EXHIBIT 10.17
DIRECTOR INDEMNIFICATION AGREEMENT
DIRECTOR INDEMNIFICATION AGREEMENT (this "Agreement"), dated as of
August 28, 1998, by and between Freedom of Information, Inc., a Delaware
corporation (the "Company" including, where appropriate, any Entity (as
hereinafter defined) controlled directly or indirectly by the Company),
and Xxx X. Xxxxxxxxxxx ("Indemnitee"):
WHEREAS, it is essential to the Company that it be able to retain and
attract as directors the most capable persons available;
WHEREAS, increased corporate litigation has subjected directors to
litigation risks and expenses, and the limitations on the availability of
directors and officers liability insurance have made it increasingly difficult
for the Company to attract and retain such persons;
WHEREAS, the Company's Certificate of Incorporation (the "Certificate of
Incorporation") requires the Company to indemnify its directors to the fullest
extent permitted by law;
WHEREAS, the Company desires to provide Indemnitee with specific
contractual assurance of Indemnitee's rights to full indemnification against
litigation risks and expenses (regardless, among other things, of any amendment
to or revocation of the Certificate of Incorporation or any change in the
ownership of the Company or the composition of its Board of Directors), which
indemnification is intended to be greater than that which is afforded by the
Certificate of Incorporation, the Company's By-laws and, to the extent insurance
is available, the coverage of Indemnitee under the Company's directors and
officers liability insurance policies; and
WHEREAS, Indemnitee is relying upon the rights afforded under this
Agreement in continuing in Indemnitee's position as a director 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:
1. Definitions.
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(a) "Corporate Status" describes the status of a person who is serving
or has served (i) as a director of the Company, (ii) in any capacity
with respect to any employee benefit plan of the Company, or (iii) as
a director, partner, trustee, officer, employee, or agent of any other
Entity at the request of the Company.
(b) "Entity" shall mean any corporation, partnership, joint venture,
trust, foundation, association, organization or other legal entity and
any group or division of the Company or any of its subsidiaries.
(c) "Expenses" shall mean all reasonable fees, costs and expenses
incurred in connection with any Proceeding (as defined below),
including, without limitation, attorneys' fees, disbursements and
retainers (including, without limitation, any such fees, disbursements
and retainers incurred by Indemnitee pursuant to Sections 10 and 11(c)
of this Agreement), fees and disbursements of expert witnesses,
private investigators and professional advisors (including without
limitation, accountants and investment bankers), court costs,
transcript costs, fees of experts, travel expenses, duplicating,
printing and binding costs, telephone and fax transmission charges,
postage, delivery services, secretarial services, and other
disbursements and expenses.
(d) "Indemnifiable Expenses," "Indemnifiable Liabilities" and
"Indeninifiable Amounts" shall have the meanings ascribed to those
terms in Section 3(a) below.
(e) "Liabilities" shall mean judgments, damages, liabilities, losses,
penalties, excise taxes, fines and amounts paid in settlement.
(f) "Proceeding" shall mean any threatened, pending or completed
claim, action, suit, arbitration, alternate dispute resolution
process, investigation, administrative hearing, appeal, or any other
proceeding, whether civil, criminal, administrative, arbitrative or
investigative, whether formal or informal, including a proceeding
initiated by Indemnitee pursuant to Section 10 of this Agreement to
enforce Indeninitee's rights hereunder.
2. Services of Indemnitee. In consideration of the Company's covenants
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and commitments hereunder, Indemnitee agrees to serve or continue to serve as a
director of the Company. However, this Agreement shall not impose any obligation
on Indemnitee or the Company to continue Indemnitee's service to the Company
beyond any period otherwise required by law or by other agreements or
commitments of the parties, if any.
3. Agreement to Indemnify. The Company agrees to indemnify Indeninitee
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as follows:
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(a) Subject to the exceptions contained in Section 4(a) below, if
Indemnitee was or is a party or is threatened to be made a party to any
Proceeding (other than an action by or in the right of the Company) by
reason of Indemnitee's Corporate Status, Indemnitee shall be indemnified by
the Company against all Expenses and Liabilities incurred or paid by
Indemnitee in connection with such Proceeding (referred to herein as
"Indemnifiable Expenses" and "Indemnifiable Liabilities," respectively, and
collectively as "Indemnifiable Amounts").
(b) Subject to the exceptions contained in Section 4(b) below, if
Indemnitee was or is a party or is threatened to be made a party to any
Proceeding by or in the right of the Company to procure a judgment in its
favor by reason of Indemnitee's Corporate Status, Indemnitee shall be
indemnified by the Company against all Indemnifiable Expenses.
4. Exceptions to Indemnification. Indemnitee shall be entitled to
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indemnification under Sections 3(a) and 3(b) above in all circumstances other
than the following:
(a) If indemnification is requested under Section 3(a) and it has been
adjudicated finally by a court of competent jurisdiction that, in
connection with the subject of the Proceeding out of which the claim for
indemnification has arisen, Indemnitee failed to act in good faith and in a
manner Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company with respect to which Indemnitee's Corporate
Status has given rise to a claim against Indemnitee, or, with respect to
any criminal action or proceeding, Indemnitee had reasonable cause to
believe that Indemnitee's conduct was unlawful, Indeninitee shall not be
entitled to payment of Indemnifiable Amounts hereunder.
(b) If indemnification is requested under Section 3(b) and
(i) it has been adjudicated finally by a court of competent
jurisdiction that, in connection with the subject of the Proceeding
out of which the claim for indemnification has arisen, Indemnitee
failed to act in good faith and in a manner Indemnitee reasonably
believed to be in or not opposed to the best interests of the Company,
Indemnitee shall not be entitled to payment of Indemnifiable Expenses
hereunder; or
(ii) it has been adjudicated finally by a court of competent
jurisdiction that Indemnitee is liable to the Company with respect
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to any claim, issue or matter involved in the Proceeding out of which
the claim for indemnification has arisen, including, without
limitation, a claim that Indemnitee received an improper personal
benefit, no Indemnifiable Expenses shall be paid with respect to such
claim, issue or matter unless the Superior Court or another court in
which such 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 indemnity for such Indemnifiable Expenses which such court
shall deem proper.
5. Procedure for Payment of Indemnifiable Amount. Indemnitee shall
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submit to the Company a written request specifying the Indemnifiable Amounts for
which Indemnitee seeks payment under Section 3 of this Agreement and the basis
for the claim. The Company shall pay such Indemnifiable Amounts to Indemnitee
within twenty (20) calendar days of receipt of the request. At the request of
the Company, Indemnitee shall furnish such documentation and information as are
reasonably available to Indemnitee and necessary to establish that Indemnitee is
entitled to, indemnification hereunder.
6. Indemnification for Expenses of a Party Who is Wholly or Partly
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Successful. Notwithstanding any other provision of this Agreement, and without
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limiting any such provision, to the extent that Indemnitee is, by reason of
Indemnitee's Corporate Status, a party to and is successful, on the merits or
otherwise, in any Proceeding, Indemnitee shall be indemnified against all
Expenses 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 reasonably incurred by Indemnitee or on
Indemnitee's behalf in connection with each successfully resolved claim, issue
or matter. For purposes of this Agreement, 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.
7. Effect of Certain Resolution. Neither the settlement or termination
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of any Proceeding nor the failure of the Company to award indemnification or to
determine that indemnification is payable shall create an adverse presumption
that Indemnitee is not entitled to indemnification hereunder. In addition, the
termination of any proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent shall not create a presumption
that Indemnitee did not act in good faith and in a manner which Indemnitee
reasonably believed to be in or not
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opposed to the best interests of the Company or, with respect to any criminal
action or proceeding, had reasonable cause to believe that Indemnitee's action
was unlawful.
8. Agreement to Advance Expenses; Conditions. The Company shall pay to
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Indemnitee all Indemnifiable Expenses incurred by Indemnitee in connection with
any Proceeding, including a Proceeding by or in the right of the Company, in
advance of the final disposition of such Proceeding. To the extent required by
Delaware law, Indemnitee hereby undertakes to repay the amount of Indemnifiable
Expenses paid to Indemnitee if it is finally determined by a court of competent
jurisdiction that Indemnitee is not entitled under this Agreement to
indemnification with respect to such Expenses. This undertaking is an unlimited
general obligation of Indemnitee.
9. Procedure for Advance Payment of Expenses. Indemnitee shall submit to
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the Company a written request specifying the Indemnifiable Expenses for which
Indemnitee seeks an advancement under Section 8 of this Agreement, together with
documentation evidencing that Indemnitee has incurred such Indemnifiable
Expenses. Payment of Indemnifiable Expenses under Section 8 shall be made no
later than twenty (20) calendar days after the Company's receipt of such
request.
10. Remedies of Indemnitee.
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(a) Right to Petition Court. In the event that Indemnitee makes a
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request for payment of Indemnifiable Amounts under Sections 3 and 5
above or a request for an advancement of Indemnifiable Expenses under
Sections 8 and 9 above and the Company fails to make such payment or
advancement in a timely manner pursuant to the terms of this
Agreement, Indemnitee may petition the Superior Court to enforce the
Company's obligations under this Agreement.
(b) Burden of Proof. In any judicial proceeding brought under Section
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10(a) above, the Company shall have the burden of proving that
Indemnitee is not entitled to payment of Indemnifiable Amounts
hereunder.
(c) Expenses. The Company agrees to reimburse Indemnitee in full for
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any Expenses incurred by Indemnitee in connection with investigating,
preparing for, litigating, defending or settling any action brought by
Indemnitee under Section 10(a) above, or in connection with any claim
or counterclaim brought by the Company in connection therewith.
(d) Validity of Agreement. The Company shall be precluded from
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asserting in any Proceeding, including, without limitation, an action
under
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Section 10(a) above, that the provisions of this Agreement are not
valid, binding and enforceable or that there is insufficient
consideration for this Agreement and shall stipulate in court that the
Company is bound by all the provisions of this Agreement.
(e) Failure to Act Not a Defense. The failure of the Company
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(including, without limitation, its Board of Directors or any
committee thereof, independent legal counsel, or stockholders) to make
a determination concerning the permissibility of the payment of
Indemnifiable Amounts or the advancement or Indemnifiable Expenses
under this Agreement shall not be a defense in any action brought
under Section 10(a) above, and shall not create a presumption that
such payment or advancement is not permissible.
11. Defense of the Underlying Proceeding.
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(a) Notice by Indemnitee. Indemnitee agrees to notify the Company
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promptly upon being served with any summons, citation, subpoena,
complaint, indictment, information, or other document relating to any
Proceeding which may result in the payment of Indemnifiable Amounts or
the advancement of Indemnifiable Expenses hereunder; provide, however,
that the failure to give any such notice shall not disqualify
Indemnitee from the right to receive payments of Indemnifiable Amounts
or advancements of Indemnifiable Expenses unless the Company's ability
to defend in such Proceeding is materially and adversely prejudiced
thereby.
(b) Defense by the Company. Subject to the provisions of the last
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sentence of this Section 11(b) and of Section 11(c) below, the Company
shall have the right to defend Indemnitee in any Proceeding which may
give rise to the payment of Indemnifiable Amounts hereunder; provided,
however, that the Company shall notify Indeninitee of any such
decision to defend within ten (10) days of receipt of notice of any
such Proceeding under Section 11(a) above. The Company shall not,
without the prior written consent of Indemnitee, consent to the entry
of any judgment against Indemnitee or enter into any settlement or
compromise which (i) includes an admission of fault of Indemnitee or
(ii) does not include, as an unconditional term thereof, the full
release of Indemnitee from all liability in respect of such
Proceeding, which release shall be in form and substance satisfactory
to Indemnitee. This Section 11(b) shall not apply to a Proceeding
brought by Indemnitee under Section 10(a) above or pursuant to Section
19 below.
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(c) Indemnitee's Right to Counsel. Notwithstanding the provisions of
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Section 11(b) above, if in a Proceeding to which Indemnitee is a party
by reason of Indemnitee's Corporate Status, Indemnitee reasonably
concludes that it may have separate defenses or counterclaims to
assert with respect to any issue which may not be consistent with the
position of other defendants in such Proceeding, or the Company fails
to assume the defense of such proceeding in a timely manner,
Indemnitee shall be entitled to be represented by separate legal
counsel of Indemnitee's choice at the expense of the Company. In
addition, if the Company fails to comply with any of its obligations
under this Agreement or in the event that the Company or any other
person takes any action to declare this Agreement void or
unenforceable, or institutes any action, suit or proceeding to deny or
to recover from Indemnitee the benefits intended to be provided to
Indemnitee hereunder, Indemnitee shall have the right to retain legal
counsel of Indemnitee's choice, at the expense of the Company, to
represent Indemnitee in connection with any such matter.
12. Representations and Warranties of the Company. The Company hereby
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represents and warrants to Indemnitee as follows:
(a) Authority. The Company has all necessary power and authority to
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enter into, and be bound by the terms of, this Agreement, and the
execution, delivery and performance of the undertakings contemplated
by this Agreement have been duly authorized by the Company.
(b) Enforceability. This Agreement, when executed and delivered by the
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Company in accordance with the provisions hereof, shall be a legal,
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws affecting the enforcement of creditors'
rights generally.
13. Insurance. The Company shall, from time to time, make the good faith
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determination whether or not it is practicable for the Company to obtain and
maintain a policy or policies of insurance with reputable insurance companies
providing the Indemnitee with coverage for losses from wrongful acts, and to
ensure the Company's performance of its indemnification obligations under this
Agreement. Among other considerations, the Company 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
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provide Indemnitee the same rights and benefits as are accorded to the most
favorably insured of the Company's officers and directors. Notwithstanding the
foregoing, the Company shall have no obligation to obtain or maintain such
insurance if the Company 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, or if the coverage provided
by such insurance is limited by exclusions so as to provide an insufficient
benefit.
14. Contract Rights Not Exclusive. The rights to payment of Indemnifiable
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Amounts and advancement of Indemnifiable Expenses provided by this Agreement
shall be in addition to, but not exclusive of, any other rights which Indemnitee
may have at any time under applicable law, the Company's By-laws or Certificate
of Incorporation or any other agreement, vote of stockholders or directors (or a
committee of directors), or otherwise, both as to action in Indemnitee's
official capacity and as to action in any other capacity as a result of
Indemnitee's serving as a director of the Company.
15. Successors. This Agreement shall be (a) binding upon all successors
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and assigns of the Company (including any transferee of all or a substantial
portion of the business, stock and/or assets of the Company and any direct or
indirect successor by merger or consolidation or otherwise by operation of law)
and (b) binding on and shall inure to the benefit of the heirs, personal
representatives, executors and administrators of Indeninitee. This Agreement
shall continue for the benefit of Indemnitee and such heirs, personal
representatives, executors and administrators after Indemnitee has ceased to
have Corporate Status.
16. Subrogation. In the event of any payment of Indemnifiable Amounts
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under this Agreement, the Company shall be subrogated to the extent of such
payment to all of the rights of contribution or recovery of Indemnitee against
other persons, and Indemnitee shall take, at the request of the Company, all
reasonable action necessary to secure such rights, including the execution of
such documents as are necessary to enable the Company to bring suit to enforce
such rights.
17. Change in Law. To the extent that a change in Delaware law (whether
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by statute or judicial decision) shall permit broader indemnification or
advancement of expenses than is provided under the terms of the By-laws of the
Company and this Agreement, Indemnitee shall be entitled to such broader
indemnification and advancements, and this Agreement shall be deemed to be
amended to such extent.
18. Severability. Whenever possible, each provision of this Agreement
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shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement, or any clause thereof,
shall be determined by a court
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of competent jurisdiction to be illegal, invalid or unenforceable, in whole or
in part, such provision or clause shall be limited or modified in its
application to the minimum extent necessary to make such provision or clause
valid, legal and enforceable, and the remaining provisions and clauses of this
Agreement shall remain fully enforceable and binding on the parties.
19. Indemnitee as Plaintiff. Except as provided in Section 10(c) of this
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Agreement and in the next sentence, Indemnitee shall not be entitled to payment
of Indemnifiable Amounts or advancement of Indemnifiable Expenses with respect
to any Proceeding brought by Indemnitee against the Company, any Entity which it
controls, any director or officer thereof, or any third party, unless the
Company has consented to the initiation of such Proceeding. This Section shall
not apply to counterclaims or affirmative defenses asserted by Indemnitee in an
action brought against Indemnitee.
20. Modifications and Waiver. Except as provided in Section 17 above with
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respect to changes in Delaware law which broaden the right of Indemnitee to be
indemnified by the Company, no supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by each 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 of this Agreement (whether or
not similar), nor shall such waiver constitute a continuing waiver.
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21. General 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 (a) when delivered by hand, (b) when transmitted by facsimile and
receipt is acknowledged, or (c) if mailed by certified or registered mail with
postage prepaid, on the third business day after the date on which it is so
mailed:
(i) If to Indemnitee, to the Indemnitee's address or facsimile number
set forth on the signature pages hereto
With a copy to:
Xxxxxxx, Procter & Xxxx XXX
Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Floor, P.C.
Facsimile: (000) 000-0000
(ii) If to the Company, to:
Freedom of Information, Inc.
000 Xx. Xxxxxx Xxxxxx
Xxxxx 000X
Xxxxxxxxx, XX 00000
Attention: President
Facsimile: (000) 000-0000
With a copy to:
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
or to such other address as may have been furnished in the same manner by any
party to the others.
22. Governing Law. This Agreement shall be governed by and construed and
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enforced under the laws of the Commonwealth of Massachusetts without giving
effect to the provisions thereof relating to conflicts of law.
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23. Consent to Jurisdiction. The Company hereby irrevocably and
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unconditionally consents to the jurisdiction of the courts of the Commonwealth
of Massachusetts and the United States District Court for the District of
Massachusetts. The Company hereby irrevocably and unconditionally waives any
objection to the laying of venue of any Proceeding arising out of or relating to
this Agreement in the courts of the Commonwealth of Massachusetts or the United
States District Court for the District of Massachusetts, and hereby irrevocably
and unconditionally waives and agrees not to plead or claim that any such
Proceeding brought in any such court has been brought in an inconvenient forum.
24. Agreement Governs. This Agreement is to be deemed consistent wherever
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possible with relevant provisions of the Company's By-laws and Certificate of
Incorporation; however, in the event of a conflict between this Agreement and
such provisions, the provisions of this Agreement shall control.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
COMPANY:
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FREEDOM OF INFORMATION, INC.
By:/s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: President
INDEMNITEE:
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/s/ Xxx X. Xxxxxxxxxxx
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Print Name: Xxx X. Xxxxxxxxxxx
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Address: c/o Xxxxxxx River Partnership
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0000 Xxxxxx Xxxxxx, Xxxxx 0000
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Xxxxxxx, XX 00000
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Also executed by Xxxxxx X. Xxxxxx, Xx. and W. Xxxxxxx Xxxxxxxxx
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