INDEMNIFICATION AGREEMENT
This
Indemnification Agreement
(“Agreement”) is
made as of this _____ day of, 20___ by and between Xxxxxxx Navigation Limited,
a
California corporation (the “Company”), and [Name] (“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
may not be willing to continue to serve as officers and directors without
additional protection; and
WHEREAS,
the Company
desires to attract and retain the services of highly qualified individuals,
such
as Indemnitee, to serve as officers and directors of the Company and to
indemnify its officers and directors so as to provide them with the maximum
protection permitted by law.
NOW,
THEREFORE,
the Company and
Indemnitee hereby agree as follows:
1. 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, 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 as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys’ fees), judgments, fines and amounts paid
in settlement (if such settlement is approved in advance by the Company, which
approval shall not be unreasonably withheld) actually and reasonably incurred
by
Indemnitee in connection with such action or proceeding if Indemnitee acted
in
good faith and in a manner Indemnitee believed to be in the best interests
of
the Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe Indemnitee’s conduct was unlawful. The termination
of any action or proceeding by judgment, order, settlement, conviction, or
upon
a plea of nolo
contendere
or its equivalent,
shall not, of itself, create a presumption that (i) Indemnitee did not act
in good faith and in a manner which Indemnitee reasonably believed to be in
the
best interests of the Company, or (ii) with respect to any criminal action
or proceeding, Indemnitee had reasonable cause to believe that Indemnitee’s
conduct was unlawful.
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(b) Proceedings
By or
in the Right of the Company.
The Company shall
indemnify Indemnitee if 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 of the Company 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 of the Company,
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 as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys’ fees) and, to the fullest extent permitted by
law, amounts paid in settlement, in each case to the extent actually and
reasonably incurred by Indemnitee in connection with the defense or settlement
of such action or proceeding if Indemnitee acted in good faith and in a manner
Indemnitee believed to be in the best interests of the Company and its
shareholders.
2. Expenses;
Indemnification Procedure.
(a) Advancement
of
Expenses.
To the extent
permitted under applicable law, the Company shall advance all expenses incurred
by Indemnitee in connection with the investigation, defense, settlement or
appeal of any civil or criminal action or proceeding referenced in
Section 1(a) or (b) hereof (but not amounts actually paid in settlement of
any such action or proceeding). Indemnitee hereby undertakes to repay such
amounts advanced only if, and to the extent that, it shall ultimately be
determined that Indemnitee is not entitled to be indemnified by the Company
as
authorized hereby. The advances to be made hereunder shall be paid by the
Company to Indemnitee within twenty (20) days following delivery of a written
request therefor by Indemnitee to the Company.
(b) Notice/Cooperation
by Indemnitee.
Indemnitee shall,
as a condition precedent to his right to be indemnified under this Agreement,
give the Company notice in writing as soon as practicable of any claim made
against Indemnitee for which indemnification will or could be sought under
this
Agreement. Notice to the Company shall be directed to the Chief Executive
Officer of the Company at the address shown on the signature page of this
Agreement (or such other address as the Company shall designate in writing
to
Indemnitee). Notice shall be deemed received three business days after the
date
postmarked if sent by domestic certified or registered mail, properly addressed;
otherwise notice shall be deemed received when such notice shall actually be
received by the Company. In addition, Indemnitee shall give the Company such
information and cooperation as it may reasonably require and as shall be within
Indemnitee’s power.
(c) Procedure.
Any
indemnification provided for in Section 1 shall be made no later than
forty-five (45) days after receipt of the written request of Indemnitee. If
a
claim under this Agreement, under any statute, or under any provision of the
Company’s Articles of Incorporation or By-laws providing for indemnification, is
not paid in full by the Company within forty-five (45) days after a written
request for payment thereof has first been received by the Company, Indemnitee
may, but need not, at any time thereafter bring an action against the Company
to
recover the unpaid amount of the claim and, subject to Section 13 of this
Agreement, Indemnitee shall also be entitled to be paid for the expenses
(including attorneys’ fees) of bringing such action. It shall be a defense to
any such action (other than an action brought to enforce a claim for expenses
incurred in connection with any action or proceeding in advance of its final
disposition) that Indemnitee has not met the standards of conduct which make
it
permissible under applicable law for the Company to indemnify Indemnitee for
the
amount claimed, and Indemnitee shall be entitled to receive interim payments
of
expenses pursuant to Subsection 2(a) unless and until such defense may be
finally adjudicated by court order or judgment from which no further right
of
appeal exists. It is the parties’ intention that if the Company contests
Indemnitee’s right to indemnification, the question of Indemnitee’s right to
indemnification shall be for the court to decide, and neither the failure of
the
Company (including its Board of Directors, any committee or subgroup of the
Board of Directors, independent legal counsel, or its shareholders) to have
made
a determination that indemnification of Indemnitee is proper in the
circumstances because Indemnitee has met the applicable standard of conduct
required by applicable law, nor an actual determination by the Company
(including its Board of Directors, any committee or subgroup of the Board of
Directors, independent legal counsel, or its shareholders) that Indemnitee
has
not met such applicable standard of conduct, shall create a presumption that
Indemnitee has or has not met the applicable standard of conduct.
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(d) Notice
to
Insurers.
If, at the time of
the receipt of a notice of a claim pursuant to Section 2(b) hereof, the
Company has director and officer liability insurance in effect, 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 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.
(e) Selection
of
Counsel.
In the event the
Company shall be obligated under Section 2(a) hereof to pay the expenses of
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 so to do. 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 with
respect to the same proceeding, provided that (i) Indemnitee shall have the
right to employ his counsel in any such proceeding at Indemnitee’s expense; and
(ii) if (A) the employment of counsel by Indemnitee has been
previously authorized by the Company, (B) Indemnitee shall have reasonably
concluded that there may be a conflict of interest between the Company and
Indemnitee in the conduct of any such defense or (C) the Company shall not,
in
fact, have employed counsel to assume the defense of such proceeding, then
the
fees and expenses of Indemnitee’s counsel shall be at the expense of the
Company.
3. 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 Incorporation, the Company’s By-laws 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 a California
corporation to indemnify a member of its board of directors, an officer or
other
corporate agent, 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 a California corporation to indemnify a member of its Board of
Directors, an officer or other corporate agent, such changes, to the extent
required by such law, statute or rule to be applied to this Agreement, shall
have the effect on this Agreement and the parties’ rights and obligations
hereunder as is required by such law, statute or rule.
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(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
Incorporation, its By-laws, any agreement, any vote of shareholders or
disinterested directors, the California General Corporation Law, 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.
4. 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.
5. Mutual
Acknowledgment.
Both the Company
and Indemnitee acknowledge that in certain instances, Federal 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
to
undertake with the 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.
6. 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 to obtain and maintain a policy or policies of
insurance with reputable insurance companies providing the officers and
directors of the Company 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 to the most favorably
insured of the Company’s directors, if Indemnitee is a director; or of the
Company’s officers, if Indemnitee is not a director of the Company but is an
officer; or of the Company’s key employees, if Indemnitee is not an officer or
director but is a key employee. 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.
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7. 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 7. If this
Agreement or any portion hereof shall be invalidated on any ground by any court
of competent jurisdiction, then the Company shall nevertheless indemnify
Indemnitee to the full extent permitted by any applicable portion of this
Agreement that shall not have been invalidated, and the balance of this
Agreement not so invalidated shall be enforceable in accordance with its
terms.
8. 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 a director
may
not be relieved of liability under the California General Corporation
Law.
(b) Claims
Initiated
by Indemnitee.
To indemnify or
advance expenses to Indemnitee with respect to proceedings or claims initiated
or brought voluntarily by Indemnitee and not by way of defense, except with
respect to proceedings brought to establish or enforce a right to
indemnification under this Agreement or any other statute or law or otherwise
as
required under Section 317 of the California General Corporation Law, but
such indemnification or advancement of expenses may be provided by the Company
in specific cases if the Board of Directors has approved the initiation or
bringing of such suit; or
(c) Lack
of Good
Faith.
To indemnify
Indemnitee for any expenses incurred by the 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 expenses or liabilities of any type whatsoever (including, but
not limited to, judgments, fines, ERISA excise 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
(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.
9. 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 expressly permitted by
Section 317 of the California General Corporation Law, such provisions
shall not be effective unless and until the Company’s Articles of Incorporation
authorize such additional rights of indemnification. In all other respects,
the
balance of this Agreement shall be effective as of the date set forth on the
first page 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, or was serving at the request of the Company 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.
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10. Construction
of Certain Phrases.
(a) For
purposes of this
Agreement, references to the “Company” shall also 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, 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.
(b) 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” 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.
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
representatives 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
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 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 costs and expenses,
including reasonable 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, or
(ii) if mailed by domestic certified or registered mail with postage
prepaid, on the third business day after the date postmarked. Addresses for
notice to either party are as shown on the signature page of this Agreement,
or
as subsequently modified by written notice.
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15. Consent
to Jurisdiction.
The Company and
Indemnitee each hereby irrevocably consent to the jurisdiction of the courts
of
the State of California for all purposes in connection with any action or
proceeding which arises out of or relates to this Agreement and agree that
any
action instituted under this Agreement shall be brought only in the state courts
of the State of California.
16. Choice
of
Law.
This Agreement
shall be governed by and its provisions construed in accordance with the laws
of
the State of California as applied to contracts between California residents
entered into and to be performed entirely within California.
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IN
WITNESS
WHEREOF,
the parties hereto
have executed this Agreement as of the date first above written.
XXXXXXX
NAVIGATION
LIMITED
By:
Title:
Address: 000
Xxxxxxx
Xxxxx
Xxxxxxxxx,
XX
00000
AGREED
TO AND
ACCEPTED:
INDEMNITEE:
[Name]
(address)
