Exhibit 4
To: _____________
Whereas |
It
is in the best interest of Silicom Ltd. (the “Company”) to retain and attract the
most capable and talented persons as Officers (“Officers”) as
defined in the Israel Companies Law - 1999 (the "Law"); and, |
Whereas |
The
Company believes that in order to engage with such persons it must provide them with
adequate protection through insurance, exemption and
indemnification in connection with their service; and, |
Whereas |
You
are or have been appointed an Officer of the Company, and in order to ensure your
continuing service with the Company in the most effective manner,
the Company desires to provide for your exemption and
indemnification, to the fullest extent permitted by law and subject
to the terms hereof. |
NOW THEREFORE, THE PARTIES AGREE AS
FOLLOWS:
|
1.1 |
Subject only to mandatory provisions of applicable law to the contrary, the Company hereby
exempts you from your liability to any and all damage caused or to be caused to the
Company as a result of a breach of your duty of care towards the Company. |
|
1.2 |
The
exemption shall not be valid with respect to any of the following: |
|
1.2.1 |
Any
liability, with respect to which you are entitled to receive payment under an insurance
policy, other than amounts which are in excess of the payment you are entitled to receive
as aforesaid; |
|
1.2.2 |
Any
liability, with respect to which you are entitled to receive indemnification hereunder. |
|
2.1 |
Subject only to mandatory provisions of applicable law to the contrary, the Company shall
indemnify you for any obligation or expense specified in Sections 2.1.1, 2.1.2 and 2.1.3
below, imposed on you or incurred by you in consequence of an act you performed in your
capacity as Officer of the Company (“Indemnifiable Liabilities”),
provided that the Company’s undertaking with respect to obligations specified in
Section 2.1.1 below shall be limited to the types of events and the amount specified in
Appendix “A” hereto. |
|
2.1.1 |
any
monetary obligation imposed on you in favor of another person by a judgment, including a
judgment given in settlement or an arbitrator’s award that has been approved by a
court; |
|
2.1.2 |
all
reasonable litigation expenses, including advocates’ professional fees, incurred by
you due to an investigation or a proceeding instituted against you by an authority
competent to administrate such an investigation or proceeding that was “finalized
without the filing of an indictment” (as defined in the Companies Law – 1999)
against you “without any financial obligation imposed in lieu of criminal proceedings” (as
defined in the Companies Law – 1999), or an investigation or proceeding that was
finalized “without the filing of an indictment” against you with a “financial
obligation imposed in lieu of criminal proceedings” with respect to an offence that
does not require proof of criminal intent; and |
|
2.1.3 |
all
reasonable litigation expenses, including advocates’ professional fees, incurred by
you or which you were ordered to pay by a court, in a proceeding filed against you by the
Company or on its behalf or by another person, or in any criminal indictment in which you
are acquitted, or in any criminal indictment in which you were convicted of an offence
which does not require proof of mens rea (criminal intent). |
|
2.1.4 |
The
above shall also apply to any obligation or expense specified in Sections 2.1.1, 2.1.2
and 2.1.3 above imposed on you in consequence of your service as Officer of a subsidiary
of the Company (as defined in the Securities Law – 1968) (“Subsidiary”) or
in consequence of your service as Officer in an affiliated company (“Chevra Mesunefet”)
(as defined in the Securities Law – 1968) (“Affiliate”). Regarding Section
2.1.3 above the Company will make available to you any security or guarantee that you may
be required to post in accordance with an interim decision given by a court or an
arbitrator, including for the purpose of substituting liens imposed on your assets. |
|
2.2 |
The
Company will not indemnify you for any Indemnifiable Liabilities with respect to which
you are entitled to payment under an insurance policy or another indemnification
agreement, other than amounts which are in excess of the amounts you are entitled to
receive as aforesaid. Notwithstanding the above, the Company agrees to advance you any
amount which you would be entitled to receive as payment under an insurance policy with
respect to Indemnifiable Liabilities and you will thereafter be obligated to assign
and/or reimburse the Company for any payment actually received by you directly or by the
Company under such insurance policy with respect to such Indemnifiable Liabilities. |
|
2.3 |
If legal proceedings that may give rise to Indemnifiable Liabilities are initiated against
you (“Legal Proceedings”), the Company will make available to you, from
time to time, the funds required to cover all expenses and other payments in connection
with the Legal Proceedings, so that you will not be required to pay them. |
|
2.4 |
If the Company pays to you or on your behalf any amount in accordance herewith, and it is
thereafter established that you were not entitled to indemnification from the Company with
respect to such amount, you will pay such amount to the Company upon the Company’s
first request, and in accordance with the payment terms the Company determines. |
3. |
The
Company will not indemnify you for any amount you may be obligated to pay in
respect of: |
|
3.1 |
A breach of your duty of loyalty, except, to the extent permitted by law, for a breach of
a duty of loyalty to the Company, a Subsidiary or an Affiliate while acting in good faith
and having reasonable cause to assume that such act would not prejudice the interests of
the Company; |
|
3.2 |
A willful breach of the duty of care or reckless disregard for the circumstances or to the
consequences of a breach of the duty of care, excluding a breach due to your negligence
only; |
|
3.3 |
An
action taken or not taken with the intent of unlawfully realizing personal gain or in
the event of an intentional conflict of interest; |
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|
3.4 |
A
fine or penalty imposed upon you for an offense; and |
|
3.5 |
A counterclaim made by the Company or in its name in connection with a claim against the
Company filed by you. |
4. |
Notices
and Defense Against Suits |
|
4.1 |
You shall notify the Company of any Legal Proceedings and of all possible or threatened
Legal Proceedings as soon as you become aware thereof, and deliver to the Company, or to
such person as it shall direct you, without delay, all documents you receive in connection
with such proceedings. |
|
4.2 |
The Company shall be entitled to assume your defense in respect of all Legal Proceedings
and to use any attorney which the Company may choose for that purpose (except an attorney
who is reasonably unacceptable to you). |
|
4.3 |
You will fully cooperate with the Company and/or its attorney in every reasonable way as
may be required, including, but not limited to, the execution of power(s) of attorney and
other documents, provided that the Company shall cover all costs incidental thereto so
that you will not be required to pay the same or to finance the same yourself. |
|
4.4 |
If the Company has notified you that it shall assume your defense with respect to a Legal
Proceeding, it shall not indemnify you for expenses you incur in connection with such
proceeding. |
|
4.5 |
The Company shall have the right to settle or to turn to arbitration with respect to Legal
Proceedings. |
|
4.6 |
Notwithstanding the aforesaid, the Company shall not have the right to settle without your
consent, not to be unreasonably withheld, unless the settlement in question is without
admission of any responsibility or liability on your part and provides for a complete
waiver of all respective claims against you. |
|
4.7 |
The Company will have no liability or obligation to indemnify you in the case of a
settlement or initiation of arbitration proceedings by you, without the Company’s
prior written consent, which consent shall not be unreasonably withheld. |
|
4.8 |
For the removal of doubt, the Company’s obligations hereunder shall not derogate from
the Company’s ability to indemnify you retroactively for any payment or expense as
provided in Sections 2.1.1, 2.1.2 and 2.1.3 above, without limitation to the types of
events and the amount specified in Appendix “A”. |
|
4.9 |
For the removal of doubt, in the case of criminal proceedings the Company and/or the
attorneys as aforesaid will not have the right to plead guilty in your name or to agree to
a plea-bargain in your name without your consent. Furthermore, in a civil proceeding
(whether before a court or as a part of a compromise arrangement), the Company and/or its
attorneys will not have the right to admit to any occurrences that are not indemnifiable
pursuant to this agreement and/or pursuant to law, without your consent. However, the
aforesaid will not prevent the Company and/or its attorneys as aforesaid, with the
approval of the Company, to come to a financial arrangement with a plaintiff in a civil
proceeding without your consent so long as such arrangement will not be an admittance of
an occurrence not indemnifiable pursuant to this agreement and/or pursuant to law and
provided however, that such financial arrangement does not deviate from the conditions
precedent in this agreement. |
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|
5.1 |
The Company’s obligations hereunder (including all annexes attached hereto) will
continue after termination of your office/employment, provided that the cause of action of
the Legal Proceedings, which led to Indemnifiable Liabilities, is based on your being or
having been a director or an Officer of the Company, and/or on your action or omission to
act during your office/employment. |
|
5.2 |
The Company’s obligations hereunder shall also apply to Indemnifiable Liabilities
related to Legal Proceedings the cause of action of which is based on your action or
omission to act prior to execution hereof. |
|
5.3 |
This agreement shall be governed by and construed and enforced in accordance with the laws
of the State of Israel, without application of the conflict of laws principles thereof. |
|
5.4 |
Gender
use of the masculine pronoun shall be deemed to include usage of the feminine
pronoun where appropriate. |
|
5.5 |
This
agreement cancels any preceding letter of indemnification that may have been issued to
you. |
|
5.6 |
The headings of the paragraphs of this agreement are inserted for convenience only and
shall not be deemed to constitute part of this agreement or to affect the construction
thereof. |
|
5.7 |
This agreement shall in no way be binding on the Company prior to the receipt of all
necessary corporate approvals required under the Law. |
IN WITNESS WHEREOF the parties have signed this Indemnification Agreement in one or more counterparts on _______, 2008
|
Silicom Ltd.
By: ______________________
Title: _____________________ |
Accepted and agreed on__________:
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APPENDIX “A”
1. |
The
Company’s obligation to indemnify you is limited to the following: |
|
a. |
Actions in connection with anything performed by the Company, its Subsidiaries
and/or Affiliates’ affairs, in the ordinary course of business. |
|
b. |
Matters connected with investments of the Company and/or Subsidiaries and/or
Affiliates thereof in other entities, including transactions entered and actions
taken by you in the name of the Company and/or a Subsidiary and/or an Affiliate
thereof as an Officer thereof, whether before or after the investment is made; |
|
c. |
Actions in connection with the merger, proposed merger, spin off or a corporate
restructuring of the Company, a Subsidiary and/or an Affiliate thereof; |
|
d. |
Without derogating from the generality of the above, actions in connection with
the purchase or sale of companies, legal entities or assets, and the division or
consolidation thereof; |
|
e. |
Actions taken in connection with labor relations and/or employment matters in
the Company, Subsidiaries and/or Affiliates thereof (including compensation for
directors and employees of the Company), and in connection with business
relations of the Company, Subsidiaries and/or Affiliates thereof, including with
employees, independent contractors, customers, suppliers and various service
providers; |
|
f. |
Actions taken pursuant to or in accordance with the policies and procedures of
the Company, Subsidiaries and/or Affiliates thereof, whether such policies and
procedures are published or not. |
|
g. |
Actions taken pursuant to or in accordance with decisions of the board of
directors or general meeting of the Company, or of its Subsidiaries or
Affiliates. |
|
h. |
Actions taken in connection with the issuance of any type of securities of
Company, or of its Subsidiaries or Affiliates, including, without limitation,
the grant of options to purchase any of the same, or any other actions taken in
connection with the Company’s capital raising efforts. |
|
i. |
The offering of securities by the Company and/or by a shareholder to the public
and/or to private investors or the offer by the Company to purchase securities
from the public and/or from private investors or other holders pursuant to a
prospectus, agreements, notices, reports, tenders and/or other proceedings. |
|
j. |
Occurrences resulting from the Company’s status as a public company, and/or
from the fact that the Company’s securities were offered to the public
and/or are traded on a stock exchange, whether in Israel or abroad; |
|
k. |
Actions taken in connection with the public relation and/or investor relation
efforts of the Company, or of its Subsidiaries or Affiliates. |
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|
l. |
Actions in connection with the testing of products developed by the Company,
Subsidiaries and/or Affiliates, actions in connection with product liability as
they relate to products developed by the Company, Subsidiaries and/or Affiliates
or actions in connection with the distribution, sale, license or use of such
products; |
|
m. |
Actions taken in connection with the intellectual property of the Company,
Subsidiaries and/or Affiliates, and its protection, including the registration
or assertion of rights to intellectual property and the defense of claims
related to intellectual property including but not limited to any infringement
by the Company, Subsidiaries and/or Affiliates on the intellectual property of a
third party; |
The total amount of indemnification
for each case (including all matters connected therewith), shall not exceed US$ 3,000,000
(in addition to any amounts paid under an insurance coverage).
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