EXHIBIT 10.4
INDEMNITY AGREEMENT
This Indemnity Agreement (this "AGREEMENT") is made as of August 3,
2005 by and between XXXX CORPORATION, a Delaware corporation (the "COMPANY"),
and [_____________] ("INDEMNITEE").
RECITALS
WHEREAS, the Company's Amended and Restated Certificate of
Incorporation (the "CHARTER") requires indemnification of the Company's
directors and permits indemnification of the Company's officers to the fullest
extent permitted by law; the Company's Bylaws (the "BYLAWS") require
indemnification of the Company's officers and directors if such officers and/or
directors, as the case may be, meet the applicable standard of conduct under the
circumstances; and Indemnitee may also be entitled to indemnification pursuant
to the Delaware General Corporation Law (the "DGCL").
WHEREAS, the Charter, Bylaws and the DGCL expressly provide that the
indemnification provisions set forth therein are not exclusive, and thereby
contemplate that contracts may be entered into between the Company and members
of the Board of Directors of the Company (the "BOARD") and officers of the
Company with respect to indemnification, hold harmless, exoneration, advancement
of expenses and reimbursement rights.
WHEREAS, the statutes and judicial decisions regarding the duties of
directors and officers are often difficult to apply, ambiguous, or conflicting,
and therefore fail to provide such directors and officers with adequate,
reliable knowledge of legal risks to which they are exposed or information
regarding the proper course of action to take.
WHEREAS, directors and officers of companies and other business
enterprises are being increasingly subjected to expensive and time-consuming
litigation relating to, among other things, matters that traditionally would
have been brought only against the Company or business enterprise itself.
WHEREAS, plaintiffs often seek damages in such large amounts and the
costs of litigation may be so great (whether or not the case is meritorious),
that the defense and/or settlement of such litigation is usually beyond the
personal resources of directors and officers.
WHEREAS, the uncertainties relating to insurance and to
indemnification have increased the difficulty of attracting and retaining such
persons.
WHEREAS, the Board has determined that the increased difficulty in
attracting and retaining such persons is detrimental to the best interests of
the Company and its stockholders and that the Company should act to assure such
persons that there will be increased certainty of such protection in the future.
WHEREAS, it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify, hold harmless, exonerate and to
advance expenses on behalf of, such persons to the fullest extent permitted by
applicable law so that they will serve
or continue to serve the Company free from undue concern that they will not be
so protected against such liabilities.
WHEREAS, this Agreement is a supplement to, and in furtherance of,
the Charter and Bylaws (and any resolutions adopted pursuant thereto) and any
insurance purchased by the Company with respect to the matters set forth in this
Agreement, and shall not be deemed a substitute therefor, nor to diminish or
abrogate any rights of Indemnitee thereunder.
WHEREAS, Indemnitee may not be willing to serve as an officer or
director without adequate protection, and the Company desires Indemnitee to
serve in such capacity. Indemnitee is willing to serve, continue to serve and to
take on additional service for or on behalf of the Company on the condition that
he or she be so indemnified by the Company.
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:
1. Services to the Company. Indemnitee will serve or continue to serve, at
the will of the Company, as an officer or director of the Company for so long as
Indemnitee is duly elected or appointed or until Indemnitee tenders his or her
resignation.
2. Definitions. As used in this Agreement:
(a) "BENEFICIAL OWNER" and "BENEFICIAL OWNERSHIP" shall have the
meaning given to such term in Rule 13d-3 under the Exchange Act.
(b) A "CHANGE IN CONTROL" shall be deemed to occur as of the first
day any one or more of the following events occur:
(i) Any Person becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing more than
twenty percent (20%) of the combined voting power of the Company's
then outstanding securities.
(ii) During any period of twenty-six (26) consecutive months
(not including any period prior to the execution of this Agreement),
individuals who at the beginning of that period constitute the Board
cease for any reason (other than death, disability or voluntary
retirement) to constitute a majority of the Board. For this purpose,
any new directors whose election by the Board or nomination for
election by the Company's stockholders was approved by a vote of at
least two-thirds of the directors then still in office, and who
either were directors at the beginning of the period or whose
election or nomination for election was so approved, will be deemed
to have been a director at the beginning of any twenty-six (26)
month period under consideration.
(iii) The stockholders of the Company approve: (A) a plan of
complete liquidation or dissolution of the Company; (B) an agreement
for the sale or disposition of all or substantially all the
Company's assets; or (C) a merger, consolidation or reorganization
of the Company with or involving any other corporation, other than a
merger, consolidation or reorganization that would result
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in the voting securities of the 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 eighty percent (80%) of the combined
voting power of the voting securities of the Company (or the
surviving entity) outstanding immediately after the merger,
consolidation, or reorganization.
(c) "CORPORATE STATUS" shall mean the status of a person who is or
was a director, officer, trustee, general partner, managing member, fiduciary,
employee or agent of the Company or of any other Enterprise for which such
person is or was serving at the request of the Company.
(d) "DELAWARE COURT" shall mean the Court of Chancery of the State
of Delaware.
(e) "DISINTERESTED DIRECTOR" shall mean a director of the Company
who is not and was not a party to the Proceeding in respect of which
indemnification is sought by Indemnitee.
