Exhibit 10
[Intelligroup LOGO]
EXECUTIVE EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into as of the 1st day of
June 2005 (the "Effective Date"), between Intelligroup, Inc. (the "Company") and
Xxxxx Xxxxxxxx (the "Executive"). The purpose of the Agreement will be to
memorialize the terms and conditions of employment for the Executive.
NOW THEREFORE, in consideration of the mutual promises contained in the
Agreement and for other good and valuable consideration, the sufficiency of
which is hereby agreed, the Company and the Executive agree as follows:
1. EMPLOYMENT.
The Company agrees to employ and engage the services of the Executive as the
Chief Financial Officer and the Executive agrees to serve the Company in such
capacity. The Executive shall report directly to the Chief Executive Officer.
2. TERM OF AGREEMENT.
The Company hereby agrees to employ the Employee, and the Employee hereby
accepts employment with the Company, upon the terms set forth in this Agreement
for a period of 2 years. This contract may be terminated by either party with 30
days notice.
3. GENERAL EMPLOYMENT TERMS.
The Executive shall devote normal business hours and be available to discuss the
business and affairs of the Company five days per week. The Executive shall
further use his best efforts to promote the interests of the Company, and
perform faithfully and efficiently the responsibilities assigned to him. While
employed by Company, Executive shall not engage in other employment, except with
the prior written consent of the Company, which must be given in writing by an
Officer of the Company.
4. COMPENSATION.
4.1 BASE SALARY. Executive shall receive an annual base salary equivalent of INR
8,155,000 ("Base Salary"). The Base Salary shall be payable in cash, subject to
applicable withholdings, in accordance with the current payroll policies of the
Company.
4.2 INCENTIVE COMPENSATION BONUS. As further compensation, the Executive will be
eligible to participate in the Company's Executive Incentive Plan. The Executive
shall be eligible under such plan for a bonus in the amount of fifty percent
(50%) of the Executive's annual base salary. This salary shall not be pro-rated
for the first year of employment. The details of this plan will documented
within the first 30 days of Executive's employment and will include a
combination of mutually agreed upon financial, operational, and organizational
objectives. The company and Executive shall in good faith agree to negotiate the
details of the plan within the first 30 days.
Executive may also be eligible for additional incentive compensation from time
to time at the discretion of the Company.
4.3 EMPLOYEE BENEFITS. In addition, the Executive shall be eligible for all
employee benefits offered to the Company's employees. In particular, the
Executive will be entitled to the following benefits:
(a) Vacation and Sick Leave. The Executive shall be eligible to
participate in the Company's standard vacation and sick leave benefit
plan and the number of vacation days afforded to Executive under the
terms of the plan shall be 20 days per year.
(b) Business Expense Reimbursement. The Executive shall receive
reimbursement of all legitimate and reasonable business expenses to the
extent necessary and incurred by the Executive on behalf of the Company
pursuant to the written policies of the Company in this regard.
(c) 401(k) Plan. The Executive is eligible to participate in the 401(k)
retirement benefit (or equivalent in country of residence) plan made
available to the employees of the Company pursuant to the terms and
conditions of such plan.
(d) Insurance Plans. The Executive is eligible to participate in the
life, health, dental, short and long-term disability plans made
available to the employees of the Company pursuant to the terms and
conditions of such plans.
(e) Changes to Employee Benefit Plans. Nothing in this Agreement shall
prevent the Company from changing, modifying, amending or terminating
the employee benefit plans of the Company so as to eliminate, reduce or
otherwise change any benefits payable under this Agreement.
(f) Indemnification. Executive will be a party to any standard
indemnification agreement for the Company's executive officers &
Directors that may be adopted by the Company and by the Board of
Directors. The Executive shall have access to the policy.
5. STOCK OPTIONS. The Executive will be eligible for a grant of 200,000 stock
options ("Options") with an effective date of April 1st, 2005. 100,000 options
shall have strike price of $1.25, while the other 100,000 options will have a
strike price of $1.50. The Options will vest in equal quarterly installments
over four (4) years. The Options shall be governed by the terms and conditions
of the Company stock option plan under which the grant is made as well as the
standard Stock Option Agreement which must be signed by the Executive and the
Company prior to such grants being effective. To the extent that there any
conflicts between this agreement and the Company's Stock Option Agreement, those
specific terms will be superseded by those in this agreement. The Executive
shall have access to the Stock Option Agreement.
6. CHANGE OF CONTROL.
Notwithstanding the foregoing, at the effective time of a pending "Change in
Control", the vesting and exercisability of your options shall be accelerated by
twelve months, effective as of the effective time of such "Change in Control".
Further, should the Company terminate your employment or attempt to change the
role as defined by this Agreement, your options shall be accelerated in full,
effective as of the effective time of such "Change in Control". "Change in
Control" shall mean (i) a merger, acquisition, sale of voting control or other
business combination such that the shareholders of the Company who hold shares
on the date of this Agreement no longer hold more than 49% of the voting power
following completion of such transaction or, in case of a merger or other
business combination, more than 49% of the voting power of the acquiring or
surviving corporation and/or (ii) the sale of all or substantially all of the
assets of the Company.
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7. TERMINATION.
7.1 CAUSE. The Company may terminate the Executive's employment for Cause. For
purposes of the Agreement, "Cause" shall mean (A) any act of dishonesty or
knowing and willful breach of fiduciary duty by the Executive; (B) commission of
a felony involving moral turpitude or unlawful, dishonest, or unethical conduct
that a reasonable person would consider damaging to the reputation of the
Company or any conduct which is in violation of the Company's policies; (C) any
material breach of any provision of the Agreement, or any other agreements
between the Executive and Company, by the Executive; or (D) insubordination or
refusal to perform assigned duties consistent with duties of the Executive's
position or to comply with the reasonable directions of Company's Board of
Directors. If the Executive's employment is terminated for Cause, the Company
shall pay the Executive his full accrued Base Salary through the date of
termination at the rate in effect at the time of such termination, and the
Company shall have no further obligation to the Executive under the Agreement or
under any other agreements or plans. All other compensation including, without
limitation, bonuses, severance and/or stock option grants shall be forfeited if
the Executive is terminated for Cause. Should cause be determined to be (C) or
(D), the company shall give the Executive a 21 day written notice and an
opportunity to correct the issues.
7.2 SEVERANCE. Employee shall be eligible for twelve months of severance (base
salary) pay following the termination of this Agreement by Company for any
reason other than Cause. The payments shall commence upon the day following
termination and continue for a period of twelve months in accordance with the
Company's standard payroll practices. The unvested options at the time of
termination shall be cancelled and returned to the company.
8. MISCELLANEOUS.
8.1 ENTIRE AGREEMENT. The Agreement constitutes the entire agreement between the
parties and supersedes any prior understandings or agreements between the
parties, written or oral, to the extent they relate in any way to the subject
matter hereof including, without limitation, any agreements entered into between
Employee and Intelligroup Asia pvt ltd. The Intelligroup Standard Employee Terms
agreement as executed by the Executive or executed in the future by the
Executive, shall be made a part of the Agreement. In the event there are any
inconsistencies between the Agreement and the foregoing agreements, the terms of
the Agreement shall take precedence.
8.2 NO ASSIGNMENT; ASSUMPTION. The Agreement is personal to the Executive and
shall not be assignable by the Executive. The Agreement shall inure to the
benefit of and be binding upon any successor to the business or assets of the
company which assumes the Agreement, whether expressly or by operation of law.
8.3 GOVERNING LAW. This is a New Jersey contract and shall be construed under
and is governed in all respects by the laws of New Jersey, without giving effect
to any conflict of laws principles of New Jersey law. Any legal action or suit
related in any way to the Agreement shall be brought exclusively in the courts
of New Jersey. Both parties agree that the courts of New Jersey are the
exclusive convenient forum for the resolution of disputes.
8.4 AMENDMENTS. No amendments of any provision of the Agreement shall be valid
unless the same shall be in writing and signed by both the Company and the
Executive.
8.5 SEVERABILITY. Any term or provision of the Agreement that is invalid or
unenforceable in any situation in any jurisdiction shall not affect the validity
or enforceability of the remaining terms and provisions hereof or the validity
or enforceability of the offending term or provision in any other situation or
in any other jurisdiction.
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8.6 RELOCATION EXPENSES. All reasonable relocation expenses shall be covered by
the company. This shall include the following: transaction costs associated with
the sale of the Executive's primary residence, airfare for the Executive and
family members to relocate to New Jersey, and moving expenses associated with
personal items. In addition, Employer shall work with employee to insure that
Employee's tax burden shall equate to that of India solely and shall cover the
advancement of additional tax payments which may be required by the Employee in
the US, provided that the payment of such advances shall be promptly repaid to
the Employer upon payment by the US authorities.
8.7 INSURANCE. The company shall make best efforts to retain its existing
Directors & Offers Insurance Policy.
IN WITNESS WHEREOF, the parties hereto have executed the Agreement as of the
date first above written.
/s/ Xxxxx Xxxxxxxx /s/ Xxxxxx Xxxxxx
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Executive Company
Xxxxxx Xxxxxx
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Name:
Title: CEO
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EXHIBIT A TO
THE EMPLOYMENT AGREEMENT
OF XXXXX XXXXXXXX
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INTELLIGROUP STANDARD EMPLOYEE TERMS ("AGREEMENT")
Employee Name:_________________________________
In consideration of employment with the Company, and all the benefits
conferred by such employment including, without limitation, any stock option
grants now or in the future by the Company, as well as the future access to
confidential information to which I shall be privileged by virtue of entering
this Agreement, the receipt and sufficiency of which are acknowledged, I, the
above-named Employee, hereby agree with the Company as follows.
1.0. DEFINITIONS.
1.1. "Company" shall refer to Intelligroup, Inc. and/or its direct or
indirect subsidiaries and affiliates.
1.2. "Confidential Information" shall mean a) proprietary information which the
Company possesses, or to which the Company has rights, which has commercial
value including without limitation, trade secrets, product ideas, designs,
configurations, processes, techniques, formulas, software, improvements,
inventions, data, know-how, copyrightable materials, marketing plans and
strategies, sales and financial reports and forecasts, lists of present and
prospective customers, lists of present or former employees, and any information
relating to research, development, programming, purchasing, accounting,
engineering, merchandising and licensing as well as any information developed by
in the course of my employment with the Company including information relating
to inventions under Section 4 below, as well as any other information to which I
may have access in connection with your employment; b) any other information of
the Company which is designated as "Confidential" or "Proprietary" or by its
nature reasonably should be considered "Confidential"; or c) information of
others including, without limitation, the customers, partners or other companies
or individuals with which the Company conducts business, which is designated or
otherwise would reasonably be designated as the confidential or proprietary
information of such companies under their policies, procedures or agreements
with the Company and, in the absence of such policies, procedures or agreements,
by applying the definition of "Confidential Information" as described above to
such information. I understand that as an employee of Intelligroup it is my duty
to understand the nature of Confidential Information and I will request
clarification as necessary.
2. THIS SECTION LEFT INTENTIONALLY BLANK.
3. CONFIDENTIALITY. I understand and agree that my employment creates a
relationship of confidence and trust between myself and the Company with respect
all Confidential Information. At all times, both during my employment with the
Company and after its termination, I will keep in confidence and trust all such
Confidential Information, and will not use or disclose any such Confidential
Information without the advance written consent of the Company, except as may be
necessary in the ordinary course of performing my duties to the Company. The
restrictions set forth in this Section 2 will not apply to information which is
generally known to the public or in the trade, unless such knowledge results
from an unauthorized disclosure by me, but this exception will not affect the
application of any other provision of this Agreement to such information in
accordance with the terms of such provision. I likewise agree to immediately
report to my supervisor any violation of the Company's security measures or
prohibited disclosure of Confidential Information by any person or organization.
I agree to immediately report to my supervisor the names of any persons or
organizations that attempt to obtain Confidential Information from me.
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4. DOCUMENTS, RECORDS, ETC. All documents, records, apparatus, equipment and
other physical property, including but not limited to papers, notebooks,
manuals, reports, desktops, laptops, printers, mobile phones, remote email
assistants, computer files, software, vehicles, tools, keys, entry cards or
badges, credit authorizations, user identifications and passwords, whether or
not pertaining to Proprietary Information, which are furnished to me by the
Company or are produced by me in connection with my employment will be and
remain the sole property of the Company. I will return to the Company all such
materials and property as and when requested by the Company. In any event, I
will return all such materials and property immediately upon termination of my
employment for any reason. I will not take with me any such material or property
or any copies thereof upon such termination.
5. OWNERSHIP OF INVENTIONS. I agree that any and all writings, inventions,
improvements, processes, procedures, and/or techniques, which I make, conceive,
discover or develop, in whole or in part, either alone or jointly with others,
during the term of my employment with the Company ("Work Product"), shall be the
sole property of the Company. The Company will be the sole owner of all patents,
copyrights and other proprietary rights in and with respect to such Work
Product. To the fullest extent permitted by law, such Work Product will be
deemed works made for hire. I hereby transfer and assign to the Company any
proprietary rights which I may have or acquire in any such Work Product, and I
waive any moral rights or other special rights which I may have or accrue
therein. I agree to execute any documents and take any actions that may be
required to effect and confirm such transfer and assignment and waiver. The
provisions of this Section 4 will apply to all Work Products which are conceived
or developed during the term of my employment with the Company, whether before
or after the date of this Agreement, and whether or not further development or
reduction to practice may take place after termination of my employment, for
which purpose it will be presumed that any Work Product conceived by me which
are reduced to practice within one year after termination of my employment were
conceived during the term of my employment with the Company unless I am able to
establish a later conception date by clear and convincing written evidence. The
provisions of this Section 5 will not apply, however, to any Inventions which
may be disclosed in a separate Schedule attached to this Agreement prior to its
acceptance by the Company, representing Inventions made by me prior to my
employment by the Company.
6. DISCLOSURE OF INVENTIONS. I agree promptly to disclose to the Company, or any
persons designated by it, in writing, all Work Products which are or may be
subject to the provisions of Section 5.
7. OBTAINING AND ENFORCING PROPRIETARY RIGHTS. I agree to assist the Company, at
the Company's request from time to time and at the Company's expense, to obtain
and enforce patents, copyrights or other proprietary rights with respect to Work
Product in any and all countries. I will execute all documents reasonably
necessary or appropriate for this purpose. This obligation will survive the
termination of my employment, provided that the Company will compensate me at a
reasonable rate after such termination for time actually spent by me at the
Company's request on such assistance. In the event that the Company is unable
for any reason whatsoever to secure my signature to any document reasonably
necessary or appropriate for any of the foregoing purposes (including renewals,
extensions, continuations, divisions or continuations in part), I hereby
irrevocably designate and appoint the Company and its duly authorized officers
and agents as my agents and attorneys-in-fact to act for me and on my behalf,
but only for the purpose of executing and filing any such document and doing all
other lawfully permitted acts to accomplish the foregoing purposes with the same
legal force and effect as if executed by me.
8. SOLICITATION OF EMPLOYEES. I agree that during and for a period of twelve
(12) months immediately following the termination of my employment with the
Company for any reason, whether with or without cause, I shall not either
directly or indirectly solicit, induce, recruit or encourage any of the
Company's employees or independent contractors to leave their employment or end
their business relationship with the Company, or take away such employees or
independent contractors, or attempt to solicit, induce, recruit, encourage, or
take away any of the Company's employees or independent contractors, either for
myself or for any other person or entity. I agree that if I breach, or propose
to breach, any portion of this Section 8, the Company shall be entitled, in
addition to all other remedies that it may have, to damages, damages associated
with recruiting costs and training costs for replacing Company's employee.
