INDEMNIFICATION AGREEMENT
Exhibit (e)(5)
This INDEMNIFICATION AGREEMENT (this “Agreement”) is
made and entered into this day
of ,
2005 (the “Effective Date”) by and between WiderThan
Americas, Inc., a company organized under the laws of the State
of Delaware (the “Company”),
and
(the “Indemnitee”).
WHEREAS, the Company believes it is essential to retain and
attract qualified directors and officers both for its Board of
Directors (the “Board”) and that of WiderThan Co.
Ltd., a company organized under the laws of the Republic of
Korea (the “Parent”);
WHEREAS, the Indemnitee is a director
and/or
officer of the Company and Parent;
WHEREAS, it is to the benefit of the Company that Indemnitee
serves as a director or officer of the Company and the Parent;
WHEREAS, the Company has requested that Indemnitee serve and
continue to serve as an officer or director of Parent during his
service as a director or officer of the Company;
WHEREAS, both the Company and the Indemnitee recognize the
increased risk of litigation and other claims being asserted
against directors and officers of public companies; and
WHEREAS, in recognition of the Indemnitee’s need for
(i) substantial protection against personal liability and
(ii) an inducement to continue to provide effective
services to the Company as a director
and/or
officer thereof, the Company wishes to provide for the
indemnification of the Indemnitee and to advance expenses to the
Indemnitee to the fullest extent permitted by law and as set
forth in this Agreement, and, to the extent insurance is
maintained by the Company, to provide for the continued coverage
of the Indemnitee under the Company’s directors’ and
officers’ liability insurance policies.
NOW, THEREFORE, in consideration of the premises contained
herein and of the Indemnitee continuing to serve the Company
directly or, at its request, with another enterprise, and
intending to be legally bound hereby, the parties hereto agree
as follows:
1. Certain Definitions.
(a) A “Change in Control” shall be deemed
to have occurred if:
(i) any “person,” as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder (the
“Exchange Act”), other than (a) a trustee
or other fiduciary holding securities under an employee benefit
plan of the Parent or Company; (b) a corporation owned,
directly or indirectly, by the stockholders of the Parent or
Company in substantially the same proportions as their ownership
of stock of the Parent or Company; or (c) any current
beneficial stockholder or group, as defined by
Rule 13d-5
of the Exchange Act, including the heirs, assigns and successors
thereof, of beneficial ownership, within the meaning of
Rule 13d-3
of the Exchange Act, of securities possessing more than 50% of
the total combined voting power of the Parent’s or
Company’s outstanding securities; hereafter becomes the
“beneficial owner,” as defined in
Rule 13d-3
of the Exchange Act, directly or indirectly, of securities of
the Parent or Company representing 20% or more of the total
combined voting power represented by the Parent or
Company’s then outstanding Voting Securities;
(ii) during any period of two consecutive years,
individuals who at the beginning of such period constitute the
Board and any new director whose election by the Board or
nomination for election by the Parent’s or Company’s
stockholders was approved by a vote of at least two-thirds of
the directors then in office who either were directors at the
beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to
constitute a majority thereof; or
(iii) the stockholders of the Parent or Company approve a
merger or consolidation of the Parent or Company with any other
corporation, other than a merger or consolidation which would
result in the
Voting Securities of the Parent or Company outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into Voting
Securities of the surviving entity) at least 80% of the total
voting power represented by the Voting Securities of the Parent
or Company or such surviving entity outstanding immediately
after such merger or consolidation, or the stockholders of the
Parent or Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the
Parent or Company, in one transaction or a series of
transactions, of all or substantially all of the Parent’s
or Company’s assets.
(b) ”DGCL” shall mean the General
Corporate Law of the State of Delaware, as the same exists or
may hereafter be amended or interpreted.
(c) ”Expense” shall mean attorneys’
fees and all other costs, expenses and obligations paid or
incurred in connection with investigating, defending, being a
witness in or participating in (including on appeal), or
preparing for any of the foregoing, any Proceeding relating to
any Indemnifiable Event.
(d) ”Indemnifiable Event” shall mean any
event or occurrence that takes place either prior to or after
the execution of this Agreement, related to the fact that the
Indemnitee is or was a director or officer of the Company, or is
or was serving at the request of the Company as a director,
officer, employee, or agent of another corporation, including
the Parent or any subsidiary of the Parent, or of a partnership,
joint venture, trust or other enterprise, including service with
respect to employee benefit plans, or by reason of anything done
or not done by the Indemnitee in any such capacity.
(e) ”Proceeding” shall mean any
threatened, pending or completed action, suit, investigation or
proceeding, and any appeal thereof, whether civil, criminal,
administrative or investigative
and/or any
inquiry or investigation, whether conducted by the Company or
any other party, that the Indemnitee in good faith believes
might lead to the institution of any such action.
(f) ”Reviewing Party” shall mean any
appropriate person or body consisting of a member or members of
the Company’s Board or any other person or body appointed
by the Board (including the special independent counsel referred
to in Section 7) who is not a party to the particular
Proceeding with respect to which the Indemnitee is seeking
indemnification.
(g) ”Voting Securities” shall mean any
securities of the Parent or Company which vote generally in the
election of directors.
2. Indemnification.
(a) In the event the Indemnitee was or is a party to or is
involved (as a party, witness, or otherwise) in any Proceeding
by reason of (or arising in part out of) an Indemnifiable Event,
whether the basis of the Proceeding is the Indemnitee’s
alleged action in an official capacity as a director or officer
or in any other capacity while serving as a director or officer,
the Company shall indemnify the Indemnitee to the fullest extent
permitted by the DGCL against any and all Expenses, liability,
and loss (including judgments, fines, ERISA excise taxes or
penalties, and amounts paid or to be paid in settlement, and any
interest, assessments, or other charges imposed thereon, and any
federal, state, local, or foreign taxes imposed on any director
or officer as a result of the actual or deemed receipt of any
payments under this Agreement) (collectively,
“Liabilities”) reasonably incurred or suffered by such
person in connection with such Proceeding. To the fullest extent
permitted under the DGCL the Company shall provide
indemnification pursuant to this Section 2 as soon as
practicable, but in no event later than 30 days after it
receives written demand from the Indemnitee.
(b) Notwithstanding anything in this Agreement to the
contrary and except as provided in Section 6 below, the
Indemnitee shall not be entitled to indemnification pursuant to
this Agreement:
(i) in respect to remuneration paid to Indemnitee if it
shall be determined by final judgment or other final
adjudication that such remuneration was in violation of law;
(ii) on account of Indemnitee’s conduct which is
finally adjudged to have been knowingly fraudulent or
deliberately dishonest, or to constitute willful misconduct;
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(iii) on account of Indemnitee’s conduct which is the
subject of a Proceeding brought by the Parent or 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 Parent or Company,
or any other willful and deliberate breach in bad faith of
Indemnitee’s duty to the Parent or Company or its
stockholders;
(iv) in connection with any Proceeding initiated by the
Indemnitee against the Parent or Company or any director or
officer of the Parent or Company unless the Parent or Company
has joined in or consented to the initiation of such Proceeding;
(v) if a final decision by a court having jurisdiction in
the matter shall determine that such indemnification is not
lawful; or
(vi) in connection with any Proceeding with respect to
which a claim for indemnity hereunder is made, arose from or is
based upon any of the foregoing: (A) 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; or (B) any activities by Indemnitee that
constitute a breach of or default under any agreement between
the Indemnitee and the Parent or Company.
3. Contribution. If the indemnification
provided in Section 2 hereof is unavailable by reason of a
court decision described in Section 2(b)(v) hereof based on
grounds other than any of those set forth in
paragraphs (i) through (iv) of Section 2(b)
hereof, then in respect of any Proceeding in which the Company
is jointly liable with Indemnitee (or would be if joined in such
action, suit or proceeding), the Company shall, to the fullest
extent permitted by the KCC, contribute to the amount of
Liabilities incurred and paid or payable by Indemnitee in such
proportion as is appropriate to reflect (a) the relative
benefits received by the Company on the one hand and Indemnitee
on the other hand from the transaction from which such
Proceeding arose, and (b) 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 Liabilities, 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, judgments, fines or settlement
amounts. The Company agrees that it would not be just and
equitable if contribution pursuant to this Section 3 were
determined by pro rata allocation or any other method of
allocation which does not take account of the foregoing
equitable considerations.
4. Advancement of Expenses. The Company
shall advance Expenses to the Indemnitee within 10 days of
such request (an “Expense Advance”); provided,
however, that if required by applicable corporate laws such
Expenses shall be advanced only upon delivery to the Company of
an undertaking by or on behalf of the Indemnitee to repay such
amount if it is ultimately determined that the Indemnitee is not
entitled to be indemnified by the Company; and provided further,
that the Company shall make such advances only to the extent
permitted by the DGCL. Expenses incurred by the Indemnitee while
not acting in
his/her
capacity as a director or officer, including service with
respect to employee benefit plans, may be advanced upon such
terms and conditions as the Board, in its sole discretion, deems
appropriate. Notwithstanding the foregoing, the Company shall
not be required to advance Expenses to Indemnitee in respect of
any action arising from or based upon any of the matters set
forth in Section 2(b).
5. Review Procedure for
Indemnification. Notwithstanding the foregoing,
(a) the obligations of the Company under Sections 2
(a), 3 and 4 above shall be subject to the condition that the
Reviewing Party shall not have determined (in a written opinion,
in any case in which the special independent counsel referred to
in Section 7 hereof is involved) that the Indemnitee would
not be permitted to be indemnified under applicable law, and
(b) the obligation of the Company to make an Expense
Advance pursuant to Section 4 above shall be subject to the
condition that, if, when and to the extent that the Reviewing
Party determines that the Indemnitee would not be permitted to
be so indemnified under applicable law, the Company shall be
entitled to be reimbursed by the Indemnitee (who hereby agrees
to reimburse the Company) for all such amounts theretofore paid;
provided, however, that if the Indemnitee has commenced legal
proceedings in a court of competent jurisdiction pursuant to
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Section 6 below to secure a determination that the
Indemnitee should be indemnified under applicable law, any
determination made by the Reviewing Party that the Indemnitee
would not be permitted to be indemnified under applicable law
shall not be binding and the Indemnitee shall not be required to
reimburse the Company for any Expense Advance until a final
judicial determination is made with respect thereto (as to which
all rights of appeal therefrom have been exhausted or have
lapsed). The Indemnitee’s obligation to reimburse the
Company for Expense Advances pursuant to this Section 5
shall be unsecured and no interest shall be charged thereon. If
there has not been a Change in Control, the Reviewing Party
shall be selected by the Board, and if there has been such a
Change in Control, other than a Change in Control which has been
approved by a majority of the Company’s Board who were
directors immediately prior to such Change in Control, the
Reviewing Party shall be the special independent counsel
referred to in Section 7 hereof.
6. Enforcement of Indemnification
Rights. If the Reviewing Party determines that
the Indemnitee substantively would not be permitted to be
indemnified in whole or in part under applicable law, or if the
Indemnitee has not otherwise been paid in full pursuant to
Sections 2, 3 and 4 above within 30 days after a
written demand has been received by the Company, the Indemnitee
shall have the right to commence litigation in any court in the
State of Delaware having subject matter jurisdiction thereof and
in which venue is proper to recover the unpaid amount of the
demand (an “Enforcement Proceeding”) and, if
successful in whole or in part, the Indemnitee shall be entitled
to be paid any and all Expenses in connection with such
Enforcement Proceeding. The Company hereby consents to service
of process for such Enforcement Proceeding and to appear in any
such Enforcement Proceeding. Any determination by the Reviewing
Party otherwise shall be conclusive and binding on the Company
and the Indemnitee.
7. Change in Control. The Company agrees
that if there is a Change in Control of the Parent or Company,
other than a Change in Control which has been approved by a
majority of the Parent’s or Company’s Board who were
directors immediately prior to such Change in Control, as the
case may be, then with respect to all matters thereafter arising
concerning the rights of the Indemnitee to indemnity payments
and Expense Advances under this Agreement or any other agreement
or under applicable law now or hereafter in effect relating to
indemnification for Indemnifiable Events, the Company shall seek
legal advice only from special independent counsel selected by
the Indemnitee and approved by the Company, which approval shall
not be unreasonably withheld. Such special independent counsel
shall not have otherwise performed services for the Company or
the Indemnitee, other than in connection with such matters,
within the last five years. Such independent counsel shall not
include any person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of
interest in representing either the Company or the Indemnitee in
an action to determine the Indemnitee’s rights under this
Agreement. Such counsel, among other things, shall render its
written opinion to the Company and the Indemnitee as to whether
and to what extent the Indemnitee would be permitted to be
indemnified under applicable law. The Company agrees to pay the
reasonable fees of the special independent counsel referred to
above and to indemnify fully such counsel against any and all
expenses (including attorneys’ fees), claims, liabilities
and damages arising out of or relating to this Agreement or the
engagement of special independent counsel pursuant to this
Agreement.
8. Partial Indemnity. If the Indemnitee
is entitled under any provision of this Agreement to
indemnification by the Company for some or a portion of the
Expenses and Liabilities, but not, however, for all of the total
amount thereof, the Company shall nevertheless indemnify the
Indemnitee for the portion thereof to which the Indemnitee is
entitled. Moreover, notwithstanding any other provision of this
Agreement, to the extent that the Indemnitee has been successful
on the merits or otherwise in defense of any or all Proceedings
relating in whole or in part to an Indemnifiable Event or in
defense of any issue or matter therein, including dismissal
without prejudice, the Indemnitee shall be indemnified against
all Expenses incurred in connection therewith. In connection
with any determination by the Reviewing Party or otherwise as to
whether the Indemnitee is entitled to be indemnified hereunder,
the burden of proof shall be on the Company to establish that
the Indemnitee is not so entitled.
9. Non-exclusivity. The rights of the
Indemnitee hereunder shall be in addition to any other rights
the Indemnitee may have under any statute, provision of the
Company’s Articles of Incorporation, vote of shareholders
or disinterested directors or otherwise, both as to action in an
official capacity and as to action in another capacity while
holding such office or any other agreement providing for
indemnification of Indemnitee. To the extent that a change in
the DGCL permits greater indemnification by agreement than would
be afforded currently under this
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Agreement, it is the intent of the parties hereto that the
Indemnitee shall enjoy by this Agreement the greater benefits so
afforded by such change.
10. Liability Insurance. To the extent
the Company maintains an insurance policy or policies providing
directors’ and officers’ liability insurance, the
Indemnitee shall be covered by such policy or policies, in
accordance with its or their terms, to the maximum extent of the
coverage available for any director or officer of the Company.
11. Notification and Defense of
Claim. Not later than thirty (30) 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 Company under this Agreement, notify the
Company of the commencement thereof; but the omission so to
notify the Company will not relieve it 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 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 jointly with any other indemnifying
party similarly notified will 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 counsel in such action, suit or proceeding but the
fees and expenses of such counsel incurred after notice from the
Company of its 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 at the
expense of the Company.
(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.
12. No Presumption. For purposes of this
Agreement, to the fullest extent permitted by law, the
termination of any Proceeding, action, suit or claim, by
judgment, order, settlement (whether with or without court
approval) or conviction, or upon a plea of nolo contendere, or
its equivalent, shall not create a presumption that the
Indemnitee did not meet any particular standard of conduct or
have any particular belief or that a court has determined that
indemnification is not permitted by applicable law.
13. Period of Limitations. No legal
action shall be brought and no cause of action shall be asserted
by or on behalf of the Company or any affiliate of the Company
against the Indemnitee, the Indemnitee’s spouse, heirs,
executors or personal or legal representatives after the
expiration of two years from the date of accrual of such cause
of action, or such longer period as may be required by state law
under the circumstances, and any claim or cause of action of the
Company or its affiliate shall be extinguished and deemed
released unless asserted by the timely filing of a legal action
within such period; provided, however, that if any shorter
period of limitations is otherwise applicable to any such cause
of action, such shorter period shall govern.
14. Amendment of this Agreement. 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 be deemed or shall constitute a waiver of any other
provisions hereof (whether or not similar), nor shall such
waiver constitute a continuing waiver. Except as specifically
provided herein, no failure to exercise or any delay in
exercising any right or remedy hereunder shall constitute a
waiver thereof.
15. 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 the
Indemnitee, who shall execute all papers required and shall do
everything that may be necessary to secure such rights,
including the execution of such documents necessary to enable
the Company effectively to bring suit to enforce such rights.
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16. No Duplication of Payments. The
Company shall not be liable under this Agreement to make any
payment in connection with any claim made against Indemnitee to
the extent the Indemnitee has otherwise actually received
payment (under any insurance policy, shareholder vote, agreement
or otherwise) of the amounts otherwise indemnifiable hereunder.
17. Binding Effect. This Agreement shall
be binding upon and inure to the benefit of and be enforceable
by the parties hereto and their respective successors, assigns,
including any direct or indirect successor by purchase, merger,
consolidation or otherwise to all or substantially all of the
business
and/or
assets of the Company, spouses, heirs, and personal and legal
representatives. The Company shall require and cause any
successor (whether direct or indirect by purchase, merger,
consolidation or acquisition of all, substantially all, or a
substantial part, of the business
and/or
assets of the Company) by written agreement in form and
substance satisfactory to the Indemnitee, expressly to assume
and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform if
no such succession had taken place. This Agreement shall
continue in effect regardless of whether the Indemnitee
continues to serve as a director or officer of the Company or of
any other enterprise at the Company’s request.
18. Severability. The provisions of this
Agreement shall be severable in the event that any of the
provisions hereof (including any provision within a single
section, paragraph or sentence) is held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, and
the remaining provisions shall remain enforceable to the fullest
extent permitted by law. Furthermore, to the fullest extent
possible, the provisions of this Agreement (including, without
limitation, each portion of this Agreement containing any
provision held to be invalid, void or otherwise unenforceable,
that is not itself invalid, void or unenforceable) shall be
construed so as to give effect to the intent manifested by the
provision held invalid, illegal or unenforceable.
19. Governing Law. This Agreement shall
be governed by and construed and enforced in accordance with the
laws of the State of Delaware applicable to contracts made and
to be performed in such State without giving effect to the
principles of conflicts of laws.
20. Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute
one and the same instrument.
21. Notices. All notices, demands, and
other communications required or permitted hereunder shall be
made in writing and shall be deemed to have been duly given if
delivered by hand, against receipt, or mailed, postage prepaid,
certified or registered mail, return receipt requested, and
addressed to the Company at:
WiderThan Americas, Inc.
00 Xxxx 00xx Xx., 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
and to the Indemnitee at:
Notice of change of address shall be effective only when done in
accordance with this Section. All notices complying with this
Section shall be deemed to have been received on the date of
delivery or on the third business day after mailing.
22. Entire Agreement. This Agreement sets
forth the entire understanding of the parties relating to the
subject matter thereof and supersedes all prior agreements and
understandings among or between any of the parties relating to
the subject matter thereof.
23. Survival of Rights. All agreements
and obligations of the Company contained herein 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,
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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. The rights conferred on Indemnitee
by this Agreement shall inure to the benefit of
Indemnitee’s heirs, executors and administrators.
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IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement as of the day first set forth above.
COMPANY:
WIDERTHAN AMERICAS, INC.
| By: |
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Name: _
_
Title: _
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INDEMNITEE:
Signature
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Name: _
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