INDEMNIFICATION AGREEMENT
BETWEEN
POWER-ONE, INC.
AND
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TABLE OF CONTENTS
Page
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1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1 Indemnification in Third Party Actions . . . . . . . . . . . . . 2
2.2 Indemnification in Proceedings By or In the Name of the
Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.3 Partial Indemnification. . . . . . . . . . . . . . . . . . . . . 2
2.4 Indemnification Hereunder Not Exclusive. . . . . . . . . . . . . 3
2.5 Indemnification of Indemnified Costs of Successful Party . . . . 3
2.6 Indemnified Costs Advanced . . . . . . . . . . . . . . . . . . . 3
2.7 Limitations on Indemnification . . . . . . . . . . . . . . . . . 3
3. PRESUMPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.1 Presumption Regarding Standard of Conduct . . . . . . . . . . . 4
3.2 Determination of Right to Indemnification . . . . . . . . . . . 4
3.2.1 Burden . . . . . . . . . . . . . . . . . . . . . . . . 4
3.2.2 Standard . . . . . . . . . . . . . . . . . . . . . . . 4
4. OTHER AGREEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.1 Change in Control Event. . . . . . . . . . . . . . . . . . . . . 5
4.2 Maintenance of Liability Insurance . . . . . . . . . . . . . . . 5
4.2.1 Affirmative Covenant of the Company. . . . . . . . . . 5
4.2.2 Indemnitee Named as Insured. . . . . . . . . . . . . . 5
4.3 Agreement to Serve . . . . . . . . . . . . . . . . . . . . . . . 5
4.4 Effect of this Agreement on Employment Agreement . . . . . . . . 6
4.5 Nature of Rights; Separability . . . . . . . . . . . . . . . . . 6
4.6 Savings Clause . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.7 Repayment of Indemnified Costs . . . . . . . . . . . . . . . . . 6
4.8 Repayment . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5. INDEMNIFICATION PROCEDURE . . . . . . . . . . . . . . . . . . . . . . 6
5.1 Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5.2 Company Participation . . . . . . . . . . . . . . . . . . . . . . 7
5.3 Settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.4 Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
6. MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . 7
6.1 Amendments; Waivers . . . . . . . . . . . . . . . . . . . . . . . 7
6.2 Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
6.3 Interpretation; Governing Law . . . . . . . . . . . . . . . . . . 8
6.4 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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6.5 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6.6 Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . 8
6.7 Expenses; Legal Fees. . . . . . . . . . . . . . . . . . . . . . . 8
6.8 Representation by Counsel; Interpretation . . . . . . . . . . . . 8
6.9 Specific Performance. . . . . . . . . . . . . . . . . . . . . . . 8
6.10 Time is of the Essence. . . . . . . . . . . . . . . . . . . . . . 8
6.11 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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POWER-ONE, INC.
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (this "AGREEMENT") is made as of __________,
1997, by and between Power-One, Inc., a Delaware corporation (the "COMPANY"),
and the individual whose name appears below the word "Indemnitee" on the
signature page of this Agreement (the "INDEMNITEE"). In consideration of the
services of the Indemnitee to the Company, and to induce the Indemnitee to
continue to serve as a director and/or officer, the Company and the Indemnitee
agree as follows:
R E C I T A L S
A. The Indemnitee has agreed to serve as a director and/or officer of the
Company and in such capacity will render valuable services to the
Company.
B. The Company has concluded that insurance and statutory indemnity
provisions may provide inadequate protection to individuals requested
to serve as its directors and officers.
C. To induce and encourage the Indemnitee to serve as a director and/or
officer of the Company, the Company's Board of Directors has decided
that this Agreement is not only reasonable and prudent, but necessary,
to promote and ensure the best interests of the Company and its
stockholders.
1. DEFINITIONS
As used in this Agreement:
"AGENT" means a director, officer, employee or agent of the Company or of any
other corporation, partnership, joint venture, trust, employee benefit plan, or
other enterprise that the Indemnitee served in any of such capacities at the
request of the Company.
"CHANGE IN CONTROL EVENT" has the same meaning as an "Event" as defined in the
Company's 1996 Amended and Restated Stock Incentive Plan.
"EXPENSES" includes, but is not limited to, attorneys' fees, disbursements and
retainers, accounting and witness fees, travel and deposition costs, expenses of
investigations and amounts paid in settlement by or on behalf of the Indemnitee,
and any expenses of establishing a right to indemnification pursuant to this
Agreement, to the extent actually and reasonably incurred by the Indemnitee in
connection with any Proceeding. "EXPENSES" does not include the amount of
judgments, fines, penalties or ERISA excise taxes actually levied against the
Indemnitee.
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"INDEMNIFIED COSTS" means all Expenses, judgments, fines, penalties and ERISA
excise taxes actually and reasonably incurred by the Indemnitee in connection
with the investigation, defense, appeal, or settlement of any Proceeding.
A "POTENTIAL CHANGE IN CONTROL EVENT" will be deemed to have occurred if:
(a) the Company enters into an agreement or arrangement that would
constitute a Change in Control Event if consummated;
(b) any person (including the Company) publicly announces an
intention to take or to consider taking actions that would
constitute a Change in Control Event if consummated; or
(c) the Board of Directors adopts a resolution to the effect that,
for purposes of this Agreement, a Potential Change in Control
Event has occurred.
"PROCEEDING" means any threatened, pending or completed action, suit or
proceeding (including appeals thereof), whether brought by or in the name of the
Company or otherwise and whether of a civil, criminal or administrative or
investigative nature, in which the Indemnitee is or will be a party at the time
because the Indemnitee is or was an Agent, whether or not the Indemnitee is
serving in such capacity at the time any liability or Expense is incurred for
which indemnification or reimbursement is to be provided under this Agreement.
2. INDEMNIFICATION
2.1 INDEMNIFICATION IN THIRD PARTY ACTIONS. The Company will indemnify the
Indemnitee if the Indemnitee becomes a party to, is threatened to be made
a party to, is a witness or other participant in, or is otherwise
involved in any Proceeding (other than a Proceeding by or in the name of
the Company to procure a judgment in its favor), because the Indemnitee
is or was an Agent, against all Indemnified Costs, to the fullest extent
permitted by applicable law. Any settlement must be approved in writing
by the Company.
2.2 INDEMNIFICATION IN PROCEEDINGS BY OR IN THE NAME OF THE COMPANY. The
Company will indemnify the Indemnitee if the Indemnitee is a party to, is
threatened to be made a party to, is a witness or other participant in,
or is otherwise involved in any Proceeding by or in the name of the
Company to procure a judgment in its favor because the Indemnitee was or
is an Agent of the Company against all Expenses in connection with the
defense or settlement of the Proceeding, to the fullest extent permitted
by applicable law.
2.3 PARTIAL INDEMNIFICATION. If the Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or
a portion of, but not the total
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amount of, the Indemnified Costs, the Company will nevertheless indemnify
the Indemnitee for the portion of the Indemnified Costs to which the
Indemnitee is entitled.
2.4 INDEMNIFICATION HEREUNDER NOT EXCLUSIVE. The indemnification provided by
this Agreement is not exclusive of any other rights to which the
Indemnitee may be entitled under the Company's Certificate of
Incorporation, the Bylaws, any agreement, any vote of stockholders or
disinterested directors, applicable law, or otherwise, both as to action
in the Indemnitee's official capacity and as to action in another
capacity on behalf of the Company.
2.5 INDEMNIFICATION OF INDEMNIFIED COSTS OF SUCCESSFUL PARTY.
Notwithstanding any other provisions of this Agreement, to the extent
that the Indemnitee has been successful in defense of any Proceeding or
in defense of any claim, issue or matter in the Proceeding, on the merits
or otherwise, including, but not limited to, the dismissal of a
Proceeding without prejudice, the Indemnitee will be indemnified against
all Indemnified Costs incurred in connection therewith to the fullest
extent permitted by applicable law.
2.6 INDEMNIFIED COSTS ADVANCED. The Indemnified Costs incurred by the
Indemnitee in any Proceeding will be paid promptly by the Company in
advance of the final disposition of the Proceeding at the written request
of the Indemnitee to the fullest extent permitted by applicable law. The
advances to be made will be paid by the Company to the Indemnitee within
30 days following delivery of the written request by Indemnitee to the
Company, accompanied by substantiated documentation.
2.7 LIMITATIONS ON INDEMNIFICATION. Notwithstanding anything to the contrary
in this Agreement, the Company is not required to make payments to:
(a) indemnify or advance Indemnified Costs with respect to
Proceedings initiated or brought voluntarily by the Indemnitee
and not by way of defense, except with respect to Proceedings
brought to establish or enforce a right to indemnification under
this Agreement or any other statute or law or otherwise as
required under applicable law;
(b) indemnify the Indemnitee for any Indemnified Costs for which
payment is actually made to the Indemnitee under an insurance
policy, except for any excess beyond the amount of payment under
the policy;
(c) indemnify the Indemnitee for any Indemnified Costs sustained in
any Proceeding for an accounting of profits made from the
purchase or sale by the Indemnitee of securities of the Company
pursuant to Section 16(b) of the Securities Exchange Act of 1934,
as amended, the rules and regulations promulgated thereunder and
amendments thereto or similar provisions of any federal, state or
local law;
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(d) indemnify the Indemnitee for any Indemnified Costs resulting from
Indemnitee's conduct that is finally adjudged by a court of
competent jurisdiction to have been willful misconduct, knowingly
fraudulent or deliberately dishonest; or
(e) indemnify the Indemnitee if a court of competent jurisdiction
finally determines that such payment is unlawful.
3. PRESUMPTIONS
3.1 PRESUMPTION REGARDING STANDARD OF CONDUCT. The Indemnitee will be
conclusively presumed to have met the relevant standards of conduct as
defined by applicable law for indemnification pursuant to this Agreement
unless a determination that the Indemnitee has not met the relevant
standards is made by (a) the Board of Directors of the Company by a
majority vote of a quorum consisting of directors who are not parties to
the Proceeding, (b) the stockholders of the Company by majority vote, or
(c) in a written opinion by independent legal counsel, selection of whom
has been made by the Company's Board of Directors and approved by the
Indemnitee.
3.2 DETERMINATION OF RIGHT TO INDEMNIFICATION.
3.2.1 BURDEN. If a claim under this Agreement is not paid by the
Company within 30 days of receipt of written notice, the right to
indemnification as provided by this Agreement will be enforceable
by the Indemnitee in any court of competent jurisdiction. The
burden of proving by clear and convincing evidence that
indemnification or advances are not appropriate will be on the
Company. Neither the failure of the directors, stockholders, or
independent legal counsel to have made a determination prior to
the commencement of the action that indemnification or advances
are proper in the circumstances because the Indemnitee has met
the applicable standard of conduct, nor an actual determination
by the directors, stockholders or independent legal counsel that
the Indemnitee has not met the applicable standard of conduct,
will be a defense to the action or create a presumption that the
Indemnitee has not met the applicable standard of conduct.
3.2.2 STANDARD. The Indemnitee's Expenses incurred in connection with
any Proceeding concerning the Indemnitee's right to
indemnification or advances in whole or in part pursuant to this
Agreement will be indemnified by the Company regardless of the
outcome of the Proceeding, unless a court of competent
jurisdiction determines that each of the material assertions made
by the Indemnitee in the Proceeding was not made in good faith or
was frivolous.
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4. OTHER AGREEMENTS
4.1 CHANGE IN CONTROL EVENT. If there is a Change in Control Event or a
Potential Change in Control Event of the Company (other than a Change in
Control Event or Potential Change in Control Event that has been approved
by a majority of the Company's Board of Directors who were directors
immediately prior to the Change in Control Event or Potential Change in
Control Event), then with respect to all matters thereafter arising
concerning the rights of the Indemnitee to be indemnified for Indemnified
Costs, the Company will seek legal advice only from independent counsel
selected by the Indemnitee, and reasonably satisfactory to the Company,
and who has not otherwise performed other services for the Company or the
Indemnitee within the last three years ("SPECIAL INDEPENDENT COUNSEL").
The Special Independent Counsel, among other things, will 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 will pay the reasonable fees and expenses of
the Special Independent Counsel.
4.2 MAINTENANCE OF LIABILITY INSURANCE.
4.2.1 AFFIRMATIVE COVENANT OF THE COMPANY. While the Indemnitee
continues to serve as a director or officer of the Company, and
thereafter while the Indemnitee is subject to any possible
Proceeding, the Company will maintain in full force and effect
directors' and officers' liability insurance ("D&O INSURANCE") in
reasonable amounts from reputable insurers. The Company has no
obligation, however, to obtain or maintain D&O Insurance if it
determines in good faith that insurance is not reasonably
available, the premium costs for insurance are disproportionate
to the amount of coverage provided, the coverage provided by
insurance is so limited by exclusions that it provides an
insufficient benefit, or the Indemnitee is covered by similar
insurance maintained by a subsidiary of the Company. If the
Company has D&O Insurance at the time it receives a notice that a
Proceeding has commenced, the Company will give prompt notice of
such commencement to the insurers as required by the respective
policies. The Company will 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.
4.2.2 INDEMNITEE NAMED AS INSURED. In all D&O Insurance policies, the
Indemnitee will be named as an insured in a manner that provides
the Indemnitee the same rights and benefits accorded to the most
favorably insured of the Company's directors and officers.
4.3 AGREEMENT TO SERVE. Indemnitee will serve or continue to serve as an
Agent of the Company for so long as the Indemnitee is duly elected or
appointed or until the Indemnitee voluntarily resigns. Indemnitee will
give notice to the Company at least thirty (30) days prior to voluntarily
resigning.
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4.4 EFFECT OF THIS AGREEMENT ON EMPLOYMENT AGREEMENT. Any present or future
employment agreement between the Indemnitee and the Company is not
modified by this Agreement. Nothing contained in this Agreement creates
in the Indemnitee any right of continued employment.
4.5 NATURE OF RIGHTS; SEPARABILITY. The rights afforded to the Indemnitee by
this Agreement are contract rights and may not be diminished, eliminated
or otherwise affected by amendments to the Company's Certificate of
Incorporation, Bylaws or agreements, including D&O Insurance policies.
Each provision of this Agreement, to the extent practicable, is a
separate and distinct agreement and independent of the others, so that if
any provision of this Agreement is held to be invalid or unenforceable
for any reason, the invalidity or unenforceability will not affect the
validity or enforceability of the other provisions. To the extent
required, any provision of this Agreement may be modified by a court of
competent jurisdiction to preserve its validity and to provide the
Indemnitee with the broadest possible indemnification permitted under
applicable law.
4.6 SAVINGS CLAUSE. If this Agreement or any portion of it is invalidated on
any ground by any court of competent jurisdiction, then the Company will
nevertheless indemnify the Indemnitee as to Indemnified Costs with
respect to any Proceeding to the full extent permitted by any applicable
portion of this Agreement that is not invalidated, or by any applicable
law.
4.7 REPAYMENT OF INDEMNIFIED COSTS. The Indemnitee will reimburse the
Company for all Indemnified Costs paid by the Company in defending any
Proceeding against the Indemnitee if and only to the extent that a court
of competent jurisdiction finally decides that the Indemnitee is not
entitled to be indemnified by the Company for such Indemnified Costs
under the provisions of applicable law, the Company's Bylaws, Certificate
of Incorporation, this Agreement, or otherwise. The Indemnitee will
repay such amounts advanced only if, and to the extent that, it is
ultimately determined that Indemnitee is not entitled to be indemnified
for such Indemnified Costs by the Company pursuant to this Agreement.
4.8 REPAYMENT. The Indemnitee will promptly repay to the Company any amounts
paid to the Indemnitee pursuant to other rights of indemnification or
under any insurance policy, to the extent those payments are duplicative
of payments under this Agreement.
5. INDEMNIFICATION PROCEDURE
5.1 NOTICE. Promptly after receipt of notice that a Proceeding has
commenced, the Indemnitee will, if a claim is to be made under this
Agreement, notify the Company of that fact. The failure to notify the
Company will not relieve it from any liability that it may have to the
Indemnitee except to the extent of the Company's material damage
resulting from such failure.
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5.2 COMPANY PARTICIPATION. The Company will be entitled to participate in
any Proceeding at its own expense and, except as otherwise provided
below, to the extent that it may wish, the Company may assume the defense
of any Proceeding for which indemnification is sought hereunder, with
counsel reasonably satisfactory to the Indemnitee. After the Company
notifies the Indemnitee of the Company's election to assume the defense
of a Proceeding, during the Company's good faith defense the Company will
not be liable to the Indemnitee under this Agreement for any legal or
other expenses subsequently incurred by the Indemnitee in connection with
the defense of the Proceeding, other than reasonable costs of
investigation or as otherwise provided below. The Indemnitee will have
the right to employ the Indemnitee's counsel in any Proceeding, but the
fees and expenses of the counsel incurred after the Company assumes the
defense of the Proceeding will be at the expense of the Indemnitee,
unless (a) the employment of counsel by the Indemnitee has been
authorized by the Company, (b) the Indemnitee has reasonably concluded
that there is be a conflict of interest between the Company and the
Indemnitee in the conduct of the defense of a Proceeding, or (c) the
Company has not in fact employed counsel to assume the defense of a
Proceeding. In each of the foregoing cases the fees and expenses of the
Indemnitee's counsel will be at the expense of the Company. The Company
will not be entitled to assume the defense of any Proceeding brought by
or on behalf of the Company or as to which the Indemnitee has made the
conclusion that there may be a conflict of interest between the Company
and the Indemnitee.
5.3 SETTLEMENT. The Company will not settle or compromise any Proceeding in
any manner that would impose any penalty or limitation on the Indemnitee
without the Indemnitee's consent. The Indemnitee will not settle or
compromise any Proceeding without the Company's consent. Neither the
Company nor the Indemnitee will unreasonably withhold their consent or
approval under this Agreement.
5.4 SUBROGATION. If the Company pays Indemnified Costs, the Company will be
subrogated to the extent of such payment to all of the rights of recovery
of the Indemnitee against third parties. The Indemnitee will do all
things reasonably necessary to secure such rights, including the
execution of documents necessary to enable the Company effectively to
bring suit to enforce such rights.
6. MISCELLANEOUS PROVISIONS
6.1 AMENDMENTS; WAIVERS. Amendments, waivers, consents and approvals under
this Agreement must be in writing and designated as such. No failure or
delay in exercising any right will be deemed a waiver of such right.
6.2 INTEGRATION. This Agreement is the entire agreement between the parties
pertaining to its subject matter, and supersedes all prior agreements and
understandings of the parties in connection with such subject matter.
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6.3 INTERPRETATION; GOVERNING LAW. This Agreement is to be construed as a
whole and in accordance with its fair meaning. This Agreement is to be
interpreted in accordance with the laws of the State of Delaware relating
to indemnification of Agents.
6.4 HEADINGS. Headings of Sections and subsections are for convenience only
and are not a part of this Agreement.
6.5 COUNTERPARTS. This Agreement may be signed in one or more counterparts,
all of which constitute one agreement.
6.6 SUCCESSORS AND ASSIGNS. This Agreement is binding upon and inures to the
benefit of each party and such party's respective heirs, personal
representatives, successors and assigns. Nothing in this Agreement,
express or implied, is intended to confer any rights or remedies upon any
other person.
6.7 EXPENSES; LEGAL FEES. Each party will pay its own expenses in the
negotiation, preparation and performance of this Agreement. The
prevailing party in any action relating to this Agreement will be
entitled to reasonable legal fees, costs and expenses incurred in such
action.
6.8 REPRESENTATION BY COUNSEL; INTERPRETATION. Each party acknowledges that
it has been given an opportunity to be represented by counsel in
connection with this Agreement. Any rule of law, including, but not
limited to, Section 1654 of the California Civil Code, or any legal
decision that would require interpretation of any claimed ambiguities in
this Agreement against the party that drafted it, has no application and
is expressly waived.
6.9 SPECIFIC PERFORMANCE. The Company acknowledges that in view of the
uniqueness of the matters contemplated by this Agreement, the Indemnitee
would not have an adequate remedy at law for money damages if this
Agreement is not being performed in accordance with its terms. The
Company therefore agrees that the Indemnitee will be entitled to specific
enforcement of the terms hereof in addition to any other remedy to which
the Indemnitee may be entitled.
6.10 TIME IS OF THE ESSENCE. Time is of the essence in the performance of
each provision of this Agreement.
6.11 NOTICES. Any notice to be given hereunder must be in writing and
delivered as follows (or to another address designated in writing):
IF TO POWER-ONE, INC.: IF TO THE INDEMNITEE:
000 Xxxxx Xxxxx Xx the Indemnitee's most recent address on
Xxxxxxxxx, Xxxxxxxxxx 00000 the books and records of the Company or at
Attention: President such other address as Indemnitee indicates
to the Company
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The parties have signed this Agreement as of the date on page one.
INDEMNITEE
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Print Name:
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POWER-ONE, INC.
By:
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Title:
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