EXHIBIT 10.7
[FORM OF]
INDEMNIFICATION AGREEMENT
INDEMNIFICATION AGREEMENT, dated as of _____________ 1999 (this
"AGREEMENT"), by and between Xxxxxxxx.xxx, Inc., a Delaware corporation (the
"COMPANY"), and _________________________ ("INDEMNITEE").
W I T N E S S E T H:
WHEREAS, the Company desires to attract and retain the services of able
persons to serve as its officers and directors;
WHEREAS, the Company and Indemnitee recognize the increasing difficulty
in obtaining officers' and directors' liability insurance, the significant
increase in the cost of such insurance and the general reduction in the coverage
of such insurance;
WHEREAS, the Company and Indemnitee further recognize the substantial
increase in corporate litigation in general, subjecting officers and directors
to litigation risks at the same time that liability insurance has been severely
limited; and
WHEREAS, neither Indemnitee nor the Company regards statutory
indemnification protection as fully adequate given the present circumstances;
NOW THEREFORE, the Company and Indemnitee hereby agree as follows:
1. (a) THIRD-PARTY PROCEEDINGS. The Company shall indemnify Indemnitee
to the fullest extent of Delaware law, except as otherwise provided in Section 3
of this Agreement, if Indemnitee is or was a party or is threatened to be made a
party to any threatened, pending or completed suit, action, proceeding,
arbitration or alternative dispute resolution mechanism, investigation,
administrative hearing, whether civil, criminal, administrative or investigative
(any such suit, action, proceeding, arbitration or alternative dispute
resolution mechanism, investigation, administrative hearing being referred to
herein as a "PROCEEDING") (other than an action by or in the right of the
Company) by reason of the fact that Indemnitee is or was a director, officer,
employee or agent of the Company or any subsidiary or affiliated entity (each, a
"Subsidiary") of the Company, by reason of any action or inaction on the part of
Indemnitee while an officer or director of the Company or any Subsidiary of the
Company or by reason of the fact that Indemnitee is or was serving at the
request of the Company as a director, officer, employee or agent of another
Person (as defined in Section 6(d)), against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement (if such settlement is
approved in advance by the Company, which approval shall not be unreasonably
withheld) actually and reasonably incurred by Indemnitee in connection with such
action or proceeding if Indemnitee acted in good faith and in a manner
Indemnitee reasonably believed to be in or not opposed to the best interests of
the Company and its stockholders, and
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful.
(b) PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY. The Company
shall indemnify Indemnitee to the fullest extent of Delaware law, except as
otherwise provided in Section 3 of this Agreement, if Indemnitee is or was a
party or is threatened to be made a party to any threatened, pending or
completed Proceeding by or in the right of the Company or any subsidiary of the
Company to procure a judgment in its favor by reason of the fact that Indemnitee
is or was a director, officer, employee or agent of the Company or any
Subsidiary of the Company, by reason of any action or inaction on the part of
Indemnitee while an officer or director of the Company or any Subsidiary of the
Company or by reason of the fact that Indemnitee is or was serving at the
request of the Company as a director, officer, employee or agent of another
Person, against expenses (including attorneys' fees) and, to the fullest extent
permitted by Delaware law, amounts paid in settlement (if such settlement is
approved by the Company, which approval shall not be unreasonably withheld), in
each case to the extent actually and reasonably incurred by Indemnitee in
connection with the defense or settlement of such Proceeding if Indemnitee acted
in good faith and in a manner Indemnitee reasonably believed to be in or not
opposed to the best interests of the Company and its stockholders, except that
no indemnification shall be made in respect of any claim, issue or matter as to
which Indemnitee shall have been adjudged to be liable to the Company and its
stockholders in the performance of Indemnitee's duty to the Company and its
stockholders unless and only to the extent that the Court of Chancery of the
State of Delaware, or the court in which such action or proceeding shall have
been brought or is pending, shall determine that in view of all the
circumstances of the case, Indemnitee is fairly and reasonably entitled to
indemnity for expense, and then only to the extent that the court shall
determine.
(c) SELECTION OF COUNSEL. In the event the Company shall be
obligated under Section 1(a) or (b) hereof to pay the expenses of any Proceeding
against Indemnitee, the Company shall be entitled to assume the defense of such
Proceeding, with counsel approved by Indemnitee (who shall not unreasonably
withhold such approval), 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 Proceeding,
PROVIDED, THAT, (i) Indemnitee shall have the right to employ his counsel in any
such proceeding at Indemnitee's expense; and (ii) if (A) the employment of
counsel by Indemnitee has been previously authorized in writing by the Company,
(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
and shall have notified the company in writing thereof, (C) Indemnitee shall
have reasonably concluded that there may be a conflict of interest between
Indemnitee and other indemnitees of the Company being represented by counsel
retained by the Company in the same proceeding and shall have notified the
Company in writing thereof, or (D) the Company shall not, in fact, have employed
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counsel to assume the defense of such proceeding, then the fees and expenses of
Indemnitee's counsel shall be at the expense of the Company.
2. CONTRIBUTION. If, when Indemnitee has met the applicable standard of
conduct, the indemnification provisions set forth in Section 1 should, under
applicable law, be to any extent unenforceable, then the Company agrees that it
shall be treated as though it is or was a party to the threatened, pending or
completed Proceeding in which Indemnitee is or was involved and that the Company
shall contribute to the amounts paid or payable by Indemnitee as a result of
such expenses (including attorneys' fees), judgments in third-party Proceedings,
fines and amounts paid in settlement actually and reasonably incurred by
Indemnitee in such proportion as is appropriate to reflect the relative fault of
the Company on the one hand and Indemnitee on the other in connection with such
action or inaction, or alleged action or inaction, as well as any other relevant
equitable considerations.
For purposes of this Section 2, the relative benefit to the Company
shall be deemed to be the benefits accruing to it and to all of its directors,
officers, employees and agents (other than Indemnitee), as a group and treated
as one entity, and the relative benefit to Indemnitee shall be deemed to be an
amount not greater than Indemnitee's yearly base salary or director's
compensation as the case may be, from the Company during the first year in which
the action or inaction, or alleged action or inaction, forming the basis for the
threatened, pending or contemplated Proceeding was alleged to have occurred plus
the amount, if any, of monetary benefit and other consideration received by
Indemnitee in the transaction (s) that gave rise to such Proceeding. The
relative fault shall be determined by reference to, among other things, the
fault of the Company and all of its directors, officers, employees and agents
(other than Indemnitee), as a group and treated as one entity, and such group's
relative intent, knowledge, access to information and opportunity to have
altered or prevented the action or inaction, or alleged action or inaction,
forming the basis for the threatened, pending or contemplated Proceeding, and
Indemnitee's relative fault in light of such factors on the other hand.
3. LIMITATIONS TO RIGHTS OF INDEMNIFICATION AND ADVANCEMENT OF
EXPENSES. Except as otherwise provided in Sections 9 and 12 of this Agreement,
Indemnitee shall not be entitled to indemnification or advancement of expenses
under this Agreement:
(a) with respect to any Proceeding initiated, brought or made
by Indemnitee (i) against the Company, unless a Change in Control(as defined in
Section 5(b) of this Agreement) shall have occurred, or (ii) against any person
other than the Company, unless approved in advance by the Board of Directors of
the Company (the "Board");
(b) on account of any suit in which it shall be determined by
final judgment by a court having jurisdiction in the matter that Indemnitee
intentionally caused or intentionally contributed to the injury complained of
with the knowledge that such injury would occur;
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(c) on account of Indemnitee's conduct which shall be
determined by final judgment by a court having jurisdiction in the mater that
Indemnitee was knowingly fraudulent, deliberately dishonest, engaged in willful
misconduct or that Indemnitee received an improper personal benefit;
(d) for any expenses incurred by Indemnitee with respect to
any proceeding instituted by Indemnitee to enforce or interpret this Agreement,
to the extent that a court of competent jurisdiction determines that any of the
material assertions made by Indemnitee in such proceeding was not made in good
faith or was frivolous;
(e) for expenses or liabilities of any type whatsoever
(including, but not limited to, judgments, fines, ERISA excise taxes or
penalties and amounts paid in settlement) which have been paid directly to
Indemnitee by an insurance carrier under a policy of officers' and directors'
liability insurance maintained by the Company;
(f) for expenses or 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 (the "EXCHANGE ACT"), or any
similar successor statute; or
(g) if it shall be determined by final judgment by a court
having jurisdiction in the matter that such indemnification is not lawful.
4. PROCEDURE FOR DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION. (a)
To obtain indemnification under this Agreement, Indemnitee shall submit to the
Company a written request, including such documentation and information as is
reasonably available to Indemnitee and is reasonably necessary to determine
whether and to what extent Indemnitee is entitled to indemnification. The
Secretary of the Company shall, promptly upon receipt of such a request for
indemnification, advise the Board in writing that Indemnitee has requested
indemnification.
(b) Upon written request by Indemnitee for indemnification, a
determination with respect to Indemnitee's entitlement thereto shall be made in
the specific case as follows:
(i) if a Change in Control (as defined in section 5(b)
of this Agreement) shall have occurred, by Independent Counsel (as defined in
Section 5(a) of this Agreement) in a written opinion to the Board, a copy of
which shall be delivered to Indemnitee (unless Indemnitee shall request that
such determination be made by the Board or the Stockholders, in which case the
determination shall be made in the manner provided below in clause (ii); or
(ii) if a Change in Control shall not have occurred, (A)
by the Board by a majority vote of a quorum consisting of disinterested
directors, (B) if a quorum of the Board consisting of disinterested directors is
not obtainable or, even if obtainable, such quorum of disinterested directors so
directs, by Independent Counsel in a written opinion to the Board, a copy of
which shall be delivered to Indemnitee or (C) by the stockholders of the
Company.
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(c) If it is so determined that Indemnitee is entitled to
indemnification, payment to Indemnitee shall be made within ten (10) days after
such determination. Indemnitee shall 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 that is not
privileged or otherwise protected from disclosure and that is reasonably
available to Indemnitee and reasonably necessary to such determination. Any
costs or expenses (including attorneys' fees and disbursements) incurred by
Indemnitee in so cooperating 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.
(d) If a Change in Control shall not have occurred, the
Independent Counsel shall be selected by the Board, 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), 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, a
written objection to such selection. Such objection may be asserted only on the
ground that the Independent Counsel so selected may not serve as Independent
Counsel unless and until a court has determined that such objection is without
merit. If, twenty (20) days after submission by Indemnitee of a written request
for indemnification pursuant to Section 4 hereof, no Independent Counsel shall
have been selected or if selected, shall have been objected to, in accordance
with this Section 4(d), either the Company or Indemnitee may petition the Court
of Chancery of the State of Delaware or other 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. The person with respect to whom an
objection is favorably resolved or the person so appointed shall act as
Independent Counsel under Section 4 hereof. The Company shall pay any and all
reasonable fees and expenses incident to the procedures of this Section 4,
including reasonable fees and expenses incurred by such Independent Counsel
regardless of the manner in which such Independent Counsel was selected or
appointed. Upon the due commencement of any judicial proceeding or arbitration
pursuant to Section 12 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).
5. (a) "Independent Counsel" means a law firm or a member of a law firm
that neither at the time in question, nor in the five years immediately
preceding such time has been retained to represent (i) the Company or Indemnitee
in any matter material to either such party or (ii) any other party to the
proceeding giving rise to a claim for indemnification under this Agreement.
Notwithstanding the foregoing, the term "Independent Counsel" shall not include
any person who, under the applicable standards of professional conduct then
prevailing under the law of the
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State of Delaware, would be precluded from representing either the Company or
Indemnitee in an action to determine Indemnitee's rights under this Agreement.
(b) "Change in Control" means the occurrence of any of the
following events:
(i) the Company is merged, consolidated or reorganized
into or with another corporation or other entity, and as a result of
such merger, consolidation or reorganization less than a majority of
the combined voting power of the then-outstanding securities of such
corporation or entity immediately after such transaction are held in
the aggregate by the holders of voting stock immediately prior to such
transaction;
(ii) the Company sells or otherwise transfers all or
substantially all of its assets to another corporation or other entity
in which, after giving effect to such sale or transfer, the holders of
voting stock of the Company immediately prior to such sale or transfer
hold in the aggregate less than a majority of the combined voting power
of the then-outstanding securities of such other corporation;
(iii) there is a report filed on Schedule 13D or
Schedule 14D-1 (or any successor schedule, form or report or item
therein), each as promulgated pursuant to the Exchange Act, disclosing
that any person or entity, other than any shareholder of the Company
(and its affiliates) owning 10% or more of the Company's voting stock
on the date hereof, has become the beneficial owner (as the term
"beneficial owner" is defined under Rule 13d-3 or any successor rule or
regulation promulgated under the Exchange Act) of securities
representing 50% or more of the combined voting power of the Company's
voting stock; or
(iv) if during any period of two consecutive years
individuals who at the beginning of any such period constitute the
Board cease for any reason to constitute at least a majority thereof;
PROVIDED, HOWEVER, that for purposes of this clause (iv) each director
of the Company who is first elected, or first nominated for election by
the Company's stockholders, by a vote of at least majority of the
directors of the Company (or a committee of the Board) then still in
office who were directors of the Company at the beginning of any such
period shall be deemed to have been a director of the Company at the
beginning of such period.
Notwithstanding the provisions of clause (iii) above, unless otherwise
determined in the specific case by majority vote of the Board, a "Change in
Control" shall not be deemed to have occurred solely because the Company, any
subsidiary or any employee stock ownership plan or any other employee benefit
plan of the Company or any subsidiary either files or becomes obligated to file
a report or a proxy statement under or in response to Schedule 13D, Schedule
14D-1 or Schedule 14A (or any successor schedule, form or report or item
therein) under the Exchange Act disclosing beneficial ownership by it of shares
of voting stock of the Company, whether in excess of 50% or otherwise, or
because the Company reports that a change in control of the Company has occurred
or will occur in the future by reason of such beneficial ownership.
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6. PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS. (a) In making a
determination with respect to entitlement to indemnification hereunder, the
person, 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 4 of this
Agreement, and the Company shall bear the burden of proof to rebut that
presumption in connection with the making by any person, persons or entity of
any determination contrary to that presumption.
(b) 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 (except as otherwise expressly
provided in this Agreement) 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 he reasonably believed to be in or not opposed to
the best interests of the Company, or, with respect to any criminal action or
proceeding, that Indemnitee had reasonable cause to believe that his conduct was
unlawful.
(c) Indemnitee's conduct with respect to an employee benefit
plan for a purpose he reasonably believed to be in the interests of the
participants in and beneficiaries of the plan shall be deemed to be conduct that
Indemnitee reasonably believed to be in or not opposed to the best interests of
the Company.
(d) For purposes of any determination hereunder, Indemnitee
shall be deemed to have acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Company, or, with
respect to any criminal action or proceeding, to have had no reasonable cause to
believe his conduct was unlawful, if his action was based on (i) the records or
books of account of the Company or another Person, including financial
statements, (ii) information supplied to him by the officers of the Company or
another Person in the course of their duties, (iii) the advice of legal counsel
for the Company or another Person, or (iv) information or records given or
reports made to the Company or another Person by an independent certified public
accountant or by an appraiser or other expert selected with reasonable care by
the Company or another Person. the term "another Person" as used in this
Agreement shall mean any other corporation or any partnership, joint venture,
trust, employee benefit plan or other enterprise of which Indemnitee is or was
serving at the request of the Company as an officer, director, partner, trustee,
employee or agent. The provisions of this Section 6(d) shall not be deemed to
limit in any way the other circumstances in which Indemnitee may be deemed to
have met the applicable standard of conduct set forth in Section 1.
7. SUCCESS ON MERITS OR OTHERWISE. Notwithstanding any other provision
of this Agreement, to the extent that Indemnitee has been successful on the
merits or otherwise in defense of any action, suit or proceeding described in
Section 1 hereof, or in defense of any claim, issue or matter therein, he shall
be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the investigation, defense,
settlement or appeal thereof. For purposes of this Section 7, the term
"successful on the merits or otherwise" shall include, but not be limited to,
(i) any termination, withdrawal or dismissal (with
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or without prejudice) of any Proceeding against Indemnitee without any express
finding of liability or guilt against him, (ii) the expiration of 180 days after
the making of any claim or threat of a Proceeding without the institution of the
same and without any promise of payment or payment made to induce a settlement
or (iii) the settlement of any Proceeding under Section 1, pursuant to which
Indemnitee pays less than $10,000.
8. PARTIAL INDEMNIFICATION. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of the claims, damages, expenses (including attorneys' fees), judgments,
fines or amounts paid in settlement by Indemnitee in connection with the
investigation, defense, settlement or appeal of any Proceeding specified in
Section 1, but not, however, for the total amount thereof, the Company shall
nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is
entitled. The party or parties making the determination shall determine the
portion (if less than all) of such claims, damages, expenses (including
attorneys' fees), judgments, fines or amounts paid in settlement for which
Indemnitee is entitled to indemnification under this Agreement.
9. COSTS. All the costs of making the determination required by Section
4 hereof shall be borne solely by the Company, including, but not limited to,
the costs of legal counsel, proxy solicitations and judicial determinations. The
Company shall also be solely responsible for paying (i) all reasonable expenses
incurred by Indemnitee to enforce this Agreement, including, but not limited to,
the costs incurred by Indemnitee to obtain court-ordered indemnification
pursuant to Section 12, regardless of the outcome of any such application or
proceeding, and (ii) all costs of defending any Proceedings challenging payments
to Indemnitee under this Agreement.
10. ADVANCE OF EXPENSES. The Company shall advance all expenses
incurred by or on behalf of Indemnitee in connection with any Proceeding within
twenty (20) days after the receipt by the Company of a statement or statements
from Indemnitee requesting such advance or advances from time to time, whether
prior to or after final disposition of such Proceeding. Such statement or
statements shall reasonably evidence the expenses incurred by Indemnitee and
shall include or be preceded or accompanied by an undertaking by or on behalf of
Indemnitee to repay any expenses advanced if it shall ultimately be determined
that Indemnitee is not entitled to be indemnified against such expenses, which
undertaking shall be accepted by or on behalf of the Company with reference to
the financial ability of Indemnitee to make repayment, and without the pledging
of any security by Indemnitee. Notwithstanding Indemnitee's above-described
rights to advancement of expenses, no advance of expenses shall be made in the
circumstances proscribed by Section 3(a). Notwithstanding any other provision of
this Agreement, if Indemnitee requests an adjudication or an award in
arbitration pursuant to the provisions of Section 12 below in order to establish
an entitlement to indemnification or advancement of expenses, any determination
made pursuant to Section 4 of this Agreement that Indemnitee is not entitled to
indemnification or to receive advancement of expenses shall not be binding and
Indemnitee shall not be required to reimburse the Company for any expense
advance unless and until a final judicial determination or award in arbitration
is made with respect thereto as to which all rights of appeal therefrom have
been exhausted or lapsed.
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11. INDEMNIFICATION FOR EXPENSES OF A WITNESS. Not withstanding any
other provision of this Agreement, to the extent that Indemnitee is, by reason
of any event or occurrence related to the fact that Indemnitee is or was a
director, officer, employee or agent 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 or agent of another Person, a witness in any Proceeding,
whether instituted by the Company or any other party, and to which Indemnitee is
not a party, he shall be indemnified against all expenses actually and
reasonably incurred by him or on his behalf in connection therewith.
12. ENFORCEMENT. (a) If a claim for indemnification or advancement of
expenses made to the Company pursuant to Section 3 or 10 is not timely paid in
full to Indemnitee by the Company as required by Section 3 or 10, respectively,
Indemnitee shall be entitled to seek judicial enforcement of the Company's
obligations to make such payment in an appropriate court of the State of
Delaware or any other court of competent jurisdiction. In the event that a
determination is made that Indemnitee is not entitled to indemnification or
advancement of expenses hereunder, (i) Indemnitee may seek a de novo
adjudication of Indemnitee's entitlement to such indemnification or advancement
either, at Indemnitee's sole option, or (A) an appropriate court of the State of
Delaware or any other court of competent jurisdiction or (B) an arbitration to
be conducted by a single arbitrator pursuant to the rules of the American
Arbitration Association; (ii) any such judicial proceeding or arbitration shall
not in any way be prejudiced by, and Indemnitee shall not be prejudiced in any
way by such adverse determination; and (iii) in any such judicial proceeding or
arbitration the Company shall have the burden of proving that Indemnitee is not
entitled to indemnification or advancement of expenses under this Agreement.
Indemnitee shall commence a proceeding seeking an adjudication of Indemnitee's
right to indemnification or advancement of expenses pursuant to the preceding
sentence within one year following the date on which Indemnitee first has the
right to commence such proceeding pursuant to this Section 12(a); PROVIDED,
HOWEVER, that the foregoing time limitation shall not apply in respect of a
proceeding brought by Indemnitee to enforce Indemnitee's rights under Section 7
hereof.
(b) The Company shall be precluded from asserting in any
judicial proceeding or arbitration commenced pursuant to the provisions of
Section 12(a) 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.
(c) In any action brought under this Section 12, it shall be a
defense to a claim for indemnification (other than an action brought to enforce
a claim for advancement of expenses) that Indemnitee has not met the standards
of conduct which make it permissible under Delaware law for the Company to
indemnify Indemnitee for the amount claimed. The burden of proving such defense
shall be on the Company.
(d) It is the intent of the Company that Indemnitee not be
required to incur the expenses associated with the enforcement of his rights
under this Agreement by litigation or
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other legal action because the cost and expense thereof would substantially
detract from the benefits intended to be extended to Indemnitee hereunder.
Accordingly, if it should appear to Indemnitee that the Company has failed to
comply with any of its obligations under this Agreement or in the event that the
Company or any other person takes any action to declare this Agreement void or
unenforceable, or institutes any proceeding designed (or having the effect of
being designed) to deny, or to recover from Indemnitee the benefits intended to
be provided to Indemnitee hereunder the Company irrevocably authorizes
Indemnitee from time tot time to retain counsel of his choice, at the expense of
the Company as hereafter provided, to represent Indemnitee in connection with
the initiation or defense of any litigation or other legal action, whether by or
against the Company or any director, officer, stockholder or other person
affiliated with the Company, in any jurisdiction. Regardless of the outcome
thereof, but subject to Indemnitee having acted in good faith, the Company shall
pay and be solely responsible for any and all costs, charges and expenses,
including attorneys' and others' fees and expenses, incurred by Indemnitee (i)
as a result of the Company's failure to perform this Agreement or any provision
thereof, or (ii) as a result of the Company's or any person's contesting the
validity or enforceability of this Agreement or any provision thereof as
aforesaid.
13. LIABILITY INSURANCE AND FUNDING. To the extent the Company
maintains an insurance policy or policies providing directors' and officers'
liability insurance, Indemnitee shall be covered by such policy or polices, in
accordance with its or their terms, to the maximum extent of the coverage
available for any director or officer of the Company. If, at the time of the
receipt of a notice of a claim pursuant to Section 4 hereof, the Company has
directors' and officers' liability insurance in effect, the Company shall give
prompt notice of the commencement of such proceeding to the insurers in
accordance with the procedures set forth in the respective policies. The Company
shall thereafter take all necessary or desirable action to cause such insurers
to pay, on behalf of Indemnitee, all amounts payable as a result of such
proceeding in accordance with the terms of such policies. The Company shall have
no obligation to obtain or maintain such insurance.
14. MERGER OR CONSOLIDATION. In the event that the Company shall be a
constituent corporation in a merger, consolidation or other reorganization, the
Company shall require as a condition thereto, (a) if it shall not be the
surviving, resulting or other corporation therein, the surviving, resulting or
acquiring corporation to agree to indemnify Indemnitee to the full extent
provided herein, and (b) whether or not the Company is the surviving, resulting
or acquiring corporation therein, Indemnitee shall also stand in the same
position under this Agreement with respect to the surviving, resulting or
acquiring corporation as Indemnitee would have with respect to the Company if
the Company's separate existence had continued.
15. NONDISCLOSURE OF PAYMENTS. Except as expressly required by federal
securities laws or other applicable laws, Indemnitee shall not disclose any
payments made under this Agreement, whether indemnification or advancement of
expenses, unless prior written approval of the Company is obtained. Any payments
to Indemnitee that must be disclosed shall, unless otherwise required by law, be
described only in the Company proxy or information statements relating to
special and/or annual meetings of the Company's stockholders, and the
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Company shall afford Indemnitee the reasonable opportunity to review all such
disclosures and, if requested, to explain in such statement any mitigating
circumstances regarding the events reported.
16. NONEXCLUSIVITY AND SEVERABILITY; SUBROGATION. (a) The right to
indemnification and advancement of expenses provided by this Agreement shall not
be exclusive of any other rights to which Indemnitee may be entitled under the
Amended and Restated Certificate of Incorporation (the "Certificate") or Amended
and Restated Bylaws (the "Bylaws") of the Company, Delaware law, any other
statute, insurance policy, agreement, vote of stockholders of the Company or of
the Board (or otherwise), both as to actions in his official capacity and as to
actions in another capacity while holding such office, and shall continue after
Indemnitee has ceased to be a director or officer of the Company and shall inure
to the benefit of his heirs, executors and administrators; PROVIDED, HOWEVER,
that to the extent Indemnitee otherwise would have any greater right to
indemnification and/or advancement of expenses under any provision of the
Certificate or the Bylaws of the Company, Indemnitee shall be deemed to have
such greater right pursuant to this Agreement; and, PROVIDED, FURTHER, that to
the extent that any change is made to the Delaware law (whether by legislative
action or judicial decision), the Certificate and/or the Bylaws that permits any
greater right to indemnification and/or advancement of expenses than that
provided under this Agreement as of the date hereof, Indemnitee shall be deemed
to have such greater right pursuant to this Agreement. 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 prior to such amendment, alteration, or repeal.
(b) If any provision or provisions of this Agreement are held to
be invalid, illegal or unenforceable for any reason whatsoever: (i) the
validity, legality and enforceability of the remaining provisions of this
Agreement (including, without limitation, all portions of any provisions of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or unenforceable) shall
not in any way be affected or impaired thereby and (ii) to the fullest extent
possible, the provisions of this Agreement (including, without limitation, all
portions of any provisions of this Agreement containing any such provision held
to be invalid, illegal or unenforceable, that are not themselves invalid,
illegal or unenforceable) shall be construed so as to give effect to the intent
manifested by the provision held invalid, illegal or unenforceable.
(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
actions necessary to secure such rights, including execution of such documents
as are necessary to enable the Company to bring suit to enforce such rights.
17. NOTICES. 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 addressed, on the date of such
receipt, or (ii) if mailed by domestic
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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.
18. MUTUAL ACKNOWLEDGMENT. Both the Company and Indemnitee acknowledge
that in certain instances federal law or public policy may override applicable
state law and prohibit the Company from indemnifying its directors and officers
under this Agreement or otherwise. For example, the Company and Indemnitee
acknowledge that the Securities and Exchange Commission (the "COMMISSION") has
taken the position that indemnification is not permissible for liabilities
arising under certain federal securities laws, and federal legislation prohibits
indemnification for certain ERISA violations. INDEMNITEE understands and
acknowledges that the Company has undertaken or may be required in the future to
undertake with the 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.
19. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to
principles of conflict of laws.
20. CONSENT TO JURISDICTION. The Company and Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of the State of Delaware
for all purposes in connection with any action, suit or proceeding which arises
out of or relates to this Agreement.
21. 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 against whom enforcement is sought
needs to be produced to evidence the existence of this Agreement.
22. MODIFICATION; SURVIVAL. This Agreement may be modified only by an
instrument in writing signed by both parties hereto. The provisions of this
Agreement shall survive the death, disability or incapacity of Indemnitee or the
termination of Indemnitee's service as a director or officer of the Company and
shall inure to the benefit of Indemnitee's heirs, executors and administrators.
IN WITNESS WHEREOF, the parties hereto have executed this agreement as
of the date first above written.
INDEMNITEE: XXXXXXXX.XXX, INC.
_______________________________ By: _______________________________
Title:
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