INDEMNIFICATION AGREEMENT
This Indemnification Agreement (the "Agreement") is made as of
_______________ by and between inSilicon Corporation, a Delaware corporation
(the "Corporation"), and ____________________ (the "Indemnitee").
RECITALS
The Corporation and Indemnitee recognize the increasing difficulty in
obtaining liability insurance for directors, officers and key employees, the
significant increases in the cost of such insurance and the general reductions
in the coverage of such insurance. The Corporation and Indemnitee further
recognize the substantial increase in corporate litigation in general,
subjecting directors, officers and key employees to expensive litigation risks
at the same time as the availability and coverage of liability insurance has
been severely limited. Indemnitee does not regard the current protection
available as adequate under the present circumstances, and Indemnitee and agents
of the Corporation may not be willing to continue to serve as agents of the
Corporation without additional protection. The Corporation desires to attract
and retain the services of highly qualified individuals, such as Indemnitee, and
to indemnify its directors, officers and key employees so as to provide them
with the maximum protection permitted by law.
AGREEMENT
In consideration of the mutual promises made in this Agreement, and for
other good and valuable consideration, receipt of which is hereby acknowledged,
the Corporation and Indemnitee hereby agree as follows:
1. INDEMNIFICATION.
(a) THIRD-PARTY PROCEEDINGS. The Corporation shall indemnify
Indemnitee if Indemnitee is or was a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the Corporation) by reason of the fact that Indemnitee is or was a
director, officer, employee or agent of the Corporation, or any subsidiary of
the Corporation, by reason of any action or inaction on the part of Indemnitee
while an officer or director or by reason of the fact that Indemnitee is or was
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses, liabilities, damages and losses (including
attorneys' fees), judgments, fines, excise taxes and amounts paid in settlement
(if the Corporation approves such settlement in advance, not be to unreasonably
withheld) actually and reasonably incurred or suffered by Indemnitee in
connection with such action, suit 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 Corporation and, with respect to any criminal action
or proceeding, had no reasonable cause to believe Indemnitee's conduct was
unlawful. The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, 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 Corporation, and, with respect
to any criminal action or proceeding, shall not create a presumption that
Indemnitee had reasonable cause to believe that Indemnitee's conduct was
unlawful.
(b) PROCEEDINGS BY OR IN THE RIGHT OF THE CORPORATION. The
Corporation shall indemnify Indemnitee if Indemnitee was or is a party or is
threatened to be made a party to any threatened, pending or completed action
or proceeding by or in the right of the Corporation or any subsidiary of the
Corporation 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
Corporation, or any subsidiary of the Corporation, by reason of any action or
inaction on the part of Indemnitee while an officer or director or by reason
of the fact that Indemnitee is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses,
liabilities, damages and losses (including attorneys' fees) and, to the
fullest extent permitted by law, amounts paid in settlement (if the
Corporation approves such settlement in advance, not to be unreasonably
withheld), in each case to the extent actually and reasonably incurred by
Indemnitee in connection with the defense or settlement of such action or
suit 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 Corporation,
except that no indemnification shall be made with respect to any claim, issue
or matter as to which Indemnitee shall have been finally adjudicated by court
order or judgment to be liable to the Corporation unless and only to the
extent that the Delaware Court of Chancery or the court in which such action
or proceeding is or was pending shall determine upon application that, in
view of all the circumstances of the case, Indemnitee is fairly and
reasonably entitled to indemnity for the Court of Chancery or such expenses
which such court shall deem proper.
(c) MANDATORY PAYMENT OF EXPENSES. To the extent that
Indemnitee has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Section l(a) or Section l(b) or the
defense of any claim, issue or matter therein, Indemnitee shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
Indemnitee in connection therewith.
2. NO EMPLOYMENT RIGHTS. Nothing contained in this Agreement is
intended to create in Indemnitee any right to continued employment.
3. EXPENSES; INDEMNIFICATION PROCEDURE.
(a) ADVANCEMENT OF EXPENSES. The Corporation shall advance
all expenses incurred by Indemnitee in connection with the investigation,
defense, settlement or appeal of any civil or criminal action, suit or
proceeding referred to in Section l(a) or Section l(b) of this Agreement
(including amounts actually paid in settlement of any such action, suit or
proceeding as to which Indemnitee is entitled to indemnification hereunder).
Indemnitee hereby undertakes to repay such amounts advanced only if, and to
the extent that, it shall ultimately be determined that Indemnitee is not
entitled to be indemnified by the Corporation as authorized hereby.
