INDEMNIFICATION AGREEMENT
EXHIBIT
10.3
INDEMNIFICATION
AGREEMENT,
made
and executed this 12th day of October, 2006, by and between NYFIX, Inc., a
Delaware corporation (the “Company”), and Xxxx X. Xxxxx, an individual resident
of the State of New York (the “Indemnitee”).
WHEREAS,
the Company is aware that, in order to induce highly competent persons to serve
the Company as directors or officers or in other capacities, the Company must
provide such persons with adequate protection through insurance and
indemnification against inordinate risks of claims and actions against them
arising out of their service to and activities on behalf of the
Company;
WHEREAS,
the Company recognizes that the increasing difficulty in obtaining directors’
and officers’ liability insurance, the increases in the cost of such insurance
and the general reductions in the coverage of such insurance have increased
the
difficulty of attracting and retaining such persons;
WHEREAS,
the Board of Directors of the Company has determined that it is essential to
the
best interests of the Company’s stockholders that the Company 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 such persons to the fullest extent permitted by
applicable law so that they will continue to serve the Company free from undue
concern that they will not be so indemnified; and
WHEREAS,
the Indemnitee is willing to serve, continue to serve, and take on additional
service for or on behalf of the Company or any of its direct or indirect
subsidiaries on the condition that he/she be so indemnified.
NOW,
THEREFORE, in consideration of the premises and the mutual promises and
covenants contained herein, and for other good and valuable consideration,
the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Indemnitee do hereby agree as follows:
1. Service
by the Indemnitee.
The Indemnitee agrees to serve and/or continue to serve as a director or officer
of the Company faithfully and will discharge his/her duties and responsibilities
to the best of his/her ability so long as the Indemnitee is duly elected or
qualified in accordance with the provisions of the Restated Certificate of
Incorporation (the “Certificate”) and Amended By-laws (the “By-laws”) of the
Company and the General Corporation Law of the State of Delaware, as amended
(the “DGCL”), or until his/her earlier death, resignation or removal. The
Indemnitee may at any time and for any reason resign from such position (subject
to any other contractual obligation or other obligation imposed by operation
by
law), in which event the Company shall have no obligation under this Agreement
to continue the Indemnitee in
any
such
position. Nothing in this Agreement shall confer upon the Indemnitee the right
to continue in the employ of the Company or as a director of the Company or
affect the right of the Company to terminate the Indemnitee’s employment at any
time in the sole discretion of the Company, with or without cause, subject
to
any contract rights of the Indemnitee created or existing otherwise than under
this Agreement.
2. Indemnification.
The Company shall indemnify the Indemnitee against all Expenses (as defined
below), judgments, fines and amounts paid in settlement actually and reasonably
incurred by the Indemnitee, as a result of, arising out of, or based upon,
any
events or actions that have occurred prior to or after the effective date of
the
Indemnitee’s appointment to the Board of Directors, by reason of the fact that
the Indemnitee is or was a director, officer, employee, agent or fiduciary
of
the Company, or any of its direct or indirect subsidiaries, or, at the request
of the Company, as a director, officer, employee, agent or fiduciary of any
other entity, including, but not limited to, another corporation, partnership,
limited liability company, employee benefit plan, joint venture, trust or other
enterprise, or by reason of any act or omission by him/her in such capacity,
as
provided in this Agreement to the fullest extent permitted by the Certificate,
By-laws and DGCL or other applicable law in effect on the date of this Agreement
and to any greater extent that applicable law may in the future from time to
time permit. Without diminishing the scope of the indemnification provided
by
this Section 2, the rights of indemnification of the Indemnitee provided
hereunder shall include, but shall not be limited to, those rights hereinafter
set forth, except that no indemnification shall be paid to the Indemnitee:
(a) on
account of any action, suit or proceeding in which judgment is rendered against
the Indemnitee for disgorgement of profits made from the purchase or sale by
the
Indemnitee of securities of the Company pursuant to the provisions of
Section 16(b) of the Securities Exchange Act of 1934, as amended (the
“Act”), or similar provisions of any federal, state or local statutory
law;
(b) on
account of conduct of the Indemnitee which is finally adjudged by a court of
competent jurisdiction to have been knowingly fraudulent or to constitute
willful misconduct;
(c) in
any
circumstance where such indemnification is expressly prohibited by applicable
law;
(d) with
respect to liability for which payment is actually made to the Indemnitee under
a valid and collectible insurance policy or under a valid and enforceable