(f) "ENTERPRISE" shall mean the Company, any Subsidiary of the
Company and any other corporation, constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or merger to which the
Company (or any of its wholly owned subsidiaries) is a party, partnership,
limited liability company, joint venture, trust, employee benefit plan or other
enterprise of which Indemnitee is or was serving at the request of the Company
as a director, officer, trustee, general partner, managing member, employee,
agent or fiduciary.
(g) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended.
(h) "EXPENSES" shall include all reasonable direct and indirect
costs, fees and expenses of any type or nature, including, without limitation,
all reasonable attorneys' fees and costs, retainers, court costs, transcript
costs, fees of experts, witness fees, travel expenses, fees of private
investigators and professional advisors, duplicating costs, printing and binding
costs, telephone charges, postage, delivery service fees, fax transmission
charges, secretarial services and all other disbursements or expenses of the
types customarily incurred in connection with prosecuting, defending, preparing
to prosecute or defend, investigating, being or preparing to be a witness in,
settlement or appeal of, or otherwise participating in, a Proceeding. Expenses
also shall include Expenses incurred in connection with any appeal resulting
from any Proceeding, including without limitation the premium, security for, and
other costs relating to any cost bond, supersedeas bond, or other appeal bond or
its equivalent. Expenses, however, shall not include amounts paid in settlement
by Indemnitee or the amount of judgments or fines against Indemnitee.
(i) "INDEPENDENT COUNSEL" shall mean a law firm, or a member of a
law firm, that is experienced in matters of corporation law and neither
presently is, nor in the past five years has been, retained to represent: (i)
the Company or Indemnitee in any matter material to either such party (other
than with respect to matters concerning the Indemnitee under this
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Agreement, or of other indemnitees under similar indemnification agreements), or
(ii) any other party to the Proceeding giving rise to a claim for
indemnification, hold harmless or exoneration hereunder. Notwithstanding the
foregoing, the term "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 Indemnitee in
an action to determine Indemnitee's rights under this Agreement.
(j) "PERSON" shall have the meaning as set forth in Sections 13(d)
and 14(d) of the Exchange Act as in effect on the date hereof; provided,
however, that Person shall exclude (i) the Company; (ii) any trustee or other
fiduciary holding securities under an employee benefit plan of the Company; and
(iii) any corporation owned, directly or indirectly, by the Company's
stockholders in substantially the same proportion as their ownership of stock of
the Company.
(k) "PROCEEDING" shall include any threatened, pending or completed
action, suit, arbitration, alternate dispute resolution mechanism,
investigation, inquiry, administrative hearing, appeal or any other actual,
threatened or completed proceeding, whether brought in the right of the Company
or otherwise and whether of a civil (including intentional or unintentional tort
claims), criminal, administrative or investigative nature, in which Indemnitee
was, is or will be involved as a party or otherwise by reason of the fact that
Indemnitee is or was a director or officer of the Company, by reason of any
action (or failure to act) taken by him or her or of any action (or failure to
act) on his or her part while acting as a director or officer of the Company, or
by reason of the fact that he or she is or was serving at the request of the
Company as a director, officer, trustee, general partner, managing member,
fiduciary, employee or agent of any other Enterprise, in each case whether or
not serving in such capacity at the time any liability or expense is incurred
for which indemnification, holding harmless, exoneration, reimbursement, or
advancement of expenses can be provided under this Agreement.
(l) "SUBSIDIARY" shall mean, with respect to any Person, any
corporation or other entity of which a majority of the voting power of the
voting equity securities or equity interests is owned, directly or indirectly,
by that Person.
(m) (i) References to "FINES" shall include any excise tax assessed
on Indemnitee with respect to any employee benefit plan; (ii) references to
"SERVING AT THE REQUEST OF THE COMPANY" shall include any service as a director,
officer, employee, agent or fiduciary of the Company which imposes duties on, or
involves services by, such director, officer, employee, agent or fiduciary with
respect to an employee benefit plan, its participants or beneficiaries; (iii)
none of the Company's directors or officers who serves as a director, officer,
trustee, general partner, managing member, fiduciary, employee or agent for an
entity, other than the Company or its Subsidiaries or affiliated entities
(including employee benefit plans), shall be deemed to be "SERVING AT THE
REQUEST OF THE COMPANY" for purposes of this Agreement without an express
authorizing resolution adopted by the Board or a committee thereof; and (iv) If
Indemnitee acted in good faith and in a manner he or she reasonably believed to
be in the best interests of the participants and beneficiaries of an employee
benefit plan, Indemnitee shall be deemed to have acted in a manner "NOT OPPOSED
TO THE BEST INTERESTS OF THE COMPANY" as referred to in this Agreement.
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3. Indemnity in Third-Party Proceedings. The Company shall indemnify, hold
harmless and exonerate Indemnitee in accordance with the provisions of this
Section 3 if Indemnitee is, or is threatened to be made, a party to or a
participant (as a witness or otherwise) in any Proceeding, other than a
Proceeding by or in the right of the Company to procure a judgment in its favor.
Pursuant to this Section 3, Indemnitee shall be indemnified, held harmless and
exonerated against all Expenses, judgments, liabilities, fines and amounts paid
in settlement (including all interest, assessments and other charges paid or
payable in connection with or in respect of such Expenses, judgments, fines and
amounts paid in settlement) actually and reasonably incurred by Indemnitee or on
his or her behalf in connection with such Proceeding or any claim, issue or
matter therein, if Indemnitee acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the Company
and, in the case of a criminal Proceeding had no reasonable cause to believe
that his or her conduct was unlawful.
4. Indemnity in Proceedings by or in the Right of the Company. The Company
shall indemnify, hold harmless and exonerate Indemnitee in accordance with the
provisions of this Section 4 if Indemnitee is, or is threatened to be made, a
party to or a participant (as a witness or otherwise) in any Proceeding by or in
the right of the Company to procure a judgment in its favor. Pursuant to this
Section 4, Indemnitee shall be indemnified, held harmless and exonerated against
all Expenses, judgments, liabilities, fines and amounts paid in settlement
(including all interest, assessments and other charges paid or payable in
connection with or in respect of such Expenses, judgments, fines and amounts
paid in settlement), actually and reasonably incurred by him or her on his or
her behalf in connection with such Proceeding or any claim, issue or matter
therein, if Indemnitee acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the Company. No
indemnification, hold harmless or exoneration for Expenses, judgments,
liabilities, fines and amounts paid in settlement (including all interest,
assessments and other charges paid or payable in connection with or in respect
of such Expenses, judgments, fines and amounts paid in settlement) shall be made
under this Section 4 in respect of any claim, issue or matter as to which
Indemnitee shall have been finally adjudged by a court to be liable to the
Company, unless and only to the extent that any court in which the Proceeding
was brought, or the Delaware Court, shall determine upon application that,
despite the adjudication of liability but in view of all the circumstances of
the case, Indemnitee is fairly and reasonably entitled to such indemnification,
hold harmless and exoneration rights.
5. Indemnification for Expenses of a Party Who is Wholly or Partly
Successful. Notwithstanding any other provisions of this Agreement, to the
extent that Indemnitee is a party to (or a participant in) and is successful, on
the merits or otherwise, in any Proceeding or in defense of any claim, issue or
matter therein, in whole or in part, the Company shall indemnify, hold harmless
and exonerate Indemnitee against all Expenses, liabilities, fines and amounts
paid in settlement (including all interest, assessments and other charges paid
or payable in connection with or in respect of such Expenses, fines and amounts
paid in settlement) actually and
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reasonably incurred by him or her in connection therewith. If Indemnitee is not
wholly successful in such Proceeding but is successful, on the merits or
otherwise, as to one or more but less than all claims, issues or matters in such
Proceeding, the Company shall indemnify, hold harmless and exonerate Indemnitee
against all Expenses, liabilities, fines and amounts paid in settlement
(including all interest, assessments and other charges paid or payable in
connection with or in respect of such Expenses, fines and amounts paid in
settlement) actually and reasonably incurred by him or her or on his or her
behalf in connection with each successfully resolved claim, issue or matter. If
the Indemnitee is not wholly successful in such Proceeding, the Company also
shall indemnify, hold harmless and exonerate Indemnitee against all Expenses,
liabilities, fines and amounts paid in settlement (including all interest,
assessments and other charges paid or payable in connection with or in respect
of such Expenses, fines and amounts paid in settlement) actually and reasonably
incurred in connection with a claim, issue or matter related to any claim,
issue, or matter on which the Indemnitee was successful. For purposes of this
Section and without limitation, the termination of any claim, issue or matter in
such a Proceeding by dismissal, with or without prejudice, by reason of
settlement, judgment, order or otherwise, shall be deemed to be a successful
result as to such claim, issue or matter so long as there has been no finding
that Indemnitee (i) did not act in good faith, or (ii) did not act in a manner
reasonably believed to be in or not opposed to the best interests of the
Company, or (iii) with respect to any criminal proceeding, had reasonable
grounds to believe that his or her conduct was unlawful.
6. Indemnification For Expenses of a Witness. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee is, by reason of his
or her Corporate Status, a witness in any Proceeding to which Indemnitee is not
a party, he or she shall be indemnified, held harmless and exonerated against
all Expenses actually and reasonably incurred by him or her or on his or her
behalf in connection therewith.
7. Additional Indemnification, Hold Harmless and Exoneration Rights.
(a) Notwithstanding any limitation in Sections 3, 4, or 5, the
Company shall indemnify, hold harmless and exonerate Indemnitee to the fullest
extent permitted by law if Indemnitee is a party to or threatened to be made a
party to any Proceeding (including a Proceeding by or in the right of the
Company to procure a judgment in its favor) against all Expenses, judgments,
fines, penalties and amounts paid in settlement (including all interest,
assessments and other charges paid or payable in connection with or in respect
of such Expenses, judgments, fines, penalties and amounts paid or payable)
actually and reasonably incurred by Indemnitee in connection with the
Proceeding.
(b) For purposes of Section 7(a), the meaning of the phrase "to the
fullest extent permitted by law" shall include, but not be limited to:
(i) to the fullest extent permitted by the provision of the
DGCL that authorizes or contemplates additional indemnification by
agreement, or the corresponding provision of any amendment to or
replacement of the DGCL, and
(ii) to the fullest extent authorized or permitted by any
amendments to or replacements of the DGCL adopted after the date of
this Agreement that increase the extent to which a corporation may
indemnify, hold harmless or exonerate its officers and directors.
8. Exclusions. Notwithstanding any provision in this Agreement, the
Company shall not be obligated under this Agreement to make any indemnification,
hold harmless or exoneration payment in connection with any claim made against
Indemnitee:
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(a) for which payment has actually been received by or on behalf of
Indemnitee under any insurance policy or other indemnity provision, except with
respect to any excess beyond the amount actually received under any insurance
policy, contract, agreement or other indemnity provision or otherwise; or
(b) for an accounting of profits made from the purchase and sale (or
sale and purchase) by Indemnitee of securities of the Company within the meaning
of Section 16(b) of the Exchange Act or similar provisions of state statutory
law or common law; or
(c) prior to a Change in Control, in connection with any Proceeding
(or any part of any Proceeding) initiated by Indemnitee, including any
Proceeding (or any part of any Proceeding) initiated by Indemnitee against the
Company or its directors, officers, employees or other indemnitees, unless (i)
the Board authorized the Proceeding (or any part of any Proceeding) prior to its
initiation or (ii) the Company provides the indemnification, hold harmless or
exoneration payment in its sole discretion, pursuant to the powers vested in the
Company under applicable law.
9. Advances of Expenses; Defense of Claim.
(a) Notwithstanding any provision of this Agreement to the contrary,
and to the fullest extent permitted by applicable law, the Company shall advance
the Expenses incurred by Indemnitee in connection with any Proceeding as soon as
practicable, but in any event, within thirty (30) days after the receipt by the
Company of a statement or statements requesting such advances from time to time,
whether prior to or after final disposition of any Proceeding. Advances shall be
unsecured and interest free. Advances shall be made without regard to
Indemnitee's ability to repay the Expenses and without regard to Indemnitee's
ultimate entitlement to be indemnified, held harmless or exonerated under the
other provisions of this Agreement. Advances shall include any and all
reasonable Expenses incurred pursuing a Proceeding to enforce this right of
advancement, including Expenses incurred preparing and forwarding statements to
the Company to support the advances claimed. The Indemnitee shall qualify for
advances, to the fullest extent permitted by applicable law, solely upon the
execution and delivery to the Company of an undertaking providing that the
Indemnitee undertakes to repay the advance to the extent that it is ultimately
determined that Indemnitee is not entitled to be indemnified, held harmless or
exonerated by the Company under the provisions of this Agreement, the Charter or
Bylaws, applicable law or otherwise. This Section 9(a) shall not apply to any
claim made by Indemnitee for which indemnification, hold harmless or exoneration
payment is excluded pursuant to Section 8.
(b) The Company will be entitled to participate in the Proceeding at
its own expense.
(c) The Company shall not settle any action, claim or Proceeding (in
whole or in part) which would impose any Expense, judgment, fine, penalty or
limitation on the Indemnitee without the Indemnitee's prior written consent.
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10. Procedure for Notification and Application for Indemnification.
(a) Within sixty (60) days after being served with any summons,
citation, subpoena, complaint, indictment, inquiry, information or other
document relating to any Proceeding or matter which may be subject to
indemnification, hold harmless or exoneration rights under this Agreement, or
advancement of Expenses covered hereby, Indemnitee shall submit to the Company a
written notice identifying the Proceeding. The omission by the Indemnitee to
notify the Company will not relieve the Company from any liability which it may
have to Indemnitee (i) otherwise than under this Agreement, and (ii) under this
Agreement unless and only to the extent the Company can establish that such
omission to notify resulted in actual prejudice to the Company.
(b) Indemnitee may thereafter deliver to the Company a written
application to indemnify, hold harmless and exonerate Indemnitee in accordance
with this Agreement. Such application(s) may be delivered from time to time and
at such time(s) as Indemnitee deems appropriate in his or her sole discretion.
Following such a written application for indemnification by Indemnitee, the
Indemnitee's entitlement to such indemnification shall be determined according
to Section 11(a) of this Agreement.
11. Procedure Upon Application for Indemnification.
(a) A determination, if required by applicable law, with respect to
Indemnitee's entitlement to indemnification shall be made in the specific case
by one of the following methods, which shall be at the election of Indemnitee:
(i) by a majority vote of the Disinterested Directors, even though less than a
quorum of the Board, or (ii) by Independent Counsel in a written opinion to the
Board, a copy of which shall be delivered to Indemnitee. The Company promptly
will advise Indemnitee in writing with respect to any determination that
Indemnitee is or is not entitled to indemnification, including a description of
any reason or basis for which indemnification has been denied. If it is so
determined that Indemnitee is entitled to indemnification, payment to Indemnitee
shall be made as soon as practicable, but in no event more than thirty (30)
days, after such determination. Indemnitee shall reasonably cooperate with the
person, persons or entity making such determination with respect to Indemnitee's
entitlement to indemnification, including providing to such person, persons or
entity upon reasonable advance request any documentation or information which is
not privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination. Any
costs or Expenses (including attorneys' fees and disbursements) incurred by
Indemnitee in so cooperating with the person, persons or entity making such
determination shall be borne by the Company (irrespective of the determination
as to Indemnitee's entitlement to indemnification) and the Company hereby
indemnifies, exonerates and agrees to hold Indemnitee harmless therefrom.
(b) In the event the determination of entitlement to indemnification
is to be made by Independent Counsel pursuant to Section 11(a) hereof, the
Independent Counsel shall be selected as provided in this Section 11(b).
