Exhibit 4.3
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is made as of April 6, 2000, by
and between Timberline Software Corporation, an Oregon corporation
("Corporation"), and Xxxxxx Xxxxxxx ("Indemnitee"), a director or officer of
the Corporation.
PREMISES
WHEREAS, it is essential to the Corporation to attract and retain as directors
and officers the most capable persons available;
WHEREAS, the increase in corporate litigation subjects directors and officers
to expensive litigation risks at the same time that the availability and
coverage of directors' and officers' liability insurance has been reduced;
WHEREAS, it is now and has been the express policy of the Corporation to
indemnify its directors and officers so as to provide them with the maximum
possible protection permitted by law;
WHEREAS, the Articles of Incorporation and/or Bylaws of the Corporation
require indemnification of the directors and permit indemnification of
officers of the Corporation to the fullest extent permitted by the Oregon
Business Corporation Act ("Act"); and the Act, and the Corporation's Articles
of Incorporation and Bylaws contemplate that contracts may be entered into
between the Corporation and directors and officers of the Corporation with
respect to indemnification of such directors and officers;
WHEREAS, Indemnitee is unwilling to serve, or continue to serve, the
Corporation as a director or officer without assurances that adequate
liability insurance, indemnification or a combination thereof is, and will
continue to be, provided;
WHEREAS, Indemnitee does not regard the protection available under the Act, or
the Corporation's or its Subsidiary's Articles of Incorporation, Bylaws and
insurance adequate in the present circumstances;
WHEREAS, the Corporation desires Indemnitee to serve as a director or officer;
and
WHEREAS, the Corporation, in order to induce Indemnitee to serve or continue
to serve the Corporation, has agreed to provide Indemnitee with the benefits
contemplated by this Agreement which benefits are intended to supplement or
replace, if necessary, liability insurance and supplement the indemnification
and/or exculpation provided in the Corporation's Articles of Incorporation
and/or Bylaws.
Ex. 4.3 - 1
AGREEMENT
NOW, THEREFORE, in consideration of the Premises set forth and the agreements
herein expressed, the Corporation and Indemnitee agree as follows:
1. Agreement to Serve. Indemnitee agrees to serve or continue to serve as a
director and/or officer of the Corporation for so long as Indemnitee is
duly elected or appointed or until Indemnitee tenders a resignation in
writing.
2. Definitions. As used in this Agreement:
2.1 The term "Proceeding" shall include any threatened, pending or
completed action, suit or proceeding, whether brought in the right
of the Corporation or otherwise and whether of a civil, criminal,
administrative or investigative nature, in which Indemnitee may be
or may have been involved as a party or otherwise by reason of the
fact that Indemnitee is or was a director or officer of the
Corporation or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, whether or
not serving in such capacity at the time any liability or expense is
incurred for which indemnification or reimbursement can be provided
under this Agreement.
2.2 The term "Expenses" includes, without limitation, all expenses of
investigations, judicial or administrative proceedings or appeals,
attorneys' fees and disbursements and any expenses of establishing a
right to indemnification under Section 11 of this Agreement,
including amounts paid in settlement by Indemnitee with the
Corporation's consent, which consent shall not be withheld
unreasonably, but shall not include the amount of any judgments or
fines against Indemnitee.
2.3 References to "other enterprise" shall include employee benefit
plans; references to "fines" shall include any excise tax assessed
with respect to any employee benefit plan; references to "serving at
the request of the Corporation" shall include any service as a
director, officer, employee or agent of the Corporation which
imposes duties on, or involves services by, such director, officer,
employee or agent with respect to an employee benefit plan, its
participants or beneficiaries; and a person who acted in good faith
and in a manner he reasonably believed to be in the interest of an
employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the Corporation" as referred to in
this Agreement.
3. Indemnification in Third-Party Proceedings. The Corporation shall
indemnify and hold harmless Indemnitee in accordance with the provisions
of this Section 3 if Indemnitee is a party or threatened to be made a
party to, or otherwise incurs expenses in connection with any Proceeding
(other than a Proceeding by or in the right of the Corporation to procure
a judgment in its favor) against all Expenses, judgments, fines and
amounts paid in settlement actually incurred by Indemnitee in connection
with such Proceeding, but only if Indemnitee acted in good faith and in a
Ex. 4.3 - 2
manner which Indemnitee reasonably believed to be in, or not opposed to,
the best interest of the Corporation and, in the case of criminal
proceedings, in addition, did not knowingly violate the law.
4. Indemnification in Proceedings by or in the Right of the Corporation. The
Corporation shall indemnify Indemnitee in accordance with the provisions
of this Section 4 if Indemnitee is a party or threatened to be made a
party to, or otherwise incurs expenses in connection with any Proceeding
by or in the right of the Corporation to procure a judgment in its favor,
against all Expenses actually incurred by Indemnitee in connection with
the defense or settlement of such Proceeding, but only if Indemnitee
acted in good faith and in a manner which Indemnitee reasonably believed
to be in, or not opposed to, the best interests of the Corporation.
5. Indemnification of Expenses of Successful Party. Notwithstanding any
other provisions of this Agreement, to the extent that Indemnitee has
been successful, on the merits or otherwise, in the defense of any
Proceeding or in defense of any claim, issue or matter therein, including
the dismissal of an action without prejudice, Indemnitee shall be
indemnified against all Expenses actually incurred in connection
therewith.
6. Indemnification in Proceeding by the Corporation or its Shareholders for
Monetary Damages for Conduct as a Director. The Corporation shall
indemnify Indemnitee in accordance with the provisions of this Section 6
if Indemnitee is a party or threatened to be made a party to, or
otherwise incurs expenses in connection with any Proceeding by the
Corporation or its Shareholders against all personal liability of the
Indemnitee for monetary damages for conduct as a director and/or officer
of the Corporation; provided further, Indemnitee shall not be indemnified
for (i) any breach of Indemnitee's duty of loyalty as a director or
officer of the Corporation to the Corporation or its Shareholders, (ii)
acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) any unlawful distribution
under the Act, or (iv) any transaction from which the Indemnitee derived
an improper personal benefit while serving as a director or officer of
the Corporation.
7. Additional Indemnification.
7.1 Notwithstanding any limitation in Sections 3, 4, 5 or 6, the
Corporation shall indemnify Indemnitee to the fullest extent
permitted by law if Indemnitee is a party or threatened to be made a
party to, or otherwise incurs expenses in connection with any
Proceeding (including a Proceeding by or in the right of the
Corporation to procure a judgment in its favor) against all
Expenses, judgments, fines and amounts paid in settlement actually
incurred by Indemnitee in connection with such Proceeding, provided
that no indemnity shall be made under this Section 7.1 on account of
Indemnitee's conduct which constitutes a breach of Indemnitee's duty
of loyalty to the Corporation or its stockholders, is an act or
omission not in good faith or which involves intentional misconduct
or a knowing violation of the law, results from an unlawful
distribution under the Act, or results in Indemnitee having derived
an improper personal benefit.
Ex. 4.3 - 3
7.2 For purposes of Section 7.1, the meaning of the phrase "to the
fullest extent permitted by law" shall include, but no be limited
to:
7.2.1 The fullest extent permitted by the provision of the Act that
authorizes or contemplates additional indemnification by
agreement, or the corresponding provision of any amendment to
or replacement of the Act, and
7.2.2 The fullest extent authorized or permitted by any amendments
to or replacements of the Act adopted after the date of this
Agreement that increase the extent to which a corporation may
indemnify its officers and directors.
8. Exclusions. Notwithstanding any provision in this Agreement, the
Corporation shall not be obligated under this Agreement to make any
indemnity in connection with any claim made against Indemnitee:
8.1 For which payment had actually been made to or on behalf of
Indemnitee under any insurance policy or other indemnity provision,
except with respect to any excess beyond the amount paid under such
insurance or other indemnity provision;
8.2 For any transaction from which Indemnitee derived an improper
personal benefit;
8.3 For an accounting of profits made from the purchase and sale by
Indemnitee of securities of the Corporation within the meaning of
Section 16(b) of the Securities Exchange Act of 1934 and amendments
thereto or similar provisions of any state statutory law or common
law;
8.4 If a court having jurisdiction in the matter finally determines that
such indemnification is not lawful under any applicable statute or
public policy (and, in this respect, both the Corporation 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,
therefor, unenforceable and that claims for indemnification should
be submitted to appropriate courts for adjudication); or
8.5 In connection with any proceeding (or part thereof) initiated by
Indemnitee, or any proceeding by Indemnitee against the Corporation
or its directors, officers, employees or other indemnitees, unless
(i) such indemnification is expressly required to be made by law,
(ii) the proceeding was authorized by the Board of Directors of the
Corporation, (iii) such indemnification is provided by the
Corporation, in its sole discretion, pursuant to the powers vested
in the Corporation under applicable law, or (iv) the proceeding is
initiated pursuant to Section 12 hereof and Indemnitee is successful
in whole or in part in such proceeding.
Ex. 4.3 - 4
9. Advances of Expenses. The Expenses incurred by Indemnitee in any
Proceeding shall be paid by the Corporation in advance at the written
request of Indemnitee, if Indemnitee:
9.1 Furnishes the Corporation a written affirmation of the Indemnitee's
good faith belief that Indemnitee is entitled to be indemnified by
the Corporation under this Agreement; and
9.2 Furnishes the Corporation a written undertaking to repay such
advance to the extent that it is ultimately determined by a court
that Indemnitee is not entitled to be indemnified by the
Corporation. Such advances shall be made without regard to
Indemnitee's ability to repay such expenses and without regard to
Indemnitee's ultimate entitlement to the indemnification under the
provisions of this Agreement.
10. Notification and Defense of Claim. Not later than fifteen (15) days after
receipt by Indemnitee of notice of the commencement of any Proceeding,
Indemnitee will, if a claim in respect thereof is to be made against the
Corporation under this Agreement, notify the Corporation of the
commencement thereof; provided, however, that the omission to notify the
Corporation will not relieve the Corporation from any liability which it
may have to Indemnitee otherwise than under this Agreement. With respect
to any such Proceeding as to which Indemnitee notifies the Corporation of
the commencement thereof:
10.1 The Corporation will be entitled to participate therein at its own
expense.
10.2 Except as otherwise provided below, the Corporation may, at its
option and jointly with any other indemnifying party similarly
notified and electing to assume such defense, assume the defense
thereof, with legal counsel reasonably satisfactory to Indemnitee.
Indemnitee shall have the right to employ separate counsel in such
Proceeding, but the Corporation shall not be liable to Indemnitee
under this Agreement, including Section 8 hereof, for the fees and
expenses of such counsel incurred after notice from the Corporation
of its assumption of the defense, unless (i) Indemnitee reasonably
concludes that there may be a conflict of interest between the
Corporation and Indemnitee in the conduct of the defense of such
Proceeding, or (ii) the Corporation does not employ counsel to
assume the defense of such Proceeding within a reasonable period.
Indemnitee shall be promptly notified of the employment of such
counsel. The Corporation shall not be entitled to assume the defense
of any Proceeding brought by or on behalf of the Corporation or as
to which the Indemnitee shall have made the conclusion provided for
in (i) above of the other parties required by the Corporation to be
represented by the same legal counsel.
10.3 If two or more person who may be entitled to indemnification from
the Corporation, including the Indemnitee, are parties to any
Proceeding, the Corporation may require Indemnitee to engage that
same legal counsel as to the other parties. Indemnitee shall have
the right to employ separate legal counsel in such Proceeding, but
the Corporation shall not be liable to Indemnitee under this
Ex. 4.3 - 5
Agreement, including Section 8 hereof, for the fees and expenses of
such counsel incurred after notice from the Corporation of the
requirement to engage the same counsel as other parties, unless the
Indemnitee reasonably concludes that there may be a conflict of
interest between Indemnitee and any of the other parties required b
the Corporation to be represented by the same legal counsel.
10.4 The Corporation shall not be liable to indemnify Indemnitee under
this Agreement for any amounts paid in settlement of any Proceeding
effected without its written consent, which consent shall not be
withheld unreasonably. Indemnitee shall permit the Corporation to
settle any Proceeding, the defense of which it assumes, except that
the Corporation shall not be permitted to settle any action or claim
in any manner which would impose any penalty or limitation on
Indemnitee without Indemnitee's written consent, which may be given
or withheld in Indemnitee's sole discretion.
11. Procedure upon Application for Indemnification. Any indemnification under
Sections 3, 4, 5, 6 or 7 of this Agreement shall be made no later than 90
days after receipt of the written request of Indemnitee for such
indemnification and shall not require that a determination be made in
accordance with the Act by the persons specified in the Act that
indemnification is required under this Agreement, provided, however, that
unless it is ordered by a court in a enforcement action under Section 12
of this Agreement, no such indemnification shall be made if a
determination is made within such 90-day period by (a) the Board of
Directors by a majority vote of a quorum consisting of directors who were
not parties to such Proceeding, or (b) independent legal counsel in a
written opinion (which counsel shall be appointed if such a quorum is not
obtainable), that Indemnitee is not entitled to indemnification under
this Agreement.
12. Enforcement. Any right to indemnification or advances granted by this
Agreement to Indemnitee shall be enforceable by or on behalf of
Indemnitee in any court of competent jurisdiction if (a) the claim for
indemnification or advances is denied, in whole or in part, or (b) no
disposition of such claim is made within 90 days of a written request
therefor. Indemnitee, in such enforcement action, if successful in whole
or in part, shall be entitled to be paid also the reasonable expense,
including attorneys' fees, of prosecuting the claim; the Corporation
shall not be entitled to its expenses whether or not successful in whole
or in part. It shall be a defense to any such enforcement action (other
than an action brought to enforce a claim for advancement of expenses
pursuant to Section 9 hereof if the required affirmation and undertaking
have been tendered to the Corporation) that Indemnitee is not entitled to
indemnification under this Agreement, but the burden of proving such
defense shall be on the Corporation. Neither the failure of the
Corporation (including its Board of Directors or its shareholders) to
make a determination prior to the commencement of such enforcement action
that indemnification of Indemnitee is proper in the circumstances, nor an
actual determination by the Corporation (including its Board of Directors
or its shareholders) that such indemnification is improper shall be a
defense to the action or create a presumption that Indemnitee is not
entitled to indemnification under this Agreement or otherwise. The
termination of any Proceeding by judgment, order of court, settlement,
Ex. 4.3 - 6
conviction or upon a plea of nolo contendere, or its equivalent shall
not, of itself, create a presumption that Indemnitee is not entitled to
indemnification under this Agreement or otherwise.
13. Partial Indemnification. If Indemnitee is entitled under any provisions
of this Agreement to indemnification by the Corporation for some or a
portion of the Expenses, judgment, fines and amounts paid in settlement
actually incurred by Indemnitee in the investigation, defense, appeal or
settlement of any Proceeding but not, however, for the total amount
thereof, the Corporation shall indemnify Indemnitee for the portion of
such Expenses, judgments, fines and amounts paid in settlement to which
Indemnitee is entitled.
14. Non-exclusivity and Continuity of Rights. The indemnification provided by
this Agreement shall not be deemed exclusive of any other rights to which
Indemnitee may be entitled under the Articles of Incorporation, the
Bylaws, any other agreement, any vote of shareholders or directors, the
Act, or otherwise, both as to action in Indemnitee's official capacity
and as to action in another capacity while holding such office. The
indemnification under this Agreement shall continue as to Indemnitee even
though Indemnitee ceases to be a director or officer of the Corporation
and shall inure to the benefit of the heirs and personal representatives
of Indemnitee.
15. Severability. If this Agreement or any portion thereof is invalidated on
any ground by any court of competent jurisdiction, the Corporation shall
indemnify Indemnitee as to Expenses, judgments, fines and amounts paid in
settlement with respect to any Proceeding to the full extent permitted by
any applicable portion of this Agreement that is not invalidated or by
any other applicable law.
16. Subrogation. In the event of payment under this Agreement, the
Corporation 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 necessary to secure such rights and to
enable the Corporation effectively to bring suit to enforce such rights.
17. 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 constitute a waiver of any other provisions hereof (whether or not
similar), nor shall such a waiver constitute a continuing waiver.
18. Notices. Ail notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given
(a) if delivered by hand and receipted for by the party to whom said
notice or other communication shall have been directed, at the time of
such delivery, or (b) if mailed by certified or registered mail with
postage prepaid, on the third business day after the date on which it so
mailed:
18.1 If to Indemnitee, at the address indicated on the signature page
hereof.
Ex. 4.3 - 7
18.2 If to the Corporation, to:
Timberline Software Corporation
Attention Legal
00000 XX Xxxxxxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxx 00000-0000
or to such other addresses as may have been furnished to either party by
the other party.
19. Applicable Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Oregon.
IN WITNESS WHEREOF, the Corporation and the Indemnitee have executed this
Agreement the date first above written with the intent that they be legally
and equitably bound by its terms.
CORPORATION:
Timberline Software Corporation
By: /s/ Xxxx Xxxx
-------------------------------------------------
Xxxx Xxxx, Senior Vice President, Finance and CFO
INDEMNITEE:
By: /s/ Xxxxxx Xxxxxxx
--------------------------------------------------
Xxxxxx Xxxxxxx
00000 XX Xxxxxxxxxx Xxxxxxx
Xxxxxxxxx, XX 00000-0000
Ex. 4.3 - 8
