FORM OF INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT ("Agreement"), dated as of _______, by and
between xxxxxxxx.xxx Corporation, a Delaware corporation (the "Corporation"),
and (the "Indemnitee").
RECITALS
WHEREAS, the Amended and Restated Certificate of Incorporation of the
Corporation (the "Charter") and the By-laws of the Corporation (the "By-laws")
provide for indemnification by the Corporation of its directors and officers as
provided therein, and the Indemnitee has agreed to serve as a director and/or
officer of the Corporation or has agreed to continue to serve as a director
and/or officer of the Corporation;
WHEREAS, to provide the Indemnitee with additional contractual assurance of
protection against personal liability in connection with certain proceedings
described below, the Corporation desires to enter into this Agreement;
WHEREAS, the General Corporation Law of the State of Delaware (the "DGCL")
expressly recognizes that the indemnification provisions of the DGCL are not
exclusive of any other rights to which a person seeking indemnification may be
entitled under the Charter or By-laws, a resolution of stockholders or
directors, an agreement or otherwise, and this Agreement is being entered into
pursuant to and in furtherance of the Charter and By-laws, as permitted by the
DGCL and as authorized by the Charter and the Board of Directors of the
Corporation;
WHEREAS, in order to induce the Indemnitee to serve or continue to serve as
a director and/or officer of the Corporation and in consideration of the
Indemnitee so serving, the Corporation desires to indemnify the Indemnitee and
to make arrangements pursuant to which the Indemnitee may be advanced or
reimbursed expenses incurred by the Indemnitee in certain proceedings described
below, according to the terms and conditions set forth below;
NOW, THEREFORE, in consideration of the Indemnitee's agreement to serve or
continue to serve as a director and/or officer of the Corporation and of other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Corporation has agreed to the covenants set forth herein for
the purpose of further securing to the Indemnitee the indemnification provided
by the Charter and the By-laws:
1. INDEMNIFICATION.
(a) In accordance with the provisions of paragraph (b) of this Section 1,
the Corporation shall hold harmless and indemnify the Indemnitee against any and
all expenses, liabilities and losses (including, without limitation,
investigation expenses, expert witnesses' and attorneys' fees and expenses,
judgments, penalties, fines, ERISA excise taxes, amounts paid or to be paid in
settlement and any federal, state, local or foreign taxes imposed on the
Indemnitee as a result of the actual or deemed receipt of any payments under
this Agreement, including all interest, assessments and other charges paid or
payable in connection with or in respect of such expenses, liabilities and
losses) actually incurred by the Indemnitee (net of any related insurance
proceeds or other amounts received by the Indemnitee or paid by or on behalf of
the Corporation on the Indemnitee's behalf) in connection with any threatened,
pending or completed action, suit, arbitration or proceeding or any hearing,
inquiry or investigation, whether brought by or in the right of the Corporation
or otherwise, that the Indemnitee in good faith believes might lead to the
institution of any such action, suit, arbitration or proceeding, whether civil,
criminal, administrative, investigative or other, or any appeal therefrom, in
which the Indemnitee was, is or becomes a party, witness or other participant,
or was, is or becomes threatened to be made a party, witness or other
participant, (a "Proceeding") based upon, arising from, relating to, or by
reason of the fact that the Indemnitee is, was, shall be, or shall have been a
director and/or officer of the Corporation (or any subsidiary of the
Corporation) or is or was serving, shall serve, or shall have served at the
request of the Corporation as a director, officer, partner, trustee, employee,
fiduciary or agent ("Affiliate Indemnitee") of another foreign or domestic
corporation or non-profit corporation, cooperative, partnership, joint venture,
trust, or other incorporated or unincorporated enterprise (each, a "Corporation
Affiliate"). All amounts payable by the Corporation pursuant to this Section 1
and Section 2 hereof are herein referred to as "Indemnified Amounts."
(b) In providing the foregoing indemnification, the Corporation shall, with
respect to a Proceeding, hold harmless and indemnify the Indemnitee to the
fullest extent required by the DGCL (including, without limitation, Section
145(c) of the DGCL) and to the fullest extent permitted by the Express Permitted
Indemnification Provisions (as hereinafter defined) of the DGCL. For purposes of
this Agreement, the Express Permitted Indemnification Provisions of the DGCL
shall mean indemnification as permitted by Section 145 of the DGCL or by any
amendment thereof or other statutory provisions expressly permitting such
indemnification which is adopted after the date hereof (but, in the case of any
such amendment, only to the extent that such amendment permits the Corporation
to provide broader indemnification rights than said law required or permitted
the Corporation to provide prior to such amendment).
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(c) Without limiting the generality of the foregoing, the Indemnitee shall
be entitled to the rights of indemnification provided in this Section 1 for any
expenses actually incurred in any Proceeding initiated by or in the right of the
Corporation unless the Indemnitee shall have been adjudged to be liable to the
Corporation; provided, however, that, despite the adjudication of liability but
in view of all the circumstances of the case, the Indemnitee shall be entitled
to any indemnification by the Corporation that the court or other decision maker
of any Proceeding deems proper, as permitted by Section 145(b) of the DGCL.
(d) If the Indemnitee is entitled under this Agreement to indemnification
by the Corporation for some or a portion of the Indemnified Amounts but not,
however, for all of the total amount thereof, the Corporation shall nevertheless
indemnify the Indemnitee for the portion thereof to which the Indemnitee is
entitled.
2. OTHER INDEMNIFICATION ARRANGEMENTS. The DGCL and the Charter and By-laws
permit the Corporation to purchase and maintain insurance or furnish similar
protection or make other arrangements, including, but not limited to, providing
a trust fund, letter of credit, or surety bond ("Indemnification Arrangements")
on behalf of the Indemnitee against any liability asserted against him or her or
incurred by or on behalf of him or her in such capacity as a director or officer
of the Corporation or an Affiliated Indemnitee, or arising out of his or her
status as such, whether or not the Corporation would have the power to indemnify
him or her against such liability under the provisions of this Agreement or
under the DGCL, as it may then be in effect. The purchase, establishment, and
maintenance of any such Indemnification Arrangement shall not in any way limit
or affect the rights and obligations of the Corporation or of the Indemnitee
under this Agreement except as expressly provided herein, and the execution and
delivery of this Agreement by the Corporation and the Indemnitee shall not in
any way limit or affect the rights and obligations of the Corporation or the
other party or parties thereto under any such Indemnification Arrangement.
3. ADVANCE PAYMENT OF INDEMNIFIED AMOUNTS.
(a) The Indemnitee hereby is granted the right to receive in advance of a
final, non-appealable judgment or other final adjudication of a Proceeding (a
"Final Determination") the amount of any and all expenses, including, without
limitation, investigation expenses, expert witnesses' and attorneys' fees and
expenses and other expenses expended or incurred, or expected to be expended or
incurred, by the Indemnitee in connection with any Proceeding or otherwise
expended or incurred by the Indemnitee (such amounts so expended or incurred, or
expected to be expended or incurred, being referred to as "Advanced Amounts").
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(b) In making any written request for Advanced Amounts, the Indemnitee
shall submit to the Corporation a schedule setting forth in reasonable detail
the dollar amount expended or incurred and expected to be expended or incurred.
Each such listing shall be supported by the xxxx, agreement, or other
documentation relating thereto, each of which shall be appended to the schedule
as an exhibit. In addition, before the Indemnitee may receive Advanced Amounts
from the Corporation, the Indemnitee shall provide to the Corporation (i) a
written affirmation of the Indemnitee's good faith belief that the applicable
standard of conduct required for indemnification by the Corporation has been
satisfied by the Indemnitee, and (ii) a written undertaking by or on behalf of
the Indemnitee to repay the Advanced Amount if it shall ultimately be determined
that the Indemnitee has not satisfied any applicable standard of conduct and is
not entitled to be indemnified by the Corporation. The written undertaking
required from the Indemnitee shall be an unlimited general obligation of the
Indemnitee but need not be secured. The Corporation shall pay to the Indemnitee
all Advanced Amounts within twenty (20) days after receipt by the Corporation of
all information and documentation required to be provided by the Indemnitee
pursuant to this paragraph.
4. PROCEDURE FOR PAYMENT OF INDEMNIFIED AMOUNTS.
(a) To obtain indemnification under this Agreement, the Indemnitee shall
submit to the Corporation a written request for payment of the appropriate
Indemnified Amounts, including with each request documentation and information
as is reasonably available to the Indemnitee and reasonably necessary to
determine whether and to what extent the Indemnitee is entitled to
indemnification. The Secretary of the Corporation shall, promptly upon receipt
of such a request for indemnification, advise the Board of Directors in writing
that the Indemnitee has requested indemnification.
(b) The Corporation shall pay the Indemnitee the appropriate Indemnified
Amounts unless it is established that the Indemnitee has not met any applicable
standard of conduct of the Express Permitted Indemnification Provisions. For
purposes of determining whether the Indemnitee is entitled to Indemnified
Amounts, in order to deny indemnification to the Indemnitee the Corporation has
the burden of proof in establishing that the Indemnitee did not meet the
applicable standard of conduct. In this regard, a termination of any Proceeding
by judgment, order or settlement does not create a presumption that the
Indemnitee did not meet the requisite standard of conduct; provided, however,
that the termination of any criminal proceeding by a conviction, a plea of nolo
contendere or its equivalent or an entry of an order of probation prior to
judgment, creates a rebuttable presumption that the Indemnitee did not meet the
applicable standard of conduct.
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(c) Any determination that the Indemnitee has not met the applicable
standard of conduct required to qualify for indemnification shall be made (i)
either by the Board of Directors by a majority vote of a quorum consisting of
directors who were not parties of such action, suit or proceeding; or (ii) by
independent legal counsel (who may be the outside counsel regularly employed by
the Corporation); provided that the manner in which (and, if applicable, the
counsel by which) the right to indemnification is to be determined shall be
approved in advance in writing by both the highest ranking executive officer of
the Corporation who is not party to such action (sometimes hereinafter referred
to as "Senior Officer") and by the Indemnitee. In the event that such parties
are unable to agree on the manner in which any such determination is to be made,
such determination shall be made by independent legal counsel retained by the
Corporation especially for such purpose, provided that such counsel be approved
in advance in writing by both the said Senior Officer and the Indemnitee and
provided further, that such counsel shall not be outside counsel regularly
employed by the Corporation. The fees and expenses of counsel in connection with
making said determination contemplated hereunder shall be paid by the
Corporation, and, if requested by such counsel, the Corporation shall give such
counsel an appropriate written agreement with respect to the payment of such
fees and expenses and such other matters as may be reasonably requested by
counsel.
(d) The Corporation will use its reasonable best efforts to conclude as
soon as practicable any required determination pursuant to subparagraph (c)
above and promptly will advise the Indemnitee in writing with respect to any
determination that the Indemnitee is or is not entitled to indemnification,
including a description of any reason or basis for which indemnification has
been denied. Payment of any applicable Indemnified Amounts will be made to the
Indemnitee within ten (10) days after any determination of the Indemnitee's
entitlement to indemnification.
(e) Notwithstanding the foregoing, the Indemnitee may, at any time after
sixty (60) days after a request for Indemnified Amounts has been submitted to
the Corporation (or upon receipt of written notice that a request for
Indemnified Amounts has been rejected, if earlier) and before three (3) years
after a request for Indemnified Amounts has been filed, petition a court of
competent jurisdiction to determine whether the Indemnitee is entitled to
indemnification under the provisions of this Agreement, and such court shall
thereupon have the exclusive authority to make such determination unless and
until such court dismisses or otherwise terminates such action without having
made such determination. The court shall, as petitioned, make an independent
determination of whether the Indemnitee is entitled to indemnification as
provided under this Agreement, irrespective of any prior determination made by
the Board of Directors or independent counsel. If the court shall determine that
the Indemnitee is entitled to indemnification as to any claim, issue or matter
involved in the Proceeding with respect to which there has been no prior
determination pursuant to this Agreement or with respect to which there
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has been a prior determination that the Indemnitee was not entitled to
indemnification hereunder, the Corporation shall pay all expenses (including
attorneys' fees and disbursements) actually incurred by the Indemnitee in
connection with such judicial determination.
(f) EXCLUDED COVERAGE. The Corporation shall have no obligation to
indemnify the Indemnitee for and hold him or her harmless from any loss or
expense which has been determined, by final adjudication by a court of competent
jurisdiction, to constitute an Excluded Claim (as hereinafter defined). For
purposes of this Agreement, an Excluded Claim shall mean any payment for losses
or expenses in connection with any claim:
(i) Based upon or attributable to the Indemnitee gaining in fact any
personal profit or advantage to which the Indemnitee is not entitled;
(ii) For the return by the Indemnitee of any remuneration paid to the
Indemnitee without the previous approval of the stockholders of the Corporation
which is illegal;
(iii) For an accounting of profits in fact made from the purchase or
sale by the Indemnitee of securities of the Corporation within the meaning of
Section 16 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or similar provisions of any state law;
(iv) Resulting from the Indemnitee's knowingly fraudulent, dishonest
or willful misconduct; or
(v) The payment of which by the Corporation under this Agreement is
not permitted by applicable law.
5. AGREEMENT NOT EXCLUSIVE; SUBROGATION ETC.
(a) This Agreement shall not be deemed exclusive of and shall not diminish
any other rights the Indemnitee may have to be indemnified or insured or
otherwise protected against any liability, loss, or expense by the Corporation,
any subsidiary of the Corporation, or any other person or entity under any
charter, by-laws, law, agreement, policy of insurance or similar protection,
vote of stockholders or directors, disinterested or not, or otherwise, whether
or not now in effect, both as to actions in the Indemnitee's official capacity,
and as to actions in another capacity while holding such office. The
Corporation's obligations to make payments of Indemnified Amounts hereunder
shall be satisfied to the extent that payments with respect to the same
Proceeding (or part thereof) have been made to or for the benefit of the
Indemnitee by reason of the indemnification of the Indemnitee pursuant to any
other arrangement made by the Corporation for the benefit of the Indemnitee;
provided, however, that in no event shall the Indemnitee be required to maintain
any
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other such arrangement or request payment pursuant to any other such arrangement
before seeking to be indemnified hereunder.
(b) In the event the Indemnitee shall receive payment from any insurance
carrier or from the plaintiff in any Proceeding against such Indemnitee in
respect of Indemnified Amounts after payments on account of all or part of such
Indemnified Amounts have been made by the Corporation pursuant hereto, such
Indemnitee shall promptly reimburse to the Corporation the amount, if any, by
which the sum of such payment by such insurance carrier or such plaintiff and
payments by the Corporation or pursuant to arrangements made by the Corporation
to the Indemnitee exceeds such Indemnified Amounts; provided, however, that such
portions, if any, of such insurance proceeds that are required to be reimbursed
to the insurance carrier under the terms of its insurance policy, such as
deductible or co-insurance payments, shall not be deemed to be payments to the
Indemnitee hereunder. In addition, upon payment of Indemnified Amounts
hereunder, the Corporation shall be subrogated to the rights of the Indemnitee
receiving such payments to the extent thereof against any insurance carrier (to
the extent permitted under such insurance policies) or in respect of such
Indemnified Amounts and the Indemnitee shall execute and deliver any and all
instruments and documents and perform any and all other acts or deeds which the
Corporation deems necessary or advisable to secure such rights. Such right of
subrogation shall be terminated upon receipt by the Corporation of the amount to
be reimbursed by the Indemnitee pursuant to the first sentence of this paragraph
(b).
6. INSURANCE COVERAGE. In the event that the Corporation maintains directors
and officers liability insurance to protect itself and any director or officer
of the Corporation against any expense, liability or loss, such insurance shall
cover the Indemnitee to at least the same extent as any other director or
officer of the Corporation.
7. ESTABLISHMENT OF TRUST. In the event of a potential business combination or
change in control of the Corporation of the type required to be reported under
Item 1 of Form 8-K promulgated under the Exchange Act (collectively, a "Change
in Control"), the Corporation shall, upon written request by the Indemnitee,
create a trust (the "Trust") for the benefit of the Indemnitee and from time to
time upon written request of the Indemnitee shall fund the Trust in an amount
sufficient to satisfy any and all Indemnified Amounts (including, without
limitation, Advanced Amounts) which are actually paid (but not as yet
reimbursed) or which the Indemnitee reasonably determines from time to time may
be payable by the Corporation under this Agreement. The amount or amounts to be
deposited in the Trust pursuant to the foregoing funding obligation shall be
determined by the independent legal counsel appointed under Section 4 hereof.
The terms of the Trust shall provide that following its establishment: (i) the
Trust shall not be revoked or the
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principal thereof invaded without the written consent of the Indemnitee; (ii)
the trustee of the Trust shall advance, within twenty (20) days of a request by
the Indemnitee, any and all Advanced Amounts 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 Corporation under
Section 3(b)(ii) hereof; (iii) the Corporation shall continue to fund the Trust
from time to time in accordance with the funding obligations set forth above;
(iv) the trustee of the Trust shall promptly pay to the Indemnitee all
Indemnified Amounts for which the Indemnitee shall be entitled to
indemnification pursuant to this Agreement; and (v) all unexpended funds in the
Trust shall revert to the Corporation upon a final determination by a court of
competent jurisdiction in a final decision from which there is no further right
of appeal that the Indemnitee has been fully Indemnified under the terms of this
Agreement. The trustee of the Trust shall be chosen by the Indemnitee.
8. CONTINUATION OF INDEMNITY. All agreements and obligations of the
Corporation contained herein shall continue during the period the Indemnitee is
a director or officer, as the case may be, of the Corporation (or is serving at
the request of the Corporation as an Affiliate Indemnitee) and shall continue
thereafter so long as the Indemnitee shall be subject to any possible Proceeding
by reason of the fact that the Indemnitee was a director or officer of the
Corporation or was serving in any other capacity referred to herein.
9. SUCCESSORS; BINDING AGREEMENT. This Agreement shall be binding on and shall
inure to the benefit of and be enforceable by the parties hereto, by the
Corporation's successors and assigns and by the Indemnitee's personal or legal
representatives, executors, administrators, successors, assigns, heirs, spouses,
distributees, devisees, and legatees. The Corporation shall require and cause
any successor or assignee (whether direct or indirect, by purchase, merger,
consolidation, or otherwise) to all, substantially all or a substantial part of
the business and/or assets of the Corporation, by written agreement in form and
substance reasonably satisfactory to the Corporation and to the Indemnitee,
expressly to assume and agree to perform this Agreement in the same manner and
to the same extent that the Corporation would be required to perform if no such
succession or assignment had taken place.
10. ENFORCEMENT. The Corporation has entered into this Agreement and assumed
the obligations imposed on the Corporation hereby in order to induce the
Indemnitee to act as a director or officer, as the case may be, of the
Corporation, and acknowledges that the Indemnitee is relying upon this Agreement
in continuing in such capacity.
(a) The Indemnitee's right to indemnification shall be enforceable by the
Indemnitee only in the Chancery Court of the
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State of Delaware and shall be enforceable notwithstanding any adverse
determination, other than a determination which has been made by a final
adjudication of a court of competent jurisdiction. In any such action, if a
prior adverse determination has been made, the burden of proving that
indemnification is required under this Agreement shall be on the Indemnitee. The
Corporation shall have the burden of proving that indemnification is not
required under this Agreement if no prior adverse determination shall have been
made.
(b) In the event the Indemnitee is required to bring any action to enforce
rights or to collect moneys due under this Agreement and is successful in such
action, the Corporation shall reimburse the Indemnitee for all of the
Indemnitee's fees and expenses (including attorney's fees and expenses) in
bringing and pursuing such action. The Indemnitee shall be entitled to the
advancement of Indemnified Amounts to the full extent contemplated by Section 3
hereof in connection with such proceeding.
11. SEVERABILITY. In the event that any provision of this Agreement (including
any provision within a single section, paragraph or sentence) is determined by a
court of competent jurisdiction to require the Corporation to do or to fail to
do an act which is in violation of applicable law, such provision shall be
limited or modified in its application to the minimum extent necessary to avoid
a violation of law, and, as so limited or modified, such provision and the
balance of this Agreement shall be enforceable in accordance with their terms.
12. MISCELLANEOUS. No provision of this Agreement may be modified, waived, or
discharged unless such modification, waiver, or discharge is agreed to in
writing signed by the Indemnitee and either the Chairman of the Board, the Chief
Executive Officer or the President of the Corporation or another officer of the
Corporation specifically designated by the Board of Directors. No waiver by
either party at any time of any breach by the other party of, or of compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same time or at any prior or subsequent time. This Agreement sets forth
the entire understanding between the parties hereto and supersedes and merges
all previous negotiations, representations, commitments, understandings and
agreements (written, oral or otherwise, express or implied) with respect to the
subject matter hereof between the parties hereto. The validity, interpretation,
construction, and performance of this Agreement shall be governed by the laws of
the State of Delaware, without giving effect to the principles of conflicts of
laws thereof. The Indemnitee may bring an action seeking resolution of disputes
or controversies arising under or in any way related to this Agreement in the
state or federal court jurisdiction in which the Indemnitee resides or in which
his or her place of business is located, and in any related appellate courts,
and the
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Corporation consents to the jurisdiction of such courts and to such venue.
13. NOTICES. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, as follows:
If to the Indemnitee:
[Name]
[Address]
[Facsimile]
If to the Corporation:
xxxxxxxx.xxx Corporation
00 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxxxxxx X. Xxxxxxx
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
14. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.
15. EFFECTIVENESS. This Agreement shall be effective as of the date first above
written.
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed as of the day and year first above written.
XXXXXXXX.XXX CORPORATION
By:
Name:
Title:
INDEMNITEE
Name:
