TECHNOLOGY RESEARCH CORPORATION INDIVIDUAL DIRECTOR INDEMNIFICATION AGREEMENT
TECHNOLOGY
RESEARCH CORPORATION
INDIVIDUAL
DIRECTOR INDEMNIFICATION AGREEMENT
This
Indemnification Agreement (this “Agreement”), made and entered
into as of June 1, 2005, by and between TECHNOLOGY RESEARCH CORPORATION, a
Florida corporation (the “Company”), and
_______________________, in his capacity as an independent member of the
Company’s Board of Directors (the “Indemnitee”).
BACKGROUND
INFORMATION
In
the
judgment of the Company’s Board of Directors (the “Board”),
individuals with desired levels of experience and expertise have become more
reluctant to serve publicly-held corporations as directors or in other
capacities unless provided with adequate protection through insurance or
contractual indemnities against liabilities arising from claims brought against
them as a consequence of such service.
The
Board
has previously determined it to be in the best interests of the Company and
its
shareholders for the Company to maintain at its expense liability insurance
to
protect individuals serving the Company and its subsidiaries from and against
certain liabilities. Although the furnishing of such insurance has
been a customary and widespread practice among United States-based corporations
and other business enterprises, the Board is concerned that, given current
market conditions and trends, such insurance may only be available to the
Company in the future at higher premium cost and with lesser breadth of
coverage. It has also noted that directors, officers and other
individuals in service to business enterprises are being increasingly subjected
to expensive and time-consuming litigation relating to matters that
traditionally have been brought only against the enterprise.
The
Company’s Bylaws provide that the Company shall indemnify and advance expenses
to each of its directors and officers in the manner set forth therein and to
the
fullest extent permitted by applicable law. Such law is principally
embodied in Section 607.0850 of the Florida Business Corporation Act, Chapter
607, Florida Statutes (the “FBCA”). Each of the
By-Laws and the FBCA, however, provide that the indemnification provisions
set
forth therein are not exclusive, and thereby contemplate that indemnity
agreements may be entered into between a corporation and individual members
of
its board of directors, among others.
The
Indemnitee has expressed concern that the protection available under the
Company’s Director and Officer insurance coverage, and as manifested by its
Bylaws and the FBCA, may be inadequate in the current environment, and that
without such protection he may not be willing to continue to serve as a Company
director. The Board desires for Indemnitee to continue to serve in such
capacity, and therefore believes it to be prudent for the Company to obligate
itself by means of a direct contractual promise, in the form of this Agreement,
to indemnify, and to advance expenses on behalf of, the Indemnitee so that
he
will hereafter continue to serve the Company free from undue concern that he
may
not be so indemnified.
The
parties understand that this Agreement is intended to supplement the protections
offered by the FBCA, the Company’s Bylaws or its liability insurance coverage,
and that any resolutions or written actions heretofore adopted by the Board
pursuant to any such protection shall not be deemed rescinded or diminished
in
scope or content by this Agreement’s execution and delivery, and that none of
the rights or privileges granted to the Indemnitee under such statutory law,
insurance protection or resolutions or actions shall be deemed impaired or
abrogated.
Accordingly,
in consideration of the premises and the covenants contained herein, the Company
and Indemnitee hereby covenant and agree as follows:
OPERATIVE
PROVISIONS
ARTICLE
1
Certain
Definitions
Section
1.01 As
used in this Agreement:
“Change
of Control” shall be deemed to have occurred in any one of the
following circumstances occurring after the date hereof: (i) there shall have
occurred an event required to be reported with respect to the Company in
response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to
any
similar item or any similar schedule or form) under the Exchange Act, regardless
of whether the Company is then subject to such reporting requirement; (ii)
any
"person" or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act) shall have become the "beneficial owner" (as defined in Rule
13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
representing 15% or more of the combined voting power of the Company's then
outstanding voting securities; (iii) there occurs a merger or consolidation
of
the Company with any other entity, other than a merger or consolidation which
would result in the voting securities of the Company outstanding immediately
prior to such merger or consolidation continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 51% of the combined voting power of the voting
securities of the surviving entity outstanding immediately after such merger
or
consolidation and with the power to elect at least a majority of the board
of
directors or other governing body of such surviving entity; (iv) all or
substantially all the assets of the Company are sold or disposed of in a
transaction or series of related transactions; (v) the approval by the
shareholders of the Company of a complete liquidation of the Company; or (vi)
the individuals who on the date hereof constitute the Board (including, for
this
purpose, any new director whose election or nomination for election by the
Company's shareholders was approved by a vote of at least a majority of the
directors then still in office who were directors on the date hereof or whose
election or nomination was so approved) cease for any reason to constitute
at
least a majority of the members of the Board.
“Corporate
Status” describes the status of the Indemnitee as a current or prior
director, officer, trustee, general partner, managing member, fiduciary, board
of directors’ committee member, employee or agent of any other Enterprise (as
defined below) as long as such service is or was at the request of the
Company.
“Disinterested
Director” means a director of the Company who is not and was not a
party to the Proceeding in respect of which indemnification is sought by
Indemnitee.
“Enterprise”
means the Company and any other corporation, limited liability company,
partnership, joint venture, trust, employee benefit plan or other enterprise
of
which Indemnitee is or was serving at the request of the Company as a director,
officer, trustee, general partner, managing member, fiduciary, board of
directors’ committee member, employee or agent.
“Exchange
Act” means the Securities Exchange Act of 1934, as
amended.
“Expenses”
shall include all reasonable direct and indirect costs (including, without
limitation, attorneys' fees, retainers, court costs, transcripts, fees of
experts, witness fees, travel expenses, duplicating costs, printing and binding
costs, telephone charges, postage, delivery service fees, and all other
disbursements or expenses of the types customarily incurred in connection with
(i) prosecuting, defending, preparing to prosecute or defend, investigating,
being or preparing to be a witness in, or otherwise participating in, a
Proceeding, (ii) establishing or enforcing a right to indemnification under
this
Agreement, applicable law or otherwise, or (iii) the review and preparation
of
this Agreement on behalf of Indemnitee. Expenses also shall include
Expenses incurred in connection with any appeal resulting from any Proceeding,
including without limitation the premium, security for, and other costs relating
to any cost bond, supersedeas bond, or other appeal bond or its
equivalent. Expenses, however, shall not include amounts paid in
settlement by Indemnitee or the amount of judgments or fines against
Indemnitee.
“Independent
Counsel” means a law firm, or a member of a law firm, that is
experienced in matters of corporate law and neither currently is, nor in the
five years previous to its selection or appointment has been, retained to
represent (i) the Company or Indemnitee in any matter material to either such
party (other than with respect to matters concerning the rights of Indemnitee
under this Agreement or of other indemnitees under similar indemnification
agreements) or (ii) any other party to the Proceeding giving rise to a claim
for
indemnification hereunder. Notwithstanding the foregoing, the term
“Independent Counsel” shall not include any person who, under the applicable
standards of professional conduct then prevailing, would have a conflict of
interest in representing either the Company or Indemnitee in an action to
determine Indemnitee’s rights under this Agreement.
“Independent
Directors” any member of the Company’s board of directors who is not
(i) an officer or employee of the Company, (ii) an officer, director or employee
or any affiliate (excluding the Company) thereof, (iii) a person who controls
or
is under common control of any affiliate thereof or (iv) a person who otherwise
would fail to qualify as an “independent director” under the applicable rules of
the Nasdaq National Market as then in effect.
“Liabilities”
means any losses or liabilities, including, without limitation, any judgments,
fines, ERISA excise taxes and penalties, penalties and amounts paid in
settlement, arising out of or in connection with any Proceeding (including
all
interest, assessments and other charges paid or payable in connection with
or in
respect of any such judgments, fines, ERISA excise taxes and penalties,
penalties or amounts paid in settlement).
“person”
shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange
Act; provided, however, that the term “person” shall exclude (i) the Company,
(ii) any trustee or other fiduciary holding securities under an employee benefit
plan of the Company, and (iii) any corporation owned, directly or indirectly,
by
the shareholders of the Company in substantially the same proportions as their
ownership of stock of the Company.
“Proceeding”
includes any threatened, pending or completed action, derivative action, suit,
claim, counterclaim, cross claim, arbitration, alternate dispute resolution
mechanism, investigation, inquiry, administrative hearing or any other actual
threatened or completed proceeding, whether civil (including intentional and
unintentional tort claims), criminal, administrative or investigative, including
any appeal therefrom, and whether instituted by or on behalf of the Company
or
any other party, or any inquiry or investigation that Indemnitee in good faith
believes might lead to the institution of any such action, suit or other
proceedings hereinabove listed in which Indemnitee was, is or will be involved
as a party or otherwise by reason of any Corporate Status of Indemnitee, or
by
reason of any action taken (or failure to act) by him or of any action (or
failure to act) on his part while serving in any Corporate Status, in each
case
whether or not serving in such capacity at the time any liability or expense
is
incurred for which indemnification, reimbursement, or advancement of Expenses
can be provided under this Agreement.
Section
1.02 For
the purposes of this Agreement:
References
to “Company” 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, 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, then
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.
Reference
to “other enterprise” shall include employee benefit plans; references to
“fines” shall include any excise tax assessed with respect to any employee
benefit plan; references to “serving at the request of the Company” shall
include any service as a director, officer, employee or agent of the Company
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; and a person who acted in good faith and in a manner he
reasonably believed to be in the best interests of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in
a
manner “not opposed to the best interests of the Company” as referred to in this
Agreement.
ARTICLE
2
Services
By Indemnitee
Section
2.01 . Services
By Indemnitee. Indemnitee hereby agrees to continue to serve as
a director of the Company for so long as Indemnitee is elected or until
Indemnitee tenders his resignation or is removed.
ARTICLE
3
Indemnification
Section
3.01 . General. (a) The
Company hereby agrees to and shall indemnify Indemnitee and hold him harmless
from and against any and all Expenses and Liabilities, in either case, actually
and reasonably incurred by Indemnitee or on Indemnitee’s behalf, to the fullest
extent permitted by applicable law.
For
purposes of this Section 3.01, the meaning of the phrase “to the fullest
extent permitted by applicable law” shall include, but not be limited
to:
(i) to
the
fullest extent permitted by any provision of the FBCA, or the corresponding
provision of any amendment to or replacement of the FBCA, and
(ii) to
the
fullest extent authorized or permitted by any amendments to or replacements
of
the FBCA adopted after the date of this Agreement that increase the extent
to
which a corporation may indemnify its officers and directors.
(b) Notwithstanding
any other provision of this Agreement, to the extent that Indemnitee is, by
reason of his Corporate Status, a witness in any Proceeding to which Indemnitee
is not a party, he shall be indemnified against all Expenses actually and
reasonably incurred by him or on his behalf in connection
therewith.
(c) Notwithstanding
any other provision of this Agreement, to the extent that Indemnitee is a party
to (or a participant in) and is successful, on the merits or otherwise, in
any
Proceeding or in defense of any claim, issue or matter therein, in whole or
in
part, the Company shall indemnify Indemnitee against all Expenses actually
and
reasonably incurred by him in connection therewith. If Indemnitee is not wholly
successful in such Proceeding, but is successful, on the merits or otherwise,
as
to one or more but less than all claims, issues or matters in such Proceeding,
the Company shall indemnify Indemnitee against all Expenses actually and
reasonably incurred by him or on his behalf in connection with each successfully
resolved claim, issue or matter. If the Indemnitee is not wholly successful
in
such Proceeding, the Company also shall indemnify Indemnitee against all
Expenses reasonably incurred in connection with a claim, issue or matter related
to any claim, issue, or matter on which the Indemnitee was successful. For
purposes of this Section and without limitation, the termination of any claim,
issue or matter in such a Proceeding by dismissal, with or without prejudice,
shall be deemed to be a successful result as to such claim, issue or
matter.
Section
3.02 .
Exclusions. Notwithstanding any provision of this Agreement, the
Company shall not be obligated under this Agreement to make any indemnity
(including any advancement of Expenses) in connection with any claim made
against Indemnitee:
(a) for
an
accounting of profits made from the purchase and sale (or sale and purchase)
by
Indemnitee of securities of the Company within the meaning of Section 16(b)
of
the Exchange Act or similar provisions of state statutory law or common law;
or
(b) except
as
otherwise provided in Sections 6.01(d) or (f) hereof, prior to a Change in
Control, in connection with any Proceeding (or any part of any Proceeding)
initiated by Indemnitee, including any Proceeding (or any part of any
Proceeding) initiated by Indemnitee against the Company or its affiliates or
their respective directors, officers, employees or other indemnitees, unless
(i)
the Proceeding (or any part of any Proceeding) is authorized prior to its
initiation by a majority of the Independent Directors or (ii) the Company
provides the indemnification, in its sole discretion, pursuant to the powers
vested in the Company under applicable law.
ARTICLE
4
Advancement
Of Expenses; Defense of Claims
Section
4.01 . Advances. Notwithstanding
any provision of this Agreement to the contrary, the Company shall advance
any
Expenses incurred by Indemnitee in connection with any Proceeding within ten
(10) days after the receipt by the Company of a statement or statements
requesting such advances from time to time, whether prior to or after final
disposition of any Proceeding. Any overdue amount of such Expenses to
be paid by the Company hereunder shall bear interest, compounded monthly, at
a
rate equal to the prime annual rate as reported on the last business day of
each
calendar month in the Money Rates (or other applicable) section of the Eastern
Edition of the Wall Street Journal, a publication of Dow Xxxxx & Company,
Inc., which rate is a composite of the base rate on corporate loans posted
from
time to time by at least 75% of the 30 largest commercial banks operating within
the United States. Advances shall be made without regard to
Indemnitee’s ability to repay such amounts and without regard to Indemnitee’s
ultimate entitlement to indemnification under the other provisions of this
Agreement. Advances shall include any and all reasonable Expenses
incurred pursuing an action to enforce this right of advancement, including
Expenses incurred preparing and forwarding statements to the Company to support
the advances claimed. This Section 4.01 shall not apply to any claim
made by Indemnitee for which indemnity is excluded pursuant to Section
3.02.
Section
4.02 . Repayment
of Advances or Other Expenses. Indemnitee agrees that Indemnitee
shall reimburse the Company for all Expenses advanced by the Company pursuant
to
Section 4.01 or 6.01(f), in the event and only to
the extent that it shall be determined by final judgment or other final
adjudication under the provisions of any applicable law (as to which all rights
of appeal therefrom have been exhausted or lapsed) that Indemnitee is not
entitled to be indemnified by the Company for such Expenses.
Section
4.03 . Defense
of Claims. The Company will be entitled to participate in the
Proceeding at its own expense. The Company shall not settle any
action, claim or Proceeding (in whole or in part) which would impose any
Expense, judgment, fine, penalty or limitation on the Indemnitee without the
Indemnitee’s prior written consent, such consent not to be unreasonably
withheld. Indemnitee shall not settle any action, claim or Proceeding
(in whole or in part) which would impose any Expense, judgment, fine, penalty
or
limitation on the Company without the Company’s prior written consent, such
consent not to be unreasonably withheld.
ARTICLE
5
Procedures
For Notification of and Determination of Entitlement To
Indemnification
Section
5.01 . Request
For Indemnification. (a) Within 60 days
after the
actual receipt by Indemnitee of notice that he is a party to or a participant
(as a witness or otherwise) in any Proceeding, Indemnitee shall submit to the
Company a written notice identifying the Proceeding. The omission by
the Indemnitee to so notify the Company will not relieve the Company from any
liability which it may have to Indemnitee (i) otherwise than under this
Agreement, and (ii) under this Agreement except and only to the extent the
Company can establish that such omission to notify caused actual material
prejudice to the Company.
(b) Indemnitee
shall thereafter deliver to the Company a written application to indemnify
Indemnitee in accordance with this Agreement. Such application(s) may
be delivered from time to time and at such time(s) as Indemnitee deems
appropriate in his sole discretion. Following such a written
application for indemnification by Indemnitee, the Indemnitee’s entitlement to
indemnification shall be determined according to Section 5.02 of this
Agreement.
Section
5.02 . Determination
of Entitlement. (a)
Upon written request by Indemnitee for indemnification pursuant to Section 5.01, a determination, if required by
applicable law, with respect to Indemnitee’s entitlement thereto shall be made
in the specific case: (i) by a majority vote of the Independent
Directors who are Disinterested Directors, even though less than a quorum of
the
Board; or (ii) if so requested by the Indemnitee in his sole discretion, by
Independent Counsel in a written opinion to the Board, a copy of which shall
be
delivered to Indemnitee. If it is so determined that Indemnitee is
entitled to indemnification, payment to Indemnitee shall be made within ten
days
after such determination. Indemnitee shall reasonably cooperate with
the person, persons or entity making such determination with respect to
Indemnitee’s entitlement to indemnification, including providing to such person,
persons or entity upon reasonable advance request any documentation or
information which is not privileged or otherwise protected from disclosure
and
which is reasonably available to Indemnitee and reasonably necessary to such
determination. Any costs or expenses (including attorneys’ fees and
disbursements) incurred by Indemnitee in so cooperating with the person, persons
or entity making such determination shall be borne by the Company (irrespective
of the determination as to Indemnitee’s entitlement to indemnification), and the
Company hereby indemnifies and agrees to hold Indemnitee harmless
therefrom.
(b) If
entitlement to indemnification is to be determined by Independent Counsel
pursuant to Section 5.02(a), such Independent
Counsel shall be selected as provided in this Section
5.02. If a Change in Control shall not have occurred, the
Independent Counsel shall be selected by the Independent Directors, and the
Company shall give written notice to Indemnitee advising him of the identity
of
the Independent Counsel so selected. If a Change in Control shall
have occurred, the Independent Counsel shall be selected by Indemnitee (unless
Indemnitee shall request that such selection be made by the Board, in which
event the preceding sentence shall apply), and Indemnitee shall give written
notice to the Company advising it of the identity of the Independent Counsel
so
selected. In either event, Indemnitee or the Company, as the case may
be, may, within ten days after such written notice of selection shall have
been
received, deliver to the Company or to Indemnitee, as the case may be, a written
objection to such selection; provided, however, that such objection may be
asserted only on the ground that the Independent Counsel so selected does not
meet the requirements of “Independent Counsel” as defined in Section 1 of this
Agreement, and the objection shall set forth with particularity the factual
basis of such assertion. Absent a proper and timely objection, the
person so selected shall act as Independent Counsel. If such written
objection is so made and substantiated, the Independent Counsel so selected
may
not serve as Independent Counsel unless and until such objection is withdrawn
or
a court of competent jurisdiction has determined that such objection is without
merit. If, within 20 days after submission by Indemnitee of a written
request for indemnification pursuant to Section 5.01
hereof, no Independent Counsel shall have been selected and not objected to,
either the Company or Indemnitee may petition a court of competent jurisdiction
for resolution of any objection which shall have been made by the Company or
Indemnitee to the other’s selection of Independent Counsel and/or for the
appointment as Independent Counsel of a person selected by the court or by
such
other person as the court shall designate, and the person with respect to whom
all objections are so resolved or the person so appointed shall act as
Independent Counsel under Section 5.02(a) hereof.
Upon the due commencement of any judicial proceeding or arbitration pursuant
to
Section 6.01(a) of this Agreement, the Independent
Counsel shall be discharged and relieved of any further responsibility in such
capacity (subject to the applicable standards of professional conduct then
prevailing).
(c) The
Company agrees to pay the reasonable fees of any Independent Counsel and to
fully indemnify such Independent Counsel against any and all Expenses, claims,
liabilities and damages arising out of or relating to this Agreement or its
engagement pursuant hereto.
Section
5.03 . Presumptions
and Burdens of Proof; Effect of Certain Proceedings. (a) In making any
determination
with respect to entitlement to indemnification hereunder, the person or persons
or entity making such determination shall presume that Indemnitee is entitled
to
indemnification under this Agreement if Indemnitee has submitted a request
for
indemnification in accordance with Section 5.01 of
this Agreement, and the Company shall have the burdens of coming forward with
evidence and of persuasion to overcome that presumption in connection with
the
making by any person, persons or entity of any determination contrary to that
presumption. Neither the failure of any person, persons or entity to
have made a determination prior to the commencement of any action pursuant
to
this Agreement that indemnification is proper in the circumstances because
Indemnitee has met the applicable standard of conduct, nor an actual
determination by any person, persons or entity that Indemnitee has not met
such
applicable standard of conduct, shall be a defense to the action or create
a
presumption that Indemnitee has not met the applicable standard of
conduct.
(b) If
the
person, persons or entity empowered or selected under Section 5.02 of this Agreement to determine whether
Indemnitee is entitled to indemnification shall not have made a determination
within 60 days after receipt by the Company of the request therefor, the
requisite determination of entitlement to indemnification shall be deemed to
have been made and Indemnitee shall be entitled to such
indemnification.
(c) The
termination of any Proceeding or of any claim, issue or matter therein, by
judgment, order, settlement or conviction, or upon a plea of nolo contendere
or
its equivalent, shall not (except as otherwise provided in this Agreement)
of
itself adversely affect the right of Indemnitee to indemnification or create
a
presumption that Indemnitee did not act in good faith and in a manner which
he
reasonably believed to be in or not opposed to the best interests of the Company
or, with respect to any criminal Proceeding, that Indemnitee had reasonable
cause to believe that his conduct was unlawful.
(d) For
purposes of any determination of good faith, Indemnitee shall be deemed to
have
acted in good faith if Indemnitee’s action is based on the records or books of
account of any Enterprise, including financial statements, or on information
supplied to Indemnitee by the officers of such Enterprise in the course of
their
duties, or on the advice of legal counsel for such Enterprise or on information
or records given or reports made to such Enterprise by an independent certified
public accountant or by an appraiser or other expert selected by such
Enterprise. The provisions of this Section
5.03(c) shall not be deemed to be exclusive or to limit the other
circumstances in which Indemnitee may be deemed or found to have met the
applicable standard of conduct set forth in this Agreement.
(e) The
knowledge and/or actions, or failure to act, of any other director, trustee,
partner, managing member, fiduciary, officer, agent or employee of any
Enterprise shall not be imputed to Indemnitee for purposes of determining any
right to indemnification under this Agreement.
ARTICLE
6
Remedies
of Indemnitee
Section
6.01 . Adjudication
or Arbitration. (a) In the event of
any dispute
between Indemnitee and the Company hereunder as to entitlement to
indemnification or advancement of Expenses (including without limitation where
(i) a determination is
made pursuant to Section 5.02 of this Agreement that
Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses
is
not timely made pursuant to Section 4.01 of this
Agreement, (iii) no
determination of entitlement to indemnification shall have been made pursuant
to
Section 5.02(a) of this Agreement within 45 days
after receipt by the Company of the request for indemnification, (iv) payment of indemnification
is not made pursuant to the last sentence of Section
5.02(a) of this Agreement within ten days after receipt by the Company of a
written request therefor, or (v) payment of indemnification
pursuant to Section 3.01 of this Agreement is not
made within ten days after a determination has been made that Indemnitee is
entitled to indemnification), then Indemnitee shall be entitled to an
adjudication by a court of his entitlement to such indemnification or
advancement of Expenses. Alternatively, in such case, Indemnitee, at his option,
may seek an award in arbitration to be conducted by a single arbitrator pursuant
to the Commercial Arbitration Rules of the American Arbitration
Association. The Company shall not oppose Indemnitee’s right to seek
any such adjudication or award in arbitration.
(b) In
the
event that a determination shall have been made pursuant to Section 5.02(a) of this Agreement that Indemnitee is
not entitled to indemnification, any judicial proceeding or arbitration
commenced pursuant to this Section 6.01 shall be
conducted in all respects as a de novo trial, or arbitration, on the
merits, and Indemnitee shall not be prejudiced by reason of that adverse
determination. In any judicial proceeding or arbitration commenced
pursuant to this Section 6.01 the Company shall have
the burden of proving Indemnitee is not entitled to indemnification or
advancement of Expenses, as the case may be, and the Company may not refer
to or
introduce into evidence any determination pursuant to Section 5.02(a) of this Agreement adverse to Indemnitee
for any purpose. If Indemnitee commences a judicial proceeding or
arbitration pursuant to this Section 6.01,
Indemnitee shall not be required to reimburse the Company for any advances
pursuant to Section 4.02 until a final determination
is made with respect to Indemnitee’s entitlement to indemnification (as to which
all rights of appeal have been exhausted or lapsed).
(c) If
a
determination shall have been made pursuant to Section
5.02(a) of this Agreement that Indemnitee is entitled to indemnification,
the Company shall be bound by such determination in any judicial proceeding
or
arbitration commenced pursuant to this Section
6.01.
(d) In
the
event that Indemnitee, pursuant to this Section
6.01, seeks a judicial adjudication of or an award in arbitration to enforce
his rights under, or to recover damages for breach of, this Agreement,
Indemnitee shall be entitled to recover from the Company, and shall be
indemnified by the Company against, any and all Expenses actually and reasonably
incurred by him in such judicial adjudication or arbitration. If it
shall be determined in said judicial adjudication or arbitration that Indemnitee
is entitled to receive part but not all of the indemnification or advancement
of
Expenses sought, the Indemnitee shall be entitled to recover from the Company,
and shall be indemnified by the Company against, any and all Expenses reasonably
incurred by Indemnitee in connection with such judicial adjudication or
arbitration.
(e) The
Company shall be precluded from asserting in any judicial proceeding or
arbitration commenced pursuant to this Section 6.01
that the procedures and presumptions of this Agreement are not valid, binding
and enforceable and shall stipulate in any such court or before any such
arbitrator that the Company is bound by all the provisions of this
Agreement.
(f) The
Company shall indemnify Indemnitee to the fullest extent permitted by law
against all Expenses and, if requested by Indemnitee, shall (within ten days
after the Company’s receipt of each such written request) advance such Expenses
to Indemnitee, which are incurred by Indemnitee in connection with any judicial
proceeding or arbitration brought by Indemnitee for (i) indemnification or
advances of Expenses by the Company under this Agreement or any other agreement
or provision of the Company’s Articles of Incorporation or By-laws now or
hereafter in effect, or (ii) recovery or advances under any insurance policy
maintained by any person for the benefit of Indemnitee in connection with the
performance of his duties for or on behalf of the Company, regardless of whether
Indemnitee ultimately is determined to be entitled to such indemnification,
advance or insurance recovery, as the case may be.
ARTICLE
7
Directors'
and Officers' Liability Insurance
Section
7.01 . D&O
Liability Insurance. The Company shall obtain and maintain a
policy or policies of insurance (“D&O Liability Insurance”)
with reputable insurance companies providing liability insurance for directors
and officers of the Company in their capacities as such (and for any capacity
in
which any director or officer of the Company serves any other Enterprise at
the
request of the Company), in respect of acts or omissions occurring while serving
in such capacity, on terms with respect to coverage and amount (including with
respect to the payment of Expenses) no less favorable than those of such policy
in effect on the date hereof.
Section
7.02 . Evidence
of Coverage. Upon request by Indemnitee, the Company shall
provide copies of all policies of D&O Liability Insurance obtained and
maintained in accordance with Section 7.01 of this Agreement. The
Company shall promptly notify Indemnitee of any changes in such insurance
coverage.
ARTICLE
8
Miscellaneous
Section
8.01 . Nonexclusivity
of Rights. The rights of indemnification and advancement of
Expenses as provided by this Agreement shall not be deemed exclusive of any
other rights to which Indemnitee may at any time be entitled to under applicable
law, the Company’s Articles of Incorporation, the Company’s Bylaws, any
agreement, a vote of shareholders or a resolution of directors, or
otherwise. No amendment, alteration or repeal of this Agreement or of
any provision hereof shall limit or restrict any right of Indemnitee under
this
Agreement in respect of any action taken or omitted by such Indemnitee in his
Corporate Status prior to such amendment, alteration or repeal. To
the extent that a change in Florida law, whether by statute or judicial
decision, permits greater indemnification or advancement of Expenses than would
be afforded currently under the Company’s Bylaws and this Agreement, it is the
intent of the parties hereto that Indemnitee shall enjoy by this Agreement
the
greater benefits so afforded by such change. No right or remedy
herein conferred is intended to be exclusive of any other right or remedy,
and
every other right and remedy shall be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion
or
employment of any other right or remedy.
Section
8.02 . Insurance
and Subrogation. (a)
To the extent that, pursuant to Section 7.01, the Company maintains a policy
or
policies providing D&O Liability Insurance, 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 such director, trustee, partner,
managing member, fiduciary, officer, employee or agent under such policy or
policies. If, at the time the Company receives notice from any source
of a Proceeding as to which Indemnitee is a party or a participant (as a witness
or otherwise), the Company has director and officer liability insurance in
effect, the Company shall give prompt notice of such Proceeding to the insurers
in accordance with the procedures set forth in the respective
policies. The Company 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. The failure or refusal of any such insurer to pay any
such amount shall not affect or impair the obligations of the Company under
this
Agreement.
(b) In
the
event of any payment under this Agreement, the Company shall be subrogated
to
the extent of such payment to all of the rights of recovery of Indemnitee,
who
shall execute all papers required and take all action necessary to secure such
rights, including execution of such documents as are necessary to enable the
Company to bring suit to enforce such rights.
(c) The
Company shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable (or for which advancement is provided hereunder)
hereunder if and to the extent that Indemnitee has otherwise actually received
such payment under any insurance policy, contract, agreement or
otherwise.
(d) The
Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee
who is or was serving at the request of the Company as a director, officer,
trustee, partner, managing member, fiduciary, board of directors’ committee
member, employee or agent of any other Enterprise shall be reduced by any amount
Indemnitee has actually received as indemnification or advancement of Expenses
from such Enterprise.
Section
8.03 . Contribution. To
the fullest extent permissible under applicable law, if the indemnification
provided for in this Agreement is unavailable to Indemnitee for any reason,
the
Company, in lieu of indemnifying Indemnitee, shall contribute to the amount
incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes,
amounts paid or to be paid in settlement and/or for Expenses, in connection
with
any claim relating to an indemnifiable event under this Agreement, in such
proportion as the Board deems fair and reasonable in light of all of the
circumstances of such Proceeding in order to reflect (i) the relative benefits
received by the Company and Indemnitee as a result of the event(s) and/or
transaction(s) giving rise to such Proceeding; and/or (ii) the relative fault
of the
Company (inclusive of any of its directors, officers, employees and agents)
and
Indemnitee in connection with such event(s) and/or transaction(s).
Section
8.04 . Amendment. This
Agreement may not be modified or amended except by a written instrument executed
by or on behalf of each of the parties hereto.
Section
8.05 . Waivers. The
observance of any term of this Agreement may be waived (either generally or
in a
particular instance and either retroactively or prospectively) by the party
entitled to enforce such term only by a writing signed by the party against
which such waiver is to be asserted. Unless otherwise provided herein, no delay
on the part of any party hereto in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any waiver on the part
of
any party hereto of any right, power or privilege hereunder operate as a waiver
of any other right, power or privilege hereunder nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder.
Section
8.06 . Entire
Agreement. This Agreement and the documents referred to herein
constitute the entire agreement between the parties hereto with respect to
the
matters covered hereby, and any other prior or contemporaneous oral or written
understandings or agreements with respect to the matters covered hereby are
superseded by this Agreement.
Section
8.07 . Severability. If
any provision of this Agreement shall be held to be invalid, illegal or
unenforceable for any reason: (a) the validity, legality
and
enforceability of the remaining provisions of this Agreement (including without
limitation, each portion of any Section of this Agreement containing any such
provision held to be invalid, illegal or unenforceable, that is not itself
invalid, illegal or unenforceable) shall not be affected or impaired thereby
and
shall remain enforceable to the fullest extent permitted by law; (b) such provision shall
be
deemed reformed to the extent necessary to conform to applicable law and to
give
the maximum effect to the intent of the parties hereto; and (c) to the fullest extent
possible, the provisions of this Agreement (including, without limitation,
each
portion of any Section of this Agreement containing any such provision held
to
be invalid, illegal or unenforceable, that is not itself invalid, illegal or
unenforceable) shall be construed so as to give effect to the intent manifested
thereby.
Section
8.08 . Notice
Of Proceedings. Indemnitee agrees promptly to notify the Company
in writing upon being served with any summons, citation, subpoena, complaint,
indictment, information or other document relating to any Proceeding or matter
which may be subject to indemnification or advancement of Expenses covered
hereunder. The failure of Indemnitee to so notify the Company shall
not relieve the Company of any obligation which it may have to the Indemnitee
under this Agreement or otherwise.
Section
8.09 . Notices. All
notices, requests, demands and other communications required or permitted under
this Agreement shall be in writing and shall be deemed to have been furnished
(a) if delivered by hand
or by courier and receipted for by the party to whom such notice or other
communication shall have been directed, (b) mailed by certified
or
registered mail with postage prepaid, on the third business day after the date
on which it is so mailed or (c) if sent by facsimile
transmission and fax confirmation is received, on the next business day
following the date on which such facsimile transmission was sent. Addresses
for
notice to either party shall be those maintained in the Company’s records on the
date of this Agreement, or such other address as either party shall have
furnished by written notice to the other party as provided above.
Section
8.10 . Binding
Effect. (a) The Company confirms
and
agrees that it has entered into this Agreement and assumed the obligations
imposed on it hereby to induce Indemnitee to serve as a director of the Company,
and the Company acknowledges that Indemnitee is relying upon this Agreement
in
serving as a director of the Company.
(b) 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 and/or assets of the Company, spouses,
heirs, and executors, administrators, personal and legal
representatives. The Company shall require and cause any successor
(whether direct or indirect by purchase, merger, consolidation or otherwise)
to
all or substantially all, or a substantial part of the business or assets of
the
Company, by written agreement in the form and substance satisfactory to
Indemnitee, to assume and agree to perform this Agreement in the manner and
to
the same extent that the Company would be required to perform if no such
succession had taken place.
(c) The
indemnification and advancement of Expenses provided by, or granted pursuant
to
this Agreement shall continue as to a person who has ceased to be a director,
officer, employee or agent or is deceased and shall inure to the benefit of
the
heirs, executors, administrators, legatees and assigns, of such a
person.
Section
8.11 . Governing
Law. This Agreement and the legal relations among the parties
shall be governed by, and construed and enforced in accordance with, the laws
of
the State of Florida, without regard to its conflict of laws rules.
Section
8.12 . Consent
To Jurisdiction. Except with respect to any arbitration
commenced by Indemnitee pursuant to Section 6.01(a)
of this Agreement, the Company and Indemnitee hereby irrevocably and
unconditionally (i) agree
that any action or proceeding arising out of or in connection with this
Agreement shall be brought only in the Circuit Court in and for Pinellas County,
Florida (the “Circuit Court”), and not in any other state or
federal court in the United States of America or any court in any other country,
(ii) consent to submit to the exclusive jurisdiction of the Circuit Court for
purposes of any action or proceeding arising out of or in connection with this
Agreement, (iii) waive any objection to the laying of venue of any such action
or proceeding in the Circuit Court, and (iv) waive, and agree not to plead
or to
make, any claim that any such action or proceeding brought in the Circuit Court
has been brought in an improper or inconvenient forum.
Section
8.13 . Headings. The
Article and Section headings in this Agreement are for convenience of reference
only, and shall not be deemed to alter or affect the meaning or interpretation
of any provisions hereof.
Section
8.14 . Counterparts. This
Agreement may be executed in one or more counterparts, by means of multiple
signature pages each containing less than all required signatures, and by means
of facsimile signatures, each of which shall for all purposes be deemed to
be an
original but all of which together shall constitute one and the same
Agreement. Only one such counterpart signed by the party against whom
enforceability is sought needs to be produced to evidence the existence of
this
Agreement.
. Use
of Certain Terms. As used in this Agreement, the words “herein,”
“hereof,” and “hereunder” and other words of similar import refer to this
Agreement as a whole and not to any particular paragraph, subparagraph, section,
subsection, or other subdivision. Whenever the context may require, any pronoun
used in this Agreement shall include the corresponding masculine, feminine
or
neuter forms, and the singular form of nouns, pronouns and verbs shall include
the plural and vice versa.
IN
WITNESS WHEREOF, this Agreement has
been executed and delivered and shall be deemed effective as of the date first
above written.
TECHNOLOGY
RESEARCH
CORPORATION
By:
Name:
Title:
INDEMNITEE
By:
Name:
