Exhibit 10.8
INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT (this "AGREEMENT") is made and entered
into this ____ day of _____________, ____ (the "EFFECTIVE DATE") by and between
Passave, Inc., a Delaware corporation (the "COMPANY"), and [ ] (the
"INDEMNITEE").
WHEREAS, the Company believes it is essential to retain and attract
qualified directors and officers;
WHEREAS, the Indemnitee is a director and/or officer of the Company;
WHEREAS, both the Company and the Indemnitee recognize the increased risk
of litigation and other claims being asserted against directors and officers of
public companies;
WHEREAS, the Company's Amended and Restated Certificate of Incorporation
(the "CERTIFICATE OF INCORPORATION") and Bylaws (the "BYLAWS") authorize the
Company to indemnify and advance expenses to its directors and officers to the
extent permitted by the DGCL (as hereinafter defined);
WHEREAS, the Indemnitee has been serving and intends to continue serving
as a director and/or officer of the Company in part in reliance on the
Certificate of Incorporation and Bylaws, or is relying upon the rights afforded
under this Agreement in accepting the Indemnitee's position as a director,
officer or employee of the Company; and
WHEREAS, in recognition of the Indemnitee's need for (i) substantial
protection against personal liability based on the Indemnitee's reliance on the
Certificate of Incorporation and Bylaws, (ii) specific contractual assurance
that the protection promised by the Certificate of Incorporation and Bylaws will
be available to the Indemnitee, regardless of, among other things, any amendment
to or revocation of the Bylaws or any change in the composition of the Company's
Board of Directors (the "BOARD") or acquisition transaction relating to the
Company and (iii) an inducement to continue to provide effective services to the
Company as a director and/or officer thereof, the Company wishes to provide for
the indemnification of the Indemnitee and to advance expenses to the Indemnitee
to the fullest extent permitted by law and as set forth in this Agreement, and,
to the extent insurance is maintained by the Company, to provide for the
continued coverage of the Indemnitee under the Company's directors' and
officers' liability insurance policies.
NOW, THEREFORE, in consideration of the premises contained herein and for
the Indemnitee continuing to serve the Company directly or, at its request, with
another enterprise, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. CERTAIN DEFINITIONS.
(a) A "CHANGE IN CONTROL" shall be deemed to have occurred if:
(i) any "person," as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder (the "EXCHANGE ACT"), other than (a) a trustee or other
fiduciary holding securities under an employee
benefit plan of the Company; (b) 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; or (c) any current beneficial stockholder or
group, as defined by Rule 13d-5 under the Exchange Act, including the heirs,
assigns and successors thereof, of beneficial ownership, within the meaning of
Rule 13d-3 under the Exchange Act, of securities possessing more than 50% of the
total combined voting power of the Company's outstanding securities; hereafter
becomes the "beneficial owner," as defined in Rule 13d-3 under the Exchange Act,
directly or indirectly, of securities of the Company representing 20% or more of
the total combined voting power represented by the Company's then outstanding
Voting Securities;
(ii) during any period of two consecutive years,
individuals who at the beginning of such period constitute the Board and any new
director whose election by the Board or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds of the directors then
in office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof; or
(iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the Voting Securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into Voting Securities of the
surviving entity) at least 80% of the total voting power represented by the
Voting Securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or the stockholders of the
Company approve a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company, in one transaction or a series of
transactions, of all or substantially all of the Company's assets.
(b) "DGCL" shall mean the General Corporation Law of the State
of Delaware, as the same exists or may hereafter be amended or interpreted;
PROVIDED, HOWEVER, that in the case of any such amendment or interpretation,
only to the extent that such amendment or interpretation permits the Company to
provide broader indemnification rights than were permitted prior thereto.
(c) "EXPENSE" shall mean attorneys' fees and all other costs,
expenses and obligations paid or incurred in connection with investigating,
defending, being a witness in or participating in (including on appeal) or
preparing for any of the foregoing, any Proceeding relating to any Indemnifiable
Event.
(d) "INDEMNIFIABLE EVENT" shall mean any event or occurrence
that takes place either prior to or after the execution of this Agreement,
related to the fact that the Indemnitee is or was a director or officer of the
Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with respect to employee
benefit plans, or by reason of anything done or not done by the Indemnitee in
any such capacity.
(e) "PROCEEDING" shall mean any threatened, pending or
completed action, suit, investigation or proceeding, and any appeal thereof,
whether civil, criminal, administrative
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or investigative and/or any inquiry or investigation, whether conducted by the
Company or any other party, that the Indemnitee in good faith believes might
lead to the institution of any such action.
(f) "REVIEWING PARTY" shall mean any appropriate person or body
consisting of a member or members of the Company's Board or any other person or
body appointed by the Board (including the special independent counsel referred
to in Section 6) who is not a party to the particular Proceeding with respect to
which the Indemnitee is seeking indemnification.
(g) "VOTING SECURITIES" shall mean any securities of the
Company which vote generally in the election of directors.
2. INDEMNIFICATION. In the event the Indemnitee was or is a party to
or is involved (as a party, witness or otherwise) in any Proceeding by reason of
(or arising in part out of) an Indemnifiable Event, whether the basis of the
Proceeding is the Indemnitee's alleged action in an official capacity as a
director or officer or in any other capacity while serving as a director or
officer, the Company shall indemnify the Indemnitee to the fullest extent
permitted by the DGCL against any and all Expenses, liabilities and losses
(including judgments, fines, ERISA excise taxes or penalties, and amounts paid
or to be paid in settlement, and any interest, assessments or other charges
imposed thereon, and any federal, state, local or foreign taxes imposed on any
director or officer as a result of the actual or deemed receipt of any payments
under this Agreement) (collectively, "LIABILITIES") reasonably incurred or
suffered by such person in connection with such Proceeding. The Company shall
provide indemnification pursuant to this Section 2 as soon as practicable, but
in no event later than 30 days after it receives written demand from the
Indemnitee. Notwithstanding anything in this Agreement to the contrary and
except as provided in Section 5 below, the Indemnitee shall not be entitled to
indemnification pursuant to this Agreement (i) in connection with any Proceeding
initiated by the Indemnitee against the Company or any director or officer of
the Company unless the Company has joined in or consented to the initiation of
such Proceeding or (ii) on account of any suit in which judgment is rendered
against the Indemnitee pursuant to Section 16(b) of the Exchange Act for an
accounting of profits made from the purchase, sale or other transaction by the
Indemnitee of securities of the Company (or derivatives thereof).
3. ADVANCEMENT OF EXPENSES. The Company shall advance Expenses to the
Indemnitee within 30 business days of such request (an "EXPENSE ADVANCE");
PROVIDED, HOWEVER, that if required by applicable corporate laws, such Expenses
shall be advanced only upon delivery to the Company of an undertaking by or on
behalf of the Indemnitee to repay such amount if it is ultimately determined
that the Indemnitee is not entitled to be indemnified by the Company; PROVIDED,
FURTHER, that the Company shall make such advances only to the extent permitted
by applicable law. Expenses incurred by the Indemnitee while not acting in
his/her capacity as a director or officer, including service with respect to
employee benefit plans, may be advanced upon such terms and conditions as the
Board, in its sole discretion, deems appropriate.
4. REVIEW PROCEDURE FOR INDEMNIFICATION. Notwithstanding the
foregoing, (i) the obligations of the Company under Sections 2 and 3 above shall
be subject to the condition that the Reviewing Party shall not have determined
(in a written opinion, in any case in which the special independent counsel
referred to in Section 6 hereof is involved) that the Indemnitee
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would not be permitted to be indemnified under applicable law and (ii) the
obligation of the Company to make an Expense Advance pursuant to Section 3 above
shall be subject to the condition that, if, when and to the extent that the
Reviewing Party determines that the Indemnitee would not be permitted to be so
indemnified under applicable law, the Company shall be entitled to be reimbursed
by the Indemnitee (who hereby agrees to reimburse the Company) for all such
amounts theretofore paid; PROVIDED, HOWEVER, that if the Indemnitee has
commenced legal proceedings in a court of competent jurisdiction pursuant to
Section 5 below to secure a determination that the Indemnitee should be
indemnified under applicable law, any determination made by the Reviewing Party
that the Indemnitee would not be permitted to be indemnified under applicable
law shall not be binding and the Indemnitee shall not be required to reimburse
the Company for any Expense Advance until a final judicial determination is made
with respect thereto (as to which all rights of appeal therefrom have been
exhausted or have lapsed). The Indemnitee's obligation to reimburse the Company
for Expense Advances pursuant to this Section 4 shall be unsecured and no
interest shall be charged thereon. If there has not been a Change in Control,
the Reviewing Party shall be selected by the Board, and if there has been such a
Change in Control, other than a Change in Control which has been approved by a
majority of the Company's Board who were directors immediately prior to such
Change in Control, the Reviewing Party shall be the special independent counsel
referred to in Section 6 hereof.
5. ENFORCEMENT OF INDEMNIFICATION RIGHTS. If the Reviewing Party
determines that the Indemnitee substantively would not be permitted to be
indemnified in whole or in part under applicable law, or if the Indemnitee has
not otherwise been paid in full pursuant to Sections 2 and 3 above within 30
days after a written demand has been received by the Company, the Indemnitee
shall have the right to commence litigation in any court in the State of New
York having subject matter jurisdiction thereof and in which venue is proper to
recover the unpaid amount of the demand (an "ENFORCEMENT PROCEEDING") and, if
successful in whole or in part, the Indemnitee shall be entitled to be paid any
and all Expenses in connection with such Enforcement Proceeding. The Company
hereby consents to service of process for such Enforcement Proceeding and to
appear in any such Enforcement Proceeding. Any determination by the Reviewing
Party otherwise shall be conclusive and binding on the Company and the
Indemnitee.
6. CHANGE IN CONTROL. The Company agrees that if there is a Change in
Control of the Company, other than a Change in Control which has been approved
by a majority of the Company's Board who were directors immediately prior to
such Change in Control, then with respect to all matters thereafter arising
concerning the rights of the Indemnitee to indemnity payments and Expense
Advances under this Agreement or any other agreement or under applicable law or
the Certificate of Incorporation or Bylaws now or hereafter in effect relating
to indemnification for Indemnifiable Events, the Company shall seek legal advice
only from special independent counsel selected by the Indemnitee and approved by
the Company, which approval shall not be unreasonably withheld. Such special
independent counsel shall not have otherwise performed services for the Company
or the Indemnitee, other than in connection with such matters, within the last
five years. Such 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 the Indemnitee in an
action to determine the Indemnitee's rights under this Agreement. Such counsel,
among other things, shall render its
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written opinion to the Company and the Indemnitee as to whether and to what
extent the Indemnitee would be permitted to be indemnified under applicable law.
The Company agrees to pay the reasonable fees of the special independent counsel
referred to above and to indemnify fully such counsel against any and all
expenses (including attorneys' fees), claims, liabilities and damages arising
out of or relating to this Agreement or the engagement of special independent
counsel pursuant to this Agreement.
7. PARTIAL INDEMNITY. If the Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of the Expenses and Liabilities, but not, however, for all of the total
amount thereof, the Company shall nevertheless indemnify the Indemnitee for the
portion thereof to which the Indemnitee is entitled. Moreover, notwithstanding
any other provision of this Agreement, to the extent that the Indemnitee has
been successful on the merits or otherwise in defense of any or all Proceedings
relating in whole or in part to an Indemnifiable Event or in defense of any
issue or matter therein, including dismissal without prejudice, the Indemnitee
shall be indemnified against all Expenses incurred in connection therewith. In
connection with any determination by the Reviewing Party or otherwise as to
whether the Indemnitee is entitled to be indemnified hereunder, the burden of
proof shall be on the Company to establish that the Indemnitee is not so
entitled.
8. NON-EXCLUSIVITY. The rights of the Indemnitee hereunder shall be
in addition to any other rights the Indemnitee may have under any statute,
provision of the Certificate of Incorporation or Bylaws, vote of stockholders or
disinterested directors or otherwise, both as to action in an official capacity
and as to action in another capacity while holding such office. To the extent
that a change in the DGCL permits greater indemnification by agreement than
would be afforded currently under the Company's Certificate of Incorporation and
Bylaws and this Agreement, it is the intent of the parties hereto that the
Indemnitee shall enjoy by this Agreement the greater benefits so afforded by
such change.
9. LIABILITY INSURANCE. To the extent the Company maintains an
insurance policy or policies providing directors' and officers' liability
insurance, the 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 director or officer of the Company.
10. SETTLEMENT OF CLAIMS. The Company shall not be liable to indemnify
the Indemnitee under this Agreement (a) for any amounts paid in settlement of
any action or claim effected without the Company's written consent, which
consent shall not be unreasonably withheld; or (b) for any judicial award if the
Company was not given a reasonable and timely opportunity, at its expense, to
participate in the defense of such action.
11. NO PRESUMPTION. For purposes of this Agreement, to the fullest
extent permitted by law, the termination of any Proceeding, action, suit or
claim, by judgment, order, settlement (whether with or without court approval)
or conviction, or upon a plea of nolo contendere, or its equivalent, shall not
create a presumption that the Indemnitee did not meet any particular standard of
conduct or have any particular belief or that a court has determined that
indemnification is not permitted by applicable law.
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12. PERIOD OF LIMITATIONS. No legal action shall be brought and no
cause of action shall be asserted by or on behalf of the Company or any
affiliate of the Company against the Indemnitee, the Indemnitee's spouse, heirs,
executors or personal or legal representatives after the expiration of two years
from the date of accrual of such cause of action, or such longer period as may
be required by state law under the circumstances, and any claim or cause of
action of the Company or its affiliate shall be extinguished and deemed released
unless asserted by the timely filing of a legal action within such period;
PROVIDED, HOWEVER, that if any shorter period of limitations is otherwise
applicable to any such cause of action, such shorter period shall govern.
13. CONSENT AND WAIVER BY THIRD PARTIES. The Indemnitee hereby
represents and warrants that he or she has obtained all waivers and/or consents
from third parties which are necessary for his or her employment with the
Company on the terms and conditions set forth herein and to execute and perform
this Agreement without being in conflict with any other agreement, obligation or
understanding with any such third party. The Indemnitee represents that he or
she is not bound by any agreement or any other existing or previous business
relationship which conflicts with, or may conflict with, the performance of his
or her obligations hereunder or prevent the full performance of his or her
duties and obligations hereunder.
14. AMENDMENT OF THIS AGREEMENT. No supplement, modification 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.
Except as specifically provided herein, no failure to exercise or any delay in
exercising any right or remedy hereunder shall constitute a waiver thereof.
15. SUBROGATION. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of the Indemnitee, who shall execute all papers required and shall
do everything that may be necessary to secure such rights, including the
execution of such documents necessary to enable the Company effectively to bring
suit to enforce such rights.
16. NO DUPLICATION OF PAYMENTS. The Company shall not be liable under
this Agreement to make any payment in connection with any claim made against
Indemnitee to the extent the Indemnitee has otherwise actually received payment
(under any insurance policy, Bylaw, vote, agreement or otherwise) of the amounts
otherwise indemnifiable hereunder.
17. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
successors, assigns, including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
and/or assets of the Company, spouses, heirs and personal and legal
representatives. The Company shall require and cause any successor (whether
direct or indirect by purchase, merger, consolidation or otherwise) to all,
substantially all, or a substantial part, of the business and/or assets of the
Company, by written agreement in form and substance satisfactory to the
Indemnitee, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform if
no such succession had taken place. This Agreement shall continue in effect
regardless of whether the
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Indemnitee continues to serve as a director or officer of the Company or of any
other enterprise at the Company's request.
18. SEVERABILITY. The provisions of this Agreement shall be severable
in the event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) is held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, and the remaining
provisions shall remain enforceable to the fullest extent permitted by law.
Furthermore, to the fullest extent possible, the provisions of this Agreement
(including, without limitation, each portion of this Agreement containing any
provision held to be invalid, void or otherwise unenforceable, that is not
itself invalid, void or unenforceable) shall be construed so as to give effect
to the intent manifested by the provision held invalid, illegal or
unenforceable.
19. GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed in such State without giving effect to the
principles of conflicts of laws.
20. CONSENT TO JURISDICTION; APPOINTMENT OF AGENT FOR SERVICE OF
PROCESS. The Indemnitee pursuant to this Agreement has legally, validly,
effectively and irrevocably submitted to the personal jurisdiction of any
federal or state court in the State of New York, County of New York, and
pursuant to this Agreement has legally, validly and effectively designated,
appointed and empowered, an agent for service of process in any suit of
proceeding based on or arising under this Agreement in any federal or state
court in the State of New York, County of New York.
21. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
22. NOTICES. All notices, demands, and other communications required
or permitted hereunder shall be made in writing and shall be deemed to have been
duly given if delivered by hand, against receipt, or mailed, postage prepaid,
certified or registered mail, return receipt requested, and addressed to the
Company at:
Passave, Inc.
0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxx Xxxxx, Xxxxxxxxxx 00000
and to the Indemnitee at:
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Notice of change of address shall be effective only when done in
accordance with this Section. All notices complying with this Section shall be
deemed to have been received on the date of delivery or on the third business
day after mailing.
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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day first set forth above.
THE COMPANY:
PASSAVE, INC.
By:_____________________________________
Name:___________________________________
Title:__________________________________
INDEMNITEE:
________________________________________
Signature
Print Name:_____________________________
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