EXHIBIT 10.33
FORM OF
INDEMNIFICATION AGREEMENT
This Agreement, dated as of _________, 2000 is made by and
between Therma-Wave, Inc., a Delaware corporation (the "Company"), and
[________________] who is currently serving as an officer and/or director of the
Company (the "Indemnitee").
WHEREAS, the Indemnitee is currently serving in the capacity
or capacities described above;
WHEREAS, the Company recently completed an initial public
offering of its common stock (the "Offering"), which will likely increase the
risk of litigation and other claims being asserted against the directors and
officers of the Company;
WHEREAS, prior to the Offering the Company determined that it
was in the best interests of the Company to enter into indemnification
agreements with its current officers and/or directors of the Company;
WHEREAS, the Company wishes the Indemnitee to continue to
serve in such capacity or capacities and the Indemnitee is willing, under
certain circumstances, to continue in such capacity or capacities;
WHEREAS, damages sought and sometimes paid in many claims made
against corporate directors and officers and the expenses required to defend
such claims, whether or not the allegations are meritorious, may not bear a
reasonable relationship to the amount of compensation received by and may be
beyond the financial resources of the Indemnitee;
WHEREAS, the Indemnitee is currently entitled to
indemnification under Delaware General Corporation Law and the Certificate of
Incorporation of the Company, which the Indemnitee does not regard to be
adequate protection against the risks associated with his service to or at the
request of the Company:
WHEREAS, the Indemnitee and the Company have concluded that
the exposure to risk of personal liability and payment of damages out of the
Indemnitee's personal assets may result in overly conservative direction and
supervision of the Company's affairs, which is detrimental to the best interests
of the Company and its stockholders; and
WHEREAS, the Company has concluded that additional protection
is necessary for its directors and elected officers.
NOW, THEREFORE, the parties hereto, intending to be legally
bound, hereby:
1. Definitions.
(a) Agent. For the purposes of this Agreement, "agent" of the
Company means any person who is or was a director, officer, employee, agent or
fiduciary of the Company or a subsidiary of the Company, or is or was serving at
the request of, for the convenience of, or to represent the interests of the
Company or a subsidiary of the Company as a director, officer, employee, agent
or fiduciary of another corporation, partnership, joint venture, trust or other
enterprise or entity, including service with respect to an employee benefit
plan.
(b) Disinterested Director. For purposes of this Agreement,
"Disinterested Director" of the Company means a director of the Company who is
not and was not a party to the proceeding for which indemnification is being
sought by the claimant.
(c) Expenses. For purposes of this Agreement, "expenses"
includes all direct and indirect costs of any type or nature whatsoever
(including, without limitation, all attorneys' fees and related disbursements,
other out-of-pocket costs and reasonable compensation for time spent by the
Indemnitee for which he is not otherwise compensated by the Company or any third
party) actually and reasonably incurred by the Indemnitee in connection with
either the investigation, defense or appeal of a proceeding or establishing or
enforcing a right to indemnification under this Agreement, Section 145 of the
General Corporation Law of Delaware or otherwise; provided, however, that
expenses shall not include any judgments, fines, excise taxes or penalties under
the Employee Retirement Income Security Act of 1974 ("ERISA"), or amounts paid
in settlement of a proceeding.
(d) Independent Legal Counsel. For purposes of this Agreement,
"Independent Legal Counsel" means a law firm, a member of a law firm, or an
independent practitioner, that is experienced in matters of corporation law and
shall include any person who, under the applicable standards of professional
conduct then prevailing, would not have a conflict of interest in representing
either the Company or the Indemnitee in an action to determine the Indemnitee's
rights under this Agreement.
(e) Proceeding. For the purposes of this Agreement,
"proceeding" means any threatened, pending, or completed action, suit or other
proceeding, whether civil, criminal, administrative, investigative or any other
type whatsoever.
(f) Subsidiary. For purposes of this Agreement, "subsidiary"
means any corporation, partnership, joint venture or other enterprise, a
majority of whose equity interests are owned by the Company, directly or through
one or more other subsidiaries.
2. Agreement to Serve. The Indemnitee agrees to serve as an
agent of the Company, at its will (or under separate agreement, if such
agreement exists), in the capacity Indemnitee currently serves as an agent of
the Company, so long as he is duly appointed or elected and qualified in
accordance with the applicable provisions of the By-Laws of the Company or any
subsidiary of the Company or until such time as he tenders his resignation in
writing; provided, however, that nothing contained in this Agreement is intended
to create any right to continued employment of the Indemnitee.
3. Mandatory Indemnification. Subject to the limitations set
forth in Section 7, if the Indemnitee is a person who was or is a party or is
threatened to be made a party to or is involved, including involvement as a
witness, in any proceeding, including any action by or in the right of the
Company, by reason of the fact that he is or was or has agreed to become an
agent, or by reason of any action alleged to have been taken or omitted by him
in any such capacity, the Company shall indemnify the Indemnitee against all
expense, liability and loss (including but not limited to judgments, fines,
ERISA excise taxes or penalties and amounts paid or to be paid in settlement),
actually and reasonably incurred by him in connection with the investigation,
defense, settlement or appeal of such proceeding; provided, however, that except
as provided in Section 7(c) of this Agreement with respect to proceedings
seeking to enforce rights to indemnification, the Company shall indemnify the
Indemnitee in connection with a proceeding (or part thereof) initiated by the
Indemnitee only if such proceeding (or part thereof) was authorized by the Board
of Directors of the Company.
4. Mandatory Advancement of Expenses. The Company shall
advance all expenses incurred by the Indemnitee in connection with the
investigation, defense, settlement or appeal of any proceeding referred to in
Section 3 to which the Indemnitee is a party or is threatened to be made a party
or with respect to which the Indemnitee is otherwise involved (including
involvement as a witness) as an agent of the Company. The Indemnitee hereby
undertakes to repay such amounts advanced if, but only if and to the extent
that, it shall ultimately be determined pursuant to the provisions hereof that
the Indemnitee is not entitled to be indemnified by the Company as authorized
hereby. The advances to be made hereunder shall be paid by the Company to the
Indemnitee within twenty (20) days following delivery of a written request
therefor by the Indemnitee to the Company; provided, however, that, if and to
the extent that the Delaware General Corporation Law requires, an advancement of
expenses incurred by the Indemnitee in his capacity as a director or officer
shall be made only upon delivery of an undertaking by or on behalf of the
Indemnitee to repay all amounts so advanced if it shall ultimately be determined
by final judicial decision from which
there is no further right to appeal that the Indemnitee is not entitled to be
indemnified for such expenses under this Agreement or otherwise.
5. Maintenance of D&O Insurance.
(a) So long as the Indemnitee shall continue to serve in any
capacity described in Section 2 and thereafter so long as there is any
reasonable possibility that the Indemnitee shall be subject to any proceeding by
reason of the fact that the Indemnitee served in any of such capacities, the
Company will use reasonable efforts to purchase and maintain in effect for the
benefit of the Indemnitee one or more valid, binding and enforceable policies of
directors@ and officers@ liability insurance ("D&O Insurance") providing, in all
respects, coverage and amounts as reasonably determined by the Board of
Directors.
(b) Notwithstanding Section 5(a), the Company shall not be
required to maintain D&O Insurance if such is not reasonably available or if, in
the reasonable business judgment of the Board of Directors of the Company as it
may exist from time to time, either (i) the premium cost for such insurance is
substantially disproportionate to the amount of insurance or (ii) the coverage
is so limited by exclusions that there is insufficient benefit provided by such
insurance.
6. Notice and Other Indemnification Procedures.
(a) Promptly after receipt by the Indemnitee of notice of the
commencement of or the threat of commencement of any proceeding, the Indemnitee
shall, if the Indemnitee believes that the indemnification with respect thereto
properly may be sought from the Company under this Agreement, notify the Company
of the commencement or threat of commencement thereof. The failure to notify or
promptly notify the Company shall not relieve the Company from any liability
which it may have to the Indemnitee otherwise than under this Agreement, and
shall relieve the Company from liability hereunder only to the extent the
Company has been prejudiced.
(b) If, at the time of the receipt of a notice of the
commencement of a proceeding pursuant to Section 6(a), the Company has D&O
Insurance in effect, the Company shall give prompt notice of the commencement of
such proceeding to the insurers in accordance with the procedures set forth in
the D&O Insurance policy. The Company shall thereafter take all necessary or
desirable action to cause such insurers to pay, to or on behalf of the
Indemnitee, all amounts payable as a result of such proceeding in accordance
with the terms of such policy.
(c) In the event the Company shall be obligated to pay the
expenses of the Indemnitee in connection with any proceeding, the Company shall
be entitled to assume the defense of such proceeding, with counsel approved by
the Indemnitee, upon the delivery to the Indemnitee of written notice of its
election to do so. After delivery of such notice, approval of such counsel by
the Indemnitee and the retention of such counsel by the Company, the Company
will not be liable to the Indemnitee under this Agreement for any fees of
counsel or other expenses subsequently incurred by the Indemnitee with respect
to the same proceeding; provided that (i) the Indemnitee shall have the right to
employ his own counsel in any such proceeding at the Indemnitee's expense and
(ii) if (A) the employment of counsel by the Indemnitee has been previously
authorized by the Company, or (B) the Indemnitee shall have reasonably concluded
that there is a conflict of interest between the Company and the Indemnitee in
the conduct of any such defense, or (C) the Company shall not, in fact, have
employed counsel to assume the defense of such proceeding, the fees and expenses
of the Indemnitee's counsel shall be paid by the Company; and provided further
that the Company shall not be required to pay the expenses of more than one such
separate counsel for persons it is indemnifying in any one proceeding.
7. Determination of Right to Indemnification.
(a) To the extent the Indemnitee has been successful on the
merits or otherwise in defense of any proceeding referred to in Section 3 or in
the defense of any claim, issue or matter described therein, the Company shall
indemnify the Indemnitee pursuant to Section 3 against expenses actually and
reasonably incurred by him in connection with the investigation, defense, or
appeal of such proceeding. If the Indemnitee has not been successful on the
merits or otherwise in any such defense, the Company also shall indemnify the
Indemnitee pursuant to Section 3
unless, and only to the extent that, the Indemnitee has not met the applicable
standard of conduct under the Delaware General Corporation Law as it now exists
or may hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Company to provide broader
indemnification rights than said law permitted the Company to provide prior to
such amendment).
(b) Subject to the provisions of Section 8 relating to a
Change in Control (as defined therein), the determination as to whether the
Indemnitee is entitled to indemnification shall be made as follows: (1) if
requested by the Indemnitee, by Independent Legal Counsel selected by the
Indemnitee with the consent of the Company (which consent shall not be
unreasonably withheld) or (2) if no request is made by the Indemnitee for a
determination by Independent Legal Counsel, (i) by a quorum of the Board of
Directors consisting of Disinterested Directors or (ii) if such quorum is not
obtainable or, even if obtainable, if a quorum of Disinterested Directors so
directs, by Independent Legal Counsel in a written opinion. If Independent Legal
Counsel shall make such determination, the Company agrees to pay the reasonable
fees of such counsel and to indemnify such counsel fully against any and all
expenses (including attorneys' fees), claims, liabilities and damages arising
out of or relating to this Agreement or counsel's engagement pursuant hereto.
(c) Notwithstanding a determination that the Indemnitee is not
entitled to indemnification with respect to a specific proceeding, the
Indemnitee shall have the right to apply to the court of Chancery of Delaware,
the court in which that proceeding is or was pending or any other court of
competent jurisdiction, for the purpose of enforcing the Indemnitee's right to
indemnification or the advance payment of expenses pursuant to this Agreement.
The burden of proof shall be on the Company in any such suit to demonstrate by
the weight of the evidence that the Indemnitee is not entitled to
indemnification or advance payment of expenses. The Indemnitee's expenses
incurred in successfully establishing his right to indemnification or
advancement of expenses, in whole or in part, in any such action (or settlement
thereof) shall be paid by the Company.
(d) Notwithstanding anything in Sections 3 or 4 to the
contrary, the Company shall not be liable under this Agreement to make any
indemnity payment or advancement of expenses in connection with any proceeding
(i) to the extent that payment is actually made, or for which payment is
available, to or on behalf of the Indemnitee under an insurance policy, except
in respect of any amount in excess of the limits of liability of such policy or
any applicable deductible under such policy; (ii) to the extent that payment has
been or will be made to the Indemnitee by the Company otherwise than pursuant to
this Agreement; or (iii) to the extent that there was a final adjunction by a
court of competent jurisdiction that the Indemnitee has not met the applicable
standard of conduct required to entitle the Indemnitee to indemnification under
the Delaware General Corporation Law as it now exists or may hereafter be
amended (but, in the case of any such amendment, only to the extent that such
amendment permits the Company to provide broader indemnification rights than
said law permitted the Company to provide prior to such amendment).
8. Change In Control.
(a) The Company agrees that if there is a Change in Control,
as defined below, of the Company (other than a Change in Control which has been
approved by a majority of the members of the Board of Directors who were
directors immediately prior to such Change in Control), then with respect to all
matters thereafter arising concerning the rights of the Indemnitee to indemnity
payments and advance payments of expenses under this Agreement, the Company
shall seek legal advice only from Independent Legal Counsel selected by the
Indemnitee with the consent of the Company (which shall not be unreasonably
withheld). Such counsel, among other things, shall render a written opinion to
the Company and the Indemnitee as to whether and to what extent the Indemnitee
would be permitted to be indemnified under this Agreement and applicable law.
The Company agrees to pay the reasonable fees of the Independent Legal Counsel
and to indemnify such counsel fully against any and all expenses (including
attorneys' fees), claims, liabilities and damages arising out of or relating to
this Agreement or counsel's engagement pursuant hereto.
(b) Alternatively, the Indemnitee may choose to submit all
matters arising concerning his rights to indemnity payments and advance payments
of expenses under this Agreement to a panel of three arbitrators, one of whom is
selected by the Company, another of whom is selected by the Indemnitee and the
third of whom is selected
by the first two arbitrators so selected. Any such submission shall be governed
by the Commercial Arbitration Rules of the American Arbitration Association and
shall be deemed to be a submission within the meaning of the Federal Arbitration
Act or any statutory modification or re-enactments thereof. Arbitration
proceedings shall take place in Los Angeles, California, unless otherwise agreed
to by the parties.
(c) "Change in Control" for purposes of this Agreement shall
be deemed to have occurred if (a) any "person" (as such term is used in Section
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder), 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 stockholders of the Company in
substantially the same proportions as their ownership of stock 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, except that a person who as of the date of this Agreement owns 20%
or more of the total voting power represented by the Company's outstanding
voting securities shall not be deemed to have caused a Change in Control, or (b)
during any period of two consecutive years, individuals who at the beginning of
such period constitute the Board of Directors and any new director whose
election by the Board of Directors or nomination for election by the Company's
stockholders was approved by a vote of at least two-third (2/3) of the directors
then still in office who either were directors at the beginning of the period or
whose election or nomination for election was previously so approved, cease for
any reason to constitute a majority thereof, or (c) the stockholders of the
Company approve a merger, plan of complete liquidation of the Company, an
agreement for the sale or disposition by the Company of all or any substantial
part of the Company's assets, or other business combination of the Company with
any other corporation, other than a business combination 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 business combination.
9. Limitation of Actions and Release of Claims. No proceeding
shall be brought and no cause of action shall be asserted by the Company or any
subsidiary or by any stockholder on behalf of the Company or any subsidiary
against the Indemnitee, his spouse, heirs, estate, executors or administrators
after the expiration of one year from the act or omission of the Indemnitee upon
which such proceeding is based; provided, however, that in the event that the
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Indemnitee has fraudulently concealed the facts underlying such cause of action,
no proceeding shall be brought and no cause of action shall be asserted after
the expiration of one year from the earlier of (i) the date the Company or any
subsidiary of the Company discovers such facts or (ii) the date the Company or
any subsidiary of the Company could have discovered such facts by the exercise
of reasonable diligence. Any claim or cause of action of the Company or any
subsidiary of the Company, including claims predicated upon the negligent act or
omission of the Indemnitee, shall be extinguished and deemed released unless
asserted by filing of a legal action within such period. This Section 9 shall
not apply to any cause of action which has accrued on the date hereof and of
which the Indemnitee is aware on the date hereof but as to which the Company has
no actual knowledge apart from the Indemnitee's knowledge.
10. Non-exclusivity. The provisions for indemnification and
advancement of expenses set forth in this Agreement shall not be deemed
exclusive of any other rights which the Indemnitee may have under any provision
of law, the Company's Certificate of Incorporation or By-Laws, the vote of the
Company's stockholders or Disinterested Directors, other agreements, or
otherwise, both as to administrators in his official capacity and to action in
another capacity while occupying his position as an agent of the Company, and
the Indemnitee's rights hereunder shall continue after the Indemnitee has ceased
acting as an agent of the Company and shall inure to the benefit of the heirs,
executors and administrators of the Indemnitee.
11. Settlement. The Company shall not be liable to indemnify
the Indemnitee under this Agreement for any amounts paid in settlement of any
proceeding without its written consent, which consent shall not be unreasonably
withheld. The Company shall not settle any proceeding which would impose any
penalty or limitation on the Indemnitee without the Indemnitee's written
consent, which consent shall not be unreasonably withheld. In the event that
consent is not given and the parties hereto are unable to agree on a proposed
settlement, Independent Legal Counsel shall be retained by the Company, at its
expense, with the consent of the Indemnitee, which consent shall not
be unreasonably withheld, for the purpose of determining whether or not the
proposed settlement is reasonable under all the circumstances; and if
Independent Legal Counsel determines the proposed settlement is reasonable under
all the circumstances, the settlement may be consummated without the consent of
the other party.
12. Subrogation Rights. In the event of any payment under this
Agreement, the Company shall be subrogated to the extent of such payment to all
of the rights of recovery of the Indemnitee against any person or organization
and the Indemnitee shall execute all papers required and shall do everything
that may be reasonably necessary to secure such rights.
13. Allowance for Compliance with Commission Requirements.
Indemnitee acknowledges that the Securities and Exchange Commission (the
"Commission") has expressed the opinion that indemnification of directors and
officers from liabilities under the Securities Act of 1933 (the "Act") is
against public policy as expressed in the Act and is, therefore, unenforceable.
Indemnitee hereby acknowledges and agrees that it will not be a breach of this
Agreement for the Company to undertake with the Commission in connection with
the registration for sale of any shares or other securities of the Company from
time to time that, in the event a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or paid
by a director or officer of the Company in the successful defense of any action,
suit or proceeding) is asserted in connection with such shares or other
securities being registered, the Company 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 of whether or not such indemnification by
the Company is against public policy as expressed in the Act and the Company
will be governed by the final adjudication of such issue. Indemnitee further
agrees that such submission to a court of competent jurisdiction shall not be a
breach of this Agreement.
14. Interpretation of Agreement. It is understood that the
parties hereto intend this Agreement to be interpreted and enforced so as to
provide indemnification and payments for Expenses to the Indemnitee to the
fullest extent permitted by applicable law and to waive or render inapplicable
to the fullest extent permitted by applicable law which would impose any
condition or limitation upon, or otherwise impair or prohibit the enforcement
of, any provision in this Agreement. Indemnitee's rights hereunder shall apply
to claims made against Indemnitee arising out of acts or omissions which
occurred prior to the date hereof as well as those which occur after the date
hereof.
15. Severability. If any provision or provisions of this
Agreement shall be held to be invalid, illegal or unenforceable for any reason
whatsoever, (i) the validity, legality and enforceability of the remaining
provisions of this Agreement (including, without limitation, all portions of any
paragraph of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that are not themselves invalid, illegal or
unenforceable) shall not in any way be affected or impaired thereby and (ii) to
the fullest extent possible, the provisions of this Agreement (including,
without limitation, all portions of any paragraph of this Agreement containing
any such provision held to be invalid, illegal or unenforceable) shall be
construed so as to give effect to the intent manifested by the provision held
invalid, illegal or unenforceable and to give effect to Section 14.
16. Modification and Waiver. 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 provision hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver.
17. Successors and Assigns. The terms of this Agreement shall
bind, and shall inure to the benefit of, the successors and assigns of the
parties hereto.
18. Notices. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed duly
given (i) on the date of delivery if delivered by hand or via telecopy or (ii)
on the second business day after being deposited in the U.S. mail (registered or
express), postage prepaid. Addresses for notice to either parry are as shown on
the signature page of this Agreement, or as subsequently modified by written
notice. Each party agrees to receipt for any notice received promptly upon
request.
19. Governing Law. This Agreement shall be governed
exclusively by and construed according to the laws of the State of Delaware, as
applied to contracts between Delaware residents entered into and to be performed
entirely within Delaware.
20. Consent to Jurisdiction. The Company and the Indemnitee
each hereby irrevocably consents to the jurisdiction of the courts of the State
of Delaware and the Company irrevocably consents to the jurisdiction of any
court in which an Indemnitee brings action pursuant to Section 7(c), for all
purposes in connection with any proceeding which arises out of or relates to
this Agreement. The Company agrees not to initiate any such action or proceeding
in any state other than Delaware.
21. Effectiveness. This Agreement shall be deemed effective as
of: (i) October 1, 1997, in the event that the Indemnitee was serving as an
officer and/or director of the Company as of that date or (ii) if the Indemnitee
was not serving as an officer and/or director of the Company on October 1, 1997,
the date the Indemnitee was first elected or appointed, as the case may be, to
serve as an officer and/or director of the Company.
* * * * *
IN WITNESS WHEREOF, the parties hereto have entered into this
Indemnification Agreement effective as of the date first above written.
Therma-Wave, Inc.
0000 Xxxxxxxx Xxx
Xxxxxxx, Xxxxxxxxxx 00000
Telecopy No.: (000) 000-0000
By:_____________________________________
Its:____________________________________
INDEMNITEE:
________________________________________
Name:___________________________________
Title:__________________________________
Address:________________________________
________________________________
Telecopy No.:___________________________
