EXHIBIT 10
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is made as of __________
____, 2003 by and between Xxxxxxxx Xxxxx. 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 indemnification
against the risks of claims being asserted against them arising out of their
service to and activities on behalf of such corporations; and
WHEREAS, the Board of Directors of the Company (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; and
WHEREAS, the Board has determined that, in order to help attract and
retain qualified individuals as directors and in other capacities, the best
interests of the Company and its stockholders will be served by attempting to
maintain, on an ongoing basis, at the Company's sole expense, insurance to
protect persons serving the Company and its subsidiaries as directors and in
other capacities 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 for many years, 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; and
WHEREAS, the Board has determined that, in order to help attract and
retain qualified individuals as directors and in other capacities, the best
interests of the Company and its stockholders will be served by assuring such
individuals that the Company will indemnify them to the maximum extent
permitted by law; and
WHEREAS, the Amended and Restated Certificate of Incorporation (the
"Certificate of Incorporation") and the By-Laws (the "By-Laws") of the Company
require indemnification of the officers and directors of the Company, and
Indemnitee may also be entitled to indemnification pursuant to the Delaware
General Corporation Law ("DGCL"); and
WHEREAS, the Certificate of Incorporation, 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, officers and other persons with respect to
indemnification and the advancement of defense costs; and
WHEREAS, it therefore is reasonable, prudent and necessary for the
Company contractually to obligate itself to indemnify, and to advance defense
costs 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; and
WHEREAS, this Agreement is a supplement to and in furtherance of the
Certificate of Incorporation, By-Laws and any resolutions adopted pursuant
thereto, and shall not be deemed a substitute therefor, nor shall it be deemed
to diminish or abrogate any rights of Indemnitee thereunder; and
WHEREAS, the Board recognizes that the Indemnitee does not regard the
protection available under the Company's Certificate of Incorporation, the
By-Laws and insurance program as adequate in the present circumstances, and may
not be willing to serve or continue to serve as a director and/or in such other
capacity as the Company may request without adequate protection, and the
Company desires Indemnitee to serve in such capacity; and
WHEREAS, Indemnitee is willing to serve, and continue to serve, and
take on additional service as a member of the Board, an officer or a key
employee on the condition that he or she be indemnified as provided for herein.
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, at the will of the Company, 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 or her resignation.
2. DEFINITIONS. As used in this Agreement:
(a) 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) Any Person (excluding any employee benefit
plan of the Company) is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing fifty percent (50%) or
more of the combined voting power of the Company's outstanding securities then
entitled ordinarily to vote for the election of directors; or
(ii) During any period of two (2) consecutive
years commencing on or after October 4, 2002, the individuals who at the
beginning of such period constitute the Board or any individuals who would be
Continuing Directors (as defined below) cease for any reason to constitute at
least a majority thereof; or
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(iii) The Board shall approve a sale of all or
substantially all of the assets of the Company; or
(iv) The Board shall approve any merger,
consolidation, or like business combination or reorganization of the Company,
the consummation of which would result in the occurrence of any event described
in clause (a) or (b), above.
(b) "Continuing Directors" shall mean the directors of
the Company in office on October 4, 2002 and any successor to any such director
and any additional director who after October 4, 2002 (i) was nominated or
selected by a majority of the Continuing Directors in office at the time of his
or her nomination or selection and (ii) who is not an "affiliate" or
"associate" (as defined in Regulation 12B under the Exchange Act) of any person
who is the beneficial owner, directly or indirectly, of securities representing
ten percent (10%) or more of the combined voting power of the Company's
outstanding securities then entitled ordinarily to vote for the election of
directors.
(c) "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
(d) "Person" shall have the meaning set forth in
Sections 13(d) and 14(d) of the Exchange Act; provided, however, that Person
shall exclude (i) the Company and (ii) any trustee or other fiduciary holding
securities under an employee benefit plan of the Company.
(e) "Beneficial Owner" shall have the meaning given to
such term in Rule 13d-3 issued under the Exchange Act; provided, however, that
Beneficial Owner shall exclude any Person becoming a Beneficial Owner by reason
of the stockholders of the Company approving a merger of the Company with
another entity.
(f) "Corporate Status" shall describe the status of a
person who is or was a director, officer, trustee, partner, 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.
(g) "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.
(h) "Enterprise" shall mean any 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, partner, member, fiduciary, employee
or agent.
(i) "Expenses" shall include all reasonable attorneys'
fees, retainers, court costs, transcript costs, fees of experts, witness fees,
travel expenses, duplicating costs, printing and binding costs, telephone
charges, postage, delivery service fees, and all other disbursements or
expenses of the types and amounts customarily incurred in
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connection with prosecuting, defending, preparing to prosecute or defend,
investigating, being or preparing to be a witness in, or otherwise
participating in, a Proceeding (as defined below). Expenses also shall include
costs incurred in connection with any appeal resulting from any Proceeding (as
defined below), including, without limitation, the premium, security for, and
other costs relating to any 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.
(j) References to "fines" shall include any excise tax
assessed on a person with respect to any employee benefit plan pursuant to
applicable law.
(k) References to "serving at the request of the
Company" shall include any service provided at the request of the Company as a
director, officer, trustee, partner, member, fiduciary, employee or agent of
the Company which imposes duties on, or involves services by, such director,
officer, trustee, partner, member, fiduciary, employee or agent with respect to
an employee benefit plan, its participants or beneficiaries.
(l) Any action taken or omitted to be taken by a person
for a purpose which he or she reasonably believed to be in the interests of the
participants and beneficiaries of an employee benefit plan shall be deemed to
have been taken in "good faith" and for a purpose which is "not opposed to the
best interests of the Company", as such terms are referred to in this Agreement
and used in the DGCL.
(m) 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, criminal, administrative or investigative
nature, including any related appeal, in which Indemnitee was, is or will be
involved as a party or witness or otherwise by reason of the fact that
Indemnitee is or was a director, officer, trustee, partner, member, fiduciary,
employee or agent of the Company, by reason of any action taken or not taken by
him or her while acting as director, officer, trustee, partner, member,
fiduciary, employee or agent of the Company, or by reason of the fact that he
or she is or was serving at the request of the Company as a director, officer,
trustee, partner, 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.
(n) "Independent Counsel" means a law firm, or a member
of a law firm, that is experienced in matters of corporation law and neither
presently is, nor in the past five (5) 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 the Indemnitee under this
Agreement, or 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
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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.
3. INDEMNITY IN THIRD-PARTY PROCEEDINGS. The Company shall
indemnify Indemnitee in accordance with the provisions of this Section 3 if
Indemnitee is made, or is threatened to be made, a party to or a participant in
(as a witness or otherwise) 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 judgments, fines,
penalties, amounts paid in settlement (if such settlement is approved in
writing in advance by the Company, which approval shall not be unreasonably
withheld) (including, without limitation, all interest, assessments and other
charges paid or payable in connection with or in respect of any of the
foregoing) (collectively, "Losses") and Expenses actually and reasonably
incurred by Indemnitee or on his or her behalf in connection with such
Proceeding or any action, discovery event, claim, issue or matter therein or
related thereto, if Indemnitee acted in good faith, for a purpose which he or
she reasonably believed to be in or not opposed to the best interests of the
Company and, in the case of a criminal Proceeding, in addition, had no
reasonable cause to believe that his or her conduct was unlawful.
4. INDEMNITY IN PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY.
The Company shall indemnify Indemnitee in accordance with the provisions of
this Section 4 if Indemnitee is made, or is threatened to be made, a party to
or a participant in (as a witness or otherwise) 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 her or on his or her behalf in connection with
the defense or settlement of such Proceeding or any action, discovery event,
claim, issue or matter therein or related thereto, if Indemnitee acted in good
faith, for a purpose which he or she reasonably believed to be in or not
opposed to the best interests of the Company. No indemnification, however,
shall be made under this Section 4 in respect of any claim, issue or matter as
to which Indemnitee shall have been adjudged to be liable to the Company,
unless and only to the extent that the court in which the Proceeding was
brought or, if no Proceeding was brought in a court, any court of competent
jurisdiction, determines upon application that, in view of all the
circumstances of the case, Indemnitee fairly and reasonably is entitled to
indemnification for such portion of the Expenses as the court deems proper.
5. INDEMNIFICATION FOR EXPENSES WHERE INDEMNITEE IS WHOLLY OR
PARTLY SUCCESSFUL. Notwithstanding and in addition to any other provisions of
this Agreement, to the extent that Indemnitee is a party to a Proceeding and is
successful, on the merits or otherwise, in the defense of any claim, issue or
matter therein, the Company shall indemnify Indemnitee against all Expenses
actually and reasonably incurred by him or her or on his or her behalf in
connection with such successful defense. For the avoidance of doubt, if
Indemnitee is not wholly successful in such Proceeding but is successful, on
the merits or otherwise, as to one or more but less than all claims, issues or
matters in such Proceeding, the Company shall indemnify Indemnitee against all
Expenses actually and reasonably incurred by him or her or on his or her behalf
in connection with each
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successfully resolved claim, issue or matter. For purposes of this Section 5
and, without limitation, the termination of any claim, issue or matter in such
a Proceeding by withdrawal or 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
and in addition to any other provision of this Agreement, to the extent that
Indemnitee is, by reason of his or her Corporate Status, a witness in or
otherwise incurs Expenses in connection with any Proceeding to which Indemnitee
is not a party, he or she shall be indemnified against all Expenses actually
and reasonably incurred by him or her or on his or her behalf in connection
therewith.
7. ADDITIONAL INDEMNIFICATION.
(a) Notwithstanding any limitation in Sections 3, 4, or
5 hereof or in Section 145 of the DGCL, the Company shall indemnify Indemnitee
to the fullest extent permitted by law if Indemnitee is made, or is 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 Losses and
Expenses actually and reasonably incurred by Indemnitee in connection with the
Proceeding. No indemnification 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) For purposes of Sections 7(a), the meaning of the
phrase "to the fullest extent permitted by law" shall include, but not be
limited to:
i. to the fullest extent authorized or
permitted by the then-applicable provisions of the DGCL that authorize or
contemplate indemnification by agreement, or the corresponding provision of any
amendment to or replacement of the DGCL, and
ii. to the fullest extent authorized or
permitted by any amendments to or replacements of the DGCL adopted after the
date of this Agreement that increase the extent to which a corporation may
indemnify its officers and directors.
(c) Indemnitee shall be entitled to the prompt payment
of all Expenses reasonably incurred in enforcing successfully (fully or
partially) this Agreement.
8. EXCLUSIONS. Notwithstanding any provision in this Agreement,
the Company shall not be obligated under this Agreement to make any indemnity
in connection with any claim made against Indemnitee:
(a) for which payment actually has 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 such insurance policy or other indemnity provision; or
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(b) for an accounting of profits made from the purchase
and sale (or sale and purchase) by Indemnitee of securities of the Company
within the meaning of Section 16(b) of the Exchange Act, as amended, or similar
provisions of state blue sky law, state statutory law or common law; or
(c) prior to a Change in Control, in connection with any
Proceeding (or any part of any Proceeding) initiated by Indemnitee, including
any Proceeding (or any part of any Proceeding) initiated by Indemnitee against
the Company (other than any Proceeding referred to in Sections 13(d) or (e)
below or any other Proceeding commenced to recover any Expenses referred to in
Section 7(c) above) or its directors, officers, employees or other indemnitees,
unless (i) the Board authorized the Proceeding (or any part of any Proceeding)
prior to its initiation or (ii) the Company provides the indemnification, in
its sole discretion, pursuant to the powers vested in the Company under
applicable law; or
(d) if the funds at issue were paid pursuant to a
settlement approved by a court and indemnification would be inconsistent with
any condition with respect to indemnification expressly imposed by the court in
approving the settlement.
9. ADVANCES OF EXPENSES; DEFENSE OF CLAIM.
(a) Notwithstanding any provision of this Agreement to
the contrary, the Indemnitee shall be entitled to advances of Expenses incurred
by him or her or on his or her behalf in connection with a Proceeding that
Indemnitee claims is covered by Sections 3 and 4 hereof, prior to a final
determination of eligibility for indemnification and prior to the final
disposition of the Proceeding, upon the execution and delivery to the Company
of an undertaking by or on behalf of the Indemnitee providing that the
Indemnitee will repay such advances to the extent that it ultimately is
determined that Indemnitee is not entitled to be indemnified by the Company.
This Section 9(a) shall not apply to any claim made by Indemnitee for which
indemnity is excluded pursuant to Section 8.
(b) The Company shall advance pursuant to Section 9(a)
the Expenses incurred by Indemnitee in connection with any Proceeding within
thirty (30) days after the receipt by the Company of a written 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 such advances. Advances shall include any and all reasonable Expenses
incurred pursuing an action to enforce such right to receive advances.
