INDEMNIFICATION AGREEMENT
Exhibit 10.11
This INDEMNIFICATION AGREEMENT is effective as of [date], between NEWPORT CORPORATION, a Nevada corporation (the “Company”), and [name] (“Indemnitee”), an officer and/or member of the Board of Directors of the Company.
WHEREAS, the parties believe it appropriate to memorialize and reaffirm the Company’s indemnification obligations to Indemnitee and, in addition, set forth the indemnification agreements contained herein.
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reflect the relative benefits received by the Company and the Indemnitee, or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company and the Indemnitee in connection with any action or inaction which resulted in such losses, claims, damages, expenses or liabilities, as well as any other relevant equitable considerations. In connection with any registration of the Company’s securities, the relative benefits received by the Company and the Indemnitee shall be deemed to be in the same respective proportions that the net proceeds from the offering (before deducting expenses) received by the Company and the Indemnitee, in each case as set forth in the table on the cover page of the applicable prospectus, bear to the aggregate public offering price of the securities so offered. The relative fault of the Company and the Indemnitee shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or the Indemnitee and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
The Company and the Indemnitee agree that it would not be just and equitable if contribution pursuant to this Section 1(b) were determined by pro rata or per capita allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. In connection with the registration of the Company’s securities, in no event shall an Indemnitee be required to contribute any amount under this Section 1(b) in excess of the lesser of (i) that proportion of the total of such losses, claims, damages or liabilities indemnified against equal to the proportion of the total securities sold under such registration statement which is being sold by such Indemnitee or (ii) the proceeds received by Indemnitee from its sale of securities under such registration statement. No person found guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act of 1933, as amended) shall be entitled to contribution from any person who was not found guilty of such fraudulent misrepresentation.
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3. Trust Fund, Beneficiaries’ Representative.
(a) The Company may establish or fund a trust, in the sole discretion of the Board of Directors of the Company and with no obligation to do so, to satisfy certain of the Company’s obligations under this Agreement and similar agreements with other directors and/or officers (collectively, including Indemnitee, the “Beneficiaries”). Therefore, in addition to Indemnitee’s rights under this Indemnification Agreement and any applicable insurance policy, Indemnitee shall, if such trust has been established and has remained funded, also have the right to seek indemnification payments from the trustee of the trust (“Trustee”) in accordance with the terms of this Agreement and of the trust agreement.
(b) All communications or demands made by and among the Company, the Trustee, if any, and the Beneficiaries are to be made through the individual designated as the Beneficiaries’ representative (“Beneficiaries’ Representative”). The Beneficiaries’ Representative as of the date of this Agreement is Xxxxxx X. Xxxxxx. The Beneficiaries’ Representative may be changed from time to time and at any time upon agreement of two-thirds of the Beneficiaries. In discharging his obligations hereunder, the Beneficiaries’ Representative shall at all times act expeditiously and in a manner reasonably believed to be in the best interests of the Beneficiaries.
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(a) If a claim under this Agreement, or any statute, or under any provision of the Company’s Articles of Incorporation or Bylaws providing for indemnification, is not paid in full by the Company or the Insurance Company within forty-five (45) days after a written request for payment thereof has been received by the Company, Indemnitee may, but need not, at any time thereafter bring an action against the Company to recover the unpaid amount of the claim and, if successful in whole or in part, Indemnitee shall also be entitled to be paid for the expenses (including attorneys’ fees) of bringing such action.
(b) It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in connection with any action, suit or proceeding in advance of its final disposition) that Indemnitee has not met the standards of conduct which make it permissible under applicable law for the Company to indemnify Indemnitee for the amount claimed, but the burden of proving such defense shall be on the Company and Indemnitee shall be entitled to receive interim payments of interim expenses pursuant to Section 2 hereof unless and until such defense may be finally adjudicated by court order or judgment from which no further right of appeal exists. It is the parties’ intention that if the Company contests Indemnitee’s right to indemnification, the question of Indemnitee’s right to indemnification shall be for the court to decide, and neither the failure of the Company (including its board of directors, independent legal counsel, or its stockholders) to have made a determination that indemnification of Indemnitee is proper in the circumstances because Indemnitee has met the applicable standard of conduct required by applicable law, nor an actual determination by the Company (including its board of directors, any committee or subgroup of the board of directors, independent legal counsel, or its stockholders) that Indemnitee has not met such applicable standard of conduct, shall create a presumption that Indemnitee has or has not met the applicable standard of conduct.
(a) Whether Indemnitee is seeking payment of Indemnifiable Expenses directly from the Company, the Trustee, if any, or from the Insurance Company, the Beneficiaries’ Representative shall have the right and obligation on behalf of Indemnitee and other Beneficiaries, to (i) select counsel to represent them with respect to any matter subject to indemnification and payment hereunder; (ii) coordinate the defense of any such matter; and (iii) approve the fees and other expenses of counsel selected by him pursuant hereto.
(b) Notwithstanding the foregoing, Indemnitee may retain different counsel than the other Beneficiaries, or may incur expenses not shared in common with the other Beneficiaries, in connection with any Indemnifiable Litigation if in the reasonable judgment of Indemnitee there may be legal defenses available to him which are different from or additional to those available to the other Beneficiaries and, as a consequence, an actual or potential conflict of interest with the other Beneficiaries exists, or if other facts or circumstances exist which would make the representation of Indemnitee and other Beneficiaries inappropriate due to conflicts of interest. Indemnitee must obtain the prior written approval of the Beneficiaries’ Representative to retain such counsel, which consent shall not be unreasonably withheld. In the event that the Beneficiaries’ Representative withholds such consent, Indemnitee shall then have the right to seek approval for such separate counsel from the Company, or the Trustee, if any, which approval shall not be unreasonably withheld.
(c) Nothing contain herein shall prohibit Indemnitee from retaining other counsel at Indemnitee’s own expense.
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8. Construction of Certain Phrases.
(a) For purposes of this Agreement, references to the “Company” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, employees, agents or fiduciaries, so that if Indemnitee is or was a director, officer, employee, agent or fiduciary of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, employee benefit plan, trust or other enterprise, Indemnitee shall stand in the same position under the provisions of this Agreement with respect to the resulting or surviving corporation as Indemnitee would have with respect to such constituent corporation if its separate existence had continued.
(b) For purposes of this Agreement, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on Indemnitee with respect to an employee benefit plan; and 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 its beneficiaries; and if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in the interest 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.
(c) For purposes of this Agreement a “Change in Control” shall be deemed to have occurred if (i) there shall be consummated any consolidation or merger of the Company in which the Company is not the continuing or surviving corporation or pursuant to which shares of the Company’s Voting Securities would be converted into cash, securities or other property, other than a merger of the Company in which the holders of the Company’s Voting Securities immediately prior to the merger have the same proportionate ownership of at least eighty percent (80%) of common stock of the surviving corporation immediately after the merger; (ii) there shall be consummated any consolidation or merger of the Company in which the Company is the surviving corporation, but the holders of the Company’s outstanding Voting Securities immediately prior to such merger or consolidation hold, in the aggregate, securities possessing less than eighty percent (80%) of the total combined voting power of all outstanding Voting Securities of the Company immediately after such merger or consolidation; (iii) there shall be consummated any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company; (iv) the stockholders of the Company approve any plan or proposal for the liquidation or dissolution of the Company; (v) any person (as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), shall become the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of 20% or more of the Company’s outstanding Voting Securities (other than any such person who is
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the record owner of at least 15% of the Company’s outstanding Voting Securities on the date hereof, other than nominees); (vi) during any period of two consecutive years during the term of this Agreement, individuals who at the beginning of the two year period constituted the entire Board of Directors do not for any reason constitute a majority thereof unless the election, or the nomination for election by the Company’s stockholders, of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period; (vii) an event shall occur constituting a “Business Combination” under the Company’s Articles of Incorporation as amended to date.
(d) For purposes of this Agreement, “Independent Legal Counsel” shall mean an attorney or firm of attorneys, selected in accordance with the provisions of Section 1(d) hereof, who shall not have otherwise performed services for the Company or Indemnitee within the last three years (other than with respect to matters concerning the rights of Indemnitee under this Agreement, or of other indemnitees under similar indemnity agreements).
(e) For purposes of this Agreement, “Voting Securities” shall mean any securities of the Company that vote generally in the election of directors.
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16. Entire Agreement; Modification and Waiver. This Agreement constitutes the entire agreement between the Indemnitee and the Company with respect to the subject matter hereof and replaces and supersedes all prior indemnification agreements between Indemnitee and the Company. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.
18. Choice of Law. The validity, interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of Nevada.
[signature page follows]
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NEWPORT CORPORATION | ||||||
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Name: |
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INDEMNITEE | ||||||
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[Name] |
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EXHIBIT A
UNDERTAKING AGREEMENT
This UNDERTAKING AGREEMENT is effective as of , 20 , between NEWPORT CORPORATION, a Nevada corporation (the “Company”) and (“Indemnitee”), an officer and/or member of the Board of Directors of the Company.
WHEREAS, the Company is willing to make such payments but, in accordance with Article TENTH of the Bylaws of the Company and Section 78.751 of the Nevada Revised Statutes, the Company may make such payments only if it receives an undertaking to repay from Indemnitee; and
WHEREAS, Indemnitee is willing to give such an undertaking;
1. In regard to any payments made by the Company to Indemnitee pursuant to the terms of the Indemnification Agreement dated , 20 , between the Company and Indemnitee, if it shall ultimately be determined by court order or judgment from which no further right of appeal exists, that the Indemnitee is not entitled to be indemnified by the Company pursuant to the Bylaws of the Company and Section 78.751 of the Nevada Revised Statutes, or other applicable law, Indemnitee hereby undertakes and agrees to repay to the Company any and all amounts so paid promptly and in any event within thirty (30) days after such determination.
2. This Agreement shall not affect in any manner rights which Indemnitee may have against the Company, any insurer or any other person to seek indemnification for or reimbursement of any expenses referred to herein or any judgment which may be rendered in any litigation or proceeding.
NEWPORT CORPORATION | ||||||
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INDEMNITEE | ||||||
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