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EXHIBIT 10.1
INDEMNIFICATION AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into this
____ day of _______________, 1996 between ATL Products, Inc., a Delaware
corporation (the "Company") and ____________________ ("Indemnitee").
WITNESSETH THAT:
WHEREAS, Indemnitee performs a valuable service for the
Company; and
WHEREAS, the Board of Directors of the Company have adopted a
Certificate of Incorporation (the "Certificate") permitting the Board of
Directors to indemnify the [officers] [directors] of the Company; and
WHEREAS, the Certificate and Section 145 of the Delaware
General Corporation Law, as amended ("Law"), by their nonexclusive nature
permit contracts between the Company and the [officers] [directors] of the
Company with respect to indemnification of such [officers] [directors]; and
WHEREAS, in accordance with the authorization as provided by
the Law, the Company may purchase and maintain a policy or policies of
director's and officer's liability insurance ("D & O Insurance"), covering
certain liabilities which may be incurred by its [officers] [directors] in the
performance of their obligations as [officers] [directors] of the Company; and
WHEREAS, as a result of recent developments affecting the
terms, scope and availability of D & O Insurance there exists general
uncertainty as to the extent of protection afforded Company [officers]
[directors] by such D & O Insurance and said uncertainty also exists under
statutory and bylaw indemnification provisions; and
WHEREAS, in recognition of past services and in order to
induce Indemnitee to continue to serve as a[n officer] [director] of the
Company, the Company has determined and agreed to enter into this contract with
Indemnitee;
NOW, THEREFORE, in consideration of Indemnitee's continued
service as a[n officer] [director] after the date hereof, the parties hereto
agree as follows:
1. INDEMNITY OF INDEMNITEE. The Company hereby agrees
to hold harmless and indemnify Indemnitee to the full extent authorized or
permitted by the provisions of the Law, as such may be amended from time to
time, and Article [14] of the [Certificate], as such may be amended. In
furtherance of the foregoing indemnification, and without limiting the
generality thereof:
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(a) Proceedings Other Than Proceedings by or in
the Right of the Company. Indemnitee shall be entitled to the rights of
indemnification provided in this Section 1(a) if, by reason of his Corporate
Status (as hereinafter defined), he is, or is threatened to be made, a party to
or participant in any Proceeding (as hereinafter defined) other than a
Proceeding by or in the right of the Company. Pursuant to this Section 1(a),
Indemnitee shall be indemnified against all Expenses (as hereinafter defined),
judgments, penalties, fines and amounts paid in settlement actually and
reasonably incurred by him or on his behalf in connection with such Proceeding
or any claim, issue or matter therein, if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Company and, with respect to any criminal Proceeding, had no reasonable
cause to believe his conduct was unlawful.
(b) Proceedings by or in the Right of the
Company. Indemnitee shall be entitled to the rights of indemnification
provided in this Section 1(b) if, by reason of his Corporate Status, he is, or
is threatened to be made, a party to or participant in any Proceeding brought
by or in the right of the Company to procure a judgment in its favor. Pursuant
to this Section 1(b), Indemnitee shall be indemnified against all Expenses
actually and reasonably incurred by him or on his behalf in connection with
such Proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Company;
provided, however, that, if applicable law so provides, no indemnification
against such Expenses shall be made in respect of any claim, issue or matter in
such Proceeding as to which Indemnitee shall have been adjudged to be liable to
the Company unless and to the extent that the Court of Chancery of the State of
Delaware, or the court in which such Proceeding shall have been brought or is
pending, shall determine that such indemnification may be made.
(c) Indemnification for Expenses of a Party Who
is Wholly or Partly Successful. Notwithstanding any other provision of this
Agreement, to the extent that Indemnitee is, by reason of his Corporate Status,
a party to and is successful, on the merits or otherwise, in any Proceeding, he
shall be indemnified to the maximum extent permitted by law against all
Expenses actually and reasonably incurred by him or on his 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 him or on
his behalf in connection with each successfully resolved claim, issue or
matter. 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.
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2. ADDITIONAL INDEMNITY.
(a) Subject only to the exclusions set forth in
Section 2(b) hereof, the Company hereby further agrees to hold harmless and
indemnify Indemnitee against any and all Expenses, judgments, fines and amounts
paid in settlement actually and reasonably incurred by Indemnitee in connection
with any Proceeding (including an action by or on behalf of the Company) to
which Indemnitee is, was or at any time becomes a party, or is threatened to be
made a party, by reason of his Corporate Status; provided, however, that with
respect to actions by or on behalf of the Company, indemnification of
Indemnitee against any judgments shall be made by the Company only as
authorized in the specific case upon a determination that Indemnitee acted in
good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Company; and
(b) No indemnity pursuant to this Section 2 shall
be paid by the Company:
(i) In respect to remuneration paid to
Indemnitee if it shall be determined by a final judgment or other final
adjudication that such remuneration was in violation of law;
(ii) On account of any suit in which
judgment is rendered against Indemnitee for an accounting of profits made from
the purchase or sale by Indemnitee of securities of the Company pursuant to the
provisions of Section 16(b) of the Securities Exchange Act of 1934 and
amendments thereto or similar provisions of any federal, state or local
statutory law;
(iii) On account of Indemnitee's conduct
which is finally adjudged to have been knowingly fraudulent or deliberately
dishonest, or to constitute willful misconduct; or
(iv) If a final decision by a court
having jurisdiction in the matter shall determine that such indemnification is
not lawful.
3. CONTRIBUTION. If the indemnification provided in
Sections 1 and 2 is unavailable and may not be paid to Indemnitee for any
reason other than those set forth in paragraphs (i), (ii) and (iii) of Section
2(b), then in respect to any Proceeding in which the Company is jointly liable
with Indemnitee (or would be if joined in such Proceeding), the Company shall
contribute to the amount of Expenses, judgments, fines and amounts paid in
settlement actually and reasonably incurred and paid or payable by Indemnitee
in such proportion as is appropriate to reflect (i) the relative benefits
received by the Company on the one hand and by the Indemnitee on the other hand
from the transaction from which such Proceeding arose, and (ii) the relative
fault of the Company on the one hand and of the
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Indemnitee on the other hand in connection with the events which resulted in
such Expenses, judgments, fines or settlement amounts, as well as any other
relevant equitable considerations. The relative fault of the Company on the
one hand and of the Indemnitee on the other hand shall be determined by
reference to, among other things, the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent the circumstances
resulting in such Expenses, judgments, fines or settlement amounts. The
Company agrees that it would not be just and equitable if contribution pursuant
to this Section 3 were determined by pro rata allocation or any other method of
allocation which does not take account of the foregoing equitable
considerations.
4. INDEMNIFICATION FOR EXPENSES OF A WITNESS.
Notwithstanding any other provision of this Agreement, to the extent that
Indemnitee is, by reason of his Corporate Status, a witness in any Proceeding
to which Indemnitee is not a party, he shall be indemnified against all
Expenses actually and reasonably incurred by him or on his behalf in connection
therewith.
5. ADVANCEMENT OF EXPENSES. Notwithstanding any other
provision of this Agreement, the Company shall advance all reasonable Expenses
incurred by or on behalf of Indemnitee in connection with any Proceeding by
reason of Indemnitee's Corporate Status within ten days after the receipt by
the Company of a statement or statements from Indemnitee requesting such
advance or advances from time to time, whether prior to or after final
disposition of such Proceeding. Such statement or statements shall reasonably
evidence the Expenses incurred by Indemnitee and shall include or be preceded
or accompanied by an undertaking by or on behalf of Indemnitee to repay any
Expenses advanced if it shall ultimately be determined that Indemnitee is not
entitled to be indemnified against such Expenses. Any advances and
undertakings to repay pursuant to this Section 5 shall be unsecured and
interest free. Notwithstanding the foregoing, the obligation of the Company to
advance Expenses pursuant to this Section 5 shall be subject to the condition
that, if, when and to the extent that the Company determines that Indemnitee
would not be permitted to be indemnified under applicable law, the Company
shall be entitled to be reimbursed, within thirty (30) days of such
determination, by Indemnitee (who hereby agrees to reimburse the Company) for
all such amounts theretofore paid; provided, however, that if Indemnitee has
commenced or thereafter commences legal proceedings in a court of competent
jurisdiction to secure a determination that Indemnitee should be indemnified
under applicable law, any determination made by the Company that Indemnitee
would not be permitted to be indemnified under applicable law shall not be
binding and Indemnitee shall not be required to reimburse the Company for any
advance of Expenses until a final judicial determination is made with respect
thereto (as to which all rights of appeal therefrom have been exhausted or
lapsed).
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6. PROCEDURE FOR DETERMINATION OF ENTITLEMENT TO
INDEMNIFICATION.
(a) To obtain indemnification (including, but not
limited to, the advancement of Expenses and contribution by the Company) under
this Agreement, Indemnitee shall submit 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. The
Secretary of the Company shall, promptly upon receipt of such a request for
indemnification, advise the Board of Directors in writing that Indemnitee has
requested indemnification.
(b) Upon written request by Indemnitee for
indemnification pursuant to the first sentence of Section 6(a) hereof, 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 (as hereinafter defined) shall have occurred, by Independent Counsel
(as hereinafter defined) in a written opinion to the Board of Directors, a copy
of which shall be delivered to Indemnitee (unless Indemnitee shall request that
such determination be made by the Board of Directors or the stockholders, in
which case the determination shall be made in the manner provided in Clause
(ii) below), or (ii) if a Change in Control shall not have occurred, (A) by the
Board of Directors by a majority vote of a quorum consisting of Disinterested
Directors (as hereinafter defined), or (B) if a quorum of the Board of
Directors consisting of Disinterested Directors is not obtainable or, even if
obtainable, said Disinterested Directors so direct, by Independent Counsel in a
written opinion to the Board of Directors, a copy of which shall be delivered
to Indemnitee, or (C) if so directed by said Disinterested Directors, by the
stockholders of the Company; and, if it is determined that Indemnitee is
entitled to indemnification, payment to Indemnitee shall be made within ten
(10) days after such determination. Indemnitee shall 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 Independent Counsel, member of the Board of Directors, or
stockholder of the Company shall act reasonably and in good faith in making a
determination under the Agreement of the Indemnitee's entitlement to
indemnification. Any costs or expenses (including attorneys' fees and
disbursements) incurred by Indemnitee 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 and agrees to hold
Indemnitee harmless therefrom.
(c) If the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to Section 6(b)
hereof, the Independent Counsel shall be selected as provided in this Section
6(c). If a Change in Control shall not have occurred,
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the Independent Counsel shall be selected by the Board of Directors, and the
Company shall give written notice to Indemnitee advising him 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 of Directors,
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 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 14 of
this Agreement, 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 a written objection is
made and substantiated, the Independent Counsel 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 20 days after
submission by Indemnitee of a written request for indemnification pursuant to
Section 6(a) hereof, no Independent Counsel shall have been selected and not
objected to, either the Company or Indemnitee may petition the Court of
Chancery of the State of Delaware or other 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 6(b) hereof. The Company shall pay any and
all reasonable fees and expenses of Independent Counsel incurred by such
Independent Counsel in connection with acting pursuant to Section 6(b) hereof,
and the Company shall pay all reasonable fees and expenses incident to the
procedures of this Section 6(c), regardless of the manner in which such
Independent Counsel was selected or appointed. Upon the due commencement of
any judicial proceeding or arbitration pursuant to Section 8(a)(iii) of this
Agreement, Independent Counsel shall be discharged and relieved of any further
responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).
(d) The Company shall not be required to obtain
the consent of the Indemnitee to the settlement of any Proceeding which the
Company has undertaken to defend if the Company assumes full and sole
responsibility for such settlement and the settlement grants the Indemnitee a
complete and unqualified release in respect of the potential liability.
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7. PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS.
(a) In making a determination with respect to
entitlement to indemnification hereunder, the person or persons or entity
making such determination shall presume that Indemnitee is entitled to
indemnification under this Agreement if Indemnitee has submitted a request for
indemnification in accordance with Section 6(a) of this Agreement, and the
Company shall 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.
(b) If the person, persons or entity empowered or
selected under Section 6 of this Agreement to determine whether Indemnitee is
entitled to indemnification shall not have made a determination within thirty
(30) days after receipt by the Company of the request therefor, the requisite
determination of entitlement to indemnification shall 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 30-day
period may be extended for a reasonable time, not to exceed an additional
fifteen (15) 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 documentation and/or
information relating thereto; and provided, further, that the foregoing
provisions of this Section 7(b) shall not apply (i) if the determination of
entitlement to indemnification is to be made by the stockholders pursuant to
Section 6(b) of this Agreement and if (A) within fifteen (15) days after
receipt by the Company of the request for such determination the Board of
Directors or the Disinterested Directors, if appropriate, resolve 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 6(b) of this Agreement.
(c) The termination of any Proceeding or of any
claim, issue or matter therein, by judgment, order, settlement (with or without
court approval), 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 he 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 his conduct was unlawful.
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(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 Enterprise (as
hereinafter defined), including financial statements, or on information
supplied to Indemnitee by the [officers] [directors] 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 reasonable care by the Enterprise. In addition, the knowledge
and/or actions, or failure to act, of any director, officer, agent or employee
of the Enterprise shall not be imputed to Indemnitee for purposes of
determining the right to indemnification under this Agreement. The provisions
of this Section 7(d) shall not be deemed to be exclusive or to limit in any way
the other circumstances in which the Indemnitee may be deemed to have met the
applicable standard of conduct set forth in this Agreement.
8. REMEDIES OF INDEMNITEE.
(a) In the event that (i) a determination is made
pursuant to Section 6 of this Agreement that Indemnitee is not entitled to
indemnification under this Agreement, (ii) advancement of Expenses is not
timely made pursuant to Section 5 of this Agreement, (iii) no determination of
entitlement to indemnification shall have been made pursuant to Section 6(b) of
this Agreement within 90 days after receipt by the Company of the request for
indemnification, (iv) payment of indemnification is not made pursuant to
Section 3 or 4 of this Agreement within ten (10) days after receipt by the
Company of a written request therefor, or (v) payment of indemnification is not
made within ten (10) days after a determination has been made that Indemnitee
is entitled to indemnification or such determination is deemed to have been
made pursuant to Section 6 or 7 of this Agreement, Indemnitee shall be entitled
to an adjudication in an appropriate court of the State of Delaware, or in any
other court of competent jurisdiction, of his entitlement to such
indemnification. Alternatively, Indemnitee, at his 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 8(a). 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 6(b) of this Agreement that Indemnitee is not
entitled to indemnification, any judicial proceeding or arbitration commenced
pursuant to this Section 8 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.
(c) If a determination shall have been made
pursuant to Section 6(b) of this Agreement that Indemnitee is entitled to
indemnification, the Company shall be bound
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by such determination in any judicial proceeding or arbitration commenced
pursuant to this Section 8, 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) In the event that Indemnitee, pursuant to
this Section 8, seeks a judicial adjudication of or an award in arbitration to
enforce his rights under, or to recover damages for breach of, this Agreement,
Indemnitee shall be entitled to recover from the Company, and shall be
indemnified by the Company against, any and all expenses (of the types
described in the definition of Expenses in Section 16 of this Agreement)
actually and reasonably incurred by him in such judicial adjudication or
arbitration, but only if he prevails therein. If it shall be determined in
said judicial adjudication or arbitration that Indemnitee is entitled to
receive part but not all of the indemnification sought, the expenses incurred
by Indemnitee in connection with such judicial adjudication or arbitration
shall be appropriately prorated. The Company shall indemnify Indemnitee
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
such expenses to Indemnitee, which are incurred by Indemnitee in connection
with any action brought by Indemnitee to recover under any directors' and
officers' liability insurance policies maintained by the Company, regardless of
whether Indemnitee ultimately is determined to be entitled to such
indemnification, advancement of expenses or insurance recovery, as the case may
be.
(e) The Company shall be precluded from asserting
in any judicial proceeding or arbitration commenced pursuant to this Section 8
that the procedures and presumptions of this Agreement are not valid, binding
and enforceable and shall stipulate in any such court or before any such
arbitrator that the Company is bound by all the provisions of this Agreement.
9. NON-EXCLUSIVITY; SURVIVAL OF RIGHTS; INSURANCE;
SUBROGATION.
(a) The rights of indemnification as provided by
this Agreement shall not be deemed exclusive of any other rights to which
Indemnitee may at any time be entitled under applicable law, the Certificate,
any agreement, a vote of stockholders or a resolution of directors, or
otherwise. 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 his
Corporate Status prior to such amendment, alteration or repeal. To the extent
that a change in the Law, whether by statute or judicial decision, permits
greater indemnification than would be afforded currently under the Certificate
and 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.
No right or remedy herein conferred is intended to be exclusive of any other
right or remedy, and every other right and
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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 or fiduciaries of the Company or of any other
corporation, partnership, joint venture, trust, employee benefit plan or 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.
(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 hereunder if
and to the extent that Indemnitee has otherwise actually received such payment
under any insurance policy, contract, agreement or otherwise.
10. EXCEPTION TO RIGHT OF INDEMNIFICATION.
Notwithstanding any other provision of this Agreement, Indemnitee shall not be
entitled to indemnification under this Agreement with respect to any Proceeding
brought by Indemnitee, or any claim therein, unless (a) the bringing of such
Proceeding or making of such claim shall have been approved by the Board of
Directors or (b) such Proceeding is being brought by the Indemnitee to assert
his rights under this Agreement.
11. DURATION OF AGREEMENT. All agreements and
obligations of the Company contained herein shall continue during the period
Indemnitee is a[n officer] [director] of the Company (or is or was serving at
the request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise) and shall
continue thereafter so long as Indemnitee shall be subject to any Proceeding
(or any proceeding commenced under Section 8 hereof) by reason of his Corporate
Status, whether or not he is acting or serving in any such capacity at the time
any liability or expense is incurred for which indemnification can be provided
under this Agreement. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective
successors (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),
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assigns, spouses, heirs, executors and personal and legal representatives.
This Agreement shall continue in effect regardless of whether Indemnitee
continues to serve as a[n officer] [director] of the Company or any other
enterprise at the Company's request.
12. SECURITY. To the extent requested by the Indemnitee
and approved by the Board of Directors, the Company may at any time and from
time to time provide security to the Indemnitee for the Company's obligations
hereunder through an irrevocable bank line of credit, funded trust or other
collateral. Any such security, once provided to the Indemnitee, may not be
revoked or released without the prior written consent of the Indemnitee.
13. ENFORCEMENT.
(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[n officer] [director] of
the Company, and the Company acknowledges that Indemnitee is relying upon this
Agreement in serving as a[n officer] [director] of the Company.
(b) This Agreement constitutes the entire
agreement between the parties hereto with 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.
14. DEFINITIONS. For purposes of this Agreement:
(a) "Change in Control" means a change in control
of the Company occurring after the date of this Agreement of a nature that
would be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A (or in response to any similar item on any similar schedule or
form) promulgated under the Securities Exchange Act of 1934 (the "Act"),
whether or not the Company is then subject to such reporting requirement;
provided, however, that, without limitation, such a Change in Control shall be
deemed to have occurred if after the date of this Agreement (i) any "person"
(as such term is used in Sections 13(d) and 14(d) of the Act, as amended) other
than a trustee or other fiduciary holding securities under an employee benefit
plan of the Company or a corporation owned directly or indirectly by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company, is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Act), directly or indirectly, of securities of
the Company representing 15% or more of the combined voting power of the
Company's then outstanding securities (other than any such person or any
affiliate thereof that is such a 15% beneficial owner as of the date hereof)
without the prior approval of at least two-thirds of the members of the Board
of Directors in office immediately prior to such person attaining such
percentage interest; (ii) there occurs a proxy contest, or the Company is a
party to a merger, consolidation, sale of assets, plan of
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liquidation or other reorganization, as a consequence of which members of the
Board of Directors in office immediately prior to such transaction or event
constitute less than a majority of the Board of Directors thereafter; or (iii)
during any period of two consecutive years, other than as a result of an event
described in clause (a)(ii) of this Section 16, individuals who at the
beginning of such period constituted the Board of Directors (including for this
purpose any new director whose election or nomination for election by the
Company's stockholders was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of such
period) cease for any reason to constitute at least a majority of the Board of
Directors. A Change in Control shall not be deemed to have occurred under item
(i) above if the "person" described under item (i) is entitled to report its
ownership on Schedule 13G promulgated under the Act and such person is able to
represent that it acquired such securities in the ordinary course of its
business and not with the purpose nor with the effect of changing or
influencing the control of the Company, nor in connection with or as a
participant in any transaction having such purpose or effect. If the "person"
referred to in the previous sentence would at any time not be entitled to
continue to report such ownership on Schedule 13G pursuant to Rule
13d-1(b)(3)(i)(B) of the Act, then a Change in Control shall be deemed to have
occurred at such time.
(b) "Corporate Status" describes the status of a
person who is or was a director, officer, employee or agent or fiduciary of the
Company or of any other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise which such person is or was serving
at the express written request of the Company.
(c) "Disinterested Director" means 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.
(d) "Enterprise" shall mean the Company and any
other corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise of which Indemnitee is or was serving at the express written
request of the Company as a director, officer, employee, agent or fiduciary.
(e) "Expenses" shall include all reasonable
attorneys' fees, retainers, court costs, transcript costs, fees of experts,
witness fees, travel expenses, duplicating costs, printing and binding costs,
telephone charges, postage, delivery service fees, and all other disbursements
or expenses of the types customarily incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, participating, or
being or preparing to be a witness in a Proceeding.
(f) "Independent Counsel" means 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
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to either such party (other than with respect to matters concerning the
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. The Company
agrees to pay the reasonable fees of the Independent 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.
(g) "Proceeding" includes any threatened, pending
or completed action, suit, arbitration, alternate dispute resolution mechanism,
investigation, inquiry, administrative hearing or any other actual, threatened
or completed proceeding, whether brought by or in the right of the Company or
otherwise and whether civil, criminal, administrative or investigative, in
which Indemnitee was, is or will be involved as a party or otherwise, by reason
of the fact that Indemnitee is or was a[n officer] [director] of the Company,
by reason of any action taken by him or of any inaction on his part while
acting as a[n officer] [director] of the Company, or by reason of the fact that
he is or was serving at the request of the Company as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise; in each case whether or not he is acting or serving in any
such capacity at the time any liability or expense is incurred for which
indemnification can be provided under this Agreement; including one pending on
or before the date of this Agreement; and excluding one initiated by an
Indemnitee pursuant to Section 8 of this Agreement to enforce his rights under
this Agreement.
15. SEVERABILITY. If any provision or provisions of this
Agreement shall be held by a court of competent jurisdiction to be invalid,
void, illegal or otherwise 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; and (b) 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.
16. MODIFICATION AND WAIVER. No supplement,
modification, termination or 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.
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17. NOTICE BY INDEMNITEE. Indemnitee agrees promptly to
notify 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 covered hereunder.
The failure to so notify the Company shall not relieve the Company of any
obligation which it may have to the Indemnitee under this Agreement or
otherwise.
18. NOTICES. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if (i) delivered by hand and receipted for by the party to whom said
notice or other communication shall have been directed, or (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:
/s/ [SIGNATURE]
------------------------------
ATL Products, Inc.
0000 Xxxxx Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
(b) If to the Company, to:
ATL Products, Inc.
0000 Xxxxx Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Chief Executive Officer
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.
19. 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.
20. HEADINGS. The headings of the paragraphs 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.
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21. GOVERNING LAW. The parties agree that this Agreement
shall be governed by, and construed and enforced in accordance with, the laws
of the State of Delaware without application of the conflict of laws principles
thereof.
22. GENDER. Use of the masculine pronoun shall be deemed
to include usage of the feminine pronoun where appropriate.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on and as of the day and year first above written.
ATL PRODUCTS, INC.
By /s/ XXXXX X. XXXX
--------------------------------
Xxxxx X. Xxxx President and
Chief Executive Officer
-------------------------------------
, Indemnitee
--------------
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EXHIBIT A
PROMISSORY NOTE
$ , 1997
------------------- ---------- --
Anaheim, California
FOR VALUE RECEIVED, ATL Products, Inc., a Delaware corporation (the
"Borrower"), promises to pay to the order of Odetics, Inc., a Delaware
corporation (the "Lender"), at Anaheim, California, or at such other place as
the holder of this Note may from time to time designate in writing, the
principal amount of __________________________________ dollars ($_________),
with interest on the principal amount from the date of disbursement of the
principal amount at the rate per annum set forth in this Note, to be paid as
set forth in this Note.
The principal amount of this Note shall bear interest at the rate per
annum equal to Lender's cost of borrowing from the lesser of either of Lender's
primary banks, or Lender's principal bank, as the case may be during the term
of the Note, but shall not exceed the maximum rate of interest permitted by
applicable law.
The Borrower shall pay the principal amount of this Note and interest
thereon as follows: The Borrower shall pay towards the principal, an amount
equal to forty percent of the net proceeds of its initial public offering (the
"Offering") of its common stock, such amount not to exceed $10,000,000, upon
consummation of the Offering. The Borrower shall thereafter pay the remaining
principal balance of this Note in sixteen (16) equal annual installments at the
end of each calendar quarter commencing June 30, 1997 and continuing until all
principal and interest have been fully paid. Each payment of principal shall
be accompanied by a payment equal to all interest accrued on the outstanding
principal amount of the Note.
The Borrower shall have the right to prepay the principal sum of this
Note, or any part thereof or interest thereon, at any time without penalty or
prepayment charge.
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Both principal and interest shall be paid by Borrower in lawful money of
the United States of America in cash or in the form of a cashier's or certified
check.
If the Borrower shall default in the timely making of any payment of
principal and/or interest due hereunder and if the same remains unpaid for
fifteen (15) days following receipt by Borrower of written notice of such
default the Lender may declare the entire remaining indebtedness owing
hereunder, including any accrued interest, to become immediately due and
payable.
Notwithstanding anything to the contrary in this Note, the total
liability of the Borrower for payments in the nature of interest shall not
exceed the limits applicable to this Note, if any, imposed by the usury laws, if
any, of the United States of America or the State of California. If any payment
in the nature of interest made by the Borrower or received by the holder of this
Note is determined to be in excess of any limit applicable to this Note imposed
by such usury laws, then the amount of such excess shall constitute and be
considered a payment of principal, not interest, and such amount shall be
applied to reduce the principal sum so that the total liability of the Borrower
for payments in the nature of interest does not exceed the applicable limits, if
any, imposed by such usury laws. In the event and to the extent such excess
amount of interest exceeds the outstanding unpaid principal balance hereunder,
any such excess amount shall be immediately returned to Borrower by Lender.
No delay or omission on the part of the Lender hereof in exercising any
right hereunder shall operate as a waiver of such right or of any other right
under this Note.
Neither this Note nor any term hereof may be waived, amended, discharged,
modified, changed, or terminated orally, nor shall any waiver of any provision
hereof be effective except by an instrument in writing signed by Borrower and
the Lender thereof.
Whenever used herein, the words "Borrower" and "Lender" shall be deemed
to include their respective heirs, personal representatives, successors and
assigns.
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All notices to be given under this Note shall be deemed served upon
receipt by the addressee or, if mailed, upon the expiration of seventy-two
(72) hours after deposit in the United States Postal Service, certified mail,
postage prepaid, addressed to the address of Borrower or Lender as hereinafter
set forth:
Borrower's Address: 0000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
Lender's Address: 0000 Xxxxx Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Chief Executive Officer
This Note may from time to time be extended or renewed, with or without
notice to Borrower or any guarantor hereon and any related right may be waived,
exchanged, surrendered or otherwise dealt with, all without affecting the
liability of Borrower or any guarantor hereon.
There are no oral agreements between the Lender and the Borrower
relating to this Note. If any provision of this Note is held to be invalid or
unenforceable, it shall not affect the validity and enforceability of the other
provisions of this Note. This Note has been executed and delivered in the State
of California and is to be governed by and construed according to the laws
thereof.
IN WITNESS WHEREOF, the Borrower has executed this Note as of the date
first hereinabove written.
ATL Products, Inc.
By:
----------------------------------
Name:
Title:
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