1
EXHIBIT 10.3
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT ("Agreement") is made on this ____ day of
________, 19___, between HARBINGER CORPORATION, a Georgia corporation ("HC") and
("Indemnitee").
W I T N E S S E T H:
WHEREAS, Indemnitee is a member of the Board of Directors of HC and in
such capacity performs a valuable service for HC;
WHEREAS, HC's Bylaws (the "Bylaws") authorize HC to indemnify its officers
and directors in accordance with the Official Code of Georgia Annotated (the
"Statute"); and
WHEREAS, in order to encourage Indemnitee to continue to serve as a member
of the Board of Directors of HC and to perform other designated services for HC
at its request, HC has determined and agreed to enter into this Agreement with
Indemnitee;
NOW, THEREFORE, in consideration of Indemnitee's continued service as a
director of HC and the performance of such other services as requested by HC,
the parties hereby agree as follows:
1. INDEMNITY OF INDEMNITEE. HC shall defend, hold harmless and indemnify
Indemnitee to the full extent permitted by the provisions of the Statute, as
currently in effect or as it may hereafter be amended, or by the provisions of
any other statute authorizing or permitting such indemnification, whether
currently in effect or hereafter adopted.
2. ADDITIONAL INDEMNITY.
(a) Except as provided in subsections (d) and (e) of this Section 2
below, HC shall indemnify Indemnitee to the fullest extent permitted by the
Statute, and to the extent that applicable law from time to time in effect shall
permit indemnification that is broader than provided in this Agreement, then to
the maximum extent authorized by law, should Indemnitee be made a party to a
proceeding because he is or was a member of the Board of Directors against
liability incurred by him in the proceeding if Indemnitee acted in a manner he
believed in good faith to be in or not opposed to the best interests of HC and,
in the case of any criminal proceeding, he had no reasonable cause to be believe
his conduct was unlawful.
(b) Indemnitee's conduct with respect to an employee benefit plan for a
purpose he believed in good faith to be in the interests of the participants in
and beneficiaries of the plan is conduct that satisfies the requirement of
subsection (a) of this Section 2 above.
(c) The termination of a proceeding by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent shall not, of
itself, be determinative that Indemnitee did not meet the standard of conduct
set forth in subsection (a) of this Section 2 above.
(d) HC shall not indemnify Indemnitee under this Agreement:
(1) In connection with a proceeding by or in the right of HC in
which Indemnitee was adjudged liable to HC; or
(2) In connection with any other proceeding in which Indemnitee was
adjudged liable on the basis that personal benefit was improperly received by
him unless, and then only to the extent that, a
2
court of competent jurisdiction determines pursuant to Section 14-2-854 of the
Statute that in view of the circumstances of the case, Indemnitee is fairly and
reasonably entitled to indemnification.
(e) Indemnification permitted under this Agreement in connection with a
proceeding by or in the right of HC is limited to reasonable expenses incurred
in connection with the proceeding.
3. DETERMINATION AND AUTHORIZATION OF INDEMNIFICATION.
(a) HC shall not indemnify Indemnitee under Section 2 of this Agreement
above unless a determination has been made in the specific case that
indemnification of Indemnitee is permissible in the circumstances because he has
met the standard of conduct set forth in subsection (a) of Section 2 of this
Agreement above; provided, however, that regardless of the result or absence of
any such determination, and unless limited by the Articles of Incorporation of
HC, to the extent that Indemnitee has been successful, on the merits or
otherwise, in the defense of any proceeding to which he was a party, or in
defense of any claim, issue or matter therein, because he is or was a member of
the Board of Directors, HC shall indemnify Indemnitee against reasonable
expenses incurred by him in connection therewith.
(b) The determination specified in subsection (a) of this Section 3
shall be made:
(1) By the Board of Directors of HC by majority vote of a quorum
consisting of Directors not at the time parties to the proceeding;
(2) If a quorum cannot be obtained under paragraph (1) of this
subsection (b) of this Section 3, by majority vote of a committee duly
designated by the Board of Directors (in which designation Directors who are
parties may participate), consisting solely of two or more Directors not at the
time parties to the proceeding;
(3) By special legal counsel:
(A) Selected by the Board of Directors or its committee in the
manner prescribed in paragraphs (1) and (2) of this subsection (b) of this
Section 3; or
(B) If a quorum of the Board of Directors cannot be obtained
under paragraph (1) of this subsection (b) of this Section 3 and a committee
cannot be designated under paragraph (2) of this subsection (b) of this Section
3, selected by a majority vote of the full Board of Directors (in which
selection Directors who are parties may participate); or
(4) By the shareholders of HC, but shares owned by or voted under
the control of Directors who are at the time parties to the proceeding may not
be voted on the determination.
(c) Evaluation as to reasonableness of expenses shall be made in the
same manner as the determination that indemnification is permissible, except
that if the determination is made by special legal counsel, evaluation as to
reasonableness of expenses shall be made by those entitled under paragraph (3)
of subsection (b) of this Section 3 to select counsel.
(d) If the determination to be made pursuant to Section 3(a) above has
not been made within thirty (30) days following Indemnitee's written request for
indemnification, then Indemnitee shall be deemed to have met the standard of
conduct set forth in subsection (a) of Section 3 of this Agreement. If the
determination to be made pursuant to Section 3(c) above has not been made within
thirty (30) days following Indemnitee's written request for indemnification for,
or advancement of, expenses, then the expenses claimed shall be deemed
reasonable.
3
4. NOTIFICATION AND DEFENSE OF CLAIM.
(a) Promptly after receipt by Indemnitee of notice of the commencement
of any action, suit or proceeding, Indemnitee will, if a claim in respect
thereto is to be made against HC under this Agreement, notify HC of the
commencement thereof, but the failure to so notify HC will not relieve it from
any liability which it may have to Indemnitee otherwise under this Agreement.
With respect to any such action, suit or proceeding as to which Indemnitee so
notifies HC:
(1) HC will be entitled to participate therein at its own expense;
and
(2) except as otherwise provided below, to the extent that it may
desire, HC may assume the defense thereof.
(b) After notice from HC to Indemnitee of its election to assume the
defense thereof, HC will not be liable to Indemnitee under this Agreement for
any legal or other expenses subsequently incurred by Indemnitee in connection
with the defense thereof other than reasonable costs of investigation or as
otherwise provided below. Indemnitee shall have the right to employ counsel of
his choosing in such action, suit or proceeding but the fees and expenses of
such counsel incurred after notice from HC of its assumption of the defense
thereof shall be at the expense of Indemnitee unless (i) the employment of
counsel by Indemnitee has been authorized in writing by HC, (ii) HC and
Indemnitee shall reasonably conclude that there may be a conflict of interest
between HC and Indemnitee in the conduct of the defense of such action, or (iii)
HC shall not in fact have employed counsel to assume the defense of such action,
in each of which cases the reasonable fees and expenses of Indemnitee's counsel
shall be paid by HC.
(c) HC shall not be liable to Indemnitee under this Agreement for any
amounts paid in settlement of any threatened or pending action, suit or
proceeding without its prior written consent. HC shall not settle any such
action, suit or proceeding in any manner which would impose any penalty or
limitation on Indemnitee without Indemnitee's prior written consent. Neither HC
nor Indemnitee will unreasonably withhold his or its consent to any proposed
settlement.
5. PREPAYMENT OF EXPENSES.
(a) HC shall pay for or reimburse the reasonable expenses incurred by
Indemnitee resulting from Indemnitee having been a party to a proceeding in
advance of final disposition of the proceeding if:
(1) Indemnitee furnishes HC with a written affirmation of his good
faith belief that he has met the standard of conduct set forth in subsection (a)
of Section 2 above; and
(2) Indemnitee furnishes HC with a written undertaking, executed
personally or on his behalf, to repay any advances if it is ultimately
determined that he is not entitled to indemnification under this Agreement.
(b) The undertaking required by paragraph (2) of subsection (a) of this
Section 5 must be an unlimited general obligation of Indemnitee but need not be
secured and may be accepted without reference to financial ability to make
repayment.
6. CONTINUATION OF INDEMNITY. All agreements and obligations of HC
contained in this Agreement shall continue during the period Indemnitee is a
member of the Board of Directors of HC and shall continue thereafter so long as
Indemnitee shall be subject to any action, suit or proceeding, whether civil,
criminal, administrative or investigative, and whether formal or informal, by
reason of the fact that Indemnitee was an officer of HC, or is or was serving at
the request of HC as a director of another corporation, partnership, joint
venture, trust or other enterprise.
4
7. RELIANCE. HC has entered into this Agreement in order to induce
Indemnitee to continue as a member of the Board of Directors of HC and
acknowledges that Indemnitee is relying upon this Agreement in continuing in
such capacity.
8. SEVERABILITY. Each of the provisions of this Agreement is a separate
and distinct agreement and independent of the others, so that if any provision
hereof shall be held to be invalid or unenforceable for any reason, such
invalidity or unenforceability shall not affect the validity or enforceability
of the other provisions hereof.
9. GENERAL.
(a) This Agreement shall be governed by and construed in accordance
with the laws of the State of Georgia.
(b) Neither this Agreement nor any rights or obligations hereunder
shall be assigned or transferred by Indemnitee.
(c) This Agreement shall be binding upon Indemnitee and upon HC, its
successors and assigns, including successors by merger or consolidation, and
shall inure to the benefit of Indemnitee, his heirs, personal representatives
and permitted assigns and to the benefit of HC, its successors and assigns.
(d) No amendment, modification or termination of this Agreement shall
be effective unless in writing signed by both parties hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and
as of the day and year first above written.
INDEMNITEE: HARBINGER CORPORATION
By: By:
----------------------------------- -------------------------------------
Name (Print): Title:
------------------------- ----------------------------------
Date: Date:
--------------------------------- -----------------------------------
