INDEMNIFICATION AGREEMENT
Exhibit
10.1
THIS
INDEMNIFICATION AGREEMENT,
made
and entered into as of this 8th day of July, 2008 (this “Agreement”), by and
between NU
HORIZONS ELECTRONICS CORP.,
a
Delaware corporation (the “Corporation”), and ______________
(“Indemnitee”):
WHEREAS,
highly
competent persons are becoming more reluctant to serve publicly-held
corporations as directors or as officers or in other capacities unless they
are
provided with adequate protection through insurance or adequate indemnification
against inordinate risks of claims and actions against them arising out of
their
service to, and activities on behalf of, such corporations; and
WHEREAS,
the
statutes and judicial duties regarding the duties of officers and directors
are
often difficult to apply, ambiguous or conflicting and therefore fail to provide
such directors and officers with adequate and reliable knowledge of legal risks
to which they are exposed or information regarding the proper course of action
to take; and
WHEREAS,
the
current impracticability of obtaining adequate insurance and the uncertainties
relating to indemnification have increased the difficulty of attracting and
retaining such persons; and
WHEREAS,
the
Board of Directors of the Corporation (the “Board of Directors”) has determined
that the difficulty in attracting and retaining such persons is detrimental
to
the best interests of the Corporation’s stockholders and that the Corporation
should act to assure such persons that there will be increased certainty of
such
protection in the future; and
WHEREAS,
the
Corporation believes it is unfair for the directors and officers to assume
the
risk of huge judgments and other expenses which may occur in cases in which
the
director or officer acted in good faith; and
WHEREAS,
it is
reasonable, prudent and necessary for the Corporation contractually to obligate
itself to indemnify such persons to the fullest extent permitted by applicable
law so that they will serve or continue to serve the Corporation free from
undue
concern that they will not be so indemnified; and
WHEREAS,
Indemnitee is willing to serve, continue to serve and/or to take on additional
service for or on behalf of the Corporation on the condition that he or she
be
so indemnified;
NOW,
THEREFORE,
in
consideration of the premises and the covenants contained herein, the
Corporation and Indemnitee do hereby covenant and agree as follows:
1. DEFINITIONS
FOR PURPOSES OF THIS AGREEMENT:
(a) “Change
in Control” means a change in control of the Corporation of a nature that would
be required to be reported in response to Item 5(f) of Schedule 14A of
Regulation 14A (or in response to any similar item or similar schedule or form)
promulgated under the Securities Exchange Act of 1934 (the “Act”), whether or
not the Corporation is then subject to such reporting requirement; provided,
however, that, without limitation, such a Change in Control shall be deemed
to
have occurred if (i) any “person” (as such term is used in Sections 13(d) and
14(d) of the Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3
under the Act), directly or indirectly, of securities of the Corporation
representing 20% or more of the combined voting power of the Corporation’s then
outstanding securities without the prior approval of at least two-thirds of
the
members of the Board of Directors in office immediately prior to such person
attaining such percentage interest; (ii) the Corporation is a party to a merger,
consolidation, sale of assets or other reorganization, or a proxy contest,
as a
consequence of which members of the Board of Directors in office immediately
prior to such transaction or event constitute less than two-thirds of the Board
of Directors thereafter; (iii) during any period of twenty-four (24) consecutive
months, individuals who at the beginning of such period constituted the Board
of
Directors (including for this purpose any new director whose election or
nomination for election by the Corporation’s stockholders was approved by a vote
of at least two-thirds of the directors then still in office who were directors
at the beginning of such period) cease for any reason to constitute at least
two-thirds of the Board of Directors; or (iv) the stockholders of the
Corporation approve a plan of complete liquidation of the Corporation or an
agreement for the sale or disposition by the Corporation (in one transaction
or
a series of transactions) of all or substantially all of the Corporation’s
assets.
(b) “Potential
Change in Control” shall be deemed to have occurred if (i) the Corporation
enters into an agreement, the consummation of which would result in the
occurrence of a Change in Control; (ii) a person (including the Corporation)
publicly announces a legitimate intention to take or to consider taking actions
which if consummated would constitute a Change in Control; (iii) any person,
other than a trustee or other fiduciary holding securities under an employee
benefit plan of the Corporation or a corporation owned, directly or indirectly,
by the shareholders of the Corporation in substantially the same proportions
as
their ownership of stock of the Corporation, who is or becomes the beneficial
owner, directly or indirectly, of securities of the Corporation representing
9.5% or more of the combined voting power of the Corporation’s then outstanding
Voting Securities, increases his beneficial ownership of such securities by
five
percentage points or more over the percentage so owned by such person; or (iv)
the Board of Directors adopts a resolution to the effect that, for purposes
of
this Agreement, a Potential Change in Control has occurred.
(c) “Code”
means the Delaware General Corporation Law, as amended.
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(d) “Corporate
Status” describes the status of a person who (i) is or was or has agreed to
become a director, officer, employee or other fiduciary of the Corporation
or a
Subsidiary, or (ii) is or was serving at the request or for the convenience
of,
or representing the interests of the Corporation or a Subsidiary as a director,
officer, employee or other fiduciary of a foreign or domestic corporation,
partnership, joint venture, trust or other enterprise.
(e) “Disinterested
Director” means a director of the Corporation who is not and was not a party to
the Proceeding in respect of which indemnification is sought by
Indemnitee.
(f) “Proceeding”
includes any threatened, pending or completed inquiry, action, suit,
arbitration, alternate dispute resolution mechanism, investigation,
administrative hearing or any other proceeding, whether civil, criminal,
administrative or investigative, including
those in which the Indemnitee is merely a witness by reason of the Indemnitee’s
Corporate Status, except one
initiated by the Indemnitee pursuant to Section 12(a) of this Agreement to
enforce Indemnitee’s rights under this Agreement.
(g) “Expenses”
includes all direct and indirect costs of any type or nature whatsoever
(including, without limitation, all attorneys’, witness and other professional
fees and related disbursements, other out-of-pocket costs and reasonable
compensation for time spent by the Indemnitee for which he is not otherwise
compensated by the Corporation or any third party (i) for any period during
which Indemnitee is not an agent, in the employment of, or providing services
for compensation to, the Corporation or any Subsidiary; and (ii) the rate of
compensation and estimated time involved is approved in advance by the
Disinterested Directors, actually and reasonably incurred by the Indemnitee
in
connection with either the investigation, defense or appeal of a Proceeding
(including amounts paid in settlement by or on behalf of Indemnitee), or the
prosecution of an action or proceeding, including appeals, to establish or
enforce a right to indemnification under this Agreement. Expenses as defined
herein, shall not include any judgments, fines or penalties actually levied
against the Indemnitee.
(h) “Independent
Counsel” means (i) any law firm or member of a law firm which the Board of
Directors may designate from time to time provided that the law firm or member
of the law firm so designated is experienced in matters of corporation law
and
neither presently is, nor in the past five years has been, retained to
represent: (A) the Corporation or Indemnitee in any matter material to either
such party, or (B) any other party to the Proceeding giving rise to a claim
for
indemnification 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 Corporation or Indemnitee in an action to determine
Indemnitee’s rights under this Agreement arising on or after the date of this
Agreement, regardless of when the Indemnitee’s act or failure to act
occurred.
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(i) “Subsidiary”
means any corporation, partnership, limited liability company, joint venture,
trust or other enterprise of which the Corporation owns (either directly or
through or together with another Subsidiary of the Corporation) either
(i) a general partner, managing member or other similar interest or
(ii) (A) 50% or more of the voting power of the voting capital equity
interests of such corporation, partnership, limited liability company, joint
venture or other enterprise, or (B) 50% or more of the outstanding voting
capital stock or other voting equity interests of such corporation, partnership,
limited liability company, joint venture or other enterprise.
2. SERVICES
BY INDEMNITEE.
Indemnitee
agrees to serve or continue to serve as an executive officer of the Corporation
or any Subsidiary so long as he is duly appointed or elected and qualified
in
accordance with the applicable provisions of the By-Laws of the Corporation
or
the By-Laws of any Subsidiary or until such time as he tenders his resignation
in writing. This Agreement shall not impose any obligation on the Indemnitee
or
the Corporation to continue the Indemnitee’s position with the Corporation
beyond any period otherwise applicable, nor to create any right to continued
employment of the Indemnitee in any capacity.
3. GENERAL.
The
Corporation shall indemnify, and shall advance Expenses to Indemnitee as
provided in this Agreement and to the fullest extent permitted by
law.
4. PROCEEDINGS
OTHER THAN PROCEEDINGS BY OR IN THE RIGHT
OF THE CORPORATION.
Indemnitee
shall be entitled to the rights of indemnification provided in this Section
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if, by reason of Indemnitee’s Corporate Status, he or she is, or is threatened
to be made, a party to or otherwise involved in any threatened,
pending or completed
Proceeding, other than a Proceeding by or in the right of the Corporation.
Pursuant to this Section 4, Indemnitee shall be indemnified against Expenses
to
the fullest extent permitted by the Code, as the same may be amended from time
to time (but, only to the extent that such amendment permits Indemnitee to
broader indemnification rights than the Code permitted prior to adoption of
such
amendment).
5. PROCEEDINGS
BY OR IN THE RIGHT OF THE CORPORATION.
Indemnitee
shall be entitled to the rights of indemnification provided in this Section
5,
if, by reason of his Corporate Status, he is, or is threatened to be made,
a
party to or otherwise involved in any threatened,
pending or completed Proceeding brought by or in the right of the Corporation
to
procure a
judgment in its favor. Pursuant to this Section, Indemnitee shall be indemnified
against Expenses to
the
fullest extent permitted by the Code, as the same may be amended from time
to
time (but, only to the extent that such amendment permits Indemnitee to broader
indemnification rights than the Code permitted prior to adoption of such
amendment).
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6.
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INDEMNIFICATION
FOR EXPENSES OF SUCCESSFUL PARTY AND PARTIAL
INDEMNIFICATION.
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Notwithstanding
any other provision of this Agreement, to the extent that Indemnitee is, by
reason of his or her Corporate Status, a party to and is successful, on the
merits or otherwise, in any Proceeding, he or she shall be indemnified against
all Expenses actually incurred by Indemnitee or on Indemnitee’s behalf in
connection therewith. If Indemnitee is entitled under any provision of this
Agreement to indemnification by the Corporation for some or a portion of any
Expenses actually and reasonably incurred by Indemnitee in the investigation,
defense, settlement or appeal of any Proceeding, but is precluded by applicable
law or the specific terms of this Agreement from indemnification for the total
amount thereof, the Corporation shall nevertheless indemnify Indemnitee for
the
portion thereof to which Indemnitee is entitled. For purposes of this Section,
but without limitation, the termination of any claim, issue or matter in such
a
Proceeding by dismissal or withdrawal, with or without prejudice, shall be
deemed to be a successful result as to such claim, issue or matter.
7. ADVANCE
OF EXPENSES.
The
Corporation shall advance all reasonable Expenses incurred by or on behalf
of
Indemnitee in connection with any Proceeding within twenty days after the
receipt by the Corporation of a statement or statements from Indemnitee
requesting such advance or advances from time to time, whether prior to or
after
final disposition of such Proceeding. Such statement or statements shall
evidence or reflect the Expenses incurred by Indemnitee and shall include or
be
preceded or accompanied by an undertaking by or on behalf of Indemnitee to
repay
any Expenses advanced
if and to the extent it is determined ultimately in a court of competent
jurisdiction in a final judgment, not subject to appeal, that Indemnitee is
not
entitled to be indemnified against such Expenses.
Advances
shall be unsecured, interest free and without regard to Indemnitee’s ability to
repay the Expenses. Advances shall include any and all Expenses actually and
reasonably incurred by Indemnitee pursuing an action to enforce Indemnitee’s
right to indemnification under this Agreement or otherwise and this right of
advancement, including Expenses incurred preparing and forwarding statements
to
the Corporation to support the advances claimed. Indemnitee acknowledges that
the execution and delivery of this Agreement shall constitute an undertaking
providing that Indemnitee shall, to the fullest extent required by law, repay
the advance if and to the extent that it is ultimately determined by a court
of
competent jurisdiction in a final judgment, not subject to appeal, that
Indemnitee is not entitled to be indemnified by the Corporation in accordance
with the terms of this Agreement. The right to advances under this Section
shall
continue until final disposition of any Proceeding, including any appeal
therein. This Section 7 shall not apply to any claim made by Indemnitee for
which indemnity is excluded pursuant to Section 15.
8. PROCEDURE
FOR DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION.
(a) To
obtain
indemnification under this Agreement, Indemnitee shall submit to the Corporation
a written request, including therein or therewith such documentation and
information as is reasonably available to Indemnitee and is reasonably necessary
to determine whether and to what extent Indemnitee is entitled to
indemnification. Promptly upon receipt of such a request for indemnification,
the Secretary of the Corporation shall advise the Board of Directors in writing
that Indemnitee has requested indemnification.
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(b) Upon
written request by Indemnitee for indemnification pursuant to Section 8(a)
hereof, a determination, if required by applicable law, with respect to
Indemnitee’s entitlement thereto shall be made in the specific case as follows:
(i) if a Change in Control shall have occurred, by Independent Counsel in a
written opinion to the Board of Directors, a copy of which shall be delivered
to
Indemnitee (unless Indemnitee shall request that such determination be made
by
the Board of Directors, in which case the determination shall be made in the
manner provided below in clauses (ii) or (iii)); (ii) if a Change in Control
shall not have occurred, (A) by the Board of Directors by a majority vote of
a
quorum consisting of Disinterested Directors, or (B) if a quorum of the Board
of
Directors consisting of Disinterested Directors is not obtainable or, even
if
obtainable, if such quorum of Disinterested Directors so directs, by Independent
Counsel in a written opinion to the Board of Directors, a copy of which shall
be
delivered to Indemnitee; (iii) as provided in Section 9(b) of this Agreement;
and, if it is determined that Indemnitee is entitled to indemnification, payment
to Indemnitee shall be made within ten (10) days after such determination.
Indemnitee shall 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
shall be borne by the Corporation (regardless of the determination as to
Indemnitee’s entitlement to indemnification) and the Corporation hereby
indemnifies and agrees to hold Indemnitee harmless therefrom.
(c) In
the
event the determination of entitlement to indemnification is to be made by
Independent Counsel pursuant to Section 8(b) of this Agreement, and no counsel
shall have been designated previously by the Board of Directors or the
Independent Counsel so designated is unwilling or unable to serve, then, (i)
if
no Change in Control shall have occurred, the Independent Counsel shall be
selected by the Board of Directors and the Corporation shall give written notice
to Indemnitee advising him of the identity of the Independent Counsel so
selected; (ii) if a Change in Control shall have occurred, the Independent
Counsel shall be selected by Indemnitee (unless Indemnitee shall request that
such selection be made by the Board of Directors, in which event the preceding
sentence shall apply), and Indemnitee shall give written notice to the
Corporation advising it of the identity of the Independent Counsel so selected.
In either event, Indemnitee or the Corporation, as the case may be, may, within
7 days after such written notice of selection shall have been given, deliver
to
the Corporation or to Indemnitee, as the case may be, a written objection to
such selection. Such objection may be asserted only on the ground that the
Independent Counsel so selected does not meet the requirement of “Independent
Counsel” as defined in this Agreement, and the objection shall set forth with
particularity the factual basis of such assertion. If such written objection
is
made, the Independent Counsel so selected may not serve as Independent Counsel
unless and until a court has determined that such objection is without merit.
If, within 20 days after submission by Indemnitee of a written request for
indemnification pursuant to Section 8(a) hereof, no Independent Counsel shall
have been selected or if selected, shall have been objected to, in accordance
with this Section 8(c), either the Corporation or Indemnitee may petition the
Court of Chancery of the State of Delaware or other court of competent
jurisdiction for resolution of any objection which shall have been made by
the
Corporation or Indemnitee to the other’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 an objection is favorably resolved or the person so appointed shall
act
as Independent Counsel under Section 8(b) hereof. The Corporation shall pay
any
and all reasonable fees and expenses of Independent Counsel incurred by such
Independent Counsel in connection with the performance of his or her
responsibilities pursuant to Section 8(b) hereof, and the Corporation shall
pay
all reasonable fees and Expenses incident to the implementation of the
procedures of this Section 8(c), regardless of the manner in which such
Independent Counsel was selected or appointed. Upon the due commencement of
any
judicial proceeding or arbitration pursuant
to
Section 12 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).
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9. PRESUMPTIONS
AND EFFECT OF CERTAIN PROCEEDINGS.
(a) If
a
Change in Control shall have occurred, in making a determination with respect
to
entitlement to indemnification hereunder, the person, persons or entity making
such determination shall presume that the Indemnitee is entitled to
indemnification under this Agreement if the Indemnitee has submitted a request
for indemnification in accordance with Section 8(a) of this Agreement, and
the
Corporation shall have the burden of proof to overcome that presumption in
connection with the making of any determination contrary to that presumption
by
any person, persons or entity.
(b) If
within
30 days after receipt by the Corporation of the request for indemnification,
the
Board shall not have made a determination under Section 8(b)(i) or 8(b)(ii)(A)
with regard thereto, the requisite determination of entitlement to
indemnification shall be deemed to have been made in favor of the Indemnitee
who
then shall be entitled to such indemnification. The foregoing provisions of
this
Section 9(b) shall not apply if the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to Section 8(b)(i)
or 8(b)(ii)(B) of this Agreement.
(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 the Indemnitee to
indemnification.
10. ASSUMPTION
OF DEFENSE.
In
the
event the Corporation shall be obligated to pay the Expenses of any Proceeding
against the Indemnitee, the Corporation, if appropriate, shall be entitled
to
assume the defense of such Proceeding, with counsel reasonably acceptable to
the
Indemnitee, upon the delivery to the Indemnitee of written notice of its
election to do so. After delivery of such notice, approval of such counsel
by
the Indemnitee and the retention of such counsel by the Corporation, the
Corporation will not be liable to the Indemnitee under this Agreement for any
fees of counsel subsequently incurred by the Indemnitee with respect to the
same
Proceeding, provided that (i) the Indemnitee shall have the right to employ
his
or her counsel in such Proceeding at the Indemnitee’s expense; and (ii) if (a)
the employment of counsel by the Indemnitee has been previously authorized
in
writing by the Corporation, (b) the Corporation shall have reasonably concluded
that there may be a conflict of interest between the Corporation and the
Indemnitee in the conduct of any such defense, or (c) the Corporation shall
not,
in fact, have employed counsel to assume the defense of such Proceeding, the
fees and Expenses of the Indemnitee’s counsel shall be subject to the
indemnification and advancement of Expenses provisions of this
Agreement.
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11. ESTABLISHMENT
OF A TRUST.
(a) In
the
event of a Potential Change in Control, the Corporation, upon written request
by
the Indemnitee, shall create a trust for the benefit of the Indemnitee and
from
time to time upon written request of the Indemnitee shall fund such trust in
an
amount sufficient to satisfy any and all Expenses which at the time of each
such
request it is reasonably anticipated will be incurred in connection with a
Proceeding for which the Indemnitee is entitled to rights of indemnification
under Section 4 or 5 hereof, and any and all judgments, fines, penalties and
settlement amounts of any and all proceedings for which the Indemnitee is
entitled to rights of indemnification under Section 4 or 5 from time to time
actually paid or claimed, reasonably anticipated or proposed to be paid. The
amount or amounts to be deposited in the trust pursuant to the foregoing funding
obligation shall be determined by the party who would be required to make the
determination of the Indemnitee’s right to indemnification under Section 8(b)
hereof (the “Reviewing Party”). The terms of the trust shall provide that upon a
Change in Control (i) the trust shall not be revoked or the principal thereof
invaded, without the written consent of the Indemnitee, (ii) the trustee shall
advance, within two business days of a request by the Indemnitee, any and all
Expenses to the Indemnitee (and the Indemnitee hereby agrees to reimburse the
trust under the circumstances under which the Indemnitee would be required
to
reimburse the Corporation under Section 7 hereof), (iii) the trust shall
continue to be funded by the Corporation in accordance with the funding
obligation set forth above, (iv) the trustee shall promptly pay to the
Indemnitee all amounts for which the Indemnitee shall be entitled to
indemnification pursuant to this Agreement or otherwise, and (v) all unexpended
funds in such trust shall revert to the Corporation upon a final determination
by the Reviewing Party or a court of competent jurisdiction, as the case may
be,
that Indemnitee has been fully indemnified under the terms of this Agreement.
The trustee shall be an institutional trustee with a highly regarded reputation
chosen by the Indemnitee. Nothing in this Section 11 shall relieve the
Corporation of any of its obligations under this Agreement.
(b) Nothing
contained in this Section 11 shall prevent the Board of Directors of the
Corporation in its discretion at any time and from time to time, upon request
of
the Indemnitee, from providing security to the Indemnitee for the Corporation’s
obligations hereunder through an irrevocable line of credit, funded trust as
described in Section (a) above, or other collateral. Any such security, once
provided to the Indemnitee, may not be revoked or released without the prior
consent of the Indemnitee.
12. REMEDIES
OF INDEMNITEE.
(a) In
the
event that any one or more of the following events shall have occurred: (i)
a
determination is made pursuant to Section 8 of this Agreement that Indemnitee
is
not entitled to indemnification under this Agreement; (ii) Expenses are not
advanced timely in accordance with Section 7 of this Agreement; (iii) the
determination of entitlement to indemnification is to be made by Independent
Counsel pursuant to Section 8(b) of this Agreement and such determination shall
not have been made and delivered in a written opinion within 90 days after
receipt by the Corporation of the request for indemnification; (iv) payment
of
indemnification is not made pursuant to Section 6 of this Agreement within
ten
days after receipt by the Corporation of a written request therefor; (v) payment
of indemnification is not made within ten days after a determination has been
made that Indemnitee is entitled to indemnification or such determination is
deemed to have been made pursuant to Section 9(b) of this Agreement; and/or
(vi)
the Corporation fails to comply with its obligations under Section 11(a) with
regard to the establishment or funding of a trust for Expenses, the Indemnitee
shall be entitled to an adjudication of his entitlement to such indemnification,
advancement of Expenses or the establishment and funding of the trust in an
appropriate court of the State of Delaware, or in any other court of competent
jurisdiction. Alternatively, Indemnitee, at his or her option, may seek an
award
in arbitration to be conducted by a single arbitrator pursuant to the rules
of
the American Arbitration Association. Indemnitee shall commence such proceeding
seeking an adjudication or an award in arbitration within 180 days following
the
date on which Indemnitee first has the right to commence such proceeding
pursuant to this Section 12. The Corporation shall not oppose Indemnitee’s right
to seek any such adjudication or award in arbitration.
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(b) Whenever
a determination is made pursuant to Section 8 of this Agreement that Indemnitee
is not entitled to indemnification, the judicial proceeding or arbitration
commenced pursuant to this Section 12 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. If a Change in Control shall have
occurred, the Corporation shall have the burden of proving that Indemnitee
is
not entitled to indemnification or advancement of Expenses, as the case may
be,
in any judicial proceeding or arbitration commenced pursuant to this Section
12.
(c) If
a
determination shall have been made or deemed to have been made pursuant to
Section 8 of this Agreement that Indemnitee is entitled to indemnification,
the
Corporation shall be bound by such determination in any judicial proceeding
or
arbitration commenced pursuant to this Section 12 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) The
Corporation shall be precluded from asserting in any judicial proceeding or
arbitration commenced pursuant to this Section 12 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 Corporation
is bound by all the provisions of this Agreement.
(e) In
the
event that Indemnitee, pursuant to this Section 12 seeks a judicial adjudication
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 Corporation, and shall be indemnified by the Corporation against,
any
and all expenses (of the types described in the definition of Expenses in this
Agreement) actually incurred by Indemnitee in connection with obtaining such
judicial adjudication or arbitration, but only if he or she prevails therein.
If
it shall be determined in said judicial adjudication or arbitration that
Indemnitee is entitled to receive part but not all of the indemnification or
advancement of Expenses sought, the Expenses incurred by Indemnitee in
connection with such judicial adjudication or arbitration shall be appropriately
prorated.
13. NON-EXCLUSIVITY;
DURATION OF AGREEMENT; INSURANCE: SUBROGATION.
(a) The
rights of indemnification and to receive 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 Corporation’s
Certificate of Incorporation or By-Laws, any other agreement, a vote of
stockholders or a resolution of directors, or otherwise. This Agreement shall
continue until and terminate upon the later of: (a) 10 years after the date that
Indemnitee shall have ceased to serve as an officer or director of the
Corporation, or (b) the final termination of all pending Proceedings in respect
of which Indemnitee is granted rights of indemnification or advancement of
Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to
Section 12 of this Agreement relating thereto.
(b) (i) To
the
extent that the Corporation maintains an insurance policy or policies providing
liability insurance for directors and officers of the Corporation, Indemnitee
shall be covered by such policy or policies in accordance with the terms thereof
to the maximum extent of the coverage available for any such director, officer,
employee or agent under such policy or policies. The Corporation shall take
all
necessary or appropriate action to cause such insurers to pay on behalf of
the
Indemnitee all amounts payable as a result of the commencement of a proceeding
in accordance with the terms of such policy.
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(ii) Notwithstanding
the fact that the Indemnitee shall have ceased to serve as an officer or
director of the Corporation, the Corporation will continue to provide officers
and directors liability insurance for Indemnitee from the date of termination
of
such service for a period of three years, which insurance will be on terms
no
less favorable than that provided to the current officers and directors,
provided that the Corporation provides officers and directors liability
insurance to its current officers and directors, and provided further that
the
annual premiums for the liability insurance to be provided to the Indemnitee
do
not exceed by more than 50% the premium charged for the coverage available
for
any of the Corporation’s current officers and directors. The foregoing shall not
limit the Company’s ability to purchase a tail insurance policy for the benefit
of the Indemnitee for a period exceeding three years in the event of a Change
in
Control or other extraordinary transaction.
(c) In
the
event of any payment under this Agreement, the Corporation 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 Corporation to bring suit to enforce such rights.
(d) The
Corporation shall not be liable under this Agreement to make any payment of
amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee
otherwise actually has received such payment under any insurance policy,
contract, agreement or otherwise.
14. 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 (b) 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 by the provision held invalid, illegal
or
unenforceable.
15. EXCEPTION
TO RIGHT OF INDEMNIFICATION OR ADVANCEMENT
OF EXPENSES.
(a) Any
provision herein to the contrary notwithstanding, the Corporation shall not
be
obligated pursuant to the terms of this Agreement to indemnify Indemnitee on
account of any Proceeding with respect to (i) remuneration paid to
Indemnitee if it is determined by final judgment or other final adjudication
that such remuneration was in violation of law (and, in this respect, both
the
Corporation and Indemnitee 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, as indicated in Section 15(d) below);
(ii) a final judgment rendered against Indemnitee for an accounting,
disgorgement or repayment of profits made from the purchase or sale by
Indemnitee of securities of the Corporation against Indemnitee or in connection
with a settlement by or on behalf of Indemnitee to the extent it is acknowledged
by Indemnitee and the Corporation that such amount paid in settlement resulted
from Indemnitee's conduct from which Indemnitee received monetary personal
profit, pursuant to the provisions of Section 16(b) of the Securities
Exchange Act of 1934, as amended, or other provisions of any federal, state
or
local statute or rules and regulations thereunder; (iii) a final judgment
or other final adjudication not subject to appeal that Indemnitee’s conduct was
in bad faith, knowingly fraudulent or deliberately dishonest or constituted
willful misconduct (but only to the extent of such specific determination);
or
(iv) on account of conduct that is established by a final judgment not subject
to appeal as constituting a breach of Indemnitee’s duty of loyalty to the
Corporation or resulting in any personal profit or advantage to which Indemnitee
is not legally entitled. For purposes of the foregoing sentence, a final
judgment or other adjudication not subject to appeal may be reached in either
the underlying Proceeding in connection with which indemnification is sought
or
a separate proceeding or action to establish rights and liabilities under this
Agreement.
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(b) Any
provision herein to the contrary notwithstanding, the Corporation shall not
be
obligated to indemnify or advance Expenses to Indemnitee with respect to
proceedings or claims initiated or brought by Indemnitee against the Corporation
or its directors, officers, employees or other agents and not by way of defense,
except (i) with respect to Proceedings brought to establish or enforce a right
to indemnification under this Agreement or under any other agreement, provision
in the By-Laws or Certificate of Incorporation or applicable law, or (ii) with
respect to any other Proceeding initiated by Indemnitee that is either approved
by the Board of Directors or in which Indemnitee’s participation is required by
applicable law. However, indemnification or advancement of Expenses may be
provided by the Corporation in specific cases if the Board of Directors
determines it to be appropriate.
(c) Any
provision herein to the contrary notwithstanding, the Corporation shall not
be
obligated pursuant to the terms of this Agreement to indemnify Indemnitee under
this Agreement for any amounts paid in settlement of a Proceeding effected
without the Corporation’s written consent. Neither the Corporation nor
Indemnitee shall unreasonably withhold consent to any proposed settlement;
provided, however, that the Corporation may in any event decline to consent
to
(or to otherwise admit or agree to any liability for indemnification hereunder
in respect of) any proposed settlement if the Corporation is also a party in
such Proceeding and determines in good faith that such settlement is not in
the
best interests of the Corporation and its stockholders.
(d) Any
provision herein to the contrary notwithstanding, the Corporation shall not
be
obligated pursuant to the terms of this Agreement to indemnify Indemnitee or
otherwise act in violation of any undertaking appearing in and required by
the
rules and regulations promulgated under the Securities Act of 1933, as amended
(the “Act”), or in any registration statement filed with the SEC under the Act.
Indemnitee acknowledges that paragraph (h) of Item 512 of Regulation S-K
currently generally requires the Corporation to undertake in connection with
any
registration statement filed under the Act to submit the issue of the
enforceability of Indemnitee’s rights under this Agreement in connection with
any liability under the Act on public policy grounds to a court of appropriate
jurisdiction and to be governed by any final adjudication of such issue.
Indemnitee specifically agrees that any such undertaking shall supersede the
provisions of this Agreement and to be bound by any such undertaking. A
determination that Indemnitee is not entitled to indemnification pursuant to
this Section 15(d) may be made by the Corporation upon receipt of a written
opinion from Independent Counsel, a copy of which opinion shall be delivered
to
Indemnitee. In the event Indemnitee disputes such opinion, Indemnitee shall
in
any event be entitled to seek enforcement of its rights hereunder pursuant
to
Section 12 and Indemnitee shall be indemnified in connection with costs in
seeking such enforcement.
16. HEADINGS.
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.
17. MODIFICATION
AND WAIVER.
No
supplement, modification or amendment of this Agreement shall be binding unless
executed in writing by both of the parties hereto. 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 the Code,
whether by statute or judicial decision, permits greater indemnification or
advancement of expenses than would be afforded currently under the Corporation’s
Certificate of Incorporation, By-Laws and 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 waiver of any of the provisions of
this
Agreement shall be deemed or shall constitute a waiver of any other provision
hereof (whether or not similar) nor shall such waiver constitute a continuing
waiver.
11
18. SURVIVAL
OF RIGHTS.
Indemnitee’s rights hereunder shall continue after Indemnitee has ceased acting
as an agent of the Corporation and shall inure to the benefit of the heirs,
executors, administrators and assigns of Indemnitee. The obligations and duties
of the Corporation to Indemnitee under this Agreement shall be binding on the
Corporation and its successors and assigns. The Corporation shall require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business or assets of the
Corporation, expressly to assume and agree to perform this Agreement in the
same
manner and to the same extent that the Corporation would be required to perform
if no such succession had taken place. 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, by
Indemnitee shall not prevent the concurrent assertion or employment of any
other
right or remedy by Indemnitee.
19. NOTICE
BY INDEMNITEE.
Indemnitee
agrees promptly to notify the Corporation in writing upon being served with
any
summons, citation, subpoena, complaint, indictment, information or other
document relating to any Proceeding or matter which may be subject to
indemnification or advancement of Expenses covered hereunder; provided, however,
that the failure to give any such notice shall not disqualify the Indemnitee
from indemnification hereunder.
20. NOTICES.
All
notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given if (i) delivered by hand
to
the party to whom said notice or other communication shall have been directed,
or (ii) mailed by certified or registered mail with postage
prepaid.
(a) If
to
Indemnitee, to:
[___________]
(b) If
to the
Corporation, to:
00
Xxxxxx
Xxxx
Xxxxxxxx,
XX 00000
or
to
such other address as may have been furnished to Indemnitee by the Corporation
or to the Corporation by Indemnitee, as the case may be.
12
21. GOVERNING
LAW.
The
parties agree that this Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of Delaware.
22. COUNTERPARTS.
This
Agreement, and any amendments thereto, may be executed and delivered 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 but one and the same
Agreement. For purposes of this Agreement, a photographic, photostatic,
facsimile, electronic, or similar reproduction and transmission by (or on behalf
of) a party hereto on the signature page of this Agreement, any amendment to
this Agreement, or other document or writing, as applicable, will have the
same
effect as that party signing and delivering that signature page in person to
the
applicable recipient thereof.
23. ENTIRE
AGREEMENT.
This
Agreement constitutes the entire agreement between the parties with respect
to
the subject matter hereof and supersedes all prior agreements, understandings
and negotiations, written and oral, between the parties with respect to the
subject matter of this Agreement; provided, however, that this Agreement is
a
supplement to and in furtherance of the Corporation’s Certificate of
Incorporation, By-Laws, the Code and any other applicable law, and shall not
be
deemed a substitute therefor, and does not diminish or abrogate any
rights of Indemnitee thereunder.
[SIGNATURE
PAGE
FOLLOWS THIS PAGE]
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IN
WITNESS WHEREOF,
the
parties hereto have executed this Agreement on the day and year first above
written.
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ATTEST:
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_____________________________
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By:_______________________________
|
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INDEMNITEE:
|
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___________________________________
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[___________________]
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