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EXHIBIT 10.25
DIRECTOR'S INDEMNIFICATION AGREEMENT
THIS DIRECTOR'S INDEMNIFICATION AGREEMENT is made and entered into this ___
day of __________________ 2000 between Accelerated Networks, Inc., a Delaware
corporation ("Corporation"), and ____________________ ("Director"),
RECITALS:
A. Director, as a member of the Board of Directors of the Company, performs
a valuable service in such capacity for the Company;
B. The stockholders of the Company have adopted Bylaws (the "Bylaws")
providing for the indemnification of the officers, directors, agents and
employees of the Company to the maximum extent authorized by Section 145 of the
Delaware General Corporation Law, as amended (the "Delaware Law");
C. The Bylaws and the Delaware Law, by their non-exclusive nature, permit
contracts between the Company, its officers and the members of its Board of
Directors with respect to indemnification of such persons;
D. In accordance with the authorization as provided by the Delaware Law,
the Company has purchased and presently maintains or will shortly hereafter
purchase and thereafter maintain, a policy or policies of directors and officers
liability insurance ("D & O Insurance"), covering certain liabilities which may
be incurred by its directors and officers in their performance as directors or
officers of the Company;
E. As a result of developments affecting the terms, scope and availability
of D & O Insurance, there exists general uncertainty as to the extent of
protection afforded members of the Board of Directors and officers of the
Company by such D & O Insurance and by statutory and Bylaw indemnification
provisions; and
F. In order to induce Director to continue to serve as a member of the
Board of Directors of the Company, the Company has determined and agreed to
enter into this contract with Director.
NOW, THEREFORE, in consideration of Director's continued service as a
director after the date hereof, the parties hereto agree as follows:
1. INDEMNITY OF DIRECTOR. Corporation hereby agrees to hold harmless and
indemnify Director to the fullest extent authorized or permitted by the
provisions of the Delaware Law, as may be amended from time to time, and by the
Bylaws as they exist on the date hereof
2. ADDITIONAL INDEMNITY. Subject only to the exclusions set forth in
Section 3 hereof, Corporation hereby further agrees to hold harmless and
indemnify Director:
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a. against any and all expenses (including attorneys' fees), witness
fees, judgments, fines and amounts paid in settlement actually and reasonably
incurred by Director in connection with any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (including an action by or in the right of Corporation) to which
Director is, was or at any time becomes a party, or is threatened to be made a
party, by reason of the fact that Director is, was or at any time becomes a
director, officer, employee or agent of Corporation, or is or was serving or at
any time serves at the request of Corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise; and
b. otherwise to the fullest extent as may be provided to Director by
Corporation under the non-exclusivity provisions of Section 6 of Article
VII of the Bylaws of the Corporation.
3. LIMITATIONS ON ADDITIONAL INDEMNITY.
No indemnity pursuant to Section 2 hereof shall be paid by Corporation for
any of the following:
a. except to the extent the aggregate of losses to be indemnified
thereunder exceeds the sum of such losses for which Director is indemnified
pursuant to Section 1 hereof or pursuant to any D & O Insurance purchased and
maintained by Corporation;
b. in respect to remuneration paid to Director if it shall be
determined by a final judgment or other final adjudication that such
remuneration was in violation of law;
c. on account of any suit in which judgment is rendered against
Director for an accounting of profits made from the purchase or sale by Director
of securities of Corporation pursuant to the provisions of Section 16(b) of the
Securities Exchange Act of 1934 and amendments thereto or similar provisions of
any federal, state or local statutory law;
d. on account of Director's conduct which is finally adjudged to have
been knowingly fraudulent or deliberately dishonest, or to constitute willful
misconduct;
e. on account of Director's conduct which is the subject of an action,
suit or proceeding described in Section 7(c)(ii) hereof;
f. on account of any action, claim or proceeding (other than a
proceeding referred to in Section 8(b) hereof) initiated by Director unless such
action, claim or proceeding was authorized in the specific case by action of the
Board of Directors; or
g. if a final decision by a Court having jurisdiction in the matter
shall determine that such indemnification is not lawful (and, in this respect,
both Corporation and Director have been advised that the Securities and Exchange
Commission believes that indemnification for liabilities arising under the
federal securities laws is against public policy and is, therefore,
unenforceable and that claims for indemnification should be submitted to
appropriate courts for adjudication).
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4. CONTRIBUTION. If the indemnification provided in Sections 1 and 2 hereof
is unavailable by reason of a court decision described in Section 3(g) hereof
based on grounds other than any of those set forth in paragraphs (b) through (f)
of Section 3 hereof, then in respect of any threatened, pending or completed
action, suit or proceeding in which Corporation is jointly liable with Director
(or would be if joined in such action, suit or proceeding), Corporation shall
contribute to the amount of expenses (including reasonable attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
and paid or payable by Director in such proportion as is appropriate to reflect
(i) the relative benefits received by Corporation on the one hand and Director
on the other hand from the transaction from which such action, suit or
proceeding arose, and (ii) the relative fault of Corporation on the one hand and
of Director on the other in connection with the events which resulted in such
expenses, judgments, fines or settlement amounts, as well as any other relevant
equitable considerations. The relative fault of Corporation on the one hand and
of Director on the other shall be determined by reference to, among other
things, the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent the circumstances resulting in such expenses,
judgments, fines or settlement amounts. Corporation agrees that it would not be
just and equitable if contribution pursuant to this Section 4 were determined by
pro rata allocation or any other method of allocation which does not take
account of the foregoing equitable considerations.
5. CONTINUATION OF OBLIGATIONS. All agreements and obligations of
Corporation contained herein shall continue during the period Director is a
director, officer, employee or agent of Corporation (or is or was serving at the
request of Corporation as a director, officer employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise) and shall continue thereafter so long as Director shall be subject
to any possible claim or threatened, pending or completed action, suit or
proceeding, whether civil, criminal or investigative, by reason of the fact that
Director was a director of Corporation or serving in any other capacity referred
to herein.
6. NOTIFICATION AND DEFENSE OF CLAIM. Not later than thirty (30) days after
receipt by Director of notice of the commencement of any action, suit or
proceeding, Director will, if a claim in respect thereof is to be made against
Corporation under this Agreement, notify Corporation of the commencement
thereof; but the omission so to notify Corporation will not relieve it from any
liability which it may have to Director otherwise than under this Agreement.
With respect to any such action, suit or proceeding as to which Director
notifies Corporation of the commencement thereof:
a. Corporation will be entitled to participate therein at its own
expense;
b. except as otherwise provided below, to the extent that it may wish,
Corporation jointly with any other indemnifying party similarly notified will be
entitled to assume the defense thereof, with counsel reasonably satisfactory to
Director. After notice from Corporation to Director of its election so as to
assume the defense thereof, Corporation will not be liable to Director under
this Agreement for any legal or other expenses subsequently incurred by Director
in connection with the defense thereof other than reasonable costs of
investigation or as otherwise provided below. Director shall have the right to
employ its counsel in such action,
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suit or proceeding but the fees and expenses of such counsel incurred after
notice from Corporation of its assumption of the defense thereof shall be at the
expense of Director unless (i) the employment of counsel by Director has been
authorized by Corporation, (ii) Director shall have reasonably concluded, based
on the advice of counsel, that there may be a conflict of interest between
Corporation and Director in the conduct of the defense of such action or (iii)
Corporation shall not in fact have employed counsel to assume the defense of
such action, in each of which cases the fees and expenses of Director's separate
counsel shall be at the expense of Corporation. Corporation shall not be
entitled to assume the defense of any action, suit or proceeding brought by or
on behalf of Corporation or as to which Director shall have made the conclusion
provided for in (ii) above; and
c. Corporation shall not be liable to indemnify Director under this
Agreement for any amounts paid in settlement of any action or claim effected
without its written consent. Corporation shall be permitted to settle any action
except that it shall not settle any action or claim in any manner which would
impose any penalty or limitation on Director without Director's written consent.
Neither Corporation nor Director will unreasonably withhold its consent to any
proposed settlement.
7. ADVANCEMENT AND REPAYMENT OF EXPENSES.
a. In the event that Director employs his own counsel pursuant to
Section 6(b)(i) through (iii) above, Corporation shall advance to Director,
prior to any final disposition of any threatened or pending action, suit or
proceeding, whether civil, criminal, administrative or investigative, any and
all reasonable expenses (including legal fees and expenses) incurred in
investigating or defending any such action, suit or proceeding within ten (10)
days after receiving copies of invoices presented to Director for such expenses;
and
b. Director agrees that Director will reimburse Corporation for all
reasonable expenses paid by Corporation in defending any civil or criminal
action, suit or proceeding against Director in the event and only to the extent
it shall be ultimately determined by a final judicial decision (from which there
is no right of appeal) that Director is not entitled, under provisions of
Delaware Law, the Bylaws, this Agreement or otherwise, to be indemnified by
Corporation for such expenses.
c. Notwithstanding the foregoing, Corporation shall not be required to
advance such expenses to Director if Director (i) commences any action, suit or
proceeding as a plaintiff unless such advance is specifically approved by a
majority of the Board of Directors or (ii) is a party to an action, suit or
proceeding brought by Corporation and approved by a majority of Corporation's
Board of Directors which alleges willful misappropriation of corporate assets by
Director, disclosure of confidential information in violation of Director's
fiduciary or contractual obligations to Corporation, or any other willful and
deliberate breach in bad faith of Director's duty to Corporation or its
stockholders.
8. ENFORCEMENT.
a. Corporation expressly confirms and agrees that it has entered into
this Agreement and assumed the obligations imposed on Corporation hereby in
order to induce
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Director to continue as a director of Corporation, and acknowledges that
Director is relying upon this Agreement in continuing in such capacity.
b. In the event Director is required to bring any action to enforce
rights or to collect moneys due under this Agreement and is successful in such
action, Corporation shall reimburse Director for all of Director's reasonable
fees and expenses in bringing and pursuing such action.
9. SUBROGATION. In the event of payment under this agreement, Corporation
shall be subrogated to the extent of such payment to all of the rights of
recovery of Director, who shall execute all documents required and shall do all
acts that may be necessary to secure such rights and to enable Corporation
effectively to bring suit to enforce such rights.
10. NON-EXCLUSIVITY OF RIGHTS. The rights conferred on Director by this
Agreement shall not be exclusive of any other right which Director may have or
hereafter acquire under any statute, provision of Corporation's Articles or
Bylaws, agreement, vote of stockholders or directors, or otherwise, both as to
action in Director's official capacity and as to action in another capacity
while a member of the Board of Directors.
11. SURVIVAL OF RIGHTS. The rights conferred on Director by this Agreement
shall continue after Director has ceased to be a director, officer, employee or
other agent of Corporation and shall inure to the benefit of Director's heirs,
executors and administrators.
12. 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 or the obligation of Corporation to indemnify the
Director to the fullest extent provided by the Bylaws or the Delaware Law.
13. GOVERNING LAW; VENUE AND JURISDICTION. This Agreement shall be
interpreted and enforced in accordance with the laws of the State of Delaware,
without regard to the conflicts of law provisions thereof. The Company and
Director 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 Court of Chancery of the State of Delaware (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) waive any objection
to the laying of venue of any such action or proceeding in the Delaware Court,
and (iv) 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 otherwise inconvenient forum.
14. BINDING EFFECT. This Agreement shall be binding upon Director and upon
Corporation, its successors and assigns, and shall inure to the benefit of
Director, his heirs, personal representatives and assigns and to the benefit of
Corporation, its successors and assigns.
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15. AMENDMENT AND TERMINATION. No amendment, modification, termination or
cancellation of this Agreement shall be effective unless in writing signed by
both parties hereto.
16. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings of the parties relating
thereto.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and
as of the day and year first above written.
Accelerated Networks, Inc.
By:
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Xxxxxx Xxxxxxxx
Its Chief Executive Officer
DIRECTOR
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Name:
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