EXECUTION COPY
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is made as of March 12,
2003 by and between Xxxxxxxx.xxx, Inc., a Delaware corporation (the "Company"),
and ______________ ("Indemnitee").
RECITALS
WHEREAS, highly competent persons have become more reluctant to serve
publicly-held corporations as directors or in other capacities unless they are
provided with adequate protection through insurance and/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 United States-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 and
Restated Certificate of Incorporation (as amended) (the "Charter") and the
By-Laws of the Company require indemnification of the officers and directors of
the Company. Indemnitee may also be entitled to indemnification pursuant to the
Delaware General Corporation Law ("DGCL"). The Charter, the By-Laws 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 of directors, 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.
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WHEREAS, this Agreement is a supplement to and in furtherance of the
Charter, the By-Laws of the Company 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
Company's Charter, By-Laws and insurance as adequate in the present
circumstances, and may not be willing to serve as an officer or 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.
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:
1. Services to the Company. Indemnitee will serve or continue to serve
as an officer, director or key employee of the Company for so long as Indemnitee
is duly elected or appointed or until Indemnitee tenders his resignation.
2. Definitions. As used in this Agreement:
(a) References to "agent" shall mean any person who is or was a
director, officer, or employee of the Company or a subsidiary of the Company or
other person authorized by the Company to act for or on behalf of the Company,
to include such person serving in such capacity as a director, officer,
employee, fiduciary or other official of another corporation, partnership,
limited liability company, joint venture, trust or other enterprise at the
request of, for the convenience of, or to represent the interests of, the
Company or a subsidiary of the Company.
(b) A "Change in Control" shall be deemed to occur 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), and/or its Affiliates and Associates (as these terms are defined in the
Rights Agreement, dated October 28, 2002, between the Company and American Stock
Transfer & Trust Company, as Rights Agent (the "Rights Agreement")) (other than
any trustee or other fiduciary holding securities under an employee benefit plan
of the Company) is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing twenty-five percent (25%) or more of the
combined voting power of the Company's then outstanding securities entitled to
vote generally in the election of directors, unless (a) the change in the
relative beneficial ownership of the Company's securities by any Person results
solely from a reduction in the aggregate number of outstanding shares or
securities entitled to vote generally in the election of directors, or (b) such
acquisition was approved in advance by the Continuing Directors (as defined
below) and such acquisition would not constitute a Change in Control under part
(iii) of this definition;
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(ii) Change in Board of Directors. Individuals who, as of the
date hereof, constitute the Board, and any new director 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 were
directors on the date hereof or whose election or nomination for election was
previously so approved (collectively, the "Continuing Directors"), cease for any
reason to constitute at least a majority of the members of the Board; provided,
however, that any individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board shall not be considered a Continuing Director;
(iii) Corporate Transactions. The effective date of a
reorganization, merger or consolidation of the Company (a "Business
Combination"), in each case, unless, following such Business Combination, (1)
all or substantially all of the individuals and entities who were the Beneficial
Owners of securities entitled to vote generally in the election of directors
immediately prior to such Business Combination, beneficially own, directly or
indirectly, more than 51% of the combined voting power of the then outstanding
securities entitled to vote generally in the election of directors of the
corporation or other entity resulting from such Business Combination (including,
without limitation, a corporation or other entity which as a result of such
transaction owns the Company or all or substantially all of the Company's assets
either directly or through one or more Subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business Combination
of the securities entitled to vote generally in the election of directors, (2)
no Person (excluding any corporation or other entity resulting from such
Business Combination) is the Beneficial Owner, directly or indirectly, of
twenty-five percent (25%) or more of the combined voting power of the then
outstanding securities entitled to vote generally in the election of directors
of such corporation or other entity except to the extent that such ownership
existed prior to the Business Combination and (3) at least a majority of the
Board of Directors of the corporation or other entity resulting from such
Business Combination were Continuing Directors at the time of the execution of
the initial agreement, or of the action of the Board of Directors, providing for
such Business Combination;
(iv) Liquidation. The approval by the stockholders of the
Company of a complete liquidation of the Company or an agreement or series of
agreements for the sale or disposition by the Company of all or substantially
all of the Company's assets (or, if such approval is not required, the decision
by the Board to proceed with such a liquidation, sale, or disposition in one
transaction or a series of related transactions);
(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.
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(c) The term "Beneficial Owner" shall have the meaning set forth in
Rule 13d-3 promulgated under the Exchange Act.
(d) "Corporate Status" describes the status of a person who is or
was a director, officer, trustee, general partner, managing member, fiduciary,
employee or agent of the Company or of any other Enterprise (as defined below)
which such person is or was serving at the request of the Company.
(e) "Disinterested Director" shall mean a director of the Company
who is not and was not a party to the Proceeding (as defined below) in respect
of which indemnification is sought by Indemnitee.
(f) "Enterprise" shall mean the Company and any other corporation,
limited liability company, partnership, joint venture, trust, employee benefit
plan or other enterprise of which Indemnitee is or was serving at the request of
the Company as a director, officer, trustee, general partner, managing member,
fiduciary, employee or agent.
(g) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
(h) "Expenses" shall include attorneys' fees and costs, 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 in connection
with prosecuting, defending, preparing to prosecute or defend, investigating,
being or preparing to be a witness in, or otherwise participating 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, supersedeas 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.
(i) "Independent Counsel" shall mean 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.
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(j) References to "fines" shall include any excise tax assessed on
Indemnitee with respect to any employee benefit plan; references to "serving at
the request of the Company" shall include any service as a director, officer,
employee, agent or fiduciary of the Company which imposes duties on, or involves
services by, such director, officer, employee, agent or fiduciary with respect
to an employee benefit plan, its participants or beneficiaries; and if
Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to
be in the best interests of the participants and beneficiaries of an employee
benefit plan, Indemnitee shall be deemed to have acted in a manner "not opposed
to the best interests of the Company" as referred to in this Agreement.
(k) The term "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 Subsidiaries of the Company (as defined
below), (iii) any employment benefit plan of the Company or of a Subsidiary of
the Company or of any corporation or other entity owned, directly or indirectly,
by the stockholders of the Company in substantially the same proportions as
their ownership of stock of the Company, and (iv) any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or of a
Subsidiary of the Company or of a corporation or other entity owned directly or
indirectly by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company.
(l) The term "Proceeding" shall include 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 in the right of the Company or
otherwise and whether of a civil (including intentional or unintentional tort
claims), criminal, administrative or investigative nature, in which Indemnitee
was, is or will be involved as a party or otherwise by reason of the fact that
Indemnitee is or was a director or officer of the Company, by reason of any
action taken by him (or failure to act) by him or of any action (or failure to
act) on his part while acting as a director or officer of the Company, or by
reason of the fact that he is or was serving at the request of the Company as a
director, officer, trustee, general partner, managing member, fiduciary,
employee or agent of any other Enterprise, in each case whether or not serving
in such capacity at the time any liability or expense is incurred for which
indemnification, reimbursement, or advancement of expenses can be provided under
this Agreement.
(m) The term "Subsidiary," with respect to any Person, shall
mean any corporation or other entity of which a majority of the voting power of
the voting equity securities or equity interest is owned, directly or
indirectly, by that Person.
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3. Indemnity in Third-Party Proceedings. The Company shall indemnify
and hold harmless Indemnitee in accordance with the provisions of this Section 3
if Indemnitee was, is, or is threatened to be made, a party to or a participant
(as a witness or otherwise) in any Proceeding, other than a Proceeding by or in
the right of the Company to procure a judgment in its favor. Pursuant to this
Section 3, Indemnitee shall be indemnified against all Expenses, judgments,
liabilities, fines, penalties and amounts paid in settlement (including all
interest, assessments and other charges paid or payable in connection with or in
respect of such Expenses, judgments, fines, penalties and amounts paid in
settlement) actually and reasonably incurred by Indemnitee or on his behalf in
connection with such Proceeding or any claim, issue or matter therein, if
Indemnitee acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the Company and, in the case of a
criminal Proceeding, had no reasonable cause to believe that his conduct was
unlawful.
4. Indemnity in Proceedings by or in the Right of the Company. The
Company shall indemnify and hold harmless Indemnitee in accordance with the
provisions of this Section 4 if Indemnitee was, is, or is threatened to be made,
a party to or a participant (as a witness or otherwise) in any Proceeding by or
in the right of the Company to procure a judgment in its favor. Pursuant to this
Section 4, Indemnitee shall be indemnified against all Expenses actually and
reasonably incurred by him or on his behalf in connection with such Proceeding
or any claim, issue or matter therein, if Indemnitee acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interests of
the Company. No indemnification for Expenses shall be made under this Section 4
in respect of any claim, issue or matter as to which Indemnitee shall have been
finally adjudged by a court to be liable to the Company, unless and only to the
extent that any court in which the Proceeding was brought or the Delaware Court
(as defined below) 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 indemnification.
5. Indemnification for Expenses of a Party Who is Wholly or Partly
Successful. Notwithstanding any other provisions of this Agreement, to the
extent that Indemnitee is a party to (or a participant in) 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, the Company shall indemnify and hold
harmless Indemnitee against all Expenses actually and reasonably incurred by him
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 and hold harmless Indemnitee against all Expenses actually and
reasonably incurred by him or on his behalf in connection with each successfully
resolved claim, issue or matter. If Indemnitee is not wholly successful in such
Proceeding, the Company also shall indemnify and hold harmless Indemnitee
against all Expenses reasonably incurred in connection with a claim, issue or
matter related to any claim, issue, or matter on which Indemnitee was
successful. 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.
6. Indemnification For Expenses of a Witness. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee is, by reason of his
Corporate Status, a witness in any Proceeding to which Indemnitee is not a
party, he shall be indemnified and held harmless against all Expenses actually
and reasonably incurred by him or on his behalf in connection therewith.
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7. Additional Indemnification.
(a) Notwithstanding any limitation in Sections 3, 4, or 5, the
Company shall indemnify and hold harmless Indemnitee if Indemnitee is a party to
or threatened to be made a party to any Proceeding (including a Proceeding by or
in the right of the Company to procure a judgment in its favor) against all
Expenses, judgments, fines, penalties and amounts paid in settlement (including
all interest, assessments and other charges paid or payable in connection with
or in respect of such Expenses, judgments, fines, penalties and amounts paid in
settlement) actually and reasonably incurred by Indemnitee in connection with
the Proceeding. No indemnity shall be made under this Section 7(a) on account of
Indemnitee's conduct which constitutes a breach of Indemnitee's duty of loyalty
to the Company or its stockholders or is an act or omission not in good faith or
which involves intentional misconduct or a knowing violation of the law.
(b) Notwithstanding any limitation in Sections 3, 4, 5 or 7(a), the
Company shall indemnify and hold harmless Indemnitee if Indemnitee is a party to
or threatened to be made a party to any Proceeding (including a Proceeding by or
in the right of the Company to procure a judgment in its favor) against all
Expenses, judgments, fines, penalties and amounts paid in settlement (including
all interest, assessments and other charges paid or payable in connection with
or in respect of such Expenses, judgments, fines, penalties and amounts paid in
settlement) actually and reasonably incurred by Indemnitee in connection with
the Proceeding.
8. Contribution; Joint Liability.
(a) To the fullest extent permissible under applicable law, if the
indemnification and hold harmless rights provided for in this Agreement are
unavailable to Indemnitee in whole or in part for any reason whatsoever, the
Company, in lieu of indemnifying and holding harmless Indemnitee, shall pay, in
the first instance, the entire amount incurred by Indemnitee, whether for
judgments, liabilities, fines, penalties, amounts paid or to be paid in
settlement and/or for Expenses, in connection with any Proceeding without
requiring Indemnitee to contribute to such payment, and the Company hereby
waives and relinquishes any right of contribution it may have at any time
against Indemnitee.
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(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 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 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 amounts paid in settlement, as
well as any other equitable considerations. 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 shall not enter into any settlement of any
Proceeding in which the Company may be 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 or which may be asserted in such Proceeding
against Indemnitee.
(d) The Company hereby agrees to fully indemnify and hold harmless
Indemnitee from any claims for contribution which may be brought by officers,
directors or employees of the Company other than Indemnitee who may be jointly
liable with Indemnitee.
9. Exclusions. (a) 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:
(i) for which payment has actually been received by or on behalf of
Indemnitee under any insurance policy or other indemnity provision, except with
respect to any excess beyond the amount actually received under any insurance
policy, contract, agreement, other indemnity provision or otherwise; or
(ii) for an accounting of profits made from the purchase and sale
(or sale and purchase) by Indemnitee of securities of the Company pursuant to
Section 16(b) of the Exchange Act.
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(b) Prior to a Change in Control, the Company shall not be obligated
under this Agreement to indemnify any Indemnitee or advance any Expenses of any
Indemnitee in connection with any actual or threatened proceeding (or any part
of any actual or threatened proceeding) initiated by Indemnitee, including any
such proceeding (or any part of any such 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 such
proceeding) prior to its initiation or (ii) the Company provides the
indemnification, in its sole discretion, pursuant to the powers vested in the
Company under applicable law; provided, however, that nothing in this Section
9(b) shall limit the right of any Indemnitee to be indemnified (with interest)
under Sections 14(e) and (f).
10. Advances of Expenses; Defense of Claim.
(a) Notwithstanding any provision of this Agreement to the contrary
and to the fullest extent permitted by applicable law, the Company shall advance
the Expenses incurred by Indemnitee in connection with any Proceeding within ten
(10) days after the receipt by the Company of a statement or statements
requesting such advances from time to time, whether prior to or after final
disposition of any Proceeding. Advances shall be unsecured and interest free.
Advances shall be made without regard to Indemnitee's ability to repay the
Expenses and without regard to Indemnitee's ultimate entitlement to
indemnification under the other provisions of this Agreement. Advances shall
include any and all reasonable Expenses incurred pursuing a Proceeding to
enforce this right of advancement, including Expenses incurred preparing and
forwarding statements to the Company to support the advances claimed. Indemnitee
shall qualify for advances solely upon the execution and delivery to the Company
of an undertaking providing that Indemnitee undertakes to repay the advance to
the extent that it is ultimately determined that Indemnitee is not entitled to
be indemnified by the Company under the provisions of this Agreement, the
Charter, the By-Laws of the Company, the DGCL or otherwise. This Section 10(a)
shall not apply to any claim made by Indemnitee for which indemnity is excluded
pursuant to Section 9.
(b) The Company will be entitled to participate in the Proceeding at
its own expense.
(c) The Company shall not settle any action, claim or Proceeding (in
whole or in part) which would impose any Expense, judgment, fine, penalty or
limitation on Indemnitee without Indemnitee's prior written consent.
11. Procedure for Notification and Application for Indemnification.
(a) Indemnitee agrees to notify promptly the Company in writing upon
being served with any summons, citation, subpoena, complaint, indictment,
information or other document relating to any Proceeding or matter which may be
subject to indemnification or advancement of Expenses covered hereunder. The
failure of Indemnitee to so notify the Company shall not relieve the Company of
any obligation which it may have to Indemnitee under this Agreement, or
otherwise.
