INDEMNIFICATION AGREEMENT
Exhibit 10.3
THIS INDEMNIFICATION AGREEMENT is made and entered into as of this 15th day of
December, 2006 (this “Agreement’’), by and between Peerless Systems Corporation, a Delaware
corporation (the “Corporation”), and Xxxxxxx X. Roll (‘‘Indemnitee”).
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adjudged to be liable to the Corporation if such indemnification is not permitted by Delaware
or other applicable law; provided, however, that indemnification against Expenses, liabilities and
losses shall nevertheless be made by the Corporation in such event 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.
(a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Corporation
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 Corporation shall, promptly
upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has
requested indemnification.
(b) Upon written request by Indemnitee for indemnification pursuant to Section 7(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, a copy
of which shall be delivered to Indemnitee (unless Indemnitee shall request that such determination
be made by the Board or the stockholders, in which case the determination shall be made in the
manner provided below in clause (ii) or (iii) of this Section 7(b)); (ii) if a Change of Control
shall not have occurred, (A) by the Board by a majority vote of the Disinterested Directors (as
hereinafter defined), even though less than a quorum, (B) if no Disinterested Directors exist, or
even if Disinterested Directors exist, if a majority of such Disinterested Directors so direct, by
Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to
Indemnitee, or (C) by the stockholders of the Corporation; or (iii) as provided in Section 8(b) of
this Agreement; and, if it is so 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 that is not privileged or otherwise
protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary
to such determination. Any costs or expenses (including attorneys’ fees and disbursements)
incurred by Indemnitee in so cooperating shall be borne by the Corporation (irrespective of the
determination as to Indemnitee’s entitlement to indemnification), and the Corporation hereby
indemnifies and agrees to hold harmless Indemnitee therefrom.
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(c) If the determination of entitlement to indemnification is to be made by Independent
Counsel pursuant to Section 7(b) of this Agreement, the Independent Counsel shall be selected as
provided in this Section 7(c). If a Change of Control shall not have occurred, the Independent
Counsel shall be selected by a majority of the Disinterested Directors, and the Corporation shall
give written notice to Indemnitee advising Indemnitee of the identity of the Independent Counsel so
selected. If a Change of Control shall have occurred, the Independent Counsel shall be selected by
Indemnitee (unless Indemnitee shall request that such selection be made by the Board, in which
event the preceding sentence shall apply), and Indemnitee shall give written notice to the
Corporation advising it of the identity of the Independent Counsel so selected. In either event,
Indemnitee or the Corporation, as the case may be, may, within seven (7) days after such written
notice of selection shall have been given, deliver to the Corporation or to Indemnitee, as the case
may be, a written objection to such selection. Such objection may be asserted only on the ground
that the Independent Counsel so selected does not meet the requirement 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. If such written objection is made, the Independent Counsel so
selected may not serve as Independent Counsel unless and until a court has determined that such
objection is without merit. If, within twenty (20) days after submission by Indemnitee of a
written request for indemnification pursuant to Section 7(a) of this Agreement, no Independent
Counsel shall have been selected or, if selected, shall have been objected to, in accordance with
this Section 7(c), either the Corporation or Indemnitee may petition the Court of Chancery of the
State of Delaware or other court of competent jurisdiction for resolution of any objection that
shall have been made by the Corporation 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 an objection is
favorably resolved or the person so appointed shall act as Independent Counsel under Section 7(b)
of this Agreement. The Corporation shall pay any and all reasonable fees and expenses incurred by
such Independent Counsel in connection with acting pursuant to Section 7(b) of this Agreement, and
the Corporation shall pay all reasonable fees and expenses incident to the procedures of this
Section 7(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 9(a) of
this Agreement, the Independent Counsel shall be discharged and relieved of any further
responsibility in such capacity (subject to the applicable standards of professional conduct then
prevailing).
(a) If a Change of Control shall have occurred, in making a determination with respect to
entitlement to indemnification hereunder, the person, 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 7(a) of this Agreement, and the
Corporation 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 7 of this Agreement
to determine whether Indemnitee is entitled to indemnification shall not have made such
determination within sixty (60) days after receipt by the Corporation 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 sixty-day period may be
extended for a reasonable time, not to exceed an additional thirty (30) 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 of documentation and/or
information relating thereto; and provided, further, that the foregoing provisions of this Section
8(b) shall not apply (i) if the determination of entitlement to indemnification is to be made by
the stockholders pursuant to Section 7(b) of this Agreement and if (A) within fifteen (15) days
after receipt by the Corporation of the request for such determination the Board has resolved 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 7(b) of this Agreement.
