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Exhibit 17
FORM OF INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is made as of
, by and between QUARTERDECK CORPORATION, a Delaware corporation (the
"Company"), and ("Indemnitee"), with reference to the following
facts:
A. Indemnitee is currently serving as a director or officer of the
Company.
B. The Company and Indemnitee recognize the substantial increase in
corporate litigation in general, subjecting officers and directors to expensive
litigation risks at the same time as the availability and coverage of liability
insurance has been severely limited.
C. Indemnitee does not regard the current protection available to be
adequate under the present circumstances to protect him or her against the risks
associated with his or her service to the Company and the Company recognizes
that Indemnitee and other officers and directors of the Company may not be
willing to continue to serve as officers or directors without additional
protection.
D. The Company desires to attract and retain the services of highly
qualified individuals, including Indemnitee, to serve as officers and directors
of the Company and thus desires to indemnify its officers and directors to
provide them with the maximum protection permitted by law.
THEREFORE, IN CONSIDERATION OF the foregoing premises, the Company and
Indemnitee hereby agree as follows:
1. Indemnification.
1.1 Third Party Proceedings. The Company shall indemnify Indemnitee
if Indemnitee is or was a party or is threatened to be made a party to any
proceeding (other than an action by or in the right of the Company to procure a
judgment in its favor) by reason of the fact that Indemnitee is or was a
director, officer, employee or other agent of the Company, or any subsidiary of
the Company, and such proceeding relates to any action or inaction on the part
of Indemnitee while an officer, director, employee or agent or by reason of the
fact that Indemnitee 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, against expenses (including, subject to
Section 13 hereof, attorney's fees and any expenses of establishing a right to
indemnification pursuant to this Agreement or under Delaware law), judgments,
fines, settlements (if such settlement is approved in advance by the Company,
which approval shall not be unreasonably withheld) and other amounts actually
and reasonable incurred by Indemnitee in connection with such proceeding if
Indemnitee acted in good faith and in a manner Indemnitee reasonable believed to
be in or not opposed to the best interests of the Company and, in the case of a
criminal proceeding, if Indemnitee had no reasonable cause to believe
Indemnitee's conduct was unlawful. The termination of any proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendere or its
equivalent shall not, of itself, create a presumption that Indemnitee did not
act in good faith and in a manner which Indemnitee reasonably believed to be in
or not opposed to the best interests of the Company, or with respect to any
criminal proceedings, would not create a presumption that Indemnitee had
reasonable cause to believe that Indemnitee's conduct was unlawful.
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1.2 Proceedings By or In the Right of the Company. The Company shall
indemnify Indemnitee if Indemnitee was or is a party or is threatened to be made
a party to any threatened, pending or completed action by or in the right of the
Company or any subsidiary of the Company to procure a judgment in its favor by
reason of the fact that Indemnitee is or was a director, officer, employee or
other agent of the Company, or any subsidiary of the Company, and such action
relates to any action or inaction on the part of Indemnitee while an officer,
director or agent, or by reason of the fact that Indemnitee 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, against
expenses (including, subject to Section 13 hereof, attorneys' fees and any
expenses of establishing a right to indemnification pursuant to this Agreement
or under Delaware law) and amounts paid in settlement, in each case to the
extent actually and reasonably incurred by Indemnitee in connection with the
defense or settlement of the proceeding if Indemnitee acted in good faith and in
a manner Indemnitee believed to be in or not opposed to the best interests of
the Company, except that no indemnification shall be made with respect to any
claim, issue or matter to which Indemnitee shall have been adjudged to have been
liable to the Company in the performance of Indemnitee's duty to the Company,
unless and only to the extent that the court in which such proceeding is or was
pending shall determine upon application that, in view of all the circumstances
of the case, Indemnitee is fairly and reasonably entitled to indemnity for
expenses and then only to the extent that the court shall determine.
1.3 Successful Defense on Merits. To the extent that Indemnitee has
been successful on the merits in defense of any proceeding referred to in
Section 1.1 or 1.2 above, or in defense of any claim, issue or matter therein,
the Company shall indemnify Indemnitee against expenses (including attorneys'
fees) actually and reasonably incurred by Indemnitee in connection therewith.
1.4 Certain Terms Defined. For purposes of this Agreement, references
to "other enterprises" shall include employee benefit plans, references to
"fines" shall include any excise taxes assessed on Indemnitee with respect to an
employee benefit plan and references to "proceeding" shall include any
threatened, pending or completed action or proceeding, whether civil, criminal,
administrative or investigative. For purposes of this Agreement, references to
the "Company" shall include, in addition to the resulting corporation, any
constituent corporation (including any constituent of a constituent) absorbed in
a consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, and employees
or agents, so that if Indemnitee is or was a director, officer, employee or
agent of such constituent corporation, or is or was serving at the request of
such constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
Indemnitee shall stand in the same position under the provisions of this
Agreement with respect to the resulting or surviving corporation as Indemnitee
would have with respect to such constituent corporation if its separate
existence had continued.
2. Agreement to serve. Indemnitee agrees to serve or continue to serve as
a director and/or officer of the Company for so long as he or she is duly
elected or appointed or until such time as he or she voluntarily resigns.
Indemnitee agrees to tender written notice to the Company at least 30 days prior
to voluntarily resigning. The terms of any existing employment agreement between
Indemnitee and the Company shall continue in effect but shall be modified or
supplemented by the terms of this Agreement. Nothing contained in this Agreement
is intended to create in Indemnitee any right to continued employment.
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3. Expenses; Indemnification Procedure.
3.1 Advancement of Expenses. The Company shall advance all expenses
incurred by Indemnitee in connection with the investigation, defense, settlement
(excluding amounts actually paid in settlement of any action, suit or
proceeding) or appeal of any civil or criminal action, suit or proceeding
referenced in Section 1.1 or 1.2 hereof. Indemnitee hereby undertakes to repay
such amounts advanced only if, and to the extent that, it shall be determined
ultimately that Indemnitee is not entitled to be indemnified by the Company as
authorized hereby. The advances to be made hereunder shall be paid by the
Company to Indemnitee within twenty (20) days following delivery of a written
request therefor by Indemnitee to the Company.
3.2 Notice of Claim. Indemnitee shall, as a condition precedent to
his right to be indemnified under this Agreement, give the Company notice in
writing as soon as practicable of any claim made against Indemnitee for which
indemnification will or could be sought under this Agreement. Notice to the
Company shall be directed to the President of the Company at the address shown
on the signature page of this Agreement (or such other address as the Company
shall designate in writing to Indemnitee). In addition, Indemnitee shall give
the Company such information and cooperation as it may reasonably require and as
shall be within Indemnitee's power.
3.3 Enforcement Rights. Any indemnification provided for in Section 1
shall be made no later than forty-five (45) days after receipt of the written
request of Indemnitee. If a claim or request under this Agreement, under any
statute, or under any provision of the Company's Bylaws providing for
indemnification, is not paid by the Company, or on its behalf, within forty-five
(45) days after written request for payment thereof has been received by the
Company, Indemnitee may, but need not, at any time thereafter bring suit against
the Company to recover the unpaid amount of the claim or request, and subject to
Section 13, Indemnitee shall also be entitled to be paid for the expenses
(including attorneys' fees) of bringing such action. It shall be a defense to
any such action (other than an action brought to enforce a claim for expenses
incurred in connection with any action, suit or proceeding in advance of its
final disposition) that Indemnitee has not met the standards of conduct which
make it permissible under applicable law for the Company to indemnify Indemnitee
for the amount claimed by the burden for proving such defense shall be on the
Company and Indemnitee shall be entitled to receive interim payments of expenses
pursuant to Section 3.1 unless and until such defense may be finally adjudicated
by court order or judgment for which no further right of appeal exists. The
parties hereto intend that if the Company contests Indemnitee's right to
indemnification, the question of Indemnitee's right to indemnification shall be
a decision for the court and no presumption regarding whether the applicable
standard has been met will arise based on any determination or lack of
determination of such by the Company (including its Board or any subgroup
thereof, independent legal counsel or its stockholders).
3.4 Assumption of Defense. In the event the Company shall be
obligated to pay the expenses of any proceeding against Indemnitee, the Company,
as appropriate, shall be entitled to assume the defense of such proceeding with
counsel approved by Indemnitee, which approval shall not be unreasonably
withheld, upon the delivery to Indemnitee of written notice of its election so
to do. After delivery of such notice, approval of such counsel by Indemnitee and
the retention of such counsel by the Company, the Company will not be liable to
Indemnitee under this Agreement for any fees of counsel subsequently incurred by
Indemnitee with respect to the same proceeding, unless (I) the employment of
counsel by Indemnitee is authorized by
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the Company, (ii) Indemnitee shall have reasonably concluded that there may be a
conflict of interest of such counsel retained by the Company between the Company
and Indemnitee in the conduct of such defense, or (iii) the Company ceases or
terminates the employment of such counsel with respect to the defense of such
proceeding, in any of which events then the fees and expenses of Indemnitee's
counsel shall be at the expense of the Company. At all times Indemnitee shall
have the right to employ other counsel in any such proceeding at Indemnitee's
expense.
3.5 Approval of Expenses. No expenses for which indemnity shall be
sought under this Agreement, other than those in respect of judgments and
verdicts actually rendered, shall be incurred without the prior consent of the
Company, which consent shall not be unreasonably withheld.
3.6 Notice to Insurers. If, at the time of the receipt of a notice of
a claim pursuant to Section 3.2 hereof, the Company has director and officer
liability insurance in effect, the Company shall give prompt notice to 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 the Indemnitee, all amounts payable as a result of such proceeding in
accordance with the terms of such policies.
3.7 Subrogation. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of the Indemnitee, who shall do all things that may be necessary to
secure such rights, including the execution of such documents necessary to
enable the Company effectively to bring suit to enforce such rights.
4. Exceptions. Notwithstanding any other provision herein to the
contrary, the Company shall not be obligated pursuant to the terms of this
Agreement:
4.1 Claims Initiated by Indemnitee. To indemnify or advance expenses
to Indemnitee with respect to proceedings or claims initiated or brought
voluntarily by Indemnitee and not by way of defense, except with respect to
proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other statute or law or as otherwise required under the
Delaware General Corporation Law, but such indemnification or advancement of
expenses may be provided by the Company in specific cases if the Board of
Directors has approved the initiation or bringing of such suit; or
4.2 Lack of Good Faith. To indemnify Indemnitee for any expenses
incurred by Indemnitee with respect to any proceeding instituted by Indemnitee
to enforce or interpret this Agreement, if a court of competent jurisdiction
determines that such proceeding was not made in good faith or was frivolous; or
4.3 Insured Claims. To indemnify Indemnitee for expenses or
liabilities of any type whatsoever (including, but not limited to, judgments,
fines, ERISA excise taxes or penalties, and amounts paid in settlement) which
have been paid directly to Indemnitee by an insurance carrier under a policy of
officers' and directors' liability insurance maintained by the Company; or
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4.4 Claims Under Section 16(b). To indemnify Indemnitee for expenses
and the payment of profits arising from the purchase and sale by Indemnitee of
securities in violation of Section 16(b) of the Securities Exchange Act of 1934,
as amended, or any similar successor statute.
5. Partial Indemnification. If Indemnitee is entitled under any
provisions of this Agreement to indemnification by the Company for some or a
portion of the expenses, judgments, fines or penalties actually or reasonably
incurred by Indemnitee in the investigation, defense, appeal or settlement of
any civil or criminal action, suit or proceeding, but not, however, for the
total amount thereof, the Company shall nevertheless indemnify Indemnitee for
the portion of such expenses, judgments, fines or penalties to which Indemnitee
is entitled.
6. Additional Indemnification Rights; Nonexclusivity.
6.1 Scope. Notwithstanding any other provision of this Agreement, the
Company hereby agrees to indemnify Indemnitee to the fullest extent permitted by
law, including those circumstances in which indemnification would otherwise be
discretionary. In the event of any change in any applicable law, statute or rule
which narrows the rights of a Delaware corporation to indemnify a member of its
Board of Directors or an officer, such changes, 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.
6.2 Non-Exclusivity. Nothing herein shall be deemed to diminish or
otherwise restrict any rights to which Indemnitee may be entitled under the
Company's Restated Bylaws, any agreement, any vote of stockholders or
disinterested directors, or under the laws of the State of Delaware.
7. Mutual Acknowledgement. Both the Company and Indemnitee acknowledge
that in certain instances, Federal laws or applicable public policy may prohibit
the Company from indemnifying its directors and officers under this Agreement or
otherwise. Indemnitee understands and acknowledges that the Company has
undertaken or may be required in the future to undertake with the Securities and
Exchange Commission to submit the question of indemnification to a court in
certain circumstances for a determination of the Company's right under public
policy to indemnify Indemnitee.
8. Officer and Director Liability Insurance. The Company shall, from time
to time, make the good faith determination whether or not it is practicable for
the Company to obtain and maintain a policy or policies of insurance with
reputable insurance companies providing the officers and directors of the
Company with coverage for losses from wrongful acts, or to ensure the Company's
performance of its indemnification obligations under this Agreement. Among other
considerations, the Company will weigh the costs of obtaining such insurance
coverage against the protection afforded by such coverage. Notwithstanding the
foregoing, the Company shall have no obligation to obtain or maintain such
insurance if the Company determines in good faith that such insurance is not
reasonably available, if the premium costs for such insurance are
disproportionate to the amount of coverage provided, if the coverage provided by
such insurance is limited by exclusions so as to provide an insufficient
benefit, or if Indemnitee is covered by similar insurance maintained by a
subsidiary or parent of the Company.
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9. Severability. Nothing in this Agreement is intended to require or
shall be construed as requiring the Company to do or fail to do any act in
violation of applicable law. The Company's inability, pursuant to court order,
to perform its obligations under this Agreement shall not constitute a breach of
this Agreement. If this Agreement or any portion hereof shall be invalidated on
any grounds by any court of competent jurisdiction, than the Company shall
nevertheless indemnify Indemnitee to the fullest extent permitted by any
applicable portion of this Agreement that shall not have been invalidated and
the balance of this Agreement not so invalidated shall be enforceable in
accordance with its terms.
10. Effective Dates. This Agreement shall be effective as of the date set
forth on the first page and may apply to acts or omissions of Indemnitee which
occurred prior to such date as Indemnitee was an officer, director, employee or
other agent of the Company, or any predecessor corporation or constituent
corporation in a merger involving the Company, 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, at the time such act or
omission occurred.
11. Coverage. The provisions of the Agreement shall continue as to
Indemnitee for any action taken or not taken while serving in an indemnified
capacity even though Indemnitee may have ceased to serve in such capacity at the
time of any action, suit or other covered proceeding. This Agreement shall be
binding upon the Company and its successors and assigns and shall inure to the
benefit of Indemnitee and Indemnitee's estate, heirs, legal representatives and
assigns.
12. Notice. All notices, requests, demands and other communication under
this Agreement shall be in writing and shall be deemed duly given (I) if
delivered by hand and receipted for by the addressee, on the date of such
receipt, or (ii) if mailed by domestic certified or registered mail with postage
prepaid, on the third business day after the date postmarked. Addresses for
notice to either party are as shown on the signature page of this Agreement or
as subsequently modified by written notice.
13. Attorneys' Fees. In the event that any action is instituted by
Indemnitee under this Agreement to enforce or interpret any of the terms hereof,
Indemnitee shall be entitled to be paid all court costs and expenses, including
reasonable attorneys' fees, incurred by Indemnitee with respect to such action,
unless as a part of such action, the court of competent jurisdiction determines
that the action was not instituted in good faith or was frivolous. In the event
of an action instituted by or in the name of the Company under this Agreement,
or to enforce or interpret any of the terms of this Agreement, Indemnitee shall
be entitled to be paid all court costs and expenses, including attorneys' fees,
incurred by Indemnitee in defense of such action (including with respect to
Indemnitee's counterclaims and cross-claims made in such action), unless as a
part of such action the court determines that Indemnitee's defenses to such
action were not made in good faith or were frivolous.
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, as applied to contracts
between Delaware residents entered into and to be performed entirely within
Delaware.
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15. Consent to Jurisdiction. The Company and Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of the State of Delaware
for all purposes in connection with any action or proceeding which arises out of
or relates to this Agreement and agree that any action instituted under this
Agreement shall be brought only in the state courts in the State of Delaware.
16. Counterparts. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
QUARTERDECK CORPORATION Address:
00000 Xxxxxxxx Xxx
Xxxxxx xxx Xxx, XX 00000-0000
By:
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Title:
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INDEMNITEE Address:
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Signature
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Print Name
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