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EXHIBIT 10.1
STORAGE DIMENSIONS, INC.
INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT is made as of the ____ day of
____________, 1996 by and between Storage Dimensions, Inc., a Delaware
corporation (the "CORPORATION"), and the individual whose name appears on the
signature page hereof (such individual being referred to herein as the
"INDEMNIFIED REPRESENTATIVE" and, together with other persons who may execute
similar agreements, as "INDEMNIFIED REPRESENTATIVES").
WHEREAS, the Indemnified Representative currently is and will be in the
future serving in one or more capacities as a director, officer, employee, or
agent of the Corporation or, at the request of the Corporation, as a director,
officer, employee, agent, fiduciary, or trustee of, or in a similar capacity
for, another corporation, partnership, joint venture, trust, employee benefit
plan, or other entity, and in so doing is and will be performing a valuable
service to or on behalf of the Corporation;
WHEREAS, the Board of Directors of the Corporation has determined that,
in order to attract and retain qualified individuals, the Corporation will
attempt to maintain, at its sole expense, liability insurance to protect persons
serving the Corporation and its subsidiaries from certain liabilities. Although
the furnishing of such insurance has been a customary and widespread practice
among United States based corporations and other business enterprises, the
Corporation believes that, given current market conditions and trends, such
insurance may be available to it in the future only at higher premiums and with
more exclusions. At the same time, directors, officers, and other persons in
service to corporations or business enterprises are being increasingly subjected
to expensive and time-consuming litigation relating to, among other things,
matters that traditionally would have been brought only against the Corporation
or business enterprise itself;
WHEREAS, the Indemnified Representative is willing to continue to serve
and to undertake additional duties and responsibilities for and on behalf of the
Corporation on the condition that he or she be indemnified contractually by the
Corporation; and
WHEREAS, as an inducement to the Indemnified Representative to continue
to serve the Corporation, and in consideration for such continued service, the
Corporation has agreed to indemnify the Indemnified Representative upon the
terms set forth herein.
NOW, THEREFORE, in consideration of the promises and mutual covenants
contained herein, and intending to be legally bound hereby, the Corporation and
the Indemnified Representative agree as follows:
1. AGREEMENT TO SERVE. The Indemnified Representative agrees to serve
or continue to serve for or on behalf of the Corporation in each Official
Capacity (as hereinafter defined) held now or in the future for so long as the
Indemnified Representative is duly elected or appointed or until such time as
the Indemnified Representative tenders a resignation in writing. This Agreement
shall not be deemed an employment contract between the Corporation or any of its
subsidiaries and any Indemnified
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Representative who is an employee of the Corporation or any of its subsidiaries.
The Indemnified Representative specifically acknowledges that the Indemnified
Representative's employment with the Corporation or any of its subsidiaries, if
any, is at will, and that the Indemnified Representative may be discharged at
any time for any reason, with or without cause, except as may be otherwise
provided in any written employment contract between the Indemnified
Representative and the Corporation or any of its subsidiaries, other applicable
formal severance policies duly adopted by the board of directors of the
Indemnified Representative's employer, or, with respect to service as a director
of the Corporation, by the Corporation's Certificate of Incorporation, Bylaws,
and the Delaware General Corporation Law. The foregoing notwithstanding, this
Agreement shall continue in force after the Indemnified Representative has
ceased to serve in any Official Capacity for or on behalf of the Corporation or
any of its subsidiaries.
2. INDEMNIFICATION.
(a) Except as provided in Sections 3 and 5 hereof, the
Corporation shall indemnify the Indemnified Representative against any Liability
(as hereinafter defined) incurred by or assessed against the Indemnified
Representative in connection with any Proceeding (as hereinafter defined) in
which the Indemnified Representative may be involved, as a party or otherwise,
by reason of the fact that the Indemnified Representative is or was serving in
any Official Capacity held now or in the future, including, without limitation,
any Liability resulting from actual or alleged breach or neglect of duty, error,
misstatement, misleading statement, omission, negligence, act giving rise to
strict or product liability, act giving rise to liability for environmental
contamination, or other act or omission, whether occurring prior to or after the
date of this Agreement. As used in this Agreement:
(1) "Liability" means any damage, judgment, amount paid in
settlement, fine, penalty, punitive damage, or expense of any nature (including
attorneys' fees and expenses);
(2) "Proceeding" means any threatened, pending, or
completed action, suit, appeal, arbitration, or other proceeding of any nature,
whether civil, criminal, administrative, or investigative, whether formal or
informal, and whether brought by or in the right of the Corporation, a class of
its security holders, or any other party; and
(3) "Official Capacity" means service to the Corporation as
a director or officer or, at the request of the Corporation, as a director,
officer, employee, agent, fiduciary, or trustee of, or in a similar capacity
for, another corporation, partnership, joint venture, trust, employee benefit
plan (including a plan qualified under the Employee Retirement Income Security
Act of 1974), or other entity.
(b) Notwithstanding Section 2(a) hereof, except for a
Proceeding brought pursuant to Section 5(d) of this Agreement, the Corporation
shall not indemnify the Indemnified Representative under this Agreement for any
Liability incurred in a Proceeding initiated by the Indemnified Representative
unless the Proceeding is authorized, either before or after commencement of the
Proceeding, by the majority vote of a quorum of the Board of Directors of the
Corporation. An affirmative defense or counterclaim of an Indemnified
Representative shall not be deemed to constitute a Proceeding initiated by the
Indemnified Representative.
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3. EXCLUSIONS.
(a) The Corporation shall not be liable under this Agreement
to make any payment in connection with any Liability incurred by the Indemnified
Representative:
(1) to the extent payment for such Liability is made to
the Indemnified Representative under an insurance policy obtained by the
Corporation;
(2) to the extent payment is made to the Indemnified
Representative for such Liability by the Corporation under its Certification of
Incorporation, Bylaws, the Delaware General Corporation Law, or otherwise than
pursuant to this Agreement;
(3) to the extent such Liability is determined in a final
determination pursuant to Section 5(d) hereof to be based upon or attributable
to the Indemnified Representative gaining any personal profit to which such
Indemnified Representative was not legally entitled;
(4) for any claim by or on behalf of the Corporation for
recovery of profits resulting from the purchase and sale or sale and purchase by
such Indemnified Representative of equity securities of the Corporation pursuant
to Section 16(b) of the Securities Exchange Act of 1934, as amended;
(5) for which the conduct of the Indemnified
Representative has been determined in a final determination pursuant to Section
5(d) hereof to constitute bad faith or active and deliberate dishonesty, in
either such case material to the cause of action or claim at issue in the
Proceeding, or
(6) to the extent such indemnification has been determined
in a final determination pursuant to Section 5(d) hereof to be unlawful.
(b) Any act, omission, liability, knowledge, or other fact of
or relating to any other person, including any other person who is also an
Indemnified Representative, shall not be imputed to the Indemnified
Representative for the purposes of determining the applicability of any
exclusion set forth herein.
(c) The termination of a proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent
shall not, of itself, create a presumption that the Indemnified Representative
is not entitled to indemnification under this Agreement.
4. ADVANCEMENT OF EXPENSES. The Corporation shall pay any
Liability in the nature of an expense (including attorneys' fees and expenses)
incurred in good faith by the Indemnified Representative in advance of the final
disposition of a Proceeding within thirty (30) days of receipt of a demand for
payment by the Indemnified Representative; provided, however, that the
Indemnified Representative shall repay such amount if it shall ultimately be
determined, pursuant to Section 5(d) hereof, that the Indemnified Representative
is not entitled to be indemnified by the Corporation pursuant to this
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Agreement. The financial ability of the Indemnified Representative to repay an
advance shall not be a prerequisite to the making to such advance.
5. INDEMNIFICATION PROCEDURE.
(a) The Indemnified Representative shall use his best efforts
to notify promptly the Secretary of the Corporation of the commencement of any
Proceeding or the occurrence of any event which might give rise to a Liability
under this Agreement, but the failure to so notify the Corporation shall not
relieve the Corporation of any obligation which it may have to the Indemnified
Representative under this Agreement or otherwise.
(b) The Corporation shall be entitled, upon notice to the
Indemnified Representative, to assume the defense of any Proceeding with counsel
reasonably satisfactory to the Indemnified Representative involved in such
Proceeding or, if there be more than one (1) Indemnified Representatives
involved in such Proceeding, to a majority of the Indemnified Representatives
involved in such Proceeding. If, in accordance with the foregoing, the
Corporation defends the Proceeding, the Corporation shall not be liable for the
expenses (including attorneys' fees and expenses) of the Indemnified
Representative incurred in connection with the defense of such Proceeding
subsequent to the required notice, unless (i) such expenses (including
attorneys' fees) have been authorized by the Corporation or (ii) the Corporation
shall not in fact have employed counsel reasonably satisfactory to such
Indemnified Representative, or to the majority of Indemnified Representative if
more than one (1) is involved, to assume the defense of such Proceeding or (iii)
counsel for the Indemnified Representative shall have provided a written legal
opinion that there may be a conflict of interest between such Indemnified
Representative and other parties represented by legal counsel selected by the
Corporation, in any of which events the Indemnified Representative shall be
entitled to have the expenses of separate legal counsel paid by the Corporation.
The foregoing notwithstanding, the Indemnified Representative may elect to
retain counsel at the Indemnified Representative's own cost and expense to
participate in the defense of such Proceeding.
(c) The Corporation shall not be required to obtain the
consent of the Indemnified Representative to the settlement of any Proceeding
which the Corporation has undertaken to defend if the Corporation assumes full
and sole responsibility for such settlement and the settlement grants the
Indemnified Representative a complete and unqualified release in respect of the
potential Liability. The Corporation shall not be liable for any amount paid by
an Indemnified Representative in settlement of any Proceeding that is not
defended by the Corporation, unless the Corporation has consented to such
settlement, which consent shall not be unreasonably withheld.
(d) Except as set forth herein, any dispute concerning the
right to indemnification under this Agreement and any other dispute arising
hereunder, including but not limited to matters of validity, interpretation,
application, and enforcement, shall be determined exclusively by and through
final and binding arbitration in Milpitas, California, or other location
mutually agreed to, each party hereto expressly and conclusively waiving its,
his or her right to proceed to a judicial determination with respect to such
matter; provided, however, that in the event that a claim for indemnification
against liabilities arising under the Securities Act of 1933 (the "Act") (other
than the payment by the Corporation of
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expenses incurred or paid by a director, officer, or controlling person of the
Corporation in the successful defense of any action, suit, or proceeding) is
asserted by a director, officer, or controlling person in connection with
securities being registered under the Act, the Corporation will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of competent jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue. The arbitration shall be
conducted in accordance with the commercial arbitration rules then in effect of
the American Arbitration Association before a panel of three (3) arbitrators,
one (1) of whom shall be selected by the Corporation, the second of whom shall
be selected by the Indemnified Representative, and the third of whom shall be
selected by the other two (2) arbitrators. Each arbitrator selected as provided
herein is required to be serving or to have served as a director or an executive
officer of a corporation whose shares of common stock, during at least one year
of such service, were quoted on the Nasdaq National Market or listed on the New
York Stock Exchange or the American Stock Exchange. The Corporation shall
reimburse the Indemnified Representative for the expenses (including attorneys'
fees) incurred in prosecuting or defending such arbitration to the full extent
of such expenses if the Indemnified Representative is awarded 50% or more of the
monetary value of his claim or, if not, to the extent such expenses are
determined by the arbitrators to be allocable to the Corporation. It is
expressly understood and agreed by the parties that a party may compel
arbitration pursuant to this Section 5(d) through an action for specific
performance and that any award entered by the arbitrators may be enforced,
without further evidence or proceedings, in any court of competent jurisdiction.
(e) Upon a payment under this Agreement to the Indemnified
Representative with respect to any Liability, the Corporation shall be
subjugated to the extent of such payment to all of the rights of the Indemnified
Representative to recover against any person with respect to such Liability, and
the Indemnified Representative shall execute all documents and instruments
required and shall take such other actions as may be necessary to secure such
rights including the execution of such documents as may be necessary for the
Corporation to bring suit to enforce such rights.
6. CONTRIBUTION. If the indemnification provided for in this Agreement
is unavailable for any reason to hold harmless an Indemnified Representative in
respect of any Liability or portion thereof the Corporation shall contribute to
such Liability or portion thereof in such proportion as is appropriate to
reflect the relative benefits received by the Corporation and the Indemnified
Representative from the transaction giving rise to the Liability.
7. NON-EXCLUSIVITY. The rights granted to the Indemnified
Representative pursuant to this Agreement shall not be deemed exclusive of any
other rights to which the Indemnified Representative may be entitled under
statute, the provisions of any Certificate of Incorporation, Bylaws, or
agreement, a vote of stockholders or directors, or otherwise, both as to action
in an Official Capacity and in any other capacity.
8. RELIANCE ON PROVISIONS. The Indemnified Representative, when acting
in any Official Capacity, shall be deemed to be acting in reliance upon the
rights of indemnification provided by this Agreement and the indemnification
provisions of the Corporation's Certificate of Incorporation and Bylaws.
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9. SEVERABILITY AND REFORMATION. Any provision of this Agreement which
is determined to be invalid or unenforceable in any jurisdiction or under any
circumstances shall be ineffective only to the extent of such invalidity or
unenforceability and shall be deemed reformed to the extent necessary to conform
to the applicable law of such jurisdiction and still give maximum effect to the
intent of the parties hereto. Any such determination shall not invalidate or
render unenforceable the remaining provisions hereof and shall not invalidate or
render unenforceable such provision in any other jurisdiction or under any other
circumstances.
10. NOTICES. Any notice, claim, request, or demand required or
permitted hereunder shall be in writing and shall be deemed given if delivered
personally or sent by telegram or by registered or certified mail, first class,
postage prepaid: (i) if to the Corporation to Storage Dimensions, Inc., at its
principal executive offices, Attention: Secretary, or (ii) if to any Indemnified
Representative, to the address of such Indemnified Representative listed on the
signature page hereof, or to such other address as any party hereto shall have
specified in a notice duly given in accordance with this Section 10.
11. AMENDMENTS: BINDING EFFECT. No amendment, modification,
termination, or cancellation of this Agreement shall be effective as to the
Indemnified Representative unless signed in writing by the Corporation and the
Indemnified Representative. This Agreement shall be binding upon the Corporation
and its successors and assigns and shall inure to the benefit of the Indemnified
Representative's heirs, executors, administrators, and personal representatives.
12. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to the
conflict of laws provisions thereof.
13. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be enforceable against the party actually
executing such counterpart, and all of which together shall constitute one
instrument.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the day and year first set forth above.
(Corporate Seal) STORAGE DIMENSIONS, INC.
By:______________________________
Title:___________________________
INDEMNIFIED REPRESENTATIVE
_________________________________
Name
Address
_________________________________
_________________________________
_________________________________
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