INDEMNIFICATION AGREEMENT
Exhibit 10.1
THIS INDEMNIFICATION AGREEMENT (this “Agreement”), effective as of , 2007, is
made by and between XXXX-XXXXX COMPANY, a Delaware corporation (the “Company”), and
(“Indemnitee”), who is currently serving the Company in the capacity of
a director and/or officer of the Company.
WITNESSETH:
WHEREAS, in recognition of Indemnitee’s need for substantial protection against personal
liability in order to enhance Indemnitee’s continued service to the Company in an effective manner
and Indemnitee’s reliance on the provisions of the Bylaws requiring indemnification of Indemnitee
under certain circumstances, and in part to provide Indemnitee with specific contractual assurance
that the protection promised by such Bylaws will be available to Indemnitee (regardless of, among
other things, any amendment to or revocation of such Bylaws or any change in the composition of the
Company’s Board of Directors or acquisition transaction relating to the Company), the Company
wishes to provide in this Agreement for the indemnification of and the advancing of expenses to
Indemnitee to the fullest extent (whether partial or complete) permitted by law and as set forth in
this Agreement, and, to the extent insurance is maintained, for the continued coverage of
Indemnitee under the Company’s directors’ and officers’ liability insurance policies.
NOW THEREFORE, in consideration of the premises and of Indemnitee’s continued services as a
director and/or an officer of the Company, the Company and the Indemnitee, intending to be legally
bound, do hereby agree as follows:
1. Agreement to Serve. Indemnitee agrees to serve or continue to serve as a director
and/or an officer of the Company, at the will of the Company, for so long as he or she is duly
elected or appointed and qualified in accordance with the provisions of the Bylaws of the Company
or until such time as he or she tenders his or her resignation in writing.
2. Certain Definitions.
(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 stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company, is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of
securities of the Company representing 30% or more of the total voting power represented by the
Company’s then outstanding Voting Securities, or (ii) during any period of two consecutive years,
individuals who at the beginning of such period constitute the Board of Directors of the Company
and any new director whose election by the Board of Directors or nomination for election by the
Company’s stockholders was approved by a vote of at least two-thirds (2/3) of the directors then
still in office who either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to constitute a majority
thereof, or (iii) the stockholders of the Company approve a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation which would result in the Voting
Securities of the Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into Voting Securities of the surviving entity) at
least 80% of the total voting power represented by the Voting Securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation, or the stockholders of
the Company approve a plan of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all the Company’s assets.
(b) Claim: any threatened, pending or completed action, suit or proceeding, or any
inquiry or investigation, and any appeal thereof, whether conducted or initiated by the Company,
whether brought by or in the right of the Company or any subsidiary or any other party, whether
civil, criminal, administrative, or investigative.
(c) Disinterested Director: a director of the Company who is not and was not a party
to the Claim in respect of which indemnification is sought by Indemnitee.
(d) Expenses: shall include all reasonable attorneys’ fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses, duplicating and printing costs
and all other disbursements or expenses of the type customarily and reasonably incurred in
connection with prosecuting, defending, preparing to prosecute or defend, investigating, or being
or preparing to be a witness in any Claim and any expenses reasonably and actually incurred in
establishing a right to indemnification under this Agreement. Expenses shall not include amounts
of judgments, fines or penalties against Indemnitee.
(e) Indemnifiable Event: any event or occurrence related to the fact that Indemnitee
is or was a director, officer, employee, agent or fiduciary of the Company, or is or was serving at
the request of the Company as a director, officer, employee, trustee, agent or fiduciary of another
corporation, partnership, joint venture, employee benefit plan, trust or other enterprise, or by
reason of anything done or not done by Indemnitee in any such capacity.
(f) Reviewing Party: 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 (including
the special independent counsel referred to in Section 5) who is not a party to the particular
Claim for which Indemnitee is seeking indemnification.
(g) Voting Securities: any securities of the Company which vote generally in the
election of directors.
3. Basic Indemnification Arrangement.
(a) In the event Indemnitee was, 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, a Claim by reason of (or
arising in part out of) an Indemnifiable Event, the Company shall indemnify Indemnitee to the
fullest extent permitted by law as soon as practicable but in any event no later than thirty (30)
days after written demand is presented to the Company, against any and all Expenses, judgments,
fines, penalties and amounts paid in settlement of such Claim. Notwithstanding anything in this
Agreement to the contrary, and except as provided in Section 6, prior to a Change in Control,
Indemnitee shall not be entitled to indemnification pursuant to this Agreement in connection with
any Claim initiated by Indemnitee against the Company or any director or officer of the Company
unless the Company has joined in or consented to the initiation of such claim.
(b) If so requested by Indemnitee, the Company shall advance (within ten (10) business days of
such written request) all Expenses to Indemnitee (an “Expense Advance”) upon receipt by the
Company of an undertaking by or on behalf of Indemnitee to repay such amount to the extent that it
is ultimately determined that Indemnitee is not entitled to be indemnified.
(c) Notwithstanding the foregoing, (i) the obligations of the Company under Section 3(a) and
(b) shall be subject to the condition that the Reviewing Party shall not have determined (in a
written opinion, in any case in which the special independent counsel referred to in Section 5
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 Expense Advance pursuant to Section 3(b) shall be
subject to the condition that if, when, and to the extent that, the Reviewing Parry determines, or
it is otherwise ultimately determined, 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 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
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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). If there has been a Change in Control, the Reviewing Party shall be the
special independent counsel referred to in Section 5 hereof. If the Board of Directors selects the
Reviewing Party, the selection shall be made by a majority vote of Disinterested Directors, even
though less than a quorum; in the event that a majority of Disinterested Directors so directs, the
determination shall be made by independent counsel, as defined in Section 5 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 in the Court of Chancery of Delaware, or any
other court of competent jurisdiction and in which venue is proper, seeking an initial
determination by the court or challenging any such determination by the Reviewing Party or any
aspect thereof, 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.
4. Term of Agreement. This Agreement shall continue until and terminate upon the
later of (i) 10 years after the date that Indemnitee shall have ceased to serve as a director or
officer of the Company or of any other corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise which Indemnitee served at the express written request of the
Company; or (ii) the final termination of all pending Claims in respect of which Indemnitee is
granted rights of indemnification or advancement of Expenses hereunder.
5. 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 indemnity payments
and Expense Advances under this Agreement or any other agreement or Company Bylaw now or hereafter
in effect relating to Claims for Indemnifiable Events, the Company shall seek legal advice only
from special independent counsel selected by Indemnitee and approved by the Company (which approval
shall not be unreasonably withheld), and who has not otherwise performed services for the Company,
for Indemnitee, or for any other party to the Claim within the last five years (other than in
connection with such matters). 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 special
independent 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.
6. Indemnification for Additional Expenses. The Company shall indemnify Indemnitee
against all Expenses (including attorneys’ fees) and, if requested by Indemnitee, shall (within ten
(10) business days of such written request) advance such Expenses to Indemnitee, which are incurred
by Indemnitee in connection with any claim asserted against or action brought by Indemnitee for (i)
indemnification or advance payment of Expenses by the Company under this Agreement or any other
agreement or Company Bylaw now or hereafter in effect relating to Claims for Indemnifiable Events
and/or (ii) recovery under any directors’ and officers’ liability insurance policies maintained by
the Company, regardless of whether Indemnitee ultimately is determined to be entitled to such
indemnification, advance expense payment or insurance recovery, as the case may be.
7. Partial Indemnity, Etc. If Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company of some or a portion of the Expenses, judgments, fines,
penalties and amounts paid in settlement of a Claim but not, however, for all of the total amount
thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which
Indemnitee is entitled.
8. No Presumption. For purposes of this Agreement, the termination of any 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
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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.
9. Non-exclusivity, Etc. The rights of Indemnitee hereunder shall be in addition to
any other rights Indemnitee may have under the Company’s Bylaws or the Delaware General Corporation
Law or otherwise. To the extent that a change in the Delaware General Corporation Law (whether by
statute or judicial decision), or the Company’s Bylaws, permits greater indemnification by
agreement than would be afforded currently under the Company’s Bylaws 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.
10. Liability Insurance. To the extent the Company maintains an insurance policy or
policies for directors’ and officers’ liability, 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 Company director or officer. If a Change in Control occurs while the Company has in place
insurance policy or policies for directors’ and officers’ liability, the Company shall maintain
such coverage at levels equal to or greater than the levels in place for directors’ and officers’
liability immediately before a Change of Control occurs. If, at the time of the receipt by the
Company of a notice of a Claim pursuant to this Agreement, 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.
11. 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, until a Change in Control it 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; provided that, Indemnitee shall have the right
to withhold approval if 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), and approved by
the Company’s directors and officers, and the Company’s insurance carrier if, and only if, such
insurance carrier is assuming the fees and expenses of such counsel, 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, until a Change in
Control 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. 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.
12. Amendments and Waiver. No supplement, modification or amendment of this Agreement
shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions
hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.
13. Subrogation. In the event of payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all the rights of recovery of Indemnitee who shall
execute all papers required and shall do everything that may be necessary to secure such rights,
including the execution of such documents necessary to enable the Company effectively to bring suit
to enforce such rights.
14. Binding Effect, Etc. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their
respective successors, assigns, including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business and/or assets of the
Company, spouses, heirs, and personal and legal representatives. This agreement supersedes any
agreement previously entered into between and by the parties pertaining to indemnification by the
Company of Indemnitee under the circumstances provided for herein.
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15. 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.
16. Limitations on Indemnification. No payment pursuant to this Agreement shall be
made by the Company:
(a) To indemnify Indemnitee for any Expenses, judgments, fines or penalties for which payment
is actually made to Indemnitee under a valid and collectible insurance policy, Bylaw, contract,
agreement or otherwise, except in respect of any excess beyond the amount of payment under such
insurance;
(b) To indemnify Indemnitee for any Expenses, judgments, fines or penalties sustained for an
accounting of profits made from the purchase or sales by Indemnitee of securities of the Company
pursuant to the provisions of Section 16(b) of the Securities Exchange Act of 1934, the rules and
regulations promulgated thereunder and amendments thereto or similar provisions of any federal,
state or local statutory law;
(c) To indemnify Indemnitee for any Expenses, judgments, fines or penalties resulting from
Indemnitee’s conduct which is finally adjudged to have been willful misconduct, knowingly
fraudulent or deliberately dishonest;
(d) Until a Change in Control, 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 Certificate of
Incorporation or Bylaws 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 the applicable provisions of the Delaware General
Corporation Law, regardless of whether Indemnitee ultimately is determined to be entitled to such
indemnification, advance expense payment or insurance recovery, as the case may be; or
(e) If a court of competent jurisdiction finally determines that such payment hereunder is
unlawful.
17. Notice. Indemnitee shall, as a condition precedent to his or her right to be
indemnified under this Agreement, give to the Company notice in writing as soon as practicable of
any proceeding for which indemnity will or could be sought under this agreement. Indemnitee shall
give the Company such information and cooperation as it may reasonably require and as shall be
within Indemnitee’s power.
18. Governing Law. This Agreement shall be governed by and construed and enforced in
accordance with the law of the State of Delaware applicable to contracts made to be performed in
such state without giving effect to the principles of conflicts of laws.
19. No Construction as Employment Agreement. Nothing contained in this Agreement
shall be construed as giving Indemnitee any right to be retained in the engagement or employ
of the Company or any of its subsidiaries.
IN WITNESS WHEREOF, the parties hereby have caused this Indemnification Agreement to be duly
executed and signed as of the day and year first above written.
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| XXXX XXXXX COMPANY | ||||||
| By: | ||||||
| Title: President | ||||||
| (Sign) | ||||||
| (Print Name) | ||||||
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