EXHIBIT 10.5
INDEMNIFICATION AGREEMENT
AGREEMENT, effective as of March 26, 1999, between NEW PLANET RESOURCES,
INC., a Delaware corporation (the "Company"), and Xxxxxx Xxxxx ("Indemnitee").
WHEREAS, Indemnitee is a director (or officer) of the Company;
WHEREAS, both the Company and Indemnitee recognize the increased risk of
litigation and other claims being asserted against directors and officers of
public companies at a time when it has become increasingly difficult to obtain
adequate insurance coverage at reasonable costs;
WHEREAS, in recognition of Indemnities need for substantial protection
against personal liability in order to enhance Indemnitees continued service
to the Company in an effective manner, the Company wishes to provide in this
Agreement for the identification of and the advancing of expenses to
Indemnitee to the full extent (whether partial or complete) permitted by law
and as set forth in this Agreement, and, to the extent insurance is
maintained, for the continued coverage of Indemnitee under the Company's
directors' and officers' liability insurance policies, regardless of any
future change in the Certificate of Incorporation, By-Laws, composition of the
Board of Directors, or structure of the Company.;
NOW, THEREFORE, in consideration of the premises and of Indemnitee's
service to the Company, directly or indirectly, and intending to be legally
bound hereby, the parties hereto agree as follows:
1. In the event Indemnitee was, is, or becomes a party to or a witness or
other participant in, or is threatened to be made a party to or a witness or
other participant in, any threatened, pending or completed action, suit or
proceeding, or any inquiry or investigation, whether conducted by the Company
or any other party, that Indemnitee in good faith believes might lead to any
such action, suit or proceeding, whether civil, criminal, administrative,
investigative or otherwise (a "Claim") by reason of (or arising in part out
of) the fact that Indemnitee is or was a director, officer, employee, agent or
fiduciary of the Company, or is or was serving at the request of the Company
as a director, officer, employee, trustee, agent or fiduciary of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, or by reason of anything done or not done by Indemnitee in any
such capacity (an "Indemnifiable Event"), the Company shall indemnify
Indemnitee to the full extent permitted by law (the determination of which
shall be made by the Reviewing Party referred to below) as soon as practicable
but in any event no later than thirty days after written demand is presented
to the Company, against any and all expenses (including attorneys' fees and
all other costs, expenses, and obligations paid or incurred in connection with
investigating, preparing for and defending or participating in the defense of
(including on appeal) any Claim relating to any Indemnifiable Event)
(collectively "Expenses"), judgments, fines, penalties and amounts paid in
settlement (including all interest, assessments and other charges paid or
payable in connection with or in respect of such judgments, fines, penalties
or amounts paid in settlement) of such Claim and, if so requested by
Indemnitee, the Company shall advance (within two business days of such
request) any and all such Expenses to Indemnitee; provided, however, that (i)
the foregoing obligation of the Company shall not apply to a Claim that was
commenced by the Indemnitee without the prior approval of the Board of
Directors of the Company unless the Claim was commenced after a Change in
Control (as defined in Section 5 herein); (ii) the foregoing obligation of
the Company shall be subject to the condition that an appropriate person or
body (the "Reviewing Party") shall not have determined (in a written opinion
in any case in which the special, independent counsel referred to in Section 4
hereof is involved) that Indemnitee would not be permitted to be indemnified
for such Expenses under applicable law; and (iii) if, when and to the extent
that the Reviewing Party determines that Indemnitee would not be permitted to
be indemnified for such Expenses under applicable law, the Company shall be
entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the
Company) for all such amounts theretofore paid (unless Indemnitee has
commenced legal proceedings in a court of competent jurisdiction to secure a
determination that Indemnitee should be indemnified under applicable law, in
which event Indemnitee shall not be required to so reimburse the Company until
a final judicial determination requiring such reimbursement is made with
respect thereto as to which all rights of appeal therefrom have been exhausted
or lapsed) and the Company shall not be obligated to indemnify or advance any
additional amounts to Indemnitee under this Agreement (unless there has been a
determination by a court of competent jurisdiction that the Indemnitee would
be permitted to be so indemnified or entitled to such expense advances under
applicable law).
2. If there has not been a Change in Control of the Company (as
hereinafter defined), the Reviewing Party shall be (1) quorum of the Board of
Directors consisting of directors who are not parties to the action, suit or
proceeding acting by majority vote, or, (2) if such a quorum is not
obtainable, or, even if obtainable, a quorum of disinterested directors so
directs, independent legal counsel by the use of a written opinion or (3) the
stockholders. If there has been a Change in Control of the Company, the
Reviewing Party shall be the special, independent counsel referred to in
Section 4 hereof.
3. If Indemnitee has not been indemnified by the expiration of the
foregoing thirty-day period or received expense advances or if the Reviewing
Party determines that Indemnitee would not be permitted to be indemnified or
be entitled to receive expense advances within two days of the request
therefor in whole or in part under applicable law, Indemnitee shall have the
right to commence litigation seeking from the court a finding that Indemnitee
is entitled to indemnification and expense advances or enforcement of
Indemnitee's entitlement to indemnification and expense advances or
challenging any determination by the Reviewing Party or any aspect thereof
that Indemnitee is not entitled to be indemnified or receive expense advances
and the burden of proving that indemnification or advancement of expenses is
not appropriate shall be on the Company; any determination by the Reviewing
Party in favor of Indemnitee shall be conclusive and binding on the Company,
unless facts supplied by Indemnitee which form the basis for the determination
are subsequently determined to have been materially incorrect at the time
supplied. Indemnitee agrees to bring any such litigation in any court in the
States of Delaware having subject matter jurisdiction thereof and in which
venue is proper, and the Company hereby consents to service of process and to
appear in any such proceeding.
4. The Company agrees that if there is a Change in Control of the Company
(as hereinafter defined), then with respect to all matters thereafter arising
concerning the rights of Indemnitee to indemnity payments and expense advances
under this Agreement or any other agreement or By-laws now or hereafter in
effect relating to Claims for Indemnifiable Events, the Company shall seek
legal advice only from special, independent counsel selected by Indemnitee who
a majority of the disinterested Directors approves (which approval shall not
be unreasonably withheld), and who has not otherwise performed services for
the Company or Indemnitee. Such counsel, among other things, shall determine
whether and to what extent Indemnitee is permitted to be indemnified or is
entitled to expense advances under applicable law and shall render its written
opinion to the Company and Indemnitee to such effect. The Company agrees to
pay the reasonable fees of the special, independent counsel referred to above
and to fully indemnify such counsel against any and all expenses (including
attorney's fees), claims, liabilities and damages arising out of or relating
to this Agreement or its engagement pursuant hereto except for willful
misconduct or gross negligence.
5. For purposes of this Agreement, (a) "Change in Control of the Company"
shall be deemed to have occurred if (i) any "person" (as such term is used in
Sections 13(d)(3) and 14(d) of the Securities Exchange Act of 1934, as
amended), other than a trustee or other fiduciary holding securities under an
employee benefit plan of the Company, is or becomes the beneficial owner (as
defined in Rule 13d-3 under said Act), directly or indirectly, of securities
of the Company representing 20% or more of the combined voting power of the
Company's then outstanding securities, or (ii) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the Board of Directors of the Company and any new director whose election by
the Board of Directors or nomination for election by the Company'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, cease for any reason to constitute a majority thereof, or (iii) the
stockholders of the Company approve a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least 80% of the
combined voting power of the voting securities of the Company of such
surviving entity outstanding immediately after such merger or consolidation,
or if the stockholders of the Company approve a plan of complete liquidation
of the Company or an agreement for the sale or disposition by the Company of
all or substantially all the Company's assets.
6. To the extent Indemnitee is successful in such proceeding, the Company
shall indemnify Indemnitee against any and all expenses (including attorney's
fees) which are incurred by the Indemnitee in connection with any claim
asserted or action brought by Indemnitee for (i) indemnification or advance
payment of Expenses by the Company under this Agreement or any other agreement
or Company By-laws now or hereafter in effect relating to Claims for
Indemnifiable Events and/or (ii) recovery under any directors' and officers'
liability insurance policies maintained by the Company, regardless of whether
Indemnitee ultimately is determined to be entitled to such indemnification,
advance payment of Expenses or insurance recovery, as the case may be.
7. If Indemnitee is entitled under any provision of this Agreement to
indemnification by the Company for some or a portion of the Expenses,
judgments, fines, penalties and amounts paid in settlement of any Claim but
not, however, for all of the total amount thereof, the Company shall
nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee
is entitled. Notwithstanding any other provision of this Agreement, to the
extent that Indemnitee has been successful on the merits or otherwise in the
defense of any Claim relating in whole or in part to any Indemnifiable Event
or in defense of any issue or matter therein, including dismissal without
prejudice, Indemnitee shall be indemnified against all Expenses incurred in
connection therewith.
8. For purposes of this Agreement, the termination of any Claim by
judgment, order, settlement (whether with or without court approval) or
conviction, or upon a plea of nolo contendere, or its equivalent, shall not
create a presumption that Indemnitee did not meet any particular standard of
conduct or have any particular belief or that a court has determined that
Indemnitee is not entitled to indemnification or expense advance or that
indemnification or expense advance is not permitted by applicable law.
9. The Company hereby agrees that, so long as Indemnitee shall continue to
serve in a capacity referred to in Section 1 hereof, and thereafter so long as
Indemnitee shall be subject to any possible claim or threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative, by reason of the fact that Indemnitee served in any capacity
referred to in Section 1 hereof, the Company shall maintain in effect for the
benefit of Indemnitee any Directors' and Officers' Liability Insurance
presently in force and effect, providing, in all respects, coverage at least
comparable to that presently provided; provided, however, if, in the business
judgment of the then Board, either (a) the premium cost for such insurance is
substantially disproportionate to the amount of coverage, or (b) the coverage
provided by such insurance is so limited by exclusions that there is
insufficient benefit from such insurance, then and in that event the Company
shall not be required to maintain such insurance but shall and hereby agrees
to the full extent permitted by law to hold harmless and indemnify Indemnitee
to the fullest extent of the coverage which would otherwise have been provided
for the benefit of Indemnitee.
10. (a) In the event of any changes after the date of this Agreement
in any applicable law, statute, or rule which expands the right of the Company
to indemnify a person serving in a capacity referred to in Section 1 hereof,
such change shall be within the purview of Indemnitee's rights, and the
Company's obligations, under this Agreement. In the event of any changes in
any applicable law, statute, or rule which narrow the right of the Company to
indemnify a person serving in a capacity referred to in Section 1 hereof, such
changes, to the extent not otherwise required by such law, statute or rule to
be applied to this Agreement, shall have no effect on this Agreement or the
parties' rights and obligations hereunder.
(b) The indemnification provided by this Agreement shall not be deemed
exclusive of any rights to which Indemnitee may be entitled under the
Company's Certificate of Incorporation, its By-laws, any agreement, any vote
of stockholders or disinterested directors, laws and regulations in effect now
or in the future, or otherwise, both as to action in Indemnitee's official
capacity and as to action in another capacity while holding such office.
11. If the indemnification provided in Section 1 is unavailable and may
not be paid to Indemnitee because such indemnification is not permitted by
law, then in respect of any threatened, pending or completed action, suit or
proceeding in which the Company is jointly liable with Indemnitee (or would be
if joined in such action, suit or proceeding), the Company shall contribute to
the full extent permitted by law, to the amount of expenses, judgments, fines
(including excise taxes and penalties) and amounts paid in settlement actually
and reasonably incurred and paid or payable by Indemnitee in such proportion
as is appropriate to reflect (i) the relative benefits received by the Company
on the one hand and Indemnitee on the other hand from the transaction from
which such action, suit or proceeding arose, and (ii) the relative fault of
the Company on the one hand and of Indemnitee on the other in connection with
the events which resulted in such expenses, judgments, fines or settlement
amounts, as well as any other relevant equitable considerations. The relative
fault of the Company on the one hand and of Indemnitee on the other shall be
determined by reference to among other things, the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent the
circumstances resulting in such expenses, judgments, fines or settlement
amounts. The Company agrees that it would not be just and equitable if
contribution pursuant to this paragraph were determined by pro rata allocation
or any other method of allocation which does not take account of the foregoing
equitable considerations.
12. All obligations of the Company contained herein shall continue during
the period Indemnitee serves in a capacity referred to in Section 1 hereof of
the Company and shall continue thereafter so long as Indemnitee shall be
subject to any possible Claim relating to an Indemnifiable Event.
13. (a) Promptly after receipt by Indemnitee of notice of the
commencement of any Claim relating to an Indemnifiable Event or proceeding in
which Indemnitee is made or is threatened to be made a party or a witness,
Indemnitee shall notify the Company of the commencement of such Claim; but the
omission so to notify the Company shall not relieve the Company from any
obligation it may have to indemnify or advance expenses to Indemnitee
otherwise than under this Agreement.
(b) Indemnitee shall not settle any claim or action in any manner which
would impose on the Company any penalty, constraint, or obligation to hold
harmless or indemnify Indemnitee pursuant to this Agreement without the
Company's prior written consent, which consent shall not be unreasonably
withheld.
14. If any Claim relating to an Indemnifiable Event, commenced against
Indemnitee is also commenced against the Company, the Company shall be
entitled to participate therein at its own expense, and, except as otherwise
provided hereinbelow, to the extent that it may wish, the Company shall be
entitled to assume the defense thereof. After notice from the Company to
Indemnitee of its election to assume the defense of any Claim, the Company
shall not be obligated to Indemnitee under this Agreement for any legal or
other expenses subsequently incurred by Indemnitee in connection with the
defense thereof other than reasonable costs of investigation, travel, and
lodging expenses arising out of Indemnitee's participation in such Claim.
Indemnitee shall have the right to employ Indemnitee's own counsel in such
Claim, but the fees and expenses of such counsel incurred after notice from
the Company to Indemnitee of its assumption of the defense thereof shall be at
the expense of Indemnitee unless (i) otherwise authorized by the Company, (ii)
Indemnitee shall have reasonably concluded, and so notified the Company, that
there may be a conflict of interest between the Company and Indemnitee in the
conduct of the defense of such Claim, or (iii) the Company shall not in fact
have employed counsel to assume the defense of such Claim, in which cases the
fees and expenses of Indemnitee's counsel shall be at the expense of the
Company. The Company shall not be entitled to assume the defense of any Claim
brought by or on behalf of the Company or its stockholders or as to which
Indemnitee shall have made the conclusion set forth in (ii) of this Section
14.
15. No supplement, modification or amendment of this Agreement shall be
binding unless executed in writing by both of the parties hereto. No waiver
of any of the provisions of this Agreement shall be deemed or shall constitute
a waiver of any other provisions hereof (whether or not similar) nor shall
such waiver constitute a continuing waiver.
16. In the event of payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee, who shall execute all papers required and shall do everything that
may be necessary to secure such rights, including the execution of such
documents necessary to enable the Company effectively to bring suit to enforce
such rights.
17. The Company shall not be liable under this Agreement to make any
payment in connection with any claim made against Indemnitee to the extent
Indemnitee has otherwise actually received payment (under any insurance
policy, By-law or otherwise) of the amounts otherwise indemnifiable hereunder.
18. This Agreement shall be binding upon and inure to the benefit of and
be enforceable by the parties hereto and their respective successors, assigns,
including any direct or indirect successor by purchase, merger, consolidation
or otherwise to all or substantially all of the business and/or assets of the
Company, spouses, heirs, executors, and personal and legal representatives.
This Agreement shall continue in effect regardless of whether Indemnitee
continues to serve as an officer or director of the Company or of any other
enterprise at the Company's request.
19. The provisions of this Agreement shall be severable in the event that
any of the provisions hereof (including any provision within a single section,
paragraph or sentence) are held by a court of competent jurisdiction to be
invalid, void or otherwise unenforceable, and the remaining provisions shall
remain enforceable to the full extent permitted by law.
20. This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware applicable to contracts made and to be
performed in such state, but excluding any conflicts-of-law rule or principle
which might refer such governance, construction or enforcement to the laws of
another state or country.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
and as of the day and year first above written.
NEW PLANET RESOURCES, INC.
By:/s/X.X. Xxxxx
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X.X. Xxxxx, President
INDEMNITEE
Xxxxxx Xxxxx
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Xxxxxx Xxxxx
