation. The fees and expenses of
counsel in connection with making said determination contemplated hereunder
shall be paid by the Corporation, and, if requested by such counsel, the
Corporation shall give such counsel an appropriate written agreement with
respect to the payment of such fees and expenses and such other matters as may
be reasonably requested by counsel.
(d) The Corporation will use its reasonable best efforts to
conclude as soon as practicable any required determination pursuant to
subparagraph (c) above and promptly will advise the Indemnitee in writing with
respect to any determination that the Indemnitee is or is not entitled to
indemnification, including a description of any reason or basis for which
indemnification has been denied. Payment of any applicable Indemnified Amounts
will be made to the Indemnitee within ten (10) days after any determination of
the Indemnitee's entitlement to indemnification.
(e) Notwithstanding the foregoing, the Indemnitee may, at any
time after sixty (60) days after a request for Indemnified Amounts has been
submitted to the Corporation (or upon receipt of written notice that a request
for Indemnified Amounts has been rejected, if
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earlier) and before three (3) years after a request for Indemnified Amounts has
been filed, petition a court of competent jurisdiction to determine whether the
Indemnitee is entitled to indemnification under the provisions of this
Agreement, and such court shall thereupon have the exclusive authority to make
such determination unless and until such court dismisses or otherwise terminates
such action without having made such determination. The court shall, as
petitioned, make an independent determination of whether the Indemnitee is
entitled to indemnification as provided under this Agreement, irrespective of
any prior determination made by the Board of Directors or independent counsel.
If the court shall determine that the Indemnitee is entitled to indemnification
as to any claim, issue or matter involved in the Proceeding with respect to
which there has been no prior determination pursuant to this Agreement or with
respect to which there has been a prior determination that the Indemnitee was
not entitled to indemnification hereunder, the Corporation shall pay all
expenses (including attorneys' fees and disbursements) actually incurred by the
Indemnitee in connection with such judicial determination.
(f) EXCLUDED COVERAGE. The Corporation shall have no
obligation to indemnify the Indemnitee for and hold him or her harmless from any
loss or expense which has been determined, by final adjudication by a court of
competent jurisdiction, to constitute an Excluded Claim (as hereinafter
defined). For purposes of this Agreement, an Excluded Claim shall mean any
payment for losses or expenses in connection with any claim:
(i) based upon or attributable to the Indemnitee
gaining in fact any personal profit or advantage to which the
Indemnitee is not entitled;
(ii) for the return by the Indemnitee of any
remuneration paid to the Indemnitee without the previous
approval of the stockholders of the Corporation which is
illegal;
(iii) for an accounting of profits in fact made from
the purchase or sale by the Indemnitee of securities of the
Corporation within the meaning of Section 16 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or
similar provisions of any state law;
(iv) resulting from the Indemnitee's knowingly
fraudulent, dishonest or willful misconduct; or
(v) the payment of which by the Corporation
under this Agreement is not permitted by applicable law.
Section 5. Agreement Not Exclusive; Subrogation etc.
(a) This Agreement shall not be deemed exclusive of and shall
not diminish any other rights the Indemnitee may have to be indemnified or
insured or otherwise protected against any liability, loss, or expense by the
Corporation, any subsidiary of the Corporation, or any other person or entity
under any charter, by-laws, law, agreement, policy of insurance or similar
protection, vote of stockholders or directors, disinterested or not, or
otherwise, whether or not now in effect, both as to actions in the Indemnitee's
official capacity, and as to actions in
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another capacity while holding such office. The Corporation's obligations to
make payments of Indemnified Amounts hereunder shall be satisfied to the extent
that payments with respect to the same Proceeding (or part thereof) have been
made to or for the benefit of the Indemnitee by reason of the indemnification of
the Indemnitee pursuant to any other arrangement made by the Corporation for the
benefit of the Indemnitee; provided, however, that in no event shall the
Indemnitee be required to maintain any other such arrangement or request payment
pursuant to any other such arrangement before seeking to be indemnified
hereunder.
(b) In the event the Indemnitee shall receive payment from any
insurance carrier or from the plaintiff in any Proceeding against such
Indemnitee in respect of Indemnified Amounts after payments on account of all or
part of such Indemnified Amounts have been made by the Corporation pursuant
hereto, such Indemnitee shall promptly reimburse to the Corporation the amount,
if any, by which the sum of such payment by such insurance carrier or such
plaintiff and payments by the Corporation or pursuant to arrangements made by
the Corporation to the Indemnitee exceeds such Indemnified Amounts; provided,
however, that such portions, if any, of such insurance proceeds that are
required to be reimbursed to the insurance carrier under the terms of its
insurance policy, such as deductible or co-insurance payments, shall not be
deemed to be payments to the Indemnitee hereunder. In addition, upon payment of
Indemnified Amounts hereunder, the Corporation shall be subrogated to the rights
of the Indemnitee receiving such payments to the extent thereof against any
insurance carrier (to the extent permitted under such insurance policies) or in
respect of such Indemnified Amounts and the Indemnitee shall execute and deliver
any and all instruments and documents and perform any and all other acts or
deeds which the Corporation deems necessary or advisable to secure such rights.
Such right of subrogation shall be terminated upon receipt by the Corporation of
the amount to be reimbursed by the Indemnitee pursuant to the first sentence of
this paragraph (b).
Section 6. INSURANCE COVERAGE. In the event that the Corporation maintains
directors and officers liability insurance to protect itself and any director or
officer of the Corporation against any expense, liability or loss, such
insurance shall cover the Indemnitee to at least the same extent as any other
director or officer of the Corporation.
Section 7. ESTABLISHMENT OF TRUST. In the event of a potential business
combination or change in control of the Corporation of the type required to be
reported under Item 1 of Form 8-K promulgated under the Exchange Act
(collectively, a "Change in Control"), the Corporation shall, upon written
request by the Indemnitee, create a trust (the "Trust") for the benefit of the
Indemnitee and from time to time upon written request of the Indemnitee shall
fund the Trust in an amount sufficient to satisfy any and all Indemnified
Amounts (including, without limitation, Advanced Amounts) which are actually
paid (but not as yet reimbursed) or which the Indemnitee reasonably determines
from time to time may be payable by the Corporation under this Agreement. The
amount or amounts to be deposited in the Trust pursuant to the foregoing funding
obligation shall be determined by the independent legal counsel appointed under
Section 4 hereof. The terms of the Trust shall provide that following its
establishment: (i) the Trust shall not be revoked or the principal thereof
invaded without the written consent of the Indemnitee; (ii) the trustee of the
Trust shall advance, within twenty (20) days of a request by the Indemnitee, any
and all Advanced Amounts to the Indemnitee (and the Indemnitee hereby agrees to
reimburse the Trust under the circumstances under which the Indemnitee would be
required to
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reimburse the Corporation under Section 3(b)(ii) hereof; (iii) the Corporation
shall continue to fund the Trust from time to time in accordance with the
funding obligations set forth above; (iv) the trustee of the Trust shall
promptly pay to the Indemnitee all Indemnified Amounts for which the Indemnitee
shall be entitled to indemnification pursuant to this Agreement; and (v) all
unexpended funds in the Trust shall revert to the Corporation upon a final
determination by a court of competent jurisdiction in a final decision from
which there is no further right of appeal that the Indemnitee has been fully
Indemnified under the terms of this Agreement. The trustee of the Trust shall be
chosen by the Indemnitee.
Section 8. CONTINUATION OF INDEMNITY. All agreements and obligations of the
Corporation contained herein shall continue during the period the Indemnitee is
a director or officer, as the case may be, of the Corporation (or is serving at
the request of the Corporation as an Affiliate Indemnitee) and shall continue
thereafter so long as the Indemnitee shall be subject to any possible Proceeding
by reason of the fact that the Indemnitee was a director or officer of the
Corporation or was serving in any other capacity referred to herein.
Section 9. SUCCESSORS; BINDING AGREEMENT. This Agreement shall be binding on and
shall inure to the benefit of and be enforceable by the parties hereto, by the
Corporation's successors and assigns and by the Indemnitee's personal or legal
representatives, executors, administrators, successors, assigns, heirs, spouses,
distributees, devisees, and legatees. The Corporation shall require and cause
any successor or assignee (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 Corporation, by written agreement in form and
substance reasonably satisfactory to the Corporation and to the 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 or assignment had taken place.
Section 10. ENFORCEMENT. The Corporation has entered into this Agreement and
assumed the obligations imposed on the Corporation hereby in order to induce the
Indemnitee to act as a director or officer, as the case may be, of the
Corporation, and acknowledges that the Indemnitee is relying upon this Agreement
in continuing in such capacity.
(a) The Indemnitee's right to indemnification shall be
enforceable by the Indemnitee only in the Chancery Court of the State of
Delaware and shall be enforceable notwithstanding any adverse determination,
other than a determination which has been made by a final adjudication of a
court of competent jurisdiction. In any such action, if a prior adverse
determination has been made, the burden of proving that indemnification is
required under this Agreement shall be on the Indemnitee. The Corporation shall
have the burden of proving that indemnification is not required under this
Agreement if no prior adverse determination shall have been made.
(b) In the event the Indemnitee is required to bring any
action to enforce rights or to collect moneys due under this Agreement and is
successful in such action, the Corporation shall reimburse the Indemnitee for
all of the Indemnitee's fees and expenses (including attorney's fees and
expenses) in bringing and pursuing such action. The Indemnitee
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shall be entitled to the advancement of Indemnified Amounts to the full extent
contemplated by Section 3 hereof in connection with such proceeding.
Section 11. SEVERABILITY. In the event that any provision of this Agreement
(including any provision within a single section, paragraph or sentence) is
determined by a court of competent jurisdiction to require the Corporation to do
or to fail to do an act which is in violation of applicable law, such provision
shall be limited or modified in its application to the minimum extent necessary
to avoid a violation of law, and, as so limited or modified, such provision and
the balance of this Agreement shall be enforceable in accordance with their
terms.
Section 12. MISCELLANEOUS. No provision of this Agreement may be modified,
waived, or discharged unless such modification, waiver, or discharge is agreed
to in writing signed by the Indemnitee and either the Chairman of the Board or
the Chief Executive Officer or another officer of the Corporation specifically
designated by the Board of Directors. No waiver by either party at any time of
any breach by the other party of, or of compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same time or
at any prior or subsequent time. This Agreement sets forth the entire
understanding between the parties hereto and supersedes and merges all previous
negotiations, representations, commitments, understandings and agreements
(written, oral or otherwise, express or implied) with respect to the subject
matter hereof between the parties hereto. The validity, interpretation,
construction, and performance of this Agreement shall be governed by the laws of
the State of Delaware, without giving effect to the principles of conflicts of
laws thereof. The Indemnitee may bring an action seeking resolution of disputes
or controversies arising under or in any way related to this Agreement in the
state or federal court jurisdiction in which the Indemnitee resides or in which
his or her place of business is located, and in any related appellate courts,
and the Corporation consents to the jurisdiction of such courts and to such
venue.
Section 13. NOTICES. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, as follows:
If to the Indemnitee:
c/o Wright Medical Group, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
If to the Corporation:
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Xxxxxx Medical Group, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: General Counsel
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
Section 14. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
Section 15. EFFECTIVENESS. This Agreement shall be effective as of the
date first above written.
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed as of the day and year first above written.
XXXXXX MEDICAL GROUP, INC.
By:
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Name:
Title:
INDEMNITEE
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Name:
