EXHIBIT 99.2
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INDEMNIFICATION AGREEMENT
This Agreement dated July 7, 2005 is between Clinical Data, Inc. (the
"COMPANY"), a Delaware corporation, and _______________ (the "INDEMNITEE"), who
is an officer of the Company. Its purpose is to provide the maximum protection
for the Indemnitee against personal liability arising out of his service to the
Company so as to encourage the continuation of such service and the effective
exercise of his business judgment in connection therewith.
RECITALS
WHEREAS, the Company and Indemnitee recognize the continued difficulty
in obtaining liability insurance for its directors, officers, employees,
stockholders, controlling persons, agents and fiduciaries, the significant
increases in the cost of such insurance and the general reductions in the
coverage of such insurance;
WHEREAS, the Company and Indemnitee further recognize the substantial
increase in corporate litigation in general, subjecting directors, officers,
employees, controlling persons, stockholders, agents and fiduciaries to
expensive litigation risks at the same time as the availability and coverage of
liability insurance has been severely limited;
WHEREAS, the Indemnitee does not regard the current protection
available as adequate under the present circumstances, and Indemnitee and other
directors, officers, employees, stockholders, controlling persons, agents and
fiduciaries of the Company may not be willing to serve in such capacities
without additional protection;
WHEREAS, the Company (i) desires to attract and retain the involvement
of highly qualified individuals and entities, such as Indemnitee, to serve the
Company and (ii) wishes to provide for the indemnification and advancing of
expenses to each Indemnitee to the maximum extent permitted by law; and
WHEREAS, in view of the considerations set forth above, the Company
desires that Indemnitee be indemnified by the Company as set forth herein.
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:
1. Services to the Company. Indemnitee agrees to serve as an officer
of the Company. Indemnitee may at any time and for any reason resign from such
position (subject to any other contractual obligation or any obligation imposed
by operation of law), in which event the Company shall have no obligation under
this Agreement to continue Indemnitee in such position, nor shall Indemnitee be
required to continue to serve in such capacity. This Agreement shall not be
deemed an employment contract between the Company (or any of its subsidiaries)
and Indemnitee. The foregoing notwithstanding, this Agreement shall continue in
force after Indemnitee has ceased to serve as an officer of the Company.
2. Definitions. For purposes of this Agreement, the following terms
shall have the meanings hereafter assigned to them:
(a) "Change in Control" means the occurrence of (i) a change in
control of the Company, not approved by a resolution of the Company's
Board of Directors, of a nature that would be required to be reported
in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated
under the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), including in any event the acquisition by any "person" (as such
term is used in Sections 13(d) and 14(d)(2) of the Exchange Act) of
beneficial ownership, directly or indirectly, of securities of the
Company representing 25% or more of the combined voting power of the
Company's then outstanding securities, and (ii) within a period of not
more than two years after the event described in the preceding clause
(i), a change in the identity of a majority of the members of the
Company's Board of Directors otherwise than through death, disability
or retirement in accordance with the Company's normal retirement
policies.
(b) "Claim" means any threatened, pending or completed action, suit
or proceeding, 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, suit or
proceeding, whether civil, criminal, administrative, investigative or
other.
(c) "Expenses" means reasonable attorneys' fees and all other
reasonable costs, expenses and obligations paid or incurred in
connection with investigating, defending, being a witness in or
participating in (including on appeal), or preparing to defend, be a
witness in or participate in, any Claim relating to any Indemnifiable
Event.
(d) "Indemnifiable Event" means any event or occurrence related to
the fact that the Indemnitee is or was a director, officer, employee,
agent or fiduciary of the Company, or is or was serving at the request
of the Company as a director, officer, employee, trustee, agent or
fiduciary of another corporation, partnership, joint venture, employee
benefit plan, trust or other enterprise, including, without limitation,
a charity or non-profit organization or person, or by reason of
anything done or not done by the Indemnitee in any such capacity.
(e) "Potential Change in Control" means the occurrence of (i) any
person's public announcement of an intention to take or to consider
taking actions which if consummated might result in a Change in
Control, (ii) the acquisition by any "person" (as such term is used in
Section 13(d) and 14(d)(2) of the Exchange Act) of beneficial
ownership, directly or indirectly, of securities of the Company
representing 25% or more of the combined voting power of the Company's
then outstanding securities, or (iii) the adoption by the Company's
Board of Directors of a resolution to the effect that, for purposes of
this Agreement, a Potential Change in Control has occurred.
(f) "Reviewing Party" means the person or body appointed by the
Company's Board of Directors pursuant to Section 3(b), which shall not
be or include a person who is a party to the particular Claim for which
the Indemnitee is seeking indemnification.
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3. Basic Indemnification Arrangement.
(a) In the event that the Indemnitee was or is a party to or
witness or other participant in, or is threatened to be made a party to
or witness or other participant in, a Claim by reason of (or arising in
part out of) an Indemnifiable Event, the Company shall indemnify the
Indemnitee to the fullest extent permitted by law as soon as
practicable, but in any event no later than thirty days after written
demand is presented to the Company, against all Expenses, judgments,
fines, penalties and amounts paid in settlement (including all
interest, assessments and other charges paid or payable in respect of
such Expenses, judgments, fines, penalties or amounts paid in
settlement; provided, however, the Company shall have been given the
opportunity to consent in writing to such settlement (which consent
shall not be unreasonably withheld)) of such Claim. If so requested by
the Indemnitee, the Company shall advance (within two business days of
such request and subject to providing any undertaking that may be
required by law) all Expenses to the Indemnitee (an "EXPENSE ADVANCE").
Notwithstanding anything in this Agreement to the contrary, prior to a
Change in Control, the Indemnitee shall not be entitled to
indemnification pursuant to this Agreement in connection with any Claim
initiated by the Indemnitee against the Company or any director or
officer of the Company (otherwise than to enforce his rights under this
Agreement) unless the Company has consented to the initiation of such
Claim.
(b) In the event of any demand by the Indemnitee for
indemnification hereunder or under the Company's Certificate of
Incorporation or By-laws, the Board of Directors of the Company shall,
within five days after such demand, designate a Reviewing Party, who
shall, if there has been a Change of Control of the Company, be the
special independent counsel referred to in Section 4 hereof. The
obligations of the Company under Section 3(a) 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 4 hereof is involved) that the Indemnitee is not
permitted to be indemnified under applicable law, and the obligation of
the Company to make an Expense Advance pursuant to Section 3(a) shall
be subject to the condition that, if, when and to the extent that the
Reviewing Party determines that the Indemnitee is not 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. Unless the Indemnitee
agrees otherwise, the Reviewing Party must render a decision within ten
days after appointment. If the Indemnitee has commenced legal
proceedings in a court of competent jurisdiction to secure a
determination that the Indemnitee may be indemnified under applicable
law, any determination made by the Reviewing Party that the Indemnitee
is not 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 hereto (as to which all rights of appeal therefrom
have been exhausted or lapsed). If there has been no determination by
the Reviewing Party or if the Reviewing Party determines that the
Indemnitee is not permitted to be indemnified in whole or in part under
applicable law, the Indemnitee shall have the right to commence
litigation in any court in the State of Delaware having subject matter
jurisdiction thereof and in which venue is proper seeking an initial
determination by the court or challenging
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any such determination by the Reviewing Party or any aspect thereof,
and the Company hereby consents to service of process and to appear in
any such proceeding. Any determination by the Reviewing Party otherwise
shall be conclusive and binding on the Company and the Indemnitee.
4. Change in Control. The Company agrees that if there is a Change in
Control of the Company, 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 the Company's
Certificate of Incorporation or By-laws, now or hereafter in effect relating to
Claims 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) who has not
otherwise performed services for the Company within the last ten years (other
than in connection with such matters) or for the Indemnitee. Such counsel among
other things, shall render its written opinion to the Company and the Indemnitee
as to whether and to what extent the Indemnitee is permitted to be indemnified
under applicable law. The Company agrees to pay the reasonable fees of the
special independent counsel, or other Reviewing Party, and to indemnify such
counsel, or other Reviewing Party, against any and all expenses (including
attorneys' fees), claims, liabilities and damages relating to this Agreement or
its engagement pursuant hereto.
