EXHIBIT 10.14
INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT is made and entered into as of the 14th
day of June, 1989 by and between _____________ ("Indemnitee") and Epitope,
Inc., an Oregon corporation (the "Company").
RECITALS
A. The Company has recognized the difficulty that publicly held
corporations are having in attracting and retaining qualified directors,
officers and key employees as a result of the increasing risk of claims and
actions against them arising out of their association with the Company.
B. Indemnitee is an officer, director and/or key employee of the
Company.
C. Indemnitee is willing to serve, to continue to serve and to take on
additional service for or on behalf of the Company.
D. In view of the mutual desire of the parties that Indemnitee render
valuable services to the Company, the parties have agreed to enter into this
Indemnification Agreement.
THEREFORE IT IS AGREED:
1. Definitions. The following definitions shall apply to this
Agreement:
1.1. "Act" shall be the Oregon Business Corporation Act and all
amendments thereto hereinafter enacted.
1.2. "Expenses" shall include, without limitation, expenses of
investigations, judicial or administrative proceedings or appeals and
attorneys' fees and disbursements and any expenses of establishing a right to
indemnification under this Agreement.
1.3. "Liability" means the obligation to pay a judgment,
settlement, penalty, fine, including an excise tax assessed with respect to an
employee benefit plan, or reasonable Expenses incurred with respect to a
Proceeding.
1.4. "Party" includes an individual who was is or is threatened to
be made a named defendant or respondent in a proceeding.
1.5. "Proceeding" means any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative and whether formal or informal.
2. Indemnification. The Company shall indemnify Indemnitee against
Liability and Expenses actually and necessarily incurred by him or her in any
Proceeding in which he or she is made a Party by reason of being or having
been a director, officer or key employee of the Company, except in relation to
matters as to which indemnification is prohibited by the Act; but such
indemnification shall not be deemed exclusive of any other rights to which
Indemnitee may be entitled under any bylaw or agreement of the Company,
general or specific action of the Company's board of directors, vote of the
Company's shareholders or otherwise.
3. Procedure for Indemnification. After the final disposition of
any Proceeding in which Indemnitee may be entitled to indemnification pursuant
to this Agreement, Indemnitee may send to the Company a written request for
indemnification. The Company shall, in accordance with the provisions of the
Act regarding determination and authorization of indemnification, make a
finding whether the indemnification requested is permitted by the laws of the
state of Oregon no later than 60 days following receipt by the Company of such
request. The Company shall cause the indemnification requested to be
authorized and paid unless the Company finds that the indemnification
requested is not so permitted. Indemnitee shall be given an opportunity to be
heard and to present evidence in connection with the consideration of the
party or parties determining Indemnitee's right to indemnification under the
Act. If the Company does not authorize indemnification hereunder, Indemnitee
shall have the right to seek court-oredered indemnification in accordance with
the provisions of the Act. In any such action, neither the making of, nor the
failure to make, any finding by the Company that indemnification of the
Indemnitee is proper or not proper in the circumstances shall be a defense to
such action or create a presumption that the Indemnitee has not met the
standard of conduct required by the Act. In making its determination and in
any court proceeding, the Company shall have the burden of proving that
Indemnitee has not met the standard of conduct required by the Act to entitle
Indemnitee to indemnification.
4. Procedure for Advancement of Expenses. The Company shall pay for
or reimburse the reasonable Expenses incurred by Indemnitee as a result of
being Party to a Proceeding promptly upon receipt of a written request for
payment of such Expenses that is in accordance with the requirements of the
Act for such written statements. Such written statement shall also include or
be accompanied by documentation of the Expenses incurred certified true and
correct by Indemnitee. When available, such documentation of expenses shall
include copies of bills or statements evidencing the Expenses incurred. If
the requirements of this Section 4 are met, the Company shall pay the amount
requested promptly notwithstanding the absence of a final disposition of the
Proceeding.
5. Partial Indemnity. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of the Expenses or Liability incurred by Indemnitee in the
preparation, investigation, defense, appeal or settlement of any Proceeding
but not, however, for the total amount thereof, the Company shall indemnify
Indemnitee for the portion of such Expenses or Liability to which Indemnitee
is entitled in accordance with this Agreement.
6. Insurance. The Company may, but shall not be required to, purchase
and keep in force during the term of this Agreement a policy or policies of
liability insurance on behalf of Indemnitee against Liability and Expenses
incurred in any Proceeding. Nothing herein shall be construed to prohibit
Indemnitee from maintaining his or her own policy of liability insurance.
