EXHIBIT 10.11
UNIGRAPHICS SOLUTIONS INC.
INDEMNIFICATION AGREEMENT
THIS AGREEMENT is entered into as of [Date], 1998 ("Agreement"),
between Unigraphics Solutions Inc., a Delaware corporation (the "Company"), and
[Name] ("Indemnitee").
BACKGROUND STATEMENT AND RECITALS
Highly competent and experienced persons are becoming more reluctant
to serve corporations as directors or in other capacities unless they are
provided with adequate protection through insurance and adequate indemnification
against inordinate risks of claims and actions against them arising out of their
service to and activities on behalf of the corporation.
The Board of Directors of the Company (the "Board") has determined
that the inability to attract and retain such persons would be detrimental to
the best interests of the Company and its stockholders and that the Company
should act to assure such persons that there will be increased certainty of such
protection in the future.
The Board has also determined that it is reasonable, prudent and
necessary for the Company, in addition to making available directors' and
officers' liability insurance (or otherwise providing for adequate arrangements
of self-insurance), contractually to obligate itself to indemnify such persons
to the fullest extent permitted by applicable law so that they will serve or
continue to serve the Company free from undue concern that they will not be so
indemnified.
Indemnitee is willing to serve, continue to serve and to take on
additional service for or on behalf of the Company on the condition that he be
so indemnified.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants herein contained, and other good and valuable consideration, the
sufficiency and receipt of which are hereby acknowledged, the parties hereby
agree as follows:
ARTICLE 1
CERTAIN DEFINITIONS
As used herein, the following words and terms shall have the following
respective meanings:
-1-
"Change in Control" means a change in control of the Company occurring
after the Public Status Date of a nature that would be required to be reported
in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to
any similar item on any similar schedule or form) under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), whether or not the Company is then
subject to such reporting requirement; provided, however, that, without limiting
the generality of the foregoing, a Change in Control shall be deemed to have
occurred (irrespective of the applicability of the initial clause of this
definition) if at any time after the Public Status Date (a) any "person" (as
such term is used in Sections 13(d) and 14(d) of the Exchange Act, but excluding
(i) any employee benefit plan of the Company or of any subsidiary of the
Company, and (ii) any entity organized, appointed or established by the Company
pursuant to the terms of any such plan) is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 50% or more of the combined voting power
of the Company's then outstanding securities without the prior approval of at
least two-thirds of the members of the whole Board in office immediately prior
to such person attaining such percentage interest; (b) the Company is a party to
a merger, consolidation, share exchange, sale of assets or other reorganization,
or a proxy contest, as a consequence of which members of the Board in office
immediately prior to such transaction or event constitute less than a majority
of the whole Board thereafter; or (c) during any period of two consecutive
years, individuals who at the beginning of such period constituted members of
the Board (including for this purpose any new member whose election or
nomination for election by the Company's stockholders was approved by at least
two-thirds of the members of the whole Board then still in office who were
members of the Board at the beginning of such period) cease for any reason to
constitute a majority of the whole Board. Notwithstanding the foregoing, a
Change in Control shall not be deemed to have occurred solely as a result of
Electronic Data Systems Corporation (or a successor corporation) remaining or
becoming the beneficial owner of 50% or more of the combined voting power of the
Company's then outstanding securities.
"Claim" means an actual or threatened claim or request for relief.
"Corporate Status" means the status of a person who is or was a
director, nominee for director, officer, employee, agent or fiduciary of the
Company or of any other corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise which such person is or was serving at the
request of the Company.
"Disinterested Director," with respect to any request by Indemnitee
for indemnification hereunder, means a director of the Company who neither is
nor was a party to the Proceeding or subject to a Claim, issue or matter in
respect of which indemnification is sought by Indemnitee.
"DGCL" means the Delaware General Corporation Law and any successor
statute thereto as either of them may be amended from time to time.
-2-
"Expenses" means all attorneys' fees, retainers, court costs,
transcript costs, 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 prosecuting, defending, preparing to prosecute or defend,
investigating, being or preparing to be a witness in, or participating in
(including on appeal), a Proceeding.
"Independent Counsel" means a law firm, or a member of a law firm,
that is experienced in matters of corporation law and neither contemporaneously
is, nor in the five years theretofore has been, retained to represent (a) the
Company or Indemnitee in any matter material to either such party, (b) any other
party to the Proceeding giving rise to a claim for indemnification hereunder or
(c) the beneficial owner, directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the Company's then
outstanding voting securities (other than, in each such case, with respect to
matters concerning the rights of Indemnitee under this Agreement, or of other
indemnitees under similar indemnification agreements). 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.
"person" shall have the meaning ascribed to such term in Sections
13(d) and 14(d) of the Exchange Act.
"Proceeding" means any threatened, pending or completed action, suit,
arbitration, alternate dispute resolution mechanism, administrative hearing or
any other proceeding, whether civil, criminal, administrative or investigative
and whether or not based upon events occurring, or actions taken, before the
date hereof (except any of the foregoing initiated by Indemnitee pursuant to
Article 6 or Section 7.8 to enforce his rights under this Agreement), and any
inquiry or investigation that could lead to, and any appeal in or related to,
any such action, suit, arbitration, alternative dispute resolution mechanism,
hearing or proceeding.
"Public Status Date" means the first date on which the Company has
outstanding a class of equity securities registered under the Exchange Act.
ARTICLE 2
SERVICES BY INDEMNITEE
Section 2.1 Services. Indemnitee agrees to serve, or continue to
serve, as a director of the Company. Indemnitee may from time to time also
agree to serve, as the Company may request from time to time, as a director,
officer, employee, agent or fiduciary of another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise. Indemnitee and the
Company each acknowledge that they have entered into this Agreement as a means
of inducing Indemnitee to serve, or continue to serve, the Company in such
capacities.
-3-
Indemnitee may at any time and for any reason resign from such position or
positions (subject to any other contractual obligation or any obligation imposed
by operation of law). The Company shall have no obligation under this Agreement
to continue Indemnitee in any such position or positions.
ARTICLE 3
INDEMNIFICATION
Section 3.1 General. The Company shall indemnify, and advance
Expenses to, Indemnitee to the fullest extent permitted by applicable law in
effect on the date hereof and to such greater extent as applicable law may
thereafter from time to time permit. The rights of Indemnitee provided under
the preceding sentence shall include, but shall not be limited to, the right to
be indemnified and to have Expenses advanced in all Proceedings to the fullest
extent permitted by Section 145 of the DGCL. The provisions set forth in this
Agreement are provided in addition to and as a means of furtherance and
implementation of, and not in limitation of, the obligations expressed in this
Article 3.
Section 3.2 Proceedings Other Than by or in Right of the Company.
Indemnitee shall be entitled to indemnification pursuant to this Section 3.2 if,
by reason of his Corporate Status, he was, is or is threatened to be made, a
party to any Proceeding, other than a Proceeding by or in the right of the
Company. Pursuant to this Section 3.2, the Company shall indemnify Indemnitee
against Expenses, judgments, penalties, fines and amounts paid in settlement
(including all interest, assessments and other charges paid or payable in
connection with any such Expenses, judgments, penalties, fines and amounts paid
in settlement) actually and reasonably incurred by him or on his behalf in
connection with such Proceeding or any Claim, issue or matter therein, if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company, and with respect to any criminal
Proceeding, had no reasonable cause to believe his conduct was unlawful.
Nothing in this Section 3.2 shall limit the benefits of Section 3.1 or any other
Section hereunder.
