INDEMNITY AGREEMENT
Exhibit 99.1
This Indemnity Agreement (this “Agreement”) dated as of _________, is made and
entered into by and between Neurocrine Biosciences, Inc., a Delaware corporation (the
“Company”), and
_________ (“Indemnitee”).
Recitals
A. The Company desires to attract and retain the services of highly qualified individuals as
directors, officers, employees and agents.
B. The Company’s bylaws (the “Bylaws”) require that the Company indemnify its directors and
officers, and empowers the Company to indemnify its employees and other agents, as authorized by
the Delaware General Corporation Law, as amended (the “DGCL”), under which the Company is organized
and such Bylaws expressly provide that the indemnification provided therein is not exclusive and
contemplates that the Company may enter into separate agreements with its directors, officers and
other persons to set forth specific indemnification provisions.
C. The Company has determined that Indemnitee and other directors, officers, employees and
agents of the Company may not be willing to serve or continue to serve in such capacities without
additional protection.
D. The Company desires and has requested Indemnitee to serve or continue to serve as a
director, officer, employee or agent of the Company, as the case may be, and has proffered this
Agreement to Indemnitee as an additional inducement to serve in such capacity.
E. Indemnitee is willing to serve, or to continue to serve, as a director, officer, employee
or agent of the Company, as the case may be, if Indemnitee is furnished the indemnity provided for
herein by the Company.
Agreement
Now Therefore, in consideration of the mutual covenants and agreements set forth
herein, the parties hereto, intending to be legally bound, hereby agree as follows:
1. Definitions.
(a) Agent. For purposes of this Agreement, the term “agent” of the Company means any person
who: (i) is or was a director, officer, employee or other fiduciary of the Company or a subsidiary
of the Company; or (ii) is or was serving at the request or for the convenience of, or representing
the interests of, the Company or a subsidiary of the Company, as a director, officer, employee or
other fiduciary of a foreign or domestic corporation, partnership, joint venture, trust or other
enterprise.
(b) Expenses. For purposes of this Agreement, the term “expenses” shall be broadly construed
and shall include, without limitation, all direct and indirect costs of any type
or nature whatsoever (including, without limitation, all attorneys’, witness, or other
professional fees and related disbursements, and other out-of-pocket costs of whatever nature),
actually and reasonably incurred by Indemnitee in connection with the investigation, defense or
appeal of a proceeding or establishing or enforcing a right to indemnification under this
Agreement, the DGCL or otherwise, and amounts paid in settlement by or on behalf of Indemnitee, but
shall not include any judgments, fines or penalties actually levied against Indemnitee for such
individual’s violations of law. The term “expenses” shall also include reasonable compensation for
time spent by Indemnitee for which Indemnitee is not compensated by the Company or any subsidiary
or third party (i) for any period during which Indemnitee is not an agent, in the employment of, or
providing services for compensation to, the Company or any subsidiary; and (ii) if the rate of
compensation and estimated time involved is approved by the directors of the Company who are not
parties to any action with respect to which expenses are incurred, for Indemnitee while an agent
of, employed by, or providing services for compensation to, the Company or any subsidiary.
(c) Proceedings. For purposes of this Agreement, the term “proceeding” shall be broadly
construed and shall include, without limitation, 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 in the right of
the Company or otherwise and whether of a civil, criminal, administrative or investigative nature,
and whether formal or informal in any case, in which Indemnitee was, is or will be involved as a
party or otherwise by reason of: (i) the fact that Indemnitee is or was a director or officer of
the Company; (ii) the fact that any action taken by Indemnitee or of any action on Indemnitee’s
part while acting as director, officer, employee or agent of the Company; or (iii) the fact that
Indemnitee is or was serving at the request of the Company as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, and in any such case described above, whether or not serving in any such capacity at
the time any liability or expense is incurred for which indemnification, reimbursement, or
advancement of expenses may be provided under this Agreement.
(d) Subsidiary. For purposes of this Agreement, the term “subsidiary” means any corporation
or limited liability company of which more than 50% of the outstanding voting securities or equity
interests are owned, directly or indirectly, by the Company and one or more of its subsidiaries,
and any other corporation, limited liability company, partnership, joint venture, trust, employee
benefit plan or other enterprise of which Indemnitee is or was serving at the request of the
Company as a director, officer, employee, agent or fiduciary.
(e) Independent Counsel. For purposes of this Agreement, the term “independent counsel” means
a law firm, or a partner (or, if applicable, member) of such a law firm, that is experienced in
matters of corporation law and neither presently is, nor in the past five (5) years has been,
retained to represent: (i) the Company 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 Company or Indemnitee in an action to determine Indemnitee’s
rights under this Agreement.
2.
2. Agreement to Serve. Indemnitee will serve, or continue to serve, as a director, officer,
employee or agent of the Company or any subsidiary, as the case may be, faithfully and to the best
of his or her ability, at the will of such corporation (or under separate agreement, if such
agreement exists), in the capacity Indemnitee currently serves as an agent of such corporation, so
long as Indemnitee is duly appointed or elected and qualified in accordance with the applicable
provisions of the bylaws or other applicable charter documents of such corporation, or until such
time as Indemnitee tenders his or her resignation in writing; provided, however, that nothing
contained in this Agreement is intended as an employment agreement between Indemnitee and the
Company or any of its subsidiaries or to create any right to continued employment of Indemnitee
with the Company or any of its subsidiaries in any capacity.
The Company acknowledges that it has entered into this Agreement and assumes the obligations
imposed on it hereby, in addition to and separate from its obligations to Indemnitee under the
Bylaws, to induce Indemnitee to serve, or continue to serve, as a director, officer, employee or
agent of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement
in serving as a director, officer, employee or agent of the Company.
3. Indemnification.
(a) Indemnification in Third Party Proceedings. Subject to Section 10 below, the Company
shall indemnify Indemnitee to the fullest extent permitted by the DGCL, as the same may be amended
from time to time (but, only to the extent that such amendment permits Indemnitee to broader
indemnification rights than the DGCL permitted prior to adoption of such amendment), if Indemnitee
is a party to or threatened to be made a party to or otherwise involved in any proceeding, for any
and all expenses, actually and reasonably incurred by Indemnitee in connection with the
investigation, defense, settlement or appeal of such proceeding.
(b) Indemnification in Derivative Actions and Direct Actions by the Company. Subject to
Section 10 below, the Company shall indemnify Indemnitee to the fullest extent permitted by the
DGCL, as the same may be amended from time to time (but, only to the extent that such amendment
permits Indemnitee to broader indemnification rights than the DGCL permitted prior to adoption of
such amendment), if Indemnitee is a party to or threatened to be made a party to or otherwise
involved in any proceeding by or in the right of the Company to procure a judgment in its favor,
against any and all expenses actually and reasonably incurred by Indemnitee in connection with the
investigation, defense, settlement, or appeal of such proceedings.
4. Indemnification of Expenses of Successful Party. Notwithstanding any other provision of
this Agreement, to the extent that Indemnitee has been successful on the merits or otherwise in
defense of any proceeding or in defense of any claim, issue or matter therein, including the
dismissal of any action without prejudice, the Company shall indemnify Indemnitee against all
expenses actually and reasonably incurred in connection with the investigation, defense or appeal
of such proceeding.
3.
5. Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement
to indemnification by the Company for some or a portion of any expenses actually and reasonably
incurred by Indemnitee in the investigation, defense, settlement or appeal of a proceeding, but is
precluded by applicable law or the specific terms of this Agreement to indemnification for the
total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof
to which Indemnitee is entitled.
6. Advancement of Expenses. To the extent not prohibited by law, the Company shall advance
the expenses incurred by Indemnitee in connection with any proceeding, and such advancement shall
be made within twenty (20) days after the receipt by the Company of a statement or statements
requesting such advances (which shall include invoices received by Indemnitee in connection with
such expenses but, in the case of invoices in connection with legal services, any references to
legal work performed or to expenditures made that would cause Indemnitee to waive any privilege
accorded by applicable law shall not be included with the invoice) and upon request of the Company,
an undertaking to repay the advancement of expenses if and to the extent that it is ultimately
determined by a court of competent jurisdiction in a final judgment, not subject to appeal, that
Indemnitee is not entitled to be indemnified by the Company. Advances shall be unsecured, interest
free and without regard to Indemnitee’s ability to repay the expenses. Advances shall include any
and all expenses actually and reasonably incurred by Indemnitee pursuing an action to enforce
Indemnitee’s right to indemnification under this Agreement, or otherwise and this right of
advancement, including expenses incurred preparing and forwarding statements to the Company to
support the advances claimed. Indemnitee acknowledges that the execution and delivery of this
Agreement shall constitute an undertaking providing that Indemnitee shall, to the fullest extent
required by law, repay the advance if and to the extent that it is ultimately determined by a court
of competent jurisdiction in a final judgment, not subject to appeal, that Indemnitee is not
entitled to be indemnified by the Company. The right to advances under this Section shall continue
until final disposition of any proceeding, including any appeal therein. This Section 6 shall not
apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Section 10(b).
7. Notice and Other Indemnification Procedures.
(a) Notification of Proceeding. Indemnitee will notify the Company in writing promptly 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 or
advancement of expenses covered hereunder. The failure of Indemnitee to so notify the Company
shall not relieve the Company of any obligation which it may have to Indemnitee under this
Agreement or otherwise.
(b) Request for Indemnification and Indemnification Payments. Indemnitee shall notify the
Company promptly in writing upon receiving notice of any demand, judgment or other requirement for
payment that Indemnitee reasonably believes to be subject to indemnification under the terms of
this Agreement, and shall request payment thereof by the Company. Indemnification payments
requested by Indemnitee under Section 3 hereof shall be made by the Company no later than sixty
(60) days after receipt of the written request of Indemnitee. Claims for advancement of expenses
shall be made under the provisions of Section 6 herein.
4.
(c) Application for Enforcement. In the event the Company fails to make timely payments as
set forth in Sections 6 or 7(b) above, Indemnitee shall have the right to apply to any court of
competent jurisdiction for the purpose of enforcing Indemnitee’s right to indemnification or
advancement of expenses pursuant to this Agreement. In such an enforcement hearing or proceeding,
the burden of proof shall be on the Company to prove that indemnification or advancement of
expenses to Indemnitee is not required under this Agreement or permitted by applicable law. Any
determination by the Company (including its Board of Directors, stockholders or independent
counsel) that Indemnitee is not entitled to indemnification hereunder, shall not be a defense by
the Company to the action nor create any presumption that Indemnitee is not entitled to
indemnification or advancement of expenses hereunder.
(d) Indemnification of Certain Expenses. The Company shall indemnify Indemnitee against all
expenses incurred in connection with any hearing or proceeding under this Section 7 unless the
Company prevails in such hearing or proceeding on the merits in all material respects.
8. Assumption of Defense. In the event the Company shall be requested by Indemnitee to pay
the expenses of any proceeding, the Company, if appropriate, shall be entitled to assume the
defense of such proceeding, or to participate to the extent permissible in such proceeding, with
counsel reasonably acceptable to Indemnitee. Upon assumption of the defense by the Company and the
retention of such counsel by the Company, the Company shall not be liable to Indemnitee under this
Agreement for any fees of counsel subsequently incurred by Indemnitee with respect to the same
proceeding, provided that Indemnitee shall have the right to employ separate counsel in such
proceeding at Indemnitee’s sole cost and expense. Notwithstanding the foregoing, if Indemnitee’s
counsel delivers a written notice to the Company stating that such counsel has reasonably concluded
that there may be a conflict of interest between the Company and Indemnitee in the conduct of any
such defense or the Company shall not, in fact, have employed counsel or otherwise actively pursued
the defense of such proceeding within a reasonable time, then in any such event the fees and
expenses of Indemnitee’s counsel to defend such proceeding shall be subject to the indemnification
and advancement of expenses provisions of this Agreement.
9. Insurance. To the extent that the Company maintains an insurance policy or policies
providing liability insurance for directors, officers, employees, or agents of the Company or of
any subsidiary (“D&O Insurance”), 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. If, at the time of the receipt
of a notice of a claim pursuant to the terms hereof, the Company has D&O Insurance in effect, the
Company shall give prompt notice of the commencement of such proceeding to the insurers in
accordance with the procedures set forth in the respective policies. The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all
amounts payable as a result of such proceeding in accordance with the terms of such policies.
10. Exceptions.
5.
(a) Certain Matters. Any provision herein to the contrary notwithstanding, the Company shall
not be obligated pursuant to the terms of this Agreement to indemnify Indemnitee on account of any
proceeding with respect to (i) remuneration paid to Indemnitee if it is determined by final
judgment or other final adjudication that such remuneration was in violation of law (and, in this
respect, both the Company and Indemnitee have been advised that the Securities and Exchange
Commission believes that indemnification for liabilities arising under the federal securities laws
is against public policy and is, therefore, unenforceable and that claims for indemnification
should be submitted to appropriate courts for adjudication, as indicated in Section 10(d) below);
(ii) a final judgment rendered against Indemnitee for an accounting, disgorgement or repayment of
profits made from the purchase or sale by Indemnitee of securities of the Company against
Indemnitee or in connection with a settlement by or on behalf of Indemnitee to the extent it is
acknowledged by Indemnitee and the Company that such amount paid in settlement resulted from
Indemnitee’s conduct from which Indemnitee received monetary personal profit, pursuant to the
provisions of Section 16(b) of the Securities Exchange Act of 1934, as amended, or other provisions
of any federal, state or local statute or rules and regulations thereunder; (iii) a final judgment
or other final adjudication that Indemnitee’s conduct was in bad faith, knowingly fraudulent or
deliberately dishonest or constituted willful misconduct (but only to the extent of such specific
determination); or (iv) on account of conduct that is established by a final judgment as
constituting a breach of Indemnitee’s duty of loyalty to the Company or resulting in any personal
profit or advantage to which Indemnitee is not legally entitled. For purposes of the foregoing
sentence, a final judgment or other adjudication may be reached in either the underlying proceeding
or action in connection with which indemnification is sought or a separate proceeding or action to
establish rights and liabilities under this Agreement.
(b) Claims Initiated by Indemnitee. Any provision herein to the contrary notwithstanding, the
Company shall not be obligated to indemnify or advance expenses to Indemnitee with respect to
proceedings or claims initiated or brought by Indemnitee against the Company or its directors,
officers, employees or other agents and not by way of defense, except (i) with respect to
proceedings brought to establish or enforce a right to indemnification under this Agreement or
under any other agreement, provision in the Bylaws or Certificate of Incorporation or applicable
law, or (ii) with respect to any other proceeding initiated by Indemnitee that is either approved
by the Board of Directors or Indemnitee’s participation is required by applicable law. However,
indemnification or advancement of expenses may be provided by the Company in specific cases if the
Board of Directors determines it to be appropriate.
(c) Unauthorized Settlements. Any provision herein to the contrary notwithstanding, the
Company shall not be obligated pursuant to the terms of this Agreement to indemnify Indemnitee
under this Agreement for any amounts paid in settlement of a proceeding effected without the
Company’s written consent. Neither the Company nor Indemnitee shall unreasonably withhold consent
to any proposed settlement; provided, however, that the Company may in any event decline to consent
to (or to otherwise admit or agree to any liability for indemnification hereunder in respect of)
any proposed settlement if the Company is also a party in such proceeding and determines in good
faith that such settlement is not in the best interests of the Company and its stockholders.
6.
(d) Securities Act Liabilities. Any provision herein to the contrary notwithstanding, the
Company shall not be obligated pursuant to the terms of this Agreement to indemnify Indemnitee or
otherwise act in violation of any undertaking appearing in and required by the rules and
regulations promulgated under the Securities Act of 1933, as amended (the “Act”), or in any
registration statement filed with the SEC under the Act. Indemnitee acknowledges that paragraph
(h) of Item 512 of Regulation S-K currently generally requires the Company to undertake in
connection with any registration statement filed under the Act to submit the issue of the
enforceability of Indemnitee’s rights under this Agreement in connection with any liability under
the Act on public policy grounds to a court of appropriate jurisdiction and to be governed by any
final adjudication of such issue. Indemnitee specifically agrees that any such undertaking shall
supersede the provisions of this Agreement and to be bound by any such undertaking.
11. Nonexclusivity and Survival of Rights. The provisions for indemnification and advancement
of expenses set forth in this Agreement shall not be deemed exclusive of any other rights which
Indemnitee may at any time be entitled under any provision of applicable law, the Company’s
Certificate of Incorporation, Bylaws or other agreements, both as to action in Indemnitee’s
official capacity and Indemnitee’s action as an agent of the Company, in any court in which a
proceeding is brought, and Indemnitee’s rights hereunder shall continue after Indemnitee has ceased
acting as an agent of the Company and shall inure to the benefit of the heirs, executors,
administrators and assigns of Indemnitee. The obligations and duties of the Company to Indemnitee
under this Agreement shall be binding on the Company and its successors and assigns until
terminated in accordance with its terms. The Company shall require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the
business or assets of the Company, 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.
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 or her corporate status prior to such amendment, alteration or repeal. To
the extent that a change in the DGCL, whether by statute or judicial decision, permits greater
indemnification or advancement of expenses than would be afforded currently under the Company’s
Certificate of Incorporation, Bylaws 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 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, by Indemnitee shall not prevent the
concurrent assertion or employment of any other right or remedy by Indemnitee.
12. Term. This Agreement shall continue until and terminate upon the later of: (a) five (5)
years after the date that Indemnitee shall have ceased to serve as a director or and/or officer,
employee or agent of the Company; or (b) one (1) year after the final termination of any
proceeding, including any appeal then pending, in respect to which Indemnitee was granted rights of
indemnification or advancement of expenses hereunder.
7.
No legal action shall be brought and no cause of action shall be asserted by or in the right
of the Company against an Indemnitee or an Indemnitee’s estate, spouse, heirs, executors or
personal or legal representatives after the expiration of five (5) years from the date of accrual
of such cause of action, and any claim or cause of action of the Company shall be extinguished and
deemed released unless asserted by the timely filing of a legal action within such five-year
period; provided, however, that if any shorter period of limitations is otherwise applicable to
such cause of action, such shorter period shall govern.
13. 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 Indemnitee, who, at
the request and expense of the Company, shall execute all papers required and shall do everything
that may be reasonably necessary to secure such rights, including the execution of such documents
necessary to enable the Company effectively to bring suit to enforce such rights.
14. Interpretation of Agreement. It is understood that the parties hereto intend this
Agreement to be interpreted and enforced so as to provide indemnification to Indemnitee to the
fullest extent now or hereafter permitted by law.
15. Severability. If any provision of this Agreement shall be held to be invalid, illegal or
unenforceable for any reason whatsoever, (a) the validity, legality and enforceability of the
remaining provisions of the Agreement (including without limitation, all portions of any paragraphs
of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that
are not themselves invalid, illegal or unenforceable) shall not in any way be affected or impaired
thereby; and (b) to the fullest extent possible, the provisions of this Agreement (including,
without limitation, all portions of any paragraph of this Agreement containing any such provision
held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or
unenforceable) shall be construed so as to give effect to the intent manifested by the provision
held invalid, illegal or unenforceable and to give effect to Section 14 hereof.
16. Amendment and Waiver. No supplement, modification, amendment, or cancellation of this
Agreement shall be binding unless executed in writing by 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.
17. Notice. Except as otherwise provided herein, any notice or demand which, by the
provisions hereof, is required or which may be given to or served upon the parties hereto shall be
in writing and, if by telegram, telecopy or telex, shall be deemed to have been validly served,
given or delivered when sent, if by overnight delivery, courier or personal delivery, shall be
deemed to have been validly served, given or delivered upon actual delivery and, if mailed, shall
be deemed to have been validly served, given or delivered three (3) business days after deposit in
the United States mail, as registered or certified mail, with proper postage prepaid and addressed
to the party or parties to be notified at the addresses set forth on the signature page of this
Agreement (or such other address(es) as a party may designate for itself by like notice). If to
the Company, notices and demands shall be delivered to the attention of the Secretary of the
Company.
8.
18. Governing Law. This Agreement shall be governed exclusively by and construed according to
the laws of the State of Delaware, as applied to contracts between Delaware residents entered into
and to be performed entirely within Delaware.
19. 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 but
one and the same Agreement. Only one such counterpart need be produced to evidence the existence
of this Agreement.
20. Headings. The headings of the sections of this Agreement are inserted for convenience
only and shall not be deemed to constitute part of this Agreement or to affect the construction
hereof.
21. Entire Agreement. This Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof and supersedes all prior agreements, understandings and
negotiations, written and oral, between the parties with respect to the subject matter of this
Agreement; provided, however, that this Agreement is a supplement to and in furtherance of the
Company’s Certificate of Incorporation, Bylaws, the DGCL and any other applicable law, and shall
not be deemed a substitute therefor, and does not diminish or abrogate any rights of Indemnitee
thereunder.
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9.
In Witness Whereof, the parties hereto have entered into this Indemnity
Agreement effective as of the date first above written.
| NEUROCRINE BIOSCIENCES, INC. | ||||||||
| By: | ||||||||
| Name: | ||||||||
| Title: | ||||||||
| INDEMNITEE | ||||||||
| Signature of Indemnitee | ||||||||
| Print or Type Name of Indemnitee | ||||||||
