INDEMNIFICATION AGREEMENT
This
Indemnification Agreement (“Agreement”) is made as of this ______ day of
_______________, 200_, by and between Global Technology Industries, Inc., a
Delaware corporation (the “Company”), and ______________________________
(“Indemnitee”), with reference to the following facts:
A. Indemnitee
is a director and/or officer of the Company.
B. The
Company recognizes that the vagaries of public policy and the interpretation
of
ambiguous statutes, regulations and court opinions are too uncertain to provide
the Company’s officers and directors with adequate or reliable advance knowledge
or guidance with respect to the legal risks and potential liabilities to which
they may become personally exposed as a result of performing their duties in
good faith as an Agent (as defined below) for the Company Group (as defined
below).
C. The
Company recognizes that the cost to a director or officer of defending against
lawsuits resulting from the performance of his or her duties in good faith
for
the Company Group, whether or not meritorious, is typically beyond the financial
resources of most officers and directors of the Company.
D. The
Company recognizes that the legal risks and potential liabilities, and the
very
threat thereof, associated with lawsuits filed against the officers and
directors of the Company Group, and the resultant substantial time, expense,
harassment and anxiety spent and endured in defending against such lawsuits,
bears no reasonable or logical relationship to the amount of compensation
received by such officers and directors, and thus poses a significant deterrent
to and results in increased reluctance on the part of experienced and capable
individuals to serve as an Agent of the Company Group.
E. In
order
to induce and encourage highly experienced and capable persons such as
Indemnitee to serve as an Agent of the Company Group, secure in the knowledge
that certain expenses, costs and liabilities incurred by them in their defense
of such litigation will be borne by the Company and that they will receive
the
maximum protection against such risks and liabilities as may be afforded by
law,
the Board (as defined below) has determined that entering into this Agreement
with Indemnitee is not only reasonable and prudent but necessary to promote
and
ensure the best interests of the Company and the Company’s stockholders.
F. The
Company and Indemnitee desire that the indemnification rights provided by this
Agreement shall be supplemental to, and shall not supersede or replace, any
indemnification rights which may be provided by other sources, including without
limitation any indemnification which may be provided by the Company pursuant
to
its bylaws, by contract or by applicable law.
NOW,
THEREFORE, with reference to the foregoing facts, the Company and Indemnitee
hereby agree as follows:
1. Agreement
to Serve.
Indemnitee agrees to serve and/or continue to serve as a director and/or officer
of one or more members of the Company Group in the same capacity or capacities
in which Indemnitee is serving on the date hereof for at least 30 days from
the date hereof; provided, however, that nothing contained in this Agreement
is
intended to or shall create any obligation of any member of the Company Group
to
continue to retain Indemnitee as an Agent or to maintain Indemnitee as a
director during such period.
2. Definitions.
The
following terms shall have the meanings set forth below:
“Action”
shall
mean any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative.
“Agent”
shall
mean, with respect to Indemnitee, Indemnitee in his or her capacity as an
officer, director, employee or agent of the Company Group and in his or her
capacity as an officer, director, employee or agent of any other Entity for
which he or she is serving in such capacity or capacities as the request of
the
Company. For purposes of this Agreement, if Indemnitee provides service as
an
officer, director, employee or agent of any Entity controlled by the Company
or
any employee benefit plan of the Company, then Indemnitee shall be deemed to
serve at the request of the Company.
“Board”
shall
mean the Board of Directors of the Company.
“Company
Group”
shall
mean the Company, each subsidiary and parent of the Company, and any successor,
resulting or surviving corporation of the Company or any subsidiary or parent
of
such successor, resulting or surviving corporation.
For
purposes of this Agreement, references to the “Company
Group”
shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power
and
authority to indemnify its Agents, so that if Indemnitee is or was an Agent
of
such constituent corporation, or is or was serving at the request of such
constituent corporation as an Agent of another corporation, partnership, joint
venture, trust or other enterprise, Indemnitee shall stand in the same position
under the provisions of this Agreement with respect to the resulting or
surviving corporation as Indemnitee would have with respect to such constituent
corporation if its separate existence had continued.
“Entity”
shall
mean any corporation, limited liability company, partnership, joint venture,
trust or other enterprise, and employee benefit plan.
“Expenses”
shall
include costs and expenses, including without limitation attorneys’ fees.
“Fines”
shall
include, in addition to fines, any excise taxes assessed on Indemnitee with
respect to an employee benefit plan.
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For
purposes of this Agreement, if Indemnitee acted in good faith and in a manner
Indemnitee reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan, Indemnitee shall be deemed to have
acted in a manner “in the best interests of the Company” as referred to in this
Agreement.
3. Indemnification.
3.1 Third
Party Proceedings.
The
Company shall indemnify Indemnitee if Indemnitee is or was a party or is
threatened to be made a party to any Action (other than an Action by or in
the
right of the Company) by reason of the fact that Indemnitee is or was an Agent
against Expenses, judgments, Fines, settlements and other amounts actually
and
reasonably incurred by Indemnitee in connection with such Action if Indemnitee
acted in good faith and in a manner Indemnitee reasonably believed to be in
the
best interests of the Company and its stockholders and, with respect to any
criminal Action, had no reasonable cause to believe Indemnitee’s conduct was
unlawful. The termination of any Action by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not,
of
itself, create a presumption that Indemnitee did not act in good faith and
in a
manner which Indemnitee reasonably believed to be in the best interest of the
Company, or with respect to any criminal Action, had reasonable cause to believe
that Indemnitee’s conduct was unlawful.
3.2 Proceedings
By or in the Right of the Company.
The
Company shall indemnify Indemnitee if Indemnitee is or was a party or is
threatened to be made a party to any Action by or in the right of the Company
to
procure a judgment in its favor by reason of the fact that Indemnitee is or
was
an Agent against Expenses, judgments, Fines, settlements and other amounts
actually and reasonably incurred by Indemnitee in connection with the Action
if
Indemnitee acted in good faith and in a manner Indemnitee reasonably believed
to
be in the best interests of the Company and its stockholders.
3.3 Mandatory
Payment of Expenses.
To the
extent that Indemnitee has been successful on the merits or otherwise in defense
of any Action referred to in Section 3.1 or 3.2 or the defense of any
claim, issue or matter therein, Indemnitee shall be indemnified against Expenses
actually and reasonably incurred by Indemnitee in connection therewith.
3.4 Approval
for Settlements.
The
Company shall not be obligated to indemnify Indemnitee for any settlements
entered into by Indemnitee with respect to any Action unless the Company
approves such settlement or the Company unreasonably withholds such approval
following not less than 10 days prior written notice of the proposed
settlement.
4. Expenses;
Indemnification Procedure.
4.1 Advancement
of Expenses.
The
Company shall advance all Expenses actually and reasonably incurred by
Indemnitee in connection with the investigation, defense, or appeal of any
Action referenced in Section 3 hereof. Indemnitee hereby undertakes to
repay such amounts advanced only if, and to the extent that, it shall ultimately
be determined that Indemnitee is not entitled to be indemnified by the Company
as authorized hereby.
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4.2 Notice
to Company by Indemnitee.
Indemnitee shall, as a condition precedent to Indemnitee’s right to be
indemnified under this Agreement, give the Company notice in writing as soon
as
practicable of any claim made against Indemnitee for which such indemnification
will or could be sought under this Agreement. Notice to the Company shall be
directed to the Chief Executive Officer of the Company at the executive offices
of the Company (unless Indemnitee is the Chief Executive Officer, in which
the
notice shall be addressed to the Board of Directors and to the next most senior
officer of the Company). In addition, Indemnitee shall give the Company such
information and cooperation as it may reasonably require and as shall be within
Indemnitee’s power.
4.3 Procedure.
The
Company agrees to provide any indemnification and advances required under this
Agreement no later than 30 days after receipt of the written request of
Indemnitee. If a claim for indemnification or advance under this Agreement
is
not paid in full by the Company within 30 days after a written request for
payment therefor has first been received by the Company, Indemnitee may, but
need not, at any time thereafter bring an action against the Company to recover
the unpaid amount of the claim. 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 in advance of its final disposition) that Indemnitee has not
met
the standards of conduct which make it permissible under the applicable law
for
the Company to indemnify Indemnitee, but the burden of proving such defense
shall be on the Company and Indemnitee shall be entitled to receive interim
payments of expenses pursuant to Section 4.1 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 intention of the parties that if the Company
contests Indemnitee’s right to indemnification under this Agreement or
applicable law, the question of Indemnitee’s right to indemnification shall be
for the court to decide, and neither the failure of the Company (including
its
officers, Board, any committee or subgroup of its Board, independent legal
counsel or its stockholders) to have made a determination that indemnification
of Indemnitee is or is not proper in the circumstances because Indemnitee has
or
has not met the applicable standard of conduct required by this Agreement or
by
applicable law, nor an actual determination by the Company (including its
officers, Board, any committee or subgroup of its Board, independent legal
counsel or its stockholders) that Indemnitee has or has not met such applicable
standard of conduct, shall create a presumption that Indemnitee has or has
not
met the applicable standard of conduct.
4.4 Notice
to Insurers.
If, at
the time of the receipt of a notice of a claim pursuant to Section 4
hereof, the Company has director and officer liability insurance in effect,
the
Company shall give prompt notice of the commencement of such proceeding to
the
insurers in accordance with the procedures set forth in the respective policies.
The Company shall thereafter take all necessary or desirable action to cause
such insurers to pay, on behalf of the Indemnitee, all amounts payable as a
result of such proceeding in accordance with the terms of such policies.
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4.5 Selection
of Counsel.
If the
Company shall be obligated under Section 3 or 4 hereof to indemnify
Indemnitee or advance Expenses to Indemnitee in connection with any Action,
the
Company shall be entitled to assume the defense of such Action, with counsel
approved by Indemnitee, upon the delivery to Indemnitee of written notice of
its
election so to do. After delivery of such notice, approval of such counsel
by
Indemnitee and the retention of such counsel by the Company, the Company will
not be liable to Indemnitee under this Agreement for any fees of counsel
subsequently incurred by Indemnitee with respect to the same Action, provided
that (a) Indemnitee shall have the right to employ separate counsel in any
such
Action at Indemnitee’s expense; and (b) if (i) the employment of
counsel by Indemnitee has been previously authorized by the Company,
(ii) Indemnitee shall have reasonably concluded that there may be a
conflict of interest between the Company and Indemnitee in the conduct of any
such defense, or (iii) the Company shall not, in fact, have employed
counsel to assume the defense of such Action, then the fees and expenses of
Indemnitee’s counsel shall be at the expense of the Company.
4.6 Effect
of Change in Law.
Notwithstanding any other provision of this Agreement, in the event of any
change in any applicable law, statute or rule which narrows the right of the
Company to indemnify Indemnitee, such change, to the extent not otherwise
required by such law, statute or rule to be applied to this Agreement, shall
have no effect on this Agreement or the parties’ rights and obligations
hereunder.
4.7 Nonexclusivity.
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 Bylaws, any other agreement, any vote of stockholders or
disinterested directors, applicable law, or otherwise, both as to action in
Indemnitee’s official capacity and as to action in another capacity while
holding such office. The indemnification provided under this Agreement shall
continue as to Indemnitee from any action taken or not taken while serving
in an
indemnified capacity even though he may have ceased to serve in such capacity
at
the time of the Action.
5. Partial
Indemnification.
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,
settlements and other amounts actually or reasonably incurred by Indemnitee
in
the investigation, defense, appeal or settlement of any Action, but not,
however, for the total amount thereof, the Company shall nevertheless indemnify
Indemnitee for the portion of such Expenses, judgments, settlements, Fines
and
other amounts to which Indemnitee is entitled.
6. Mutual
Acknowledgement re Submission of Claims to Court.
Both
the Company and Indemnitee acknowledge that in certain instances, Federal or
state law, regulation or applicable public policy may require the Company to
submit the question of indemnification to a court in certain circumstances
for a
determination of the Company’s right under law or public policy to indemnify
Indemnitee. For example, in connection with any public offering of the Company’s
securities, the Company will have to make such undertaking to the Securities
and
Exchange Commission. Indemnitee acknowledges and agrees that the Company will
not be in breach of this Agreement for any such submission.
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7. Severability.
Nothing
in this Agreement is intended to require or shall be construed as requiring
the
Company to do or fail to do any act in violation of applicable law. The
Company’s inability, pursuant to law, regulation or court order, to perform its
obligations under this Agreement shall be severable as provided in this
Section 7. If this Agreement or any portion hereof shall be invalidated on
any ground by any court of competent jurisdiction, then the Company shall
nevertheless indemnify Indemnitee to the full extent permitted by any applicable
portion of this entire Agreement that shall not have been invalidated, and
the
balance of this Agreement not so invalidated shall be enforceable in accordance
with its terms.
8. Exceptions.
Any
other provision herein to the contrary notwithstanding, the Company shall not
be
obligated pursuant to the terms of this Agreement:
8.1 Claims
Initiated by Indemnitee.