(c) The Company will be entitled to participate in the
Proceeding at its own expense.
(d) 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
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on the Indemnitee without the Indemnitee's prior written consent, which consent
shall not be unreasonably withheld.
10. PROCEDURE FOR NOTIFICATION AND APPLICATION FOR
INDEMNIFICATION.
(a) Within sixty (60) days after the actual receipt by
Indemnitee of notice that he or she is a party to or is requested to be a
participant in (as a witness or otherwise) any Proceeding, Indemnitee shall
submit to the Company a written notice identifying the Proceeding. The failure
by the Indemnitee to notify the Company within such 60-day period will not
relieve the Company from any liability which it may have to Indemnitee (i)
otherwise than under this Agreement, and (ii) under this Agreement, provided
that if the Company can establish that such failure to notify the Company in a
timely manner resulted in actual prejudice to the Company, then the Company
will be relieved from liability only to the extent of such actual prejudice.
(b) Indemnitee shall at the time of giving such notice
pursuant to Section 10(a) or thereafter deliver to the Company a written
application for indemnification. Such application may be delivered at such time
as Indemnitee deems appropriate in his or her sole discretion. Following
delivery of such a written application for indemnification by Indemnitee, the
Indemnitee's entitlement to indemnification shall be determined promptly
according to Section 11(a) of this Agreement and the outcome of such
determination shall be reported to Indemnitee in writing within forty-five (45)
days of the submission of such application.
11. PROCEDURE UPON APPLICATION FOR INDEMNIFICATION.
(a) Upon written application by Indemnitee for
indemnification pursuant to Section 10(b) or written statement by Indemnitee
for advances of Expenses pursuant to Section 9(b), a determination with respect
to Indemnitee's entitlement thereto pursuant to the mandatory terms of this
Agreement, pursuant to statute, or pursuant to other sources of right to
indemnity, and pursuant to Section 12 of this Agreement shall be made in the
specific case: (i) by a majority vote of the Disinterested Directors, whether
or not such directors otherwise would constitute a quorum of the Board; (ii) by
a committee of Disinterested Directors designated by a majority vote of such
directors, whether or not such directors would otherwise constitute a quorum of
the Board, (iii) if there are no Disinterested Directors or if so requested by
(x) the Indemnitee in his or her sole discretion or (y) the Disinterested
Directors, by Independent Counsel in a written opinion to the Board, a copy of
which shall be delivered to Indemnitee or (iv) by the stockholders of the
Company. Indemnitee shall reasonably cooperate with the person, persons or
entity making the 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
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hereby indemnifies and agrees to hold Indemnitee harmless from any such costs
and expenses.
(b) If it is determined that Indemnitee is entitled to
indemnification requested by the Indemnitee in a written application submitted
to the Company pursuant to Section 10(b), payment to Indemnitee shall be made
within ten (10) days after such determination. All advances of Expenses
requested in a written statement by Indemnitee pursuant to Section 9(b) prior
to a final determination of eligibility for indemnification shall be paid in
accordance with Section 9.
(c) In the event the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to Section 11(a)
hereof, the Independent Counsel shall be selected as provided in this Section
11(c). If a Change in Control shall not have occurred, the Independent Counsel
shall be selected by the Board, and the Company shall give written notice to
Indemnitee advising him or her of the identity of the Independent Counsel so
selected. If a Change in Control shall have occurred, the Independent Counsel
shall be selected by Indemnitee (unless Indemnitee shall request that such
selection be made by the Board, in which event the preceding sentence shall
apply), and Indemnitee shall give written notice to the Company advising it of
the identity of the Independent Counsel so selected. In either event,
Indemnitee or the Company, as the case may be, may, within ten (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 a written objection is 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.
(d) If, within twenty (20) days after submission by
Indemnitee of a written request for indemnification pursuant to Section 9(b) or
10(b) hereof, no Independent Counsel shall have been selected and not objected
to, either the Company or Indemnitee may petition a court of competent
jurisdiction 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 Court or
by such other person as the Court shall designate, and the person with respect
to whom all objections are so resolved or the person so appointed shall act as
Independent Counsel under Section 11(a) hereof.
(e) The Company agrees to pay the reasonable fees and
expenses of the Independent Counsel and to fully indemnify 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.
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(f) Upon the due commencement of any judicial proceeding
or arbitration pursuant to Section 13(a) of this Agreement, any Independent
Counsel shall be discharged and relieved of any further responsibility in such
capacity (subject to the applicable standards of professional conduct then
prevailing).
12. PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS.
(a) Presumption in Favor of Indemnitee. 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 an application for indemnification in accordance with Section
10(a) of this Agreement, and the Company shall have the burden of proof to
overcome that presumption.
(b) No Presumption Against Indemnitee. 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 nor an actual determination by the Company (including by its
directors or Independent Counsel) that Indemnitee has not met the applicable
standard of conduct for indemnification shall be a defense to the action or
create a presumption that Indemnitee has not met the applicable standard of
conduct.
(c) Sixty Day Period for Determination. If the person,
persons or entity empowered or selected under Section 11 of this Agreement to
determine whether Indemnitee is entitled to indemnification shall not have made
a determination within sixty (60) days after receipt by the Company of an
application therefor, a 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 application for indemnification,
or (ii) a prohibition of such indemnification under applicable law; provided,
however, that such 60-day period may be extended for a reasonable time, not to
exceed an additional thirty (30) days, if the person, persons or entity making
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.
(d) No Presumption from Termination of a Proceeding. 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 of itself adversely affect the right of Indemnitee
to indemnification or create a presumption that Indemnitee did not act in good
faith and for a purpose which he or she 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 or her
conduct was unlawful.
(e) Reliance as Safe Harbor. For purposes of any
determination of good faith, Indemnitee shall be deemed to have acted in good
faith if Indemnitee's action
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or failure to act is based on the records or books of account of the Company or
any Enterprise other than the Company, including financial statements, or on
information supplied to Indemnitee by the officers of the Company or any
Enterprise other than the Company in the course of their duties, or on the
advice of legal counsel for the Company or any Enterprise other than the
Company or on information or records given or reports made to the Company or
any Enterprise other than the Company by an independent certified public
accountant or by an appraiser or other expert selected by the Company or any
Enterprise other than the Company, except if the Indemnitee knew or had reason
to know that such records or books of account of the Company, information
supplied by the officers of the Company, advice of legal counsel or information
or records given or reports made by an independent certified public accountant
or by an appraiser or other expert were materially false or inaccurate. The
provisions of this Section 12(e) shall not be deemed to be exclusive or to
limit in any way the other circumstances in which the Indemnitee may be deemed
or found to have met any applicable standard of conduct.
(f) Actions of Others. The knowledge and/or actions, or
failure to act, of any other director, officer, trustee, partner, member,
fiduciary, employee or agent of the Company or any Enterprise other than the
Company shall not be imputed to Indemnitee for purposes of determining the
right to indemnification under this Agreement.
13. REMEDIES OF INDEMNITEE.
(a) Adjudication/Arbitration. In the event that (i) a
determination is made pursuant to Section 11 of this Agreement that Indemnitee
is not entitled to indemnification under this Agreement, (ii) advancement of
Expenses is not timely made pursuant to Section 9 of this Agreement, (iii)
subject to Section 12(c), no determination of entitlement to indemnification
shall have been made pursuant to Section 11(a) of this Agreement within 60 days
after receipt by the Company of the application for indemnification, or (iv)
payment of indemnification is not made pursuant to Sections 3, 4, 5, 6, 7 and
11(b) of this Agreement within ten (10) days after a determination has been
made that Indemnitee is entitled to indemnification, or after receipt by the
Company of a written request for any additional monies owed with respect to a
Proceeding as to which it already has been determined that Indemnitee is
entitled to indemnification, Indemnitee shall be entitled to an adjudication by
a court of his or her entitlement to such indemnification or advancement of
Expenses. Alternatively, Indemnitee, at his or her 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. The Company shall
not oppose Indemnitee's right to seek any such adjudication or award in
arbitration.
(b) Indemnitee Not Prejudiced by Prior Adverse
Determination. In the event that a determination shall have been made pursuant
to Section 11(a) of this Agreement that Indemnitee is not entitled to
indemnification, any judicial proceeding or arbitration commenced pursuant to
this Section 13 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
the prior adverse determination. In any judicial proceeding or arbitration
11
commenced pursuant to this Section 13, the Company shall have the burden of
proving Indemnitee is not entitled to indemnification or advancement of
Expenses, as the case may be.
(c) Company Bound by Prior Determination. If a
determination shall have been made pursuant to Section 11(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 13, 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 application for indemnification,
or (ii) a prohibition of such indemnification under applicable law.
(d) Expenses. In the event that Indemnitee, pursuant to
this Section 13, seeks a judicial adjudication of or an award in arbitration to
enforce his or her rights under, or to recover damages for breach of, this
Agreement, Indemnitee shall be entitled to recover from the Company, and shall
be indemnified by the Company against, any and all Expenses actually and
reasonably incurred by him or her in such judicial adjudication or arbitration
if it shall be determined in such judicial adjudication or arbitration that
Indemnitee is entitled to receive all or part of the indemnification or
advancement of Expenses sought which the Company had disputed prior to the
commencement of the judicial proceeding or arbitration.
(e) Advances of Expenses. If requested by Indemnitee,
the Company shall (within ten (10) days after receipt by the Company of a
written request therefore) advance to Indemnitee the Expenses which are
incurred by Indemnitee in connection with any judicial proceeding or
arbitration brought by Indemnitee for indemnification or advance of Expenses
from the Company under this Agreement or under any directors' and officers'
liability insurance policies maintained by the Company, if the Indemnitee has
submitted an undertaking to repay such Expenses if Indemnitee ultimately is
determined to not be entitled to such indemnification, advancement of Expenses
or insurance recovery, as the case may be. The Indemnitee's financial ability
to repay any such advances shall not be a basis for the Company to decline to
make such advances.
(f) Precluded Assertions by the Company. The Company
shall be precluded from asserting in any judicial proceeding or arbitration
commenced pursuant to this Section 13 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.
14. NON-EXCLUSIVITY; SURVIVAL OF RIGHTS; INSURANCE; SUBROGATION.
(a) Rights of Indemnitee Not Exclusive. 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 Certificate of
Incorporation, the By-Laws, any agreement, vote of stockholders or a resolution
of directors, or otherwise. No right or remedy herein
12
conferred by this Agreement 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 or subsequent
assertion or employment of any other right or remedy.
(b) Survival of Rights. 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 or her Corporate Status prior to such amendment,
alteration or repeal.
(c) Change of Law. 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 Certificate
of Incorporation, the By-Laws and this Agreement, it is the intent of the
parties hereto that Indemnitee shall enjoy by this Agreement the greater
benefits so afforded by such change.
(d) Insurance. To the extent that the Company maintains an
insurance policy or policies providing liability insurance for directors,
officers, trustees, partners, 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, trustee, partner, member, fiduciary, officer,
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 that covers Indemnitee, 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 the Indemnitee, all amounts payable as a result of such Proceeding in
accordance with the terms of such policies.
(e) Subrogation. 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.
(f) Other Payments. The Company shall not be liable under this
Agreement to make any payment of amounts otherwise indemnifiable (or for which
advancement is provided hereunder) if and to the extent that Indemnitee has
otherwise actually received such payment under any insurance policy, contract,
agreement or otherwise.
(g) Other Indemnification. The Company's obligation to indemnify
or advance Expenses hereunder to Indemnitee who is or was serving at the
request of the
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Company as a director, officer, trustee, partner, 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.
15. 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 any of the following: a director,
officer, agent or employee of the Company or as a director, officer, trustee,
partner, 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 after the expiration
of any rights of appeal) then pending 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 13 of this Agreement
(including any rights of appeal of any Proceeding commenced pursuant to Section
13). This Agreement shall be binding upon the Company and its successors and
assigns and shall inure to the benefit of Indemnitee and his or her heirs,
executors and administrators.
16. SEVERABILITY. If any provision or provisions of this
Agreement shall be held to be invalid, illegal or unenforceable for any reason
whatsoever: (a) the validity, legality and enforceability of the remaining
provisions of this Agreement (including, without limitation, each portion of
any Section of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that is not itself invalid, illegal or unenforceable)
shall not in any way be affected or impaired thereby and shall remain
enforceable to the fullest extent permitted by law; (b) such provision or
provisions shall be deemed reformed to the extent necessary to conform to
applicable law and to give the maximum effect to the intent of the parties
hereto; and (c) to the fullest extent possible, the provisions of this
Agreement (including, without limitation, each portion of any Section of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall be
construed so as to give effect to the intent manifested thereby.
17. ENFORCEMENT.
(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 to continue to serve, as a
director, officer, employee and/or agent of the Company, and the Company
acknowledges that Indemnitee is relying upon this Agreement in serving or
continuing to serve as a director, officer, employee and/or agent of the
Company.
(b) This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings, oral, written and implied,
between the parties hereto with respect to the subject matter hereof.
14
18. MODIFICATION AND WAIVER. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by each
of the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provisions of this
Agreement nor shall any waiver constitute a continuing waiver.
19. SUCCESSORS AND BINDING AGREEMENT.
(a) The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation, reorganization or
otherwise) and any acquiror of all or substantially all of the business or
assets of the Company, by agreement in form and substance reasonably
satisfactory to Indemnitee and/or his or her counsel, expressly to assume and
agree to perform this Agreement in the same manner and to the same extent the
Company would be required to perform it if no such succession had taken place.
(b) This Agreement will be binding upon and inure to the
benefit of the Company and any successor to the Company, including, without
limitation, any person acquiring directly or indirectly all or substantially
all of the business or assets of the Company whether by purchase, merger,
consolidation, reorganization or otherwise (and such successor will thereafter
be deemed the "Company" for purposes of this Agreement), but will not otherwise
be assignable or delegatable by the Company.
(c) This Agreement will inure to the benefit of and be
enforceable by the Indemnitee's personal or legal representatives, executors,
administrators, successors, heirs, distributees, legatees and other successors.
(d) This Agreement is personal in nature and neither of
the parties hereto will, without the consent of the other, assign or delegate
this Agreement or any rights or obligations hereunder except as expressly
provided in Sections 19(a), (b) and (c). Without limiting the generality or
effect of the foregoing, Indemnitee's right to receive payments hereunder will
not be assignable, whether by pledge, creation of a security interest or
otherwise, other than by a transfer by the Indemnitee's will or by the laws of
descent and distribution, and, in the event of any attempted assignment or
transfer contrary to this Section 19(d), the Company will have no liability to
pay any amount so attempted to be assigned or transferred.
20. NOTICES. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given if: (i) delivered by hand and receipted for by the party
to whom said notice or other communication shall have been directed, on the
date of such receipt, or (ii) 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
subsequently shall provide in writing to the Company.
15
(b) If to the Company to:
Xxxxxxxx Xxxxx, Inc.
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: General Counsel
or to any other address as may have been furnished to Indemnitee in writing by
the Company.
21. CONTRIBUTION. To the fullest extent permissible under
applicable law, if the indemnification provided for in this Agreement is
unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of
indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee,
whether for judgments, fines, penalties, excise taxes, amounts paid or to be
paid in settlement and/or for Expenses, in connection with any claim relating
to an indemnifiable event under this Agreement, in such proportion as is deemed
fair and reasonable in light of all of the circumstances of such Proceeding in
order to reflect (i) the relative benefits received by the Company and
Indemnitee as a result of the event(s) and/or transaction(s) giving cause to
such Proceeding; and/or (ii) the relative fault of the Company (and its
directors, officers, employees and agents) and Indemnitee in connection with
such event(s) and/or transaction(s).
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, principles or rules. Except with respect to any
arbitration commenced by Indemnitee pursuant to Section 13 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)
irrevocably appoint, to the extent such party is not a resident of the State of
Delaware, Corporation Service Company; 0000 Xxxxxxxxxxx Xxxx, Xxxxx 000;
Wilmington; New Castle County; Delaware 19808 as its agent in the State of
Delaware as such party's agent for acceptance of legal process in connection
with any such action or proceeding against such party with the same legal force
and validity as if served upon such party personally within the State of
Delaware, (iv) waive any objection to the laying of venue of any such action or
proceeding in the Delaware Court, and (v) waive, and agree not to plead or to
make, any claim that any such action or proceeding brought in the Delaware
Court has been brought in an improper or inconvenient forum.
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
16
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.
[The remainder of this page is intentionally left blank.]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
signed as of the day and year first above written.
XXXXXXXX XXXXX, INC. INDEMNITEE
By:
------------------------------- ---------------------------------------
Name: Name:
Title: Address:
Address for Notices:
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---------------------------------------
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Attention:
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