7. Exclusions. The Company shall not be liable to make any payment
hereunder:
7.1. If it shall be finally adjudicated that such payment is
prohibited by law;
7.2. On account of any Proceeding brought under Section 16(b) of
the Securities Exchange Act of 1934, as such law is amended from time to time,
or under any similar law that replaces Section 16(b), in which judgment is
rendered against Indemnitee for an accounting for profits made from the
purchase or sale by Indemnitee of the securities of the Company;
7.3. For Liability or Expenses in any Proceeding brought by
Indemnitee against the Company unless (I) the Proceeding is brought as a
Proceeding for indemnity under this Agreement, (ii) Indemnitee is successful
in whole or in part in a Proceeding or (iii) the indemnification is included
in a settlement of the Proceeding or is awarded by a court;
7.4. To the extent payment is actually made to Indemnitee under a
valid, enforceable and collectible insurance policy, whether provided by the
Company or by Indemnitee (the "Insurance Policy"), by or out of a fund created
by the Company and under the control of a trustee or otherwise (the "Fund") or
from other sources provided by the Company ("Other Sources"); or
7.5. For amounts paid in settlement of a claim effected without
the Company's prior written consent, which consent shall not be unreasonably
withheld. If Indemnitee shall become obligated or required to pay any amount
that the Company would be obligated to pay hereunder except for the exclusion
in Section 7.4, the Company shall advance such amount to Indemnitee if payment
is not reasonably expected to be made under the Insurance Policy, by the Fund
or from Other Sources prior to the time that Indemnitee must make such
payment, provided, however, that Indemnitee shall immediately pay over to the
Company, from the funds Indemnitee later receives under the Insurance Policy,
from the Fund or from Other Sources, an amount equal to the amount advanced.
8. Defense of Claim. If any Proceeding asserted or commenced against
Indemnitee is also asserted or commenced against the Company, the Company
shall be entitled to participate in the Proceeding at its own expense and,
except as otherwise provided herein below, to the extent that it may wish the
Company shall be entitled to assume the defense thereof. After notice from
the Company to Indemnitee of its election to assume the defense of any such
Proceeding, Indemnitee shall have the right to employ Indemnitee's own counsel
in such Proceeding, but the Expenses of such counsel incurred after notice
from the Company to Indemnitee of its assumption of the defense thereof shall
be the Expenses of Indemnitee, and the Company may not be obligated to
Indemnitee under this Agreement for any Expenses subsequently incurred by
Indemnitee in connection therewith other than the reasonable costs of
investigation, travel and lodging Expenses arising out of Indemnitee's
participation in the defense of such Proceeding unless (i) otherwise
authorized by the Company, (ii) Indemnitee's counsel shall have reasonably
concluded, and so notified the Company in writing, that there may be a
conflict of interest between the Company and Indemnitee in the conduct of the
defense of such Proceeding or (iii) the Company shall not in fact have
employed counsel to assume the defense of such Proceeding. If the Company may
be obligated for some or all of the Expenses of Indemnitee under this Section
8, the determination of Indemnitee's entitlement to indemnification shall be
made in accordance with Section 3.
9. Change in Control.
9.1. The Company agrees that, if there is a Change in Control (as
hereinafter defined) of the Company, then with respect to all matters
thereafter arising concerning the rights of Indemnitee to indemnification and
Expense advances under this Agreement, the Company shall seek legal advice
only from special, independent counsel selected by the Company with the
consent of Indemnitee, which consent shall not be unreasonably withheld, with
respect to matters arising out of this Agreement, including but not limited to
the right of Indemnitee to indemnification hereunder. Such counsel shall,
among other things, render its written opinion to the Company and Indemnitee
as to whether and to what extent Indemnitee would be permitted to be
indemnified under the Act and as to the amount of reasonable indemnification.
Such written opinion shall be binding upon the Company and Indemnitee. The
Company shall agree to pay the reasonable fees of such special counsel and to
indemnify fully such counsel against any and all expenses, including attorney
fees, claims, liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto.
9.2. For the purpose of this Section 9, a "Change in Control"
shall be deemed to have occurred if:
9.2.1. Any "person," as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934 (the "1934 Act"), other
than a trustee or other fiduciary holding securities under an employee benefit
plan of the Company or a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportion as their
ownership of the Company, becomes the "Beneficial Owner," as defined in Rule
13d-3 under the 1934 Act, directly or indirectly, of securities of the Company
representing twenty-five percent (25%) or more of the combined voting power of
the Company's then outstanding voting securities ("Voting Stock");
9.2.2. During any period of twenty-four (24) consecutive
months, not including any period prior to the execution of this Agreement,
individuals who at the beginning of such period constitute the board of
directors of the Company and any new director, other than a director
designated by a person who has entered into an agreement with the Company to
effect a transaction described in Section 9.2.1 or 9.2.3, whose election was
approved by a vote of at least two-thirds (2/3rds) of the shares entitled to
vote, cease for any reason to constitute a majority of the board; or
9.2.3. The stockholders of the Company (i) approve a
merger or consolidation of the Company with any other corporation, other than
a merger or consolidation that would result in the Voting Stock outstanding
immediately prior thereto continuing to represent, either by remaining
outstanding or by being converted into Voting Stock of the surviving entity,
at least seventy percent (70%) of the combined voting power of the Voting
Stock of the Company or such surviving entity outstanding immediately after
such merger or consolidation, (ii) approve a plan of complete liquidation of
the Company or (iii) approve an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets.
10. Potential Chanqe in Control.
10.1. In the event of a Potential Change in Control (as hereinafter
defined), the Company shall, upon written request by Indemnitee, create a
trust (the "Trust") for the benefit of Indemnitee and from time to time upon
written request of Indemnitee shall fund the Trust in an amount sufficient to
satisfy any and all Expenses reasonably anticipated at the time of each such
request to be incurred in connection with investigating, preparing for and
defending any Proceeding for which Indemnitee may be entitled to
indemnification under this Agreement, and any and all Liability for which
Indemnitee is entitled to indemnification hereunder from time to time actually
paid, reasonably anticipated or proposed to be paid. The amount or amounts to
be deposited in the Trust pursuant to the foregoing funding obligations shall
be determined in accordance with the provisions of the Act with regard to
determination and authorization of indemnification.
10.2. The terms of the Trust shall provide that upon a Change in
Control:
10.2.1. The Trust shall not be revoked or the principal
thereof invaded without the prior written consent of Indemnitee;
10.2.2. The trustee of the Trust (the "Trustee") shall
advance, within two (2) business days of a written request by Indemnitee in
accordance with the requirements of Section 4, any and all Expenses to
Indemnitee, and Indemnitee hereby agrees to reimburse the Trust under the
circumstances under which Indemnitee would be required to reimburse the
Company pursuant to the Act and Section 4;
10.2.3. The Trust shall continue to be funded by the
Company in accordance with the funding obligation set forth above;
10.2.4. The Trustee shall promptly pay to Indemnitee all
amounts for which Indemnitee shall be entitled to indemnification pursuant to
this Agreement or otherwise; and
10.2.5. All unexpended funds in the Trust shall revert to
the Company upon a final determination by the special counsel established in
accordance with Section 9 or a court of competent jurisdiction, as the case
may be, that Indemnitee has been fully indemnified under the terms of this
Agreement.
10.3. The Trustee shall be selected by Indemnitee with the consent
of the Company, which consent shall not be unreasonably withheld, and all
reasonable expenses, fees and other disbursements of the Trustee in connection
with the establishment and administration of the Trust shall be paid by the
Company.
10.4. Nothing in this Section 10 shall relieve the Company of any
of its obligations under this Agreement.
10.5. A "Potential Change in Control" shall be deemed to have
occurred if: (i) the Company enters into an agreement, the consummation of
which would result in the occurrence of a Change in Control; (ii) any person,
including the Company, publicly announces an intention to take or to consider
taking actions that, if consummated, would constitute a Change in Control;
(iii) any person, other than a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or a corporation owned, directly
or indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company, who is or becomes the
beneficial owner, directly or indirectly, of stock of the Company representing
nine and one-half percent (9.5%) or more of the combined voting power of the
Company's then outstanding Voting Stock, increases his or her beneficial
ownership of such stock by five (5) percentage points or more over the
percentage so owned by such person; or (iv) the board of directors adopts a
resolution to the effect that, for purposes of this Agreement, a Potential
Change in Control has occurred.
11. Nonexclusivity and Continuation of Rights. The indemnification
provided by this Agreement shall not be deemed exclusive of any other rights
consistent with the laws of the state of Oregon to which Indemnitee may be
entitled under the Company's articles of incorporation, bylaws or any other
agreement, vote of shareholders or otherwise, both as to action in
Indemnitee's official capacity and as to action in another capacity while
holding office or while employed by or acting as agent for the Company, and
shall continue notwithstanding that Indemnitee may have ceased to be connected
with the Company.
12. Heirs, Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the heirs, successors and assigns of the
Company and Indemnitee.
13. Severability. Wherever possible, each provision in this Agreement
shall be interpreted in such manner as to be effective and valid under the
laws of the state of Oregon, but if any provision of this Agreement shall be
invalidated by any court of competent jurisdiction, such provision shall be
ineffective only to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.
14. 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 Indemnitee, who shall execute all documents required and shall
do all acts necessary to secure such rights, including the execution of such
documents necessary to enable the Company effectively to bring suit to enforce
such rights.
15. Modification and Amendment. No amendment, modification,
termination or claimed waiver of any of the provisions hereof shall be valid
unless in writing and signed by both of the parties hereto.
16. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered by hand and receipted for by the party to whom said notice or other
communication shall have been directed or mailed by certified or registered
mail with postage prepaid, on the third business day after the date on which
it is so mailed:
If to Indemnitee: If to the Company:
Name Epitope, Inc.
Address Attn.: Corporate Secretary
City, State ZIP 00000 X.X. Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxx 00000
or to such other address as may have been furnished to the other party.
17. Governinq Law. This Agreement shall be governed by and construed
in accordance with the laws of the state of Oregon.
IN WITNESS WHEREOF, the parties hereto have executed this Indemnification
Agreement as of the date first hereinabove written.
INDEMNITEE EPITOPE, INC., an Oregon
corporation
_____________________________ By ___________________
Xxxxxxx X. Xxxxxx Title: _________________
