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EXHIBIT 10.13
INDEMNIFICATION AGREEMENT
BETWEEN
MASIMO CORPORATION
AND
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MASIMO CORPORATION
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (this "AGREEMENT") is made as of
__________, 2000, by and between MASIMO CORPORATION, a Delaware corporation (the
"COMPANY"), and the individual whose name appears below the word "Indemnitee" on
the signature page (the "INDEMNITEE"). In consideration of the services of the
Indemnitee, and to induce the Indemnitee to continue to serve as a director
and/or officer, the Company and the Indemnitee agrees as follows:
R E C I T A L S
A. The Indemnitee has agreed to continue to serve as a director and/or
officer of the Company and in such capacity will render valuable
services to the Company.
B. The Company has concluded that insurance and statutory indemnity
provisions may provide inadequate protection to individuals requested
to serve as its directors and officers.
C. To induce and encourage the Indemnitee to continue to serve as a
director and/or officer of the Company, the Company's Board of
Directors has decided that this Agreement is not only reasonable and
prudent, but necessary, to promote and ensure the best interests of the
Company and its stockholders.
1. DEFINITIONS
As used in this Agreement:
"AGENT" means a director, officer, employee or agent of the Company or of any
other corporation, partnership, joint venture, trust, employee benefit plan, or
other enterprise that the Indemnitee served in any of such capacities at the
request of the Company.
"CHANGE IN CONTROL EVENT" has the meaning set forth in the Company's Second
Amended and Restated 1996 Incentive Stock Option, Nonqualified Stock Option and
Restricted Stock Purchase Plan, as amended.
"EXPENSES" includes, but is not limited to, attorneys' fees, disbursements and
retainers, accounting and witness fees, travel and deposition costs, expenses of
investigations and amounts paid in settlement by or on behalf of the Indemnitee,
and any expenses of establishing a right to indemnification pursuant to this
Agreement, to the extent actually and reasonably incurred by the Indemnitee in
connection with any Proceeding. "EXPENSES" does not include the amount of
judgments, fines, penalties or ERISA excise taxes actually levied against the
Indemnitee.
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"INDEMNIFIED COSTS" means all Expenses, judgments, fines, penalties and ERISA
excise taxes actually and reasonably incurred by the Indemnitee in connection
with the investigation, defense, appeal, or settlement of any Proceeding.
A "POTENTIAL CHANGE IN CONTROL EVENT" will be deemed to have occurred if:
(a) the Company enters into an agreement or arrangement that would
constitute a Change in Control Event if consummated;
(b) any person (including the Company) publicly announces an intention
to take or to consider taking actions that would constitute a Change in
Control Event if consummated;
or
(c) the Board of Directors adopts a resolution to the effect that, for
purposes of this Agreement, a Potential Change in Control Event has
occurred.
"PROCEEDING" means any threatened, pending or completed action, suit or
proceeding (including appeals thereof), whether brought by or in the name of the
Company or otherwise and whether of a civil, criminal or administrative or
investigative nature, in which the Indemnitee is or will be a party at the time
because the Indemnitee is or was an Agent, whether or not the Indemnitee is
serving in such capacity at the time any liability or Expense is incurred for
which indemnification or reimbursement is to be provided under this Agreement.
2. INDEMNIFICATION
2.1 INDEMNIFICATION IN THIRD PARTY ACTIONS. The Company will indemnify the
Indemnitee if the Indemnitee becomes a party to, is threatened to be
made a party to, is a witness or other participant in, or is otherwise
involved in any Proceeding (other than a Proceeding by or in the name
of the Company to procure a judgment in its favor), because the
Indemnitee is or was an Agent, against all Indemnified Costs, to the
fullest extent permitted by applicable law. Any settlement must be
approved in writing by the Company.
2.2 INDEMNIFICATION IN PROCEEDINGS BY OR IN THE NAME OF THE COMPANY. The
Company will indemnify the Indemnitee if the Indemnitee is a party to,
is threatened to be made a party to, is a witness or other participant
in, or is otherwise involved in any Proceeding by or in the name of the
Company to procure a judgment in its favor because the Indemnitee was
or is an Agent of the Company against all Expenses in connection with
the defense or settlement of the Proceeding, to the fullest extent
permitted by applicable law.
2.3 PARTIAL INDEMNIFICATION. If the Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some
or a portion of, but not the total amount of, the Indemnified Costs,
the Company will nevertheless indemnify the Indemnitee for the portion
of the Indemnified Costs to which the Indemnitee is entitled.
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2.4 INDEMNIFICATION HEREUNDER NOT EXCLUSIVE. The indemnification provided
by this Agreement is not exclusive of any other rights to which the
Indemnitee may be entitled under the Company's Certificate of
Incorporation, the Bylaws, any agreement, any vote of stockholders or
disinterested directors, applicable law, or otherwise, both as to
action in the Indemnitee's official capacity and as to action in
another capacity on behalf of the Company.
2.5 INDEMNIFICATION OF INDEMNIFIED COSTS OF SUCCESSFUL PARTY.
Notwithstanding any other provisions of this Agreement, to the extent
that the Indemnitee has been successful in defense of any Proceeding or
in defense of any claim, issue or matter in the Proceeding, on the
merits or otherwise, including, but not limited to, the dismissal of a
Proceeding without prejudice, the Indemnitee will be indemnified
against all Indemnified Costs incurred in connection therewith to the
fullest extent permitted by applicable law.
2.6 INDEMNIFIED COSTS ADVANCED. The Indemnified Costs incurred by the
Indemnitee in any Proceeding will be paid promptly by the Company in
advance of the final disposition of the Proceeding at the written
request of the Indemnitee to the fullest extent permitted by applicable
law. The advances to be made will be paid by the Company to the
Indemnitee within 30 days following delivery of the written request by
Indemnitee to the Company, accompanied by substantiated documentation.
2.7 LIMITATIONS ON INDEMNIFICATION. Notwithstanding anything to the
contrary in this Agreement, the Company is not required to make
payments to:
(a) indemnify or advance Indemnified Costs with respect to
Proceedings initiated or brought voluntarily by the Indemnitee and not
by way of defense, except with respect to Proceedings brought to
establish or enforce a right to indemnification under this Agreement or
any other statute or law or otherwise as required under applicable law;
(b) indemnify the Indemnitee for any Indemnified Costs for
which payment is actually made to the Indemnitee under an insurance
policy, except for any excess beyond the amount of payment under the
policy;
(c) indemnify the Indemnitee for any Indemnified Costs
sustained in any Proceeding for an accounting of profits made from the
purchase or sale by the Indemnitee of securities of the Company
pursuant to Section 16(b) of the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder and
amendments thereto or similar provisions of any federal, state or local
law;
(d) indemnify the Indemnitee for any Indemnified Costs
resulting from Indemnitee's conduct that is finally adjudged by a court
of competent jurisdiction to have been willful misconduct, knowingly
fraudulent or deliberately dishonest; or
(e) indemnify the Indemnitee if a court of competent
jurisdiction finally determines that such payment is unlawful.
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3. PRESUMPTIONS
3.1 PRESUMPTION REGARDING STANDARD OF CONDUCT. The Indemnitee will be
conclusively presumed to have met the relevant standards of conduct as
defined by applicable law for indemnification pursuant to this
Agreement unless a determination that the Indemnitee has not met the
relevant standards is made by (a) the Board of Directors of the Company
by a majority vote of a quorum consisting of directors who are not
parties to the Proceeding, (b) the stockholders of the Company by
majority vote, or (c) in a written opinion by independent legal
counsel, selection of whom has been made by the Company's Board of
Directors and approved by the Indemnitee.
3.2 DETERMINATION OF RIGHT TO INDEMNIFICATION.
3.2.1 BURDEN. If a claim under this Agreement is not paid by the
Company within 30 days of receipt of written notice, the right to
indemnification as provided by this Agreement will be enforceable by
the Indemnitee in any court of competent jurisdiction. The burden of
proving by clear and convincing evidence that indemnification or
advances are not appropriate will be on the Company. Neither the
failure of the directors, stockholders, or independent legal counsel to
have made a determination before the commencement of the action that
indemnification or advances are proper in the circumstances because the
Indemnitee has met the applicable standard of conduct, nor an actual
determination by the directors, stockholders or independent legal
counsel that the Indemnitee has not met the applicable standard of
conduct, will be a defense to the action or create a presumption that
the Indemnitee has not met the applicable standard of conduct.
3.2.2 STANDARD. The Indemnitee's Expenses incurred in connection with
any Proceeding concerning the Indemnitee's right to indemnification or
advances in whole or in part pursuant to this Agreement will also be
indemnified by the Company regardless of the outcome of the Proceeding,
unless a court of competent jurisdiction determines that each of the
material assertions made by the Indemnitee in the Proceeding was not
made in good faith or was frivolous.
4. OTHER AGREEMENTS
4.1 CHANGE IN CONTROL EVENT. If there is a Change in Control Event or a
Potential Change in Control Event of the Company (other than a Change
in Control Event or Potential Change in Control Event that has been
approved by a majority of the Company's Board of Directors who were
directors immediately before the Change in Control Event or Potential
Change in Control Event), then with respect to all matters thereafter
arising concerning the rights of the Indemnitee to be indemnified for
Indemnified Costs, the Company will seek legal advice only from
independent counsel selected by the Indemnitee, and reasonably
satisfactory to the Company, and who has not otherwise performed other
services for the Company or the Indemnitee within the last three years
("SPECIAL INDEPENDENT COUNSEL"). The Special Independent Counsel, among
other
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things, will render its written opinion to the Company and the
Indemnitee as to whether and to what extent the Indemnitee would be
permitted to be indemnified under applicable law or this Agreement. The
Company will pay the reasonable fees and expenses of the Special
Independent Counsel.
4.2 MAINTENANCE OF LIABILITY INSURANCE.
4.2.1 AFFIRMATIVE COVENANT OF THE COMPANY. While the Indemnitee
continues to serve as a director or officer of the Company, and
thereafter while the Indemnitee is subject to any possible Proceeding,
the Company will promptly obtain and maintain in full force and effect
directors' and officers' liability insurance ("D&O INSURANCE") in
reasonable amounts from reputable insurers. The Company has no
obligation, however, to obtain or maintain D&O Insurance if it
determines in good faith that insurance is not reasonably available,
the premium costs for insurance are disproportionate to the amount of
coverage provided, the coverage provided by insurance is so limited by
exclusions that it provides an insufficient benefit, or the Indemnitee
is covered by similar insurance maintained by a subsidiary of the
Company. If at the time it receives a notice a Proceeding has commenced
the Company has D&O Insurance, the Company will give prompt notice of
such commencement to the insurers as required by the respective
policies. The Company will 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.
4.2.2 INDEMNITEE NAMED AS INSURED. In all D&O Insurance policies, the
Indemnitee will be named as an insured in a manner that provides the
Indemnitee the same rights and benefits accorded to the most favorably
insured of the Company's directors and officers.
4.3 AGREEMENT TO SERVE. Indemnitee will serve or continue to serve as an
Agent of the Company for so long as the Indemnitee is duly elected or
appointed or until the Indemnitee voluntarily resigns. Indemnitee will
give notice to the Company at least thirty (30) days before voluntarily
resigning.
4.4 EFFECT OF THIS AGREEMENT ON EMPLOYMENT AGREEMENT. Any present or future
employment agreement between the Indemnitee and the Company is not
modified by this Agreement. Nothing contained in this Agreement creates
in the Indemnitee any right of continued employment.
4.5 NATURE OF RIGHTS; SEPARABILITY. The rights afforded to the Indemnitee
by this Agreement are contract rights and may not be diminished,
eliminated or otherwise affected by amendments to the Company's
Certificate of Incorporation, Bylaws or agreements, including D&O
Insurance policies. Each provision of this Agreement is a separate and
distinct agreement and independent of the others, so that if any
provision of this Agreement is held to be invalid or unenforceable for
any reason, the invalidity or unenforceability will not affect the
validity or enforceability of the other provisions. To the extent
required, any provision of this Agreement may be modified by a court of
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competent jurisdiction to preserve its validity and to provide the
Indemnitee with the broadest possible indemnification permitted under
applicable law.
4.6 SAVINGS CLAUSE. If this Agreement or any portion of it is invalidated
on any ground by any court of competent jurisdiction, then the Company
will nevertheless indemnify the Indemnitee as to Indemnified Costs with
respect to any Proceeding to the full extent permitted by any
applicable portion of this Agreement that is not invalidated, or by any
applicable law.
4.7 REPAYMENT OF INDEMNIFIED COSTS. The Indemnitee will reimburse the
Company for all Indemnified Costs paid by the Company in defending any
Proceeding against the Indemnitee if and only to the extent that a
court of competent jurisdiction finally decides that the Indemnitee is
not entitled to be indemnified by the Company for such Indemnified
Costs under the provisions of applicable law, the Company's Bylaws,
Certificate of Incorporation, this Agreement, or otherwise.
4.8 REPAYMENT. The Indemnitee will promptly repay to the Company any
amounts paid to the Indemnitee pursuant to other rights of
indemnification or under any insurance policy, to the extent those
payments are duplicative of payments under this Agreement.
5. INDEMNIFICATION PROCEDURE
5.1 NOTICE. Promptly after receipt of notice that a Proceeding has
commenced, the Indemnitee will, if a claim is to be made under this
Agreement, notify the Company of that fact. The failure to notify the
Company will not relieve the Company from any liability that it may
have to the Indemnitee except to the extent of the Company's material
damage resulting from such failure.
5.2 COMPANY PARTICIPATION. The Company will be entitled to participate in
any Proceeding at its own expense and, except as otherwise provided
below, to the extent that it may wish, the Company may assume the
defense of any Proceeding for which indemnification is sought
hereunder, with counsel reasonably satisfactory to the Indemnitee.
After the Company notifies the Indemnitee of the Company's election to
assume the defense of a Proceeding, during the Company's good faith
active defense the Company will 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 of the Proceeding, other
than reasonable costs of investigation or as otherwise provided below.
The Indemnitee will have the right to employ the Indemnitee's counsel
in any Proceeding, but the fees and expenses of the counsel incurred
after the Company assumes the defense of the Proceeding will be at the
expense of the Indemnitee, unless (a) the employment of counsel by the
Indemnitee has been authorized by the Company, (b) the Indemnitee has
reasonably concluded that there may be a conflict of interest between
the Company and the Indemnitee in the conduct of the defense of a
Proceeding, or (c) the Company has not in fact employed counsel to
assume the defense of a Proceeding. In each of the foregoing cases the
fees and expenses of the Indemnitee's counsel will be at
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the expense of the Company. The Company will not be entitled to assume
the defense of any Proceeding brought by or on behalf of the Company or
as to which the Indemnitee has made the conclusion that there may be a
conflict of interest between the Company and the Indemnitee.
5.3 SETTLEMENT. The Company will not settle or compromise any Proceeding in
any manner that would impose any penalty or limitation on the
Indemnitee without the Indemnitee's consent. The Indemnitee will not
settle or compromise any Proceeding without the Company's consent.
Neither the Company nor the Indemnitee will unreasonably withhold their
consent or approval under this Agreement.
5.4 SUBROGATION. If the Company pays Indemnified Costs, the Company will be
subrogated to the extent of such payment to all of the rights of
recovery of the Indemnitee against third parties. The Indemnitee will
do all things reasonably necessary to secure such rights, including the
execution of documents necessary to enable the Company effectively to
bring suit to enforce such rights.
6. MISCELLANEOUS PROVISIONS
6.1 AMENDMENTS; WAIVERS. Amendments, waivers, consents and approvals under
this Agreement must be in writing and designated as such. No failure or
delay in exercising any right will be deemed a waiver of such right.
6.2 INTEGRATION. This Agreement is the entire agreement between the parties
pertaining to its subject matter, and supersedes all prior agreements
and understandings of the parties in connection with such subject
matter.
6.3 INTERPRETATION; GOVERNING LAW. This Agreement is to be construed as a
whole and in accordance with its fair meaning. This Agreement is to be
interpreted in accordance with the laws of the State of Delaware
relating to indemnification of Agents.
6.4 HEADINGS. Headings of Sections and subsections are for convenience only
and are not a part of this Agreement.
6.5 COUNTERPARTS. This Agreement may be signed in one or more counterparts,
all of which constitute one agreement.
6.6 SUCCESSORS AND ASSIGNS. This Agreement is binding upon and inures to
the benefit of each party and such party's respective heirs, personal
representatives, successors and assigns. Nothing in this Agreement,
express or implied, is intended to confer any rights or remedies upon
any other person.
6.7 EXPENSES; LEGAL FEES. Each party will pay its own expenses in the
negotiation, preparation and performance of this Agreement. The
prevailing party in any action
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relating to this Agreement will be entitled to reasonable legal fees,
costs and expenses incurred in such action.
6.8 REPRESENTATION BY COUNSEL; INTERPRETATION. Each party acknowledges that
it has been given an opportunity to be represented by counsel in
connection with this Agreement. Any rule of law, including, but not
limited to, Section 1654 of the California Civil Code, or any legal
decision that would require interpretation of any claimed ambiguities
in this Agreement against the party that drafted it, has no application
and is expressly waived.
6.9 SPECIFIC PERFORMANCE. The Company acknowledges that in view of the
uniqueness of the matters contemplated by this Agreement, the
Indemnitee would not have an adequate remedy at law for money damages
if this Agreement is not being performed in accordance with its terms.
The Company therefore agrees that the Indemnitee will be entitled to
specific enforcement of the terms hereof in addition to any other
remedy to which the Indemnitee may be entitled.
6.10 TIME IS OF THE ESSENCE. Time is of the essence in the performance of
each provision of this Agreement.
6.11 NOTICES. Any notice to be given hereunder must be in writing and
delivered as follows (or to another address designated in writing):
IF TO MASIMO CORPORATION: IF TO THE INDEMNITEE:
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0000 Xxxxxx Xxxxxx At the Indemnitee's most recent address
Xxxxxx, Xxxxxxxxxx 00000 on the books and records of the Company
Attention: Chief Financial Officer
The parties have signed this Agreement as of the date on page one.
INDEMNITEE
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Print Name:
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MASIMO CORPORATION
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By: Xxx Xxxxx
Title: President and Chief Executive Officer
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