5. Establishment of Trust. In the event of a Potential Change in
Control, the Company shall create a Trust for the benefit of the Indemnitee
(either alone or together with one or more other indemnitees) and from time to
time fund such Trust in such amounts as the Company's Board of Directors may
determine to satisfy Expenses reasonably anticipated to be incurred in
connection with investigating, preparing for and defending any Claim relating to
an Indemnifiable Event, and all judgments, fines, penalties and settlement
amounts of all Claims relating to an Indemnifiable Event from time to time paid
or claimed, reasonably anticipated or proposed to be paid. The terms of any
Trust established pursuant hereto shall provide that upon a Change in Control
(i) the Trust shall not be revoked or the principal thereof invaded (except as
provided in any of the circumstance described in the following clauses (ii)
through (iv)), without the written consent of the Indemnitee, (ii) the Trustee
shall advance, within two business days of a request by the Indemnitee, all
Expenses to the Indemnitee (and the Indemnitee hereby agrees to reimburse the
Trust under the circumstances under which the Indemnitee would be required to
reimburse the Company under Section 3(b) of this Agreement), (iii) the Trustee
shall promptly pay to the Indemnitee all amounts for which the Indemnitee shall
be entitled to indemnification pursuant to this Agreement or otherwise, and (iv)
all unexpended funds in such Trust shall revert to the Company upon a final
determination by the Reviewing Party or a court of competent jurisdiction, as
the case may be, that the Indemnitee has been fully indemnified under the terms
of this Agreement. The Trustee shall be a person or entity reasonably
satisfactory to the Indemnitee. Nothing in this Section 5 shall relieve the
Company of any of its obligations under this Agreement.
6. Indemnification for Additional Expenses. The Company shall indemnify
the Indemnitee against all reasonable expenses (including reasonable attorneys'
fees) and, if requested by the Indemnitee, shall (within two business days of
such request) advance such expenses to the Indemnitee, which are incurred by the
Indemnitee in connection with any claim or action brought by the Indemnitee for
(i) indemnification or advance payment of Expenses by
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the Company under this Agreement or any other agreement or Company By-law or
provision of the Company's Certificate of Incorporation now or hereafter in
effect relating to Claims for Indemnifiable Events or (ii) recovery under any
directors' and officers' liability insurance policies maintained by the Company,
regardless of whether the Indemnitee ultimately is determined to be entitled to
such indemnification, advance expense payment or insurance recovery, as the case
may be.
7. Partial Indemnity, Etc. If the Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for a portion of
the Expenses, judgments, fines, penalties and amounts paid in settlement of a
Claim but not for the total amount thereof, the Company shall indemnify the
Indemnitee for the portion thereof to which the Indemnitee is entitled.
8. No Presumption. For purposes of this Agreement, the termination of
any claim, action, suit or proceeding 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. Notwithstanding any other provision of this
Agreement, to the extent that the Indemnitee has been successful on the merits
or otherwise in defense of Claims relating 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.
9. Non-exclusivity, Etc. The rights of the Indemnitee hereunder shall
be in addition to any other rights the Indemnitee may have under the Company's
Certificate of Incorporation and By-laws or the Delaware General Corporation Law
or otherwise against the Company or any other person. To the extent that a
change in the Delaware General Corporation Law (whether by statute or judicial
decision) permits greater indemnification by agreement than would be afforded
currently under the Company's Certificate of Incorporation and By-laws and this
Agreement, it is the intent of the parties hereto that the Indemnitee shall
enjoy by this Agreement the greater benefits afforded by such change, and this
Agreement shall be deemed automatically amended to such extent without the need
for formal revision. Furthermore, if Delaware General Corporation Law changes to
limit any benefits hereunder, it is the intent of the parties that, to the
extent permitted by law, the indemnification provided hereunder for an existing
claim or one which arises from acts prior to such change shall continue as
herein provided.
10. 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 Company director or officer thereunder.
11. Amendments, Etc. No supplement, modification or amendment of this
Agreement (other than an automatic amendment under Section 9 above) shall be
binding unless executed in writing by both of the parties hereto. No waiver of
any of the provisions of this
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Agreement shall constitute a waiver of any other provisions hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.
12. 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 such papers and do all such
things as may be necessary or desirable to secure such rights, but only after
Indemnitee or a Trust established and fully funded under Section 5 above have
indemnified Indemnitee for all claims hereunder.
13. No Duplication of Payments. The Company shall not be liable under
this Agreement to make any payment in connection with any claim made against the
Indemnitee to the extent the Indemnitee has otherwise received payment (under
any insurance policy, Certificate of Incorporation, By-law or otherwise) of the
amounts otherwise indemnifiable hereunder.
14. Binding Effect, Etc. 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
or assets of the Company, spouses, heirs, and personal and legal
representatives. This Agreement shall continue in effect regardless of whether
the Indemnitee continues to serve as an officer or director of the Company or of
any other enterprise, including, without limitation, a charity or non-profit
organization or person, at the Company's request.
15. 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) are 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.
16. 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 law.
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IN WITNESS WHEREOF, the undersigned have executed this Indemnification
Agreement as of the date first above written.
CLINICAL DATA, INC.
By: ______________________
Name:
Title:
INDEMNITEE
__________________________
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