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(b) Indemnitee may deliver to the Company a written application to
have the Company indemnify and hold harmless Indemnitee in accordance with this
Agreement. Such application(s) may be delivered from time to time and at such
time(s) as Indemnitee deems appropriate in his sole discretion. Following such a
written application for indemnification by Indemnitee, Indemnitee's entitlement
to indemnification shall be determined according to Section 12(a) of this
Agreement.
12. Procedure Upon Application for Indemnification.
(a) A determination, if required by applicable law, with respect to
Indemnitee's entitlement to indemnification shall be made in the specific case
by one of the following methods, which shall be at the election of Indemnitee:
(i) by a majority vote of the Disinterested Directors, even though less than a
quorum of the Board or (ii) by Independent Counsel in a written opinion to the
Board, a copy of which shall be delivered to Indemnitee. If it is determined
that Indemnitee is entitled to indemnification, payment to Indemnitee shall be
made within ten (10) days after such determination. Indemnitee shall reasonably
cooperate with the person, persons or entity making such determination with
respect to Indemnitee's entitlement to indemnification, including providing to
such person, persons or entity upon reasonable advance request any documentation
or information which is not privileged or otherwise protected from disclosure
and which is reasonably available to Indemnitee and reasonably necessary to such
determination. Any 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.
(b) In the event the determination of entitlement to indemnification
is to be made by Independent Counsel pursuant to Section 12(a) hereof, the
Independent Counsel shall be selected as provided in this Section 12(b). The
Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall
request that such selection be made by the Board), and Indemnitee shall give
written notice to the Company advising it of the identity of the Independent
Counsel so selected and certifying that the Independent Counsel so selected
meets the requirements of "Independent Counsel" as defined in Section 2 of this
Agreement. If the Independent Counsel is selected by the Board, the Company
shall give written notice to Indemnitee advising him of the identity of the
Independent Counsel so selected and certifying that the Independent Counsel so
selected meets the requirements of "Independent Counsel" as defined in Section 2
of this Agreement. In either event, Indemnitee or the Company, as the case may
be, may, within 10 days after such written notice of selection shall have been
received, deliver to the Company or to Indemnitee, as the case may be, a written
objection to such selection; provided, however, that such objection may be
asserted only on the ground that the Independent Counsel so selected does not
meet the requirements of "Independent Counsel" as defined in Section 2 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 such written objection is so made
and substantiated, the Independent Counsel so selected may not serve as
Independent Counsel unless and until such objection is withdrawn or a court of
competent jurisdiction 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 11(a) hereof, no Independent Counsel shall
have been selected and not objected to, either the Company or Indemnitee may
petition the Delaware Court (as defined below) for resolution of any objection
which shall have been made by the Company or Indemnitee to the other's selection
of Independent Counsel and/or for the appointment as Independent Counsel of a
person selected by the Delaware Court, and the person with respect to whom all
objections are so resolved or the person so appointed shall act as Independent
Counsel under Section 12(a) hereof. Upon the due commencement of any judicial
proceeding or arbitration pursuant to Section 14(a) of this Agreement,
Independent Counsel shall be discharged and relieved of any further
responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).
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(c) The Company agrees to pay the reasonable fees and expenses of
Independent Counsel and to fully indemnify and hold harmless such Independent
Counsel against any and all Expenses, claims, liabilities and damages arising
out of or relating to this Agreement or its engagement pursuant hereto.
13. Presumptions and Effect of Certain Proceedings.
(a) 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 if Indemnitee has submitted a request for indemnification in
accordance with Section 11(b) of this Agreement, and the Company shall have the
burden of proof to overcome that presumption in connection with the making by
any person, persons or entity of any determination contrary to that presumption.
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.
(b) If the person, persons or entity empowered or selected under
Section 12 of this Agreement to determine whether Indemnitee is entitled to
indemnification shall not have made a determination within thirty (30) days
after receipt by the Company of the request therefor, the requisite
determination of entitlement to indemnification shall be deemed to have been
made and Indemnitee shall be entitled to such indemnification, absent (i) a
misstatement by Indemnitee of a material fact, or an omission of a material fact
necessary to make Indemnitee's statement not materially misleading, in
connection with the request for indemnification, or (ii) a final judicial
determination that any or all such indemnification is expressly prohibited under
applicable law; provided, however, that such 30-day period may be extended for a
reasonable time, not to exceed an additional fifteen (15) days, if the person,
persons or entity making the determination with respect to entitlement to
indemnification in good faith requires such additional time for the obtaining or
evaluating of documentation and/or information relating thereto.
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(c) 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 he 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 his conduct was unlawful.
(d) For purposes of any determination of good faith, 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 by the Enterprise. The provisions of this Section 13(d)
shall not be deemed to be exclusive or to limit in any way the other
circumstances in which Indemnitee may be deemed or found to have met the
applicable standard of conduct set forth in this Agreement.
(e) The knowledge and/or actions, or failure to act, of any other
director, officer, trustee, partner, managing member, fiduciary, agent or
employee of the Enterprise shall not be imputed to Indemnitee for purposes of
determining the right to indemnification under this Agreement.
14. Remedies of Indemnitee.
(a) In the event that (i) a determination is made pursuant to
Section 12 of this Agreement that Indemnitee is not entitled to indemnification
under this Agreement, (ii) advancement of Expenses is not timely made pursuant
to Section 10 of this Agreement, (iii) no determination of entitlement to
indemnification shall have been made pursuant to Section 12(a) of this Agreement
within thirty 30 days after receipt by the Company of the request for
indemnification (but without prejudice to Indemnitee's rights under Section
13(b)), (iv) payment of indemnification is not made pursuant to Section 5, 6, 7
or the last sentence of Section 12(a) of this Agreement within ten (10) days
after receipt by the Company of a written request therefor, (v) a contribution
payment is not made in a timely manner pursuant to Section 8 of this Agreement,
or (vi) payment of indemnification pursuant to Section 3 or 4 of this Agreement
is not made within ten (10) days after a determination has been made that
Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an
adjudication by the Delaware Court (as defined below) with respect to such
Indemnitee's entitlement to such indemnification, contribution or advancement of
Expenses. Alternatively, Indemnitee, at his option, may seek an award in
arbitration to be conducted by a single arbitrator pursuant to the Commercial
Arbitration Rules of the American Arbitration Association. Except as set forth
herein, the provisions of Delaware law (without regard to its conflict of laws
rules) shall apply to any such arbitration. The Company shall not oppose
Indemnitee's right to seek any such adjudication or award in arbitration.
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(b) In the event that a determination shall have been made pursuant
to Section 12(a) of this Agreement that Indemnitee is not entitled to
indemnification, any judicial proceeding or arbitration commenced pursuant to
this Section 14 shall be conducted in all respects as a de novo trial, or
arbitration, on the merits and Indemnitee shall not be prejudiced by reason of
that adverse determination. In any judicial proceeding or arbitration commenced
pursuant to this Section 14, Indemnitee shall be presumed to be entitled to
indemnification under this Agreement and the Company shall have the burden of
proving Indemnitee is not entitled to indemnification or advancement of
Expenses, as the case may be, and the Company may not refer to or introduce into
evidence any determination pursuant to Section 12(a) of this Agreement adverse
to Indemnitee for any purpose. If Indemnitee commences a judicial proceeding or
arbitration pursuant to this Section 14, Indemnitee shall not be required to
reimburse the Company for any advances pursuant to Section 10 until a final
determination is made with respect to Indemnitee's entitlement to
indemnification (as to which all rights of appeal have been exhausted or
lapsed).
(c) If a determination shall have been made pursuant to Section
12(a) of this Agreement that Indemnitee is entitled to indemnification, the
Company shall be bound by such determination in any judicial proceeding or
arbitration commenced pursuant to this Section 14, 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.
