Contract
Exhibit 10.2
The attached form of Indemnification Agreement has been entered into by Aspect Medical
Systems, Inc., (the “Company”) and each of the below-named officers and directors of the Company on
September 23, 2009:
Name
Xxxxxxx Xxxxxx
J. Xxxx Xxxxxxxxx
Xxx X. Xxxx
Xxxxxx X. Xxxxxxx
Xxxx Xxxxxxxx
Xxxx Xxxxxxxx
Xxxxxx X. Xxxxxx
X. Xxxxxxxxxxxx Eagle
Xxxxxxx Xxxxx
Xxxxx X. Xxxxx, Xx.
Xxxxxx X. Xxxxxxx
Xxxxx X. Xxxxxx, M.D.
Xxxxx X. Xxxxxxx
Xxxx X. Xxxxxxx, Ph.D., Jr.
Xxxx X. X’Xxxxxx
Xxxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx, M.D.
J. Xxxx Xxxxxxxxx
Xxx X. Xxxx
Xxxxxx X. Xxxxxxx
Xxxx Xxxxxxxx
Xxxx Xxxxxxxx
Xxxxxx X. Xxxxxx
X. Xxxxxxxxxxxx Eagle
Xxxxxxx Xxxxx
Xxxxx X. Xxxxx, Xx.
Xxxxxx X. Xxxxxxx
Xxxxx X. Xxxxxx, M.D.
Xxxxx X. Xxxxxxx
Xxxx X. Xxxxxxx, Ph.D., Jr.
Xxxx X. X’Xxxxxx
Xxxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx, M.D.
This Indemnification Agreement (“Agreement”) is made as of ___, 2009 by and between
Aspect Medical Systems, Inc., a Delaware corporation (the “Company”), and
(“Indemnitee”), a director or officer of the Company.
RECITALS
WHEREAS, it is essential to the Company to retain and attract as directors and officers the
most capable persons available;
WHEREAS, the prevailing, significant level of corporate litigation subjects directors and
officers to expensive litigation risks at the same time that the availability of directors’ and
officers’ liability insurance has been severely limited;
WHEREAS, it is the express policy of the Company, as reflected in the Company’s Restated
Certificate of Incorporation to indemnify its directors and officers;
WHEREAS, the Company’s Restated Certificate of Incorporation and the General Corporation Law
of the State of Delaware (the “DGCL”) expressly provide that the indemnification provisions set
forth therein are not exclusive, and thereby contemplate that contracts may be entered into between
the Company and members of the board of directors, officers and other persons with respect to
indemnification;
WHEREAS, the Board of Directors of the Company (the “Board”) has determined that the increased
difficulty in attracting and retaining such directors and officers is detrimental to the best
interests of the Company and its stockholders and that the Company should act to assure such
persons that there will be increased certainty of such protection from certain liabilities and
expenses in the future;
WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate
itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent
permitted by applicable law so that they will serve or continue to serve the Company free from
undue concern that they will not be so indemnified; and
WHEREAS, the Company desires Indemnitee to serve, or continue to serve, as a director or
officer of the Company.
NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the
Company and Indemnitee do hereby covenant and agree as follows:
Section 1. Services to the Company. Indemnitee agrees to serve or continue to serve
as a director or officer of the Company for so long as Indemnitee is duly elected or appointed or
until such time as Indemnitee tenders a resignation in writing. This Agreement shall not be deemed
an employment contract between the Company (or any of its subsidiaries or any Enterprise) and
Indemnitee.
Section 2. Definitions. As used in this Agreement:
(a) References to “agent” shall mean any person who is or was a director, officer, or employee
of the Company or a subsidiary of the Company or any other person authorized by the Company to act
for the Company, including such person serving in such capacity at another Enterprise at the
request of, for the convenience of, or to represent the interests of the Company or a subsidiary of
the Company.
(b) A “Change in Control” shall be deemed to occur upon the earliest to occur after the date
of this Agreement of any of the following events:
(i) the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Exchange Act (a “Person”) of beneficial ownership of any capital stock of the
Company if, after such acquisition, such Person beneficially owns (within the meaning of Rule 13d-3
promulgated under the Exchange Act) 30% or more of either (x) the then-outstanding shares of common
stock of the Company (the “Outstanding Company Common Stock”) or (y) the combined voting power of
the then-outstanding securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of
this subsection (i), the following acquisitions shall not constitute a Change in Control Event: (A)
any acquisition directly from the Company (excluding an acquisition pursuant to the exercise,
conversion or exchange of any security exercisable for, convertible into or exchangeable for common
stock or voting securities of the Company, unless the Person exercising, converting or exchanging
such security acquired such security directly from the Company or an underwriter or agent of the
Company), (B) any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company, or (C) any acquisition by
any corporation pursuant to a Business Combination (as defined below) which complies with clauses
(x) and (y) of subsection (iii) of this definition; or
(ii) such time as the Continuing Directors (as defined below) do not constitute a majority of
the Board (or, if applicable, the Board of Directors of a successor corporation to the Company),
where the term “Continuing Director” means at any date a member of the Board (x) who was a member
of the Board on March 25, 2005 or (y) who was nominated or elected subsequent to such date by at
least a majority of the directors who were Continuing Directors at the time of such nomination or
election or whose election to the Board was recommended or endorsed by at least a majority of the
directors who were Continuing Directors at the time of such nomination or election; provided,
however, that there shall be excluded from this clause (y) any individual whose initial assumption
of office occurred as a result of an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened solicitation of proxies or consents,
by or on behalf of a person other than the Board; or
(iii) the consummation of a merger, consolidation, reorganization, recapitalization or share
exchange involving the Company or a sale or other disposition of all or substantially all of the
assets of the Company (a “Business Combination”), unless, immediately following such Business
Combination, each of the following two conditions is satisfied: (x) all or substantially all of the
individuals and entities who were the beneficial owners of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of the then-outstanding shares of common stock and the
combined voting power of the then-outstanding securities entitled to vote generally in the election
of directors, respectively, of the resulting or acquiring corporation in such Business Combination
(which shall include, without limitation, a corporation which as a result of such transaction owns
the Company or substantially all of the Company’s assets either directly or through one or more
subsidiaries) (such resulting or acquiring corporation is referred to herein as the “Acquiring
Corporation”) in substantially the same proportions as their ownership of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, respectively, immediately prior to such
Business Combination and (y) no Person (excluding any employee benefit plan (or related trust)
maintained or sponsored by the Company or by the Acquiring Corporation) beneficially owns, directly
or indirectly, 30% or more of the then-outstanding shares of common stock of the Acquiring
Corporation, or of the combined voting power of the then-outstanding securities of such corporation
entitled to vote generally in the election of directors (except to the extent that such ownership
existed prior to the Business Combination).
(c) “Corporate Status” shall mean the status of a person who is or was a director, officer,
trustee, general partner, managing member, fiduciary, employee or agent of the Company or of any
other Enterprise which such person is or was serving at the request of the Company.
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(d) “Disinterested Director” shall mean a director of the Company who is not and was not a
party to the Proceeding in respect of which indemnification is sought by Indemnitee.
(e) “Enterprise” shall mean the Company and any other corporation, partnership, limited
liability company, joint venture, trust, employee benefit plan, nonprofit entity or other
enterprise of which Indemnitee is or was serving at the request of the Company as a director,
officer, trustee, general partner, managing member, fiduciary, employee or agent.
(f) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to
time.
(g) “Expenses” shall mean all direct and indirect costs, fees and expenses of any type or
nature whatsoever, including, without limitation, all attorneys’ fees and costs, retainers, court
costs, transcript costs, fees of experts, witness fees, travel expenses, fees of private
investigators and professional advisors, duplicating costs, printing and binding costs, telephone
charges, postage, delivery service fees, any federal, state, local or foreign taxes imposed on
Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, ERISA
excise taxes and penalties, fax transmission charges, secretarial services and all other
disbursements, obligations or expenses of the types customarily incurred in connection with
prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a
witness in, or otherwise participating in, a Proceeding. Expenses also shall include (i) Expenses
incurred in connection with any appeal resulting from any Proceeding, including without limitation
the principal, premium, security for, and other costs relating to any cost bond, supersedeas bond,
or other appeal bond or its equivalent, and (ii) for purposes of Section 14(d) only, Expenses
incurred by Indemnitee or on Indemnitee’s behalf in connection with the interpretation, enforcement
or defense of Indemnitee’s rights under this Agreement, by litigation or otherwise. Expenses,
however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or
fines against Indemnitee.
(h) “Independent Counsel” shall mean a law firm, or a member of a law firm, that is
experienced in matters of corporation law and neither presently is, nor in the past five years has
been, retained to represent: (i) the Company or Indemnitee in any matter material to either such
party (other than with respect to matters concerning Indemnitee under this Agreement, or of other
indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding
giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term
“Independent Counsel” shall not include any person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of interest in representing either the
Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.
(i) The term “Proceeding” shall include any threatened, pending or completed action, suit,
arbitration, mediation, alternate dispute resolution mechanism, investigation, inquiry,
administrative hearing or any other actual, threatened or completed proceeding, whether brought in
the right of the Company or otherwise and whether of a civil, criminal, administrative legislative,
or investigative (formal or informal) nature, including any appeal therefrom, in which Indemnitee
was, is or will be involved as a party, potential party, non-party witness or otherwise by reason
of the fact that Indemnitee is or was a director or officer of the Company, by reason of any action
(or failure to act) taken by Indemnitee or of any action (or failure to act) on Indemnitee’s part
while acting as director or officer of the Company, or by reason of the fact that Indemnitee is or
was serving at the request of the Company at any Enterprise, in each case whether or not serving in
such capacity at the time any liability or expense is incurred for which indemnification,
reimbursement, or advancement of expenses can be provided under this Agreement. If Indemnitee
believes in good faith that a given situation may lead to or culminate in the institution of a
Proceeding, this shall be considered a Proceeding under this paragraph.
(j) Reference to “fines” shall include any excise tax assessed with respect to any employee
benefit plan; references to “serving at the request of the Company” shall include any service as
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a director, officer, employee or agent of the Company which imposes duties on, or involves
services by, such director, officer, employee or agent with respect to an employee benefit plan,
its participants or beneficiaries; and a person who acted in good faith and in a manner he or she
reasonably believed to be in the best interests of the participants and beneficiaries of an
employee benefit plan shall be deemed to have acted in manner “not opposed to the best interests of
the Company” as referred to in this Agreement.
(k) For avoidance of doubt, all references herein to the Company’s obligation to “indemnify”
Indemnitee, and all variants of such term, also refer to and include an obligation of the Company
to hold harmless the Indemnitee.
Section 3. Indemnity in Third-Party Proceedings. The Company shall indemnify
Indemnitee in accordance with the provisions of this Section 3 if Indemnitee was, is, or is
threatened to be made a party to or a participant in any Proceeding, other than a Proceeding by or
in the right of the Company to procure a judgment in its favor. Pursuant to this Section 3,
Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all
Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by
Indemnitee or on Indemnitee’s behalf in connection with such Proceeding or any claim, issue or
matter therein, 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, in the case of a criminal Proceeding
had no reasonable cause to believe that Indemnitee’s conduct was unlawful. The parties hereto
intend that this Agreement shall provide to the fullest extent permitted by law for indemnification
in excess of that expressly permitted by the DGCL, including, without limitation, any
indemnification provided by the Company’s Restated Certificate of Incorporation, its By-laws, vote
of its stockholders or disinterested directors or applicable law.
Section 4. Indemnity in Proceedings by or in the Right of the Company. The Company
shall indemnify Indemnitee in accordance with the provisions of this Section 4 if Indemnitee was,
is, or is threatened to be made a party to or a participant in any Proceeding by or in the right of
the Company to procure a judgment in its favor. Pursuant to this Section 4, Indemnitee shall be
indemnified to the fullest extent permitted by applicable law against all Expenses actually and
reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with such Proceeding or
any claim, issue or matter therein, 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. No
indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue or
matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the
Company, unless and only to the extent that the Delaware Court of Chancery or any court in which
the Proceeding was brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably
entitled to indemnification.
Section 5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful.
Notwithstanding any other provisions of this Agreement, to the fullest extent permitted by
applicable law and to the extent that Indemnitee is a party to (or a participant in) and is
successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or
matter therein, in whole or in part, the Company shall indemnify Indemnitee against all Expenses
actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith.
If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or
otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the
Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by
Indemnitee or on Indemnitee’s behalf in connection with or related to each successfully resolved
claim, issue or matter to the fullest extent permitted by law. For purposes of this Section and
without limitation, the termination of any claim, issue or matter in such a Proceeding by
dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim,
issue or matter.
Section 6. Indemnification For Expenses of a Witness. Notwithstanding any other
provisions of this Agreement, to the fullest extent permitted by applicable law and to the extent
that
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Indemnitee is, by reason of Indemnitee’s Corporate Status, a witness or otherwise asked to
participate in any Proceeding to which Indemnitee is not a party, Indemnitee shall be indemnified
against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in
connection therewith.
Section 7. Partial Indemnification. If Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a portion of Expenses, but not,
however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the
portion thereof to which Indemnitee is entitled.
Section 8. Additional Indemnification.
(a) Notwithstanding any limitation in Sections 3, 4, or 5, the Company shall indemnify
Indemnitee to the fullest extent permitted by applicable law if Indemnitee is a party to or
threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the
Company to procure a judgment in its favor) against all Expenses, judgments, fines and amounts paid
in settlement actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in
connection with such Proceeding or any claim, issue or matter therein.
(b) For purposes of Section 8(a), the meaning of the phrase “to the fullest extent permitted
by applicable law” shall include, but not be limited to:
(i) to the fullest extent permitted by the provision of the DGCL that authorizes or
contemplates additional indemnification by agreement, or the corresponding provision of any
amendment to or replacement of the DGCL, and
(ii) to the fullest extent authorized or permitted by any amendments to or replacements of the
DGCL adopted after the date of this Agreement that increase the extent to which a corporation may
indemnify its officers and directors.