Indemnitee shall select the Independent Counsel and shall give written notice to
the Company advising it of the identity of the Independent Counsel so selected
and certifying that the Independent Counsel so selected meets the requirements
of "Independent Counsel" as defined in Section 2 of this Agreement. The
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Company may, within thirty (30) days after such written notice of selection
shall have been received, deliver to Indemnitee a written objection to such
selection; provided, however, that such objection may be asserted only on the
ground that the Independent Counsel so selected does not meet the requirements
of "Independent Counsel" as defined in Section 2 of this Agreement, and the
objection shall set forth with particularity the factual basis of such
assertion. Absent a proper and timely objection, the person so selected shall
act as Independent Counsel. If such written objection is so made and
substantiated, the Independent Counsel so selected may not serve as Independent
Counsel unless and until such objection is withdrawn or a court of competent
jurisdiction has determined that such objection is without merit. If, within
forty-five (45) days after submission by Indemnitee of a written request for
indemnification pursuant to Section 10(a) hereof, no Independent Counsel shall
have been selected and not objected to, either the Company or Indemnitee may
petition a court of competent jurisdiction for resolution of any objection which
shall have been made by the Company to Indemnitee's selection of Independent
Counsel and/or for the appointment as Independent Counsel of a person selected
by the Court or by such other person as the Court shall designate, and the
person with respect to whom all objections are so resolved or the person so
appointed shall act as Independent Counsel under Section 11(a) hereof. Upon the
due commencement of any judicial proceeding or arbitration pursuant to Section
13(a) of this Agreement, Independent Counsel shall be discharged and relieved of
any further responsibility in such capacity (subject to the applicable standards
of professional conduct then prevailing).
(c) The Company agrees to pay the reasonable fees and expenses of
Independent Counsel and to fully indemnify, hold harmless and exonerate such
Independent Counsel against any and all Expenses, claims, liabilities and
damages arising out of or relating to this Agreement or its engagement pursuant
hereto.
12. Presumptions and Effect of Certain Proceedings.
(a) In making a determination with respect to entitlement to
indemnification hereunder, the person, persons or entity making such
determination shall presume that Indemnitee is entitled to indemnification under
this Agreement if Indemnitee has submitted a request for indemnification in
accordance with Section 10(a) of this Agreement, and the Company shall have the
burden of proof to overcome that presumption in connection with the making by
any person, persons or entity of any determination contrary to that presumption.
Neither the failure of the Company (including by its directors or independent
legal counsel) to have made a determination prior to the commencement of any
action pursuant to this Agreement that indemnification is proper in the
circumstances because Indemnitee has met the applicable standard of conduct, nor
an actual determination by the Company (including by its directors or
independent legal counsel) that Indemnitee has not met such applicable standard
of conduct, shall be a defense to the action or create a presumption that
Indemnitee has not met the applicable standard of conduct.
(b) If the person, persons or entity empowered or selected under
Section 11 of this Agreement to determine whether Indemnitee is entitled to
indemnification shall not have made a determination within ninety (90) days
after receipt by the Company of the request therefor, the requisite
determination of entitlement to indemnification shall be deemed to have been
made and Indemnitee shall be entitled to such indemnification, absent (i) a
misstatement by
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Indemnitee of a material fact, or an omission of a material fact necessary to
make Indemnitee's statement not materially misleading, in connection with the
request for indemnification, or (ii) a prohibition of such indemnification under
applicable law as set forth in a final judicial determination; provided,
however, that such 90-day period may be extended for a reasonable time, not to
exceed an additional thirty (30) days, if the person, persons or entity making
the determination with respect to entitlement to indemnification in good faith
requires such additional time for the obtaining or evaluating of documentation
and/or information relating thereto.
(c) The termination of any Proceeding or of any claim, issue or
matter therein, by judgment, order, settlement or conviction, or upon a plea of
nolo contendere or its equivalent, shall not (except as otherwise expressly
provided in this Agreement) of itself adversely affect the right of Indemnitee
to indemnification or create a presumption that Indemnitee did not meet any
particular standard of conduct, did not act in good faith and in a manner which
he or she reasonably believed to be in or not opposed to the best interests of
the Company or, with respect to any criminal Proceeding, that Indemnitee had
reasonable cause to believe that his or her conduct was unlawful.
(d) For purposes of any determination of good faith, Indemnitee
shall be deemed to have acted in good faith and in a manner which he or she
reasonably believed to be in or not opposed to the best interests of the Company
if Indemnitee's action is based on the records or books of account of the
Enterprise, including financial statements, or on information, opinions, reports
or statements supplied to Indemnitee by the directors or officers of the
Enterprise in the course of their duties, or on the advice of legal counsel for
the Enterprise or on information or records given or reports made to the
Enterprise by an independent certified public accountant, investment banker or
by an appraiser or other expert selected with the reasonable care by the
Enterprise. The provisions of this Section 12(d) shall not be deemed to be
exclusive or to limit in any way the other circumstances in which the Indemnitee
may be deemed or found to have met the applicable standard of conduct set forth
in this Agreement.
(e) The knowledge and/or actions, or failure to act, of any other
director, officer, trustee, partner, managing member, fiduciary, agent or
employee of the Enterprise shall not be imputed to Indemnitee for purposes of
determining the right to indemnification under this Agreement.
13. Remedies of Indemnitee.
(a) In the event that (i) a determination is made pursuant to
Section 11 of this Agreement that Indemnitee is not entitled to indemnification
under this Agreement, (ii) advancement of Expenses, to the fullest extent
permitted by law, is not timely made pursuant to Section 9 of this Agreement,
(iii) no determination of entitlement to indemnification shall have been made
pursuant to Section 11(a) of this Agreement within ninety (90) days after
receipt by the Company of the request for indemnification, (iv) payment of
indemnification is not made pursuant to Section 5, 6, 7 or the last sentence of
Section 11(a) of this Agreement within thirty (30) days after receipt by the
Company of a written request therefor, or (v) payment of indemnification
pursuant to Section 3 or 4 of this Agreement is not made within thirty (30) days
after a determination has been made that Indemnitee is entitled to
indemnification, Indemnitee
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shall be entitled to an adjudication by the Delaware Court of his or her
entitlement to such indemnification, hold harmless, exoneration or advancement
of Expenses rights. Alternatively, Indemnitee, at his or her option, may seek an
award in arbitration to be conducted by a single arbitrator pursuant to the
Commercial Arbitration Rules of the American Arbitration Association. Except as
set forth herein, the provisions of Delaware law (without regard to its
conflicts of laws rules) shall apply to any such arbitration. The Company shall
not oppose Indemnitee's right to seek any such adjudication or award in
arbitration.
(b) In the event that a determination shall have been made pursuant
to Section 11(a) of this Agreement that Indemnitee is not entitled to
indemnification, any judicial proceeding or arbitration commenced pursuant to
this Section 13 shall be conducted in all respects as a de novo trial, or
arbitration, on the merits and Indemnitee shall not be prejudiced by reason of
that adverse determination. In any judicial proceeding or arbitration commenced
pursuant to this Section 13 the Company shall have the burden of proving
Indemnitee is not entitled to be indemnified, held harmless, exonerated or to
receive advancement of Expenses, as the case may be, and the Company may not
refer to or introduce into evidence any determination pursuant to Section 11(a)
of this Agreement adverse to Indemnitee for any purpose.
(c) If a determination shall have been made pursuant to Section
11(a) of this Agreement that Indemnitee is entitled to indemnification, the
Company shall be bound by such determination in any judicial proceeding or
arbitration commenced pursuant to this Section 13, absent (i) a misstatement by
Indemnitee of a material fact, or an omission of a material fact necessary to
make Indemnitee's statement not materially misleading, in connection with the
request for indemnification, or (ii) a prohibition of such indemnification under
applicable law.
(d) In the event that Indemnitee, pursuant to this Section 13, seeks
a judicial adjudication of or an award in arbitration to enforce his or her
rights under, or to recover damages for breach of, this Agreement, Indemnitee
shall be entitled to recover from the Company, and shall be indemnified, held
harmless and exonerated by the Company against, any and all Expenses actually
and reasonably incurred by him or her in such judicial adjudication or
arbitration. If it shall be determined in said judicial adjudication or
arbitration that Indemnitee is entitled to receive part but not all of the
indemnification, hold harmless, exoneration or advancement of Expenses sought,
the Indemnitee shall be entitled to recover from the Company, and shall be
indemnified, held harmless and exonerated by the Company against, any and all
Expenses reasonably incurred by Indemnitee in connection with such judicial
adjudication or arbitration.
(e) The Company shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section 13 that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
that the Company is bound by all the provisions of this Agreement. The Company
shall indemnify, hold harmless and exonerate Indemnitee to the fullest extent
permitted by law against all Expenses and, if requested by Indemnitee, shall
(within thirty (30) days after the Company's receipt of a written request
therefore) advance to Indemnitee such Expenses which are incurred by Indemnitee
in connection with any judicial proceeding or arbitration brought by Indemnitee
(i) to enforce his or her rights under, or to recover damages for breach of,
this Agreement or any other indemnification, hold harmless, exoneration or
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advancement agreement or provision of the Charter or Bylaws, now or hereafter in
effect or (ii) for recovery or advances under any insurance policy maintained by
any person or the Company for the benefit of Indemnitee, regardless of whether
Indemnitee ultimately is determined to be entitled to such indemnification,
advancement of Expenses or insurance recovery, as the case may be.
(f) If the Company fails to pay any amount due to Indemnitee
hereunder within the time periods specified herein, then the Company shall pay
to Indemnitee interest on such amount at the prime rate then in effect for the
period commencing with the date on which such amount was required to be paid
hereunder and ending with the date on which such payment is made by the Company
to Indemnitee.
14. Security. Notwithstanding anything herein to the contrary, to the
extent requested by Indemnitee and approved by the Board, the Company may at any
time and from time to time provide security to Indemnitee for the Company's
obligations hereunder through an irrevocable bank line of credit, funded trust
or other collateral. Any such security, once provided to Indemnitee, may not be
revoked or released without the prior written consent of Indemnitee.
15. Non-exclusivity; Survival of Rights; Insurance; Subrogation.
(a) The rights of Indemnitee to be indemnified, held harmless and
exonerated and to advancement of Expenses as provided by this Agreement shall
not be deemed exclusive of any other rights to which Indemnitee may at any time
be entitled under applicable law, the Charter, the Bylaws, any agreement, a vote
of stockholders or a resolution of directors, or otherwise. No amendment,
alteration or repeal of this Agreement or of any provision hereof shall limit or
restrict any right of Indemnitee under this Agreement in respect of any action
taken or omitted by such Indemnitee in his or her Corporate Status prior to such
amendment, alteration or repeal. To the extent that a change in applicable law,
whether by statute or judicial decision, permits greater indemnification, hold
harmless or exoneration rights or advancement of Expenses than would be afforded
currently under the Charter, the Bylaws or this Agreement, it is the intent of
the parties hereto that Indemnitee shall enjoy by this Agreement the greater
benefits so afforded by such change. No right or remedy herein conferred is
intended to be exclusive of any other right or remedy, and every other right and
remedy shall be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other right or remedy.
(b) To the extent that the Company maintains an insurance policy or
policies providing liability insurance for directors, officers, trustees,
partners, managing members, fiduciaries, employees, or agents of the Company or
of any other Enterprise which such person serves at the request of the Company,
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 such
director, trustee, partner, managing member, fiduciary, officer, employee or
agent under such policy or policies. If, at the time the Company receives notice
from any source of a Proceeding as to which Indemnitee is a party or a
participant (as a witness or otherwise), the Company has director and officer
liability insurance in effect, the Company shall give prompt notice of such
Proceeding to the insurers in accordance with the procedures set forth in the
respective policies.
- 12 -
The Company shall 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.
(c) In the event of any 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 papers required and take all
action necessary to secure such rights, including execution of such documents as
are necessary to enable the Company to bring suit to enforce such rights.
(d) The Company's obligation to indemnify, hold harmless, exonerate
or advance Expenses hereunder to Indemnitee who is or was serving at the request
of the Company as a director, officer, trustee, partner, managing member,
fiduciary, employee or agent of any other Enterprise shall be reduced by any
amount Indemnitee has actually received as indemnification, hold harmless or
exoneration payments or advancement of expenses from such other Enterprise.
(e) The DGCL, the Charter and the Bylaws permit the Company to
purchase and maintain insurance or furnish similar protection or make other
arrangements including, but not limited to, providing a trust fund, letter of
credit, or surety bond ("INDEMNIFICATION ARRANGEMENTS") on behalf of Indemnitee
against any liability asserted against him or her or incurred by or on behalf of
him or her or in such capacity as a director, officer, employee or agent of the
Company, or arising out of his or her Corporate Status as such, whether or not
the Company would have the power to indemnify, hold harmless or exonerate him or
her against such liability under the provisions of this Agreement or under the
DGCL, as it may then be in effect. The purchase, establishment, and maintenance
of any such Indemnification Arrangement shall not in any way limit or affect the
rights and obligations of the Company or of the Indemnitee under this Agreement
except as expressly provided herein, and the execution and delivery of this
Agreement by the Company and the Indemnitee shall not in any way limit or affect
the rights and obligations of the Company or the other party or parties thereto
under any such Indemnification Arrangement
16. Duration of Agreement. This Agreement shall continue until and
terminate upon the later of: (a) ten (10) years after the date that Indemnitee
shall have ceased to serve as a director or officer, trustee, partner, managing
member, fiduciary of the Company or as a director, officer, employee or agent of
any other corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise which Indemnitee served at the request of the Company; or
(b) one (1) year after the final termination of any Proceeding (including any
appeal thereto) then pending in respect of which Indemnitee is granted rights of
indemnification, hold harmless, exoneration or advancement of Expenses hereunder
and of any proceeding commenced by Indemnitee pursuant to Section 13 of this
Agreement relating thereto (including any rights of appeal of any Proceeding
described in Section 13). This Agreement shall be binding upon the Company and
its successors and assigns and shall inure to the benefit of Indemnitee and his
or her heirs, executors and administrators.
17. Period of Limitations. No legal action shall be brought and no cause
of action shall be asserted by or in the right of the Company against
Indemnitee, Indemnitee's spouse,
- 13 -
heirs, executors or personal or legal representatives after the expiration of
two (2) years from the date of accrual of such cause of action, and any claim or
cause of action of the Company shall be extinguished and deemed released unless
asserted by the timely filing of a legal action within such two-year period;
provided, however, that if any shorter period of limitations is otherwise
applicable to any such cause of action, such shorter period shall govern.
18. Severability. If any provision or provisions of this Agreement shall
be held to be invalid, illegal or unenforceable for any reason whatsoever: (a)
the validity, legality and enforceability of the remaining provisions of this
Agreement (including without limitation, each portion of any Section of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall not
in any way be affected or impaired thereby and shall remain enforceable to the
fullest extent permitted by law; (b) such provision or provisions shall be
deemed reformed to the extent necessary to conform to applicable law and to give
the maximum effect to the intent of the parties hereto; and (c) to the fullest
extent possible, the provisions of this Agreement (including, without
limitation, each portion of any Section of this Agreement containing any such
provision held to be invalid, illegal or unenforceable, that is not itself
invalid, illegal or unenforceable) shall be construed so as to give effect to
the intent manifested thereby.
19. Additional Acts. If for the validation of any of the provisions in
this Agreement any act, resolution, approval or other procedure is required, the
Company undertakes to cause such act, resolution, approval or other procedure to
be affected or adopted in a manner that will enable the Company to fulfill its
obligations under this Agreement.
20. Enforcement and Binding Effect.
(a) The Company expressly confirms and agrees that it has entered
into this Agreement and assumed the obligations imposed on it hereby in order to
induce Indemnitee to serve as a director or officer of the Company, and the
Company acknowledges that Indemnitee is relying upon this Agreement in serving
as a director or officer of the Company.
(b) Without limiting any of the Indemnitee's rights under the
Charter or Bylaws, this Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral, written and implied, between the
parties hereto with respect to the subject matter hereof.
(c) The indemnification, hold harmless, exoneration and advancement
of Expenses rights provided by or granted pursuant to this Agreement shall be
binding upon and be enforceable by the parties hereto and their respective
successors and assigns (including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
or assets of the Company), shall continue as to an Indemnitee who has ceased to
be a director, officer, employee or agent of the Company or of any other
Enterprise at the Company's request, and shall inure to the benefit of
Indemnitee and his or her spouse, assigns, heirs, devisees, executors and
administrators and other legal representatives.
(d) The Company shall require and cause any successor (whether
direct or indirect by purchase, merger, consolidation or otherwise) to all,
substantially all or a substantial
- 14 -
part, of the business and/or assets of the Company, by written agreement in form
and substance reasonably 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.
(e) The Company and Indemnitee agree herein that a monetary remedy
for breach of this Agreement, at some later date, may be inadequate,
impracticable and difficult of proof, and further agree that such breach may
cause Indemnitee irreparable harm. Accordingly, the parties hereto agree that
Indemnitee may enforce this Agreement by seeking, among other things, injunctive
relief and/or specific performance hereof, without any necessity of showing
actual damage or irreparable harm and that by seeking injunctive relief and/or
specific performance, Indemnitee shall not be precluded from seeking or
obtaining any other relief to which he or she may be entitled. The Company and
Indemnitee further agree that Indemnitee shall be entitled to such specific
performance and injunctive relief, including temporary restraining orders,
preliminary injunctions and permanent injunctions, without the necessity of
posting bonds or other undertaking in connection therewith. The Company
acknowledges that in the absence of a waiver, a bond or undertaking may be
required of Indemnitee by the Court, and the Company hereby waives any such
requirement of such a bond or undertaking.
21. Modification and Waiver. No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by 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 of this Agreement nor shall
any waiver constitute a continuing waiver.
22. Notices. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given
(a) if delivered by hand and receipted for by the party to whom said notice or
other communication shall have been directed, or (b) if mailed by certified or
registered mail with postage prepaid, on the third (3rd) business day after the
date on which it is so mailed:
(a) If to Indemnitee, at the address indicated on the signature page
of this Agreement, or such other address as Indemnitee shall provide in writing
to the Company.
(b) If to the Company to Xxxx Corporation, Attention: General
Counsel, 00000 Xxxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000 or to any other
address as may have been furnished in writing to Indemnitee by the Company.
23. Contribution. To the fullest extent permissible under applicable law,
if the indemnification, hold harmless and exoneration rights provided for in
this Agreement is unavailable to Indemnitee for any reason whatsoever, the
Company, in lieu of indemnifying, holding harmless and exonerating Indemnitee,
shall contribute to the amount incurred by Indemnitee, whether for judgments,
fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or
for Expenses, in connection with any claim relating to an indemnifiable event
under this Agreement, in such proportion as is deemed fair and reasonable in
light of all of the circumstances of such Proceeding in order to reflect (i) the
relative benefits received by the Company and Indemnitee as a result of the
event(s) and/or transaction(s) giving cause to such
- 15 -
Proceeding; and/or (ii) the relative fault of the Company (and its directors,
officers, employees and agents) and Indemnitee in connection with such event(s)
and/or transaction(s).
24. Applicable Law and Consent to Jurisdiction. This Agreement and the
legal relations among the parties shall be governed by, and construed and
enforced in accordance with, the laws of the State of Delaware, without regard
to its conflict of laws rules. Except with respect to any arbitration commenced
by Indemnitee pursuant to Section 13(a) of this Agreement, the Company and
Indemnitee hereby irrevocably and unconditionally (i) agree that any action or
proceeding arising out of or in connection with this Agreement shall be brought
only in the Delaware Court, and not in any other state or federal court in the
United States of America or any court in any other country, (ii) consent to
submit to the exclusive jurisdiction of the Delaware Court for purposes of any
action or proceeding arising out of or in connection with this Agreement, (iii)
irrevocably appoint, to the extent such party is not a resident of the State of
Delaware, RL&F Service Corp., One Xxxxxx Square, 10th Floor, 10th and King
Streets, Wilmington, Delaware 19801 as its agent in the State of Delaware as
such party's agent for acceptance of legal process in connection with any such
action or proceeding against such party with the same legal force and validity
as if served upon such party personally within the State of Delaware, (iv) waive
any objection to the laying of venue of any such action or proceeding in the
Delaware Court, and (v) waive, and agree not to plead or to make, any claim that
any such action or proceeding brought in the Delaware Court has been brought in
an improper or inconvenient forum, or is subject, in whole or in part, to a jury
trial.
25. Identical Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
but all of which together shall constitute one and the same Agreement. Only one
such counterpart signed by the party against whom enforceability is sought needs
to be produced to evidence the existence of this Agreement.
26. Miscellaneous. Use of the masculine pronoun shall be deemed to include
usage of the feminine pronoun where appropriate. The headings of the paragraphs
of this Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction thereof.
[Signature page follows]
- 16 -
IN WITNESS WHEREOF, the parties have caused this Agreement to be
signed as of the day and year first above written.
XXXX CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxxxx
Senior Vice President, Secretary and
General Counsel
INDEMNITEE
____________________________________
Name: [_______________]
Title: [_______________]
Address: [_______________]
[_______________]
[_______________]
