INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is made as of
________________, 2002 by and between Clarus Corporation, a Delaware corporation
(the "Company"), and ________________________ ("Indemnitee").
RECITALS
WHEREAS, it is essential to the Company and its stockholders to attract
and retain highly qualified and capable directors, officers, employees, and
agents;
WHEREAS, the Certificate of Incorporation of the Company (the
"Certificate of Incorporation") allows the Company to indemnify and advance
expenses to its directors and officers;
WHEREAS, this Agreement is a supplement to and in furtherance of the
Certificate of Incorporation of the Company and any resolutions adopted pursuant
thereto and shall not be deemed a substitute therefor, nor to diminish or
abrogate any rights of Indemnitee thereunder;
WHEREAS, in recognition of Indemnitee's need for protection against
personal liability in order to induce Indemnitee to serve the Company in an
effective manner, and to supplement the Company's directors' and officers'
liability insurance coverage, and, in part, to provide Indemnitee with specific
contractual assurance that the protection provided by the Certificate of
Incorporation will be available to Indemnitee (regardless of, among other
things, any amendment to or revocation of the Certificate of Incorporation), the
Company wishes to provide the Indemnitee with the benefits contemplated by this
Agreement; and
WHEREAS, as a result of the provision of such benefits Indemnitee has
agreed to serve or continue to serve the Company as a director, officer,
employee, or agent;
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:
1. DEFINITIONS. As used in this Agreement:
(a) "Beneficial Owner" shall have the meaning given to such
term in Rule l3d-3 under the Exchange Act; provided, however, that Beneficial
Owner shall exclude any Person otherwise becoming a Beneficial Owner by reason
of the stockholders of the Company approving a merger of the Company with
another entity.
(b) "Board" or "Board of Directors" shall mean the board of
directors of the Company from time to time.
(b) A "Change in Control" shall be deemed to occur upon the
earliest to occur after the date of this Agreement of any of the following
events:
(i) Acquisition of Stock by Third Party. Any Person (as
defined below) is or becomes the Beneficial Owner (as defined below), directly
or indirectly, of securities of the Company representing thirty percent (30%) or
more of the combined voting power of the Company's then outstanding securities;
(ii) Change in Board of Directors. During any period of
two (2) consecutive years (not including any period prior to the execution of
this Agreement), individuals who at the beginning of such period constitute the
Board, and any new director (other than a director designated by a person who
has entered into an agreement with the Company to effect a transaction described
in Sections 1(b)(i), 1(b)(iii) or 1(b)(iv)) whose election by the Board or
nomination for election by the Company's stockholders was approved by a vote of
at least two-thirds 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 least
a majority of the members of the Board;
(iii) Corporate Transactions. The effective date of a
merger or consolidation of the Company with any other entity, other than a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior to such merger or consolidation continuing
to represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 66.67% of the combined voting
power of the voting securities of the surviving entity outstanding immediately
after such merger or consolidation and with the power to elect at least a
majority of the board of directors or other governing body of such surviving
entity;
(iv) Liquidation. The approval by the stockholders of the
Company of a complete liquidation of the Company or an agreement or series of
agreements for the sale or disposition by the Company of all or substantially
all of the Company's assets; and
(v) Other Events. There occurs any other event of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A (or a response to any similar item on any similar
schedule or form) promulgated under the Exchange Act (as defined below), whether
or not the Company is then subject to such reporting requirement.
(c) "Corporate Status" describes the status of a person who is
or was a director, officer, trustee, general partner, managing member,
fiduciary, employee or agent of the Company or of any other Enterprise (as
defined below) which such person is or was serving at the request of the
Company.
(d) "DGCL" means the General Corporation Law of the State of
Delaware, as in effect from time to time.
2
(e) "Disinterested Director" means a director of the Company
who is not and was not a party to the Proceeding in respect of which
indemnification is sought by Indemnitee.
(f) "Enterprise" shall mean the Company and any other
corporation, limited liability company, partnership, joint venture, trust,
employee benefit plan or other enterprise or entity of which Indemnitee is or
was serving at the request of the Company as a director, officer, trustee,
general partner, managing member, fiduciary, employee or agent.
(g) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(h) "Expenses" shall include all reasonable attorneys' fees,
retainers, court costs, transcript costs, fees of experts, witness fees, travel
expenses, duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees, and all other disbursements, costs, or expenses
of the types customarily incurred in connection with prosecuting, defending,
preparing to prosecute or defend, investigating, being or preparing to be a
witness in, or otherwise participating in, a Proceeding. Expenses also shall
include Expenses incurred in connection with any appeal resulting from any
Proceeding, including without limitation the premium, security for, and other
costs relating to any cost bond, supersedes bond, or other appeal bond or its
equivalent. Expenses, however, shall not include amounts paid in settlement by
Indemnitee or the amount of judgments, fines, or other Losses against
Indemnitee.
(i) "Independent Counsel" means a law firm, or a member of a
law firm, that is experienced in matters of corporation law and neither
presently is, nor in the past five years has been, retained to represent: (i)
the Company or Indemnitee in any matter material to either such party (other
than with respect to matters concerning the Indemnitee under this Agreement, or
of other indemnitees under similar indemnification agreements), or (ii) any
other party to the Proceeding giving rise to a claim for indemnification
hereunder. Notwithstanding the foregoing, the term "Independent Counsel" shall
not include any person who, under the applicable standards of professional
conduct then prevailing, would have a conflict of interest in representing
either the Company or Indemnitee in an action to determine Indemnitee's rights
under this Agreement. The Company agrees to pay the reasonable fees and expenses
of the Independent Counsel referred to above and to fully indemnify such counsel
against any and all Expenses, claims, liabilities and damages arising out of or
relating to this Agreement or its engagement pursuant hereto.
(j) "Loss" means all judgments, fines, penalties, damages,
liabilities, claims, 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, damages, liabilities, claims, and amounts
paid in settlement).
(k) Reference to "other enterprise" shall include employee
benefit plans; references to "fines" shall include any excise tax assessed with
respect to any employee benefit plan; references to "serving at the request of
the Company" shall include any service as a director, officer, employee or agent
of the Company which imposes duties on, or involves services by, such director,
officer, employee or agent with respect to an employee benefit plan, its
participants or beneficiaries;
3
and a person who acted in good faith and in a manner he reasonably believed to
be in the best interests of the participants and beneficiaries of an employee
benefit plan shall be deemed to have acted in a manner "not opposed to the best
interests of the Company" as referred to in this Agreement.
(k) A "Potential Change in Control" shall occur if the Company
(a) enters into an agreement, the consummation of which would result in the
occurrence of a Change in Control or (b) the Board of Directors adopts a
resolution to the effect that, for purposes of this Agreement, a potential
Change in Control has occurred.
(l) "Person" shall have the meaning as set forth in Sections
13(d) and 14(d) of the Exchange Act; provided, however, that Person shall
exclude (i) the Company and any of its direct and indirect subsidiaries, (ii)
any trustee or other fiduciary holding securities under an employee benefit plan
of the Company, and (iii) any corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company.
(m) The term "Proceeding" shall include any threatened,
pending or completed action, suit, arbitration, alternate dispute resolution
mechanism, investigation, inquiry, administrative hearing or any other actual,
threatened or completed proceeding, whether brought in the right of the Company
or otherwise and whether of a civil, criminal, administrative or investigative
nature, in which Indemnitee was, is or will be involved as a party or otherwise
by reason of the fact that Indemnitee is or was a director, officer, employee,
or agent of the Company, by reason of any action taken (or failure to act) by
him or of any action (or failure to act) on his part while acting as director or
officer of the Company, or by reason of the fact that he is or was serving at
the request of the Company as a director, officer, trustee, general partner,
managing member, fiduciary, employee or agent of any other Enterprise, in each
case whether or not serving in such capacity at the time any liability or
expense is incurred for which indemnification, reimbursement, or advancement of
expenses can be provided under this Agreement.
2. INDEMNIFICATION IN THIRD-PARTY PROCEEDINGS. The Company
shall indemnify Indemnitee, his executors, and administrators in accordance with
the provisions of this Section 2 if Indemnitee is, or is threatened to be made,
a party to or a participant (as a witness or otherwise) in any Proceeding, other
than a Proceeding by or in the right of the Company to procure a judgment in its
favor. Pursuant to this Section 2, Indemnitee shall be indemnified against all
Expenses and Losses incurred by Indemnitee or on his behalf in connection with
such Proceeding or any claim, issue or matter therein, if Indemnitee acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Company and, in the case of a criminal action or
proceeding had no reasonable cause to believe that his conduct was unlawful.
3. INDEMNIFICATION IN PROCEEDINGS BY OR IN THE RIGHT OF THE
COMPANY. The Company shall indemnify Indemnitee, his executors, and
administrators in accordance with the provisions of this Section 3 if Indemnitee
is, or is threatened to be made, a party to or a participant (as a witness or
otherwise) in any Proceeding by or in the right of the Company to procure a
judgment in its favor. Pursuant to this Section 3, Indemnitee shall be
indemnified against all
4
Expenses, but not Losses, incurred by him or on his behalf in connection with
such Proceeding or any claim, issue or matter therein, if Indemnitee acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Company. No indemnification for Expenses shall be made
under this Section 3 in respect of any claim, issue or matter as to which
Indemnitee shall have been finally adjudged by a court to be liable to the
Company, unless and only to the extent that any court in which the Proceeding
was brought or the Delaware Court of Chancery 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 indemnification for
such Expenses which the Delaware Court of Chancery or such other court shall
deem proper.
4. INDEMNIFICATION FOR EXPENSES OF A WITNESS. Notwithstanding any
other provision of this Agreement, to the extent that Indemnitee is, by reason
of his Corporate Status, a witness in any Proceeding to which Indemnitee is not
a party, he shall be indemnified against all Expenses incurred by him or on his
behalf in connection therewith.
5. ADDITIONAL INDEMNIFICATION.
(a) Notwithstanding any limitation in Sections 2 or 3, the
Company shall indemnify Indemnitee to the fullest extent permitted by law if
Indemnitee is a party to or threatened to be made a party to any Proceeding
(including a Proceeding by or in the right of the Company to procure a judgment
in its favor) against all Expenses and Losses incurred by Indemnitee in
connection with the Proceeding. No indemnification shall be made under this
Section 5(a) on account of Indemnitee's conduct which constitutes a breach of
Indemnitee's duty of loyalty to the Company or its stockholders or is an act or
omission not in good faith or which involves intentional misconduct or a knowing
violation of the law.
(b) For purposes of Section 5(a), the meaning of the phrase
"to the fullest extent permitted by law" shall include, but not be limited to:
(i) to the fullest extent permitted by the provision of
the DGCL that authorizes or contemplates additional indemnification by
agreement, or the corresponding provision of any amendment to or replacement of
the DGCL, and
(ii) to the fullest extent authorized or permitted by any
amendments to or replacements of the DGCL adopted after the date of this
Agreement that increase the extent to which a corporation may indemnify its
officers and directors.
6. EXCLUSIONS. Notwithstanding any provision in this Agreement, the
Company shall not be obligated under this Agreement to make any indemnification
in connection with any claim made against Indemnitee:
(a) for which payment has actually been received by or on
behalf of Indemnitee under any insurance policy or other indemnification
provision, except with respect to any excess beyond the amount actually received
under any insurance policy or other indemnification provision;
5
(b) for an accounting of profits made from the purchase and
sale (or sale and purchase) by Indemnitee of securities of the Company within
the meaning of Section 16(b) of the Exchange Act or similar provisions of state
statutory law or common law; or
(c) for any Loss which the Company is prohibited by applicable
law from paying as indemnification or for any other reason.
7. ADVANCES OF EXPENSES; DEFENSE OF CLAIM; SETTLEMENT
(a) Notwithstanding any provision of this Agreement to the
contrary, the Company shall advance the Expenses incurred by Indemnitee in
connection with any Proceeding within ten (10) days after the receipt by the
Company of a statement or statements requesting such advances from time to time,
whether prior to or after final disposition of any Proceeding. Advances shall be
unsecured and interest free. Advances shall be made without regard to
Indemnitee's ability to repay the expenses and without regard to Indemnitee's
ultimate entitlement to indemnification under the other provisions of this
Agreement. Advances shall include any and all Expenses incurred pursuing an
action to enforce this right of advancement, including Expenses incurred
preparing and forwarding statements to the Company to support the advances
claimed. The Indemnitee shall qualify for advances solely upon the execution and
delivery to the Company of an undertaking providing that the Indemnitee
undertakes to repay the advance to the extent that it is ultimately determined
that Indemnitee is not entitled to be indemnified by the Company. This Section
7(a) shall not apply to any claim made by Indemnitee for which indemnification
is excluded pursuant to Section 6.
(b) In the event the Company shall be obligated hereunder to
provide indemnification for Expenses or Losses, or shall be required to make an
advance in accordance with Section 7(a) hereof, the Company, if appropriate,
shall be entitled to assume the defense of such Proceeding, with counsel
reasonably satisfactory to Indemnitee, upon the delivery to Indemnitee of
reasonable written notice of its election to do so. After delivery of such
notice, the Company will not be liable to Indemnitee under this Agreement for
any legal or other Expenses subsequently incurred by Indemnitee in connection
with such defense other than reasonable Expenses of investigation; provided that
Indemnitee shall have the right to employ its counsel in such Proceeding but the
Expenses of such counsel incurred after delivery of notice from the Company of
its assumption of such defense shall be at the Indemnitee's expense; provided
further that if: (i) the employment of counsel by Indemnitee has been previously
authorized by the Company, (ii) Indemnitee shall have reasonably concluded that
there will 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 or having employed
counsel, such counsel is not diligently prosecuting a defense on behalf of the
Indemnitee, the Expenses of counsel employed by the Indemnitee shall be at the
expense of the Company.
(c) The Company shall not settle any action, claim or
Proceeding (in whole or in part) which would impose any Expense, Loss, or
limitation on the Indemnitee without the Indemnitee's prior written consent, and
no settlement of any Proceeding shall be entered into unless, if applicable, in
the Indemnitee's discretion, such settlement includes, as an unconditional term
6
thereof, the delivery by the claimant or plaintiff in such Proceeding to
Indemnitee of a duly executed written release of Indemnitee from all liability
or obligation in respect of such Proceeding, which release shall be reasonably
satisfactory in form and substance to Indemnitee and Indemnitee's counsel. The
Company shall have no obligation to indemnify Indemnitee under this Agreement
for any amounts paid in settlement of any Proceeding effected without the
Company's prior written consent, which consent shall not be unreasonably
withheld, conditioned, or delayed.
8. PROCEDURE FOR NOTIFICATION AND APPLICATION FOR INDEMNIFICATION.
(a) Within forty-five (45) days after the actual receipt by
Indemnitee of notice that he or she is a party to or a participant (as a witness
or otherwise) in any Proceeding, Indemnitee shall submit to the Company a
written notice identifying the Proceeding. The omission by the Indemnitee to
notify the Company will not relieve the Company from any liability which it may
have to Indemnitee (i) otherwise than under this Agreement, and (ii) under this
Agreement only to the extent the Company can establish that such omission to
notify resulted in actual prejudice to the Company.
(b) Indemnitee shall thereafter deliver to the Company a
written application to indemnify Indemnitee in accordance with this Agreement.
Such application(s) may be delivered from time to time and at such time(s) as
Indemnitee deems appropriate in his or her sole discretion. Following such a
written application for indemnification by Indemnitee, the Indemnitee's
entitlement to indemnification shall be determined according to Section 9(a) of
this Agreement.
9. PROCEDURE UPON APPLICATION FOR INDEMNIFICATION.
(a) Upon written request by Indemnitee for indemnification
pursuant to Section 8(b), a determination, if required by law, with respect to
Indemnitee's entitlement to indemnification hereunder shall be made (i) by a
majority vote of the Disinterested Directors, even though less than a quorum of
the Board, or if there are no Disinterested Directors by a majority vote of the
Board or (ii) if so requested by the Indemnitee in his or her sole discretion,
by Independent Counsel in a written opinion to the Board and the Indemnitee,
which shall supersede any determination made by the Board. If (i) it is so
determined that Indemnitee is entitled to indemnification or (ii) a
determination is not required by applicable law, payment to Indemnitee shall be
made within ten (10) days after such determination. Indemnitee shall reasonably
cooperate with the person, persons or entity making such determination with
respect to Indemnitee's entitlement to indemnification, including providing to
such person, persons or entity upon reasonable advance request any documentation
or information which is not privileged or otherwise protected from disclosure
and which is reasonably available to Indemnitee and reasonably necessary to such
determination. Any Expenses incurred by Indemnitee in so cooperating with the
person, persons or entity making such determination shall be borne by the
Company (irrespective of the determination as to Indemnitee's entitlement to
indemnification) and the Company hereby indemnifies and agrees to hold
Indemnitee harmless therefrom.
(b) In the event the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to Section 9(a)
hereof, the Independent Counsel shall be selected
7
as provided in this Section 9(b). If a Change in Control shall not have
occurred, the Independent Counsel shall be selected by the Board of Directors,
and the Company shall give written notice to Indemnitee advising him of the
identity of the Independent Counsel so selected. If a Change in Control shall
have occurred, the Independent Counsel shall be selected by Indemnitee (unless
Indemnitee shall request that such selection be made by the Board of Directors,
in which event the preceding sentence shall apply), and Indemnitee shall give
written notice to the Company advising it of the identity of the Independent
Counsel so selected. In either event, Indemnitee or the Company, as the case may
be, may, within 10 days after such written notice of selection shall have been
received, deliver to the Company or to Indemnitee, as the case may be, a written
objection to such selection; provided, however, that such objection may be
asserted only on the ground that the Independent Counsel so selected does not
meet the requirements of "Independent Counsel" as defined in Section 1 of this
Agreement, and the objection shall set forth with particularity the factual
basis of such assertion. Absent a proper and timely objection, the person so
selected shall act as Independent Counsel. If such written objection is so made
and substantiated, the Independent Counsel so selected may not serve as
Independent Counsel unless and until such objection is withdrawn or a court of
competent jurisdiction has determined that such objection is without merit. If,
within 20 days after submission by Indemnitee of a written request for
indemnification pursuant to Section 8(b) hereof, no Independent Counsel shall
have been selected and not objected to, either the Company or Indemnitee may
petition a court of competent jurisdiction for resolution of any objection which
shall have been made by the Company or Indemnitee to the other's selection of
Independent Counsel and/or for the appointment as Independent Counsel of a
person selected by the Court or by such other person as the Court shall
designate, and the person with respect to whom all objections are so resolved or
the person so appointed shall act as Independent Counsel under Section 9(a)
hereof. Upon the due commencement of any judicial proceeding or arbitration
pursuant to Section 12(a) of this Agreement, Independent Counsel shall be
discharged and relieved of any further responsibility in such capacity (subject
to the applicable standards of professional conduct then prevailing).
(c) The Company agrees to pay the reasonable fees of
Independent Counsel and to fully indemnify such Independent Counsel against any
and all Expenses and Losses arising out of or relating to this Agreement or its
engagement pursuant hereto.
10. ESTABLISHMENT OF TRUST. In the event of a Potential Change in
Control or Change of Control, the Company shall, upon written request by
Indemnitee, create a trust (the "Trust") for the benefit of Indemnitee and from
time to time upon written request of Indemnitee shall fund the Trust in an
amount sufficient, in the reasonable opinion of the Board or the Independent
Counsel, as the case may be, to satisfy any and all Losses and Expenses which
are actually paid or which Indemnitee reasonably determines from time to time
may be payable by the Company under this Agreement. 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 Indemnitee; (ii) the
trustee of the Trust shall advance, within 20 days of a request by Indemnitee,
any and all Expenses to Indemnitee (and Indemnitee hereby agrees to reimburse
the Trust under the circumstances under which Indemnitee would be required to
reimburse the Company under Section 7(a) of this Agreement); (iii) the Company
shall continue to fund the Trust from time to time in accordance with the
funding obligations set forth above; (iv) the trustee of the Trust shall
promptly pay to Indemnitee
8
all Expenses and Losses for which Indemnitee shall be entitled to
indemnification pursuant this Agreement; and (v) all unexpended funds in the
Trust shall revert to the Company upon a final determination by a court of
competent jurisdiction in a final decision from which there is no further right
of appeal that Indemnitee has been fully indemnified under the terms of this
Agreement. The trustee of the Trust shall be chosen by Indemnitee and shall be
approved by the Company, which approval shall not be unreasonably withheld,
conditioned, or delayed.
11. PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS.
(a) In making a determination with respect to entitlement to
indemnification hereunder, the person or persons or entity making such
determination shall presume that Indemnitee is entitled to indemnification under
this Agreement if Indemnitee has submitted a request for indemnification in
accordance with Section 8(b) of this Agreement, and the Company shall have the
burden of proof to overcome that presumption in connection with the making by
any person, persons or entity of any determination contrary to that presumption.
Neither the failure of the Company (including by its directors or independent
legal counsel) to have made a determination prior to the commencement of any
action pursuant to this Agreement that indemnification is proper in the
circumstances because Indemnitee has met the applicable standard of conduct, nor
an actual determination by the Company (including by its directors or
independent legal counsel) that Indemnitee has not met such applicable standard
of conduct, shall be a defense to the action or create a presumption that
Indemnitee has not met the applicable standard of conduct.
(b) If the person, persons or entity empowered or selected
under Section 9 of this Agreement to determine whether Indemnitee is entitled to
indemnification shall not have made a determination within thirty (30) days
after receipt by the Company of the request therefor, the requisite
determination of entitlement to indemnification shall be deemed to have been
made and Indemnitee shall be entitled to such indemnification, absent a
prohibition of such indemnification under applicable law; provided, however,
that such 30-day period may be extended for a reasonable time, not to exceed an
additional fifteen (15) days, if the person, persons or entity making the
determination with respect to entitlement to indemnification in good faith
requires such additional time for the obtaining or evaluating of documentation
and/or information relating thereto.
(c) The termination of any Proceeding or of any claim, issue
or matter therein, by judgment, order, settlement or conviction, or upon a plea
of nolo contendere or its equivalent, shall not of itself adversely affect the
right of Indemnitee to indemnification or create a presumption that Indemnitee
did not act in good faith and in a manner which the Indemnitee reasonably
believed to be in or not opposed to the best interests of the Company or, with
respect to any criminal Proceeding, that Indemnitee had reasonable cause to
believe that the Indemnitee's conduct was unlawful.
(d) For purposes of any determination of good faith,
Indemnitee shall be deemed to have acted in good faith if Indemnitee's action is
based on the records or books of account of the Enterprise, including financial
statements, or on information supplied to Indemnitee by the officers of the
Enterprise in the course of their duties, or on the advice of legal counsel for
the Enterprise or on information or records given or reports made to the
Enterprise by an independent certified public
9
accountant or by an appraiser or other expert selected by the Enterprise or any
other Person permitted by law. The provisions of this Section 11(d) shall not be
deemed to be exclusive or to limit in any way the other circumstances in which
the Indemnitee may be deemed or found to have met the applicable standard of
conduct set forth in this Agreement.
(e) The knowledge and/or actions, or failure to act, of any
other director, trustee, partner, managing member, fiduciary, officer, agent or
employee of the Enterprise shall not be imputed to Indemnitee for purposes of
determining the right to indemnification under this Agreement.
12. REMEDIES OF INDEMNITEE.
(a) In the event that (i) a determination is made pursuant to
Section 9 of this Agreement that Indemnitee is not entitled to indemnification
under this Agreement, (ii) advancement of Expenses is not timely made pursuant
to Section 7 of this Agreement, (iii) no determination of entitlement to
indemnification shall have been made pursuant to Section 9(a) of this Agreement
within forty-five (45) days after receipt by the Company of the request for
indemnification, (iv) payment of indemnification is not made pursuant to Section
4 or the last sentence of Section 9(a) of this Agreement within ten (10) days
after receipt by the Company of a written request therefor, or (v) payment of
indemnification pursuant to Section 2, 3, or 5 of this Agreement is not made
within ten (10) days after a determination has been made that Indemnitee is
entitled to indemnification, if such a determination is required by applicable
law, Indemnitee shall be entitled to an adjudication by a court of his
entitlement to such indemnification or advancement of Expenses. Alternatively,
Indemnitee, at his option, may seek an award in arbitration to be conducted by a
single arbitrator pursuant to the Commercial Arbitration Rules of the American
Arbitration Association. The Company shall not oppose Indemnitee's right to seek
any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made
pursuant to Section 9(a) of this Agreement that Indemnitee is not entitled to
indemnification, any judicial proceeding or arbitration commenced pursuant to
this Section 12 shall be conducted in all respects as a de novo trial, or
arbitration, on the merits and Indemnitee shall not be prejudiced by reason of
that adverse determination. In any judicial proceeding or arbitration commenced
pursuant to this Section 12 the Company shall have the burden of proving
Indemnitee is not entitled to indemnification or advancement of Expenses, as the
case may be, and the Company may not refer to or introduce into evidence any
determination pursuant to Section 9(a) of this Agreement adverse to Indemnitee
for any purpose. If Indemnitee commences a judicial proceeding or arbitration
pursuant to this Section 12, Indemnitee shall not be required to reimburse the
Company for any advances pursuant to Section 7 until a final determination is
made with respect to Indemnitee's entitlement to indemnification (as to which
all rights of appeal have been exhausted or lapsed).
(c) If a determination shall have been made pursuant to
Section 9(a) of this Agreement that Indemnitee is entitled to indemnification,
the Company shall be bound by such determination in any judicial proceeding or
arbitration commenced pursuant to this Section 12, absent a prohibition of such
indemnification under applicable law.
10
(d) In the event that Indemnitee, pursuant to this Section 12,
seeks a judicial adjudication of or an award in arbitration to enforce his
rights under, or to recover damages for breach of, this Agreement, Indemnitee
shall be entitled to recover from the Company, and shall be indemnified by the
Company against, any and all Expenses incurred by him in such judicial
adjudication or arbitration. If it shall be determined in such judicial
adjudication or arbitration that Indemnitee is entitled to receive part but not
all of the indemnification or advancement of Expenses sought, the Indemnitee
shall be entitled to recover from the Company, and shall be indemnified by the
Company against, any and all Expenses incurred by Indemnitee in connection with
such judicial adjudication or arbitration.
(e) The Company shall be precluded from asserting in any
judicial proceeding or arbitration commenced pursuant to this Section 12 that
the procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
that the Company is bound by all the provisions of this Agreement.
(f) The Company shall indemnify Indemnitee to the fullest
extent permitted by law against all Expenses and, if requested by Indemnitee,
shall (within ten (10) days after the Company's receipt of such written request)
advance such Expenses to Indemnitee, which are incurred by Indemnitee in
connection with any judicial proceeding or arbitration brought by Indemnitee for
(i) indemnification or advances of Expenses by the Company under this Agreement
or any other agreement or provision of the Company's Certificate of
Incorporation or By-laws now or hereafter in effect or (ii) recovery or advances
under any insurance policy maintained by any person for the benefit of
Indemnitee, regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification, advance or insurance recovery, as the case
maybe.
13. NON-EXCLUSIVITY; SURVIVAL OF RIGHTS; INSURANCE; SUBROGATION.
(a) The rights of the indemnification hereunder including to
indemnification and to receive advancement of Expenses as provided by this
Agreement shall not be deemed exclusive of any other rights to which Indemnitee
may at any time be entitled under applicable law, the Company's Certificate of
Incorporation, the Company's By-laws, any agreement, a vote of stockholders or a
resolution of directors, or otherwise. No amendment, alteration or repeal of
this Agreement or of any provision hereof shall limit or restrict any right of
Indemnitee under this Agreement in respect of any action taken or omitted by
such Indemnitee in his Corporate Status prior to such amendment, alteration or
repeal. To the extent that a change in Delaware law, whether by statute or
judicial decision, permits greater indemnification or advancement of Expenses
than would be afforded currently under the Company's By-laws and this Agreement,
it is the intent of the parties hereto that Indemnitee shall enjoy by this
Agreement the greater benefits so afforded by such change. No right or remedy
herein conferred is intended to be exclusive of any other right or remedy, and
every other right and remedy shall be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other right or remedy.
11
(b) To the extent that the Company maintains an insurance
policy or policies providing liability insurance for directors, officers,
trustees, partners, managing members, fiduciaries, employees, or agents of the
Company or of any other Enterprise which such person serves at the request of
the Company, Indemnitee shall be covered by such policy or policies in
accordance with its or their terms to the maximum extent of the coverage
available for any such director, trustee, partner, managing member, fiduciary,
officer, employee or agent under such policy or policies. If, at the time the
Company receives notice from any source of a Proceeding as to which Indemnitee
is a party or a participant (as a witness or otherwise), the Company has
director and officer liability insurance in effect, the Company shall give
prompt notice 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.
(c) In the event of any 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 take all
action necessary to secure such rights, including execution of such documents as
are necessary to enable the Company to bring suit to enforce such rights.
(d) The Company shall not be liable under this Agreement to
make any payment of amounts otherwise indemnifiable (or for which advancement is
provided hereunder) hereunder if and to the extent that Indemnitee has otherwise
actually received such payment under any insurance policy, contract, agreement
or otherwise.
(e) The Company's obligation to indemnify or advance Expenses
hereunder to Indemnitee who is or was serving at the request of the Company as a
director, officer, trustee, partner, managing member, fiduciary, employee or
agent of any other Enterprise shall be reduced by any amount Indemnitee has
actually received as indemnification or advancement of expenses from such
Enterprise.
14. DURATION OF AGREEMENT. This Agreement shall continue until and
terminate upon the later of: (a) ten (10) years after the date that Indemnitee
shall have ceased to serve as a director or officer of the Company or as a
director, officer, trustee, partner, managing member, fiduciary, employee or
agent of any other corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise which Indemnitee served at the request of the
Company; or (b) one (1) year after the final termination of any Proceeding
(including any rights of appeal thereto) then pending, or reasonably related to,
or arising out of the same facts of, any Proceeding then pending, in respect of
which Indemnitee is granted rights of indemnification or advancement of Expenses
hereunder and of any proceeding commenced by Indemnitee pursuant to Section 12
of this Agreement relating thereto (including any rights of appeal of any
Section 12 Proceeding).
15. SEVERABILITY. If any provision or provisions of this Agreement
shall be held to be invalid, illegal or unenforceable for any reason whatsoever:
(a) the validity, legality and enforceability of the remaining provisions of
this Agreement (including without limitation, each portion of any Section of
this Agreement containing any such provision held to be invalid, illegal or
12
unenforceable, that is not itself invalid, illegal or unenforceable) shall not
in any way be affected or impaired thereby and shall remain enforceable to the
fullest extent permitted by law; (b) such provision or provisions shall be
deemed reformed to the extent necessary to conform to applicable law and to give
the maximum effect to the intent of the parties hereto; and (c) to the fullest
extent possible, the provisions of this Agreement (including, without
limitation, each portion of any Section of this Agreement containing any such
provision held to be invalid, illegal or unenforceable, that is not itself
invalid, illegal or unenforceable) shall be construed so as to give effect to
the intent manifested thereby.
16. ENFORCEMENT AND BINDING EFFECT.
(a) The Company expressly confirms and agrees that it has
entered into this Agreement and assumed the obligations imposed on it hereby in
order to induce Indemnitee to serve as a director or officer of the Company, and
the Company acknowledges that Indemnitee is relying upon this Agreement in
serving as a director, officer, employee, or agent of the Company.
(b) This Agreement constitutes the entire agreement between
the parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral, written and implied, between the
parties hereto with respect to the subject matter hereof.
(c) The indemnification and advancement of expenses provided
by, or granted pursuant to this Agreement shall continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to the
benefit of the heirs, executors and administrators of such a person.
17. MODIFICATION AND WAIVER. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by 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 of this Agreement
nor shall any waiver constitute a continuing waiver.
18. NOTICE BY INDEMNITEE. Indemnitee agrees promptly to notify the
Company in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to any Proceeding
or matter which may be subject to indemnification or advancement of Expenses
covered hereunder. The failure of Indemnitee to so notify the Company shall not
relieve the Company of any obligation which it may have to the Indemnitee under
this Agreement or otherwise.
19. NOTICES. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given (a) if delivered by hand and receipted for by the party to whom said
notice or other communication shall have been directed, or (b) mailed by
certified or registered mail with postage prepaid, on the third business day
after the date on which it is so mailed:
(a) If to Indemnitee, at the address indicated on the
signature page of this Agreement, or such other address as Indemnitee shall
provide in writing to the Company.
13
(b) If to the Company to:
Clarus Corporation
0000 Xxxxx Xxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
with a copy to :
Xxxx Xxxxxxx, P.C.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
or to any other address as may have been furnished to Indemnitee in writing by
the Company.
20. CONTRIBUTION. To the fullest extent permissible under applicable
law, if the indemnification provided for in this Agreement is unavailable to
Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying
Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for
Expenses or Losses, in connection with any claim relating to an indemnifiable
event under this Agreement, in such proportion as is deemed fair and reasonable
in light of all of the circumstances of such Proceeding in order to reflect (i)
the relative benefits received by the Company and Indemnitee as a result of the
event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the
relative fault of the Company (and its directors, officers, employees and
agents) and Indemnitee in connection with such event(s) and/or transaction(s).
21. APPLICABLE LAW AND CONSENT TO JURISDICTION. This Agreement and
the legal relations among the parties shall be governed by, and construed and
enforced in accordance with, the laws of the State of Delaware, without regard
to its conflict of laws rules. Except with respect to any arbitration commenced
by Indemnitee pursuant to Section 12(a) of this Agreement, the Company and
Indemnitee hereby irrevocably and unconditionally (i) agree that any action or
proceeding arising out of or in connection with this Agreement shall be brought
only in the Chancery Court of the State of Delaware (the "Delaware Court"), and
not in any other state or federal court in the United States of America or any
court in any other country, (ii) consent to submit to the exclusive jurisdiction
of the Delaware Court for purposes of any action or proceeding arising out of or
in connection with this Agreement, (iii) waive any objection to the laying of
venue of any such action or proceeding in the Delaware Court, and (iv) waive,
and agree not to plead or to make, any claim that any such action or proceeding
brought in the Delaware Court has been brought in an improper or inconvenient
forum.
22. 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 one and the same Agreement.
Only one such counterpart signed by the party
14
against whom enforceability is sought needs to be produced to evidence the
existence of this Agreement.
23. MISCELLANEOUS. Use of the masculine pronoun shall be deemed to
include usage of the feminine pronoun where appropriate. The headings of the
paragraphs of this Agreement are inserted for convenience only and shall not be
deemed to constitute part of this Agreement or to affect the construction
thereof.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
15
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
as of the day and year first above written.
Clarus Corporation
By: ______________________________
Name: _____________________
Title: _____________________
Indemnitee
By: ______________________________
Name: _____________________
Address: _____________________
_____________________
_____________________
_____________________
_____________________
16