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9. COMPETITIVE ACTIVITIES. I agree that while I am employed by the Company and
for a period of twelve (12) months following the termination of my employment
with the Company for any reason, whether with or without cause, I will not,
without the Company's express written consent, directly or indirectly, whether
as owner, partner, shareholder, director, officer, consultant, agent, employee,
contractor, or otherwise: a) engage in any business that, in the reasonable
judgment of the Company, is competitive with the Company or which may, in the
reasonable judgment of the Company, become competitive with the Company in the
foreseeable future, or assist others in any business that is competitive with
the Company; b) solicit or accept employment or similar business from, contract
with or otherwise assist any customer, partner or other company with which the
Company had a business agreement within the twelve (12) months preceding the
solicitation or acceptance of such services, except in the course of your
employment with the Company; or c) cause or seek to have any customer, partner
or other company which the Company has a business agreement with to end or
otherwise detrimentally alter their business relationship with the Company.
I understand that the restrictions set forth in this Section 9 are intended to
protect the Company's legitimate interest in its Proprietary Information and
established customer relationships and goodwill, and agree that such
restrictions are necessary, reasonable and appropriate for this purpose.
10. THIRD-PARTY AGREEMENTS AND RIGHTS. I hereby confirm that I am not bound by
the terms of any agreement with any previous employer or other party which
restricts in any way my use or disclosure of information or my engagement in any
business, except as may be disclosed in a separate Schedule attached to this
Agreement prior to its acceptance by the Company. I have delivered to the
Company true and complete copies of any agreements listed on said Schedule. I
represent to the Company that my execution of this Agreement, my employment with
the Company and the performance of my proposed duties for the Company will not
violate any obligations I may have to any such previous employer or other party.
In my work for the Company, I will not disclose or make use of any information
in violation of any agreements with or rights of any such previous employer or
other party, and I will not bring to the premises of the Company any copies or
other tangible embodiments of non-public information belonging to or obtained
from any such previous employment or other party.
11. THIS SECTION LEFT INTENTIONALLY BLANK.
12. EQUITABLE REMEDIES. I agree that it would be difficult to measure any
damages caused to the Company which might result from any breach of the terms of
this Agreement, and that in any event money damages would be an inadequate
remedy for any such breach. Accordingly, I agree that if I breach, or propose to
breach, any portion of this Agreement, the Company shall be entitled, in
addition to all other remedies that it may have, to an injunction or other
appropriate equitable relief to restrain any such breach without showing or
proving any actual damage to the Company. In addition, the party seeking to
enforce performance of the terms of this Agreement shall be entitled to all
reasonable attorneys fees and third party costs incurred in seeking enforcement
of this Agreement, regardless of whether suit or other legal or equitable is
commenced, including attorneys fees and costs incurred through engagement in
alternative dispute resolution procedures such as mediation or arbitration fees.
13. BINDING EFFECT. This Agreement will be binding upon me and my heirs,
executors, administrators and legal representatives and will inure to the
benefit of the Company, any subsidiary of the Company, and its and their
respective successors and assigns.
14. ENFORCEABILITY. If any portion or provision of this Agreement is to any
extent declared illegal or unenforceable by a court of competent jurisdiction,
then the remainder of this Agreement, or the application of such portion or
provision in circumstances other than those as to which it is so declared
illegal or unenforceable, will not be affected thereby, and each portion and
provision of this Agreement shall be valid and enforceable to the fullest extent
permitted by law. In the event that any provision of this Agreement is
determined by any court of competent jurisdiction to be unenforceable by reason
of excessive scope as to geographic, temporal or functional coverage, such
provision will be deemed to extend only over the maximum geographic, temporal
and functional scope as to which it may be enforceable.
15. THIS SECTION LEFT INTENTIONALLY BLANK.
16. THIS SECTION LEFT INTENTIONALLY BLANK.
17. NOTICES. Any notices, requests, demands and other communications provided
for by this Agreement will be sufficient if in writing and delivered in person
or sent by registered or certified mail, postage prepaid, to me at the last
address which I have filed in writing with the Company or, in the case of any
notice to the Company, at its main offices, to the attention of its Chief
Executive Officer.
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18. GOVERNING LAW. This is a New Jersey contract and shall be construed under
and be governed in all respects by the laws of New Jersey, without giving effect
to the conflict of laws principles of New Jersey law. Any legal action or suit
related to this Agreement shall be brought exclusively in the courts of New
Jersey. Both parties agree that exclusive jurisdiction lies in the state and
federal courts residing in New Jersey for the resolution of disputes.
I UNDERSTAND THAT THIS AGREEMENT AFFECTS IMPORTANT RIGHTS. I HAVE READ IT
CAREFULLY AND AM SATISFIED THAT I UNDERSTAND IT COMPLETELY.
/s/ Xxxxx Xxxxxxxx
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Signature of Employee
Date: June 2, 2005
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Accepted and Agreed to by
Intelligroup, Inc.
By: /s/ Xxxxxx Xxxxxx
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Name: Xxxxxx Xxxxxx
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Title: CEO
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Date: 6/2/2005
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SCHEDULE OF PRIOR INVENTIONS AND THIRD PARTY AGREEMENTS (IF ANY)
Accepted by Accepted by
INTELLIGROUP, INC. EMPLOYEE
By: /s/ Xxxxxx Xxxxxx By: /s/ Xxxxx Xxxxxxxx
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Name: Xxxxxx Xxxxxx Name: Xxxxx Xxxxxxxx
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Title: CEO Date: June 2, 2005
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Date: 6/2/2005
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EXHIBIT B TO
THE EMPLOYMENT AGREEMENT
OF XXXXX XXXXXXXX
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INTELLIGROUP, INC.
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is made as of April 1, 2005,
by and between Intelligroup, Inc., a New Jersey corporation (the "Company"), and
Xxxxx Xxxxxxxx ("Indemnitee").
WHEREAS, Indemnitee is an officer and/or director of the Company and
performs a valuable service in such capacity for the Company;
WHEREAS, the Company and Indemnitee recognize the substantial increase in
corporate litigation in general, subjecting directors, officers, employees,
agents and fiduciaries to expensive litigation risks at the same time as the
availability and coverage of liability insurance may be limited;
WHEREAS, the Company and Indemnitee further recognize the difficulty in
obtaining liability insurance for its directors, officers, employees, agents and
fiduciaries, the significant increases in the cost of such insurance and the
general reductions in the coverage of such insurance;
WHEREAS, Indemnitee does not regard the current protection available as
adequate under the present circumstances, and the Indemnitee and other
directors, officers, employees, agents and fiduciaries of the Company may not be
willing to continue to serve in such capacities without additional protection;
and
WHEREAS, the Company desires to attract and retain the services of highly
qualified individuals, such as Indemnitee, to serve the Company and, in part, in
order to induce Indemnitee to continue to provide services to the Company as an
officer and/or director, the Company wishes to provide for the indemnification
and advancing of expenses to Indemnitee to the maximum extent permitted by law.
NOW, THEREFORE, the Company and Indemnitee hereby agree as follows:
1. Indemnification.
(a) Indemnification of Expenses. The Company shall indemnify Indemnitee
to the fullest extent permitted by law if Indemnitee was or is or becomes a
party to or witness or other participant in, or is threatened to be made a party
to or witness or other participant in, any threatened, pending or completed
action, suit, proceeding or alternative dispute resolution mechanism, or any
hearing, inquiry or investigation that Indemnitee in good faith believes might
lead to the institution of any such action, suit, proceeding or alternative
dispute resolution mechanism, whether civil, criminal, administrative,
investigative or other (hereinafter a "Claim") by reason of (or arising in part
out of) any event or occurrence related to the fact that Indemnitee is or was a
director, officer, employee, agent or fiduciary of the Company, or any
subsidiary of the Company, or is or was serving at the request of the Company as
a director, officer, employee, agent or fiduciary of another corporation,
partnership, joint venture, trust or other enterprise, or by reason of any
action or inaction on the part of Indemnitee while serving in such capacity
(hereinafter an "Indemnifiable Event") against any and all expenses (including
attorneys' fees and all other costs, expenses and obligations incurred in
connection with investigating, defending, being a witness in or participating in
(including on appeal), or preparing to defend, be a witness in or participate
in, any such action, suit, proceeding, alternative dispute resolution mechanism,
hearing, inquiry or investigation), judgments, fines, penalties and amounts paid
in settlement (if such settlement is approved in advance by the Company, which
approval shall not be unreasonably withheld) of such Claim and any federal,
state, local or foreign taxes imposed on the Indemnitee as a result of the
actual or deemed receipt of any payments under this Agreement (collectively,
hereinafter "Expenses"), including all interest, assessments and other charges
paid or payable in connection with or in respect of such Expenses. Such payment
of Expenses shall be made by the Company as soon as practicable but in any event
no later than thirty (30) days after written demand by Indemnitee therefor is
presented to the Company.
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(b) Reviewing Party. Notwithstanding the foregoing, (i) the obligations
of the Company under Section l(a) shall be subject to the condition that the
Reviewing Party (as described in Section 10(e) hereof) shall not have determined
(in a written opinion, in any case in which the Independent Legal Counsel
referred to in Section 1(c) hereof is involved) that Indemnitee would not be
permitted to be indemnified under applicable law, and (ii) the obligation of the
Company to make an advance payment of Expenses to Indemnitee pursuant to Section
2(a) (an "Expense Advance") shall be subject to the condition that, if, when and
to the extent that the Reviewing Party determines that Indemnitee would not be
permitted to be so indemnified 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; provided, however, that if
Indemnitee has commenced or thereafter commences legal proceedings in a court of
competent jurisdiction to secure a determination that Indemnitee should be
indemnified under applicable law, any determination made by the Reviewing Party
that Indemnitee would not be permitted to be indemnified under applicable law
shall not be binding and Indemnitee shall not be required to reimburse the
Company for any Expense Advance until a final judicial determination is made
with respect thereto (as to which all rights of appeal therefrom have been
exhausted or lapsed). Indemnitee's obligation to reimburse the Company for any
Expense Advance shall be unsecured and no interest shall be charged thereon. If
there has not been a Change in Control (as defined in Section 10(c) hereof), the
Reviewing Party shall be selected by the Board of Directors, and if there has
been such a Change in Control (other than a Change in Control which has been
approved by a majority of the Company's Board of Directors who were directors
immediately prior to such Change in Control), the Reviewing Party shall be the
Independent Legal Counsel referred to in Section l(c) hereof. If there has been
no determination by the Reviewing Party or if the Reviewing Party determines
that Indemnitee substantively would not be permitted to be indemnified in whole
or in part under applicable law, Indemnitee shall have the right to commence
litigation seeking an initial determination by the court or challenging any such
determination by the Reviewing Party or any aspect thereof, including the legal
or factual bases therefor, and the Company hereby consents to service of process
and to appear in any such proceeding. Any determination by the Reviewing Party
otherwise shall be conclusive and binding on the Company and Indemnitee.
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(c) Change in Control. The Company agrees that if there is a Change in
Control of the Company (other than a Change in Control which has been approved
by a majority of the Company's Board of Directors who were directors immediately
prior to such Change in Control) then with respect to all matters thereafter
arising concerning the rights of Indemnitee to payments of Expenses and Expense
Advances under this Agreement or any other agreement or under the Company's
Amended and Restated Certificate of Incorporation or Amended and Restated
By-laws as now or hereafter in effect, the Company shall seek legal advice only
from Independent Legal Counsel (as defined in Section 10(d) hereof) selected by
Indemnitee and approved by the Company (which approval shall not be unreasonably
withheld). Such counsel, among other things, shall render its written opinion to
the Company and Indemnitee as to whether and to what extent Indemnitee would be
permitted to be indemnified under applicable law. The Company agrees to pay the
reasonable fees of the Independent Legal Counsel referred to above and to fully
indemnify such counsel against any and all expenses (including attorneys' fees),
claims, liabilities and damages arising out of or relating to this Agreement or
its engagement pursuant hereto.
(d) Mandatory Payment of Expenses. Notwithstanding any other provision
of this Agreement other than Section 8 hereof, to the extent that Indemnitee has
been successful on the merits or otherwise, including, without limitation, the
dismissal of an action without prejudice, in defense of any action, suit,
proceeding, inquiry or investigation referred to in Section (1)(a) hereof or in
the defense of any claim, issue or matter therein, Indemnitee shall be
indemnified against all Expenses incurred by Indemnitee in connection therewith.
2. Expenses; Indemnification Procedure.
(a) Advancement of Expenses. The Company shall advance all Expenses
incurred by Indemnitee. The advances to be made hereunder shall be paid by the
Company to Indemnitee as soon as practicable but in any event no later than five
(5) days after written demand by Indemnitee therefor to the Company.
(b) Notice/Cooperation 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 indemnification will or could be sought under this
Agreement. Notice to the Company shall be directed to the President of the
Company at the address shown on the signature page of this Agreement (or such
other address as the Company shall designate in writing to Indemnitee). In
addition, Indemnitee shall give the Company such information and cooperation as
it may reasonably require and as shall be within Indemnitee's power.
(c) No Presumptions; Burden of Proof. For purposes of this Agreement,
the termination of any claim, action, suit or proceeding, 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 indemnification is not
permitted by applicable law. In addition, neither the failure of the Reviewing
Party to have made a determination as to whether Indemnitee has met any
particular standard of conduct or had any particular belief, nor an actual
determination by the Reviewing Party that Indemnitee has not met such standard
of conduct or did not have such belief, prior to the commencement of legal
proceedings by Indemnitee to secure a judicial determination that Indemnitee
should be indemnified under applicable law, shall be a defense to Indemnitee's
claim or create a presumption that Indemnitee has not met any particular
standard of conduct or did not have any particular belief. In connection with
any determination by the Reviewing Party or otherwise as to whether the
Indemnitee is entitled to be indemnified hereunder, the burden of proof shall be
on the Company to establish that Indemnitee is not so entitled.
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(d) Notice to Insurers. If, at the time of the receipt by the Company
of a notice of a Claim pursuant to Section 2(b) hereof, the Company has
liability insurance in effect which may cover such Claim, the Company shall give
prompt notice of the commencement of such Claim to the insurers in accordance
with the procedures set forth in such policy or 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 action,
suit, proceeding, inquiry or investigation in accordance with the terms of such
policies.
(e) Assumption of Defense; Selection of Counsel. In the event the
Company shall be obligated hereunder to pay the Expenses of any action, suit,
proceeding, inquiry or investigation, the Company, if appropriate, shall be
entitled to assume the defense of such action, suit, proceeding, inquiry or
investigation with counsel approved by Indemnitee (which approval shall not be
unreasonably withheld), 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, suit,
proceeding, inquiry or investigation; provided that, (i) Indemnitee shall have
the right to employ Indemnitee's counsel in any such action, suit, proceeding,
inquiry or investigation at Indemnitee's expense and (ii) if (A) the employment
of counsel by Indemnitee has been previously authorized by the Company or (B)
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.
Notwithstanding the foregoing, in the event the Company shall not continue to
retain such counsel to defend such action, suit, proceeding, inquiry or
investigation, then the fees and expenses of Indemnitee's counsel shall be at
the expense of the Company.
3. Additional Indemnification Rights; Nonexclusivity.
(a) Scope. The Company hereby agrees to indemnify the Indemnitee to the
fullest extent permitted by law, notwithstanding that such indemnification is
not specifically authorized by the other provisions of this Agreement, the
Company's Amended and Restated Certificate of Incorporation, the Company's
Amended and Restated By-laws or by statute. In the event of any change after the
date of this Agreement in any applicable law, statute or rule which expands the
right of a New Jersey corporation to indemnify a member of its board of
directors or an officer, employee, agent or fiduciary, it is the intent of the
parties hereto that Indemnitee shall enjoy by this Agreement the greater
benefits afforded by such change. In the event of any change in any applicable
law, statute or rule which narrows the right of a New Jersey corporation to
indemnify a member of its board of directors or an officer, employee, agent or
fiduciary, 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.
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(b) Nonexclusivity. The indemnification provided by this Agreement
shall be in addition to any rights to which Indemnitee may be entitled under the
Company's Amended and Restated Certificate of Incorporation, its Amended and
Restated By-laws, any agreement, any vote of shareholders or disinterested
directors, the New Jersey Business Corporation Act, or otherwise. The
indemnification provided under this Agreement shall continue as to Indemnitee
for any action taken or not taken while serving in an indemnified capacity even
though Indemnitee may have ceased to serve in such capacity.
4. No Duplication of Payments. The Company shall not be liable under this
Agreement to make any payment in connection with any action, suit, proceeding,
inquiry or investigation made against Indemnitee to the extent Indemnitee has
otherwise actually received payment (under any insurance policy, Amended and
Restated Certificate of Incorporation, By-laws or otherwise) of the amounts
otherwise indemnifiable hereunder.
5. Partial Indemnification. If Indemnitee is entitled under any provision
of this Agreement to indemnification by the Company for some or a portion of
Expenses in the investigation, defense, appeal or settlement of any civil or
criminal action, suit, proceeding, inquiry or investigation, but not, however,
for all of the total amount thereof, the Company shall nevertheless indemnify
Indemnitee for the portion of such Expenses to which Indemnitee is entitled.
6. Mutual Acknowledgment. Both the Company and Indemnitee acknowledge that
in certain instances, Federal law or applicable public policy may prohibit the
Company from indemnifying its directors, officers, employees, agents or
fiduciaries under this Agreement or otherwise. Indemnitee understands and
acknowledges that the Company has undertaken or may be required in the future to
undertake with the Securities and Exchange Commission to submit the question of
indemnification to a court in certain circumstances for a determination of the
Company's right under public policy to indemnify Indemnitee.
7. Liability Insurance. To the extent the Company maintains liability
insurance applicable to directors, officers, employees, agents or fiduciaries,
Indemnitee shall be covered by such policies in such a manner as to provide
Indemnitee the same rights and benefits as are accorded to the most favorably
insured of the Company's directors, if Indemnitee is a director; or of the
Company's officers, if Indemnitee is not a director of the Company but is an
officer; or of the Company's key employees, agents or fiduciaries, if Indemnitee
is not an officer or director but is a key employee, agent or fiduciary.
8. Exceptions. Any other provision herein to the contrary notwithstanding,
the Company shall not be obligated pursuant to the terms of this Agreement:
(a) Excluded Action or Omissions. To indemnify Indemnitee for acts,
omissions or transactions from which Indemnitee may not be relieved of liability
under applicable law.
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(b) Claims Initiated by Indemnitee. To indemnify or advance expenses
to Indemnitee with respect to proceedings or claims initiated or brought
voluntarily by Indemnitee and not by way of defense, except (i) with respect to
proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other agreement or insurance policy or under the Company's
Amended and Restated Certificate of Incorporation or Amended and Restated
By-laws now or hereafter in effect relating to Claims for Indemnifiable Events,
(ii) in specific cases if the Board of Directors has approved the initiation or
bringing of such suit, or (iii) as otherwise required under Section 14A:3-5 of
the New Jersey Business Corporation Act, regardless of whether Indemnitee
ultimately is determined to be entitled to such indemnification, advance expense
payment or insurance recovery, as the case may be.
(c) Lack of Good Faith. To indemnify Indemnitee for any expenses
incurred by the Indemnitee with respect to any proceeding instituted by
Indemnitee to enforce or interpret this Agreement, if a court of competent
jurisdiction determines that each of the material assertions made by the
Indemnitee in such proceeding was not made in good faith or was frivolous; or
(d) Claims Under Section 16(b). To indemnify Indemnitee for expenses
and the payment of profits arising from the purchase and sale by Indemnitee of
securities in violation of Section 16(b) of the Securities Exchange Act of 1934,
as amended, or any similar successor statute.
9. Period of Limitations. No legal action shall be brought and no cause
of action shall be asserted by or in the right of the Company against
Indemnitee, Indemnitee's estate, spouse, heirs, executors or personal or legal
representatives after the expiration of two years from the date of accrual of
such cause of action, and any claim or cause of action of the Company shall be
extinguished and deemed released unless asserted by the timely filing of a legal
action within such two-year period; provided, however, that if any shorter
period of limitations is otherwise applicable to any such cause of action, such
shorter period shall govern.
10. Construction of Certain Phrases.
(a) For purposes of this Agreement, references to the "Company" 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 directors, officers, employees, agents or
fiduciaries, so that if Indemnitee is or was a director, officer, employee,
agent or fiduciary of such constituent corporation, or is or was serving at the
request of such constituent corporation as a director, officer, employee, agent
or fiduciary of another corporation, partnership, joint venture, employee
benefit plan, 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.
(b) For purposes of this Agreement, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include any
excise taxes assessed on Indemnitee with respect to an employee benefit plan;
and references to "serving at the request of the Company" shall include any
service as a director, officer, employee, agent or fiduciary of the Company
which imposes duties on, or involves services by, such director, officer,
employee, agent or fiduciary with respect to an employee benefit plan, its
participants or its beneficiaries; and 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 "not opposed to the best interests of the
Company" as referred to in this Agreement.
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(c) For purposes of this Agreement a "Change in Control" shall be
deemed to have occurred if (i) any "person" (as such term is used in Sections
13(d) 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 or a corporation owned directly or indirectly by the shareholders
of the Company in substantially the same proportions as their ownership of stock
of the Company, is or becomes the "beneficial owner" (as determined in
accordance with Rule 13d-3 under such Act), directly or indirectly, of
securities of the Company representing more than 20% of the total voting power
represented by the Company's then outstanding Voting Securities, (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
shareholders 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 shareholders
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 total voting
power represented by the Voting Securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation, or the
shareholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of (in one
transaction or a series of transactions) all or substantially all of the
Company's assets.
(d) For purposes of this Agreement, "Independent Legal Counsel" shall
mean an attorney or firm of attorneys, selected in accordance with the
provisions of Section 1(c) hereof, who shall not have otherwise performed
services for the Company or Indemnitee within the last three years (other than
with respect to matters concerning the rights of Indemnitee under this
Agreement, or of other indemnitees under similar indemnity agreements).
(e) For purposes of this Agreement, a "Reviewing Party" shall mean any
appropriate person or body consisting of a member or members of the Company's
Board of Directors or any other person or body appointed by the Board of
Directors who is not a party to the particular Claim for which Indemnitee is
seeking indemnification, or Independent Legal Counsel.
(f) For purposes of this Agreement, "Voting Securities" shall mean any
securities of the Company that vote generally in the election of directors.
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11. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original.
12. Binding Effect; Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors and 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,
and personal and legal representatives. The Company shall require and cause any
successor (whether direct or indirect by purchase, merger, consolidation or
otherwise) to all, substantially all, or a substantial part, of the business
and/or assets of the Company, by written agreement in form and substance
satisfactory to Indemnitee, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform if no such succession had taken place. This Agreement shall
continue in effect regardless of whether Indemnitee continues to serve as a
director of the Company or of any other enterprise at the Company's request.
13. Attorneys' Fees. In the event that any action is instituted by
Indemnitee under this Agreement or under any liability insurance policies
maintained by the Company to enforce or interpret any of the terms hereof or
thereof, Indemnitee shall be entitled to be paid all Expenses incurred by
Indemnitee with respect to such action, regardless of whether Indemnitee is
ultimately successful in such action, and shall be entitled to the advancement
of Expenses with respect to such action, unless as a part of such action the
court of competent jurisdiction over such action determines that each 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 Expenses
incurred by Indemnitee in defense of such action (including costs and expenses
incurred with respect to Indemnitee's counterclaims and cross-claims made in
such action), and shall be entitled to the advancement Expenses with respect to
such action, unless as a part of such action the court having jurisdiction over
such action determines that each of Indemnitee's material defenses to such
action were made in bad faith or were frivolous.
14. Notice. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and receipted for by the party addressee, on the date of such
receipt, or (ii) if mailed by domestic certified or registered mail with postage
prepaid, on the third business day after the date postmarked. Addresses for
notice to either party are as shown on the signature page of this Agreement, or
as subsequently modified by written notice.
15. Consent to Jurisdiction. The Company and Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of the State of New Jersey
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 commenced, prosecuted and continued only in the Superior
Court of the State of New Jersey in and for Middlesex County, which shall be the
exclusive and only proper forum for adjudicating such a claim.
-16-
16. Severability. 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 fullest extent permitted by law.
Furthermore, to the fullest extent possible, the provisions of this Agreement
(including, without limitations, each portion of this Agreement containing any
provision held to be invalid, void or otherwise unenforceable, that is not
itself invalid, void or unenforceable) shall be construed so as to give effect
to the intent manifested by the provision held invalid, illegal or
unenforceable.
17. Choice of Law. This Agreement shall be governed by and its provisions
construed and enforced in accordance with the laws of the State of New Jersey,
as applied to contracts between New Jersey residents, entered into and to be
performed entirely within the State of New Jersey, without regard to the
conflict of laws principles thereof.
18. Subrogation. 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 documents required and shall do
all acts that may be necessary to secure such rights and to enable the Company
effectively to bring suit to enforce such rights.
19. Amendment and Termination. No amendment, modification, termination or
cancellation of this Agreement shall be effective unless it is in writing signed
by both 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.
20. Integration and Entire Agreement. This Agreement sets forth the entire
understanding between the parties hereto and supersedes and merges all previous
written and oral negotiations, commitments, understandings and agreements
relating to the subject matter hereof between the parties hereto.
21. No Construction as Employment Agreement. Nothing contained in this
Agreement shall be construed as giving Indemnitee any right to be retained in
the employ of the Company or any of its subsidiaries.
**********
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
INTELLIGROUP, INC.
By: /s/ Xxxxxx Xxxxxx
----------------------------
Name: Xxxxxx Xxxxxx
Title: CEO
Address: 000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000 XXX
AGREED TO AND ACCEPTED:
INDEMNITEE:
/s/ Xxxxx Xxxxxxxx
--------------------------
(signature)
Xxxxx Xxxxxxxx
--------------------------
(name of Indemnitee)
--------------------------
--------------------------
(address)
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