INDEMNIFICATION AGREEMENT
Exhibit
10.18
This
Indemnification Agreement (this “Agreement”)
is
made as of __________, 2007, by and between General Moly, Inc., a Delaware
corporation (the “Corporation”),
and
_____________ (the “Indemnitee”).
RECITALS
A. The
Corporation recognizes that competent and experienced persons are increasingly
reluctant to serve or to continue to serve as directors or officers of
corporations unless they are protected by comprehensive liability insurance
or
indemnification, or both, due to increased exposure to litigation costs and
risks resulting from their service to such corporations, and due to the fact
that the exposure frequently bears no reasonable relationship to the
compensation of such directors and officers;
B. The
statutes and judicial decisions regarding the duties of directors and officers
are often difficult to apply, ambiguous, or conflicting, and therefore fail
to
provide such directors and officers with adequate, reliable knowledge of legal
risks to which they are exposed or information regarding the proper course
of
action to take;
C. The
Corporation believes that the interests of the Corporation and its stockholders
would best be served by a combination of liability insurance and indemnification
by the Corporation of the directors and officers of the
Corporation;
D. The
Corporation’s Bylaws requires the Corporation to indemnify its directors and
officers to the fullest extent permitted by the Delaware General Corporation
Law
(the “DGCL”);
E. Section
145 of the DGCL (“Section 145”), under which the Corporation is organized,
empowers the Corporation to indemnify its officers, directors, employees and
agents by agreement and to indemnify persons who serve, at the request of the
Corporation, as the directors, officers, employees or agents of other
corporations or enterprises, and expressly provides that the indemnification
provided by Section 145 is not exclusive;
F. Section
102(b)(7) of the DGCL allows a corporation to include in its certificate of
incorporation a provision limiting or eliminating the personal liability of
a
director for monetary damages in respect of claims by shareholders and
corporations for breach of certain fiduciary duties, and the Corporation has
so
provided in its Certificate of Incorporation that each Director shall be
exculpated from such liability to the maximum extent permitted by
law;
G. The
Board
of Directors has determined that contractual indemnification as set forth herein
is not only reasonable and prudent but also promotes the best interests of
the
Corporation and its stockholders; and
H. Indemnitee
is willing to serve, continue to serve or to provide additional service for
or
on behalf of the Corporation on the condition that he is furnished the indemnity
provided for herein.
AGREEMENT
NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth
below, and other good and valuable consideration, the receipt and adequacy
of
which are hereby acknowledged, the parties hereto, intending to be legally
bound, hereby agree as follows:
Section
1. Certain
Definitions
(a) Corporation:
shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power
and
authority to indemnify its directors, officers, and employees or agents, so
that
if Indemnitee is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, Indemnitee shall stand
in
the same position under the provisions of this Agreement with respect to the
resulting or surviving corporation as Indemnitee would have with respect to
such
constituent corporation if its separate existence had continued.
(b) Indemnifiable
Event:
any
event or occurrence related to the fact that Indemnitee is or was a director,
officer, employee, agent, or fiduciary of the Corporation, or is or was serving
at the request of the Corporation as a director, officer, employee, trustee,
agent, or fiduciary of another corporation, partnership, joint venture, employee
benefit plan, trust, or other enterprise, or by reason of anything done or
not
done by Indemnitee in any such capacity. For purposes of this Agreement, the
Corporation agrees that Indemnitee's service on behalf of or with respect to
any
Subsidiary of the Corporation shall be deemed to be at the request of the
Corporation.
(c) Independent
Legal Counsel:
shall
include special, independent counsel selected by Indemnitee and approved by
the
Corporation (which approval shall not be unreasonably withheld), and who has
not
otherwise performed services for the Corporation or for Indemnitee within the
last five years (other than as Independent Legal Counsel under this Agreement
or
similar agreements). Independent Legal Counsel shall not be 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, nor shall
Independent Legal Counsel be any person who has been sanctioned or censured
for
ethical violations of applicable standards of professional conduct.
(d) Other
enterprises:
shall
include employee benefit plans; references to “fines”
shall
include any excise taxes assessed on Indemnitee with respect to an employee
benefit plan; and references to “serving
at the request of the Corporation”
shall
include any service as a director, officer, employee or agent of the Corporation
which imposes duties on, or involves services by, such director, officer or
employee with respect to an employee benefit plan, its participants, or
beneficiaries; and if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan, Indemnitee shall be deemed to have acted in a
manner “not
opposed to the best interests of the Corporation”
as
referred to in this Agreement.
Section
2. Generally.
To
the
fullest extent permitted by the laws of the State of Delaware:
(a)
The
Corporation shall indemnify, in the manner and to the fullest extent permitted
by the Delaware Law as the same may be amended from time to time (but in the
case of any such amendment, only to the extent that such amendment permits
the
Corporation to provide broader indemnification rights than permitted prior
thereto), any person (or the estate of any person) who is or was a party to,
or
is threatened to be made a party to, any threatened, pending or completed
action, suit or proceeding, whether or not by or in the right of the
Corporation, and whether civil, criminal, administrative, investigative or
otherwise, by reason of the fact that such person is or was a director or
officer of the Corporation, or is or was serving at the request of the
Corporation as a director or officer of another corporation, partnership, joint
venture, trust or other enterprise. For the avoidance of doubt, the foregoing
indemnification obligation includes, without limitation, claims for monetary
damages against Indemnitee in respect of an alleged breach of fiduciary duties,
to the fullest extent permitted under Section 102(b)(7) of the DGCL as in
existence on the date hereof.
(b)
Subject
to the limitation of Section 7 herein, to the fullest extent permitted by the
Delaware Law, the indemnification provided by this Section 2 shall include
expenses as incurred (including attorneys’ fees), judgments, fines and amounts
paid in settlement and any such expenses shall be paid by the Corporation in
advance of the final disposition of such action, suit or proceeding upon receipt
of an undertaking by or on behalf of the person seeking indemnification to
repay
such amounts if it is ultimately determined that he or she is not entitled
to be
indemnified. Notwithstanding the foregoing or any other provision of this
Article, no advance shall be made by the Corporation if a determination is
reasonably and promptly made by the Board by a majority vote of a quorum of
disinterested Directors, or (if such a quorum is not obtainable or, even if
obtainable, a quorum of disinterested Directors so directs) by Independent
Legal
Counsel to the Corporation, that, based upon the facts known to the Board or
such counsel at the time such determination is made, (a) the party seeking
an
advance acted in bad faith or deliberately breached his or her duty to the
Corporation or its stockholders, and (b) as a result of such actions by the
party seeking an advance, it is more likely than not that it will ultimately
be
determined that such party is not entitled to indemnification pursuant to this
Agreement.
(c)
Notwithstanding
the foregoing provisions of this Section 2, in the case of any threatened,
pending or completed action or suit by or in the right of the Corporation to
procure a judgment in its favor by reason of the fact that Indemnitee is or
was
a director, officer, employee or agent of the Corporation, or while serving
as a
director or officer of the Corporation, is or was serving or has agreed to
serve
at the request of the Corporation as a director, officer, employee or agent
of
another corporation, partnership, joint venture, trust, employee benefit plan
or
other enterprise, no indemnification shall be made in respect of any claim,
issue or matter as to which Indemnitee shall have been adjudged to be liable
to
the Corporation unless, and only to the extent that, the Delaware Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of
all
the circumstances of the case, Indemnitee is fairly and reasonably entitled
to
indemnity for such expenses which the Delaware Court of Chancery or such other
court shall deem proper.
(d)
The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not,
of
itself, create a presumption that Indemnitee did not act in good faith and
in a
manner which Indemnitee reasonably believed to be in or not opposed to the
best
interests of the Corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that Indemnitee’s conduct was
unlawful.
Section
3. Successful
Defense; Partial Indemnification.
(a) Successful
Defense.
To the
extent that Indemnitee has been successful on the merits or otherwise in defense
of any action, suit or proceeding referred to in Section 2 hereof or in defense
of any claim, issue or matter therein, Indemnitee shall be indemnified against
expenses (including attorneys’ fees) actually and reasonably incurred in
connection therewith. For purposes of this Agreement and without
limiting the foregoing, if any action, suit or proceeding is disposed of, on
the
merits or otherwise (including a disposition without prejudice), without (i)
the
disposition being adverse to Indemnitee, (ii) an adjudication that Indemnitee
was liable to the Corporation, (iii) a plea of guilty or nolo contendere by
Indemnitee, (iv) an adjudication that Indemnitee did not act in good faith
and
in a manner Indemnitee reasonably believed to be in or not opposed to the best
interests of the Corporation, and (v) with respect to any criminal proceeding,
an adjudication that Indemnitee had reasonable cause to believe Indemnitee’s
conduct was unlawful, Indemnitee shall be considered for the purposes hereof
to
have been wholly successful with respect thereto.
(b) Partial
Indemnification.
If
Indemnitee is entitled under any provision of this Agreement to indemnification
by the Corporation for some or a portion of the expenses, judgments, fines
or
penalties actually or reasonably incurred in the investigation, defense, appeal
or settlement of any civil or criminal action, suit or proceeding, but not,
however, for the total amount thereof, the Corporation shall nevertheless
indemnify Indemnitee for the portion of such expenses, judgments, fines or
penalties to which Indemnitee is entitled.
Section
4. Indemnification
Procedure.
(a) Notice/Cooperation
by Indemnitee.
Indemnitee shall, as a condition precedent to his or her right to be indemnified
under this Agreement, give the Corporation notice as soon as practicable of
any
claim made against Indemnitee for which indemnification will or could be sought
under this Agreement. Notice to the Corporation shall be directed to the Chief
Executive Officer and Secretary of the Corporation and shall be given in
accordance with the provisions of Section 112(c) below. In addition, Indemnitee
shall give the Corporation such information and cooperation as it may reasonably
require and as shall be within Indemnitee’s power.
(b) Procedure.
Any
indemnification and advances provided for in Section 2 and Section 3 shall
be made no later than thirty (30) days after receipt of the request of
Indemnitee. If a claim under this Agreement, under any statute, or under any
provision of the Corporation’s Certificate of Incorporation or Bylaws providing
for indemnification, is not paid in full by the Corporation within thirty (30)
days after a request for payment thereof has first been received by the
Corporation, Indemnitee may, but need not, at any time thereafter bring an
action against the Corporation to recover the unpaid amount of the claim and,
subject to Section 6 of this Agreement, Indemnitee shall also be entitled
to be paid for the expenses (including attorneys’ fees) of bringing such action.
It shall be a defense to any such action (other than an action brought to
enforce a claim for expenses incurred in connection with any action, suit or
proceeding in advance of its final disposition) that Indemnitee has not met
the
standards of conduct which make it permissible under applicable law for the
Corporation to indemnify Indemnitee for the amount claimed, but the burden
of
proving such defense shall be on the Corporation and Indemnitee shall be
entitled to receive interim payments of expenses pursuant to Section 2(b)
unless and until such defense may be finally adjudicated by court order or
judgment from which no further right of appeal exists. It is the parties’
intention that if the Corporation contests Indemnitee’s right to
indemnification, the question of Indemnitee’s right to indemnification shall be
for the court to decide, and neither the failure of the Corporation (including
its Board of Directors, any committee or subgroup of the Board of Directors,
independent legal counsel, or its stockholders) to have made a determination
that indemnification of Indemnitee is proper in the circumstances because
Indemnitee has met the applicable standard of conduct required by applicable
law, nor an actual determination by the Corporation (including its Board of
Directors, any committee or subgroup of the Board of Directors, independent
legal counsel, or its stockholders) that Indemnitee has not met such applicable
standard of conduct, shall create a presumption that Indemnitee has or has
not
met the applicable standard of conduct.
(c) Notice
to Insurers.
If, at
the time of the receipt of a notice of a claim pursuant to Section 4(a)
hereof, the Corporation has director and officer liability insurance in effect,
the Corporation 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 Corporation shall thereafter take all necessary or desirable
action to cause such insurers to pay, on behalf of the Indemnitee, all amounts
payable as a result of such proceeding in accordance with the terms of such
policies.
(d) Selection
of Counsel.
In the
event the Corporation shall be obligated under Section 2(b) hereof to pay the
expenses of any proceeding against Indemnitee, the Corporation, if appropriate,
shall be entitled to assume the defense of such proceeding, with counsel
approved by Indemnitee, upon the delivery to Indemnitee of written notice of
its
election so to do. After delivery of such notice, approval of such counsel
by
Indemnitee and the retention of such counsel by the Corporation, the Corporation
will not be liable to Indemnitee under this Agreement for any fees of counsel
subsequently incurred by Indemnitee with respect to the same proceeding,
pro-vided that (i) Indemnitee shall have the right to employ counsel in any
such proceeding at Indemnitee’s expense; and (ii) if (A) the
employment of counsel by Indemnitee has been previously authorized by the
Corporation, (B) Indemnitee shall have reasonably concluded that there may
be a conflict of interest between the Corporation and Indemnitee in the conduct
of any such defense or (C) the Corporation shall not, in fact, have
employed counsel to assume the defense of such proceeding, then the fees and
expenses of Indemnitee’s counsel shall be at the expense of the
Corporation.
Section
5. Additional
Indemnification Rights; Nonexclusivity.
(a) Scope.
Notwithstanding any other provision of this Agreement, the Corporation hereby
agrees to indemnify the Indemnitee to the fullest extent permitted by law,
notwithstanding that such indemnification is not specifically authorized by
the
other provisions of this Agreement, the Corporation’s Certificate of
Incorporation, and the Corporation’s Bylaws or by statute. In the event of any
change, after the date of this Agreement, in any applicable law, statute, or
rule which expands the right of a Delaware corporation to indemnify a member
of
its board of directors or an officer, such changes shall be deemed to be within
the purview of Indemnitee’s rights and the Corporation’s obligations under this
Agreement. In the event of any change in any applicable law, statute or rule
which narrows the right of a Delaware corporation to indemnify a member of
its
board of directors or an officer, such changes, to the extent not otherwise
required by such law, statute or rule to be applied to this Agreement shall
have
no effect on this Agreement or the parties’ rights and obligations
hereunder.
(b) Nonexclusivity.
The
indemnification provided by this Agreement shall not be deemed exclusive of
any
rights to which Indemnitee may be entitled under the Corporation’s Certificate
of Incorporation, its Bylaws, any agreement, any vote of stockholders or
disinterested members of the Corporation’s Board of Directors, the General
Corporation Law of the State of Delaware, or otherwise, both as to action in
Indemnitee’s official capacity and as to action in another capacity while
holding such office. The indemnification provided under this Agreement shall
continue as to Indemnitee for any action taken or not taken while serving in
an
indemnified capacity even though he or she may have ceased to serve in any
such
capacity at the time of any action, suit or other covered
proceeding.
Section
6. Attorneys’
Fees.
In the
event that any action is instituted by Indemnitee under this Agreement to
enforce or inter-pret any of the terms hereof, Indemnitee shall be entitled
to
be paid all court costs and expenses, including reasonable attorneys’ fees,
reasonably incurred by Indemnitee with respect to such action, unless as a
part
of such action, the court of competent jurisdiction determines that each of
the
material assertions made by Indemnitee as a basis for such action were not
made
in good faith or were frivolous. In the event of an action instituted by or
in
the name of the Corporation under this Agreement or to enforce or interpret
any
of the terms of this Agreement, Indemnitee shall be entitled to be paid all
court costs and expenses, including attorneys’ fees, reasonably incurred by
Indemnitee in defense of such action (including with respect to Indemnitee’s
counterclaims and cross-claims made in such action), unless as a part of such
action the court determines that each of Indemnitee’s material defenses to such
action were made in bad faith or were frivolous.
Section
7. Mutual
Acknowledgment of Limitations.
Both
the Corporation and Indemnitee acknowledge that in certain instances, Federal
law or public policy may override applicable state law and prohibit the
Corporation from indemnifying its directors and officers under this Agreement
or
otherwise. For example, the Corporation and Indemnitee acknowledge that the
Securities and Exchange Commission (the “SEC”)
has
taken the position that indemnification is not permissible for liabilities
arising under certain federal securities laws, and federal legislation prohibits
indemnification for certain ERISA violations. Indemnitee understands and
acknowledges that the Corporation has undertaken or may be required in the
future to undertake with the SEC not to indemnify Indemnitee or to submit the
question of indemnification to a court in certain circumstances for a
determination of the Corporation’s right under public policy to indemnify
Indemnitee. The Board of Directors, in its sole discretion, may withhold
indemnification if it has reasonable belief that such indemnification would
be
contrary to public policy.
Section
8. Officer
and Director Liability Insurance.
The
Corporation to the fullest extent permitted by the Delaware Law, may purchase
and maintain insurance on behalf of any such person against any liability which
may be asserted against such person. The Corporation shall, from time to time,
make the good faith determination whether or not it is practicable for the
Corporation to obtain and maintain a policy or policies of insurance with
reputable insurance companies providing the officers and directors of the
Corporation with coverage for losses from wrongful acts, or to ensure the
Corporation’s performance of its indemnification obligations under this
Agreement. Among other considerations, the Corporation will weigh the costs
of
obtaining such insurance coverage against the protection afforded by such
coverage. In all policies of director and officer liability insurance,
Indemnitee shall be named as an insured in such a manner as to provide
Indemnitee the same rights and benefits as are accorded to the most favorably
insured of the Corporation’s directors, if Indemnitee is a director; or of the
Corporation’s officers, if Indemnitee is not a director of the Corporation but
is an officer; or of the Corporation’s key employees, if Indemnitee is not an
officer or director but is a key employee. Notwithstanding the foregoing, the
Corporation shall have no obligation to obtain or maintain such insurance if
the
Corporation determines in good faith that such insurance is not reasonably
available, if the premium costs for such insurance are disproportionate to
the
amount of coverage provided, if the coverage provided by such insurance is
limited by exclusions so as to provide an insufficient benefit, or if Indemnitee
is covered by similar insurance maintained by a parent or subsidiary of the
Corporation. Further, the Corporation may create a trust fund, grant a security
interest or use other means (including without limitation a letter of credit)
to
ensure the payment of such sums as may become necessary or desirable to effect
the indemnification as provided herein.
Section
9. Severability.
Nothing
in this Agreement is intended to require or shall be construed as requiring
the
Corporation to do or fail to do any act in violation of applicable law or
against public policy as described in Section 7. The Corporation’s inability,
pursuant to court order, to perform its obligations under this Agreement shall
not constitute a breach of this Agreement. The provisions of this Agreement
shall be severable as provided in this Section 9. If this Agreement or any
portion hereof shall be invalidated or against public policy on any ground
by
any court of competent jurisdiction or other federal agency, then the
Corporation shall nevertheless indemnify Indemnitee to the full extent permitted
by any applicable portion of this Agreement that shall not have been
invalidated, and the balance of this Agreement not so invalidated shall be
enforceable in accordance with its terms.
Section
10. Exceptions.
Any
other provision herein to the contrary notwithstanding, the Corporation shall
not be obligated pursuant to the terms of this Agreement:
(a) Lack
of Good Faith.
To
indemnify Indemnitee for any expenses incurred by Indemnitee with respect to
any
proceeding instituted by Indemnitee to enforce or interpret this Agreement,
if a
court of competent jurisdiction determines that each of the material assertions
made by Indemnitee in such proceeding was not made in good faith or was
frivolous;
(b) Duty
of Loyalty.
To
indemnify Indemnitee for any expenses incurred by Indemnitee for any breach
of
the Indemnitee’s duty of loyalty to the Corporation or its
Stockholders;
(c) Unlawful
Payments of Dividends.
To
indemnify Indemnitee for any expenses incurred by Indemnitee for unlawful
payments of dividends or unlawful stock repurchases, redemptions or other
distributions; or
(d) Personal
Benefits.
To
indemnify Indemnitee for expenses or the payment of profits arising from the
purchase and sale by Indemnitee of securities in violation of Section 16(b)
of the Securities Exchange Act of 1934, as amended, or any similar successor
statute or any other personal benefits.
Section
11. Miscellaneous.
(a) Governing
Law.
This
Agreement and all acts and transactions pursuant hereto and the rights and
obligations of the parties hereto shall be governed, construed and interpreted
in accordance with the laws of the State of Delaware, without giving effect
to
principles of conflicts of law.
(b) Entire
Agreement; Enforcement of Rights.
This
Agreement sets forth the entire agreement and understanding of the parties
relating to the subject matter herein and merges all prior discussions between
them. No modification of or amendment to this Agreement, nor any waiver of
any
rights under this Agreement, shall be effective unless in writing signed by
the
parties to this Agreement. The failure by either party to enforce any rights
under this Agreement shall not be construed as a waiver of any rights of such
party.
(c) Notices.
Any
notice, demand or request required or permitted to be given under this Agreement
shall be in writing and shall be deemed sufficient when delivered personally
or
sent by fax or 48 hours after being sent by nationally-recognized courier or
deposited in the U.S. mail, as certified or registered mail, with postage
prepaid, and addressed to the party to be notified at such party’s address or
fax number as set forth below or as subsequently modified by written
notice.
(d) Counterparts.
This
Agreement may be executed in two counterparts, each of which shall be deemed
an
original and all of which together shall constitute one instrument.
(e) Successors
and Assigns.
This
Agreement shall be binding upon the Corporation and its successors and assigns,
and inure to the benefit of Indemnitee and Indemnitee’s heirs, legal
representatives and assigns.
(f) Subrogation.
In the
event of payment 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 documents required and shall do all acts that may be necessary
to secure such rights and to enable the Corporation to effectively bring suit
to
enforce such rights.
(g) No
Construction as Employment Agreement.
Nothing
contained herein shall be construed as giving Indemnitee any right to be
retained in the employ of the Corporation of any of its
Subsidiaries.
(h) Headings.
The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement. Pronouns
shall be construed to include the masculine, feminine, neuter, singular and
plural as the context requires.
(i) No
Duplication of Payment.
The
Corporation shall not be liable under this Agreement to make any payment in
connection with any claim made against Indemnitee to the extent Indemnitee
has
otherwise actually received payment (under any insurance policy, provision
of
the Corporation's charter or Bylaws or otherwise) of the amounts otherwise
indemnifiable hereunder
(j) Period
of Limitation.
No
legal action shall be brought and no cause of action shall be asserted by or
on
behalf of the Corporation or any affiliate of the Corporation against Indemnitee
or Indemnitee's spouse, heirs, executors, or personal or legal representatives
after the expiration of three years from the date of accrual of that cause
of
action, and any claim or cause of action of the Corporation or its affiliate
shall be extinguished and deemed released unless asserted by the timely filing
of a legal action within that three-year period; provided, however, that, if
any
shorter period of limitations is otherwise applicable to any such cause of
action, the shorter period shall govern.
[Signature
Page Follows]
[Signature
Page to Indemnification Agreement]
IN
WITNESS WHEREOF, this Agreement has been duly executed and delivered to be
effective as of the date first above written.
GENERAL
MOLY, INC.
By
_______________________________________
Name:
Title:
INDEMNITEE:
By
_______________________________________
Name:
