EXHIBIT 10.1
INDEMNIFICATION AGREEMENT
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This INDEMNIFICATION AGREEMENT ("Agreement") is made on ,
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1997, between BALANCE BAR COMPANY, a Delaware corporation (the "Company"), and
("Indemnitee"), an officer and/or member of the Board of
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Directors of the Company.
RECITALS
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A. The Company desires the benefits of having Indemnitee serve as an
officer and/or director secure in the knowledge that expenses, liabilities and
losses incurred by Indemnitee in Indemnitee's good faith service to the Company
will be borne by the Company or its successors and assigns in accordance with
applicable law; and
B. The Company desires that Indemnitee resist and defend against what
Indemnitee may consider to be unjustified investigations, claims, actions, suits
and proceedings which have arisen or may arise in the future as a result of
Indemnitee's service to the Company notwithstanding that conditions in the
insurance markets may make directors' and officers' liability insurance coverage
unavailable or available only at premium levels which the Company may deem
inappropriate to pay; and
C. The parties believe it appropriate to memorialize and reaffirm the
Company's indemnification obligations to Indemnitee and, in addition, set forth
the indemnification agreements contained herein;
NOW, THEREFORE, in consideration of the mutual agreements herein contained,
the parties agree as follows:
AGREEMENT
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1. INDEMNIFICATION.
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Indemnitee shall be indemnified and held harmless by the Company to the
fullest extent permitted by its Certificate of Incorporation, Bylaws and
applicable law, as the same exists or may hereafter be amended, against all
expenses, liabilities and loss (including attorneys' fees, judgments, fines, and
amounts paid or to be paid in any settlement approved in advance by the Company,
such approval not to be unreasonably withheld) (collectively, "Indemnifiable
Expenses") actually and reasonably incurred or suffered by Indemnitee in
connection with any present or future threatened,
pending or contemplated investigation, claim, action, suit or proceeding,
whether civil, criminal, administrative or investigative (collectively,
"Indemnifiable Litigation"), (i) to which Indemnitee is or was a party or is
threatened to be made a party by reason of any action or inaction in
Indemnitee's capacity as a director or officer of the Company, or (ii) with
respect to which Indemnitee is otherwise involved by reason of the fact that
Indemnitee is or was serving as a director, officer, employee or agent of the
Company, or of any subsidiary or division, 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 or other enterprise. Notwithstanding the
foregoing, Indemnitee shall have no right to indemnification for expenses and
the payment of profits arising from the purchase and sale by Indemnitee of
securities in violation of Section 16(b) of the Securities Exchange Act of 1934,
as amended.
2. NOTICE OF CLAIMS
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Indemnitee shall, as a condition precedent to Indemnitee's right to be
indemnified under this Agreement, give the Company notice in writing as soon as
practicable of any claim made against Indemnitee for which indemnification will
or could be sought under this Agreement. Notice to the Company shall be directed
to the Chief Executive Officer of the Company at the address set forth in
Section 11 hereof (or such other address as the Company shall designate in
writing to Indemnitee). A delay on the part of the Indemnitee in so notifying
the Company shall not relieve the Company from any obligation hereunder unless
(and then solely to the extent) the Company thereby is prejudiced. Any
indemnification provided for in Section 1 shall be made no later than forty-five
(45) days after receipt of the written request of Indemnitee.
3. INTERIM EXPENSES.
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The Company agrees to pay Indemnifiable Expenses incurred by Indemnitee in
connection with any Indemnifiable Litigation in advance of the final disposition
thereof, provided that the Company has received an undertaking by or on behalf
of Indemnitee, substantially in the form attached hereto as Exhibit A, to repay
the amount so advanced to the extent that it is ultimately determined that
Indemnitee is not entitled to be indemnified by the Company under this Agreement
or otherwise. The advances to be made hereunder shall be paid by the Company to
Indemnitee within twenty (20) days following delivery of a written request
therefor by Indemnitee to the Company.
4. FAILURE TO INDEMNIFY
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4.1 If a claim under this Agreement, or any statute, or under any
provision of the Company's Amended and Restated Certificate of Incorporation or
Bylaws providing for indemnification, is not paid in full by the Company, within
forty-five (45) days after a written request for payment thereof has been
received by the Company, Indemnitee may, but need not, at any time thereafter
bring an action against the Company to recover the unpaid amount of the claim
and, subject to Section 12 of this Agreement, if
successful in whole or in part, Indemnitee shall also be entitled to be paid for
the expense (including attorneys' fees) of bringing such action.
4.2 It shall be a defense to such action (other than an action brought to
enforce a claim for expenses incurred in connection with any action, suit or
proceeding in advance of its final disposition) that Indemnitee has not met the
standards of conduct which make it permissible under applicable law for the
Company to indemnify Indemnitee for the amount claimed, but the burden of
proving such defense shall be on the Company and Indemnitee shall be entitled to
receive interim payments of interim expenses pursuant to Section 3 hereof unless
and until such defense may be finally adjudicated by court order or judgment
from which no further right of appeal exists. It is the parties' intention that
if the Company contests Indemnitee's right to indemnification, the question of
Indemnitee's right to indemnification shall be for the court to decide, and
neither the failure of the Company (including its board of directors,
independent legal counsel, or its stockholders) to have made a determination
that indemnification of Indemnitee is proper in the circumstances because
Indemnitee has met the applicable standard of conduct required by applicable
law, nor an actual determination by the Company (including its board of
directors, any committee or subgroup of the board of directors, independent
legal counsel, or its stockholders) that Indemnitee has not met such applicable
standard of conduct, shall create a presumption that Indemnitee has or has not
met the applicable standard of conduct.
5. NOTICE TO INSURERS.
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If, at the time of the receipt of a notice of a claim pursuant to Section 2
hereof, the Company has director and/or officer liability 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 respective
policies. The Company shall thereafter take all necessary or desirable action to
cause such insurers to pay, on behalf of the indemnitee, all amounts payable as
a result of such proceeding in accordance with the terms of such policies.
6. RETENTION OF COUNSEL
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In the event that the Company shall be obligated to pay Indemnifiable
Expenses as a result of any proceeding against Indemnitee, the Company, if
appropriate, shall be entitled to assume the defense of such proceeding, with
counsel approved by Indemnitee, which approval shall not be unreasonably
withheld, upon the delivery to Indemnitee of written notice of its election to
do so. After delivery of such notice, approval of such counsel by Indemnitee and
the retention of such counsel by the Company, the Company will not be liable to
Indemnitee under this Agreement for any fees of counsel subsequently incurred by
that Indemnitee with respect to that same proceeding, provided that
(i) Indemnitee shall have the right to employ his or her counsel in any such
proceeding at Indemnitee's expense, and (ii) if (A) the employment
of counsel by Indemnitee has been previously authorized by the Company,
(B) Indemnitee shall have reasonably concluded that there may be a conflict of
interest between the Company and Indemnitee in the conduct of any such defense,
or (C) the Company shall not, in fact, have employed counsel to assume defense
of such proceeding, then the fees and expenses of Indemnitee's counsel shall be
at the expense of the Company.
7. SUCCESSORS
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This Agreement establishes contract rights which shall be binding upon, and
shall inure to the benefit of, the successors, assigns, heirs and legal
representatives of the parties hereto.
8. MUTUAL ACKNOWLEDGMENT
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Both the Company and Indemnitee acknowledge that in certain instances,
Federal law or applicable public policy may prohibit the Company from
indemnifying its directors and officers under this Agreement or otherwise.
Indemnitee understands and acknowledges that the Company may be required in the
future to undertake to the Securities and Exchange Commission to submit the
question of indemnification to a court in certain circumstances for a
determination of the Company's right under public policy to indemnify
Indemnitee, and, in that event, the Indemnitee's rights and the Company's
obligations hereunder shall be subject to that determination.
9. CONTRACT RIGHTS NOT EXCLUSIVE
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The contract rights conferred by this Agreement shall be in addition to,
but not exclusive of, any other right which Indemnitee may have or may hereafter
acquire under any statute, provision of the Company's Certificate of
Incorporation or Bylaws, agreement, vote of stockholders or disinterested
directors, or otherwise.
10. INDEMNITEE'S OBLIGATIONS
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The Indemnitee shall promptly advise the Company in writing of the
institution of any investigation, claim, action, suit or proceeding which is or
may be subject to this Agreement and keep the Company generally informed of, and
consult with the Company with respect to, the status of any such investigation,
claim, action, suit or proceeding. In addition, Indemnitee shall give the
Company such information and cooperation as it may reasonably require and as
shall be within Indemnitee's power.
11. NOTICES
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Any notice or other communication hereunder must be given in writing and
either (a) delivered in person, (b) transmitted by telex, telefax or
telecommunications mechanism provided that any notice so given is also mailed as
provided in clause (c) or
(c) mailed by registered or certified mail, properly addressed, as follows:
If to the Company, addressed to:
Balance Bar Company
0000 Xxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attention: Chief Executive Officer
Facsimile No. (000) 000-0000
With a copy to:
Seed, Xxxxxxx & Xxxx LLP
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Facsimile No. (000) 000-0000
If to Indemnitee addressed to:
Attention:
Facsimile No.
With copies to:
or to such other address or to such other person as either party shall have last
designated by such notice to the other party. Each such notice or other
communication shall be effective (i) if given by telecommunication, when
transmitted to the applicable number so specified in (or pursuant to) this
Section 11 and an appropriate answerback is received, (ii) if given by mail,
three days after such communication is deposited in the mails as aforesaid or
(iii) if given by any other means, when actually delivered at such address.
12. ATTORNEYS' FEES
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In the event that any action is instituted by Indemnitee under this
Agreement to enforce or interpret any of the terms hereof, Indemnitee shall be
entitled to be paid all court costs and expenses, including reasonable
attorneys' fees, incurred by Indemnitee with respect to such action, unless as a
part of such action, a court of competent jurisdiction determines that each of
the material assertions made by Indemnitee as a basis for such action were not
made in good faith or were frivolous. In the event of an action instituted by or
in the name of the Company under this Agreement, or to enforce or interpret any
other terms of this Agreement, Indemnitee shall be entitled to be paid all court
costs and expenses, including attorneys' fees, incurred by Indemnitee in defense
of such action (including with respect to Indemnitee's counterclaims and
cross-claims made in such action), unless as a part of such action the court
determines that each of Indemnitee's material defenses to such action were made
in bad faith or were frivolous.
13. SEVERABILITY
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Should any provision of this Agreement, or any clause hereof, be held to be
invalid, illegal or unenforceable, in whole or in part, the remaining provisions
and clauses of this Agreement shall remain fully enforceable and binding on the
parties. The parties agree to replace any such invalid, illegal or
unenforceable provision of this Agreement with a valid, legal and enforceable
provision which will achieve, to the extent possible, the economic, business,
and other purposes of the invalid, illegal or unenforceable provision.
14. MODIFICATION AND WAIVER
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No supplement, modification, waiver 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 of not similar) nor shall such
waiver constitute a continuing waiver.
15. CHOICE OF LAW
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The validity, interpretation, performance and enforcement of this Agreement
shall be governed by the laws of the State of Delaware.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first written above.
"COMPANY"
By
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Name:
Title:
"INDEMNITEE"
Name:
EXHIBIT A
UNDERTAKING AGREEMENT
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This UNDERTAKING AGREEMENT is made on , 199 between
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BALANCE BAR COMPANY, a Delaware corporation (the "Company") and ,
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an officer and/or member of the Board of Directors of the Company
("Indemnitee").
RECITALS
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A. Indemnitee may become involved in investigations, claims, actions,
suits or proceedings which have arisen or may arise in the future as a result of
Indemnitee's service to the Company;
B. Indemnitee desires that the Company pay any and all expenses
(including, but not limited to, attorneys' fees and court costs) actually and
reasonably incurred by Indemnitee or on Indemnitee's behalf in defending or
investigating any such suits or claims and that such payment be made in advance
of the final disposition of such investigations, claims, actions, suits or
proceedings to the extent that Indemnitee has not been previously reimbursed by
insurance.
C. The Company is willing to make such payments but, in accordance with
Section 145 of the General Corporation Law of the State of Delaware, the Company
may make such payments only if it receives an undertaking to repay from
Indemnitee.
D. Indemnitee is willing to give such an undertaking.
NOW, THEREFORE, in consideration of the mutual promises contained herein,
the parties agree as follows;
AGREEMENT
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1. In regard to any payments made by the Company to Indemnitee pursuant
to the terms of the Indemnification Agreement dated , 1997,
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between the Company and Indemnitee, Indemnitee hereby undertakes and agrees to
repay to the Company any and all amounts so paid promptly and in any event
within thirty (30) days after the disposition, including any appeals, of any
litigation or threatened litigation on account of which payments were made, but
only to the extent that Indemnitee is ultimately found not entitled to be
indemnified by the Company under the Bylaws of the Company and Section 145 of
the General Corporation Law of the State of Delaware, or other applicable law.
2. This Agreement shall not affect in any manner rights which Indemnitee
may have against the Company, any insurer or any other person to seek
indemnification for or reimbursement of any expenses referred to herein or any
judgment which may be rendered in any litigation or proceeding.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
on the date first above written.
"COMPANY"
BALANCE BAR COMPANY,
a Delaware corporation
By
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"INDEMNITEE"
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