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EXHIBIT 10.5
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this "Agreement") is made and
entered into this ___ day of _____, 1998, by and between SCC COMMUNICATIONS
CORP., a Delaware corporation (the "Company"), and ____________________
("Indemnitee").
WHEREAS, Indemnitee, a member of the Board of Directors or an officer,
employee or agent of the Company, performs a valuable service in such
capacity for the Company;
WHEREAS, the stockholders of the Company have adopted Restated Bylaws
(the "Bylaws") providing for the indemnification of the officers,
directors, employees and agents of the Company to the maximum extent
authorized by the Delaware General Corporation Law, as amended (the
"DGCL");
WHEREAS, the Bylaws, the Amended and Restated Certificate of
Incorporation (the "Certificate of Incorporation") and the DGCL, by
their non-exclusive nature, permit contracts between the Company and
the members of its Board of Directors, officers, employees or agents
with respect to indemnification of such directors, officers, employees
or agents;
WHEREAS, in accordance with the authorization as provided by the DGCL,
the Company either has purchased and presently maintains or intends to
purchase and maintain a policy or policies of Directors and Officers
Liability Insurance ("D&O Insurance") covering certain liabilities
which may be incurred by its directors and officers in the performance
of their duties as directors and officers of the Company;
WHEREAS, as a result of developments affecting the terms, scope and
availability of D&O Insurance there exists general uncertainty as to
the extent of protection afforded members of the Board of Directors or
officers, employees or agents by such D&O Insurance and by statutory
and bylaw indemnification provisions; and
WHEREAS, in order to induce Indemnitee to continue to serve as a member
of the Board of Directors, officer, employee or agent of the Company,
the Company has determined and agreed to enter into this contract with
Indemnitee.
NOW, THEREFORE, in consideration of Indemnitee's continued service as a
director, officer, employee or agent after the date hereof, and for other good
and valid consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto agree as follows:
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1. Indemnification of Indemnitee. The Company hereby agrees to
hold harmless and indemnify Indemnitee to the fullest extent authorized or
permitted by the provisions of the DGCL, as may be amended from time to time.
2. Additional Indemnity. Subject only to the exclusions set
forth in Sections 3 and 6(c) hereof, the Company hereby further agrees to hold
harmless and indemnify Indemnitee:
(a) Against any and all expenses (including attorneys'
fees), witness fees, judgments, fines and amounts paid in settlement actually
and reasonably incurred by Indemnitee in connection with any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (including an action by or in the right of the Company) to
which Indemnitee is, was or at any time becomes a party, or is threatened to be
made a party, by reason of the fact that Indemnitee is, was or at any time
becomes a director, officer, employee or agent of the Company or any subsidiary
of the Company, or is or was serving or at any time serves at the request of the
Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise;
and
(b) Otherwise to the fullest extent as may be provided to
Indemnitee by the Company under the non-exclusivity provisions of the Bylaws of
the Company, the Certificate of Incorporation and the DGCL.
3. Limitations on Additional Indemnity.
(a) No indemnity pursuant to Section 2 hereof shall be
paid by the Company:
i) In respect to remuneration paid to Indemnitee if
it shall be determined by a final judgment or other final adjudication that such
remuneration was in violation of law;
ii) On account of any suit in which judgment is
rendered against Indemnitee for an accounting of profits made from the purchase
or sale by Indemnitee of securities of the Company pursuant to the provisions of
Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto or
similar provisions of any federal, state or local statutory law;
iii) On account of Indemnitee's conduct which is
finally adjudged to have been knowingly fraudulent or deliberately dishonest or
to constitute willful misconduct;
iv) On account of Indemnitee's conduct which is the
subject of an action, suit or proceeding described in Section 6(c)(ii) hereof;
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v) On account of any action, claim or proceeding
(other than a proceeding referred to in Section 7(b) hereof) initiated by the
Indemnitee unless such action, claim or proceeding was authorized in the
specific case by action of the Board of Directors;
vi) If a final decision by a Court having jurisdiction
in the matter shall determine that such indemnification is not lawful (and, in
this respect, both the Company and Indemnitee have been advised that the
Securities and Exchange Commission believes that indemnification for liabilities
arising under the federal securities laws is against public policy and is,
therefore, unenforceable and that claims for indemnification should be submitted
to appropriate courts for adjudication); and
vii) Except to the extent the aggregate of losses to
be indemnified thereunder exceeds the sum of (a) such losses for which the
Indemnitee is indemnified pursuant to Section 1 hereof and (b) any additional
amount paid to the Indemnitee pursuant to any D&O Insurance purchased and
maintained by the Company.
(b) No indemnity pursuant to Section 1 or 2 hereof shall
be paid by the Company if the action, suit or proceeding with respect to which a
claim for indemnity hereunder is made arose from or is based upon any of the
following:
i) Any solicitation of proxies by Indemnitee, or by a
group of which he was or became a member consisting of two or more persons that
had agreed (whether formally or informally and whether or not in writing) to act
together for the purpose of soliciting proxies, in opposition to any
solicitation of proxies approved by the Board of Directors.
ii) Any activities by Indemnitee that constitute a
breach of or default under any agreement between Indemnitee and the Company.
4. Contribution. If the indemnification provided in Sections 1
and 2 hereof is unavailable by reason of a Court decision described in Section
3(a)(vi) hereof based on grounds other than any of those set forth in paragraphs
(i) through (v) of Section 3 (a) hereof, then in respect of any threatened,
pending or completed action, suit or proceeding in which the Company is jointly
liable with Indemnitee (or would be if joined in such action, suit or
proceeding), the Company shall contribute to the amount of expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred and paid or payable by Indemnitee in such proportion as is
appropriate to reflect (i) the relative benefits received by the Company on the
one hand and Indemnitee on the other hand from the transaction from which such
action, suit or proceeding arose, and (ii) the relative fault of the Company on
the one hand and of Indemnitee on the other in connection with the events which
resulted in such expenses, judgments, fines or settlement amounts, as well as
any other relevant equitable considerations. The relative fault of the Company
on the one hand and of Indemnitee on the other shall be determined by reference
to, among other things, the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent the circumstances resulting in
such expenses,
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judgments, fines or settlement amounts. The Company agrees that it would not be
just and equitable if contribution pursuant to this Section 4 were determined by
pro rata allocation or any other method of allocation which does not take
account of the foregoing equitable considerations.
5. Notification and Defense of Claim. Not later than thirty
(30) days after receipt by Indemnitee of notice of the commencement of any
action, suit or proceeding, Indemnitee shall, if a claim in respect thereof is
to be made against the Company under this Agreement, notify the President of the
Company of the commencement thereof; but Indemnitee's omission to notify the
Company will not relieve the Company from any liability which it may have to
Indemnitee otherwise than under this Agreement. The Company shall promptly
acknowledge the notice from the Indemnitee. With respect to any such action,
suit or proceeding as to which Indemnitee notifies the Company of the
commencement thereof:
(a) The Company will be entitled to participate therein at
its own expense.
(b) Except as otherwise provided below, to the extent that
it may wish, the Company shall, jointly with any other indemnifying party
similarly notified, be entitled to assume the defense thereof, with counsel
reasonably satisfactory to Indemnitee. After notice from the Company to
Indemnitee of its election to assume the defense thereof, the Company will not
be liable to 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.
Indemnitee shall have the right to employ its own counsel in such action, suit
or proceeding, but the fees and expenses of such counsel incurred after notice
from the Company of the Company's assumption of the defense thereof shall be at
the expense of Indemnitee unless (i) the employment of counsel by Indemnitee has
been authorized by the Company; (ii) Indemnitee shall have reasonably concluded
that there may be a conflict of interest between the Company and 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 Indemnitee's separate counsel shall be paid
by 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
Indemnitee shall have made the conclusion provided for in (ii) above.
(c) The Company shall not be liable to indemnify
Indemnitee under this Agreement for any amounts paid in settlement of any action
or claim effected without its written consent. The Company shall be permitted to
settle any action except that it shall not settle any action or claim in any
manner which would impose any penalty or limitation on Indemnitee without
Indemnitee's written consent. Neither the Company nor Indemnitee will
unreasonably withhold its consent to any proposed settlement.
6. Advancement and Repayment of Expenses.
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(a) In the event that Indemnitee employs his or her own
counsel pursuant to Sections 5(b)(i) through (iii) above, the Company shall
advance to Indemnitee, prior to any final disposition of any threatened or
pending action, suit or proceeding, whether civil, criminal, administrative or
investigative, any and all reasonable expenses (including legal fees and
expenses) incurred in investigating or defending any such action, suit or
proceeding within ten (10) days after receiving from Indemnitee copies of
invoices presented to Indemnitee for such expenses.
(b) Indemnitee agrees that Indemnitee will reimburse the
Company for all reasonable expenses paid by the Company in investigating or
defending any civil or criminal action, suit or proceeding against Indemnitee in
the event and only to the extent it shall be ultimately determined by a final
judicial decision (from which there is no right of appeal) that Indemnitee is
not entitled, under the provisions of the DGCL, the Bylaws, this Agreement or
otherwise, to be indemnified by the Company for such expenses.
(c) Notwithstanding the foregoing, the Company shall not
be required to advance such expenses to Indemnitee in respect of any action
arising from or based upon any of the matters set forth in subsection (b) of
Section 3 or if Indemnitee (i) commences any action, suit or proceeding as a
plaintiff unless such advance is specifically approved by a majority of the
Board of Directors or (ii) is a party to an action, suit or proceeding brought
by the Company and approved by a majority of the Board which alleges willful
misappropriation of corporate assets by Indemnitee, disclosure of confidential
information in violation of Indemnitee's fiduciary or contractual obligations to
the Company, or any other willful and deliberate breach in bad faith of
Indemnitee's duty to the Company or its shareholders.
7. Enforcement.
(a) The Company expressly confirms and agrees that it has
entered into this Agreement and assumed the obligations imposed on the Company
hereby in order to induce Indemnitee to continue as a director, officer,
employee or other agent of the Company, and acknowledges that Indemnitee is
relying upon this Agreement in continuing in such capacity.
(b) In the event Indemnitee is required to bring any
action to enforce rights or to collect moneys due under this Agreement and is
successful in such action, the Company shall reimburse Indemnitee for all
Indemnitee's reasonable fees and expenses, including attorney's fees, in
bringing and pursuing such action.
8. 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 documents required and
shall do all acts that may be necessary to secure such rights and to enable the
Company effectively to bring suit to enforce such rights.
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9. Continuation of Obligations. All agreements and obligations
of the Company contained herein shall commence upon the date that Indemnitee
first became a member of the Board of Directors or an officer, employee or agent
of the Company, as the case may be, and shall continue during the period
Indemnitee is a director, officer, employee or agent of the Company (or is or
was serving at the request of the Company as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise) and shall continue thereafter so long as
Indemnitee shall be subject to any possible claim or threatened, pending or
completed action, suit or proceeding, whether civil, criminal or investigative,
by reason of the fact that Indemnitee was a director, officer, employee or agent
of the Company or serving in any other capacity referred to herein.
10. Survival of Rights. The rights conferred on Indemnitee by
this Agreement shall continue after Indemnitee has ceased to be a director,
officer, employee or other agent of the Company and shall inure to the benefit
of Indemnitee's heirs, executors and administrators.
11. Non-Exclusivity of Rights. The rights conferred on
Indemnitee by this Agreement shall not be exclusive of any other right which
Indemnitee may have or hereafter acquire under any statute, provision of the
Company's Certificate of Incorporation or Bylaws, agreement, vote of
stockholders or directors, or otherwise, both as to action in his official
capacity and as to action in another capacity while holding office; provided,
however, that this Agreement shall supersede and replace any prior
indemnification agreements entered into by and between the Company and
Indemnitee and that any such prior indemnification agreement shall be terminated
upon the execution of this Agreement.
12. Separability. Each of the provisions of this Agreement is
a separate and distinct agreement and independent of the others, so that if any
or all of the provisions hereof shall be held to be invalid or unenforceable for
any reason, such invalidity or unenforceability shall not affect the validity or
enforceability of the other provisions hereof or the obligation of the Company
to indemnify the Indemnitee to the full extent provided by the Bylaws or the
DGCL.
13. Governing Law. This Agreement shall be interpreted and
enforced in accordance with the laws of the State of Delaware.
14. Binding Effect. This Agreement shall be binding upon
Indemnitee and upon the Company, its successors and assigns, and shall inure to
the benefit of Indemnitee, his or her heirs, personal representatives and
assigns and to the benefit of the Company, its successors and assigns.
15. Amendment and Termination. No amendment, modification,
termination or cancellation of this Agreement shall be effective unless it is in
writing and is signed by both parties hereto.
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on and as of the day and year first above written.
COMPANY
SCC Communications Corp.
By:
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Xxxxxx X. Xxxxxxxxx
President and Chief Executive
Officer
INDEMNITEE
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Xxxxxx X. Xxxxxxxxx
President and Chief Executive Officer
Address: 0000 Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxxx 00000
