EXHIBIT 10.5
FORM OF
STRATEGIX SOLUTIONS, INC.
INDEMNIFICATION AGREEMENT
THIS AGREEMENT is made and entered into as of ______________, 1998, by and
between STRATEGIX SOLUTIONS, INC., a Delaware corporation (the "Corporation"),
and ____________________ (the "Indemnitee").
WHEREAS, the Indemnitee is _________________ of the Corporation and in such
capacity is performing a valuable service to the Corporation; and
WHEREAS, Section 145 of the Delaware General Corporation Law, as amended to
date (the "State Statute") specifically contemplates that contracts may be
entered into between the Corporation and its officers with respect to
indemnification of its officers and directors; and
WHEREAS, in order to provide to the Indemnitee assurances with respect to
the protection provided against liabilities that he may incur in the performance
of his duties to the Corporation, and to thereby induce the Indemnitee to serve
as an executive officer, the Corporation has determined and agreed to enter into
this Agreement with the Indemnitee;
NOW, THEREFORE, in consideration of the premises and the Indemnitee's
service as an officer, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties agree as follows:
1. INDEMNIFICATION. Subject only to the exclusions set forth in Section 2
hereof, and in addition to any other indemnity to which the Indemnitee may be
entitled under the State Statute or any bylaw, resolution, or agreement (but
without duplication of payments with respect to indemnified amounts), the
Corporation hereby agrees to hold harmless and indemnify the Indemnitee to the
full extent that the State Statute, or any amendment thereof or other statutory
provision adopted after the date hereof, authorizes, including, but not limited
to, holding harmless and indemnifying the Indemnitee against any and all
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by the Indemnitee in connection with
any threatened, pending, or completed action, suit, or proceeding, whether
civil, criminal, administrative, or investigative (including an action by or in
the right of the Corporation), to which the Indemnitee is, was, or at any time
becomes a party, or is threatened to be made a party, by reason of the fact that
the Indemnitee is, was, or at any time becomes a director, officer, employee or
agent of the Corporation or any subsidiary of the Corporation, or is or was
serving or at any time serves at the request of the Corporation as a director,
officer, employee, or agent of another corporation, partnership, joint venture,
trust, or other enterprise. The indemnification hereunder shall be broader than
that provided for in the Articles of Incorporation and Bylaws, and in addition
to any rights granted thereunder.
2. LIMITATIONS ON INDEMNITY. Indemnification or advancement of expenses
shall not be made to or on behalf of the Indemnitee:
(a) If a judgment or other final adjudication establishes that his actions,
or omissions to act, were material to the cause of action so adjudicated and
constitute:
(i) a violation of the criminal law, unless the Indemnitee had
reasonable cause to believe his conduct was lawful or had no
reasonable cause to believe his conduct was unlawful;
(ii) a transaction from which the Indemnitee derived an improper
personal benefit;
(iii) a circumstance under which the liability provisions of Section
174 of the State Statute are applicable to the Indemnitee; or
(iv) willful misconduct or a conscious disregard for the best
interests of the Corporation in a proceeding by or in the right
of the Corporation to procure a judgment in its favor or in a
proceeding by or in the right of a shareholder.
(b) With respect to any suit in which final judgment is rendered against
the Indemnitee for an accounting of profits made from the purchase or sale by
the Indemnitee of securities of the Corporation, pursuant to the provisions of
Section 16(b) of the Securities Exchange Act of 1934 or similar provisions of
any federal, state, or local statutory law, or on account of any payment by the
Indemnitee to the Corporation in respect of any claim for such an accounting.
(c) If a final decision by a court having jurisdiction in the matter shall
determine that such indemnification is not lawful.
3. CONTRIBUTION. If the indemnification provided for in Section 1 hereof
is unavailable and may not be paid to the Indemnitee for any reason other than
those set forth in Section 2(b) hereof, then in respect of any threatened,
pending, or completed action, suit, or proceeding in which the Corporation is
jointly liable with the Indemnitee (or would be if joined in such action, suit
or proceeding), the Corporation shall contribute, to the extent it is not
prohibited from doing so, to the amount of expenses judgments, fines, and
settlements paid or payable by the Indemnitee in such proportion as is
appropriate to reflect (a) the relative benefits received by the Corporation on
the one hand and the Indemnitee on the other hand from the transaction from
which such action, suit, or proceeding arose, and (b) the relative fault of the
Corporation on the one hand and of the Indemnitee on the other in connection
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with the events which resulted in such expenses, judgments, fines, or settlement
amounts, as well as any other relevant equitable considerations. The relative
fault of the Corporation on the one hand and of the Indemnitee on the other
shall be determined by reference to, among other things, the parties' relative
intent, knowledge, access to information, and opportunity to correct or prevent
the circumstances resulting in such expenses, judgments, fines, or settlement
amounts. The Corporation agrees that it would not be just and equitable if
contribution pursuant to this Section 3 were determined by pro rata allocation
or any other method of allocation that does not take account of the foregoing
equitable considerations.
4. EFFECTIVENESS OF OBLIGATIONS. All agreements and obligations of the
Corporation contained herein shall be effective during the period the Indemnitee
is a director, officer, employee, or agent of the Corporation (or is serving at
the request of the Corporation as a director, officer, employee, or agent of
another corporation, partnership, joint venture, trust, or other enterprise) and
shall continue thereafter for so long as the Indemnitee shall be subject to any
possible claim or threatened, pending, or completed action, suit, or proceeding,
whether civil, criminal, or investigative, by reason of the fact that the
Indemnitee was an officer or a director of the Corporation or serving in any
other capacity referred to herein.
5. NOTIFICATION AND DEFENSE OF CLAIM.
(a) Promptly after receipt by the Indemnitee of notice of the commencement
of any action, suit, or proceeding, the Indemnitee will, if a claim in respect
thereof is to be made against the Corporation under this Agreement, notify the
Corporation of the commencement thereof, but the omission to so notify the
Corporation will not relieve the Corporation from any liability which it may
have to the Indemnitee otherwise than under this Agreement.
(b) With respect to any such action, suit, or proceeding as to which the
Indemnitee so notifies the Corporation:
(i) the Corporation will be entitled to participate therein at its
own expense; and
(ii) subject to Section 6 hereof, if the Indemnitee shall have
provided his written affirmation of his good faith belief that
his conduct did not constitute behavior of the kind described in
Section 2(a) hereof and that he is entitled to indemnification
hereunder, the Corporation may assume the defense thereof.
After notice from the Corporation to the Indemnitee of its election so to assume
such defense, the Corporation will not be liable to the Indemnitee under this
Agreement for any legal or other expenses subsequently incurred by the
Indemnitee in connection with the defense thereof, other than reasonable costs
of investigation or as otherwise provided below. The Indemnitee shall have the
right to employ its separate counsel in such action, suit, or proceeding, but
the fees and expenses of such counsel incurred after notice from the Corporation
of its assumption of the defense thereof shall be at the expense of the
Indemnitee unless (i) the employment of counsel by the Indemnitee has been
authorized by the Corporation, (ii) counsel designated by the Corporation to
conduct such defense shall not be reasonably satisfactory to the Indemnitee, or
(iii) the Corporation shall not in fact have employed counsel to assume the
defense of such action, in each of which cases the fees and expenses of such
counsel shall be at the expense of the Corporation. For the purposes of clause
(iii) above, the Indemnitee shall be entitled to determine that counsel
designated by the Corporation is not reasonably satisfactory if, among other
reasons, the Indemnitee shall have been advised by qualified counsel that,
because of actual or potential conflicts of interest in the matter between the
Indemnitee, other officers or directors similarly indemnified by the
Corporation, and/or the Corporation, representation of the Indemnitee by counsel
designated by the Corporation is likely to materially and adversely affect the
Indemnitee's interest or would not be permissible under applicable canons of
legal ethics.
(c) The Corporation shall not be liable to indemnify the Indemnitee under
this Agreement for any amounts paid in settlement of any action or claim
effected without the Corporation's written consent. The Corporation shall not
settle any action or claim in any manner which would impose any penalty or
limitation on the Indemnitee without the Indemnitee's written consent. Neither
the Corporation nor the Indemnitee will unreasonably withhold consent to any
proposed settlement.
6. ADVANCEMENT AND REPAYMENT OF EXPENSES. Upon request therefor
accompanied by reasonably itemized evidence of expenses incurred, and by the
Indemnitee's written affirmation of his good faith belief that his conduct met
the standard applicable to indemnification pursuant to Section 1 hereof and did
not constitute behavior of the kind described in Section 2(a) hereof, and that
he is entitled to indemnification hereunder, the Corporation shall advance to
the Indemnitee the reasonable expenses (including attorneys' fees and costs of
investigation and defense (including the fees of expert witnesses, other
professional advisors, and private investigators)) incurred by him in defending
any civil or criminal suit, action, or proceeding for which the Indemnitee is
entitled (assuming an applicable standard of conduct is met) to indemnification
pursuant to this Agreement. In the alternative and in the Indemnitee's
exclusive discretion, the Corporation will assume direct responsibility for the
payment of all such expenses after the Indemnitee has provided the Corporation
with a written request to assume direct responsibility for such payment and
after he has complied with the affirmation requirements provided above. The
Indemnitee agrees to reimburse the Corporation for all reasonable expenses paid
by the Corporation, whether pursuant to this Section or Section 5 hereof, in
defending any action, suit, or proceeding against the Indemnitee in the event
and to the extent that it shall ultimately be determined that the Indemnitee is
not entitled to be indemnified by the Corporation for such expenses under this
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Agreement. Any advances and the Indemnitee's agreement to repay shall be
unsecured and interest-free.
7. AGREEMENT TO SERVE. The Indemnitee hereby agrees to serve as an
officer and/or director of the Corporation faithfully and to the best of his
ability so long as he is duly elected and qualified in accordance with the
provisions of the Bylaws or until such time as he tenders his resignation in
writing.
8. ENFORCEMENT.
(a) The Corporation expressly confirms and agrees that it has entered into
this Agreement and assumed the obligations imposed on it hereby in order to
induce the Indemnitee to serve as an officer or a director of the Corporation
and acknowledges that the Indemnitee is relying upon this Agreement in serving
in such capacity.
(b) If the Indemnitee is required to bring any action to enforce rights or
to collect moneys due under this Agreement and is successful in such action, the
Corporation shall reimburse the Indemnitee for all of the Indemnitee's
reasonable fees and expenses in bringing and pursuing such action.
9. SEPARABILITY. Each of the provisions of this Agreement is a separate
and distinct agreement and independent of the others, so that if any provision
hereof shall be held to be invalid or unenforceable in whole or in part for any
reason, such invalidity or unenforceability shall not affect the validity or
enforceability of the other provisions hereof.
10. GOVERNING LAW; SUCCESSORS; AMENDMENT AND TERMINATION.
(a) This Agreement shall be interpreted and enforced in accordance with the
laws of the State of Delaware.
(b) This Agreement shall be binding upon the Indemnitee and the Corporation
and its successors and assigns (including any transferee of all or substantially
all of its assets and any successor by merger or otherwise by operation of law),
and shall inure to the benefit of the Indemnitee, his heirs, personal
representatives, and assigns and to the benefit of the Corporation and its
successors and assigns.
(c) No amendment, modification, termination, or cancellation of this
Agreement shall be effective unless in writing signed by both parties hereto.
11. COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed an original but all of which shall constitute one and the
same instrument.
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12. NOTICES. All notices, requests and other communications required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given and received when delivered in person, when delivered by overnight
delivery service, or three business days after being mailed by registered or
certified mail, postage prepaid, return receipt requested, to the following
addresses (or to such other address as one party may from time to time designate
in writing to the other party hereto):
If to the Corporation: Strategix Solutions, Inc.
0 Xxxxxxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
Attn: President
If to the Indemnitee: _____________________________
_____________________________
_____________________________
_____________________________
_____________________________
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
STRATEGIX SOLUTIONS, INC.
By
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Xxxxxxxx X. Xxxxxx
Vice Chairman and Chief Executive Officer
INDEMNITEE:
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