Contract
EXHIBIT 10.3
This Indemnification Agreement (“Agreement”) is made as of November 1, 2007 by and between Opnext,
Inc., a Delaware corporation (the “Company”), and Xxxxxx Xxxxxxxx (“Indemnitee”).
RECITALS
WHEREAS, highly competent persons have become more reluctant to serve publicly-held
corporations as directors, 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 the corporation;
WHEREAS, the Board of Directors of the Company (the “Board”) has determined that, in order to
attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis,
at its sole expense, liability insurance to protect persons serving the Company and its
subsidiaries from certain liabilities. Although the furnishing of such insurance has been a
customary and widespread practice among United States-based corporations and other business
enterprises, the Company believes that, given current market conditions and trends, such insurance
may be available to it in the future only at higher premiums and with more exclusions. At the same
time, directors, officers, and other persons in service to corporations or business enterprises are
being increasingly subjected to expensive and time-consuming litigation relating to, among other
things, matters that traditionally would have been brought only against the Company or business
enterprise itself. The Bylaws of the Company require indemnification of the officers and directors
of the Company. Indemnitee may also be entitled to indemnification pursuant to the General
Corporation Law of the State of Delaware (“DGCL”). The Bylaws and the DGCL expressly provide that
the indemnification provisions set forth therein are not exclusive, and thereby contemplate that
contracts may be entered into between the Company and members of the board of directors, officers
and other persons with respect to indemnification;
WHEREAS, the uncertainties relating to such insurance and to indemnification have increased
the difficulty of attracting and retaining such persons;
WHEREAS, the Board has determined that the increased difficulty in attracting and retaining
such persons is detrimental to the best interests of the Company’s stockholders and that the
Company should act to assure such persons that there will be increased certainty of such protection
in the future;
WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate
itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent
permitted by applicable law so that they will serve or continue to serve the Company free from
undue concern that they will not be so indemnified;
WHEREAS, this Agreement is a supplement to and in furtherance of the Bylaws of the Company and
any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to
diminish or abrogate any rights of Indemnitee thereunder;
WHEREAS, Indemnitee does not regard the protection available under the Company’s Bylaws and
insurance as adequate in the present circumstances, and may not be willing to serve as an officer
or director without adequate protection, and the Company desires Indemnitee to serve in such
capacity. Indemnitee is willing to serve, continue to serve and to take on additional service for
or on behalf of the Company on the condition that he be so indemnified; and
NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the
Company and Indemnitee do hereby covenant and agree as follows:
Section 1. Services to the Company. Indemnitee agrees to serve as an officer of the
Company. Indemnitee may at any time and for any reason resign from such position (subject to any
other contractual obligation or any obligation imposed by operation of law), in which event the
Company shall have no obligation under this Agreement to continue Indemnitee in such position.
This Agreement shall not be deemed an employment contract between the Company (or any of its
subsidiaries or any Enterprise) and Indemnitee. Indemnitee specifically acknowledges that
Indemnitee may be discharged at any time for any reason, with or without cause, except as may be
otherwise provided in any written employment contract between Indemnitee and the Company (or any of
its subsidiaries or any Enterprise), other applicable formal severance policies duly adopted by the
Board, or, with respect to service as a director or officer of the Company, by the Company’s
Certificate of Incorporation, the Company’s Bylaws, and the DGCL. The foregoing notwithstanding,
this Agreement shall continue in force after Indemnitee has ceased to serve as an officer of the
Company.
Section 2. Definitions. As used in this Agreement:
(a) A “Change in Control” shall be deemed to occur upon the earliest to occur after the date
of this Agreement of any of the following events:
(i) Acquisition of Stock by Third Party. Any Person (as defined below) is or becomes the
Beneficial Owner (as defined below), directly or indirectly, of securities of the Company
representing fifteen percent (15%) or more of the combined voting power of the Company’s then
outstanding securities, other than Hitachi, Ltd., or Clarity Partners, L.P. or any of its
affiliates;
(ii) Change in Board of Directors. During any period of two (2) consecutive years (not
including any period prior to the execution 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
Sections 2(a)(i), 2(a)(iii) or 2(a)(iv)) whose election by the Board or nomination for election by
the Company’s stockholders was approved by a vote of at least two-thirds 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 least a
majority of the members of the Board;
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(iii) Corporate Transactions. The effective date of a merger or consolidation of the Company
with any other entity, other than a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior to such merger or consolidation continuing
to represent (either by remaining outstanding or by being converted into voting securities of the
surviving entity) more than 51% of the combined voting power of the voting securities of the
surviving entity outstanding immediately after such merger or consolidation and with the power to
elect at least a majority of the board of directors or other governing body of such surviving
entity;
(iv) Liquidation. The approval by the stockholders of the Company of a 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; and
(v) Other Events. There occurs any other event of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a response to any similar
item on any similar schedule or form) promulgated under the Exchange Act (as defined below),
whether or not the Company is then subject to such reporting requirement.
For purposes of this Section 2(a), the following terms shall have the following meanings:
(A) “Exchange Act” shall mean the Securities
Exchange Act of 1934, as amended.
(B) “Person” shall have the meaning as set
forth in Sections 13(d) and 14(d) of the Exchange
Act; provided, however, that Person shall exclude
(i) the Company, (ii) any trustee or other fiduciary
holding securities under an employee benefit plan of
the Company, and (iii) any corporation owned,
directly or indirectly, by the stockholders of the
Company in substantially the same proportions as
their ownership of stock of the Company.
(C) “Beneficial Owner” shall have the meaning
given to such term in Rule 13d-3 under the Exchange
Act; provided, however, that Beneficial Owner shall
exclude any Person otherwise becoming a Beneficial
Owner by reason of the stockholders of the Company
approving a merger of the Company with another
entity.
(b) “Corporate Status” describes the status of a person who is or was a director, officer,
employee or agent of the Company or of any other corporation, partnership or joint venture, trust,
employee benefit plan or other enterprise which such person is or was serving at the request of the
Company.
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(c) “Disinterested Director” means a director of the Company who is not and was not a party to
the Proceeding in respect of which indemnification is sought by Indemnitee.
(d) “Enterprise” shall mean the Company and any other corporation, limited liability company,
partnership, joint venture, trust, employee benefit plan or other enterprise of which Indemnitee is
or was serving at the request of the Company as a director, officer, employee, agent or fiduciary.
(e) “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees, and all other disbursements or
expenses of the types customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, being or preparing to be a witness in, or otherwise
participating in, a Proceeding. Expenses also shall include (i) Expenses incurred in connection
with any appeal resulting from any Proceeding, including without limitation the premium, security
for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its
equivalent and (ii) for purposes of Section 13(d) only, Expenses incurred by Indemnitee in
connection with the interpretation, enforcement or defense of Indemnitee’s rights under this
Agreement, by litigation or otherwise. Expenses, however, shall not include amounts paid in
settlement by Indemnitee or the amount of judgments or fines against Indemnitee.
(f) “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in
matters of corporation law and neither presently is, nor in the past five years has been, retained
to represent: (i) the Company or Indemnitee in any matter material to either such party (other
than with respect to matters concerning the Indemnitee under this Agreement, or of other
indemnitees under similar indemnification agreements), or (ii) 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
Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. The
Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above
and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages
arising out of or relating to this Agreement or its engagement pursuant hereto.
(g) The term “Proceeding” shall include any threatened, pending or completed action, suit,
arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing
or any other actual, threatened or completed proceeding, whether brought in the right of the
Company or otherwise and whether of a civil, criminal, administrative, legislative, or
investigative nature, including any appeal therefrom, in which Indemnitee was, is or will be
involved as a party, potential party, non-party witness or otherwise by reason of the fact that
Indemnitee is or was a director or officer of the Company, by reason of any action taken by him or
of any action on his part while acting as director or officer of the Company, or by reason of the
fact that he is or was serving at the request of the Company as a director, officer, employee or
agent of another corporation, limited liability company, partnership, joint venture, trust or other
enterprise, in each case whether or not serving in such capacity at the time any liability or
expense is incurred for which indemnification, reimbursement, or advancement of
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expenses can be provided under this Agreement; except one initiated by an Indemnitee to
enforce his rights under this Agreement.
(h) Reference to “other enterprise” shall include employee benefit plans; references to
“fines” shall include any excise tax assessed with respect to any employee benefit plan; references
to “serving at the request of the Company” shall include any service as a director, officer,
employee or agent of the Company which imposes duties on, or involves services by, such director,
officer, employee or agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in
the best interests of the participants and beneficiaries of an employee benefit plan shall be
deemed to have acted in manner “not opposed to the best interests of the Company” as referred to in
this Agreement.
Section 3. Indemnity in Third-Party Proceedings. The Company shall indemnify
Indemnitee in accordance with the provisions of this Section 3 if Indemnitee is, or is threatened
to be made, a party to or a participant in any Proceeding, other than a Proceeding by or in the
right of the Company to procure a judgment in its favor. Pursuant to this Section 3, Indemnitee
shall be indemnified to the fullest extent permitted by applicable law against all Expenses,
judgments, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee or
on his behalf in connection with such Proceeding or any claim, issue or matter therein, if
Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Company and, in the case of a criminal proceeding had no reasonable cause
to believe that his conduct was unlawful.
Section 4. Indemnity in Proceedings by or in the Right of the Company. The Company
shall indemnify Indemnitee in accordance with the provisions of this Section 4 if Indemnitee is, or
is threatened to be made, a party to or a participant in any Proceeding by or in the right of the
Company to procure a judgment in its favor. Pursuant to this Section 4, Indemnitee shall be
indemnified to the fullest extent permitted by applicable law against all Expenses actually and
reasonably incurred by him or on his behalf in connection with such Proceeding or any claim, issue
or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the Company. No indemnification for Expenses shall be
made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee shall
have been finally adjudged by a court to be liable to the Company, unless and only to the extent
that the Delaware Court of Chancery or any court in which the Proceeding was brought shall
determine upon application that, despite the adjudication of liability but in view of all the
circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification.
Section 5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful.
Notwithstanding any other provisions of this Agreement to the fullest extent permitted by
applicable law, to the extent that Indemnitee is a party to (or a participant in) and is
successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or
matter therein, in whole or in part, the Company shall indemnify Indemnitee against all Expenses
actually and reasonably incurred by him in connection therewith. If Indemnitee is not wholly
successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but
less than all claims, issues or matters in such Proceeding, the Company shall indemnify
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Indemnitee
against all Expenses actually and reasonably incurred by him or on his behalf in connection with
each successfully resolved claim, issue or matter. If the Indemnitee is not wholly successful in
such Proceeding, the Company also shall indemnify Indemnitee against all Expenses reasonably
incurred in connection with a claim, issue or matter related to any claim, issue, or matter on
which the Indemnitee was successful. For purposes of this Section and without limitation, the
termination of any claim, issue or matter in such a Proceeding by dismissal, with or without
prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
Section 6. Indemnification For Expenses of a Witness. Notwithstanding any other
provision of this Agreement, to the fullest extent permitted by applicable law to the extent that
Indemnitee is, by reason of his Corporate Status, a witness in any Proceeding to which Indemnitee
is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by
him or on his behalf in connection therewith.
Section 7. Additional Indemnification.
(a) Notwithstanding any limitation in Sections 3, 4, or 5, the Company shall indemnify
Indemnitee to the fullest extent permitted by applicable law if Indemnitee is a party to or
threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the
Company to procure a judgment in its favor) against all Expenses, judgments, fines and amounts paid
in settlement actually and reasonably incurred by Indemnitee in connection with the Proceeding.
(b) For purposes of Section 7(a), the meaning of the phrase “to the fullest extent permitted
by applicable law” shall include, but not be limited to:
i. to the fullest extent permitted by the provision of the DGCL that authorizes or
contemplates additional indemnification by agreement, or the corresponding provision of any
amendment to or replacement of the DGCL, and
(ii) to the fullest extent authorized or permitted by any amendments to or replacements of the
DGCL adopted after the date of this Agreement that increase the extent to which a corporation may
indemnify its officers and directors.
Section 8. Exclusions. Notwithstanding any provision in this Agreement, the Company
shall not be obligated under this Agreement to make any indemnity in connection with any claim made
against Indemnitee:
(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance
policy or other indemnity provision, except with respect to any excess beyond the amount paid under
any insurance policy or other indemnity provision; or
(b) for (i) an accounting of profits made from the purchase and sale (or sale and purchase) by
Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act (as
defined in Section 2(a) hereof) or similar provisions of state statutory law or common law, or (ii)
any reimbursement of the Company by the Indemnitee of any bonus or other incentive-based or
equity-based compensation or of any profits realized by the
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Indemnitee from the sale of securities
of the Company, as required in each case under the Exchange Act (including any such reimbursements
that arise from an accounting restatement of the Company pursuant to Section 304 of the
Xxxxxxxx-Xxxxx Act of 2002 (the “Xxxxxxxx-Xxxxx Act”), or the payment to the Company of profits
arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the
Xxxxxxxx-Xxxxx Act); or
(c) except as provided in Section 13(d) of this Agreement, in connection with any Proceeding
(or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of
any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees
or other indemnitees, unless (i) the Board of Directors of the Company authorized the Proceeding
(or any part of any Proceeding) prior to its initiation or (ii) the Company provides the
indemnification, in its sole discretion, pursuant to the powers vested in the Company under
applicable law.
Section 9. Advances of Expenses. Notwithstanding any provision of this Agreement to
the contrary, the Company shall advance to the extent not prohibited by law, the Expenses incurred
by Indemnitee in connection with any Proceeding within 30 days after the receipt by the Company of
a statement or statements requesting such advances from time to time, whether prior to or after
final disposition of any Proceeding. Advances shall be unsecured and interest free. Advances
shall be made without regard to Indemnitee’s ability to repay the Expenses and without regard to
Indemnitee’s ultimate entitlement to indemnification under the other provisions of this Agreement.
Advances shall include any and all reasonable Expenses incurred pursuing an action to enforce this
right of advancement, including Expenses incurred preparing and forwarding statements to the
Company to support the advances claimed. The Indemnitee shall qualify for advances upon the
execution and delivery to the Company of this Agreement which shall constitute an undertaking
providing that the Indemnitee undertakes to repay the advance to the extent that it is ultimately
determined that Indemnitee is not entitled to be indemnified by the Company. This Section 9 shall
not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Section 8.
Section 10. Procedure for Notification and Defense of Claim.
(a) Indemnitee shall notify the Company in writing of any matter with respect to which
Indemnitee intends to seek indemnification or advancement of Expenses hereunder as soon as
reasonably practicable following the receipt by Indemnitee of written notice thereof. The written
notification to the Company shall include a description of the nature of the Proceeding and the
facts underlying the Proceeding. To obtain indemnification under this
Agreement, Indemnitee shall submit to the Company 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, not later than thirty (30) days after receipt by Indemnitee of notice of the
commencement of any Proceeding. The omission by Indemnitee to notify the Company hereunder will
not relieve the Company from any liability which it may have to Indemnitee hereunder or otherwise
than under this Agreement, and any delay in so notifying the Company shall not constitute a waiver
by Indemnitee of any rights under this Agreement. The Secretary of the Company shall, promptly
upon receipt of such a request for indemnification, advise the Board and the General Counsel in
writing that Indemnitee has requested indemnification.
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(b) The Company will be entitled to participate in the Proceeding at its own expense.
Section 11. Procedure Upon Application for Indemnification.
(a) Upon written request by Indemnitee for indemnification pursuant to the first sentence of
Section 10(a), a determination, if required by applicable law, with respect to Indemnitee’s
entitlement thereto shall be made in the specific case: (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; or (ii) if a Change in Control shall not have occurred, (A) by a
majority vote of the Disinterested Directors, even though less than a quorum of the Board, (B) by a
committee of Disinterested Directors designated by a majority vote of the Disinterested Directors,
even though less than a quorum of the Board, (C) if there are no such Disinterested Directors or,
if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the
Board, a copy of which shall be delivered to Indemnitee or (D) if so directed by the Board, by the
stockholders of the Company; and, if it is so 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 with the person, persons or entity making
such determination shall be borne by the Company (irrespective of the determination as to
Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold
Indemnitee harmless therefrom.
(b) In the event the determination of entitlement to indemnification is to be made by
Independent Counsel pursuant to Section 11(a) hereof, the Independent Counsel shall be selected as
provided in this Section 11(b). If a Change in Control shall not have occurred, the Independent
Counsel shall be selected by the Board of Directors, and the Company shall give written notice to
Indemnitee advising him of the identity of the Independent Counsel so selected. 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 Company advising it of the identity of the Independent Counsel so selected. In
either event, Indemnitee or the Company, as the case may be, may, within 10 days after such written
notice of selection shall have been given, deliver to the Company or to Indemnitee, as the case may
be, a written objection to such selection; provided, however, that such objection may be asserted
only on the ground that the Independent Counsel so selected does not meet the requirements of
“Independent Counsel” as defined in Section 2 of this Agreement, and the objection shall set forth
with particularity the factual basis of such assertion. Absent a proper and timely objection, the
person so selected shall act as Independent Counsel. If such written objection is so made and
substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and
until such objection is withdrawn or a court has determined that such objection is without merit.
If, within 20 days after submission by Indemnitee of a written
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request for indemnification pursuant
to Section 10(a) hereof, no Independent Counsel shall have been selected and not objected to,
either the Company or Indemnitee may petition a court of competent jurisdiction for resolution of
any objection which shall have been made by the Company 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 all
objections are so resolved or the person so appointed shall act as Independent Counsel under
Section 11(a) hereof. Upon the due commencement of any judicial proceeding or arbitration pursuant
to Section 13(a) 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).
Section 12. Presumptions and Effect of Certain Proceedings.
(a) In making a determination with respect to entitlement to indemnification hereunder, the
person or persons or entity making such determination shall, to the fullest extent not prohibited
by law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee
has submitted a request for indemnification in accordance with Section 10(a) of this Agreement, and
the Company shall, to the fullest extent not prohibited by law, have the burden of proof to
overcome that presumption in connection with the making by any person, persons or entity of any
determination contrary to that presumption. Neither the failure of the Company (including by its
directors or independent legal counsel) to have made a determination prior to the commencement of
any action pursuant to this Agreement that indemnification is proper in the circumstances because
Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company
(including by its directors or independent legal counsel) that Indemnitee has not met such
applicable standard of conduct, shall be a defense to the action or create a presumption that
Indemnitee has not met the applicable standard of conduct.
(b) Subject to Section 13(e), if the person, persons or entity empowered or selected under
Section 11 of this Agreement to determine whether Indemnitee is entitled to indemnification shall
not have made a determination within sixty (60) days after receipt by the Company of the request
therefor, the requisite determination of entitlement to indemnification shall, to the fullest
extent not prohibited by law, be deemed to have been made and Indemnitee shall be entitled to such
indemnification, 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; provided, however, that such 60-day period may be
extended for a reasonable time, not to exceed an additional thirty (30) days, if the person,
persons or entity making the determination with respect to entitlement to indemnification in good
faith requires such additional time for the obtaining or evaluating of documentation and/or
information relating thereto; and provided, further, that the foregoing provisions of this Section
12(b) shall not apply (i) if the determination of entitlement to indemnification is to be made by
the stockholders pursuant to Section 11(a) of this Agreement and if (A) within fifteen (15) days
after receipt by the Company of the request for such determination the Board of Directors has
resolved to submit such determination to the stockholders for their consideration at an annual
meeting thereof to be held within seventy five (75) days after such receipt and such determination
is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after
such receipt for the purpose of making such determination, such meeting is held
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for such purpose
within sixty (60) days after having been so called and such determination is made thereat, or (ii)
if the determination of entitlement to indemnification is to be made by Independent Counsel
pursuant to Section 11(a) 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
Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and
in a manner which he reasonably believed to be in or not opposed to the best interests of the
Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to
believe that his conduct was unlawful.
(d) Reliance as Safe Harbor. For purposes of any determination of good faith,
Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the
records or books of account of the Enterprise, including financial statements, or on information
supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the
advice of legal counsel for the Enterprise or on information or records given or reports made to
the Enterprise by an independent certified public accountant or by an appraiser or other expert
selected with the reasonable care by the Enterprise. The provisions of this Section 12(d) shall
not be deemed to be exclusive or to limit in any way the other circumstances in which the
Indemnitee may be deemed to have met the applicable standard of conduct set forth in this
Agreement.
(e) Actions of Others. The knowledge and/or actions, or failure to act, of any
director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for
purposes of determining the right to indemnification under this Agreement.
Section 13. Remedies of Indemnitee.
(a) Subject to Section 13(e), in the event that (i) a determination is made pursuant to
Section 11 of this Agreement that Indemnitee is not entitled to indemnification under this
Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 9 of this Agreement,
(iii) no determination of entitlement to indemnification shall have been made pursuant to Section
11(a) of this Agreement within 90 days after receipt by the Company of the request for
indemnification, (iv) payment of indemnification is not made pursuant to Section 5 or 6 or the last
sentence of Section 11(a) of this Agreement within ten (10) days after receipt by the
Company of a written request therefor, (v) payment of indemnification pursuant to Section 3, 4
or 7 of this Agreement is not made within ten (10) days after a determination has been made that
Indemnitee is entitled to indemnification, or (vi) in the event that the Company or any other
person takes or threatens to take any action to declare this Agreement void or unenforceable, or
institutes any litigation or other action or Proceeding designed to deny, or to recover from, the
Indemnitee the benefits provided or intended to be provided to the Indemnitee hereunder, Indemnitee
shall be entitled to an adjudication by a court of his entitlement to such indemnification or
advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an award in
arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration 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
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on which Indemnitee
first has the right to commence such proceeding pursuant to this Section 13(a); provided, however,
that the foregoing clause shall not apply in respect of a proceeding brought by Indemnitee to
enforce his rights under Section 5 of this Agreement. The Company shall not oppose Indemnitee’s
right to seek any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made pursuant to Section 11(a) of this
Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or
arbitration commenced pursuant to this Section 13 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. In any judicial proceeding or arbitration commenced pursuant to this
Section 13 the Company shall have the burden of proving Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be.
(c) If a determination shall have been made pursuant to Section 11(a) of this Agreement that
Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any
judicial proceeding or arbitration commenced pursuant to this Section 13, 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 Company shall, to the fullest extent not prohibited by law, be precluded from
asserting in any judicial proceeding or arbitration commenced pursuant to this Section 13 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 Company is bound by all the
provisions of this Agreement. It is the intent of the Company that the Indemnitee not be required
to incur legal fees or other Expenses associated with the interpretation, enforcement or defense of
Indemnitee’s rights under this Agreement by litigation or otherwise because the cost and expense
thereof would substantially detract from the benefits intended to be extended to the Indemnitee
hereunder. The Company shall indemnify Indemnitee against any and all Expenses and, if requested
by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request
therefore) advance, to the fullest extent not prohibited by law, such Expenses to Indemnitee, which
are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification
or advance of Expenses from the Company under this Agreement or under any directors’ and officers’
liability insurance policies maintained by the Company, regardless of whether Indemnitee ultimately
is determined to be
entitled to such indemnification, advancement of Expenses or insurance recovery, as the case
may be.
(e) Notwithstanding anything in this Agreement to the contrary, no determination as to
entitlement to indemnification under this Agreement shall be required to be made prior to the final
disposition of the Proceeding.
Section 14. Non-exclusivity; Survival of Rights; 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 Company’s Certificate of
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Incorporation, the Company’s Bylaws,
any agreement, a vote of stockholders or a resolution of directors, or otherwise. 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 Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in
Delaware law, whether by statute or judicial decision, permits greater indemnification or
advancement of Expenses than would be afforded currently under the Company’s Bylaws 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 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,
shall not prevent the concurrent assertion or employment of any other right or remedy.
(b) To the extent that the Company maintains an insurance policy or policies providing
liability insurance for directors, officers, employees, or agents of the Company or of any other
corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which
such person serves at the request of the Company, Indemnitee shall be covered by such policy or
policies in accordance with its or their terms to the maximum extent of the coverage available for
any such director, officer, employee or agent under such policy or policies. If, at the time of
the receipt of a notice of a claim pursuant to the terms hereof, the Company has director and
officer liability insurance in effect, the Company shall give prompt notice of the commencement of
such proceeding to the insurers in accordance with the procedures set forth in the respective
policies. The Company shall thereafter take all necessary or desirable action to cause such
insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such proceeding in
accordance with the terms of such policies.
(c) In the event of any payment under this Agreement, the Company 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 Company to bring suit to enforce such rights.
(d) The Company shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable (or for which advancement is provided hereunder)
hereunder if and to the extent that Indemnitee has otherwise actually received such payment
under any insurance policy, contract, agreement or otherwise.
(e) The Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is
or was serving at the request of the Company as a director, officer, employee or agent of any other
corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or
other enterprise shall be reduced by any amount Indemnitee has actually received as indemnification
or advancement of Expenses from such other corporation, limited liability company, partnership,
joint venture, trust, employee benefit plan or other enterprise.
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Section 15. Duration of Agreement. 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 (b) 1 year after the final termination of any Proceeding then pending 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 13 of this Agreement relating thereto.
This Agreement shall be binding upon the Company and its successors and assigns and shall inure to
the benefit of Indemnitee and his heirs, executors and administrators.
Section 16. 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 shall remain enforceable to the fullest extent permitted by
law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform
to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) 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 thereby.
Section 17. Enforcement.
(a) The Company expressly confirms and agrees that it has entered into this Agreement and
assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director
or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this
Agreement in serving as a director or officer of the Company.
(b) This Agreement constitutes the entire agreement between the parties hereto with respect to
the subject matter hereof and supersedes all prior agreements and understandings, oral, written and
implied, between the parties hereto with respect to the subject matter hereof; provided, however,
that this Agreement is a supplement to and in furtherance of the Certificate of Incorporation of
the Company, the By-laws of the Company and applicable
law, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of
Indemnitee thereunder.
Section 18. Modification and Waiver. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by the parties thereto. No waiver of any of
the provisions of this Agreement shall be deemed or shall constitute a waiver of any other
provisions of this Agreement nor shall any waiver constitute a continuing waiver.
Section 19. Notice by Indemnitee. Indemnitee agrees promptly to notify the Company 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. The failure of Indemnitee to so notify the Company
shall not relieve the Company of any obligation which it may have to the Indemnitee under this
Agreement or otherwise.
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Section 20. Notices. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by
hand and receipted for by the party to whom said notice or other communication shall have been
directed, (b) mailed by certified or registered mail with postage prepaid, on the third business
day after the date on which it is so mailed, (c) mailed by reputable overnight courier and
receipted for by the party to whom said notice or other communication shall have been directed or
(d) sent by facsimile transmission or electronic mail, with receipt of oral confirmation that such
transmission or electronic mail has been received:
(a) If to Indemnitee, at the address indicated on the signature page of this Agreement, or
such other address as Indemnitee shall provide to the Company.
(b) If to the Company to
Opnext, Inc.
0 Xxxxxxxxxxx Xxx
Xxxxxxxxx, Xxx Xxxxxx 00000
0 Xxxxxxxxxxx Xxx
Xxxxxxxxx, Xxx Xxxxxx 00000
or to any other address as may have been furnished to Indemnitee by the Company.
Section 21. Contribution. To the fullest extent permissible under applicable law, if
the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason
whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount
incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to
be paid in settlement and/or for Expenses, in connection with any claim relating to an
indemnifiable event under this Agreement,
in such proportion as is deemed fair and reasonable in light of all of the circumstances of
such Proceeding in order to reflect (i) the relative benefits received by the Company and
Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding;
and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents)
and Indemnitee in connection with such event(s) and/or transaction(s).
Section 22. Applicable Law and Consent to Jurisdiction. This Agreement and the legal
relations among the parties shall be governed by, and construed and enforced in accordance with,
the laws of the State of Delaware, without regard to its conflict of laws rules. Except with
respect to any arbitration commenced by Indemnitee pursuant to Section 10(a) of this Agreement, the
Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or
proceeding arising out of or in connection with this Agreement shall be brought only in the
Chancery Court of the State of Delaware (the “Delaware Court”), and not in any other state or
federal court in the United States of America or any court in any other country, (ii) consent to
submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding
arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not
otherwise subject to service of process in the State of Delaware, irrevocably National Registered
Agents, Inc., 0 Xxxx Xxxxxxxxxx Xxxxxx, xx xxx Xxxx xx Xxxxx, Xxxxxx of Kent as its agent in the
State of Delaware as such party’s agent for acceptance of legal process in connection with any such
action or proceeding against such party with the same legal force and validity as if served upon
such party personally within the State of Delaware, (iv)
waive any objection to the laying of venue
of any such action or proceeding in the Delaware Court, and (v)
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waive, and agree not to plead or to
make, any claim that any such action or proceeding brought in the Delaware Court has been brought
in an improper or inconvenient forum.
Section 23. Identical Counterparts. This Agreement may be executed 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 one and the same Agreement. Only one such counterpart signed by the
party against whom enforceability is sought needs to be produced to evidence the existence of this
Agreement.
Section 24. Miscellaneous. Use of the masculine pronoun shall be deemed to include
usage of the feminine pronoun where appropriate. 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.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year
first above written.
| OPNEXT, INC. | INDEMNITEE | |||||||||
By:
|
/s/ Xxxxx Xxxxxxxxx
|
By: | /s/ Xxxxxx Xxxxxxxx
|
|||||||
| Xxxxx Xxxxxxxxx | Name: Xxxxxx Xxxxxxxx | |||||||||
| VP, Business Management / Secretary |
Address: 000 Xxxxxxx Xxxxxx Xxx Xxxxx, XX 00000 |
|||||||||
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