EXHIBIT 2.7
FORM OF DIRECTOR INDEMNIFICATION AGREEMENT
This Indemnification Agreement (the "Agreement") is made as of the 7th
day of August, 1995, by and between PSICOR, Inc., a Pennsylvania Corporation
(the "Company"), and ________________ (the "Director").
A. It is essential to the Company to retain and attract as directors
the most capable persons available.
B. The substantial increase in corporate litigation subjects directors
to expensive litigation risks and it is therefore reasonable, prudent and
necessary for the Company contractually to obligate itself to indemnify
directors to the fullest extent permitted by the Pennsylvania Business
Corporation Law so that capable persons will serve or continue to serve the
Company.
C. The Director is willing to serve, continue to serve and to take on
additional service for or on behalf of the Company on the condition that the
Director be so indemnified.
NOW, THEREFORE, in consideration of the covenants contained herein and
of the Director's continuing service to the Company, the Company and the
Director do hereby agree as follows:
l. DEFINITIONS. The following terms as used in this Agreement shall
have the following respective meanings:
"Expenses" means all expenses, liabilities and losses, including
attorneys' fees, judgments, fines, and amounts paid or to be paid in
settlement of a Proceeding.
"Proceeding" means any threatened, pending or completed action, suit or
proceeding (or part thereof), whether civil, criminal, administrative or
investigative.
2. SERVICES BY DIRECTOR. The Director agrees to serve as a director
of the Company for so long as the Director is duly elected or appointed or
until the tender of the Director's written resignation.
3. INDEMNIFICATION. Subject to the terms and conditions of this
Agreement, the Company shall indemnify and hold harmless the Director to the
fullest extent authorized by the Pennsylvania Business Corporation Law, as
the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the Company to
provide broader indemnification rights than said law permitted the Company to
provide prior to such change), against all Expenses reasonably incurred or
suffered by the Director in connection with any Proceeding in which the
Director is or was a party to or witness or other participant in, or is
threatened to be made a party to or
witness or other participate in, or is involved by reason of the fact that
the Director is or was a director, officer or employee of the Company or is
or was serving at the request of the Company as a director, officer, partner,
trustee, administrator, employee or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, including service with
respect to employee benefit plans, whether the basis of the Proceeding is
alleged action in an official capacity as a director, officer, partner,
trustee, administrator, employee or agent or in any other capacity while
serving as a director, officer, partner, trustee, administrator, employee or
agent; PROVIDED, HOWEVER, that, except as provided in Section 5 hereof with
respect to Proceedings to enforce rights to indemnification, the Company
shall indemnify the Director seeking indemnification in connection with a
Proceeding (or part thereof) initiated by the Director only if such
proceeding (or part thereof) was authorized by the Board of Directors of the
Company.
4. EXPENSES. The right to indemnification conferred under Section 3
hereof shall include the right to be paid by the Company Expenses incurred in
defending any such Proceeding in advance of its final disposition; PROVIDED,
HOWEVER, that the payment of such Expenses incurred by the Director in
advance of the final disposition of a Proceeding shall be made only upon
delivery to the Company of an undertaking, by or on behalf of the Director,
to repay all advances if it shall ultimately be determined that the Director
is not entitled to be indemnified by the Company.
5. RIGHT OF THE DIRECTOR TO BRING SUIT. (a) If a claim under Section
3 hereof is not paid in full by the Company within thirty (30) days after
notice to the Company as provided in Section 10 hereof, the Director may at
any time thereafter bring suit against the Company in any court of competent
jurisdiction to recover the unpaid amount of the claim and, if successful in
whole or in part, the Director shall be entitled to be paid also the expense
of prosecuting such claim.
(b) It shall be a defense to any such action seeking indemnification
under Section 3 hereof (other than an action brought to enforce a claim for
Expenses incurred in defending any Proceeding in advance of its final
disposition where the required undertaking has been tendered to the Company
in accordance with Section 4 hereof) that the Director has not met the
applicable standard of conduct set forth in the Pennsylvania Business
Corporation Law. Further, in any action brought by the Company to recover
advances, the Company shall be entitled to recover such advances, if the
Director has not met the applicable standard of conduct set forth in the
Pennsylvania Business Corporation Law. Neither the failure of the Company
(including its Board of Directors, independent legal counsel, or its
shareholders) to have made a determination prior to the commencement of such
action that indemnification of the Director is proper in the circumstances
because the Director has met the applicable standard of conduct set forth in
the Pennsylvania Business Corporation Law, nor an actual
determination by the Company (including its Board of Directors, independent
legal counsel, or its shareholders) that the Director has not met such
applicable standard of conduct, shall be a defense to an action brought by
the Director or create a presumption that the Director has not met the
applicable standard of conduct. In any action brought by the Director to
enforce a right hereunder, or by the Company to recover payments by the
Company of advances, the burden of proof shall be on the Company.
6. ASSUMPTION OF CLAIM. The Company shall be entitled, but not
obligated, to assume the defense of any Proceeding with respect to which
indemnification is sought, with counsel satisfactory to the Director, upon
the delivery to the Director of written notice of the Company's election to
do so. After delivery of such notice, the Company will not be liable to the
Director under this Agreement for any expenses (including legal expenses)
subsequently incurred by the Director in defending such Proceeding; PROVIDED
HOWEVER, that the Director shall have the right to employ his or her own
counsel in any Proceeding but the fees and expenses of such counsel incurred
after delivery of notice from the Company of its assumption of such defense
shall be at the Director's expense; and PROVIDED, FURTHER that if (i) the
employment of such counsel by the Director has been previously authorized by
the Company, (ii) the Director shall have reasonably concluded that there may
be a conflict of interest between the Company and the Director in the conduct
of any such defense or (iii) the Company shall not, in fact, have employed
counsel to assume the defense of such action, the fees and expenses of such
counsel shall be at the expense of the Company.
7. ESTABLISHMENT OF TRUST. In the event of a Potential Change in
Control of the Company, as defined below, the Company shall, upon written
request by the Director, create a trust for the benefit of the Director and
from time to time upon written request of the Director shall fund such trust
in an amount sufficient to satisfy any and all Expenses that may properly be
subject to indemnification under Section 3 above anticipated at the time of
each such request. The amount or amounts to be deposited in the trust
pursuant to this funding obligation shall be determined by a majority vote of
a quorum consisting of directors who are not parties to such Proceeding, if
any, the executive committee of the Board of Directors or the President of
the Company. If all such individuals are parties to the Proceeding, if any,
the amount or amounts to be deposited in the trust shall be determined by
independent legal counsel. The terms of the trust shall provide that upon a
Change in Control, as defined below, (i) the trust shall not be revoked or
the principal thereof invaded, without the written consent of the Director;
(ii) the trustee shall advance, within two (2) business days of a request by
the Director, any amount properly payable to the Director under Section 3 of
this Agreement; (iii) the trust shall continue to be funded by the Company in
accordance with the funding obligation set forth above; (iv) the trustee
shall promptly pay to the Director all amounts for which the Director shall
be entitled to indemnification pursuant to
this Agreement or otherwise; and (v) all unexpended funds in such trust shall
revert to the Company upon a final determination by a court of competent
jurisdiction that the Director has been fully indemnified under the terms of
this Agreement or as set forth below. The trustee shall be chosen by the
Director and shall be a national or state chartered commercial bank. Nothing
in this Section shall relieve the Company of any of its obligations under
this Agreement. At the time of each draw from the trust fund, the Director
shall provide the trustee with a written request providing that the Director
undertakes to repay such amount to the extent that it is ultimately
determined that the Director is not entitled to such indemnification. Any
funds, including interest or investment earnings thereon, remaining in the
trust fund shall revert and be paid to the Company if (i) a Change in Control
has not occurred and (ii) the Board of Directors, the executive committee of
the Board of Directors or the President of the Company determines that the
circumstances giving rise to that particular funding of the trust no longer
exists.
For purposes of this Section and Section 9 hereof, a "Change in Control"
shall mean a change in control 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, provided
that, without limitation, such a change in control shall be deemed to have
occurred if (i) during any period of two consecutive years, individuals who
at the beginning of such period constitute the Board of Directors of the
Company and any new director whose election by the Board of Directors or
nomination for election by the Company's shareholders 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 the period or whose election or nomination
for election was previously so approved, cease for any reason to constitute a
majority thereof; (ii) the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than 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 being converted into voting securities of the
surviving entity) at least 80% of the total voting power represented by the
voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; or (iii) the shareholders of
the Company approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company (in one transaction or a
series of transactions) of all or substantially all of the Company's assets.
For purposes of this Section, a "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 (including the Company) publicly announces an intention to
take or to consider taking actions which once consummated would constitute a
Change in Control; or (iii) the Board of Directors adopts a resolution to the
effect that, for purposes of this Agreement, a Potential Change in Control
has occurred.
8. NON-EXCLUSIVITY OF RIGHTS. The rights provided hereunder shall not
be deemed exclusive of any other rights which the Director may be entitled
under any statute, agreement, provision of the Restatement of Articles of
Incorporation or Bylaws of the Company, vote of shareholders or disinterested
directors of the Company, or otherwise, and such rights shall continue after
the Director ceases to serve the Company as a director.
9. SETTLEMENT. Unless and until a Change in Control has occurred, the
Company shall have no obligation to indemnify the Director under this
Agreement for any amounts paid in settlement of any Proceeding effected
without the Company's prior written consent. The Company shall not settle
any claim in any manner which would impose any obligation on the Director
without the Director's written consent. Neither the Company nor the Director
shall unreasonably withhold their consent to any proposed settlement.
10. NOTICE OF CLAIM. The Director, as a condition precedent to his
right to be indemnified under this Agreement, shall give to the Company
notice in writing as soon as practicable of any claim made against him for
which indemnity will or could be sought under this Agreement. Notice to the
Company shall be directed to PSICOR, Inc., 00000 Xxx xxx Xxxxx Xxxxx, Xxx
Xxxxx, Xxxxxxxxxx 00000, Attention: President (or such other address as the
Company shall designate in writing to the Director). Notice shall be deemed
received if sent by prepaid mail properly addressed, the date of such notice
being the date postmarked. In addition, the Director shall give the Company
such information and cooperation as it may reasonably request.
11. SEVERABILITY. In the event that any provision of this Agreement is
determined by a court to require the Company to do or to fail to do an act
which is in violation of applicable law, such provision shall be limited or
modified in its application to the minimum extent necessary to avoid a
violation of law, and, as so limited or modified, such provision and the
balance of this Agreement shall be enforceable in accordance with their terms.
12. CHOICE OF LAW. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the Commonwealth of Pennsylvania.
13. SUCCESSORS AND ASSIGNS. This Agreement shall be (i) binding upon
all successors and assigns of the Company (including any transferee of all or
substantially all of its assets and any successor by merger or otherwise by
operation of law) and (ii) shall be binding on and inure to the benefit of
the heirs, personal representatives, executors and administrators of the
Director.
14. AMENDMENT. No amendment, modification, termination or cancellation
of this Agreement shall be effective unless made in writing and signed by
each of the parties hereto.
IN WITNESS WHEREOF, the Company and the Director have executed this
Agreement as of the day and year first above written.
PSICOR, INC.
By: ___________________________________
Its:___________________________________
DIRECTOR
_______________________________________
FORM OF AMENDMENT TO DIRECTOR INDEMNIFICATION AGREEMENT
This Amendment to Director Indemnification Agreement ("Amendment") is
made this 21st day of November, 1995 by and between Psicor, Inc. (the
"Company") and _______________ (the "Director").
A. The Company and the Director entered into a Director
Indemnification Agreement dated as of August 7, 1995 (the "Agreement"); and
B. Since entering into the Agreement, the parties have agreed to
certain changes to the Agreement set forth herein.
NOW, THEREFORE, the Company and the Director, in consideration of the
premises, agreements and covenants contained herein (the receipt and
sufficiency whereof are hereby acknowledged), hereby agree to the following
modifications of the Agreement:
1. All references to capitalized terms contained herein which are not
otherwise defined in this Amendment shall have the meanings ascribed to them
in the Agreement.
2. Section 7 of the Agreement is hereby amended by changing the
heading to "DEFINITION." and by deleting the first and third paragraphs so
that the only language remaining relates to the definition of "Change in
Control."
3. Except as specifically amended by this Amendment, all provisions of
the Agreement shall remain in full force and effect. This Amendment shall
govern in the event that there is a conflict between the Agreement and this
Amendment.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment on
the day and year first above written.
PSICOR, INC.
By:____________________________________
Name:
Title:
_______________________________________
