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EXHIBIT 10.1
XXXXXX.XXX, INC.
INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT, dated as of ___________, is between
XXXXXX.XXX, INC., a Delaware corporation (the "Company"), and __________________
("Indemnitee").
RECITALS
A. Indemnitee is a director or officer of the Company and in such
capacity is performing valuable services for the Company.
B. The Company and Indemnitee recognize the difficulty in
obtaining directors' and officers' liability insurance, the significant cost of
such insurance and the periodic reduction in the coverage of such insurance.
C. The Company and Indemnitee further recognize the substantial
increase in litigation subjecting directors and officers to expensive
litigation risks at the same time such liability insurance is being severely
limited.
D. The Company has adopted and its stockholders have approved
bylaws (the "Bylaws") providing for the indemnification of the Company's
directors and officers to the full extent permitted by Section 145 of the
General Corporation Law of Delaware (the "Statute").
E. The Bylaws and the Statute specifically provide that they are
not exclusive, and they thereby contemplate that contracts may be entered into
between the Company and its directors and officers with respect to
indemnification of such directors and officers.
F. To induce Indemnitee to serve or continue to serve the
Company, the Company desires to confirm the contract indemnification rights
provided in the Bylaws and agrees to provide Indemnitee with the benefits
contemplated by this Agreement.
AGREEMENTS
1. INDEMNITY OF INDEMNITEE
1.1. SCOPE
The Company agrees to hold harmless and indemnify Indemnitee to the
full extent permitted by law, notwithstanding that the basis for such
indemnification is not specifically enumerated in this Agreement, the Company's
Restated Certificate of Incorporation, the Bylaws, any other statute or
otherwise. In the event of any change, after the date of this
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Agreement, in any applicable law, statute or rule regarding the right of a
Delaware corporation to indemnify a member of its Board of Directors or an
officer, such change, to the extent it would expand Indemnitee's rights
hereunder, shall be included within Indemnitee's rights and the Company's
obligations hereunder, and, to the extent it would narrow Indemnitee's rights
or the Company's obligations hereunder, shall be excluded from this Agreement;
provided, however, that any change required by applicable laws, statutes or
rules to be applied to this Agreement shall be so applied regardless of whether
the effect of such change is to narrow Indemnitee's rights or the Company's
obligations hereunder.
1.2. NONEXCLUSIVITY
The indemnification provided by this Agreement shall not be deemed
exclusive of any rights to which Indemnitee may be entitled under the Company's
Restated Certificate of Incorporation, the Bylaws, any agreement, any vote of
stockholders or disinterested directors, the Statute or otherwise, whether as
to action in Indemnitee's official capacity or otherwise.
1.3. INCLUDED COVERAGE
If Indemnitee was or is made a party, or is threatened to be made a
party, to or is otherwise involved (including, without limitation, as a
witness) in any Proceeding (as defined below), the Company shall hold harmless
and indemnify Indemnitee from and against any and all losses, claims, damages,
liabilities or expenses, including, without limitation, attorneys' fees,
judgments, fines, ERISA excise taxes or penalties, witness fees, amounts paid
in settlement and other expenses incurred in connection with such Proceeding
(collectively, "Damages").
1.4. DEFINITION OF PROCEEDING
For purposes of this Agreement, "Proceeding" shall mean any completed,
actual, pending or threatened action, suit, claim or proceeding, whether civil,
criminal, administrative or investigative (including an action by or in the
right of the Company) and whether formal or informal, in which Indemnitee is,
was or becomes involved by reason of the fact that Indemnitee is or was a
director, officer, employee, trustee or agent of the Company or that, being or
having been such a director, officer, employee, trustee or agent, Indemnitee is
or was serving at the request of the Company as a director, officer, employee,
trustee or agent of another corporation or of a partnership, joint venture,
trust or other enterprise (collectively, a "Related Company"), including
service with respect to an employee benefit plan, whether the basis of such
proceeding is alleged action (or inaction) by Indemnitee in an official
capacity as a director, officer, employee, trustee or agent or in any other
capacity while serving as a director, officer, employee, trustee or agent;
provided, however, that, except with respect to an action to enforce the
provisions of this Agreement, "Proceeding" shall not include any action, suit,
claim or proceeding instituted by or at the direction of Indemnitee, unless
such action, suit, claim or proceeding is or was authorized by the Company's
Board of Directors.
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1.5. DETERMINATION OF ENTITLEMENT
In the event that a determination of Indemnitee's entitlement to
indemnification is required pursuant to Section 145(d) of the Statute or a
successor statute or pursuant to other applicable law, the appropriate decision
maker shall make such determination; provided, however, that Indemnitee shall
initially be presumed in all cases to be entitled to indemnification, that
Indemnitee may establish a conclusive presumption of any fact necessary to such
a determination by delivering to the Company a declaration made under penalty
of perjury that such fact is true and that, unless the Company shall deliver to
Indemnitee a written notice that Indemnitee is not entitled to indemnification
within 20 days after the Company's receipt of Indemnitee's initial written
request for indemnification, such determination shall conclusively be deemed to
have been made in favor of the Company's provision of indemnification, and that
the Company hereby agrees not to assert otherwise.
1.6. CONTRIBUTION
If the indemnification provided under Section 1.1 is unavailable by
reason of a court decision, based on grounds other than any of those set forth
in paragraphs (b) through (d) of Section 4.1, then, in respect of any
Proceeding in which the Company is jointly liable with Indemnitee (or would be
if joined in such Proceeding), the Company shall contribute to the amount of
Damages (including attorneys' fees) actually and reasonably incurred and paid
or payable by Indemnitee in such proportion as is appropriate to reflect (i)
the relative benefits received by the Company on the one hand and Indemnitee on
the other from the transaction from which such Proceeding arose and (ii) the
relative fault of the Company on the one hand and of Indemnitee on the other in
connection with the events that resulted in such Damages as well as any other
relevant equitable considerations. The relative fault of the Company on the
one hand and of Indemnitee on the other shall be determined by reference to,
among other things, the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent the circumstances resulting
in such Damages. The Company agrees that it would not be just and equitable if
contribution pursuant to this Section 1.6 were determined by pro rata
allocation or any other method of allocation that does not take account of the
foregoing equitable considerations.
1.7. SURVIVAL
The indemnification and contribution provided under this Agreement
shall apply to any and all Proceedings, notwithstanding that Indemnitee has
ceased to serve the Company or a Related Company, and shall continue so long as
Indemnitee shall be subject to any possible Proceeding, whether civil, criminal
or investigative, by reason of the fact that Indemnitee was a director or
officer of the Company or serving in any other capacity referred to in Section
1.4 of this Agreement.
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2. EXPENSE ADVANCES
2.1. GENERALLY
The right to indemnification of Damages conferred by Section 1 shall
include the right to have the Company pay Indemnitee's expenses in any
Proceeding as such expenses are incurred and in advance of such Proceeding's
final disposition (such right, an "Expense Advance").
2.2. CONDITIONS TO EXPENSE ADVANCE
The Company's obligation to provide an Expense Advance is subject to
the following conditions:
2.2.1. UNDERTAKING
If the Proceeding arose in connection with Indemnitee's
service as a director or officer of the Company (and not in any other capacity
in which Indemnitee rendered service, including service to any Related
Company), then Indemnitee or Indemnitee's representative shall have executed
and delivered to the Company an undertaking, which need not be secured and
shall be accepted without reference to Indemnitee's financial ability to make
repayment, by or on behalf of Indemnitee, to repay all Expense Advances if it
shall ultimately be determined by a final, unappealable decision rendered by a
court having jurisdiction over the parties that Indemnitee is not entitled to
be indemnified by the Company.
2.2.2. COOPERATION
Indemnitee shall give the Company such information and
cooperation as it may reasonably request and as shall be within Indemnitee's
power.
3. PROCEDURES FOR ENFORCEMENT
3.1. ENFORCEMENT
In the event that any claim for indemnity, whether an Expense Advance
or otherwise, is made hereunder and is not paid in full within 60 days after
written notice of such claim is delivered to the Company, Indemnitee may, but
need not, at any time thereafter bring suit against the Company to recover the
unpaid amount of the claim (an "Enforcement Action").
3.2. PRESUMPTIONS IN ENFORCEMENT ACTION
In any Enforcement Action, the following presumptions (and limitation
on presumptions) shall apply:
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(a) The Company expressly affirms and agrees that it has entered
into this Agreement and assumed the obligations imposed on it hereunder to
induce Indemnitee to continue as a director or officer of the Company;
(b) Neither (i) the failure of the Company (including the
Company's Board of Directors, independent or special legal counsel or the
Company's stockholders) to have made a determination prior to the commencement
of the Enforcement Action that indemnification of Indemnitee is proper in the
circumstances nor (ii) an actual determination by the Company, its Board of
Directors, independent or special legal counsel or stockholders that Indemnitee
is not entitled to indemnification shall be a defense to the Enforcement Action
or create a presumption that Indemnitee is not entitled to indemnification
hereunder; and
(c) If Indemnitee is or was serving as a director or officer of a
corporation of which a majority of the shares entitled to vote in the election
of its directors is held by the Company or in an Indemnitee or management
capacity in a partnership, joint venture, trust or other enterprise of which
the Company or a wholly owned subsidiary of the Company is a general partner or
has a majority ownership, then such corporation, partnership, joint venture,
trust or other enterprise shall conclusively be deemed a Related Company and
Indemnitee shall conclusively be deemed to be serving such Related Company at
the Company's request.
3.3. ATTORNEYS' FEES AND EXPENSES FOR ENFORCEMENT ACTION
In the event Indemnitee is required to bring an Enforcement Action,
the Company shall pay all of Indemnitee's fees and expenses in bringing and
pursuing the Enforcement Action (including attorneys' fees at any stage,
including on appeal); provided, however, that the Company shall not be required
to provide such payment for such attorneys' fees or expenses if a court of
competent jurisdiction determines that each of the material assertions made by
Indemnitee in such Enforcement Action was not made in good faith.
4. LIMITATIONS ON INDEMNITY; MUTUAL ACKNOWLEDGMENT
4.1. LIMITATIONS ON INDEMNITY
No indemnity pursuant to this Agreement shall be provided by the
Company:
(a) On account of any suit in which a final, unappealable judgment
is rendered against Indemnitee for an accounting of profits made from the
purchase or sale by Indemnitee of securities of the Company in violation of the
provisions of Section 16(b) of the Securities Exchange Act of 1934, as amended;
(b) For Damages that have been paid directly to Indemnitee by an
insurance carrier under a policy of directors' and officers' liability
insurance maintained by the Company;
(c) With respect to remuneration paid to Indemnitee if it shall be
determined by a final judgment or other final adjudication that such
remuneration was in violation of law;
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(d) On account of Indemnitee's conduct which is finally adjudged
to have been intentional misconduct, a knowing violation of law, a violation of
Section 174 of the Statute or a transaction from which Indemnitee derived an
improper personal benefit; or
(e) If a final decision by a court having jurisdiction in the
matter shall determine that such indemnification is not lawful.
4.2. SEC UNDERTAKING
Indemnitee understands and acknowledges that the Company may be
required in the future to undertake with the Securities and Exchange Commission
(the "SEC") to submit in certain circumstances the question of indemnification
to a court for a determination of the Company's right under public policy to
indemnify Indemnitee.
5. NOTIFICATION AND DEFENSE OF CLAIM
5.1. NOTIFICATION
Promptly after receipt by Indemnitee of notice of the commencement of
any Proceeding, Indemnitee shall, if a claim in respect thereof is to be made
against the Company under this Agreement, notify the Company of the
commencement thereof; but the omission so to notify the Company will not,
however, relieve the Company from any liability which it may have to Indemnitee
under this Agreement unless and only to the extent that such omission can be
shown to have prejudiced the Company's ability to defend the Proceeding.
5.2. DEFENSE OF CLAIM
With respect to any such Proceeding as to which Indemnitee notifies
the Company of the commencement thereof:
(a) The Company may participate therein at its own expense;
(b) The Company, jointly with any other indemnifying party
similarly notified, may assume the defense thereof, with counsel satisfactory
to Indemnitee. After notice from the Company to Indemnitee of its election so
to assume the defense thereof, the Company shall not be liable to Indemnitee
under this Agreement for any legal or other expenses (other than reasonable
costs of investigation) subsequently incurred by Indemnitee in connection with
the defense thereof unless (i) the employment of counsel by Indemnitee has been
authorized by the Company, (ii) Indemnitee shall have reasonably concluded that
there may be a conflict of interest between the Company (or any other person or
persons included in the joint defense) and Indemnitee in the conduct of the
defense of such action, or (iii) the Company shall not, in fact, have employed
counsel to assume the defense of such action, in each of which cases the fees
and expenses of counsel shall be at the Company's expense. The Company shall
not be entitled to assume the defense of any Proceeding brought by or on behalf
of the Company or as to which Indemnitee shall have reasonably made the
conclusion provided for in (ii) above;
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(c) The Company shall not be liable to Indemnitee under this
Agreement for any amounts paid in settlement of any Proceeding effected without
its written consent;
(d) The Company shall not settle any action or claim in any manner
that would impose any penalty or limitation on Indemnitee without Indemnitee's
written consent; and
(e) Neither the Company nor Indemnitee shall unreasonably withhold
its consent to any proposed settlement, provided that Indemnitee may withhold
consent to any settlement that does not provide a complete release of
Indemnitee.
6. SEVERABILITY
Nothing in this Agreement is intended to require or shall be construed
as requiring the Company to do or to fail to do any act in violation of
applicable law. The Company'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 6, and if this Agreement or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, the Company
shall nevertheless indemnify or make contribution to 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.
7. GOVERNING LAW; BINDING EFFECT; AMENDMENT AND TERMINATION
(a) This Agreement shall be interpreted and enforced in accordance
with the laws of Delaware.
(b) This Agreement shall be binding on Indemnitee and on the
Company and its successors and assigns (including any transferee of all or
substantially all of its assets and any successor by merger or otherwise by
operation of law), and shall inure to the benefit of Indemnitee and
Indemnitee's heirs, personal representatives and assigns and to the benefit of
the Company and its successors and assigns. The Company shall not effect any
sale of substantially all of its assets, merger, consolidation or other
reorganization in which it is not the surviving entity, unless the surviving
entity agrees in writing to assume all such obligations of the Company under
this Agreement.
(c) No amendment, modification, termination or cancellation of
this Agreement shall be effective unless in writing signed by both parties
hereto.
8. NOTICES
All notices, claims and other communications hereunder shall be in
writing and made by hand delivery, registered or certified mail (postage
prepaid, return receipt requested), facsimile or overnight air courier
guaranteeing next-day delivery:
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(a) If to the Company, to: with a copy to:
Xxxxxx.xxx, Inc. Xxxxxxx Coie
0000 Xxxxxx Xxxxxx 0000 Xxxxx Xxxxxx
0xx Xxxxx 00xx Xxxxx
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000-0000
Attention: Xxxx Xxxxxx, Esq. Attention: L. Xxxxxxxx Xxxxxx, Esq.
(b) If to Indemnitee, to the address specified on the last page of
this Agreement
or to such other address as either party may from time to time furnish to the
other party by a notice given in accordance with the provisions of this Section
8. All such notices, claims and communications shall be deemed to have been
duly given if (i) personally delivered, at the time delivered, (ii) mailed,
five days after dispatched, (iii) sent by facsimile transmission, upon
confirmation of receipt, and (iv) sent by any other means, upon receipt.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
and as of the day and year first above written.
XXXXXX.XXX, INC.,
a Delaware corporation
By:________________________________
Title:_____________________________
INDEMNITEE:
___________________________________
[signature of indemnitee]
Address:
___________________________________
___________________________________
___________________________________
with a copy to:
___________________________________
___________________________________
___________________________________
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