To
indemnify or advance Expenses to Indemnitee with respect to Actions initiated
or
brought voluntarily by Indemnitee and not by way of defense unless the Company
has approved the initiation or bringing of such Action in writing; or
8.2 Lack
of Good Faith.
To
indemnify Indemnitee for any Expenses incurred by Indemnitee with respect to
any
Action initiated by Indemnitee to enforce or interpret this Agreement, if a
court of competent jurisdiction determines that each of the material assertions
made by Indemnitee in such Action was not made in good faith or was frivolous;
or
8.3 No
Duplication of Payments.
To make
any payment in connection with any claim made against Indemnitee to the extent
Indemnitee has otherwise received payment (under any insurance policy, the
Certificate of Incorporation or Bylaws of the Company, contract or otherwise)
of
the amounts otherwise indemnifiable hereunder. If the Company makes any
indemnification payment to Indemnitee in connection with any claim made against
Indemnitee and Indemnitee has already received or thereafter receives payments
in connection with the same claim, then Indemnitee shall reimburse the Company
in an amount equal to the lesser of (a) the amount of the payment otherwise
received by Indemnitee and (b) the full amount of the indemnification
payment made by the Company.
8.4 Violation
of Law.
To
indemnify or advance Expenses if such indemnification would be a violation
of
applicable law or regulation.
8.5 Breach
of Employment Agreement.
To
indemnify or advance Expenses in connection with any claim by any member of
the
Company Group for any breach by Indemnitee of any employment agreement.
8.6 Insured
Claims.
For
expenses or liabilities of any type whatsoever (including, but not limited
to,
judgments, fines, ERISA excise taxes or penalties, and amounts paid in
settlement) which have been paid directly to Indemnitee by an insurance carrier
under a policy of officers’ and directors’ liability insurance or other policy
of insurance maintained by the Company.
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8.7 Unlawful
Claims.
In any
manner which is contrary to public policy or which a court of competent
jurisdiction has finally determined to be unlawful.
9. Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
constitute an original.
10. Successors
and Assigns.
This
Agreement shall be binding upon the Company and its successors and assigns,
and
shall inure to the benefit of Indemnitee and Indemnitee’s estate, heirs, legal
representatives and assigns.
11. Notices.
All
notices, requests, demands and other communications (collectively, “Notices”)
given pursuant to this Agreement shall be in writing, and shall be delivered
by
personal service, courier, facsimile transmission or by United States first
class, registered or certified mail, postage prepaid, addressed to the party
at
the address set forth on the signature page of this Agreement. Any Notice,
other
than a Notice sent by registered or certified mail, shall be effective when
received; a Notice sent by registered or certified mail, postage prepaid return
receipt requested, shall be effective on the earlier of when received or the
third day following deposit in the United States mails. Any party may from
time
to time change its address for further Notices hereunder by giving notice to
the
other party in the manner prescribed in this Section.
12. Attorneys’
Fees.
If
Indemnitee institutes an Action under this Agreement to enforce or interpret
any
of the terms hereof, Indemnitee shall be entitled to be paid all court costs
and
expenses, including reasonable attorneys’ fees, incurred by Indemnitee with
respect to such action, unless as a part of such Action, the court of competent
jurisdiction determines that all of the material assertions made by Indemnitee
as a basis for such Action were not made in good faith or were frivolous. In
the
event of an Action instituted by or in the name of the Company under this
Agreement to enforce or interpret any of the terms of this Agreement, Indemnitee
shall be entitled to be paid all court costs and expenses, including attorneys’
fees, incurred by Indemnitee in defense of such action (including with respect
to Indemnitee’s counterclaims and cross-claims made in such action), unless as a
part of such Action the court determines that all of Indemnitee’s material
defenses to such Action were made in bad faith or were frivolous.
13. Consent
to Jurisdiction.
Each of
the Company and Indemnitee irrevocably consents to the jurisdiction of the
court
of the State of New York for all purposes in connection with any action or
proceeding which arises out of or relates to this Agreement and agrees that
any
action instituted under this Agreement shall be brought only in the state courts
of the State of New York, or in Federal courts located in such State.
14. Governing
Law.
This
Agreement shall be governed by and its provisions construed in accordance with
the laws of the State of Delaware.
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first above written.
| GLOBAL TECHNOLOGY INDUSTRIES, INC | |||
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By:
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Its:
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| AGREED TO AND ACCEPTED: | |
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INDEMNITEE:
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| (type name) | |
| (signature) | |
| (address) | |
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