EXHIBIT 10.16
INDEMNITY AGREEMENT
THIS AGREEMENT is made and entered into this ____ day of _____, 2001
and effective as of April 12, 2001, by and between Openwave Systems Inc., a
Delaware corporation and its subsidiaries (collectively, the "Corporation"), and
_________________ ("Agent").
RECITALS
WHEREAS, Agent performs a valuable service to the Corporation in
his/her capacity as a director, officer or other fiduciary of an affiliate of
the Corporation;
WHEREAS, the current By-laws and Amended and Restated Certificate of
Incorporation (collectively, the "Charter Documents") require the Corporation to
indemnify and advance expenses to its directors and officers to the full extent
permitted by the Delaware General Corporation Law, as amended (as applicable,
the "Code") and the Agent intends to continue serving as a director or officer
of the Corporation in part in reliance on such Charter Documents and Code;
WHEREAS, the Charter Documents and the Code, by their non-exclusive
nature, permit contracts between the Corporation and its agents, officers,
employees and other agents with respect to indemnification of such persons; and
WHEREAS, in order to induce Agent to continue to serve the
Corporation, the Corporation has determined and agreed to enter into this
Agreement with Agent;
NOW, THEREFORE, in consideration of Agent's continued service to the
Corporation, the parties hereto agree as follows:
AGREEMENT
1. SERVICES TO THE CORPORATION. Agent will serve, at the will of the
Corporation or under separate contract, if any such contract exists, as a
director, officer or other fiduciary of an affiliate of the Corporation
(including any employee benefit plan of the Corporation) faithfully and to the
best of his ability so long as he is duly elected and qualified in accordance
with the provisions of the Charter Documents or the charter documents of such
affiliate; provided, however, that Agent may at any time and for any reason
resign from such position (subject to any contractual obligation that Agent may
have assumed apart from this Agreement) and that the Corporation or any
affiliate shall have no obligation under this Agreement to continue Agent in any
such position.
2. INDEMNITY OF AGENT.
(a) The Corporation hereby agrees to hold harmless and indemnify Agent
to the fullest extent authorized or permitted by the provisions of the
Charter Documents and the Code, as the same may be amended from time
to time (but, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than the Charter
Documents or the Code permitted prior to adoption of such amendment).
(b) Notwithstanding the foregoing, (i) the obligations of the
Corporation under Section 2(a) shall be subject to the condition that
the Reviewing Party (as defined below) shall not have determined (in a
written opinion, in any case in which the Independent Legal Counsel
referred to in Section 11(a) hereof is involved) that Agent would not
be permitted to be indemnified under applicable law, and (ii) the
obligation of the Corporation to make an advance pursuant to Section 8
shall be subject to the condition that, if, when and to the extent
that the Reviewing Party determines that Agent would not be permitted
to be so indemnified under applicable law, the Corporation shall be
entitled to be reimbursed by Agent (who hereby agrees to reimburse the
Corporation) for all such amounts theretofore paid; provided, however,
that if Agent has commenced or thereafter commences legal proceedings
in a court of competent jurisdiction to secure a determination that
Agent should be indemnified under applicable law, any determination
made by the Reviewing Party that Agent would not be permitted to be
indemnified under applicable law shall not be binding and Agent shall
not be required to reimburse the Corporation for any advance until a
final judicial determination is made with respect thereto (as to which
all rights of appeal therefrom have been exhausted or lapsed). If
there has not been a Change in Control (as defined below), the
Reviewing Party shall be selected by the Board of Directors, and if
there has been such a Change in Control (other than a Change in
Control which has been approved by a majority of the Corporation's
Board of Directors who were directors immediately prior to such Change
in Control), the Reviewing Party shall be the Independent Legal
Counsel referred to in Section 11(a) hereof. If there has been no
determination by the Reviewing Party or if the Reviewing Party
determines that Agent substantively would not be permitted to be
indemnified in whole or in part under applicable law, Agent shall have
the right to commence litigation in any court in the State of Delaware
having subject matter jurisdiction thereof and in which venue is
proper seeking an initial determination by the court or challenging
any such determination by the Reviewing Party or any aspect thereof,
including the legal or factual bases therefor, and the Corporation
hereby consents to service of process and to appear in any such
proceeding. Any determination by the Reviewing Party otherwise shall
be conclusive and binding on the Corporation and Agent.
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"Reviewing Party" shall mean any appropriate person or body consisting
of a member or members of the Corporation's Board of Directors or any
other person or body appointed by the Board who is not a party to the
particular claim for which Agent is seeking indemnification, or
Independent Legal Counsel.
3. ADDITIONAL INDEMNITY. In addition to and not in limitation of the
indemnification otherwise provided for herein, and subject only to the
exclusions set forth in Sections 4 and 7 hereof, the Corporation hereby further
agrees to hold harmless and indemnify Agent:
(a) against any and all expenses (including attorneys' fees), witness
fees, damages, judgments, fines and amounts paid in settlement and any
other amounts that Agent becomes legally obligated to pay because of
any claim or claims made against or by him in connection with any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, arbitrational, administrative or investigative
(including an action by or in the right of the Corporation) to which
Agent is, was or at any time becomes a party, or is threatened to be
made a party, by reason of the fact that Agent is, was or at any time
becomes a director, officer, employee or other agent of Corporation,
or is or was serving or at any time serves at the request of the
Corporation as a director, officer, employee or other agent of another
corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise; and
(b) otherwise to the fullest extent as may be provided to Agent by the
Corporation under the non-exclusivity provisions of the Code and the
Charter Documents.
4. LIMITATIONS ON ADDITIONAL INDEMNITY. No indemnity pursuant to
Section 3 hereof shall be paid by the Corporation:
(a) on account of any claim against Agent for an accounting of profits
made from the purchase or sale by Agent of securities of the
Corporation pursuant to the provisions of Section 16(b) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
amendments thereto or similar provisions of any federal, state or
local statutory law;
(b) on account of Agent's conduct that was knowingly fraudulent or
deliberately dishonest or that constituted willful misconduct;
(c) on account of Agent's conduct that constituted a breach of Agent's
duty of loyalty to the Corporation or resulted in any personal profit
or advantage to which Agent was not legally entitled;
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(d) for which payment is actually made to Agent under a valid and
collectible insurance policy or under a valid and enforceable
indemnity clause, bylaw or agreement, except in respect of any excess
beyond payment under such insurance, clause, bylaw or agreement;
(e) if indemnification is not lawful (and, in this respect, both the
Corporation and Agent have been advised that the Securities and
Exchange Commission believes that indemnification for liabilities
arising under the federal securities laws is against public policy and
is, therefore, unenforceable and that claims for indemnification
should be submitted to appropriate courts for adjudication); or
(f) in connection with any proceeding (or part thereof) initiated by
Agent, or any proceeding by Agent against the Corporation or its
directors, officers, employees or other agents, unless (i) such
indemnification is expressly required to be made by law, (ii) the
proceeding was authorized by the Board of Directors of the
Corporation, (iii) such indemnification is provided by the
Corporation, in its sole discretion, pursuant to the powers vested in
the Corporation under the Code, or (iv) the proceeding is initiated
pursuant to Section 9 hereof.
5. CONTINUATION OF INDEMNITY. All agreements and obligations of the
Corporation contained herein shall continue during the period Agent is a
director, officer, employee or other agent of the Corporation (or is or was
serving at the request of the Corporation as a director, officer, employee or
other agent of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise) and shall continue thereafter so long as Agent
shall be subject to any possible claim or threatened, pending or completed
action, suit or proceeding, whether civil, criminal, arbitrational,
administrative or investigative, by reason of the fact that Agent was serving in
the capacity referred to herein.
6. PARTIAL INDEMNIFICATION. Agent shall be entitled under this
Agreement to indemnification by the Corporation for a portion of the expenses
(including attorneys' fees), witness fees, damages, judgments, fines and amounts
paid in settlement and any other amounts that Agent becomes legally obligated to
pay in connection with any action, suit or proceeding referred to in Section 3
hereof even if not entitled hereunder to indemnification for the total amount
thereof, and the Corporation shall indemnify Agent for the portion thereof to
which Agent is entitled.
7. NOTIFICATION AND DEFENSE OF CLAIM. Not later than thirty (30)
days after receipt by Agent of notice of the commencement of any action, suit or
proceeding, Agent will, if a claim in respect thereof is to be made against the
Corporation under this Agreement, notify the Corporation of the commencement
thereof; but the omission so to notify the Corporation will not relieve it from
any liability which it may
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have to Agent otherwise than under this Agreement. With respect to any such
action, suit or proceeding as to which Agent notifies the Corporation of the
commencement thereof:
(a) the Corporation will be entitled to participate therein at its own
expense;
(b) except as otherwise provided below, the Corporation may, at its
option and jointly with any other indemnifying party similarly
notified and electing to assume such defense, assume the defense
thereof, with counsel reasonably satisfactory to Agent. After notice
from the Corporation to Agent of its election to assume the defense
thereof, the Corporation will not be liable to Agent under this
Agreement for any legal or other expenses subsequently incurred by
Agent in connection with the defense thereof except for reasonable
costs of investigation or otherwise as provided below. Agent shall
have the right to employ separate counsel in such action, suit or
proceeding but the fees and expenses of such counsel incurred after
notice from the Corporation of its assumption of the defense thereof
shall be at the expense of Agent unless (i) the employment of counsel
by Agent has been authorized by the Corporation, (ii) Agent shall have
reasonably concluded that there may be a conflict of interest between
the Corporation and Agent in the conduct of the defense of such action
or (iii) the Corporation shall not in fact have employed counsel to
assume the defense of such action, in each of which cases the fees and
expenses of Agent's separate counsel shall be at the expense of the
Corporation. The Corporation shall not be entitled to assume the
defense of any action, suit or proceeding brought by or on behalf of
the Corporation or as to which Agent shall have made the conclusion
provided for in clause (ii) above; and
(c) the Corporation shall not be liable to indemnify Agent under this
Agreement for any amounts paid in settlement of any action or claim
effected without its written consent, which shall not be unreasonably
withheld. The Corporation shall be permitted to settle any action
except that it shall not settle any action or claim in any manner
which would impose any penalty or limitation on Agent without Agent's
written consent, which may be given or withheld in Agent's sole
discretion.
8. EXPENSES. The Corporation shall advance, prior to the final
disposition of any proceeding, promptly following request therefor, all expenses
incurred by Agent in connection with such proceeding upon receipt of an
undertaking by or on behalf of Agent to repay said amounts if it shall be
determined ultimately that Agent is not entitled to be indemnified under the
provisions of this Agreement, the Charter Documents, the Code or otherwise.
9. ENFORCEMENT. Any right to indemnification or advances granted by
this Agreement to Agent shall be enforceable by or on behalf of Agent in any
court of competent jurisdiction if (i) the claim for indemnification or advances
is denied, in
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whole or in part, or (ii) no disposition of such claim is made within twenty
(20) days of request therefor. Agent, in such enforcement action, if successful
in whole or in part, shall be entitled to be paid also the expense of
prosecuting his claim. It shall be a defense to any action for which a claim for
indemnification is made under Section 3 hereof (other than an action brought to
enforce a claim for expenses pursuant to Section 8 hereof, provided that the
required undertaking has been tendered to the Corporation) that Agent is not
entitled to indemnification because of the limitations set forth in Section 4
hereof. Neither the failure of the Corporation (including its Board of Directors
or its shareholders) to have made a determination prior to the commencement of
such enforcement action that indemnification of Agent is proper in the
circumstances, nor an actual determination by the Corporation (including its
Board of Directors or its shareholders) that such indemnification is improper
shall be a defense to the action or create a presumption that Agent is not
entitled to indemnification under this Agreement or otherwise.
10. SUBROGATION. In the event of payment under this Agreement, the
Corporation shall be surrogated to the extent of such payment to all of the
rights of recovery of Agent, who shall execute all documents required and shall
do all acts that may be necessary to secure such rights and to enable the
Corporation effectively to bring suit to enforce such rights.
11. CHANGE IN CONTROL AND ESTABLISHMENT OF TRUST.
(a) The Corporation agrees that if there is a Change in Control (as
defined below) of the Corporation (other than a Change in Control
which has been approved by a majority of the Corporation's Board of
Directors who were directors immediately prior to such Change in
Control) then with respect to all matters thereafter arising
concerning the rights of Agent to indemnity payments and advances
under this Agreement or any other agreement or Corporation By-law now
or hereafter in effect relating to claims, the Corporation shall seek
legal advice only from Independent Legal Counsel (as defined below)
selected by Agent and approved by the Corporation (which approval
shall not be unreasonably withheld). Such counsel, among other
things, shall render its written opinion to the Corporation and Agent
as to whether and to what extent the Agent would be permitted to be
indemnified under applicable law. The Corporation agrees to pay the
reasonable fees of the Independent Legal Counsel referred to above and
to indemnify fully such counsel against any and all expenses
(including attorneys' fees), claims, liabilities and damages arising
out of or relating to this Agreement or its engagement pursuant
hereto. Change in Control shall be deemed to have occurred if (i) any
"person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act), other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Corporation or a
corporation owned directly or indirectly by the stockholders of the
Corporation in substantially the same proportions as their ownership
of stock of the Corporation, is or becomes the "beneficial
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owner" (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of the Corporation representing 20% or more
of the total voting power represented by the Corporation's then
outstanding securities of the Corporation that generally vote in the
election of directors, or (ii) during any period of two consecutive
years, individuals who at the beginning of such period constitute the
Board of Directors of the Corporation and any new director whose
election by the Board of Directors or nomination for election by the
Corporation's stockholders was approved by a vote of at least two-
thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or
nomination for election was previously so approved (collectively, the
"Incumbent Directors"), cease for any reason to constitute a majority
thereof, or (iii) the stockholders of the Corporation approve a merger
or consolidation of the Corporation with any other corporation, other
than a merger or consolidation which would result in the securities of
the Corporation that generally vote in the election of directors of
the Corporation outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
such types of securities of the surviving entity) at least 80% of the
total voting power represented by the such types of securities of the
Corporation or such surviving entity outstanding immediately after
such merger or consolidation, or the stockholders of the Corporation
approve a plan of complete liquidation of the Corporation or an
agreement for the sale or disposition by the Corporation of (in one
transaction or a series of transactions) all or substantially all the
Corporation's assets. "Independent Legal Counsel" shall mean an
attorney or firm of attorneys, selected in accordance with the
provisions of this section, who shall not have otherwise performed
services for the Corporation or Agent within the last five years
(other than with respect to matters concerning the rights of Agent
under this Agreement, or of other indemnitees under similar indemnity
agreements).
(b) In the event of a Potential Change in Control (as defined below),
the Corporation shall, upon written request by Agent, create a trust
for the benefit of Agent and from time to time upon written request of
Agent shall fund such trust in an amount sufficient to satisfy any and
all expenses reasonably anticipated at the time of each such request
to be incurred in connection with investigating, preparing for and
defending any claim, and any and all judgments, fines, penalties and
settlement amounts of any and all claims from time to time actually
paid or claimed, reasonably anticipated or proposed to be paid,
provided that in no event shall more than $500,000 be required to be
deposited in any trust created hereunder in excess of amounts
deposited in respect of reasonably anticipated expenses, and provided
further that in no event shall more than $25,000,000 in the aggregate
be required to be deposited in any such trust and any such trusts
created pursuant to similar indemnification agreements to which the
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Company is a party. The amount or amounts to be deposited in the
trust pursuant to the foregoing funding obligation shall be determined
by the Reviewing Party, in any case in which the Independent Legal
Counsel referred to above is involved. The terms of the trust shall
provide that upon a Change in Control (i) the trust shall not be
revoked or the principal thereof invaded, without the written consent
of the Agent, (ii) the trustee shall advance, within two business days
of a request by the Agent, any and all expenses to the Agent (and the
Agent hereby agrees to reimburse the trust under the circumstances
under which the Agent would be required to reimburse the Corporation
under Section 2(b) of this Agreement), (iii) the trust shall continue
to be funded by the Corporation in accordance with the funding
obligation set forth above, (iv) the trustee shall promptly pay to
Agent all amounts for which Agent shall be entitled to indemnification
pursuant to this Agreement or otherwise, and (v) all unexpended funds
in such trust shall revert to the Corporation upon a final
determination by the Reviewing Party or a court of competent
jurisdiction, as the case may be, that Agent has been fully
indemnified under the terms of this Agreement. The trustee shall be
chosen by Agent. Nothing in this Section 11 shall relieve the
Corporation of any of its obligations under this Agreement. Potential
Change in Control shall be deemed to have occurred if (i) the
Corporation enters into an agreement, the consummation of which would
result in the occurrence of a Change in Control; (ii) any person
(including the Corporation) publicly announces an intention to take or
to consider taking actions which if consummated would constitute a
Change in Control; (iii) any person, other than a trustee or other
fiduciary holding securities under an employee benefit plan of the
Corporation or a corporation owned, directly or indirectly, by the
stockholders of the Corporation in substantially the same proportions
as their ownership of stock of the Corporation, who is or becomes the
beneficial owner, directly or indirectly, of securities of the
Corporation representing 9.5% or more of the combined voting power of
the Corporation's then outstanding securities that generally vote in
the election of directors, increases his beneficial ownership of such
securities by five percentage points (5%) or more over the percentage
so owned by such person; or (iv) the Board adopts a resolution to the
effect that, for purposes of this Agreement, a Potential Change in
Control has occurred. Notwithstanding anything to the contrary set
forth herein, in the event of a request by Agent to create a trust
under this Section 11(b), the Corporation shall not be obligated to
establish such trust if at least a majority of the Incumbent Directors
in office at that time, and prior to the consummation of a Change in
Control, determine that the creation of such trust would not be in the
best interests of the Corporation.
12. NON-EXCLUSIVITY OF RIGHTS. The rights of Agent hereunder shall
be in addition to any other rights Agent may have under the Corporation's By-
laws or the Code or otherwise. To the extent that a change in the Code (whether
by statute or
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judicial decision) permits greater indemnification by agreement than would be
afforded currently under the Corporation 's By-laws and this Agreement, it is
the intent of the parties hereto that Agent shall enjoy by this Agreement the
greater benefits so afforded by such change.
13. SURVIVAL OF RIGHTS.
(a) The rights conferred on Agent by this Agreement shall continue
after Agent has ceased to be a director, officer, employee or other
agent of the Corporation or to serve at the request of the Corporation
as a director, officer, employee or other agent of another
corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise and shall inure to the benefit of Agent's heirs,
executors and administrators.
(b) The Corporation shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Corporation,
expressly to assume and agree to perform this Agreement in the same
manner and to the same extent that the Corporation would be required
to perform if no such succession had taken place.
14. SEPARABILITY. Each of the provisions of this Agreement is a
separate and distinct agreement and independent of the others, so that if any
provision hereof shall be held to be invalid for any reason, such invalidity or
unenforceability shall not affect the validity or enforceability of the other
provisions hereof. Furthermore, if this Agreement shall be invalidated in its
entirety on any ground, then the Corporation shall nevertheless indemnify Agent
to the fullest extent provided by the Charter Documents, the Code or any other
applicable law.
15. BURDEN OF PROOF. In connection with any determination by the
Reviewing Party or otherwise as to whether Agent is entitled to be indemnified
hereunder the burden of proof shall be on the Corporation to establish that
Agent is not so entitled.
16. PERIOD OF LIMITATIONS. No legal action shall be brought and no
cause of action shall be asserted by or in the right of the Company against
Agent, Agent's spouse, heirs, executors or personal or legal representatives
after the expiration of two years from the date of accrual of such cause of
action, and any claim or cause of action of the Corporation shall be
extinguished and deemed released unless asserted by the timely filing of a legal
action within such two-year period; provided, however, that if any shorter
period of limitations is otherwise applicable to any such cause of action such
shorter period shall govern.
17. ENTIRE AGREEMENT; EFFECTIVENESS. This Agreement contains the
entire agreement of the parties hereto, and supersedes any and all prior
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agreements and understandings, both oral and written, between the parties with
respect to the subject matter hereof.
18. GOVERNING LAW. This Agreement shall be interpreted and enforced
in accordance with the laws of the State of Delaware.
19. AMENDMENT AND TERMINATION. No amendment, modification,
termination or cancellation of this Agreement shall be effective unless in
writing signed by both parties hereto.
20. 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 but one and the same
Agreement.
21. HEADINGS. The headings of the sections of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction hereof.
22. NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given (i)
upon delivery if delivered by hand to the party to whom such communication was
directed, (ii) upon the third business day after the date on which such
communication was mailed if mailed by certified or registered mail with postage
prepaid, (iii) upon the first business day after the date on which such
communication was sent by a nationally recognized overnight delivery service,
with delivery confirmed, or (iv) upon delivery by facsimile, with receipt
confirmed, addressed as follows:
(a) If to Agent, at the address indicated on the signature page
hereof.
(b) If to the Corporation, to
Openwave Systems Inc.
0000 Xxxxxxx Xxxxxxxxx
Xxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Fax: (000) 000-0000
or to such other address as may have been furnished to Agent by the Corporation.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
OPENWAVE SYSTEMS INC.
By:
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Name: Xxxx X. Xxxxx
Title: Senior Vice President, Corporate
Affairs and Chief Financial Officer
AGENT
By:
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Print Name:
-----------------------------
Address:
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--------------------------------
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Fax:
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