EXHIBIT 10.19
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INDEMNIFICATION AGREEMENT
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Indemnification Agreement made and entered into this 27th day of February,
1998 ("Agreement"), by and between MARQUETTE MEDICAL SYSTEMS, INC., a Wisconsin
corporation (the "Company"), and XXXXXXXXX X. XXXXXXXXX, Indemnitee
("Indemnitee"):
WHEREAS, highly competent persons are becoming more reluctant to serve
publicly-held corporations as directors or in other capacities unless they are
provided with adequate protection through insurance and indemnification against
inordinate risks of claims and actions against them arising out of their service
to and activities on behalf of the corporation;
WHEREAS, the difficulties of obtaining adequate insurance and uncertainties
relating to indemnification have increased the difficulty of attracting and
retaining such persons;
WHEREAS, Sections 180.0850 through 180.0859 of the Wisconsin Business
Corporation Law provide mandatory and permissive indemnification to be
afforded by Wisconsin corporations to their directors;
WHEREAS, the Board of Directors of the Company has determined that the
inability to attract and retain such persons is detrimental to the best
interests of the Company's stockholders and that the Company should act to
assure such persons that there will be increased certainty of such protection in
the future by providing, in addition to indemnification provided by law, the
Company's agreement as to additional indemnification rights;
WHEREAS, it is reasonable, prudent, and necessary for the Company
contractually to obligate itself to indemnify 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, Indemnitee is willing to serve, continue to serve, and to take on
additional service for or on behalf of the Company on the condition that he be
so indemnified;
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 by Indemnitee. Indemnitee agrees to serve as a
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director, officer, employee, or agent of the Company. Indemnitee may at any time
and for any reason resign from such position (subject to any other contractual
obligation or other obligation imposed by operation of law), in which event the
Company shall have no obligation under this Agreement to continue Indemnitee
in any such position.
Section 2. Indemnification. The Company shall indemnify Indemnitee to the
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fullest extent permitted by applicable law in effect on the date hereof or as
such laws may from time to time be amended. Without diminishing the scope of
the indemnification provided by this Section 2, the rights of indemnification of
Indemnitee provided hereunder shall include, but shall not be limited to, those
rights set forth hereinafter, except to the extent expressly prohibited by
applicable law.
Section 3. Action or Proceeding Other than an Action by or in the Right of
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the Company. In addition to the indemnification of Indemnitee provided pursuant
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to the other provisions hereof, Indemnitee shall be entitled to the
indemnification rights provided in this Section 3 if he is 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
in nature, other than an action by or in the right of the Company, by reason of
the fact that he is or was a director, officer, employee, agent, or fiduciary of
the Company or is or was serving at the request of the Company as a director,
officer, employee, agent, or fiduciary of any other entity or by reason of
anything done or not done by him in such capacity. Pursuant to this Section 3,
Indemnitee shall be indemnified against all expenses (including attorneys'
fees), costs, judgments, penalties, fines, and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit, or
proceeding (including, but not limited to, the investigation, defense, or appeal
thereof), unless such amounts were incurred because the director breached or
failed to perform a duty owed to the Company and the breach or failure to
perform constitutes:
(a) a willful failure to deal fairly with the Company or its
shareholders in connection with a matter in which the director has a
material conflict of interest;
(b) a violation of the criminal law, unless the director had
reasonable cause to believe that his conduct was lawful or no reasonable
cause to believe that his conduct was unlawful;
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(c) a transaction from which the director derived an improper
personal profit; or
(d) willful misconduct.
Section 4. Actions by or in the Right of the Company. In addition to the
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indemnification of Indemnitee provided pursuant to the other provisions hereof,
Indemnitee shall be entitled to the indemnification rights provided in this
Section 4 if he is a person who was or is made a party or is threatened to be
made a party to any threatened, pending, or completed action or suit brought by
or in the right of the Company to procure a judgment in its favor by reason of
the fact that he is or was a director, officer, employee, agent, or fiduciary of
the Company or is or was serving at the request of the Company as a director,
officer, employee, agent, or fiduciary of any other entity by reason of anything
done or not done by him in any such capacity. Pursuant to this Section 4,
Indemnitee shall be indemnified against all expenses (including attorneys' fees)
and costs actually and reasonably incurred by him in connection with such action
or suit (including, but not limited to, the investigation, defense, settlement,
or appeal thereof), unless such amounts were incurred because the director
breached or failed to perform a duty owed to the Company and the breach or
failure to perform constitutes:
(a) a willful failure to deal fairly with the Company or its
shareholders in connection with a matter in which the director has a
material conflict of interest;
(b) a violation of the criminal law, unless the director had
reasonable cause to believe that his conduct was lawful or no reasonable
cause to believe that his conduct was unlawful;
(c) a transaction from which the director derived an improper
personal profit; or
(d) willful misconduct.
Section 5. Indemnification for Costs, Charges, and Expenses of Successful
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Party. Notwithstanding the other provisions of this Agreement and in addition
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to the rights to indemnification set forth elsewhere herein, to the extent that
Indemnitee has served as a witness on behalf of the Company or has been
successful on the merits or otherwise, including, without limitation, the
dismissal of an action without prejudice, in defense of any action, suit, or
proceeding referred to in Sections 3 and 4 hereof, or in defense of any claim,
issue, or matter therein, he shall be indemnified against all costs, charges,
and expenses (including attorneys'
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fees) actually and reasonably incurred by him or on his behalf in connection
therewith.
Section 6. Partial Indemnification. In addition to the rights to
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indemnification set forth elsewhere herein, if Indemnitee is only partially
successful in the defense, investigation, settlement, or appeal of any action,
suit, investigation, or proceeding described in Section 3 or 4 hereof, and as a
result, is not entitled under the other provisions of this Agreement to
indemnification by the Company for the total amount of the expenses (including
attorneys' fees), costs, judgments, penalties, fines, and amounts paid in
settlement actually and reasonably incurred by him, the Company shall
nevertheless indemnify Indemnitee, as a matter of right pursuant to Section 5
hereof, to the extent Indemnitee has been partially successful.
Section 7. Determination of Entitlement to Indemnification. Upon written
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request by Indemnitee for indemnification pursuant to this Agreement, the
entitlement of Indemnitee to indemnification pursuant to the terms of this
Agreement shall be determined by the following person or persons who shall be
empowered to make such determination:
(a) by a majority vote of a quorum of the Board of Directors
consisting of directors who are not at the time parties to the same or
related proceedings; provided, however, that if a quorum of disinterested
directors cannot be obtained, by a majority vote of a committee duly
appointed by the Board of Directors and consisting solely of two or more
directors who are not at the time parties to the same or related
proceedings, directors who are parties to the same or related proceedings
being able to participate in the designation of members of the committee;
(b) by independent legal counsel selected by a quorum of the Board of
Directors or its committee in the manner prescribed in (a) above or, if
unable to obtain such a quorum or committee, by a majority vote of the full
Board of Directors, including directors who are parties to the same or
related proceedings;
(c) by a panel of three arbitrators consisting of one arbitrator
selected by those directors entitled under (b) above to select independent
legal counsel, one arbitrator selected by the director seeking
indemnification, and one arbitrator selected by the two arbitrators
previously selected.
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(d) by an affirmative vote of shares determined in accordance with
Section 180.0725 of the Wisconsin Business Corporation Law, shares owned by
or voted under the control of persons who are at the time parties to the
same or related proceedings, whether as plaintiffs or defendants, or in any
other capacity, being ineligible to vote in making the determination;
(e) by a court pursuant to Section 180.0854 of the Wisconsin Business
Corporation Law.
Any costs or expenses (including attorneys' fees) incurred by Indemnitee in
connection with his request for indemnification hereunder shall be borne by the
Company. The Company hereby indemnifies and agrees to hold Indemnitee harmless
therefrom irrespective of the outcome of the determination of Indemnitee's
entitlement to indemnification. If the person making such determination shall
determine that Indemnitee is entitled to indemnification as to part (but not
all) of the application for indemnification, such person shall reasonably
prorate such partial indemnification among such claims, issues, or matters.
Section 8. Presumptions and Effect of Certain Proceedings. The Secretary of
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the Company shall, promptly upon receipt of Indemnitee's request for
indemnification, advise in writing the Board of Directors or such other person
or persons empowered to make the determination as provided in Section 7 that
Indemnitee has made such request for indemnification. Upon making such request
for indemnification, Indemnitee shall be presumed to be entitled to
indemnification hereunder and the Company shall have the burden of proof in the
making of any determination contrary to such presumption. If the person or
persons so empowered to make such determination shall have failed to make the
requested indemnification within sixty (60) days after receipt by the Company of
such request, the requisite determination of entitlement to indemnification
shall be deemed to have been made and Indemnitee shall be absolutely entitled to
such indemnification, absent actual and material fraud in the request for
indemnification. The termination of any action, suit, investigation, or
proceeding described in Section 3 or 4 hereof by judgment, order, settlement, or
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
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itself: (a) create a presumption that Indemnitee did not act in good faith and
in a manner which he reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal action or
proceeding, that Indemnitee had reasonable cause to believe that his conduct was
unlawful; or (b) otherwise adversely affect the rights of Indemnitee to
indemnification except as may be provided herein.
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Section 9. Advance of Expenses and Costs. All reasonable expenses and
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costs incurred by Indemnitee (including attorneys' fees, retainers, and advances
of disbursements required of Indemnitee) shall be paid by the Company in advance
of the final disposition of such action, suit, or proceeding at the request of
Indemnitee within twenty (20) days after the receipt by the Company of a
statement or statements from Indemnitee requesting such advance or advances from
time to time. Indemnitee's entitlement to such expenses shall include those
incurred in connection with any proceeding by Indemnitee seeking an adjudication
or award in arbitration pursuant to this Agreement. Such statement or
statements shall reasonably evidence the expenses and costs incurred by him in
connection therewith and shall include or be accompanied by an undertaking by or
on behalf of Indemnitee to repay such amount if it is ultimately determined that
Indemnitee is not entitled to be indemnified against such expenses and costs by
the Company as provided by this Agreement or otherwise.
Section 10. Remedies of Indemnitee in Cases of Determination not to
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Indemnify or to Advance Expenses. In the event that a determination is made
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that Indemnitee is not entitled to indemnifi cation hereunder or if payment has
not been timely made following a determination of entitlement to indemnification
pursuant to Sections 7 and 8, or if expenses are not advanced pursuant to
Section 9, Indemnitee shall be entitled to a final adjudication in an
appropriate court of the State of Wisconsin or any other court of competent
jurisdiction of his entitlement to such indemnification or advance.
Alternatively, Indemnitee at his option may seek an award in arbitration to be
conducted by a single arbitrator pursuant to the rules of the American
Arbitrator Association, such award to be made within sixty (60) days following
the filing of the demand for arbitration. The Company shall not oppose
Indemnitee's right to seek any such adjudication or award in arbitration or any
other claim but may oppose such claim. Such judicial proceeding or arbitrator
shall be made de novo and Indemnitee shall not be prejudiced by reason of a
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determination (if so made) that he is not entitled to indemnification. If a
determination is made or deemed to have been made pursuant to the terms of
Section 7 or Section 8 hereof that Indemnitee is entitled to indemnification,
the Company shall be bound by such determination and is precluded from asserting
that such determination has not been made or that the procedure by which such
determination was made is not valid, binding, and enforceable. The Company
further agrees to stipulate in any such court or before any such arbitrator that
the Company is bound by all the provisions of this Agreement and is precluded
from making any assertion to the contrary. If the court or arbitrator shall
determine that Indemnitee is entitled to any indemnification hereunder, the
Company shall pay all reasonable expenses (including
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attorneys' fees) and costs actually incurred by Indemnitee in connection with
such adjudication or award in arbitration (including, but not limited to, any
appellate proceedings).