(b) NOTICE/COOPERATION BY INDEMNITEE. Indemnitee shall, as a
condition precedent to his or her right to be indemnified under this Agreement,
give the Corporation notice in writing as soon as practicable of any claim made
against Indemnitee for which
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indemnification will or could be sought under this Agreement. Notice to the
Corporation shall be directed to the Chief Executive Officer of the
Corporation and shall be given in accordance with the provisions of Section
12(d) below. In addition, Indemnitee shall give the Corporation such
information and cooperation as it may reasonably require and as shall be
within Indemnitee's power.
(c) PROCEDURE. Any indemnification and advances provided
for in Section 1 and this Section 3 shall be made no later than sixty (60)
days after receipt of the written request of Indemnitee. If a claim under
this Agreement, under any statute, or under any provision of the
Corporation's Certificate of Incorporation or By-laws providing for
indemnification, is not paid in full by the Corporation within sixty (60)
days after a written request for payment thereof has first been received by
the Corporation, Indemnitee may, but need not, at any time thereafter bring
suit against the Corporation to recover the unpaid amount of the claim and,
subject to Section 11 of this Agreement, Indemnitee shall also be entitled to
be paid for the expenses (including attorneys' fees) of bringing such suit.
It shall be a defense to any such action (other than an action brought to
enforce a claim for expenses incurred in defending any proceeding in advance
of its final disposition where the required undertaking if any is required,
has been tendered to the Corporation) that Indemnitee has not met the
standards of conduct which makes it permissible under the General Corporation
Law of the State of Delaware for the Corporation to indemnify Indemnitee for
the amount claimed, but the burden of proving such defense shall be on the
Corporation and Indemnitee shall be entitled to receive interim payments of
expenses pursuant to Section 3(i) unless and until such defense may be
finally adjudicated by court order or judgment from which no further right of
appeal exists. It is the parties' intention that if the Corporation contests
Indemnitee's right to indemnification, such question shall be for the court
to decide, and neither the failure of the Corporation (including its Board of
Directors, any committee or subgroup of the Board of Directors, independent
legal counsel, or its shareholders) to have made a determination that
indemnification of Indemnitee is proper in the circumstances because
Indemnitee has met the applicable standard of conduct required by applicable
law, nor an actual determination by the Corporation (including its Board of
Directors, any committee or subgroup of the Board of Directors, independent
legal counsel, or its shareholders) that Indemnitee has not met such
applicable standard of conduct, shall create a presumption that Indemnitee
has or has not met the applicable standard of conduct.
(d) NOTICE TO INSURERS. If, at the time the Corporation
receives notice of a claim pursuant to Section 3(b) hereof, it has director
and officer liability insurance in effect, the Corporation shall give prompt
notice of such proceedings to the insurers in accordance with the procedures
set forth in the respective policies. The Corporation shall thereafter take
all necessary or desirable action to cause such insurers to pay, on behalf of
the Indemnitee, all amounts payable as a result of such proceeding in
accordance with the terms of such policies.
(e) SELECTION OF COUNSEL. In the event Section 3(a) hereof
obligates the Corporation to pay the expenses of any proceeding against
Indemnitee, the Corporation, if appropriate, shall be entitled to assume the
defense of such proceeding, with counsel approved by Indemnitee, 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 Corporation, the Corporation will not be
liable to Indemnitee under this Agreement for any fees of counsel
subsequently incurred by Indemnitee with respect to the same
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proceeding, provided that (i) Indemnitee shall have the right to employ
counsel in any such proceeding at Indemnitee's expense; and (ii) if (a) the
Corporation previously authorized the Indemnitee's employment, (b) Indemnitee
shall have reasonably concluded that there may be a conflict of interest
between the Corporation and Indemnitee in the conduct of any such defense or
(c) the Corporation shall not, in fact, have employed counsel to assume the
defense of such proceeding, then the fees and expenses of Indemnitee's
counsel shall be at the expense of the Corporation.
4. ADDITIONAL INDEMNIFICATION RIGHTS; NONEXCLUSIVITY.
(a) SCOPE. Notwithstanding any other provision of this
Agreement, the Corporation hereby agrees to indemnify the Indemnitee to the
fullest extent permitted by law, notwithstanding that such indemnification is
not specifically authorized by the other provisions of this Agreement, the
Corporation's Certificate of Incorporation, the Corporation's By-laws or by
statute. In the event of any change, after the date of this Agreement, in
any applicable law, statute, or rule expanding the right of a Delaware
corporation to indemnify a member of its board of directors or an officer,
such changes shall be deemed to be within the purview of Indemnitee's rights
and the Corporation's obligations under this Agreement. In the event of any
change in any applicable law, statute or rule narrowing the right of a
Delaware corporation to indemnify a member of its board of directors or an
officer, such changes, to the extent not otherwise required by such law,
statute or rule to be applied to this Agreement shall have no effect on this
Agreement or the parties' rights and obligations hereunder.
(b) NONEXCLUSIVITY. The indemnification provided by this
Agreement shall not be deemed exclusive of any rights to which Indemnitee may be
entitled under the Corporation's Certificate of Incorporation, its By-laws, any
agreement, any vote of stockholders or disinterested members of the
Corporation's Board of Directors, the General Corporation Law of the State of
Delaware, or otherwise, both as to action in Indemnitee's official capacity and
as to action in another capacity while holding such office. The indemnification
provided under this Agreement shall continue as to Indemnitee for any action
taken or not taken while serving in an indemnified capacity even though he or
she may have ceased to serve in any such capacity at the time of any action,
suit or other covered proceeding.
5. PARTIAL INDEMNIFICATION. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Corporation for some or
a portion of the expenses, judgments, fines or penalties actually or
reasonably incurred in the investigation, defense, appeal or settlement of
any civil or criminal action, suit or proceeding, but not, however, for the
total amount thereof, the Corporation shall nevertheless indemnify Indemnitee
for the portion of such expenses, judgments, fines or penalties to which
Indemnitee is entitled.
6. MUTUAL ACKNOWLEDGMENT. Both the Corporation and Indemnitee
acknowledge that in certain instances, federal law or public policy may
override applicable state law and prohibit the Corporation from indemnifying
its directors and officers under this Agreement or otherwise. For example,
the Corporation and Indemnitee acknowledge that the Securities and Exchange
Commission (the "SEC") has taken the position that indemnification is not
permissible for liabilities arising under certain federal securities laws,
and federal legislation prohibits indemnification for certain violations of
the Employee Retirement Income Security Act of 1974
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("ERISA"). Indemnitee understands and acknowledges that the Corporation has
undertaken or may be required in the future to undertake with the SEC to
submit the question of indemnification to a court in certain circumstances
for a determination of the Corporation's right under public policy to
indemnify Indemnitee.
7. OFFICER AND DIRECTOR LIABILITY INSURANCE. The Corporation
shall, from time to time, make the good faith determination whether or not it
is practicable for the Corporation to obtain and maintain a policy or
policies of insurance with reputable insurance companies providing the
officers and directors of the Corporation with coverage for losses from
wrongful acts, or to ensure the Corporation's performance of its
indemnification obligations under this Agreement. Among other
considerations, the Corporation will weigh the costs of obtaining such
insurance coverage against the protection afforded by such coverage. In all
policies of director and officer liability insurance, Indemnitee shall be
named as an insured in such a manner as to provide Indemnitee the same rights
and benefits as are accorded to the most favorably insured of the
Corporation's directors, if Indemnitee is a director; or of the Corporation's
officers, if Indemnitee is not a director of the Corporation but is an
officer; or of the Corporation's key employees, if Indemnitee is not an
officer or director but is a key employee. Notwithstanding the foregoing,
the Corporation shall have no obligation to obtain or maintain such insurance
if the Corporation determines in good faith that such insurance is not
reasonably available, if the premium costs for such insurance are
disproportionate to the amount of coverage provided, if the coverage provided
by such insurance is limited by exclusions so as to provide an insufficient
benefit, or if Indemnitee is covered by similar insurance maintained by a
parent or subsidiary of the Corporation.
8. SEVERABILITY. Nothing in this Agreement is intended to require
or shall be construed as requiring the Corporation to do or fail to do any
act in violation of applicable law. The Corporation's inability, pursuant to
court order, to perform its obligations under this Agreement shall not
constitute a breach of this Agreement. The provisions of this Agreement
shall be severable as provided in this Section 8. If this Agreement or any
portion hereof shall be invalidated on any ground by any court of competent
jurisdiction, then the Corporation shall nevertheless indemnify Indemnitee to
the full extent permitted by any applicable portion of this Agreement that
shall not have been invalidated, and the balance of this Agreement not so
invalidated shall be enforceable in accordance with its terms.
9. EXCEPTIONS. Any other provision herein to the contrary
notwithstanding, the Corporation shall not be obligated pursuant to the terms
of this Agreement:
(a) CLAIMS INITIATED BY INDEMNITEE. To indemnify or advance
expenses to Indemnitee with respect to proceedings or claims initiated or
brought voluntarily by Indemnitee and not by way of defense, except with
respect to proceedings brought to establish or enforce a right to
indemnification under this Agreement or any other statute or law or otherwise
as required under Section 145 of the Delaware General Corporation Law, but
such indemnification or advancement of expenses may be provided by the
Corporation in specific cases if the Board of Directors finds it to be
appropriate;
(b) LACK OF GOOD FAITH. To indemnify Indemnitee for any
expenses incurred by Indemnitee with respect to any proceeding instituted by
Indemnitee to enforce or interpret this
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Agreement, if a court of competent jurisdiction determines that each of the
material assertions made by Indemnitee in such proceeding was not made in
good faith or was frivolous;
(c) INSURED CLAIMS. To indemnify Indemnitee 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) if,
and then only to the extent that, such expenses or liabilities have been paid
directly to Indemnitee by an insurance carrier under a policy of officers'
and directors' liability insurance maintained by the Corporation; or
(d) CLAIMS UNDER SECTION 16(b). To indemnify Indemnitee 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, or any similar successor statute.
10. CONSTRUCTION OF CERTAIN PHRASES.
(a) For purposes of this Agreement, references to the
"Corporation" shall include, in addition to the resulting corporation, any
constituent corporation (including any constituent of a constituent) absorbed
in a consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its directors, officers, and
employees or agents, so that if Indemnitee is or was a director, officer,
employee or agent of such constituent corporation, or is or was serving at
the request of such constituent corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, Indemnitee shall stand in the same position under the provisions
of this Agreement with respect to the resulting or surviving corporation as
Indemnitee would have with respect to such constituent corporation if its
separate existence had continued.
(b) For purposes of this Agreement, references to "other
enterprises" shall include employee benefit plans; references to "fines"
shall include any excise taxes assessed on Indemnitee with respect to an
employee benefit plan; and references to "serving at the request of the
Corporation" shall include any service as a director, officer, employee or
agent of the Corporation imposing duties on, or involving services by, such
director, officer, employee or agent with respect to an employee benefit
plan, its participants, or beneficiaries; and if Indemnitee acted in good
faith and in a manner Indemnitee reasonably believed to be in the interest of
the participants and beneficiaries of an employee benefit plan, Indemnitee
shall be deemed to have acted in a manner "not opposed to the best interests
of the Corporation" as referred to in this Agreement.
11. ATTORNEYS' FEES. In the event that any action is instituted by
Indemnitee under this Agreement to enforce or interpret any of the terms
hereof, Indemnitee shall be entitled to be paid all court costs and expenses,
including reasonable attorneys' fees, incurred by Indemnitee with respect to
such action, unless as a part of such action, the court of competent
jurisdiction determines that each of the material assertions made by
Indemnitee as a basis for such action were not made in good faith or were
frivolous. In the event of an action instituted by or in the name of the
Corporation under this Agreement or to enforce or interpret any of the terms
of this Agreement, Indemnitee shall be entitled to be paid all court costs
and expenses, including attorneys' fees, incurred by Indemnitee in defense of
such action (including with respect to
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Indemnitee's counterclaims and cross-claims made in such action), unless as a
part of such action the court determines that each of Indemnitee's material
defenses to such action were made in bad faith or were frivolous.
12. MISCELLANEOUS.
(a) GOVERNING LAW. This Agreement and all acts and
transactions pursuant hereto and the rights and obligations of the parties
hereto shall be governed, construed and interpreted in accordance with the
laws of the State of Delaware, without giving effect to principles of
conflicts of law.
(b) ENTIRE AGREEMENT; ENFORCEMENT OF RIGHTS. This Agreement
sets forth the entire agreement and understanding of the parties relating to
the subject matter herein and merges all prior discussions between them. No
modification of or amendment to this Agreement, nor any waiver of any rights
under this Agreement, shall be effective unless signed in writing by the
parties to this Agreement. The failure by either party to enforce any rights
under this Agreement shall not be construed as a waiver of any rights of such
party.
(c) CONSTRUCTION. This Agreement is the result of
negotiations between and has been reviewed by each of the parties hereto and
their respective counsel, if any; accordingly, this Agreement shall be deemed
to be the product of all of the parties hereto, and no ambiguity shall be
construed in favor of or against any one of the parties hereto.
(d) NOTICES. Any notice, demand or request required or
permitted to be given under this Agreement shall be in writing and shall be
deemed sufficient when delivered personally or sent by telegram or fax or
forty-eight (48) hours after being deposited in the U.S. mail, as certified
or registered mail, with postage prepaid, and addressed to the party to be
notified at such party's address as set forth below or as subsequently
modified by written notice.
(e) COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
(f) SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon the Corporation and its successors and assigns, and inure to the benefit of
Indemnitee and Indemnitee's heirs, legal representatives and assigns.
(g) SUBROGATION. In the event of payment under this
Agreement, the Corporation shall be subrogated to the extent of such payment
to all of the rights of recovery of Indemnitee, who shall execute all
documents required and shall do all acts that may be necessary to secure such
rights and to enable the Corporation to effectively bring suit to enforce
such rights.
[Signature Page Follows]
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The parties hereto have executed this Agreement as of the day and year
set forth on the first page of this Agreement.
inSilicon Corporation
By:
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Title:
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Address: 000 Xxxx Xxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
AGREED TO AND ACCEPTED:
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Address:
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