EXHIBIT 10.1
FORM OF INDEMNITY AGREEMENT
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the "Agreement"), made and entered
into this 19th day of October, 1995 by and between Mycogen Corporation, a
California corporation ("Corporation"), and __________________ ("Director").
RECITALS:
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A. Director, a member of the Board of Directors of Corporation, performs
a valuable service in such capacity for Corporation;
B. The Articles of Incorporation of the Corporation authorize and permit
contracts between Corporation and the members of its Board of Directors with
respect to indemnification of such directors;
C. In accordance with the authorization as provided by the California
General Corporation Law, as amended ("Code"), Corporation may 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 in the performance as directors of Corporation;
D. 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 by such D & O
Insurance and by statutory and bylaw indemnification provisions; and
E. In order to induce Director to continue to serve as a member of the
Board of Directors of Corporation, Corporation has determined and agreed to
enter into this Agreement with Director.
NOW, THEREFORE, in consideration of Director's continued service as a
director after the date hereof, the parties hereto agree as follows:
1. INDEMNITY OF OFFICER. Corporation hereby agrees to hold harmless and
indemnify Director to the fullest extent authorized by the provisions of the
Code, as it may be amended from time to time.
2. ADDITIONAL INDEMNITY. Subject only to the limitations set forth in Section
3 hereof, Corporation hereby further agrees to hold harmless and indemnify
Director:
a. against any and all expenses (including attorneys' fees), witness fees,
judgments, fines and amounts paid in settlement actually and reasonably incurred
by Director 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 Corporation) to which Director is,
was or at any time becomes a party, or is threatened to be made a party, by
reason of the fact that Director is, was or at any time becomes a director,
officer, employee or agent of Corporation, or is or was serving or at any time
serves at the request of Corporation as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise; and
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b. otherwise to the fullest extent as may be provided to Director by
Corporation under the non-exclusivity provision of the Articles of Incorporation
of Corporation and the Code.
3. LIMITATIONS ON ADDITIONAL INDEMNITY.
a. No indemnity pursuant to Section 2 hereof shall be paid by
Corporation for any of the following:
(i) except to the extent the aggregate of losses to be indemnified
thereunder exceeds the sum of such losses for which Director is indemnified
pursuant to Section 1 hereof or pursuant to any D & O Insurance purchased and
maintained by Corporation;
(ii) in respect to remuneration paid to Director if it shall be
determined by a final judgment or other final adjudication that such
remuneration was in violation of law;
(iii) on account of any suit in which judgment is rendered against
Director for an accounting of profits made from the purchase or sale by Director
of securities of Corporation 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;
(iv) on account of Director's acts or omissions that involve
intentional misconduct or a knowing and culpable violation of law;
(v) on account of any action, claim or proceeding (other than a
proceeding referred to in Section 8(b) hereof) initiated by the Director unless
such action, claim or proceeding was authorized in the specific case by action
of the Board of Directors of Corporation;
(vi) on account of Director's conduct which is the subject of an
action, suit or proceeding described in Section 7(c)(ii) hereof; or
(vii) 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 Corporation and Director 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).
b. In addition to those limitations set forth above in paragraph (a) of
this Section 3, no indemnity pursuant to Section 2 hereof in an action by or in
the right of Corporation shall be paid by Corporation for any of the following:
(i) on account of acts or omissions that Director believes to be
contrary to the best interests of the Corporation or its shareholders or that
involve the absence of good faith on the part of Director;
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(ii) with respect to any transaction from which Director derived an
improper personal benefit;
(iii) on account of acts or omissions that show a reckless disregard
for Director's duty to Corporation or its shareholders in circumstances in which
Director was aware, or should have been aware, in the ordinary course of
performing a Director's duties, of a risk of serious injury to Corporation or
its shareholders;
(iv) on account of acts or omissions that constitute an unexcused
pattern of inattention that amounts to an abdication of Director's duty to the
corporation or its shareholders;
(v) to the extent prohibited by Section 310 of the California
Corporations Code, "Contracts In Which Director Has Material Financial
Interest;"
(vi) to the extent prohibited by Section 316 of the California
Corporations Code, "Corporate Actions Subjecting Directors To Joint And Several
Liability" (for prohibited distributions, loans and guarantees);
(vii) in respect of any claim, issue or matter as to which Director
shall have been adjudged to be liable to Corporation in the performance of
Director's duty to Corporation and its shareholders, unless and only to the
extent that the court in which such proceeding is or was pending shall determine
upon application that, in view of all the circumstances of the case, Director is
fairly and reasonably entitled to indemnity for expenses and then only to the
extent that the court shall determine;
(viii) of amounts paid in settling or otherwise disposing of a
pending action without court approval; or
(ix) of expenses incurred in defending a pending action which is
settled or otherwise disposed of without court approval.
4. CONTRIBUTION. If the indemnification provided in Sections 1 and 2 hereof
is unavailable by reason of a Court decision described in subsection 3(a)(vii)
hereof based on grounds other than any of those set forth in subsections
3(a)(ii) through (vi) hereof or in subsections 3(b)(i) through (vi) hereof, then
in respect of any threatened, pending or completed action, suit or proceeding in
which Corporation is jointly liable with Director (or would be if joined in such
action, suit or proceeding), Corporation 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 Director in
such proportion as is appropriate to reflect (i) the relative benefits received
by Corporation on the one hand and Director on the other hand from the
transaction from which such action, suit or proceeding arose, and (ii) the
relative fault of Corporation on the one hand and of Director 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 Corporation on the one hand and of Director 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, judgments, fines or settlement
amounts. Corporation agrees that it would not be just and equitable if
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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. CONTINUATION OF OBLIGATIONS. All agreements and obligations of
Corporation contained herein shall continue during the period Director is a
director, officer, employee or agent of Corporation (or is or was serving at the
request of Corporation 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 Director 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
Director was a director of Corporation or serving in any other capacity referred
to herein.
6. NOTIFICATION AND DEFENSE OF CLAIM. Not later than thirty (30) days after
receipt by Director of notice of the commencement of any action, suit or
proceeding, Director will, if a claim in respect thereof is to be made against
Corporation under this Agreement, notify Corporation of the commencement
thereof; but the omission so to notify Corporation will not relieve it from any
liability which it may have to Director otherwise than under this Agreement.
With respect to any such action, suit or proceeding as to which Director
notifies Corporation of the commencement thereof:
a. Corporation will be entitled to participate therein at its own expense;
b. except as otherwise provided below, to the extent that it may wish,
Corporation jointly with any other indemnifying party similarly notified will be
entitled to assume the defense thereof, with counsel reasonably satisfactory to
Director. After notice from Corporation to Director of its election to assume
the defense thereof, Corporation will not be liable to Director under this
Agreement for any legal or other expenses subsequently incurred by Director in
connection with the defense thereof other than reasonable costs of investigation
or as otherwise provided below. Director shall have the right to employ its
counsel in such action, suit or proceeding but the fees and expenses of such
counsel incurred after notice from Corporation of its assumption of the defense
thereof shall be at the expense of Director unless (i) the employment of counsel
by Director has been authorized by Corporation, (ii) Director shall have
reasonably concluded that there may be a conflict of interest between
Corporation and Director in the conduct of the defense of such action or (iii)
Corporation shall not in fact have employed counsel to assume the defense of
such action, in each of which cases the fees and expenses of Director's separate
counsel shall be at the expense of Corporation. Corporation shall not be
entitled to assume the defense of any action, suit or proceeding brought by or
on behalf of Corporation or as to which Director shall have made the conclusion
provided for in (ii) above; and
c. Corporation shall not be liable to indemnify Director under this
Agreement for any amounts paid in settlement of any action or claim effected
without its written consent. Corporation 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 Director without Director's written
consent. Neither Corporation nor Director will unreasonably withhold its
consent to any proposed settlement.
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7. ADVANCEMENT AND REPAYMENT OF EXPENSES.
a. In the event that Director employs Director's own counsel pursuant
to Section 6(b)(i) through (iii), Corporation shall advance to Director, 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 copies of invoices presented to Director for such expenses.
b. Director agrees that Director will reimburse Corporation for all
reasonable expenses paid by Corporation in defending any civil or criminal
action, suit or proceeding against Director 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 Director is not entitled, under applicable law,
Corporation's Bylaws, this Agreement or otherwise, to be indemnified by
Corporation for such expenses.
c. Notwithstanding the foregoing, Corporation shall not be required
to advance such expenses to Director if Director (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 Corporation and approved by a majority of the Board which
alleges willful misappropriation of corporate assets by Director, disclosure of
confidential information in violation of Director's fiduciary or contractual
obligations to Corporation, or any other willful and deliberate breach in bad
faith of Director's duty to Corporation or its shareholders.
8. ENFORCEMENT.
a. Corporation expressly confirms and agrees that it has entered into
this Agreement and assumed the obligations imposed on Corporation hereby in
order to induce Director to continue as a director of Corporation, and
acknowledges that Director is relying upon this Agreement in continuing in such
capacity.
b. In the event Director is required to bring any action to enforce
rights or to collect moneys due under this Agreement and is successful in such
action, Corporation shall reimburse Director for all of Director's reasonable
fees and expenses in bringing and pursuing such action.
9. SUBROGATION. In the event of payment under this Agreement, Corporation
shall be subrogated to the extent of such payment to all of the rights of
recovery of Director, who shall execute all documents required and shall do all
acts that may be necessary to secure such rights and to enable Corporation
effectively to bring suit to enforce such rights.
10. NON-EXCLUSIVITY OF RIGHTS. The rights conferred on Director by this
Agreement shall not be exclusive of any other right which Director may have or
hereafter acquire under any statute, provision of Corporation's Aritcles of
Incorporation or Bylaws, agreement, vote of stockholders or directors, or
otherwise, both as to action in Director's official capacity and as to action in
another capacity while holding office.
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11. SURVIVAL OF RIGHTS. The rights conferred on Director by this Agreement
shall continue after Director has ceased to be a director, employee or other
agent of Corporation and shall inure to the benefit of Director's heirs,
executors and administrators.
12. SEPARABILITY. Each of the provisions of this Agreement is a separate and
distinct agreement and independent of the others, so that if any provision
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.
13. GOVERNING LAW. This Agreement shall be interpreted and enforced in
accordance with the laws of the State of California.
14. BINDING EFFECT. This Agreement shall be binding upon Director and upon
Corporation, and its successors and assigns, and shall inure to the benefit of
Director, Director's heirs, personal representatives and assigns and to the
benefit of Corporation, and its successors and assigns.
15. AMENDMENT AND TERMINATION. No amendment, modification, termination or
cancellation of this Agreement shall be effective unless in writing signed by
both parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and
as of the day and year first above written.
"CORPORATION" "DIRECTOR"
MYCOGEN CORPORATION, By:_____________________________
a California Corporation _______________
Director
By:_____________________________
XXXXXXX X. XXXX
President
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