INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT is made and entered into as of this ___
day of ________, 1999 between Xxxxxx'x, Inc., a Delaware corporation (the
"Corporation"), and ___________________ ("Indemnitee").
RECITALS:
A. Indemnitee, an [executive officer of the Corporation and/or a
member of the Board of Directors], performs a valuable service in such capacity
for the Corporation; and
B. The certificate of incorporation (the "Certificate") and by-laws
(the "By-laws") of the Corporation contain provisions providing for the
indemnification of the officers, directors, agents and employees of the
Corporation to the maximum extent authorized by Section 145 of the Delaware
General Corporation Law, as amended ("DGCL"); and
C. The Certificate, the By-laws and the DGCL, by their non-exclusive
nature, permit contracts between the Corporation and the members of its Board of
Directors and officers with respect to indemnification of such directors and
officers; and
D. In accordance with the authorization as provided by the DGCL, the
Corporation has purchased and presently maintains a policy or policies of
Directors and Officers Liability Insurance ("D & O Insurance"), covering certain
liabilities which may be incurred by its directors and officers in the
performance of their duties as directors or officers of the Corporation; and
E. As a result of developments affecting the terms, scope and
availability of D & O Insurance there exists general uncertainty as to the
extent of protection afforded members of the Board of Directors and executive
officers of the Corporation by such D & O Insurance and by statutory and by-law
indemnification provisions; and
F. In order to induce Indemnitee to continue to serve as an
executive officer and a member of the Board of Directors of the Corporation, the
Corporation has determined and agreed to enter into this contract with
Indemnitee;
NOW, THEREFORE, in consideration of Indemnitee's continued service as
an executive officer and a member of the Board of Directors after the date
hereof, the parties hereto agree as follows:
1. INDEMNIFICATION OF INDEMNITEE. The Corporation hereby agrees to
hold harmless and indemnify Indemnitee and any partnership, corporation, trust
or other entity of which Director is or was a partner, shareholder, trustee,
director, officer, employee or agent (Indemnitee and each such partnership,
corporation, trust or other entity being hereinafter
referred to collectively as an "Indemnitee") to the fullest extent authorized
or permitted by the provisions of the DGCL, as may be amended from time to
time.
2. ADDITIONAL INDEMNITY. Subject only to the exclusions set forth
in Section 3 hereof, the Corporation hereby further agrees to hold harmless
and indemnify Indemnitee:
a. against any and all expenses (including attorney's fees),
witness fees, judgments, fines and amounts paid in settlement actually and
reasonably incurred by Indemnitee in connection with any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (including an action by or in the right of
the Corporation) to which Indemnitee is, was or at any time becomes a party,
or is threatened to be made a party, by reason of the fact that Indemnitee
is, was or at any time becomes a director, officer, employee or agent of the
Corporation or any subsidiary of the Corporation, or is or was serving or at
any time serves at the request of the Corporation or any subsidiary of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise,
if Director acted in good faith and in a manner Director reasonably believed
to be in or not opposed to the best interests of the Corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause to
believe Director's conduct was unlawful; and
b. otherwise to the fullest extent as may be provided to
Indemnitee by the Corporation under the non-exclusivity provisions of Article
IX of the Certificate, Article VII, Section 6 of the By-laws and the DGCL.
3. LIMITATIONS ON ADDITIONAL INDEMNITY. No indemnity pursuant to
Section 2 hereof shall be paid by the Corporation:
a. except to the extent the aggregate of losses to be
indemnified thereunder exceeds the sum of such losses for which the Indemnitee
is indemnified pursuant to Section 1 hereof or pursuant to any D & O Insurance
purchased and maintained by the Corporation;
b. in respect to remuneration paid to Indemnitee if it shall be
determined by a final judgment or other final adjudication that such
remuneration was in violation of law;
c. on account of any suit in which judgment is rendered against
Indemnitee for an accounting of profits made from the purchase or sale by
Indemnitee of securities of the Corporation pursuant to the provisions of
Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto or
similar provisions of any federal, state or local statutory law,
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d. on account of Indemnitee's conduct which is finally
adjudged to have been knowingly fraudulent or deliberately dishonest, or to
constitute willful misconduct;
e. on account of Indemnitee's conduct which is the subject of
an action, suit or proceeding described in Section 7(c)(ii) hereof;
f. on account of any action, claim or proceeding (other than
a proceeding referred to in Section 8(b) hereof) initiated by the Indemnitee
unless such action, claim or proceeding was authorized in the specific case
by action of the Board of Directors; and
g. 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 Corporation and Indemnitee 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).
4. CONTRIBUTION. If the indemnification provided in Sections 1
and 2 hereof is unavailable by reason of a Court decision described in
Section 3(g) hereof based on grounds other than any of those set forth in
paragraphs (b) through (f) of Section 3 hereof, then in respect of any
threatened, pending or completed action, suit or proceeding in which the
Corporation is jointly liable with Indemnitee (or would be if joined in such
action, suit or proceeding), the Corporation shall contribute to the amount
of expenses (including attorneys' fees), judgments, fines 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 Corporation 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 Corporation 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 Corporation 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 Corporation
agrees that it would not be just and equitable if contribution pursuant to
this Section 4 were determined by pro rata allocation or any other method of
allocation which does not take account of the foregoing equitable
considerations.
5. CONTINUATION OF OBLIGATIONS. All agreements and obligations of
the Corporation contained herein shall continue during the period Indemnitee is
a director, officer, employee or agent of the Corporation or any subsidiary of
the Corporation (or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise) if Indemnitee acted
in good faith and in a manner Indemnitee reasonably believed to be in or not
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opposed to the best interests of the Corporation, except that no indemnification
shall be made in respect of any claim, issue or matter as to which Indemnitee
shall have been adjudged to be liable to the Corporation unless and only to the
extent that the Court of Chancery of the State of Delaware or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
Indemnitee is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery of the State of Delaware or such other court shall
deem proper and shall continue thereafter so long as Indemnitee shall be subject
to any possible claim or threatened, pending or completed action, suit or
proceeding, whether civil, criminal or investigative, by reason of the fact that
Indemnitee was an officer of the Corporation or serving in any other capacity
referred to herein.
6. NOTIFICATION AND DEFENSE OF CLAIM. Not later than thirty (30)
days after receipt by Indemnitee of notice of the commencement of any action,
suit or proceeding, Indemnitee 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 have to Indemnitee otherwise
than under this Agreement. With respect to any such action, suit or
proceeding as to which Indemnitee 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, to the extent that it
may wish, the Corporation jointly with any other indemnifying party similarly
notified will be entitled to assume the defense thereof, with counsel
reasonably satisfactory to Indemnitee. After notice from the Corporation to
Indemnitee of its election so as to assume the defense thereof, the
Corporation will not be liable 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 or as
otherwise provided below. Indemnitee shall have the right to employ its
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 Indemnitee unless (i) the
employment of counsel by Indemnitee has been authorized by the Corporation,
(ii) Indemnitee shall have reasonably concluded that there may be a conflict
of interest between the Corporation and Indemnitee 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 Indemnitee'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 Indemnitee shall have made the conclusion provided
for in (ii) above; and
c. the Corporation shall not be liable to indemnify Indemnitee
under this Agreement for any amounts paid in settlement of any action or claim
effected without its
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written consent. 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 Indemnitee without Indemnitee's written
consent. Neither the Corporation nor Indemnitee will unreasonably withhold
its consent to any proposed settlement.
7. ADVANCEMENT AND REPAYMENT OF EXPENSES.
a. In the event that Indemnitee employs his own counsel
pursuant to Section 6(b)(i) through (iii) above, the Corporation shall advance
to Indemnitee, prior to any final disposition of any threatened or pending
action, suit or proceeding, whether civil, criminal, administrative or
investigative, any and all reasonable expenses (including legal fees and
expenses) incurred in investigating or defending any such action, suit or
proceeding within ten (10) days after receiving copies of invoices presented to
Indemnitee for such expenses.
b. Indemnitee agrees that Indemnitee will reimburse the
Corporation for all reasonable expenses paid by the Corporation in defending any
civil or criminal action, suit or proceeding against Indemnitee in the event and
only to the extent it shall be ultimately determined by a final judicial
decision (from which there is no right of appeal) that Indemnitee is not
entitled, under the provisions of the DGCL, the Certificate, the By-laws, this
Agreement or otherwise, to be indemnified by the Corporation for such expenses.
c. Notwithstanding the foregoing, the Corporation shall not be
required to advance such expenses to Indemnitee if Indemnitee (i) commences any
action, suit or proceeding as a plaintiff unless such advance is specifically
approved by a majority of the Board of Directors or (ii) is a party to an
action, suit or proceeding brought by the Corporation and approved by a majority
of the Board which alleges willful misappropriation of corporate assets by
Indemnitee, disclosure of confidential information in violation of Indemnitee's
fiduciary or contractual obligations to the Corporation, or any other willful
and deliberate breach in bad faith of Indemnitee's duty to the Corporation or
its shareholders.
8. PROCEDURE. Any indemnification and advances provided for in
Section 1 and Section 2 shall be made no later than forty-five (45) days after
receipt of the written request of Indemnitee. If a claim under this Agreement,
under any statute, or under any provision of the Corporation's Certificate or
Bylaws providing for indemnification, is not paid in full by the Corporation
within forty-five (45) days after a written request for payment thereof has
first been received by the Corporation, Indemnitee may, but need not, at any
time thereafter bring an action against the Corporation to recover the unpaid
amount of the claim and, subject to Section 12 of this Agreement, Indemnitee
shall also be entitled to be paid for the expenses (including attorneys' fees)
of bringing such action. It shall be a defense to any such action (other than
an action brought to enforce a claim for expenses incurred in connection with
any action, suit or proceeding in advance of its final disposition) that
Indemnitee has not met the standards of conduct which make it permissible under
applicable law for the Corporation to indemnify Indemnitee for the amount
claimed, but the burden of proving such defense shall be on the Corporation and
Indemnitee shall be entitled to receive
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interim payments of expenses pursuant to Subsection 2(a) unless and until
such defense may be finally adjudicated by court order or judgment from which
no further right of appeal exists. It is the parties' intention that if the
Corporation contests Indemnitee's right to indemnification, the question of
Indemnitee's right to indemnification shall be for the court to decide, and
neither the failure of the Corporation (including its Board of Directors, any
committee or subgroup of the Board of Directors, independent legal counsel,
or its stockholders) to have made a determination that indemnification of
Indemnitee is proper in the circumstances because Indemnitee has met the
applicable standard of conduct required by applicable law, nor an actual
determination by the Corporation (including its Board of Directors, any
committee or subgroup of the Board of Directors, independent legal counsel,
or its stockholders) that Indemnitee has not met such applicable standard of
conduct, shall create a presumption that Indemnitee has or has not met the
applicable standard of conduct.
9. ENFORCEMENT.
a. The Corporation expressly confirms and agrees that it has
entered into this Agreement and assumed the obligations imposed on the
Corporation hereby in order to induce Indemnitee to continue as an executive
officer and/or member of the Board of Directors of the Corporation, and
acknowledges that Indemnitee is relying upon this Agreement in continuing in
such capacity.
b. In the event Indemnitee is required to bring any action
to enforce rights or to collect moneys due under this Agreement and is
successful in such action, the Corporation shall reimburse Indemnitee for all
Indemnitee's reasonable fees and expenses in bringing and pursuing such
action.
10. SUBROGATION. In the event of payment under this Agreement, the
Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of Indemnitee, 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. NON-EXCLUSIVITY OF RIGHTS. The rights conferred on Indemnitee
by this Agreement shall not be exclusive of any other right which Indemnitee
may have or hereafter acquire under any statute, provision of the
Corporation's Certificate or By-laws, agreement, vote of stockholders or
directors, or otherwise, both as to action in his official capacity and as to
action in another capacity while holding office.
12. PARTIAL INDEMNIFICATION. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Corporation for some or
a portion of the expenses, judgments, fines or penalties actually or
reasonably incurred by Indemnitee in the investigation, defense, appeal or
settlement of any civil or criminal action, suit or proceeding, but not,
however, for the total amount thereof, the Corporation shall nevertheless
indemnify
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Indemnitee for the portion of such expenses, judgments, fines or penalties to
which Indemnitee is entitled.
13. SURVIVAL OF RIGHTS. The rights conferred on Indemnitee by this
Agreement shall continue after Indemnitee has ceased to be a director, officer,
employee or other agent of the Corporation and shall inure to the benefit of
Indemnitee's heirs, executors and administrators.
14. SEPARABILITY. Each of the provisions of this Agreement is a
separate and distinct agreement and independent of the others, so that if any
or all of the provisions hereof shall be held to be invalid or unenforceable
for any reason, such invalidity or unenforceability shall not affect the
validity or enforceability of the other provisions hereof or the obligation
of the Corporation to indemnify the Indemnitee to the full extent provided by
the Certificate, the By-laws or the DGCL.
15. GOVERNING LAW; CONSENT TO JURISDICTION. This Agreement shall
be interpreted and enforced in accordance with the laws of the State of
Delaware. The Corporation and Indemnitee each hereby irrevocably consent to
the jurisdiction of the courts of the State of Delaware for all purposes in
connection with any action or proceeding which arises out of or relates to
this Agreement and agree that any action instituted under this Agreement
shall be brought only in the state courts of the State of Delaware.
16. BINDING EFFECT. This Agreement shall be binding upon
Indemnitee and upon the Corporation, its successors and assigns, and shall
inure to the benefit of Indemnitee, his heirs, personal representatives and
assigns and to the benefit of the Corporation, its successors and assigns.
17. AMENDMENT AND TERMINATION. No amendment, modification,
termination or cancellation of this Agreement shall be effective unless in
writing signed by both parties hereto.
18. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Indemnity
Agreement on and as of the day and year first above written.
XXXXXX'X, INC.,
a Delaware corporation
By:_________________________________
Name:
Title:
____________________________________
[name]
Indemnitee
[SIGNATURE PAGE TO INDEMNITY AGREEMENT]
