Exhibit 99.4.1
FORM OF DIRECTOR INDEMNIFICATION
AND EXCULPATION AGREEMENT
AGREEMENT, dated as of August 27, 2001, between Check Point Software
Technologies Ltd., an Israeli company (the "COMPANY"), and
_______________________, a director of the Company (the "INDEMNITEE").
WHEREAS, the Indemnitee is a director of the Company;
WHEREAS, both the Company and Indemnitee recognize the increased
risk of litigation and other claims being asserted against
directors of public companies;
WHEREAS, the Articles of Association of the Company authorize the
Company to indemnify directors; and
WHEREAS, 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 indemnification
of and the advancing of expenses (whether partial or
complete) to Indemnitee to the fullest extent permitted by
law 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:
1. CERTAIN DEFINITIONS
4 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.
1.2. Expenses: includes reasonable costs of litigation, including
attorney's fees, expended by the Indemnitee or for which the
Indemnitee has been charged by a court. 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).
1.3. Office Holder: as such term is defined in the Israeli
Companies Law, 5759-1999.
2. INDEMNIFICATION AND ADVANCEMENT OF EXPENSES
2.1. The Company hereby undertakes to indemnify the Indemnitee to
the fullest extent permitted by applicable law, 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 (the following shall be hereinafter
referred to as "Indemnifiable Events"):
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,
for an act that the Indemnitee performed by virtue of
being an Office Holder of the Company; and
2.1.2. reasonable costs of litigation, including attorneys'
fees, expended by the Indemnitee or for which the
Indemnitee has been charged by a court, in an action
brought against the Indemnitee by or on behalf of the
Company or a third party, or in a criminal action in
which the Indemnitee was found innocent, or in a
criminal offense in which the Indemnitee was
convicted and in which a proof of criminal intent is
not required.
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.
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.
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.
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
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).
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.
4. NO MODIFICATION.
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.
5. SUBROGATION.
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.
6. REIMBURSEMENT.
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.
7. EFFECTIVENESS.
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.
8. NOTIFICATION AND DEFENSE OF CLAIM.
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:
8.1. The Company will be entitled to participate therein at its own
expense; and
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.
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.
9. EXCULPATION
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.
10. NON-EXCLUSIVITY.
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.
11. BINDING EFFECT.
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.
12. SEVERABILITY.
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.
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.
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.
COMPANY Name:
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By: Signature:
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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.
