EXHIBIT 10.9
INDEMNIFICATION AGREEMENT
THIS AGREEMENT is made as of the ___ day of ___________, between IRVINE
SENSORS CORPORATION, a Delaware corporation (the "Company"), and
________________________________________________________, an officer, member of
the Board of Directors and/or key employee of the Company or a subsidiary
thereof ("Indemnitee"), with reference to the following facts:
RECITALS:
A. Indemnitee is an officer and/or member of the Board of
Directors of the Company or a subsidiary thereof and in such
capacity is performing a valuable service for the Company.
B. Recent developments with respect to the terms and
availability of directors' and officers' liability insurance
("D & O Insurance") and with respect to the application,
amendment and enforcement of statutory and by-law
indemnification provisions generally have raised questions
concerning the adequacy and reliability of the protection
afforded to officers and directors thereby.
C. The Company and Indemnitee further recognize the substantial
increase in corporate litigation subjecting officers and
directors to expensive litigation risks at the same time as
D & O Insurance has been severely limited.
D. Indemnitee does not regard the current protection available
as adequate given the present circumstances, and Indemnitee
and other officers and directors of the Company may not be
willing to serve as such without adequate protection.
E. In order to resolve such questions and thereby induce
Indemnitee to serve as an officer and/or director of the
Company, the Company has determined and agreed to enter into
this contract with Indemnitee, and the Board of Directors of
the Company has approved the same.
NOW, THEREFORE, in consideration of Indemnitee's continued service as an
officer and/or director after the date hereof, the parties hereto hereby agree
as follows:
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AGREEMENT:
1. Indemnification of Indemnitee. The Company hereby agrees to hold
harmless and indemnify Indemnitee to the full extent authorized or permitted by
the General Corporation Law of the State of Delaware, or by any amendment
thereof or other statutory provision authorizing or permitting such
indemnification which is adopted after the date hereof.
2. Additional Indemnity. Subject only to the exclusions set forth in
section 3 hereof, the Company hereby further agrees to hold harmless and
indemnify Indemnitee:
(a) Against any and all expenses (including attorneys' fees),
witness fees, damages, judgments, fines and amounts paid in
settlement actually and reasonably incurred by Indemnitee in
connection with any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, arbitrational,
administrative or investigative or in connection with any
appeal related thereto (including an action by or in the
right of the Company), and whether in law, equity or
otherwise, to which Indemnitee is, was or at any time
becomes a party, or is threatened to be made a party or
otherwise, by reason of the fact that Indemnitee is, was or
at any time becomes a director, officer, employee or agent
of the Company, or is or was serving or at any time serves
at the request of the Company as a director, officer,
employee or agent or another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise;
and
(b) Otherwise to the fullest extent as may be provided to
Indemnitee by the Company under the provisions of Article X
of the Certificate of Incorporation of the Company, Article
VII of the By-laws of the Company and the Delaware General
Corporation law.
3. Limitations on Additional Indemnity. No indemnity pursuant to section 2
hereof shall be paid by the Company:
(a) in respect to remuneration paid to Indemnitee if it shall be
determined by a final judgment or other final adjudication
that such remuneration was in violation of law;
(b) on account of any suit in which judgment is rendered against
Indemnitee for an accounting of profits made from the
purchase or sale by Indemnitee of securities of the Company
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;
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(c) on account of Indemnitee's conduct which is finally adjudged
to have been knowingly fraudulent, deliberately dishonest or
willful misconduct;
(d) on account of Indemnitee's conduct on which it is finally
adjudged that Indemnitee derived an improper personal
benefit;
(e) if a final decision by a Court having jurisdiction in the
matter shall determine that such indemnification is not
lawful;
(f) under the circumstances described in section 6.2 hereof; or
(g) in respect of any action brought by Indemnitee unless (i)
the bringing of said action shall have been approved by the
Board of Directors of the Company, (ii) such indemnification
is expressly required to be made by law, (iii) such
indemnification is provided by the Company, in its sole
discretion, pursuant to the powers vested in the Company
under the Delaware General Corporation law, or (iv) the
proceeding is initiated pursuant to section 4.2 hereof.
4. Advancement of Expenses; Indemnification Procedure.
4.1. Expenses incurred by Indemnitee in defending a civil or criminal
action, suit or proceeding referenced in section 2 hereof shall be paid by the
Company in advance of the final disposition of such action, suit or proceeding
at the written request of Indemnitee, provided Indemnitee undertakes to repay
such amount to the extent that it is ultimately determined that Indemnitee is
not entitled to indemnification.
4.2. Any indemnification and advances provided for in section 1,
section 2 or section 4.1 hereof shall be made no later than 45 days after
receipt of the written request of Indemnitee, and Indemnitee shall be deemed
entitled to indemnification in accordance with said request, unless a reasonable
and good faith determination is made within said 45-day period by (i) the Board
of Directors by a majority vote of a quorum consisting of directors who are not
parties to such proceeding, (ii) if such a quorum is not obtainable, or, even if
obtainable, a quorum of disinterested directors so directs, by independent legal
counsel in a written opinion or (iii) by the Company's shareholders, that the
facts known to the decision-making party at the time such determination is made
demonstrate clearly and convincingly that Indemnitee is not entitled to
indemnification because his conduct falls within one of the exceptions set forth
in section 3 hereof or he is otherwise not entitled to indemnification as a
matter of law.
5. Continuation of Indemnity. All agreements and obligations of the
Company contained herein shall continue during the period Indemnitee is a
director, officer, employee or agent of the Company (or is or was serving at the
request of the Company as a director, officer, employee or agent of another
company, partnership, joint venture, trust, employee benefit plan or
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other enterprise) and shall continue thereafter so long as Indemnitee shall be
subject to any possible claim or threatened, pending or completed action, suit
or proceeding, whether civil, criminal, arbitrational, administrative or
investigative, or in connection with any appeal related thereto, and whether in
law, equity or otherwise, by reason of the fact that Indemnitee was an officer,
director and/or key employee of the company or serving in any other capacity
referred to herein.
6. Notification and Defense of Claim.
6.1. Promptly after receipt by Indemnitee of notice of the
commencement of any action, suit or proceeding, Indemnitee will, if a claim in
respect thereof is to be made against the Company under this Agreement, notify
the Company of the commencement thereof; but the omission so to notify the
Company will not relieve it from any liability which it may have to Indemnitee
otherwise than under this Agreement. With respect to any such action, suit or
proceeding as to which Indemnitee notifies the Company of the commencement
thereof:
(a) the Company will be entitled to participate therein at
its own expense; and
(b) except as otherwise provided below, to the extent that
it may wish, the Company jointly with any other
indemnifying party similarly notified will be entitled
to assume the defense thereof, with counsel
satisfactory to Indemnitee. After notice from the
Company to Indemnitee of its election so to assume the
defense thereof, the Company 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 its counsel in such action, suit or proceeding
but the fees and expenses of such counsel incurred
after notice from the Company 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 by the Company, (ii) Indemnitee shall
have reasonably concluded that there may be a conflict
of interest between the Company and Indemnitee in the
conduct of the defense of such action or (iii) the
Company shall not in fact have employed counsel to
assume the defense of such action, in each of which
cases the fees and expenses of counsel shall be at the
expense of the Company. The Company shall not be
entitled to assume the defense of any action, suit or
proceeding brought by or on behalf of the Company or as
to which Indemnitee shall have made the conclusion
provided for in (ii) above.
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6.2. The Company shall not be liable to indemnify Indemnitee under
this Agreement for any amounts paid in settlement of any action or claim
effected without its written consent, which shall not be unreasonably withheld.
The Company shall not settle any action or claim in any manner which would
impose any penalty or limitation on Indemnitee without Indemnitee's written
consent, which shall be given or withheld in Indemnitee's sole discretion.
7. Enforcement.
7.1. The Company expressly confirms and agrees that it has entered
into this Agreement and assumed the obligations imposed on the Company hereby in
order to induce Indemnitee to continue as an officer, director and/or key
employee of the Company, and acknowledges that Indemnitee is relying upon this
Agreement in continuing in such capacity.
7.2. Any right to indemnification or advances granted by this
Agreement to Indemnitee shall be enforceable by or on behalf of Indemnitee in
the forum in which the proceeding is or was pending, or, if such forum is not
available or a determination is made that such forum is not convenient, in any
court of competent jurisdiction if (i) the claim for indemnification or advances
is denied, in whole or in part, or (ii) no disposition of such claim is made
within ninety (90) days of request therefor. In the event Indemnitee is required
to bring any action to enforce rights or to collect moneys due under this
Agreement and is successful, in whole or in part, in such action, the Company
shall reimburse Indemnitee for all of Indemnitee's reasonable fees and expenses
in bringing and pursuing such action. The Company shall be entitled to raise by
pleading as an affirmative defense to any action for which a claim for
indemnification is made under sections 1 and 2 hereof that Indemnitee is not
entitled to indemnification because of the limitations set forth in section 3
hereof. Neither the failure of the Company (including its Board of Directors,
its shareholders or independent legal counsel) to have made a determination
prior to the commencement of such enforcement action that indemnification of
Indemnitee is proper in the circumstances, nor an actual determination by the
Company (including its Board of Directors, its shareholders or independent legal
counsel) that such indemnification is improper shall be a defense to the action
or create a presumption that Indemnitee is not entitled to indemnification under
this Agreement or otherwise.
8. Additional Indemnification Rights. Notwithstanding any other provision
of this Agreement, the Company hereby agrees to indemnify Indemnitee to the full
extent permitted by law, notwithstanding that such indemnification is not
specifically authorized by the other provisions of this Agreement, the Company's
Certificate of Incorporation, the By-laws or by statute. In the event of any
changes, after the date of this Agreement, in any applicable law, statute or
rule which expand the right of a Delaware corporation to indemnify an officer,
director or key employee, such changes shall be, ipso facto, within the purview
of Indemnitee's rights and the Company's obligations under this Agreement. In
the event of any changes in any applicable law, statute or rule which narrow the
right of a Delaware corporation to indemnify an officer, director or key
employee, such changes, to the extent not otherwise required by such law,
statute
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or rule to be applied to this Agreement, shall have no effect on this Agreement
or the parties' rights and obligations hereunder.
9. Contract Rights Not Exclusive. The contract rights conferred by this
Agreement shall be in addition to, but not exclusive of, any other right which
Indemnitee may have or may hereafter acquire under any statute, provision of the
Company's Certificate of Incorporation or By-laws, agreement, vote of
stockholders or disinterested directors or otherwise.
10. Mutual Acknowledgment. Both the Company and Indemnitee acknowledge that
in certain instances, federal law may override Delaware law and prohibit the
Company from indemnifying its directors and officers. For example, the Company
and Indemnitee acknowledge that the Securities and Exchange Commission has taken
the position that indemnification is not permissible for liabilities arising
under certain federal securities laws, and that other federal legislation
prohibits indemnification for certain ERISA violations.
11. Miscellaneous Provisions.
11.1. This Agreement shall be interpreted and enforced in accordance
with the laws of the State of Delaware.
11.2. This Agreement shall be binding upon Indemnitee and upon the
Company, its successors and assigns, and shall inure to the benefit of
Indemnitee, his heirs, personal representatives and assigns and to the benefit
of the Company, its successors and assigns.
(a) The rights conferred on Indemnitee by this Agreement
shall continue after Indemnitee has ceased to be a
director, officer, employee or other agent of the
Company or to serve at the request of the Company as a
director, officer, employee or other agent of another
corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise and shall
inure to the benefit of Indemnitee's heirs, executors
and administrators.
(b) The Company 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 Company, 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.
11.3. No amendment, modification, termination or cancellation of this
Agreement shall be effective unless in writing signed by both parties hereto.
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11.4. 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 provision hereof. Furthermore, if this Agreement shall be
invalidated in its entirety on any ground, then the Company shall nevertheless
indemnify Indemnitee to the fullest extent provided by the By-laws, the
corporate law of the State of Delaware or any other applicable law.
11.5. This Agreement sets forth the entire agreement of the parties
hereto with respect to the subject matter hereof and supersedes all prior
agreements between the parties with respect thereto, whether written or oral.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
IRVINE SENSORS CORPORATION
a Delaware corporation
By: ________________________________
Indemnitee
____________________________________
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