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EXHIBIT 10.38
FORM OF
INDEMNITY AGREEMENT
This Indemnity Agreement ("Agreement") is made and entered into effective as of
the day of by and between Calnetics Corporation, a California corporation (the
Corporation"), and the undersigned (the "Agent").
WHEREAS, the Agent is currently serving as a Director and/or Officer of the
Corporation and/or its subsidiaries, and the Corporation wishes the Agent to
continue in such capacities;
NOW, THEREFORE, in consideration of the foregoing recital and the mutual
agreements set forth herein, and in order to induce the Agent to continue to
serve as a Director and/or Officer of the Corporation and/or its subsidiaries
and in consideration of continued service, the parties hereto hereby agree as
follows:
1. The Corporation will pay on behalf of the Agent, and his or her
executors, administrators or assigns, any amount which the Agent is or becomes
legally obligated to pay in connection with any threatened, pending, or
completed claim or claims made against the Agent because of any act or omission
or neglect or breach of duty whether before, on or after the date hereof,
including any actual or alleged error or misstatement or misleading statement,
which the Agent commits or suffers while acting in his or her capacity as a
Director and/or Officer of the Corporation and/or its subsidiaries. The payments
which the Corporation will be obligated to make hereunder shall include, inter
alia, damages, judgments, settlements and costs, cost of investigation
(excluding salaries of officers or employees of the Corporation and its
subsidiaries) and costs of defense (including attorneys' fees) or legal actions,
claims or proceedings and appeals therefrom, and costs of attachment or similar
bonds; provided however, that the Corporation shall not be obligated to pay
fines or fees imposed by law or otherwise make any payments hereunder which it
is prohibited by applicable law from paying as indemnity or for any other
reason. In addition, to the extent that the Agent is, by reason of his status as
an agent of the Corporation and/or its subsidiaries, a witness in any
proceeding, he shall be indemnified against all costs and expenses (including
attorneys' fees) incurred by him or on his behalf in connection therewith, and
he shall be entitled to advancement of expenses in connection therewith under
the terms of Section 7 hereof.
2. If a claim under this Agreement is not paid by the Corporation, or
on its behalf, within 90 days after a written claim has been received by the
Corporation, the Agent may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim and, if successful in
whole or in part, the Agent also shall be entitled to be paid all expenses of
prosecuting such claim.
3. 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
the Agent, who shall execute all papers as appropriate to secure such rights,
including the execution of such
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documents necessary or appropriate to enable the Corporation effectively to
bring suit to enforce such rights.
4. The Corporation shall not be liable under this Agreement to make any
payment in connection with any claim made against the Agent:
(a) for which payment is actually made to the Agent under a valid and
collectible insurance policy, except in respect of any excess beyond
the amount of payment under insurance;
(b) for which the Agent is indemnified by the Corporation otherwise
than pursuant to this Agreement;
(c) based upon or attributable to the Agent gaining in fact any
personal profit or advantage to which the Agent was not legally
entitled;
(d) for an account of profits made from the purchase or sale by the
Agent of securities of the Corporation within the meaning of Section
16(b) of the Securities Exchange Act of 1934, as amended, or similar
provisions of any state statutory law or common law; or
(e) brought about or contributed to by the dishonesty of the Agent
seeking payment hereunder; provided, however, notwithstanding the
foregoing, the Agent shall be protected under this Agreement to the
fullest extent permitted under law as to any claims upon which suit may
be brought against the Agent by reason of any alleged dishonesty on his
or her part, unless a final judgment or other final adjudication
thereof adverse to the Agent shall establish that the Agent committed
acts of active and deliberate dishonesty with actual dishonest purpose
and intent, which acts were material to the cause of action so
adjudicated.
5. No costs, charges or expenses for which indemnity shall be sought
hereunder shall be incurred without the Corporation's consent, which consent
shall not be unreasonably withheld; provided that, the Corporation may ratify
expenses incurred without its consent in its sole discretion.
6. The Agent, as a condition precedent to indemnification under this
Agreement, shall give to the Corporation notice in writing as soon as
practicable of any claim made against the Agent for which indemnity will or
could be sought under this Agreement. Notice to the Corporation shall be
directed to Calnetics Corporation, 00000 Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxx
00000, Attention: Chairman of the Board and Chief Executive Officer (or such
other address as the Corporation shall designate in writing to the Agent);
notice shall be deemed received if sent by prepaid mail properly addressed, the
date of such notice being the date postmarked. In addition, the Agent shall give
the Corporation such information and cooperation as it may reasonably require
and as shall be within the Agent's power.
7. Costs and expenses (including attorneys' fees) incurred by the Agent
in defending or investigating any pending or threatened action, suit, proceeding
or investigation shall be paid by the Corporation in advance of the final
disposition of such matter, if the Agent shall undertake in writing to repay any
such advance in the event that it is ultimately
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determined that the Agent is not entitled to indemnification under the terms of
this Agreement. Notwithstanding the foregoing or any other provision of this
Agreement, no advance shall be made by the Corporation if it is reasonably and
promptly determined by the Board of Directors by a majority vote of a quorum of
disinterested Directors, or if such quorum is not obtainable, by independent
legal counsel, that, based upon the facts known to the Board or counsel at the
time such determination is made, (a) the Agent acted in bad faith or
deliberately breached his or her duty to the Corporation or its shareholders,
and (b) as a result of such actions by the Agent, it is more likely than not
that it will ultimately be determined that the Agent is not entitled to
indemnification under the terms of this Agreement.
8. Nothing herein shall be deemed to diminish or otherwise restrict the
Agent's right to indemnification under any provision of the Articles of
Incorporation or Bylaws of the Corporation or under California law.
9. This Agreement shall be governed by and construed in accordance with
the internal laws of the State of California.
10. This Agreement shall be binding upon all successors and assigns of
the Corporation (including any transferee of all or substantially all of its
assets and any successor by merger or operation of law) and shall inure to the
benefit of the heirs, personal representatives and estate of the Agent.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and signed as of the day and year first above written.
CALNETICS CORPORATION
By: _____________________________
AGENT
_________________________________
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