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(c) The termination of any Proceeding or of any claim, issue or matter therein by judgment,
order, settlement or 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 that Indemnitee reasonably believed to be in or not opposed to the best interests of
the Corporation or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause
to believe that Indemnitee’s conduct was unlawful.
(a) If (i) a determination is made pursuant to Section 7 of this Agreement that Indemnitee is
not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely
made pursuant to Section 6 of this Agreement, (iii) the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to Section 7(b) of this Agreement and
such determination shall not have been made and delivered in a written opinion within ninety (90)
days after receipt by the Corporation of the request for indemnification, (iv) payment of
indemnification is not made pursuant to Section 5 of this Agreement within ten (10) days after
receipt by the Corporation 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 7 or 8 of
this Agreement, Indemnitee shall be entitled to an adjudication in the Court of Chancery of the
State of Delaware, or in any other court of competent jurisdiction, of Indemnitee’s entitlement to
such indemnification or advancement of Expenses. Alternatively, Indemnitee, at Indemnitee’s option,
may seek an award in arbitration to be conducted by a single arbitrator, pursuant to the rules of
the American Arbitration Association. Indemnitee shall commence such proceeding seeking an
adjudication or an award in arbitration within one hundred eighty (180) days following the date on
which Indemnitee first has the right to commence such proceeding pursuant to this Section 9(a).
The Corporation shall not oppose Indemnitee’s right to any such adjudication or award in
arbitration.
(b) In the event that a determination shall have been made pursuant to Section 7 of this
Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or
arbitration commenced pursuant to this Section 9 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. If a Change of Control shall have occurred, judicial proceeding or
arbitration commenced pursuant to this Section 9, the Corporation shall have the burden of proving
that Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.
(c) If a determination shall have been made or deemed to have been made pursuant to Section 7
or 8 of this Agreement that Indemnitee is entitled to indemnification, the Corporation shall be
bound by such determination in any judicial proceeding or arbitration commenced pursuant to this
Section 9, 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) The Corporation shall be precluded from asserting in any judicial proceeding or
arbitration commenced pursuant to this Section 9 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 Corporation is bound by all the provisions of this Agreement.
(e) If Indemnitee, pursuant to this Section 9, seeks a judicial adjudication of or an award in
arbitration to enforce Indemnitee’s rights under, or to recover damages for breach of, this
Agreement, Indemnitee shall be entitled to recover from the Corporation, and shall be indemnified
by the Corporation against, any and all expenses (of the types described in the definition of
Expenses in Section 14 of this Agreement) actually and reasonably incurred by Indemnitee in such
judicial adjudication or arbitration, but only if Indemnitee 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 or advancement of Expenses sought, the expenses incurred by
Indemnitee in connection with such judicial adjudication or arbitration shall be appropriately
prorated.
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(a) The rights to be indemnified and to receive advancement of Expenses 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 Corporation’s Certificate of Incorporation or Bylaws, any other
agreement, a vote of stockholders or a resolution of directors, or otherwise. This Agreement shall
continue until, and terminate upon, the latter of: (a) ten (10) years after the date that
Indemnitee shall have ceased to serve as a director and officer of the Corporation or fiduciary of
any other domestic or foreign corporation, partnership, joint venture, limited liability company,
trust, employee benefit plan or other enterprise that Indemnitee served at the request of the
Corporation; or (b) the final termination of all pending Proceedings in respect of which Indemnitee
is granted rights of indemnification or advancement of Expenses hereunder and of any proceeding
commenced by Indemnitee pursuant to Section 9 of this Agreement relating thereto. This Agreement
shall be binding upon the Corporation and its successors and assigns and shall inure to the benefit
of Indemnitee and Indemnitee’s heirs, executors and administrators.
(b) If the Corporation maintains an insurance policy or policies providing liability insurance
for directors or officers of the Corporation or fiduciaries of any other domestic or foreign
corporation, partnership, joint venture, limited liability company, trust, employee benefit plan or
other enterprise that such person serves at the request of the Corporation, Indemnitee shall be
covered by such policy or policies in accordance with the terms thereof to the maximum extent of
the coverage available for any such director or officer under such policy or policies.
(c) If any payment is made under this Agreement, the Corporation shall be subrogated to the
extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers
required and take all action necessary to secure such rights, including execution of such documents
as are necessary to enable the Corporation to bring suit to enforce such rights.
(d) The Corporation 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.
(a) “Change in Control” means a change in control of the Corporation 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 or any similar schedule or form) promulgated under the Securities
Exchange Act of 1934, as amended (the “Act”), whether or not the Corporation is then subject to
such reporting requirement; provided, however, that,
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without limitation, such a Change in Control shall be deemed to have occurred if (i) any
“person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Act) is or becomes
the “beneficial owner” (as defined in Rule 13d-3 under the Act), directly or indirectly, of
securities of the Corporation representing 20% or more of the combined voting power of the
Corporation’s then outstanding securities without the prior approval of at least two-thirds of the
members of the Board in office immediately prior to such person attaining such percentage interest;
(ii) the Corporation is a party to a merger, consolidation, sale of assets or other reorganization,
or a proxy contest, as a consequence of which members of the Board in office immediately prior to
such transaction or event constitute less than a majority of the Board thereafter; or (iii) during
any period of two (2) consecutive years, individuals who at the beginning of such period
constituted the Board (including for this purpose any new director whose election or nomination for
election by the Corporation’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.
(b) “Corporate Status” describes the status of a person who is or was or has agreed to
become a director of the Corporation, or is or was an officer, employee, agent or fiduciary of the
Corporation or of any other domestic or foreign corporation, partnership, joint venture, limited
liability company, trust, employee benefit plan or other enterprise that such person is or was
serving at the request of the Corporation.
(c) “Disinterested Director” means a director of the Corporation who is not and was
not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.
(d) “Expenses” shall include all reasonable attorneys’ fees and expenses, retainers,
court costs, transcript costs, fees and expenses of experts and witnesses, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees,
and all other disbursements or expenses of the type customarily incurred in connection with
prosecuting, defending, preparing to prosecute or defend, being a witness in or investigating a
Proceeding.
(e) “Independent Counsel” means a law firm, or a member of a law firm, that is
experienced in matters of corporation law and neither at the time of designation is, nor in the
five years immediately preceding such designation was, retained to represent: (i) the Corporation
or Indemnitee in any matter material to either such party 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
Corporation or Indemnitee in an action to determine Indemnitee’s rights under this Agreement
arising on or after the date of this Agreement, regardless of when the Indemnitee’s act or failure
to act occurred.
(f) “Proceeding” includes any action, suit, arbitration, alternate dispute resolution
mechanism, investigation, administrative hearing and any other proceeding (including any appeals
from any of the foregoing) whether civil, criminal, administrative or investigative, except one
initiated by Indemnitee pursuant to Section 9 of this Agreement to enforce Indemnitee’s rights
under this Agreement.
16. Modification and Waiver. This Agreement may be amended from time to time to
reflect changes in Delaware law or for other reasons. 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 provision hereof (whether or not similar) nor shall such waiver constitute a continuing
waiver.
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19. 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 applicable to
contracts made and to be performed in such state without giving effect to the principles of
conflicts of laws.
20. Whole Agreement. This Agreement, including all attachments and documents
incorporated by reference herein, constitutes the entire understanding between the parties in
respect of the subject matter contained herein, superseding all prior agreements, written or oral,
concerning said employment, including but not limited that certain Indemnification Agreement dated
November 30, 2006, and no representations or statements not incorporated or referred to in this
Agreement shall be binding on either party.
| PEERLESS SYSTEMS CORPORATION, a Delaware corporation |
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| By: | /s/ Xxxxxx X. Xxxxxxx | |||
| Xxxxxx X. Xxxxxxx | ||||
| Chairman of Compensation Committee | ||||
| INDEMNITEE: | ||||
| /s/ Xxxxxxx X. Roll | ||||
| (Signature) |
| Xxxxxxx X. Roll | ||||
| (Name Printed) |
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