indemnity clause, By-law or agreement (other than this Agreement), except in
respect of any liability in excess of payment under such insurance, clause,
By-law or agreement;
(e) if
a
final decision by a court having jurisdiction in the matter shall determine
that
such indemnification is not lawful (and, in this respect, both the Company
and
the Indemnitee have been advised that it is the position of the Securities
and
Exchange Commission that indemnification for liabilities arising under the
federal securities laws is against public policy and is, therefore,
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unenforceable,
and that claims for indemnification should be submitted to the appropriate
court
for adjudication); or
(f) in
connection with any action, suit or proceeding by the Indemnitee against the
Company or any of its direct or indirect subsidiaries or the directors,
officers, employees or other Indemnitees of the Company or any of its direct
or
indirect subsidiaries, (i) unless such indemnification is expressly required
to
be made by law, (ii) unless the proceeding was authorized by the Board of
Directors of the Company, (iii) unless such indemnification is provided by
the Company, in its sole discretion, pursuant to the powers vested in the
Company under applicable law, or (iv) except as provided in Sections 11 and
13 hereof.
3. Actions
or Proceedings Other Than an Action by or in the Right of the
Company.
The Indemnitee shall be entitled to the indemnification rights provided in
this
Section 3 if the Indemnitee was or is a party or witness or is threatened
to be a party or witness to any threatened, pending or completed action, suit
or
proceeding, as a result of, arising out of, or based upon, any events or
actions, whether prior to or after the effective date of the Indemnitee’s
appointment to the Board of Directors, whether civil, criminal, administrative
or investigative in nature, other than an action by or in the right of the
Company, by reason of the fact that the Indemnitee is or was a director,
officer, employee, agent or fiduciary of the Company, or any of its direct
or
indirect subsidiaries, or is or was serving at the request of the Company,
or
any of its direct or indirect subsidiaries, as a director, officer, employee,
agent or fiduciary of any other entity, including, but not limited to, another
corporation, partnership, limited liability company, employee benefit plan,
joint venture, trust or other enterprise, or by reason of any act or omission
by
him/her in such capacity. Pursuant to this Section 3, the Indemnitee shall
be
indemnified against all Expenses, judgments, penalties (including excise and
similar taxes), fines and amounts paid in settlement which were actually and
reasonably incurred by the Indemnitee in connection with such action, suit
or
proceeding (including, but not limited to, the investigation, defense or appeal
thereof), if the Indemnitee acted in good faith and in a manner the Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his/her conduct was unlawful.
4. Actions
by or in the Right of the Company.
The Indemnitee shall be entitled to the indemnification rights provided in
this
Section 4 if the Indemnitee was or is a party or witness or is threatened to
be
made a party or witness to any threatened, pending or completed action, suit
or
proceeding, as a result of, arising out of, or based upon, any events or actions
that occurred prior to or after the effective date of the Indemnitee’s
appointment to the Board of Directors, brought by or in the right of the Company
to procure a judgment in its favor by reason of the fact that the Indemnitee
is
or was a director, officer, employee, agent or fiduciary of the Company, or
any
of its direct or indirect subsidiaries, or is or was serving at the request
of
the Company, or any of its direct or indirect subsidiaries, as a director,
officer, employee, agent or fiduciary of another entity, including, but not
limited to, another corporation, partnership, limited liability company,
employee benefit plan, joint venture, trust or other enterprise, or by reason
of
any act or omission by him/her in any such capacity. Pursuant to this Section
4,
the Indemnitee shall be indemnified against all Expenses actually and reasonably
incurred by him/her in
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connection
with the defense or settlement of such action, suit or proceeding (including,
but not limited to the investigation, defense or appeal thereof), if the
Indemnitee acted in good faith and in a manner the Indemnitee reasonably
believed to be in or not opposed to the best interests of the Company; provided
however, that no such indemnification shall be made in respect of any claim,
issue, or matter as to which the Indemnitee shall have been adjudged to be
liable to the Company, unless and only to the extent that the Court of Chancery
of the State of Delaware or the court in which such action, suit or proceeding
was brought shall determine upon application that, despite the adjudication
of
liability but in view of all the circumstances of the case, the Indemnitee
is
fairly and reasonably entitled to be indemnified against such Expenses actually
and reasonably incurred by him/her which such court shall deem
proper.
5. Good
Faith Definition.
For purposes of this Agreement, the Indemnitee shall be deemed to have acted
in
good faith and in a manner the Indemnitee reasonably believed to be in or not
opposed to the best interests of the Company, or, with respect to any criminal
action or proceeding to have had no reasonable cause to believe the Indemnitee’s
conduct was unlawful, if such action was based on (i) the records or books
of
the account of the Company or other enterprise, including financial statements;
(ii) information supplied to the Indemnitee by the officers of the Company
or
other enterprise in the course of their duties; (iii) the advice of legal
counsel for the Company or other enterprise; or (iv) information or records
given in reports made to the Company or other enterprise by an independent
certified public accountant or by an appraiser or other expert selected with
reasonable care by the Company or other enterprise.
6. Indemnification
for Expenses of Successful Party.
Notwithstanding the other provisions of this Agreement, to the extent that
the
Indemnitee has served on behalf of the Company, or any of its direct or indirect
subsidiaries, as a witness or other participant in any class action or
proceeding, or has been successful, on the merits or otherwise, in defense
of
any action, suit or proceeding referred to in Section 3 and 4 hereof, or in
defense of any claim, issue or matter therein, including, but not limited to,
the dismissal of any action without prejudice, the Indemnitee shall be
indemnified against all Expenses actually and reasonably incurred by the
Indemnitee in connection therewith, regardless of whether or not the Indemnitee
has met the applicable standards of Section 3 or 4 and without any determination
pursuant to Section 8.
7. Partial
Indemnification.
If the Indemnitee is entitled under any provision of this Agreement to
indemnification by the Company for some or a portion of the Expenses, judgments,
fines and amounts paid in settlement actually and reasonably incurred by the
Indemnitee in connection with the investigation, defense, appeal or settlement
of such suit, action, investigation or proceeding described in Section 3 or
4
hereof, but is not entitled to indemnification for the total amount thereof,
the
Company shall nevertheless indemnify the Indemnitee for the portion of such
Expenses, judgments, penalties, fines and amounts paid in settlement actually
and reasonably incurred by the Indemnitee to which the Indemnitee is
entitled.
8. Procedure
for Determination of Entitlement to Indemnification.
(a) To obtain indemnification under this Agreement, the Indemnitee shall submit
to the Company a written request, including documentation and information which
is reasonably available to the Indemnitee and is reasonably necessary to
determine whether and to what extent the Indemnitee is entitled to
indemnification. The Secretary of the Company shall, promptly upon receipt
of
a
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request
for indemnification, advise the Board of Directors in writing that the
Indemnitee has requested indemnification. Any Expenses incurred by the
Indemnitee in connection with the Indemnitee’s request for indemnification
hereunder shall be borne by the Company. The Company hereby indemnifies and
agrees to hold the Indemnitee harmless for any Expenses incurred by the
Indemnitee under the immediately preceding sentence irrespective of the outcome
of the determination of the Indemnitee’s entitlement to indemnification.
