Exhibit 4.1
DIRECTOR INSURANCE,
INDEMNIFICATION
AND EXCULPATION
AGREEMENT
Director
Insurance, Indemnification and Exculpation Agreement, dated as of September 27, 2005,
between Check Point Software Technologies Ltd., an Israeli company (the
“Company”), and ___________________, a director of the Company (the
“Indemnitee”).
| WHEREAS, |
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the
Indemnitee is a director of the Company; and |
| WHEREAS, |
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both
the Company and Indemnitee recognize the increased risk of litigation and other claims
being asserted against directors of public companies; and |
| WHEREAS, |
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the
Articles of Association of the Company authorize the Company to insure, indemnify and
exculpate directors; and |
| WHEREAS, |
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in
recognition of Indemnitee's need for substantial protection against personal liability in
order to assure Indemnitee's continued service to the Company in an
effective manner and Indemnitee's reliance on the aforesaid Articles
of Association and, in part, to provide Indemnitee with specific
contractual assurance that the protection afforded by the Articles of
Association will be available to Indemnitee (regardless of, among
other things, any change in the composition of the Company's Board
of Directors or any acquisition of the Company), the Company wishes
to provide in this Agreement for the insurance, indemnification and exculpation
of Indemnitee to the fullest extent permitted by law from time to
time and as set forth in this Agreement. |
NOW, THEREFORE, in
consideration of the foregoing premises and of the Indemnitee’s continuing to serve
the Company directly or, at its request, with another entity, and intending to be legally
bound hereby, the parties hereto agree as follows:
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1.1. |
Change
in Control: shall be deemed to have occurred if: (i) any “person” (as
such term is used in Section 13(d) and 14(d) of the United States
Securities Exchange Act of 1934, as amended), other than a trustee or
other fiduciary holding securities under an employee benefit plan of the
Company or a corporation owned directly or indirectly by the shareholders
of the Company in substantially the same proportions as their ownership of
shares of the Company, is or becomes the “beneficial owner” (as
defined in Rule 13d-3 under said Act), directly or indirectly, of
securities of the Company representing 20% or more of the total voting
power represented by the Company’s then outstanding voting
securities; or (ii) during any period of two consecutive years,
individuals who at the beginning of such period constitute the Board of
Directors of the Company and any new director whose election by the Board
of Directors or nomination for election by the Company’s shareholders
was approved by a majority of the directors then still in office who
either were directors at the beginning of the period of whose election or
nomination for election was previously so approved, cease for any reason
to constitute a majority thereof; or (iii) the shareholders of the
Company approve a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in
the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least 80% of
the total voting power represented by the voting securities of the Company
or such surviving entity outstanding immediately after such merger or
consolidation, or the shareholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all the Company’s
assets. |
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1.2. |
Expenses:
includes reasonable legal costs, including attorneys’ fees, expended
by the Indemnitee or for which the Indemnitee has been charged by a court,
or in connection with an investigation or other proceeding by a competent
authority. Expenses shall also include any security or bond that the
Indemnitee may be required to post in connection with an Indemnifiable
Event (as defined below). |
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1.3. |
Office
Holder: as such term is defined in the Israeli Companies Law,
5759-1999. |
| 2. |
INDEMNIFICATION
AND ADVANCEMENT OF EXPENSES |
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2.1. |
The
Company hereby undertakes to indemnify the Indemnitee to the fullest extent
permitted by applicable law from time to time, for any liability and
Expense that may be imposed on Indemnitee due to an act performed or
failure to act by him in his capacity as an Office Holder of the Company
or any subsidiary of the Company or any entity in which Indemnitee serves
as an Office Holder at the request of the Company either prior to or after
the date hereof, for any event against which indemnification is available
by law from time to time (“Indemnifiable Events”), including
without limitation the following: |
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2.1.1. |
monetary
liability imposed on the Indemnitee in favor of a third party in a
judgment, including a settlement or an arbitral award confirmed by a
court; |
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2.1.2. |
reasonable
legal costs, including attorney’s fees, expended by the Indemnitee as
a result of an investigation or proceeding instituted against the
Indemnitee by a competent authority, provided that such investigation or
proceeding concludes without the filing of an indictment against the
Indemnitee and either (A) no financial liability was imposed on the
Indemnitee in lieu of criminal proceedings, or (B) financial
liability was imposed on the Indemnitee in lieu of criminal proceedings
but the alleged criminal offense does not require proof of criminal
intent; and |
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2.1.3. |
reasonable
legal costs, including attorneys’ fees, expended by the Indemnitee or
for which the Indemnitee is charged by a court, (a) in an action brought
against the Indemnitee by or on behalf of the Company or a third party, or
(b) in a criminal action in which the Indemnitee is found innocent, or (c) in
a criminal action in which the Indemnitee is convicted and in which a
proof of criminal intent is not required. |
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2.2. |
The
indemnification undertaking made by the Company shall be only with respect
to such events as are described in Schedule A hereto. The maximum amount
payable by the Company under this Agreement shall not exceed one-half of
the shareholders’ equity of the Company, measured by the balance
sheet of the Company last published prior to the time that notice is
provided to the Company pursuant to Section 8 below. |
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2.3. |
If
so requested by the Indemnitee, the Company shall advance an amount (or
amounts) estimated by it to cover Indemnitee’s reasonable litigation
Expenses, with respect to which the Indemnitee is entitled to be
indemnified under Section 2.1 above. |
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2.4. |
The
Company’s obligation to indemnify the Indemnitee and advance Expenses
in accordance with this Agreement shall be for such period as the
Indemnitee shall be subject to any possible claim or threatened, pending
or completed action, suit or proceeding or any inquiry or investigation,
whether civil, criminal or investigative, arising out of the Indemnitee’s
service in the foregoing positions, whether or not the Indemnitee is still
serving in such positions. |
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2.5. |
The
Company undertakes that as long as it may be obligated to provide
indemnification and advance Expenses under this Agreement, the Company
will purchase and maintain in effect directors and officers liability
insurance to cover the liability of the Indemnitee to the fullest extent
permitted by law. |
| 3. |
GENERAL
LIMITATIONS ON INDEMNIFICATION |
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3.1. |
If,
when and to the extent that the Indemnitee would not be permitted to be so
indemnified under applicable law, the Company shall be entitled to be
reimbursed by the Indemnitee (who hereby agrees to reimburse the Company)
for all such amounts theretofore paid (unless the Indemnitee has commenced
legal proceedings in a court of competent jurisdiction to secure a
determination that the Indemnitee should be indemnified under applicable
law, in which event the Indemnitee shall not be required to so reimburse
the Company until a final judicial determination is made with respect
thereto as to which all rights of appeal therefrom have been exhausted or
lapsed) and shall not be obligated to indemnify or advance any additional
amounts to the Indemnitee (unless there has been a determination by a
court or competent jurisdiction that the Indemnitee would be permitted to
be so indemnified under this Agreement). |
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3.2. |
Change
in Control of Company. The Company undertakes that in the event of a
Change in Control of the Company, the Company’s obligations under this
Agreement shall continue to be in effect following such Change in Control,
and the Company shall take all necessary action to ensure that the party
acquiring control of the Company shall independently undertake to continue
in effect such Agreement, to maintain the provisions of the Articles of
Association allowing indemnification and to indemnify Indemnitee in the
event that the Company shall not have sufficient funds or otherwise shall
not be able to fulfill its obligations hereunder. |
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No
supplement, modification or amendment of this Agreement shall be binding unless executed
in writing by both of the parties hereto. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provisions hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver. Any waiver
shall be in writing. |
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In
the event of 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 shall do everything that may be necessary to secure such rights,
including the execution of such documents necessary to enable the Company effectively to
bring suit to enforce such rights. |
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The
Company shall not be liable under this Agreement to make any payment in connection with
any claim made against the Indemnitee to the extent the Indemnitee has otherwise actually
received payment (under any insurance policy or otherwise) of the amounts otherwise
indemnifiable hereunder. Any amounts paid to the Indemnitee under such insurance policy
or otherwise after the Company has indemnified the Indemnitee for such liability or
Expense shall be repaid to the Company promptly upon receipt by Indemnitee. |
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Subject
to the receipt of all the required approvals in accordance with Israeli Law, including
the approvals of the audit committee, the Board of Directors and, to the extent required,
by the shareholders of the Company, this Agreement shall be in full force and effect as
of the date hereof. |
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| 8. |
NOTIFICATION
AND DEFENSE OF CLAIM. |
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Promptly
after receipt by the Indemnitee of notice of the commencement of any action, suit or
proceeding, the Indemnitee will, if a claim in respect thereof is to be made against the
Company under this Agreement, notify the Company of the commencement hereof; but the
omission so to notify the Company will not relieve it from any liability which it may
have to the Indemnitee otherwise than under this Agreement. With respect to any such
action, suit or proceeding as to which the Indemnitee notifies the Company of the
commencement thereof and without derogating from Section 2.1: |
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8.1. |
The
Company will be entitled to participate therein at its own expense; and |
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8.2. |
Except
as otherwise provided below, to the extent that it may wish, the Company
jointly with any other indemnifying party similarly notified will be
entitled to assume the defense thereof, with counsel reasonably
satisfactory to the Indemnitee. After notice from the Company to the
Indemnitee of its election to assume the defense thereof, the Company will
not be liable to the Indemnitee under this Agreement for any legal or
other expenses subsequently incurred by Indemnitee in connection with the
defense thereof other than reasonable costs of investigation or as
otherwise provided below. The Indemnitee shall have the right to employ
his or her own counsel in such action, suit or proceeding, but the fees
and expenses of such counsel incurred after notice from the Company of its
assumption of the defense thereof shall be at the expense of the Indemnitee,
unless: (i) the employment of counsel by Indemnitee has been
authorized by the Company; (ii) the Indemnitee shall have reasonably
concluded that there may be a conflict of interest between the Company and
the Indemnitee in the conduct of the defense of such action; or (iii) the
Company shall not in fact have employed counsel to assume the defense of
such action, in each of which cases the fees and expenses of counsel shall
be at the expense of the Company. The Company shall not be entitled to
assume the defense of any action, suit or proceeding brought by or on
behalf of the Company or as to which the Indemnitee shall have reached the
conclusion specified in (ii) above. |
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8.3. |
The
Company shall not be liable to indemnify the Indemnitee under this Agreement
for any amounts paid in settlement of any action or claim effected without
its written consent. The Company shall not settle any action or claim in
any manner that would impose any penalty or limitation on the Indemnitee
without the Indemnitee’s written consent. Neither the Company nor the
Indemnitee will unreasonably withhold their consent to any proposed
settlement. |
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The
Company hereby exempts the Indemnitee, to the fullest extent permitted by law, from any
liability for damages caused as a result of the Indemnitee’s breach of the duty of
care to the Company, provided that the Indemnitee shall not be exempt with respect to any
action or omission as to which, under applicable law, the Company is not entitled to
exculpate the Indemnitee. |
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The
rights of the Indemnitee hereunder shall not be deemed exclusive of any other rights he
or she may have under the Company’s Articles of Association or applicable law or
otherwise, and to the extent that during the indemnification period the rights of the
then existing directors and Office Holders are more favorable to such directors or Office
Holders than the rights provided thereunder or under this Agreement to the Indemnitee,
the Indemnitee shall be entitled to the full benefits of such more favorable rights. |
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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 personal and legal
representatives. This Agreement shall continue in effect regardless of whether Indemnitee
continues to serve as an Office Holder or director of the Company or of any other
enterprise at the Company’s request, provided that the claim for indemnification
relates to an Indemnifiable Event. |
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The
provisions of this Agreement shall be severable in the event that any provision hereof
(including any provision within a single section, paragraph or sentence) is held by a
court of competent jurisdiction to be invalid, void or otherwise unenforceable, and the
remaining provisions shall remain enforceable to the fullest extent permitted by law. |
| 13. |
GOVERNING
LAW, JURISDICTION. |
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This
Agreement shall be governed by and construed and enforced in accordance with the laws of
the State of Israel. The parties hereto irrevocably submit to the exclusive jurisdiction
of the courts of Tel-Aviv in any action related to this Agreement |
| 14. |
ENTIRE
AGREEMENT AND TERMINATION. |
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This
Agreement represents the entire agreement between the parties; and there are no other
agreements, contracts or understandings between the parties with respect to the subject
matter of this Agreement. No termination or cancellation of this Agreement shall be
effective unless in writing and signed by both parties hereto. |
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IN
WITNESS WHEREOF, the parties have entered into this Agreement as of the date first above
written.
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SCHEDULE A
| 1. |
Negotiations,
execution, delivery and performance of agreements on behalf of the Company |
| 2. |
Anti-competitive
acts and acts of commercial wrongdoing |
| 3. |
Acts
in regard to invasion of privacy including with respect to databases and
acts in regard of slander |
| 4. |
Acts
in regard to copyrights, patents, designs and any other intellectual
property rights, and acts in regard to defects in the Company’s
products or services |
| 5. |
Acts
in regard to “Y2K” malfunctions |
| 6. |
Approval
of corporate actions including the approval of the acts of the Company’s
management, their guidance and their supervision |
| 7. |
Claims
of failure to exercise business judgment and a reasonable level of
proficiency, expertise and care in regard to the Company’s business |
| 8. |
Claims
relating to the offering of securities, claims relating to violations of
securities laws of any jurisdiction and claims arising out of the Company’s
status as a publicly-traded company, including, without limitation,
fraudulent disclosure claims, failure to comply with SEC disclosure rules
and other claims relating to relationships with investors and the
investment community |
| 9. |
Violations
of laws requiring the Company to obtain regulatory and governmental
licenses, permits and authorizations in any jurisdiction |
| 10. |
Claims
in connection with publishing or providing any information, including any
filings with governmental authorities, on behalf of the Company in the
circumstances required under applicable laws |
| 11. |
Violations
of any law or regulation governing domestic and international
telecommunications in any jurisdiction |
| 12. |
Claims
in connection with employment relationships with the Company’s or its
subsidiaries’ employees. |
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