Schedule of Individuals Who Are
Parties to an Indemnification Agreement
Xxxx X. Xxxxxxxx
Xxx Xxxx
Xxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxx
INDEMNIFICATION AGREEMENT
[Director Name]
This Agreement dated as of [_________________] is between Procept, Inc.
(the "Company"), a Delaware corporation, and [Director Name] ("Director"), who
is a director of the Company. Its purpose is to provide the maximum protection
for the Director against personal liability arising out of his service to the
Company so as to encourage the continuation of such service and the effective
exercise of his business judgment in connection herewith.
The parties hereto agree as follows:
1. Definitions. For purposes of this Agreement, the following terms
shall have the meanings hereafter assigned to them:
(a) "Change in Control" shall mean a change in control of the
Company of a nature that would be required to be reported in response
to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
whether or not the Company is in fact required to comply therewith;
provided, that, without limitation, 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 Exchange Act), other than the Company, any
trustee or other fiduciary holding securities under an employee benefit
plan of the Company or a corporation owned, directly or indirectly, by
the stockholders of the Company in substantially the same proportions
as their ownership of stock of the Company is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing 30%
or more of the combined voting power of the Company's then outstanding
securities;
(ii) during any period of twenty-four (24)
consecutive months (not including any period prior to the date of this
Agreement), individuals who at the beginning of such period constitute
the Board and any new director (other than a director designated by a
person who has entered into an agreement with the Company to effect a
transaction described in paragraphs (i), (iii) or (iv) of this
subsection 3(a)) whose election by the Board or nomination for election
by the Board or by the stockholders of the Company was approved by a
vote of at least two-thirds (2/3) of the directors then still in office
who either were directors at the beginning of such period or whose
election or nomination for election was previously so approved, cease
for any reason to constitute a majority thereof; or
(iii) the stockholders of the Company approve a
merger or consolidation of the Company with any other corporation,
other than (1) a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by
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being converted into voting securities of the surviving entity) at
least 50% of the combined voting securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation or (2) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no
"person" (as hereinabove defined) acquires 30% or more of the combined
voting power of the Company's then outstanding securities; or
(iv) the stockholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's
assets.
(b) "Claim" shall mean any threatened, pending or completed
action, suit or proceeding, or any inquiry or investigation, whether
conducted by the Company or any other party, that the Indemnitee in
good faith believes might lead to the institution of any such action,
suit or proceeding, whether civil, criminal, administrative,
investigative or other.
(c) "Expenses" shall include attorneys' fees and all other
costs, expenses and obligations paid or incurred in connection with
investigating, defending, being a witness in or participating in
(including on appeal), or preparing to defend, be a witness in or
participate in, any Claim relating to any Indemnifiable Event.
(d) "Indemnifiable Event" shall mean any event or occurrence
related to the fact that the Director is or was a director, officer,
employee, agent or fiduciary of the Company, or is or was serving at
the request of the Company as a director, officer, employee, trustee,
agent or fiduciary of another corporation, partnership, joint venture,
employee benefit plan, trust or other enterprise, or by reason of
anything done or not done by the Director in any such capacity.
(e) "Indemnitee" shall mean the Director and any partnership,
corporation, trust or other entity of which the Director is or was a
partner, a partner of the general partner of, shareholder, trustee,
director, officer, member, employee or agent and any other entity or
person that may be subject to a Claim by reason of (or arising in part
out of) an Indemnifiable Event, and the references to Indemnitee in
this Indemnification Agreement shall be understood to refer severally
to each Indemnitee.
(f) "Potential Change in Control" shall be deemed to have
occurred if:
(i) the Company enters into an agreement, the
consummation of which would result in the occurrence of a Change in
Control;
(ii) any person (as hereinabove defined), including
the Company, publicly announces an intention to take or consider taking
actions which if consummated would constitute a Change in Control;
(iii) any person (as hereinabove defined), other than
the Company, any trustee or other fiduciary holding securities under an
employee benefit plan of
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the Company or a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as
their ownership of stock of the Company (1) is or becomes the
beneficial owner, (2) discloses directly or indirectly to the Company
or publicly a plan or intention to become the beneficial owner, or (3)
makes a filing under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended, with respect to securities to become the
beneficial owner, directly or indirectly, of securities representing
30% or more of the combined voting power of the outstanding voting
securities of the Company; or
(iv) the Board adopts a resolution to the effect
that, for purposes of this Agreement, a Potential Change in Control of
the Company has occurred.
(g) "Reviewing Party" shall mean the person or body appointed
by the Company's Board of Directors pursuant to Section 2(b) hereof,
which shall not be or include a person who is a party to the particular
Claim for which the Indemnitee is seeking indemnification.
2. Basic Indemnification Arrangement.
(a) In the event that the Indemnitee was or is a party to or
witness or other participant in, or is threatened to be made a party to
or witness or other participant in, a Claim by reason of (or arising in
part out of) an Indemnifiable Event, the Company shall indemnify the
Indemnitee to the fullest extent permitted by law as soon as
practicable but in any event no later than thirty days after written
demand is presented to the Company, against all Expenses, judgments,
fines, penalties and amounts paid in settlement (including all
interest, assessments and other charges paid or payable in respect of
such Expenses, judgments, fines, penalties or amounts paid in
settlement) of such Claim. If so requested by the Indemnitee, the
Company shall advance (within two business days of such request) all
Expenses to the Indemnitee (an "Expense Advance"). Notwithstanding
anything in this Agreement to the contrary, prior to a Change in
Control, the Indemnitee shall not be entitled to indemnification
pursuant to this Agreement in connection with any Claim initiated by
the Indemnitee against the Company or any director or officer of the
Company (otherwise than to enforce his rights under this Agreement)
unless the Company has consented to the initiation of such Claim.
(b) In the event of any demand by the Indemnitee for
indemnification hereunder or under the Company's Amended and Restated
Certificate of Incorporation or By-laws, the Board of Directors of the
Company shall designate a Reviewing Party, who shall, if there has been
a Change of Control of the Company, be the special independent counsel
referred to in Section 3 hereof. The obligations of the Company under
Section 2(a) shall be subject to the condition that the Reviewing Party
shall not have determined (in a written opinion, in any case in which
the special independent counsel referred to in Section 3 hereof is
involved) that the Indemnitee is not permitted to be indemnified under
applicable law, and the obligation of the Company to make an Expense
Advance pursuant to Section 2(a) shall be subject to the condition
that, if, when and to the extent that the Reviewing Party determines
that the Indemnitee is not permitted to be so indemnified
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under applicable law, the Company shall be entitled to be reimbursed by
the Indemnitee (who hereby agrees to reimburse the Company) for all
such amounts theretofore paid. If the Indemnitee has commenced legal
proceedings in a court of competent jurisdiction to secure a
determination that the Indemnitee may be indemnified under applicable
law, any determination made by the Reviewing Party that the Indemnitee
is not permitted to be indemnified under applicable law shall not be
binding, and the Indemnitee shall not be required to reimburse the
Company for any Expense Advance until a final judicial determination is
made with respect hereto (as to which all rights of appeal therefrom
have been exhausted or lapsed). If there has been no determination by
the Reviewing Party or if the Reviewing Party determines that the
Indemnitee is not permitted to be indemnified in whole or in part under
applicable law, the Indemnitee shall have the right to commence
litigation in any court in the State of Delaware having subject matter
jurisdiction thereof and in which venue is proper seeking an initial
determination by the court or challenging any such determination by the
Reviewing Party or any aspect thereof, and the Company hereby consents
to service of process and to appear in any such proceeding. Any
determination by the Reviewing Party otherwise shall be conclusive and
binding on the Company and the Indemnitee.
3. Change in Control. The Company agrees that if there is a Change in
Control of the Company, then with respect to all matters thereafter arising
concerning the rights of the Indemnitee to indemnity payments and Expense
Advances under this Agreement or any other agreement or under the Company's
Amended and Restated Certificate of Incorporation or By-laws now or hereafter in
effect relating to Claims for Indemnifiable Events, the Company shall seek legal
advice only from special independent counsel selected by the Indemnitee and
approved by the Company (which approval shall not be unreasonably withheld) who
has not otherwise performed services for the Company within the last ten years
(other than in connection with such matters) or for the Indemnitee. Such counsel
among other things, shall render its written opinion to the Company and the
Indemnitee as to whether and to what extent the Indemnitee is permitted to be
indemnified under applicable law. The Company agrees to pay the reasonable fees
of the special independent counsel and to indemnify such counsel against any and
all expenses (including attorneys' fees), claims, liabilities and damages
relating to this Agreement or its engagement pursuant hereto.
4. Establishment of Trust. In the event of a Potential Change in
Control, the Company may create a Trust for the benefit of the Indemnitee
(either alone or together with one or more other indemnitees) and from time to
time fund such Trust in such amounts as the Company's Board of Directors may
determine to satisfy Expenses reasonably anticipated to be incurred in
connection with investigating, preparing for and defending any Claim relating to
an Indemnifiable Event, and all judgments, fines, penalties and settlement
amounts of all Claims relating to an Indemnifiable Event from time to time paid
or claimed, reasonably anticipated or proposed to be paid. The terms of any
Trust established pursuant hereto 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, 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 Company under
Section 2(b) of this Agreement), (iii) the Trustee shall promptly
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pay to the Indemnitee all amounts for which the Indemnitee shall be entitled to
indemnification pursuant to this Agreement or otherwise, and (iv) all unexpended
funds in such Trust shall revert to the Company upon a final determination by
the Reviewing Party or a court of competent jurisdiction, as the case may be,
that the Indemnitee has been fully indemnified under the terms of this
Agreement. The Trustee shall be a person or entity satisfactory to the
Indemnitee. Nothing in this Section 4 shall relieve the Company of any of its
obligations under this Agreement.
5. Indemnification for Additional Expenses. The Company shall indemnify
the Indemnitee against all expenses (including attorneys' fees) and, if
requested by the Indemnitee, shall (within two business days of such request)
advance such expenses to the Indemnitee, which are incurred by the Indemnitee in
connection with any claim asserted against or action brought by the Indemnitee
for (i) indemnification or advance payment of Expenses by the Company under this
Agreement or any other agreement or Company By-law or provision of the Company's
Amended and Restated Certificate of Incorporation now or hereafter in effect
relating to Claims for Indemnifiable Events or (ii) recovery under any
directors' and officers' liability insurance policies maintained by the Company,
regardless of whether the Indemnitee ultimately is determined to be entitled to
such indemnification, advance expense payment or insurance recovery, as the case
may be.
6. Partial Indemnity, Etc. If the Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for a portion of
the Expenses, judgments, fines, penalties and amounts paid in settlement of a
Claim but not for the total amount thereof, the Company shall indemnify the
Indemnitee for the portion thereof to which the Indemnitee is entitled.
Notwithstanding any other provision of this Agreement, to the extent that the
Indemnitee has been successful on the merits or otherwise in defense of Claims
relating to an Indemnifiable Event or in defense of any issue or matter therein,
including dismissal without prejudice, the Indemnitee shall be indemnified
against all Expenses incurred in connection therewith. In connection with any
determination by the Reviewing Party or otherwise as to whether the Indemnitee
is entitled to be indemnified hereunder, the burden of proof shall be on the
Company to establish that the Indemnitee is not so entitled.
7. No Presumption. For purposes of this Agreement, the termination of
any claim, action, suit or proceeding by judgment, order, settlement (whether
with or without court approval) or conviction, or upon a plea of nolo
contendere, or its equivalent, shall not create a presumption that the
Indemnitee did not meet any particular standard of conduct or have any
particular belief or that a court has determined that indemnification is not
permitted by applicable law.
8. Non-exclusivity, Etc. The rights of the Indemnitee hereunder shall
be in addition to any other rights the Indemnitee may have under the Company's
Amended and Restated Certificate of Incorporation and By-laws or the Delaware
General Corporation Law or otherwise. To the extent that a change in the
Delaware General Corporation Law (whether by statute or judicial decision)
permits greater indemnification by agreement than would be afforded currently
under the Company's Amended and Restated Certificate of Incorporation and
By-laws and this
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Agreement, it is the intent of the parties hereto that the Indemnitee shall
enjoy by this Agreement the greater benefits afforded by such change.
9. Liability Insurance. To the extent the Company maintains an
insurance policy or policies providing directors' and officers' liability
insurance, the Director shall be covered by such policy or policies, in
accordance with its or their terms, to the maximum extent to the coverage
available for any Company director or officer.
10. Amendments, Etc. 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 constitute a
waiver of any other provisions hereof (whether or not similar) nor shall such
waiver constitute a continuing waiver.
11. Subrogation. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of the Indemnitee, who shall execute all such papers and do all such
things as may be necessary or desirable to secure such rights.
12. No Duplication of Payments. The Company shall not be liable under
this Agreement to make any payment in connection with any claim made against the
Indemnitee to the extent the Indemnitee has otherwise received payment (under
any insurance policy, the Company's Amended and Restated Certificate of
Incorporation, or the Company's By-laws or otherwise) of the amounts otherwise
indemnifiable hereunder.
13. Binding Effect, Etc. This Agreement shall be binding upon and inure
to the benefit of and be enforceable by the parties hereto and their respective
successors, assigns, including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
or assets of the Company, spouses, heirs, and personal and legal
representatives. This Agreement shall continue in effect regardless of whether
the Director continues to serve as an officer or director of the Company or of
any other enterprise at the Company's request.
14. Severability. The provisions of this Agreement shall be severable
in the event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) are held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, and the remaining
provisions shall remain enforceable to the fullest extent permitted by law.
15. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of The Commonwealth of Massachusetts
applicable to contracts made and to be performed in such state without giving
effect to the principles of conflicts of law.
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IN WITNESS WHEREOF, the undersigned have executed this Indemnification
Agreement as of the date first above written.
PROCEPT, INC.
By
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Name:
Title:
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[Director Name]
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