(d) The Company shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section 14 that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
that the Company is bound by all the provisions of this Agreement.
(e) The Company shall indemnify and hold harmless Indemnitee to the
fullest extent permitted by law against all Expenses and, if requested by
Indemnitee, shall (within ten (10) days after the Company's receipt of such
written request and to the extent permitted by law) advance such Expenses to
Indemnitee, which are incurred by Indemnitee in connection with any judicial
proceeding or arbitration brought by Indemnitee (i) to enforce his rights
(including by way of equitable relief under Section 19(e)) under, or to recover
damages for breach of, this Agreement or any other indemnification, advancement
or contribution agreement or provision of the Charter or the Company's By-Laws
now or hereafter in effect; or (ii) for recovery of advances under any insurance
policy maintained by any Person for the benefit of Indemnitee, regardless of
whether Indemnitee ultimately is determined to be entitled to such
indemnification, advance, contribution or insurance recovery, as the case may
be.
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(f) Interest shall be paid by the Company to Indemnitee at the legal
rate under Delaware law for amounts which the Company indemnifies or is obliged
to indemnify for the period commencing with the date on which Indemnitee
requests indemnification, contribution, reimbursement or advancement of any
Expenses and ending with the date on which such payment is made to Indemnitee by
the Company.
15. Security. Notwithstanding anything herein to the contrary, 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.
16. Non-exclusivity; Survival of Rights; Insurance; Subrogation.
(a) The rights of indemnification and to receive advancement of
Expenses 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 Charter, the Company's By-Laws, any agreement, a vote of stockholders
or a resolution of directors, or otherwise. No amendment, alteration or repeal
of this Agreement or of any provision hereof shall limit or restrict any right
of Indemnitee under this Agreement in respect of any action taken or omitted by
such Indemnitee in his Corporate Status prior to such amendment, alteration or
repeal. To the extent that a change in Delaware law, whether by statute or
judicial decision, permits greater indemnification or advancement of Expenses
than would be afforded currently under the Charter, the Company's By-Laws or
this Agreement, it is the intent of the parties hereto that Indemnitee shall
enjoy by this Agreement the greater benefits so afforded by such change. No
right or remedy herein conferred is intended to be exclusive of any other right
or remedy, and every other right and remedy shall be cumulative and in addition
to every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other right or remedy.
(b) To the extent that the Company maintains an insurance policy or
policies providing liability insurance for directors, officers, trustees,
partners, managing members, fiduciaries, employees, or agents of the Company or
of any other Enterprise which such person serves at the request of the Company,
Indemnitee shall be covered by such policy or policies in accordance with its or
their terms to the maximum extent of the coverage available for any such
director, officer, trustee, partner, managing member, fiduciary, employee or
agent under such policy or policies. If, at the time the Company receives notice
from any source of a Proceeding as to which Indemnitee is a party or a
participant (as a witness or otherwise), the Company has director and officer
liability insurance in effect, the Company shall give prompt notice 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.
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(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'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, trustee, partner, managing member, fiduciary, 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
Enterprise.
17. Duration of Agreement. This Agreement shall continue until and
terminate upon the later of: (a) ten (10) years after the date that Indemnitee
shall have ceased to serve as a director or officer of the Company or as a
director, officer, trustee, partner, managing member, fiduciary, employee or
agent of any other corporation, partnership, joint venture, trust, employee
benefit plan or other Enterprise which Indemnitee served at the request of the
Company; or (b) one (1) year after the final termination of any Proceeding
(including any rights of appeal thereto) in respect of which Indemnitee is
granted rights of indemnification or advancement of Expenses hereunder and of
any Proceeding commenced by Indemnitee pursuant to Section 14 of this Agreement
relating thereto (including any rights of appeal of any Section 14 Proceeding);
provided, however, that with respect to Section 17(b), this Agreement shall in
such event terminate only with respect to the Proceeding in question and not
with respect to any other Proceeding.