Section 9. Exclusions. Notwithstanding any provisions in this Agreement, the Company
shall not be obligated under this Agreement to make any indemnification in connection with:
(a) any claim made against Indemnitee for which payment has actually been received by or on
behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect
to any excess beyond the amount actually received under any insurance policy, contract, agreement
or other indemnity provision; or
(b) any claim made against Indemnitee for an accounting of profits made from the purchase and
sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of
Section 16(b) of the Exchange Act or similar provisions of state statutory law or common law;
provided, however, that indemnification pursuant to this Agreement relating to any Proceeding
against Indemnitee for an accounting for profits made from the purchase or sale by Indemnitee of
securities of the Company pursuant to the provisions of Section 16(b) of the Exchange Act or
similar provisions of any federal, state or local laws shall not be prohibited if Indemnitee
ultimately establishes in any Proceeding that no recovery of such profits from Indemnitee is
permitted under Section 10(b) of the Exchange Act or similar provisions of any federal, state of
local laws;
(c) any claim made against Indemnitee for any reimbursement of the Company by Indemnitee of
any bonus or other incentive-based or equity-based compensation or of any profits realized by
Indemnitee from the sale of securities of the Company, as required in each case under the Exchange
Act (including any such reimbursements that arise from an accounting restatement of the Company
pursuant to Section 304 of the Xxxxxxxx-Xxxxx Act of 2002 (the “Xxxxxxxx-Xxxxx Act”), or the
payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in
violation of Section 306 of the Xxxxxxxx-Xxxxx Act); or
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(d) except as provided in Section 14(d), any Proceeding (or any part of any Proceeding)
initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by
Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless
(i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation
(ii) such Proceeding (or part of a Proceeding) arises in connection with any counterclaim that the
Company or its directors, officers, employees or other indemnitees assert against Indemnitee or any
affirmative defense that the Company or its directors, officers, employees or other indemnitees
raise, which, by any doctrine of issue or claim preclusion, could result in liability to
Indemnitee, (iii) the Company provides the indemnification, in its sole discretion, pursuant to the
powers vested in the Company under applicable law or (iv) the Proceeding is initiated after a
Change in Control.
Section 10. Advances of Expenses. Notwithstanding any other provisions of this
Agreement to the contrary, the Company shall advance, to the extent not prohibited by law, the
Expenses incurred by Indemnitee or on Indemnitee’s behalf in connection with any Proceeding, and
such advancement shall be made within thirty (30) days after the receipt by the Company of a
statement or statements requesting such advances from time to time, whether prior to or after final
disposition of any Proceeding. Advances shall be unsecured and interest free. Advances shall be
made without regard to Indemnitee’s ability to repay the Expenses and without regard to
Indemnitee’s ultimate entitlement to indemnification under the other provisions of this Agreement.
Advances shall include any and all reasonable Expenses incurred pursuing a Proceeding to enforce
this right of advancement, including Expenses incurred preparing and forwarding statements to the
Company to support the advances claimed. Indemnitee shall qualify for advances, to the fullest
extent permitted by applicable law, solely upon the execution and delivery to the Company of this
Agreement, which shall constitute an undertaking providing that Indemnitee undertakes to repay the
amounts advanced (without interest) to the extent that it is ultimately determined that Indemnitee
is not entitled to be indemnified by the Company under the provisions of this Agreement, the
Company’s Restated Certificate of Incorporation or By-laws, applicable law or otherwise. Unless
required by applicable law, no other form of undertaking shall be required other than the execution
of this Agreement. This Section 10 shall not apply to any claim made by Indemnitee for which
indemnity is excluded pursuant to Section 9(d). The parties agree that for the purposes of any
advancement of Expenses for which Indemnitee has made written demand to the Company in accordance
with this Agreement, all Expenses included in such demand that are certified by affidavit of
Indemnitee’s counsel as being reasonable shall be presumed conclusively to be reasonable.
Section 11. Procedure for Notification and Defense of Claim.
(a) Indemnitee shall notify promptly the Company in writing upon being served with any
summons, citation, subpoena, complaint, indictment, information or other document relating to any
Proceeding or matter which may be subject to indemnification or advancement of Expenses covered
hereunder. The failure of Indemnitee to so notify the Company shall not relieve the Company of any
obligation which it may have to Indemnitee under this Agreement, except to the extent that the
Company has been actually and materially prejudiced by such failure.
(b) To obtain indemnification under this Agreement, Indemnitee shall deliver to the Company a
written request, including therein or therewith 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 following the final disposition of such action, suit or
proceeding. 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.
(c) The Company will be entitled to participate in the Proceeding at its own expense.
Indemnitee’s counsel shall cooperate reasonably with the Company’s counsel to minimize the cost of
the defending claims against the Company and Indemnitee. The Company shall not settle any
Proceeding without Indemnitee’s written consent, provided that Indemnitee’s written consent shall
not be required if such settlement (i) grants Indemnitee a complete and unqualified release of
liability, (ii) does not impose
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any penalty or limitation on Indemnitee, and (iii) does not admit any liability or misconduct
by Indemnitee. The Company shall not be required to indemnify Indemnitee under this Agreement for
any amounts paid in settlement of any Proceeding effected without the Company’s written consent.
Neither the Company nor Indemnitee will unreasonably withhold or delay consent to any proposed
settlement.
Section 12. Procedure Upon Application for Indemnification.
(a) Upon written request by Indemnitee for indemnification pursuant to Section 11(b), a
determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto
shall be made in the specific case: (i) if a Change in Control shall have occurred, by Independent
Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee; or
(ii) if a Change in Control shall not have occurred, (A) by a majority vote of the Disinterested
Directors, even though less than a quorum of the Board, (B) by a committee of Disinterested
Directors designated by a majority vote of the Disinterested Directors, even though less than a
quorum of the Board, (C) if there are no such Disinterested Directors or, if such Disinterested
Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which
shall be delivered to Indemnitee or (D) if so directed by the Board, by the stockholders of the
Company; and, 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
reasonably cooperate with the person, persons or entity making such determination with respect to
Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity
upon reasonable advance request any documentation or information which is not privileged or
otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably
necessary to such determination. Any costs or Expenses (including attorneys’ fees and
disbursements) incurred by Indemnitee or on Indemnitee’s behalf in so cooperating with the person,
persons or entity making such determination shall be borne by the Company (irrespective of the
determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies
Indemnitee therefrom.
(b) In the event the determination of entitlement to indemnification is to be made by
Independent Counsel pursuant to Section 12(a), the Independent Counsel shall be selected as
provided in this Section 12(b). 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 Indemnitee 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, in which event the preceding sentence shall
apply), and Indemnitee shall give written notice to the Company advising it of the identity of the
Independent Counsel so selected. In either event, Indemnitee or the Company, as the case may be,
may, within ten (10) days after such written notice of selection shall have been given, deliver to
the Company or to Indemnitee, as the case may be, a written objection to such selection; provided,
however, that such objection may be asserted only on the ground that the Independent Counsel so
selected does not meet the requirements of “Independent Counsel” as defined in Section 2, and the
objection shall set forth with particularity the factual basis of such assertion. Absent a proper
and timely objection, the person so selected shall act as Independent Counsel. If such written
objection is so made and substantiated, the Independent Counsel so selected may not serve as
Independent Counsel unless and until such objection is withdrawn or a court has determined that
such objection is without merit. If, within twenty (20) days after the later of submission by
Indemnitee of a written request for indemnification pursuant to Section 11(b) and the final
disposition of the Proceeding, no Independent Counsel shall have been selected and not objected to,
either the Company or Indemnitee may petition a court of competent jurisdiction for resolution of
any objection which shall have been made by the Company or Indemnitee to the other’s selection of
Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the
Court or by such other person as the Court shall designate, and the person with respect to whom all
objections are so resolved or the person so appointed shall act as Independent Counsel under
Section 12(a). Upon the due commencement of any judicial proceeding or arbitration pursuant to
Section 14(a), Independent Counsel shall be discharged and relieved of any further responsibility
in such capacity (subject to the applicable standards of professional conduct then prevailing). The
Company agrees to pay the reasonable fees and expenses of the Independent
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Counsel referred to above and to fully indemnify such counsel against any and all Expenses,
claims, liabilities and damages arising out of or relating to this Agreement or its engagement
pursuant hereto.
(c) If the Company disputes a portion of the amounts for which indemnification is requested,
the undisputed portion shall be paid and only the disputed portion withheld pending resolution of
any such dispute.
Section 13. 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, to the fullest extent not prohibited by
law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has
submitted a request for indemnification in accordance with Section 11(b) and the Company shall, to
the fullest extent not prohibited by law, have the burden of proof to overcome that presumption in
connection with the making by any person, persons or entity of any determination contrary to that
presumption. Neither the failure of the Company (including by its directors or Independent
Counsel) to have made a determination prior to the commencement of any action pursuant to this
Agreement that indemnification is proper in the circumstances because Indemnitee has met the
applicable standard of conduct, nor an actual determination by the Company (including by its
directors or Independent Counsel) that Indemnitee has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that Indemnitee has not met the applicable
standard of conduct.
(b) Subject to Section 14(e), if the person, persons or entity empowered or selected under
Section 12 to determine whether Indemnitee is entitled to indemnification shall not have made a
determination within sixty (60) days after receipt by the Company of the request therefor, the
requisite determination of entitlement to indemnification shall, to the fullest extent not
prohibited by law, be deemed to have been made and Indemnitee shall be entitled to such
indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a
material fact necessary to make Indemnitee’s statement not materially misleading, in connection
with the request for indemnification, or (ii) a prohibition of such indemnification under
applicable law; provided, however, that such 60-day period may be extended for a reasonable time,
not to exceed an additional thirty (30) days, if the person, persons or entity making the
determination with respect to entitlement to indemnification in good faith requires such additional
time for the obtaining or evaluating of documentation and/or information relating thereto; and
provided, further, that the foregoing provisions of this Section 13(b) shall not apply (i) if the
determination of entitlement to indemnification is to be made by the stockholders pursuant to
Section 12(a) and if (A) within fifteen (15) days after receipt by the Company of the request for
such determination the Board has resolved to submit such determination to the stockholders for
their consideration at an annual meeting thereof to be held within seventy-five (75) days after
such receipt and such determination is made thereat, or (B) a special meeting of stockholders is
called within fifteen (15) days after such receipt for the purpose of making such determination,
such meeting is held for such purpose within sixty (60) days after having been so called and such
determination is made thereat, or (ii) if the determination of entitlement to indemnification is to
be made by Independent Counsel pursuant to Section 12(a).
(c) The termination of any Proceeding or of any claim, issue or matter therein, by judgment,
order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not
(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 Indemnitee reasonably believed to be in or not opposed to the best interests of
the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to
believe that Indemnitee’s conduct was unlawful.
(d) For purposes of any determination of good faith, Indemnitee shall be deemed to have acted
in good faith if Indemnitee’s action is based on the records or books of account of the
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Enterprise, including financial statements, or on information supplied to Indemnitee by the
officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the
Enterprise or on information or records given or reports made to the Enterprise by an independent
certified public accountant or by an appraiser or other expert selected with the reasonable care by
the Enterprise. The provisions of this Section 13(d) shall not be deemed to be exclusive or to
limit in any way the other circumstances in which Indemnitee may be deemed or found to have met the
applicable standard of conduct set forth in this Agreement.
(e) The knowledge and/or actions, or failure to act, of any other director, officer, trustee,
general partner, managing member, fiduciary, agent or employee of the Enterprise shall not be
imputed to Indemnitee for purposes of determining the right to indemnification under this
Agreement.
Section 14. Remedies of Indemnitee.
(a) Subject to Section 14(e), in the event that (i) a determination is made pursuant to
Section 12 that Indemnitee is not entitled to indemnification under this Agreement, (ii)
advancement of Expenses is not timely made pursuant to Section 10, (iii) no determination of
entitlement to indemnification shall have been made pursuant to Section 12(a) within ninety (90)
days after receipt by the Company of the request for indemnification, (iv) payment of
indemnification is not made pursuant to Section 5, 6 or 7 or the last sentence of Section 12(a)
within ten (10) days after receipt by the Company of a written request therefor, (v) payment of
indemnification pursuant to Section 3, 4 or 8 is not made within ten (10) days after a
determination has been made that Indemnitee is entitled to indemnification, or (vi) in the event
that the Company or any other person takes or threatens to take any action to declare this
Agreement void or unenforceable, or institutes any litigation or other action or Proceeding
designed to deny, or to recover from, Indemnitee the benefits provided or intended to be provided
to Indemnitee hereunder, Indemnitee shall be entitled to an adjudication by a court of his or her
entitlement to such indemnification, contribution or advancement rights. Alternatively,
Indemnitee, at Indemnitee’s option, may seek an award in arbitration to be conducted by a single
arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association.
Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within
180 days following the date on which Indemnitee first has the right to commence such proceeding
pursuant to this Section 14(a); provided, however, that the foregoing clause shall not apply in
respect of a proceeding brought by Indemnitee to enforce Indemnitee’s rights under Section 5. The
Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made pursuant to Section 12(a) that
Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced
pursuant to this Section 14 shall be conducted in all respects as a de novo trial, or arbitration,
on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. In
any judicial proceeding or arbitration commenced pursuant to this Section 14, Indemnitee shall be
presumed to be entitled to be indemnified and to receive advances of Expenses under this Agreement
and the Company shall have the burden of proving Indemnitee is not entitled to indemnification or
advancement of Expenses, as the case may be.
(c) If a determination shall have been made pursuant to Section 12(a) that Indemnitee is
entitled to indemnification, the Company shall be bound by such determination in any judicial
proceeding or arbitration commenced pursuant to this Section 14, absent (i) a misstatement by
Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s
statement not materially misleading, in connection with the request for indemnification, or (ii) a
prohibition of such indemnification under applicable law.
(d) The Company shall, to the fullest extent not prohibited by law, be precluded from
asserting in any judicial proceeding or arbitration commenced pursuant to this Section 14 that the
procedures and presumptions of this Agreement are not valid, binding and enforceable and shall
stipulate
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in any such court or before any such arbitrator that the Company is bound by all the
provisions of this Agreement. It is the intent of the Company that, to the fullest extent
permitted by law, Indemnitee not be required to incur legal fees or other Expenses associated with
the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement by
litigation or otherwise because the cost and expense thereof would substantially detract from the
benefits intended to be extended to Indemnitee hereunder. The Company shall indemnify Indemnitee
to the fullest extent permitted by law against any and all Expenses and, if requested by
Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefor)
advance, to the extent not prohibited by law, such Expenses to Indemnitee, which are incurred by
Indemnitee or on Indemnitee’s behalf in connection with any action brought by Indemnitee for
indemnification, contribution or advancement rights from the Company under this Agreement or under
any directors’ and officers’ liability insurance policies maintained by the Company if Indemnitee
is wholly successful on the underlying claims; if Indemnitee is not wholly successful on the
underlying claims, then such indemnification and advancement shall be only to the extent Indemnitee
is successful on such underlying claims or otherwise as permitted by law, whichever is greater. To
the extent that it is ultimately determined that Indemnitee is not wholly successful on the
underlying claims, the execution and delivery to the Company of this Agreement shall constitute an
undertaking providing that Indemnitee undertakes to repay, if required by law, the amounts advanced
(without interest) to the extent Indemnitee is not successful on such underlying claims.
(e) Notwithstanding anything in this Agreement to the contrary, no determination as to
entitlement of Indemnitee to indemnification under this Agreement shall be required to be made
prior to the final disposition of the Proceeding.
Section 15. Non-exclusivity; Survival of Rights; Insurance; Subrogation.
(a) The rights of Indemnitee as provided by this Agreement (i) shall not be deemed exclusive
of any other rights to which Indemnitee may at any time be entitled under applicable law, the
Company’s Restated Certificate of Incorporation, the Company’s By-laws, any agreement, a vote of
stockholders or a resolution of directors, or otherwise and (ii) shall be enforced and this
Agreement shall be interpreted independently of and without reference to or limitation or
constraint (whether procedural, substantive or otherwise) by any other such rights to which
Indemnitee may at any time be entitled. No amendment, alteration or repeal of this Agreement or of
any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in
respect of any action taken or omitted by such Indemnitee in Indemnitee’s Corporate Status prior to
such amendment, alteration or repeal. To the extent that a change in applicable law, whether by
statute or judicial decision, permits greater indemnification or advancement of Expenses than would
be afforded currently under the Company’s Restated Certificate of Incorporation or By-laws or 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. To the extent that a change in Delaware law, whether
by statute or judicial decision, narrows or limits indemnification or advancement of Expenses that
are afforded currently under the Company’s Restated Certificate of Incorporation or By-laws or this
Agreement, it is the intent of the parties hereto that such change, except to the extent required
by applicable law, shall have no effect on this Agreement or the parties’ rights and obligations
hereunder. No right or remedy herein conferred is intended to be exclusive of any other right or
remedy, and every other right and remedy shall be cumulative and in addition to every other right
and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other right or remedy.
(b) To the extent that the Company maintains an insurance policy or policies providing
liability insurance for directors, officers, employees, or agents of the Company or of any other
Enterprise which such person serves at the request of the Company, Indemnitee shall be covered by
such policy or policies in accordance with its or their terms to the maximum extent of the coverage
available for any such director, officer, employee or agent under such policy or policies. If, at
the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has
director and officer liability
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insurance in effect, the Company shall give prompt notice of such claim or of the commencement
of a proceeding, as the case may be, 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.
(c) In the event of any payment under this Agreement, the Company shall be subrogated to the
extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers
required and take all action necessary to secure such rights, including execution of such documents
as are necessary to enable the Company to bring suit to enforce such rights.
(d) The Company shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable (or for which advancement is provided hereunder) hereunder if and to the
extent that Indemnitee has otherwise actually received such payment under any insurance policy,
contract, agreement or otherwise.
(e) The Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is
or was serving at the request of the Company at any Enterprise shall be reduced by any amount
Indemnitee has actually received as indemnification or advancement of expenses from such
Enterprise.
Section 16. Duration of Agreement. This Agreement shall continue until and terminate
upon the later of: (a) ten (10) years after the date that Indemnitee shall have ceased to serve as
a director or officer of the Company or (b) one (1) year after the final termination of any
Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or
advancement of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section
14 relating thereto. This Agreement shall be binding upon the Company and its successors and
assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise
to all or substantially all of the business or assets of the Company) and shall continue as to an
Indemnitee who has ceased to be a director or officer of the Company or a director, officer,
trustee, general partner, managing member, fiduciary, employee or agent of any other Enterprise at
the Company’s request, and shall inure to the benefit of Indemnitee and Indemnitee’s spouse,
assigns, estate, heirs, devisees, executors and administrators and other legal representatives.
Section 17. Severability. If any provision or provisions of this Agreement shall be
held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality
and enforceability of the remaining provisions of this Agreement (including without limitation,
each portion of any Section of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any
way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by
law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform
to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to
the fullest extent possible, the provisions of this Agreement (including, without limitation, each
portion of any Section of this Agreement containing any such provision held to be invalid, illegal
or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to
give effect to the intent manifested thereby.
Section 18. Enforcement; Entire Agreement.
(a) The Company expressly confirms and agrees that it has entered into this Agreement and
assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director
or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this
Agreement in serving as a director or officer of the Company.
(b) This Agreement constitutes the entire agreement between the parties hereto with
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respect to the subject matter hereof and supersedes all prior agreements and understandings,
oral, written and implied, between the parties hereto with respect to the subject matter hereof;
provided, however, that this Agreement is a supplement to and in furtherance of the Restated
Certificate of Incorporation of the Company and applicable law, and shall not be deemed a
substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.
(c) The Company shall require and cause any successor (whether direct or indirect by purchase,
merger, consolidation or otherwise) to all or substantially all of the business or assets of the
Company 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.
Section 19. Modification and Waiver. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by the parties hereto. No waiver of any of
the provisions of this Agreement shall be deemed or shall constitute a waiver of any other
provisions of this Agreement nor shall any waiver constitute a continuing waiver.
Section 20. Notices. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by
hand and receipted for by the party to whom said notice or other communication shall have been
directed, (b) mailed by certified or registered mail with postage prepaid, on the third business
day after the date on which it is so mailed, (c) mailed by reputable overnight courier and
receipted for by the party to whom said notice or other communication shall have been directed or
(d) sent by facsimile transmission or e-mail, with receipt of oral confirmation that such
transmission has been received:
(a) If to Indemnitee, at the address indicated on the signature page of this Agreement, or
such other address as Indemnitee shall provide to the Company.
| (b) If to the Company to: | Chief Executive Officer | |||
| Aspect Medical Systems, Inc. | ||||
| Xxx Xxxxxx Xxxx | ||||
| Xxxxxxx, XX 00000 | ||||
| with a copy to: | Xxxxx X. Xxxxxx, Esq. | |||
| Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP | ||||
| 00 Xxxxx Xxxxxx, Xxxxxx XX 00000 |
or to any other address as may have been furnished to Indemnitee by the Company.
Section 21. Contribution. To the fullest extent permissible under applicable law, if
the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason
whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount
incurred by Indemnitee or on Indemnitee’s behalf, whether for Expenses, judgments, fines or amounts
paid in settlement, in connection with any claim relating to an indemnifiable event under this
Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances
of such Proceeding in order to reflect (i) the relative benefits received by the Company and
Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding;
and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents)
and Indemnitee in connection with such event(s) and/or transaction(s).
Section 22. Applicable Law and Consent to Jurisdiction. This Agreement and the legal
relations among the parties shall be governed by, and construed and enforced in accordance with,
the laws of the State of Delaware, without regard to its conflict of laws rules. Except with
respect to any arbitration commenced by Indemnitee pursuant to Section 14(a), the Company and
Indemnitee hereby irrevocably
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and unconditionally (i) agree that any action or proceeding arising out of or in connection
with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the
“Delaware Court”), and not in any other state or federal court in the United States of America or
any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the
Delaware Court for purposes of any action or proceeding arising out of or in connection with this
Agreement, (iii) waive any objection to the laying of venue of any such action or proceeding in
the Delaware Court, and (iv) waive, and agree not to plead or to make, any claim that any such
action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient
forum.
Section 23. 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 enforceability is sought needs to be produced to evidence the existence of this
Agreement.
Section 24. Headings. The headings of this Agreement are inserted for convenience
only and shall not be deemed to constitute part of this Agreement or to affect the construction
thereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year
first above written.
| ASPECT MEDICAL SYSTEMS, INC. | INDEMNITEE | |||||
By: |
||||||
Name:
|
Name: | |||||
Title:
|
Address: | |||||
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