Section 3.3 Proceedings by or in Right of the Company. Indemnitee
shall be entitled to indemnification pursuant to this Section 3.3 if, by reason
of his Corporate Status, he was, is or is threatened to be made, a party to any
Proceeding brought by or in the right of the Company to procure a judgment in
its favor. Pursuant to this Section 3.3, the Company shall indemnify Indemnitee
against Expenses actually and reasonably incurred by him or on his behalf in
connection with such Proceeding or any Claim, issue or matter therein, if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company. Notwithstanding the foregoing, no
indemnification against such Expenses shall be made in respect of any Claim,
issue or matter in such Proceeding as to which Indemnitee shall have been
adjudged to be liable to the Company if applicable law prohibits such
indemnification; provided, however, that, if applicable law so permits,
indemnification against such Expenses shall nevertheless be made by the Company
in such event if and only to the extent that the Court
-4-
of Chancery of the State of Delaware or other court of competent jurisdiction
(the "Court"), or the court in which such Proceeding shall have been brought or
is pending, shall so determine. Nothing in this Section 3.3 shall limit the
benefits of Section 3.1 or any other Section hereunder.
ARTICLE 4
EXPENSES
Section 4.1 Expenses of a Party Who Is Wholly or Partly Successful.
Notwithstanding any other provision of this Agreement to the contrary (except as
set forth in Section 7.2(c) or 7.6), and without a requirement for any
determination described in Section 5.2, the Company shall indemnify Indemnitee
against all Expenses actually and reasonably incurred by him or on his behalf in
connection with any Proceeding to which Indemnitee was or is a party by reason
of his Corporate Status and in which Indemnitee is successful, on the merits or
otherwise. If Indemnitee is not wholly successful, on the merits or otherwise,
in a Proceeding but is successful, on the merits or otherwise, as to any Claim,
issue or matter in such Proceeding, the Company shall indemnify Indemnitee
against all Expenses actually and reasonably incurred by him or on his behalf
relating to each successfully resolved Claim, issue or matter. For purposes of
this Section 4.1 and without limitation, the termination of a Claim, issue or
matter in a Proceeding by dismissal, with or without prejudice, shall be deemed
to be a successful result as to such Claim, issue or matter.
Section 4.2 Expenses of a Witness or Non-Party. Notwithstanding any
other provision of this Agreement to the contrary, to the extent that Indemnitee
is, by reason of his Corporate Status, a witness or otherwise participates in
any Proceeding at a time when he is not a party in the Proceeding, the Company
shall indemnify him against all Expenses actually and reasonably incurred by him
or on his behalf in connection therewith.
Section 4.3 Advancement of Expenses. The Company shall pay all
reasonable Expenses incurred by or on behalf of Indemnitee in connection with
any Proceeding, whether brought by or in the right of the Company or otherwise,
in advance of any determination with respect to entitlement to indemnification
pursuant to Article 5 within 15 days after the receipt by the Company of a
written request from Indemnitee requesting such payment or payments from time to
time, whether prior to or after final disposition of such Proceeding. Such
statement or statements shall reasonably evidence the Expenses incurred by
Indemnitee. Indemnitee hereby undertakes and agrees that he will reimburse and
repay the Company for any Expenses so advanced to the extent that it shall
ultimately be determined (in a final adjudication by a court from which there is
no further right of appeal or in a final adjudication of an arbitration pursuant
to Section 6.1 if Indemnitee elects to seek such arbitration) that Indemnitee is
not entitled to be indemnified by the Company against such Expenses.
-5-
ARTICLE 5
PROCEDURE FOR DETERMINATION OF ENTITLEMENT
TO INDEMNIFICATION
Section 5.1 Request by Indemnitee. To obtain indemnification under
this Agreement, Indemnitee shall submit to the Company a written request,
including therein or therewith such documentation and information as is
reasonably available to Indemnitee and is reasonably necessary to determine
whether and to what extent Indemnitee is entitled to indemnification. The
Secretary or an Assistant Secretary of the Company shall, promptly upon receipt
of such a request for indemnification, advise the members of the Board in
writing that Indemnitee has requested indemnification.
Section 5.2 Determination of Request. Upon written request by
Indemnitee for indemnification pursuant to Section 5.1, a determination, if
required by applicable law, with respect to Indemnitee's entitlement thereto
shall be made in the specific case as follows:
(a) If a Change in Control shall have occurred, by
Independent Counsel in a written opinion to the Board, a copy of which
shall be delivered to Indemnitee unless Indemnitee shall request that such
determination be made by the Disinterested Directors, in which case in the
manner provided for in clause (i) of paragraph (b) below;
(b) If a Change in Control shall not have occurred, (i) by
a majority vote of the Disinterested Directors, even though less than a
quorum of the Board, or (ii) if there are no Disinterested Directors, or if
such Disinterested Directors so direct, by Independent Counsel in a written
opinion to the Board, a copy of which shall be delivered to the Indemnitee,
or (iii) if Indemnitee and the Company mutually agree, by the stockholders
of the Company; or
(c) As provided in Section 5.4(b).
If it is so determined that Indemnitee is entitled to indemnification hereunder,
payment to Indemnitee shall be made within 15 days after such determination.
Indemnitee shall cooperate with the person or persons making such determination
with respect to Indemnitee's entitlement to indemnification, including providing
to such person upon reasonable advance request any documentation or information
that is not privileged or otherwise protected from disclosure and that is
reasonably available to Indemnitee and reasonably necessary for such
determination. Any costs or expenses (including attorneys' fees and
disbursements) incurred by Indemnitee in so cooperating with the person or
persons making such determination shall be borne by the Company (irrespective of
the determination as to Indemnitee's entitlement to indemnification), and the
Company shall indemnify and hold harmless Indemnitee therefrom.
Section 5.3 Independent Counsel. If a Change in Control shall not
have occurred and the determination of entitlement to indemnification is to be
made by Independent Counsel, the Independent Counsel shall be selected by (a) a
majority vote of the Disinterested
-6-
Directors, even though less than a quorum of the Board or (b) if there are no
Disinterested Directors, by a majority vote of the Board, and the Company shall
give written notice to Indemnitee, within 10 days after receipt by the Company
of Indemnitee's request for indemnification, specifying the identity and address
of the Independent Counsel so selected. If a Change in Control shall have
occurred and the determination of entitlement to indemnification is to be made
by Independent Counsel, the Independent Counsel shall be selected by Indemnitee,
and Indemnitee shall give written notice to the Company, within 10 days after
submission of Indemnitee's request for indemnification, specifying the identity
and address of the Independent Counsel so selected (unless Indemnitee shall
request that such selection be made by the Disinterested Directors, in which
event the Company shall give written notice to Indemnitee, within 10 days after
receipt of Indemnitee's request for the Disinterested Directors to make such
selection, specifying the identity and address of the Independent Counsel so
selected). In either event, (i) such notice to Indemnitee or the Company, as the
case may be, shall be accompanied by a written affirmation of the Independent
Counsel so selected that it satisfies the requirements of the definition of
"Independent Counsel" in Article 1 and that it agrees to serve in such capacity
and (ii) Indemnitee or the Company, as the case may be, may, within seven days
after such written notice of selection shall have been given, deliver to the
Company or to Indemnitee, as the case may be, a written objection to such
selection. Any objection to selection of Independent Counsel pursuant to this
Section 5.3 may be asserted only on the ground that the Independent Counsel so
selected does not meet the requirements of the definition of "Independent
Counsel" in Article 1, and the objection shall set forth with particularity the
factual basis of such assertion. If such written objection is timely made, the
Independent Counsel so selected may not serve as Independent Counsel unless and
until the Court has determined that such objection is without merit. In the
event of a timely written objection to a choice of Independent Counsel, the
party originally selecting the Independent Counsel shall have seven days to make
an alternate selection of Independent Counsel and to give written notice of such
selection to the other party, after which time such other party shall have five
days to make a written objection to such alternate selection. If, within 30 days
after submission of Indemnitee's request for indemnification pursuant to Section
5.1, no Independent Counsel shall have been selected and not objected to, either
the Company or Indemnitee may petition the Court for resolution of any objection
that 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 an objection is so resolved or
the person so appointed shall act as Independent Counsel under Section 5.2. The
Company shall pay any and all reasonable fees and expenses incurred by such
Independent Counsel in connection with acting pursuant to Section 5.2, and the
Company shall pay all reasonable fees and expenses incident to the procedures of
this Section 5.3, regardless of the manner in which such Independent Counsel was
selected or appointed. Upon the due commencement of any judicial proceeding or
arbitration pursuant to Section 6.1, Independent Counsel shall be discharged and
relieved of any further responsibility in such capacity (subject to the
applicable standards of professional conduct then prevailing).
-7-
Section 5.4 Presumptions and Effect of Certain Proceedings.
(a) Indemnitee shall be presumed to be entitled to
indemnification under this Agreement upon submission of a request for
indemnification pursuant to Section 5.1, and the Company shall have the
burden of proof in overcoming that presumption in reaching a determination
contrary to that presumption. Such presumption shall be used by
Independent Counsel (or other person or persons determining entitlement to
indemnification) as a basis for a determination of entitlement to
indemnification unless the Company provides information sufficient to
overcome such presumption by clear and convincing evidence.
(b) If the person or persons empowered or selected under this
Article 5 to determine whether Indemnitee is entitled to indemnification
shall not have made a determination within 60 days after receipt by the
Company of Indemnitee's request for indemnification, the requisite
determination of entitlement to indemnification shall be deemed to have
been made and Indemnitee shall be entitled to such indemnification, absent
(i) a knowing misstatement by Indemnitee of a material fact, or knowing
omission of a material fact necessary to make Indemnitee's statement not
materially misleading, in connection with Indemnitee's request for
indemnification, or (ii) a prohibition of such indemnification under
applicable law; provided, however, that such 60-day period may be extended
for a reasonable time, not to exceed an additional 30 days, if the person
making the determination with respect to entitlement to indemnification in
good faith requires such additional time for the obtaining or evaluating of
documentation and/or information relating to such determination; provided
further, that the 60-day limitation set forth in this Section 5.4(b) shall
not apply and such period shall be extended as necessary (i) if within 30
days after receipt by the Company of Indemnitee's request for
indemnification under Section 5.1 Indemnitee and the Company have agreed,
and the Board has resolved, to submit such determination to the
stockholders of the Company pursuant to Section 5.2(b) for their
consideration at an annual meeting of stockholders to be held within 90
days after such agreement and such determination is made thereat, or a
special meeting of stockholders for the purpose of making such
determination to be held within 60 days after such agreement and such
determination is made thereat, or (ii) if the determination of entitlement
to indemnification is to be made by Independent Counsel, in which case the
applicable period shall be as set forth in clause (c) of Section 6.1.
(c) The termination of any Proceeding or of any Claim, issue
or matter by judgment, order, settlement (whether with or without court
approval) or conviction, or upon a plea of nolo contendere or its
equivalent, shall not by itself adversely affect the rights of Indemnitee
to indemnification or create a presumption that Indemnitee did not act in
good faith or in a manner that 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. Indemnitee shall be deemed to have been found
liable in respect of any Claim, issue or matter only
-8-
after he shall have been so adjudged by the Court after exhaustion of all
appeals therefrom.
ARTICLE 6
CERTAIN REMEDIES OF INDEMNITEE
Section 6.1 Indemnitee Entitled to Adjudication in an Appropriate
Court. If (a) a determination is made pursuant to Article 5 that Indemnitee is
not entitled to indemnification under this Agreement, (b) there has been any
failure by the Company to make timely payment or advancement of any amounts due
hereunder, or (c) the determination of entitlement to indemnification is to be
made by Independent Counsel and such determination shall not have been made and
delivered in a written opinion within 90 days after the latest of (i) such
Independent Counsel's being appointed, (ii) the overruling by the Court of
objections to such counsel's selection or (iii) expiration of all periods for
the Company or Indemnitee to object to such counsel's selection, Indemnitee
shall be entitled to commence an action seeking an adjudication in the Court of
his entitlement to such indemnification or advancement of Expenses.
Alternatively, 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. Indemnitee shall commence such action
seeking an adjudication or an award in arbitration within 180 days following the
date on which Indemnitee first has the right to commence such action pursuant to
this Section 6.1, or such right shall expire. The Company shall not oppose
Indemnitee's right to seek any such adjudication or award in arbitration.
Section 6.2 Adverse Determination Not to Affect any Judicial
Proceeding. If a determination shall have been made pursuant to Article 5 that
Indemnitee is not entitled to indemnification under this Agreement, any judicial
proceeding or arbitration commenced pursuant to this Article 6 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 such initial adverse
determination. In any judicial proceeding or arbitration commenced pursuant to
this Article 6, Indemnitee shall be presumed to be entitled to indemnification
or advancement of Expenses, as the case may be, under this Agreement and the
Company shall have the burden of proof in overcoming such presumption and to
show by clear and convincing evidence that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be.
Section 6.3 Company Bound by Determination Favorable to Indemnitee in
any Judicial Proceeding or Arbitration. If a determination shall have been made
or deemed to have been made pursuant to Article 5 that Indemnitee is entitled to
indemnification, the Company shall be irrevocably bound by such determination in
any judicial proceeding or arbitration commenced pursuant to this Article 6 and
shall be precluded from asserting that such determination has not been made or
that the procedure by which such determination was made is not valid, binding
and enforceable, in each such case absent (a) a knowing misstatement by
Indemnitee of a material fact, or a knowing omission of a material fact
necessary to make a
-9-
statement by Indemnitee not materially misleading, in connection with
Indemnitee's request for indemnification or (b) a prohibition of such
indemnification under applicable law.
Section 6.4 Company Bound by the Agreement. The Company shall be
precluded from asserting in any judicial proceeding or arbitration commenced
pursuant to this Article 6 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.
Section 6.5 Indemnitee Entitled to Expenses of Judicial Proceeding.
If Indemnitee 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 the Company shall
indemnify Indemnitee against, any and all expenses (of the types described in
the definition of Expenses in Article 1) actually and reasonably incurred by him
in such judicial adjudication or arbitration but only if Indemnitee prevails
therein. If it shall be determined in such judicial adjudication or arbitration
that Indemnitee is entitled to receive part but not all of the indemnification
or advancement of expenses or other benefit sought, the expenses incurred by
Indemnitee in connection with such judicial adjudication or arbitration shall be
equitably allocated between the Company and Indemnitee. Notwithstanding the
foregoing, if a Change in Control shall have occurred, Indemnitee shall be
entitled to indemnification under this Section 6.5 regardless of whether
Indemnitee ultimately prevails in such judicial adjudication or arbitration.
ARTICLE 7
MISCELLANEOUS
Section 7.1 Non-Exclusivity.
(a) The rights of Indemnitee to receive indemnification and
advancement of Expenses under this Agreement shall not be deemed exclusive
of any other rights to which Indemnitee may at any time be entitled under
applicable law, the Certificate of Incorporation or Bylaws of the Company,
any other agreement, vote of stockholders or a resolution of directors, or
otherwise. No amendment or alteration of the Certificate of Incorporation
or Bylaws of the Company or any provision thereof shall adversely affect
Indemnitee's rights hereunder and such rights shall be in addition to any
rights Indemnitee may have under the Company's Certificate of
Incorporation, Bylaws and the DGCL or otherwise. To the extent that there
is a change in the DGCL or other applicable law (whether by statute or
judicial decision) that allows greater indemnification by agreement than
would be afforded currently under the Company's Certificate of
Incorporation or Bylaws and this Agreement, it is the intent of the parties
hereto that the Indemnitee shall enjoy by virtue of this Agreement the
greater benefit so afforded by such change.
-10-
(b) The Company shall not amend the Bylaws of the Company
in a manner that adversely affects Indemnitee's rights to indemnification
thereunder existing as of the date hereof until the six-year anniversary of
the Public Status Date.
Section 7.2 Insurance and Subrogation.
(a) To the extent the Company maintains an insurance policy
or policies providing liability insurance for directors, officers,
employees, agents or fiduciaries of the Company or of any other
corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise that such person serves at the request of the Company,
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, officer, employee, agent or fiduciary under such policy or
policies.
(b) In the event of any payment by the Company 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 hereunder if and to the
extent that Indemnitee has otherwise actually received such payment under
the Company's Certificate of Incorporation or Bylaws or any insurance
policy, contract, agreement or otherwise.
Section 7.3 Certain Settlement Provisions. The Company shall have no
obligation to indemnify Indemnitee under this Agreement for amounts paid in
settlement of a Proceeding or Claim without the Company's prior written consent.
The Company shall not settle any Proceeding or Claim in any manner that would
impose any fine or other obligation on 12 Indemnitee without Indemnitee's prior
written consent. Neither the Company nor Indemnitee shall unreasonably withhold
their consent to any proposed settlement.
Section 7.4 Duration of Agreement. This Agreement shall continue for
so long as Indemnitee serves as a director, nominee for director, officer,
employee, agent or fiduciary of the Company or, at the request of the Company,
as a director, nominee for director, officer, employee, agent or fiduciary of
another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise, and thereafter shall survive until and terminate upon the
latest to occur of (a) the expiration of 10 years after the latest date that
Indemnitee shall have ceased to serve in any such capacity; (b) the final
termination of all pending Proceedings in respect of which Indemnitee is granted
rights of indemnification or advancement of Expenses hereunder and of any
proceeding commenced by Indemnitee pursuant to Article 6 relating thereto; or
(c) the
-11-
expiration of all statutes of limitation applicable to possible Claims arising
out of Indemnitee's Corporate Status.
Section 7.5 Notice by Each Party. Indemnitee shall promptly notify
the Company in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document or communication relating
to any Proceeding or Claim for which Indemnitee may be entitled to
indemnification or advancement of Expenses hereunder; provided, however, that
any failure of Indemnitee to so notify the Company shall not adversely affect
Indemnitee's rights under this Agreement except to the extent the Company shall
have been materially prejudiced as a direct result of such failure. The Company
shall notify promptly Indemnitee in writing, as to the pendency of any
Proceeding or Claim that may involve a claim against the Indemnitee for which
Indemnitee may be entitled to indemnification or advancement of Expenses
hereunder.
Section 7.6 Certain Persons Not Entitled to Indemnification.
Notwithstanding any other provision of this Agreement to the contrary,
Indemnitee shall not be entitled to indemnification or advancement of Expenses
hereunder with respect to any Proceeding or any Claim, issue or matter therein,
brought or made by Indemnitee against the Company or any affiliate of the
Company, except as specifically provided in Article 5 or Article 6.
Section 7.7 Indemnification for Negligence, Gross Negligence, etc.
Without limiting the generality of any other provision hereunder, it is the
express intent of this Agreement that Indemnitee be indemnified and Expenses be
advanced regardless of Indemnitee's acts of negligence, gross negligence or
intentional or willful misconduct to the extent that indemnification and
advancement of Expenses is allowed pursuant to the terms of this Agreement and
under applicable law.
Section 7.8 Enforcement. The Company agrees that its execution of
this Agreement shall constitute a stipulation by which it shall be irrevocably
bound in any court or arbitration in which a proceeding by Indemnitee for
enforcement of his rights hereunder shall have been commenced, continued or
appealed, that its obligations set forth in this Agreement are unique and
special, and that failure of the Company to comply with the provisions of this
Agreement will cause irreparable and irremediable injury to Indemnitee, for
which a remedy at law will be inadequate. As a result, in addition to any other
right or remedy he may have at law or in equity with respect to breach of this
Agreement, Indemnitee shall be entitled to injunctive or mandatory relief
directing specific performance by the Company of its obligations under this
Agreement.
Section 7.9 Successors and Assigns. All of the terms and provisions
of this Agreement shall be binding upon, shall inure to the benefit of and shall
be enforceable by the parties hereto and their respective successors, assigns,
heirs, executors, administrators, legal representatives. The Company shall
require and cause any direct or indirect successor (whether by purchase, merger,
consolidation or otherwise) to all or substantially all of the business or
assets of the Company, by written agreement in form and substance reasonably
satisfactory to
-12-
Indemnitee, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform if
no such succession had taken place.
Section 7.10 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 7.11 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 expressly 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 7.12 Entire Agreement. This Agreement and the documents
expressly 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 expressly superseded by this Agreement.
Section 7.13 Severability. If any provision of this Agreement
(including any provision within a single section, paragraph or sentence) or the
application of such provision to any person or circumstance, shall be judicially
declared to be invalid, unenforceable or void, such decision will not have the
effect of invalidating or voiding the remainder of this Agreement or affect the
application of such provision to other persons or circumstances, it being the
intent and agreement of the parties that this Agreement shall be deemed amended
by modifying such provision to the extent necessary to render it valid, legal
and enforceable while preserving its intent, or if such modification is not
possible, by substituting therefor another provision that is valid, legal and
unenforceable and that achieves the same objective. Any such finding of
invalidity or unenforceability shall not prevent the enforcement of such
provision in any other jurisdiction to the maximum extent permitted by
applicable law.
Section 7.14 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given upon (a) transmitter's
confirmation of a receipt of a facsimile transmission, (b) confirmed delivery of
a standard overnight courier or when delivered by hand or (c) the expiration of
five business days after the date mailed by certified or registered mail (return
receipt requested), postage prepaid, to the parties at the following addresses
(or at such other addresses for a party as shall be specified by like notice):
-13-
If to the Company, to:
Unigraphics Solutions Inc.
00000 Xxxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: President
Facsimile:
If to Indemnitee, to:
Facsimile:
-----------------------
Section 7.15 Certain Construction Rules.
(a) The article and section headings contained in this
Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. As used in this Agreement,
unless otherwise provided to the contrary, (i) all references to days shall
be deemed references to calendar days and (ii) any reference to a "Section"
or "Article" shall be deemed to refer to a section or article of this
Agreement. The words "hereof," "herein" and "hereunder" and words of
similar import referring to this Agreement refer to this Agreement as a
whole and not to any particular provision of this Agreement. Whenever the
words "include," "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation." Unless
otherwise specifically provided for herein, the term "or" shall not be
deemed to be exclusive. 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.
(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 a person with respect to any
employee benefit plan; references to "serving at the request of the
Company" shall include any service as a director, nominee for director,
officer, employee or agent of the Company which imposes duties on, or
involves services by, such director, nominee, 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 interest 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.
-14-
Section 7.16 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, without giving
effect to the conflicts of laws principles thereof.
Section 7.17 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original and all of
which together shall be deemed to be one and the same instrument,
notwithstanding that both parties are not signatories to the original or same
counterpart.
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered to be effective as of the date first above written.
UNIGRAPHICS SOLUTIONS INC.
By:
--------------------------------------
Name:
Title:
INDEMNITEE
[Signature]
------------------------------------------
Name: [Printed Name]
-------------------------------------
-15-
