1
EXHIBIT 2.09
MICRO FOCUS GROUP plc
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is made effective as of
_______ ___, 1997 by and between Micro Focus Group plc, a corporation organized
under the laws of England and Wales (the "Company"), and ______________, the
undersigned officer or director of the Company and/or one or more of its
subsidiaries ("Indemnitee").
WHEREAS, the Company and Indemnitee recognize the increasing
difficulty in obtaining directors' and officers' liability insurance, 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 officers and directors
to expensive litigation risks at the same time as the availability and coverage
of liability insurance has been severely limited;
WHEREAS, Indemnitee does not regard the current protection available
as adequate under the present circumstances, and Indemnitee and other officers
and directors of the Company and/or its subsidiaries may not be willing to
serve, or to continue to serve, as officers and directors thereof without
additional protection;
WHEREAS, the Company desires to attract and to retain the services of
highly qualified individuals, such as Indemnitee, to serve as officers and
directors of the Company and/or its subsidiaries and to indemnify such officers
and directors so as to provide them with the maximum protection permitted by
law;
WHEREAS, by means of this Agreement, the Company seeks to provide
contractual protection for officers and directors of both the Company and its
subsidiaries, and the Board of Directors of the Company ("Board") has
determined that adequate consideration and direct and indirect benefit to the
Company exists for the indemnification obligations hereby created;
NOW, THEREFORE, the Company and Indemnitee hereby agree as follows:
1. EFFECTIVENESS OF AGREEMENT
To the extent that the indemnification permitted under the
terms of certain provisions of this Agreement exceeds the scope of the
indemnification permitted to be given by the Company under the laws of England
(including, without limitation, Sections 310 and 727 of the Companies Act
1985), such provisions shall not be effective and in particular shall not apply
to indemnify the Indemnitee against any fine which may be imposed upon the
Indemnitee in any criminal proceedings or against any liability to the Company
which the Indemnitee may be adjudged to have in any civil proceedings or may
agree to discharge in the course of settlement of any civil proceedings. In
all other respects, the balance of this Agreement shall be effective as of the
date set forth above and may apply to acts or omissions of Indemnitee which
occurred prior to such date if Indemnitee was an officer, director, employee or
other agent of the Company and/or one of its subsidiaries, or was serving at
the request of the Company and/or one of its subsidiaries
2
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, at the time such act or omission
occurred.
2. INDEMNIFICATION
(a) Third Party Proceedings. The Company shall indemnify
Indemnitee if Indemnitee is or was a party, or is threatened to be made a
party, to any threatened, pending or completed action or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the Company) by reason of the fact that Indemnitee is or was a
director, officer, employee or agent of the Company or any subsidiary of the
Company ("Subsidiary"), by reason of any action or inaction on the part of
Indemnitee while an officer or director or by reason of the fact that
Indemnitee is or was serving at the request of the Company or any Subsidiary as
a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against judgments, fines, amounts
paid in settlement (if such settlement is approved in advance by the Company,
which approval shall not be unreasonably withheld) and, to the fullest extent
permitted by law, expenses (including reasonable attorney's fees) actually and
reasonably incurred by Indemnitee in connection with such action or proceeding;
provided, however, that the Company may only indemnify Indemnitee with respect
to the defense of a part of a proceeding (whether civil or criminal) which
relates to any negligence, default, breach of duty or breach of trust of
Indemnitee if: (i) the judgment in such part of the proceeding is given in
Indemnitee's favor or Indemnitee is acquitted; or (ii) a court of competent
jurisdiction determines, based on all the facts and circumstances, that
Indemnitee acted honestly and reasonably under the circumstances and grants
relief to Indemnitee pursuant to Section 727 of the Companies Xxx 0000.
(b) Proceedings By or in the Right of the Company. In the
event that the Indemnitee was or is a party or is threatened to be made a party
to any threatened, pending or completed action or proceeding by or in the right
of the Company or any Subsidiary 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
Company or any Subsidiary by reason of any action or inaction on the part of
Indemnitee while an officer or director or by reason of the fact that Indemnitee
is or was serving at the request of the Company or any Subsidiary as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, the Company shall indemnify the Indemnitee, to the
fullest extent permitted by law, against expenses (including attorney's fees)
and amounts paid in settlement, in each case to the extent actually and
reasonably incurred by Indemnitee in connection with the defense of such action
or proceeding; provided, however, that the Company may only indemnify
Indemnitee with respect to the defense of any part of such proceeding which
relates to any negligence, default, breach of duty or breach of trust of
Indemnitee if: (i) the judgment in such part of the proceeding is given in
Indemnitee's favor; or (ii) a court of competent jurisdiction determines, based
on all the facts and circumstances, that Indemnitee acted honestly and
reasonably under the circumstances and grants relief to Indemnitee pursuant to
Section 727 of the Companies Xxx 0000.
3. NOTICE AND OTHER INDEMNIFICATION PROCEDURES;
DETERMINATION OF RIGHT TO INDEMNIFICATION
(a) Notice of Claim. Promptly after receipt by
Indemnitee of notice of the commencement of or the threat of commencement of
any proceeding, Indemnitee shall, if Indemnitee believes that indemnification
with respect thereto may be sought from the Company
2
3
under this Agreement, notify the Company of the commencement or threat of
commencement thereof.
(b) Notice to Insurer. If, at the time of the receipt of
a notice of the commencement of a proceeding pursuant to Section 3(a) hereof,
the Company has directors' and officers' insurance in effect with respect to
Indemnitee, 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 use its reasonable efforts 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 directors' and
officers' insurance policies.
(c) Assumption of Defense. In the event the Company
shall be obligated to indemnify the Indemnitee with respect to any proceeding
against Indemnitee, the Company, if appropriate, shall be entitled to assume
the defense of such proceeding, with counsel approved by Indemnitee (which
approval shall not be unreasonably withheld), upon the delivery to Indemnitee
of written notice of its election to do so. After delivery of such notice,
approval of such counsel by Indemnitee and the retention of such counsel by the
Company, the Company will not be liable to Indemnitee under this Agreement for
any fees of counsel subsequently incurred by Indemnitee through the engagement
of separate counsel with respect to the same proceeding; provided, however,
that: (a) Indemnitee shall have the right to employ his own counsel in any
such proceeding at Indemnitee's expense; and (b) Indemnitee shall have the
right to employ his own counsel in connection with any such proceeding, at the
expense of the Company, if (i) the employment of such counsel by Indemnitee has
been previously authorized by the Company, (ii) Indemnitee shall have
reasonably concluded that there may be a conflict of interest between the
Company or any Subsidiary and Indemnitee in the conduct of any such defense or
(iii) the Company shall not, in fact, have employed counsel to assume the
defense of such proceeding.
(d) Indemnification Upon Prevailing on the Merits. To
the extent Indemnitee has been successful on the merits or otherwise in defense
of any proceeding referred to in Section 2 of this Agreement or in the defense
of any claim, issue or matter described therein, the Company shall indemnify
Indemnitee against expenses actually and reasonably incurred by him in
connection with the investigation, defense or appeal of such proceeding, or
such claim, issue or matter, as the case may be.
(e) Indemnity Unless Ineligible. In the event that
Section 3(d) is inapplicable, or does not apply to the entire proceeding, the
Company shall nonetheless indemnify Indemnitee to the fullest extent permitted
by law, subject to the limitations expressly specified in this Agreement. The
rights of the Company or Indemnitee to appeal any court decision shall be
governed by the applicable laws and rules governing appeals of such court
decision.
(f) Dispute Expenses. Notwithstanding any other
provision in this Agreement to the contrary, the Company shall indemnify
Indemnitee against all expenses incurred by Indemnitee in connection with any
hearing or proceeding between the Company and Indemnitee involving the
interpretation or enforcement of the rights of Indemnitee under this Agreement
unless a court of competent jurisdiction finds that each of the material claims
and/or defenses of Indemnitee in any such proceeding was frivolous or not made
in good faith.
3
4
4. ADDITIONAL INDEMNIFICATION RIGHTS; NONEXCLUSIVITY
(a) Scope. Notwithstanding any other provision of this
Agreement, the Company 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 Company's
Articles of Association 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 an English company to indemnify a member of its board of directors or
any other officer, such changes shall be, ipso facto, within the purview of
Indemnitee's rights and Company's obligations, under this Agreement. In the
event of any change in any applicable law, statute or rule which narrows the
right of an English company to indemnify a member of its Board of Directors or
any other 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 Company's Articles of Association (including any similar
indemnification agreement between Indemnitee and any Subsidiary), any agreement,
any vote of shareholders or disinterested directors, 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 may have ceased to serve in such
capacity at the time of any action or other covered proceeding.
(c) Exception for Amounts Otherwise Covered. Notwith-
standing any other provisions hereof, the Company shall not be obligated to
indemnify Indemnitee for liabilities of any type whatsoever (including, but not
limited to, judgments, fines, excise taxes or penalties assessed with respect to
employee benefit plans, and amounts paid in settlement) to the extent such have
been paid directly to Indemnitee by directors' and officers' insurance or by any
Subsidiary pursuant to any indemnification agreement, any provision of any
Subsidiary's charter documents, applicable law or otherwise.
5. PARTIAL INDEMNIFICATION
If Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion of the
expenses, judgments, fines or penalties actually or reasonably incurred by him
in the investigation, defense, appeal or settlement of any civil or criminal
action or proceeding, but not, however, for the total amount thereof, the
Company shall nevertheless indemnify Indemnitee for the portion of such
expenses, judgments, fines or penalties to which Indemnitee is entitled.
6. MUTUAL ACKNOWLEDGMENT
Both the Company and Indemnitee acknowledge that in certain
instances, English law, U.S. federal or state law or applicable public policy
may prohibit the Company from indemnifying its directors and officers under this
Agreement or otherwise. Indemnitee understands and acknowledges that the
Company has undertaken or may be required in the future
4
5
to undertake with the U.S. Securities and Exchange Commission to submit the
question of indemnification to a court in certain circumstances for a
determination of the Company's right under public policy to indemnify
Indemnitee.
7. DIRECTORS' AND OFFICERS' LIABILITY INSURANCE
The Company shall, from time to time, make the good faith
determination whether or not it is practicable for the Company or a Subsidiary
to obtain and maintain a policy or policies of directors' and officers'
liability insurance with reputable insurance companies providing Indemnitee
with coverage for losses from wrongful acts, or to ensure the Company's
performance of its indemnification obligations under this Agreement. Among
other considerations, the Company will weigh the costs of obtaining such
insurance coverage against the protection afforded by such coverage. In all
policies of directors' and officers' 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 other similarly situated officers and directors.
Notwithstanding the foregoing, the Company shall have no obligation to obtain
or maintain such insurance if the Company 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 subsidiary or parent of the Company.
8. SEVERABILITY
Nothing in this Agreement is intended to require or shall be
construed as requiring the Company to do or 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 8. If any provision of this Agreement shall be found to unenforce-
able or invalidated on any ground by any court of competent jurisdiction, then
it shall be interpreted, to the extent possible, to enhance its enforceability,
or if necessary, stricken from this Agreement, in order to best achieve the
intent of the parties to this Agreement and to indemnify Indemnitee to the
fullest extent permitted by applicable law. Nonetheless, the unenforceability
or invalidity of any provision of this Agreement as applied to certain
circumstances shall not effect the enforceability or validity of such provision
applied to other circumstances or any other provision of this Agreement.
9. EXCEPTIONS
Any other provision herein to the contrary notwithstanding,
the Company shall not be obligated pursuant to the terms of this Agreement:
(a) Excluded Acts. To indemnify Indemnitee for any acts
or omissions or transactions from which an officer or director may not be
relieved of liability, or against which an officer or director may not be
indemnified, under English law.
(b) Claims Initiated by Indemnitee. To indemnify
Indemnitee with respect to proceedings or claims initiated or brought
voluntarily by Indemnitee and not by way of defense or mandatory counterclaim,
except with respect to proceedings specifically authorized by the Board or
brought to establish or enforce a right to indemnification arising under this
Agreement, the charter documents of the Company or any Subsidiary, or any
statute or law or otherwise, but such
5
6
indemnification may be provided by the Company in specific cases if the Board
finds it to be appropriate and permissible under English law; or
(c) Lack of Good Faith. To indemnify 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 the Indemnitee in such proceeding was not made in
good faith or was frivolous; or
(d) Insured Claims. To indemnify Indemnitee for
liabilities of any type whatsoever (including, without limitation, judgments,
fines, excise taxes or penalties relating to employee benefit plans, taxes or
penalties, and amounts paid in settlement) which have been paid directly to
Indemnitee by an insurance carrier under a policy of directors' and officers'
liability insurance maintained by the Company or any Subsidiary; or
(e) Claims Under Section 16(b). To indemnify Indemnitee
for expenses and 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
(f) Unauthorized Settlements. To indemnify Indemnitee
hereunder for any amounts paid in settlement of a proceeding unless the Company
consents in advance in writing to such settlement, which consent shall not be
unreasonably withheld.
10. CONSTRUCTION OF CERTAIN PHRASES
For purposes of this Agreement, references to "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 Company or any
Subsidiary" shall include any service as a director, officer, employee or agent
of the Company or any Subsidiary which imposes duties on, or involves services
by, such director, officer, employee or agent with respect to an employee
benefit plan, its participants, or beneficiaries.
11. COUNTERPARTS
This Agreement may be executed in one or more counterparts,
each of which shall constitute an original.
12. SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon the Company and its
successors and assigns, and shall inure to the benefit of Indemnitee and
Indemnitee's estate, heirs, legal representative and assigns.
13. ATTORNEYS' FEES
In the event that any action is instituted by Indemnitee under
this Agreement to enforce or interpret any of the terms hereof, Indemnitee
shall be entitled to be paid all court costs and expenses, including reasonable
attorneys' fees, incurred by Indemnitee with respect to such action, unless as
a part of such action, a 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
6
7
or were frivolous. In the event of an action instituted by or in the name of
the Company 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, 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.
14. NOTICE
All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed duly given: (i) if
delivered by hand and receipted for by the party addressee, on the date of such
receipt; (ii) if mailed by domestic certified or registered mail, return
receipt requested, with postage prepaid to a third party addressee located in
the same country, on the third business day after the date postmarked; or (iii)
if mailed by an internationally recognized express courier with written
confirmation of delivery, upon delivery to the third party addressee.
Addresses for notice to either party are as shown on the signature page of this
Agreement, or as subsequently modified by written notice.
15. CONSENT TO JURISDICTION
The Company and Indemnitee each hereby irrevocably consent to
the jurisdiction of the courts of the State of California, U.S.A. and the
courts of England for all purposes in connection with any action or proceeding
which arises out of or relates to this Agreement and agree that, unless
otherwise provided in this Agreement, any action instituted under this
Agreement shall be brought only in the state courts of the State of California,
U.S.A. or, if the parties hereto mutually agree, in the courts of England.
Service may be made by first class mail with respect to any actions arising out
of or relating to this Agreement.
16. CHOICE OF LAW
This Agreement shall be governed by and its provisions
construed in accordance with the laws of the State of California, U.S.A. as
applied to contracts between California residents entered into and to be
performed entirely within the State of California, U.S.A., except to the extent
that the Companies Act of 1985 or other laws of England apply to govern or
limit the rights and obligations hereby created.
[The remainder of this page is left intentionally blank]
7
8
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
MICRO FOCUS GROUP plc INDEMNITEE
By:
---------------------------------- -----------------------------------
(Signature)
Name: Name:
------------------------------- -----------------------------
Title: Address:
------------------------------ ---------------------------
---------------------------
Address: The Lawn, Xxx Xxxx Xxxx ---------------------------
Xxxxxxx, XX 00 0XX
Xxxxxx Xxxxxxx
8