(b) Upon
written request by the Indemnitee for indemnification pursuant to Section 3
or 4
hereof, the entitlement of the Indemnitee to indemnification pursuant to the
terms of this Agreement shall be determined by the following person or persons,
who shall be empowered to make such determination: (i) if a Change in
Control (as hereinafter defined) shall have occurred, by Independent Counsel
(as
hereinafter defined) (unless the Indemnitee shall request in writing that such
determination be made by the Board of Directors (or a committee thereof) in
the
manner provided for in clause (ii) of this Section 8(b)) in a written opinion to
the Board of Directors, a copy of which shall be delivered to the Indemnitee;
or
(ii) if a Change in Control shall not have occurred, (A)(1) by the Board of
Directors of the Company, by a majority vote of Disinterested Directors (as
hereinafter defined) even though less than a quorum, or (2) by a committee
of
Disinterested Directors designated by majority vote of Disinterested Directors,
even though less than a quorum, or (B) if there are no such Disinterested
Directors or, even if there are such Disinterested Directors, if the Board
of
Directors, by the majority vote of Disinterested Directors, so directs, by
Independent Counsel in a written opinion to the Board of Directors, a copy
of
which shall be delivered to the Indemnitee. Such Independent Counsel shall
be
selected by the Board of Directors and approved by the Indemnitee. Upon failure
of the Board of Directors to so select, or upon failure of the Indemnitee to
so
approve, such Independent Counsel shall be selected by the Chancellor of the
State of Delaware or such other person as the Chancellor shall designate to
make
such selection. Such determination of entitlement to indemnification shall
be
made not later than 45 days after receipt by the Company of a written request
for indemnification. If the person making such determination shall determine
that the Indemnitee is entitled to indemnification as to part (but not all)
of
the application for indemnification, such person shall reasonably prorate such
part of indemnification among such claims, issues or matters. If it is so
determined that the Indemnitee is entitled to indemnification, payment to the
Indemnitee shall be made within ten days after such determination.
9. Presumptions
and Effect of Certain Proceedings.
(a)
In
making a determination with respect to entitlement to indemnification, the
Indemnitee shall be presumed to be entitled to indemnification hereunder and
the
Company shall have the burden of proof in the making of any determination
contrary to such presumption.
(b) If
the
Board of Directors, or such other person or persons empowered pursuant to
Section 8 to make the determination of whether the Indemnitee is entitled to
indemnification, shall have failed to make a determination as to entitlement
to
indemnification within 45 days after receipt by the Company of such request,
the
requisite determination of entitlement to indemnification shall be deemed to
have been made and the Indemnitee shall be absolutely entitled to such
indemnification, absent actual and material fraud in the request for
indemnification or a prohibition of indemnification under applicable law. The
termination of any action, suit, investigation or proceeding described in
Section 3 or 4 hereof by judgment, order,
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settlement
or conviction, or upon a plea of nolo
contendere
or its
equivalent, shall not, of itself: (a) create a presumption that the
Indemnitee did not act in good faith and in a manner which he/she reasonably
believed to be in or not opposed to the best interests of the Company, and,
with
respect to any criminal action or proceeding, that the Indemnitee has reasonable
cause to believe that the Indemnitee’s conduct was unlawful; or
(b) otherwise adversely affect the rights of the Indemnitee to
indemnification, except as may be provided herein.
10. Advancement
of Expenses.
All reasonable Expenses actually incurred by the Indemnitee in connection with
any threatened or pending action, suit or proceeding, as a result of, arising
out of, or based upon, any events or actions that occurred prior to or after
the
effective date of the Indemnitee’s appointment to the Board of Directors, shall
be paid by the Company in advance of the final disposition of such action,
suit
or proceeding, if so requested by the Indemnitee, within 20 days after the
receipt by the Company of a statement or statements from the Indemnitee
requesting such advance or advances. The Indemnitee may submit such statements
from time to time. The Indemnitee’s entitlement to such Expenses shall include
those incurred in connection with any proceeding by the Indemnitee seeking
an
adjudication or award in arbitration pursuant to this Agreement. Such statement
or statements shall reasonably evidence the Expenses incurred by the Indemnitee
in connection therewith and shall include or be accompanied by a written
affirmation by the Indemnitee of the Indemnitee’s good faith belief that the
Indemnitee has met the standard of conduct necessary for indemnification under
this Agreement and an undertaking by or on behalf of the Indemnitee to repay
such amount if it is ultimately determined that the Indemnitee is not entitled
to be indemnified against such Expenses by the Company pursuant to this
Agreement or otherwise. Each written undertaking to pay amounts advanced must
be
an unlimited general obligation but need not be secured, and shall be accepted
without reference to financial ability to make repayment.
11. Remedies
of the Indemnitee in Cases of Determination not to Indemnify or to Advance
Expenses.
In the event that a determination is made that the Indemnitee is not entitled
to
indemnification hereunder or if the payment has not been timely made following
a
determination of entitlement to indemnification pursuant to Sections 8 and
9, or if Expenses are not advanced pursuant to Section 10, the Indemnitee
shall be entitled to a final adjudication in an appropriate court of the State
of Delaware or any other court of competent jurisdiction of the Indemnitee’s
entitlement to such indemnification or advance. Alternatively, the Indemnitee
may, at the Indemnitee’s option, seek an award in arbitration to be conducted by
a single arbitrator pursuant to the rules of the American Arbitration
Association, such award to be made within 60 days following the filing of
the demand for arbitration. The Company shall not oppose the Indemnitee’s right
to seek any such adjudication or award in arbitration or any other claim. Such
judicial proceeding or arbitration shall be made de
novo,
and the
Indemnitee shall not be prejudiced by reason of a determination (if so made)
that the Indemnitee is not entitled to indemnification. If a determination
is
made or deemed to have been made pursuant to the terms of Section 8 or
Section 9 hereof that the Indemnitee is entitled to indemnification, the
Company shall be bound by such determination and shall be precluded from
asserting that such determination has not been made or that the procedure by
which such determination was made is not valid, binding and enforceable. The
Company further agrees to stipulate in any such court or before any such
arbitrator that the Company is bound by all the provisions of this Agreement
and
is precluded from making any assertions to the contrary. If the court or
arbitrator shall determine that the Indemnitee is entitled to any
indemnification hereunder, the Company shall pay all
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reasonable
Expenses actually incurred by the Indemnitee in connection with such
adjudication or award in arbitration (including, but not limited to, any
appellate proceedings).
12. Notification
and Defense of Claim.
Promptly after receipt by the Indemnitee of notice of the commencement of any
action, suit or proceeding, the Indemnitee will, if a claim in respect thereof
is to be made against the Company under this Agreement, notify the Company
in
writing of the commencement thereof; but the omission to so notify the Company
will not relieve the Company from any liability that it may have to the
Indemnitee otherwise than under this Agreement or otherwise, except to the
extent that the Company may suffer material prejudice by reason of such failure.
Notwithstanding any other provision of this Agreement, with respect to any
such
action, suit or proceeding as to which the Indemnitee gives notice to the
Company of the commencement thereof:
(a) The
Company will be entitled to participate therein at its own expense.
(b) Except
as
otherwise provided in this Section 12(b), to the extent that it may wish,
the Company, jointly with any other indemnifying party similarly notified,
shall
be entitled to assume the defense thereof with counsel reasonably satisfactory
to the Indemnitee. After notice from the Company to the Indemnitee of its
election to so assume the defense thereof, the Company shall not be liable
to
the Indemnitee under this Agreement for any legal or other Expenses subsequently
incurred by the Indemnitee in connection with the defense thereof other than
reasonable costs of investigation or as otherwise provided below. The Indemnitee
shall have the right to employ the Indemnitee’s own counsel in such action or
lawsuit, but the fees and Expenses of such counsel incurred after notice from
the Company of its assumption of the defense thereof shall be at the expense
of
the Indemnitee unless (i) the employment of counsel by the Indemnitee has
been authorized by the Company, (ii) the Indemnitee shall have reasonably
concluded that there may be a conflict of interest between the Company and
the
Indemnitee in the conduct of the defense of such action and such determination
by the Indemnitee shall be supported by an opinion of counsel, which opinion
shall be reasonably acceptable to the Company, or (iii) the Company shall
not in fact have employed counsel to assume the defense of the action, in each
of which cases the fees and Expenses of counsel shall be at the expense of
the
Company. The Company shall not be entitled to assume the defense of any action,
suit or proceeding brought by or on behalf of the Company or as to which the
Indemnitee shall have reached the conclusion provided for in clause (ii)
above.
(c) The
Company shall not be liable to indemnify the Indemnitee under this Agreement
for
any amounts paid in settlement of any action, suit or proceeding effected
without its written consent, which consent shall not be unreasonably withheld.
The Company shall not be required to obtain the consent of the Indemnitee to
settle any action, suit or proceeding which the Company has undertaken to defend
if the Company assumes full and sole responsibility for such settlement and
such
settlement grants the Indemnitee a complete and unqualified release in respect
of any potential liability.
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(d) If,
at
the time of the receipt of a notice of a claim pursuant to this Section 12,
the
Company has director and officer liability insurance in effect, the Company
shall give prompt notice of the commencement of such proceeding to the insurers
in accordance with the procedures set forth in the respective policies. The
Company shall thereafter take all necessary or desirable action to cause such
insurers to pay, on behalf of the Indemnitee, all amounts payable as a result
of
such proceeding in accordance with the terms of the policies.
13. Other
Right to Indemnification.
The indemnification and advancement of Expenses provided by this Agreement
are
cumulative, and not exclusive, and are in addition to any other rights to which
the Indemnitee may now or in the future be entitled under any provision of
the
By-laws or Certificate of the Company, any vote of stockholders or Disinterested
Directors, any provision of law or otherwise. Except as required by applicable
law, the Company shall not adopt any amendment to its By-laws or Certificate
the
effect of which would be to deny, diminish or encumber the Indemnitee’s right to
indemnification under this Agreement.
14. Director
and Officer Liability Insurance.
The Company shall maintain directors’ and officers’ liability insurance for so
long as the Indemnitee’s services are covered hereunder, provided and to the
extent that such insurance is available on a commercially reasonable basis.
In
the event the Company maintains directors’ and officers’ liability insurance,
the Indemnitee shall be named as an insured in such manner as to provide the
Indemnitee the same rights and benefits as are accorded to the most favorably
insured of the Company’s officers or directors. However, the Company agrees that
the provisions hereof shall remain in effect regardless of whether liability
or
other insurance coverage is at any time obtained or retained by the Company,
except that any payments made to, or on behalf of, the Indemnitee under an
insurance policy shall reduce the obligations of the Company
hereunder.
15. Spousal
Indemnification.
The Company will indemnify the Indemnitee’s spouse to whom the Indemnitee is
legally married at any time the Indemnitee is covered under the indemnification
provided in this Agreement (even if the Indemnitee did not remain married to
him
or her during the entire period of coverage) against any pending or threatened
action, suit, proceeding or investigation for the same period, to the same
extent and subject to the same standards, limitations, obligations and
conditions under which the Indemnitee is provided indemnification herein, if
the
Indemnitee’s spouse (or former spouse) becomes involved in a pending or
threatened action, suit, proceeding or investigation solely by reason of his
or
her status as the Indemnitee’s spouse, including, without limitation, any
pending or threatened action, suit, proceeding or investigation that seeks
damages recoverable from marital community property, jointly-owned property
or
property purported to have been transferred from the Indemnitee to his/her
spouse (or former spouse). The Indemnitee’s spouse or former spouse also may be
entitled to advancement of Expenses to the same extent that the Indemnitee
is
entitled to advancement of Expenses herein. The Company may maintain insurance
to cover its obligation hereunder with respect to the Indemnitee’s spouse (or
former spouse) or set aside assets in a trust or escrow fund for that
purpose.
16. Intent.
This Agreement is intended to be broader than any statutory indemnification
rights applicable in the State of Delaware and shall be in addition to any
other
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rights
the Indemnitee may have under the Company’s Certificate, By-laws, applicable law
or otherwise. To the extent that a change in applicable law (whether by statute
or judicial decision) permits greater indemnification by agreement than would
be
afforded currently under the Company’s Certificate, By-laws, applicable law or
this Agreement, it is the intent of the parties that the Indemnitee enjoy by
this Agreement the greater benefits so afforded by such change. In the event
of
any change in applicable law, statute or rule which narrows the right of a
Delaware corporation to indemnify a member of its Board of Directors or an
officer, employee, agent or fiduciary, such change, to the extent not otherwise
required by such law, statute or rule to be applied to this Agreement, shall
have no effect on this Agreement or the parties’ rights and obligations
hereunder.
17. Attorney’s
Fees and Other Expenses to Enforce Agreement.
In the event that the Indemnitee is subject to or intervenes in any action,
suit
or proceeding in which the validity or enforceability of this Agreement is
at
issue or seeks an adjudication or award in arbitration to enforce the
Indemnitee’s rights under, or to recover damages for breach of, this Agreement
the Indemnitee, if he/she prevails in whole or in part in such action, shall
be
entitled to recover from the Company and shall be indemnified by the Company
against any actual expenses for attorneys’ fees and disbursements reasonably
incurred by the Indemnitee.
18. Effective
Date.
The provisions of this Agreement shall cover claims, actions, suits or
proceedings whether now pending or hereafter commenced and shall be retroactive
to cover acts or omissions or alleged acts or omissions which heretofore have
taken place as a result of, arising out of, or based upon, any events or actions
that have occurred prior to or after the effective date of the Indemnitee’s
appointment to the Board of Directors. The Company shall be liable under this
Agreement, pursuant to Sections 3 and 4 hereof, for all acts of the Indemnitee
while serving as a director and/or officer, notwithstanding the termination
of
the Indemnitee’s service, if such act was performed or omitted to be performed
during the term of the Indemnitee’s service to the Company.
19. Duration
of Agreement.
This Agreement shall survive and continue even though the Indemnitee may have
terminated his/her service as a director, officer, employee, agent or fiduciary
of the Company or as a director, officer, employee, agent or fiduciary of any
other entity, including, but not limited to another corporation, partnership,
limited liability company, employee benefit plan, joint venture, trust or other
enterprise or by reason of any act or omission by the Indemnitee in any such
capacity. This Agreement shall be binding upon the Company and its successors
and assigns, including, without limitation, any corporation or other entity
which may have acquired all or substantially all of the Company’s assets or
business or into which the Company may be consolidated or merged, and shall
inure to the benefit of the Indemnitee and his/her spouse, successors, assigns,
heirs, devisees, executors, administrators or other legal representations.
The
Company shall require any successor or assignee (whether direct or indirect,
by
purchase, merger, consolidation or otherwise) to all or substantially all of
the
business and/or assets of the Company, by written agreement in form and
substance reasonably satisfactory to the Company and the 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
or
assignment had taken place.
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20. Disclosure
of Payments.
Except as expressly required by any Federal or state securities laws or other
Federal or state law, neither party shall disclose any payments under this
Agreement unless prior approval of the other party is obtained.
21. Severability.
If any provision or provisions of this Agreement shall be held invalid, illegal
or unenforceable for any reason whatsoever, (a) the validity, legality and
enforceability of the remaining provisions of this Agreement (including, but
not
limited to, all portions of any Sections of this Agreement containing any such
provision held to be invalid, illegal or unenforceable) shall not in any way
be
affected or impaired thereby and (b) to the fullest extent possible, the
provisions of this Agreement (including, but not limited to, all portions of
any
paragraph of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that are not themselves invalid, illegal or
unenforceable) shall be construed so as to give effect to the intent manifest
by
the provision held invalid, illegal or unenforceable.
22. Counterparts.
This Agreement may be executed by 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 shall be required to be produced
to
evidence the existence of this Agreement.
23. Captions.
The captions and headings used in this Agreement are inserted for convenience
only and shall not be deemed to constitute part of this Agreement or to affect
the construction thereof.
24. Definitions.
For purposes of this Agreement:
(a) “Change
in Control” shall mean a change in control of the Company occurring after the
date hereof of a nature that would be required to be reported in response to
Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar
item on any similar schedule or form) promulgated under the Act, whether or
not
the Company is then subject to such reporting requirement; provided,
however,
that,
without limitation, a Change in Control shall include: (i) the acquisition
(other than from the Company) after the date hereof by any person, entity or
“group” within the meaning of Section 13(d)(3) or 14(d)(2) of the Act
(excluding, for this purpose, the Company or its subsidiaries, any employee
benefit plan of the Company or its subsidiaries which acquires beneficial
ownership of voting securities of the Company, and any qualified institutional
investor who meets the requirements of Rule 13d-1(b)(1) promulgated under
the Act) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Act), of 20% or more of either the then-outstanding shares
of common stock or the combined voting power of the Company’s then-outstanding
capital stock entitled to vote generally in the election of directors; (ii)
individuals who, as of the date hereof, constitute the Board of Directors (the
“Incumbent Board”) ceasing for any reason to constitute at least a majority of
the Board of Directors, provided that any person becoming a director subsequent
to the date hereof whose election, or nomination for election by
the
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Company’s
stockholders was approved by a vote of at least a majority of the directors
then
comprising the Incumbent Board (other than an election or nomination of
an
individual whose initial assumption of office is in connection with an
actual or
threatened election contest relating to the election of the directors of
the
Company) shall be, for purposes of this Agreement, considered as though
such
person were a member of the Incumbent Board; or (iii) approval by the
stockholders of the Company of (A) a reorganization, merger, or consolidation,
in each case, with respect to which persons who were the stockholders of
the
Company immediately prior to such reorganization, merger, or consolidation
do
not, immediately thereafter, own more than 50% of the combined voting power
entitled to vote generally in the election of directors of the reorganized,
merged, consolidated or other surviving corporation’s then-outstanding voting
securities, (B) a liquidation or dissolution of the Company, or (C) the
sale of
all or substantially all of the assets of the Company.
(b) “Disinterested
Director” shall mean a director of the Company who is not or was not a party to
the action, suit, investigation or proceeding in respect of which
indemnification is being sought by the Indemnitee.
(c) “Expenses”
shall include all 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 incurred in connection with prosecuting, defending,
preparing to prosecute or defend, investigating or being or preparing to be
a
witness in any threatened, pending or completed action, suit or proceeding,
as a
result of, arising out of, or based upon, any events or actions that have
occurred prior to or after the effective date of the Indemnitee’s appointment to
the Board of Directors, whether civil, criminal, administrative or investigative
in nature.
(d) “Independent
Counsel” shall mean a law firm or a member of a law firm that neither is
presently nor in the past five years has been retained to represent (i) the
Company or the Indemnitee in any matter material to either such party or (ii)
any other party to the action, suit, investigation or 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 the Indemnitee in an action
to
determine the Indemnitee’s right to indemnification under this
Agreement.
25. Entire
Agreement, Modification and Waiver.
This Agreement constitutes the entire agreement and understanding of the parties
hereto regarding the subject matter hereof, and no supplement, modification
or
amendment of this Agreement shall be binding unless executed in writing by
both
parties hereto. No waiver of any of the provisions of this Agreement shall
be
deemed or shall constitute a waiver of any other provisions hereof (whether
or
not similar) nor shall such waiver constitute a continuing waiver. No
supplement, modification or amendment of this Agreement shall limit or restrict
any right of the Indemnitee under this Agreement in respect
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of
any
act or omission of the Indemnitee prior to the effective date of such
supplement, modification or amendment unless expressly provided
therein.
26. Notices.
All notices, requests, demands or other communications hereunder shall be in
writing and shall be deemed to have been duly given if (i) delivered by hand
with receipt acknowledged by the party to whom said notice or other
communication shall have been directed, (ii) mailed by certified or registered
mail, return receipt requested with postage prepaid, on the date shown on the
return receipt or (iii) delivered by facsimile transmission on the date shown
on
the facsimile machine report:
(a) If
to the
Indemnitee to:
Xxxx
X.
Xxxxx
c/o
Xxxxxxx Xxxxxx LLC
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx,
XX 00000
Facsimile:
(000) 000-0000
(b) If
to the
Company, to:
000
Xxxx
Xxxxxx, 00xx Xxxxx
Xxx
Xxxx,
XX 00000
Attention:
General Counsel
Facsimile:
(000) 000-0000
with
a
copy to:
Xxxxxxxxx
& Xxxxxxx LLP
0000
Xxxxxxxxxxxx Xxxxxx XX
Xxxxxxxxxx,
XX 00000
Attention:
Xxxxxx Xxxx
Facsimile:
(000) 000-0000
or
to
such other address as may be furnished to the Indemnitee by the Company or
to
the Company by the Indemnitee, as the case may be.
27. Governing
Law.
The parties hereto agree that this Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of Delaware, applied
without giving effect to any conflicts-of-law principles.
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the day
and
year first above written.
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By
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/s/ Xxxxxx X. Xxxxxxxxx | |
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Name:
Xxxxxx X. Xxxxxxxxx
Title:
Chief Financial Officer
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INDEMNITEE:
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By
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/s/ Xxxx X. Xxxxx | |
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Name:
Xxxx X. Xxxxx
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