Section 11. Other Rights to Indemnification. The indemnification and
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advancement of expenses (including attorneys' fees) and costs provided by this
Agreement shall not be deemed exclusive of any other rights to which Indemnitee
may now or in the future be entitled under any provision of the By-Laws,
agreement, provision of the Articles of Incorporation, vote of stockholders or
disinterested directors, provision of law, or otherwise.
Section 12. Attorneys' Fees and Other Expenses to Enforce Agreement. In
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the event that Indemnitee is subject to or intervenes in any proceeding in
which the validity or enforceability of this Agreement is at issue or seeks an
adjudication or award in arbitration to enforce his rights under, or to recover
damages for breach of this Agreement, Indemnitee, if he prevails in whole or in
part in such action, shall be entitled to recover form the Company and shall be
indemnified by the Company against, any actual expenses for attorneys' fees and
disbursements reasonably incurred by him.
Section 13. Duration of Agreement. This Agreement shall continue until and
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terminate upon the later of: (a) ten (10) years after Indemnitee has ceased to
occupy any of the positions or have any of the relationships described in
Sections 3 and 4 of this Agreement; and (b) the final termination of all pending
or threatened actions, suits, proceedings, or investigations with respect to
Indemnitee. This Agreement shall be binding upon the Company and its successors
and assigns and shall inure to the benefit of Indemnitee and his spouse,
assigns, heirs, devises, executors, administrators, or other legal
representatives.
Section 14. Severability. If any provision or provisions of this
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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, all
portions of any paragraphs of this Agreement containing any such provision held
to be invalid, illegal, or unenforceable) shall not in any way be affected or
impaired thereby; and (b) to the fullest extent possible, the provisions of this
Agreement (including, without limitation, all portions of any paragraph of this
Agreement containing any such provision held to be invalid, illegal, or
unenforceable, that are not themselves invalid, illegal, or unenforceable) shall
be construed so as to give effect to the intent manifested by the provision held
invalid, illegal, or unenforceable.
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Section 15. Identical Counterparts. This Agreement may be executed in one
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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 16. Headings. The headings of the paragraphs of this Agreement
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are inserted for convenience only and shall not be deemed to constitute part of
this Agreement or to affect the construction thereof.
Section 17. Modification and Waiver. No supplement, modification, or
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amendment of this Agreement shall be binding unless executed in writing by both
of the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provisions hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver.
Section 18. Notice by Indemnitee. Indemnitee agrees promptly to notify
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the Company in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information, or other document relating to any matter
which may be subject to indemnification covered hereunder, either civil,
criminal, or investigative.
Section 19. Notices. All notices, requests, demands, and other
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communications hereunder shall be in writing and shall be deemed to have been
duly given if (i) delivered by and receipted for by the party to whom said
notice or other communication shall have been directed or if (ii) mailed by
certified or registered mail with postage prepaid, on the third business day
after the date on which it is so mailed:
(a) If to Indemnitee, to: 000X Xxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxx 00000
(b) If to the Company, to: Marquette Medical
Systems, Inc.
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
or to such other address as may have been furnished to Indemnitee by the Company
or to the Company by Indemnitee, as the case may be.
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Section 20. Governing Law. The parties agree that this Agreement shall be
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governed by, and construed and enforced in accordance with, the laws of the
State of Wisconsin, without giving effect to conflicts of law.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
MARQUETTE MEDICAL SYSTEMS, INC.
By:_________________________________
Xxxxxxx X. Xxxxxx,
Chairman of the Board
____________________________________
Xxxxxxxxx X. Xxxxxxxxx, Indemnitee
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