18. 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, paragraph
or sentence 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
(including, without limitation, each portion of any Section, paragraph or
sentence 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.
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19. Enforcement and Binding Effect.
(a) The Company expressly confirms and agrees that it has entered
into this Agreement and assumed the obligations imposed on it hereby in order to
induce Indemnitee to serve or continue to serve as a director, officer or key
employee of the Company, and the Company acknowledges that Indemnitee is relying
upon this Agreement in serving as a director, officer or key employee of the
Company.
(b) Without limiting any of the rights of Indemnitee under the
Charter or the By-Laws of the Company as they may be amended from time to time,
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.
(c) The indemnification and advancement of expenses provided by, or
granted pursuant to this Agreement shall be binding upon and be enforceable by
the parties hereto and their respective successors and assigns (including any
direct or indirect successor by purchase, merger, consolidation or otherwise to
all or substantially all of the business or assets of the Company), shall
continue as to an Indemnitee who has ceased to be a director, officer, employee
or agent of the Company or of any other Enterprise at the Company's request, and
shall inure to the benefit of Indemnitee and his spouse, assigns, heirs,
devisees, executors and administrators and other legal representatives.
(d) 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. The Company shall not take any action that will
cause it to be unable to comply with its obligations under this Agreement.
(e) The Company and Indemnitee agree herein that a monetary remedy
for breach of this Agreement, at some later date, may be inadequate,
impracticable and difficult of proof, and further agree that such breach may
cause Indemnitee irreparable harm. Accordingly, the parties hereto agree that
Indemnitee may enforce this Agreement by seeking injunctive relief and/or
specific performance hereof, without any necessity of showing actual damage or
irreparable harm and that by seeking injunctive relief and/or specific
performance, Indemnitee shall not be precluded from seeking or obtaining any
other relief to which he may be entitled. The Company and Indemnitee further
agree that Indemnitee shall be entitled to such specific performance and
injunctive relief, including temporary restraining orders, preliminary
injunctions and permanent injunctions, without the necessity of posting bonds or
other undertaking in connection therewith. The Company acknowledges that in the
absence of a waiver, a bond or undertaking may be required of Indemnitee by the
Court, and the Company hereby waives any such requirement of such a bond or
undertaking.
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20. Modification and Waiver. No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by 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 of this Agreement nor shall
any waiver constitute a continuing waiver.
21. Notices. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given (a) if delivered by hand and receipted for by the party to whom said
notice or other communication shall have been directed, or (b) mailed by
certified or registered mail with postage prepaid, on the third business day
after the date on which it is so mailed:
(a) If to Indemnitee, at the address indicated on the signature page
of this Agreement, or such other address as Indemnitee shall provide in writing
to the Company.
(b) If to the Company to:
Xxxxxxxx.xxx, Inc.
000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
or to any other address as may have been furnished to Indemnitee in writing by
the Company.
22. Applicable 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 laws rules. Except with respect to any arbitration commenced
by Indemnitee pursuant to Section 14(a) of this Agreement, 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 a resident of the State of Delaware, irrevocably National Registered Agents,
Inc. 0 X. Xxxxxxxxxx Xx., Xxxxx, Xxxxxxxx 00000 as its agent in the State of
Delaware 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, or is subject (in whole or in part) to a jury
trial.
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23. Identical Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall for all purposes be deemed to be an
original but all of which together shall constitute one and the same Agreement.
Only one such counterpart signed by the party against whom enforceability is
sought needs to be produced to evidence the existence of this Agreement.
24. Miscellaneous. Use of the masculine pronoun shall be deemed to
include usage of the feminine pronoun where appropriate. 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.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
as of the day and year first above written.
XXXXXXXX.XXX, INC. INDEMNITEE
By: By:
-------------------------- -----------------------------
Name: Name:
Title: Address:
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