Exhibit 10.18
Rev. 11/9/89
DIRECTOR'S
INDEMNIFICATION AGREEMENT
THIS AGREEMENT is made as of the 9th day of November, 1989 between Reflectone,
Inc., a Florida corporation ("Corporation") and
("Director").
WHEREAS, Director is a member of the Board of Directors of the Corporation and
in such capacity is performing a valuable service; and
WHEREAS, the Corporation's Bylaws (the "Bylaws") provide for the
indemnification of the officers, directors, agents and employees of the
Corporation to the maximum extent authorized by Section 607.014 of Florida
Statutes Annotated, as amended to date (the "State Statute"); and
WHEREAS, such Bylaws and the State Statute specifically provide that they are
not exclusive, and contemplate that contracts may be entered into between the
Corporation and the members of its Board of Directors with respect to
indemnification of such directors; and
WHEREAS, in accordance with the authorization provided by the State Statute,
the Corporation has purchased and presently maintains a policy of directors
and officers liability insurance ("D & O Insurance"), covering certain
liabilities which may be incurred by its directors and officers in the
performance of their services for the Corporation; and
WHEREAS, recent developments with respect to the terms and availability of D &
O Insurance have raised questions concerning the adequacy and reliability of
the protection afforded to directors thereby and under the Bylaws and State
Statute; and
WHEREAS, in order to resolve such questions and thereby induce Director to
continue to serve as a member of its Board of Directors, and to otherwise
provide services to the Corporation, the Corporation has determined and agreed
to enter into this contract with Director;
NOW, THEREFORE, in consideration of Director's continued service as a
Director, and in such other capacities as Director shall render services to
the Corporation, after the date hereof, the parties hereto agree as follows:
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1. Indemnity of Director. The Corporation hereby agrees to hold harmless
and indemnify Director to the full extent authorized or permitted by the
provisions of subsections (1) through (6) and (8) of the State Statute, or by
any amendment thereof or other similar statutory provision authorizing or
permitting such indemnification which is adopted after the date hereof.
2. Maintenance of Insurance and Self Insurance.
(a) Subject only to the provisions of Section 2(b) hereof, the
Corporation hereby agrees that, so long as Director shall continue to
serve as a director of the Corporation (or shall continue at the request
of the Corporation to serve as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise), and thereafter so long as Director shall be subject to any
possible claim or threatened, pending or completed action, suit or
proceeding, whether civil, criminal or investigative, by reason of the
fact that Director was a director of the Corporation (or served in any
of said other capacities), the Corporation will purchase and maintain in
effect for the benefit of Director one or more valid, binding and
enforceable policy or policies of D & O Insurance providing, in all
respects, coverage at least comparable to that presently provided
pursuant to the policy of D & O Insurance currently maintained in force
and effect by the Corporation (the "Insurance Policy").
(b) The Corporation shall not be required to maintain said policy or
policies of D & O Insurance in effect if said insurance is not
reasonably available or if, in the reasonable business judgment of the
Board of Directors, either (i) the premium cost for such insurance is
substantially disproportionate to the amount of coverage, or (ii) the
coverage provided by such insurance is so limited by exclusions that
there is insufficient benefit from such insurance.
(c) In the event the Corporation does not purchase and maintain in
effect said policy or policies of D & O Insurance pursuant to the
provisions of Section 2(b) hereof, the Corporation agrees to hold
harmless and indemnify Director to the full extent of the coverage which
would otherwise have been provided for the benefit of Director pursuant
to the Insurance Policy.
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3. Additional Indemnity. Subject only to the exclusions set forth in
Section 4 hereof, and in addition to the indemnity provided in Sections 1 and
2(c) hereof, Corporation hereby further agrees to hold harmless and indemnify
Director against any and all expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by
Director in connection with any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or investigative
(including an action by or in the right of the Corporation) to which Director
is, was or at any time becomes a party, or is threatened to be made a party,
by reason of the fact that Director is, was or at any time becomes a director,
officer, employee or agent of the Corporation, or is or was serving or at any
time serves at the request of the Corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise.
4. Limitations on Additional Indemnity. No indemnity pursuant to Section 3
hereof shall be paid by the Corporation:
(a) In respect of expenses, judgments and settlement amounts to the
extent attributable to the recovery of remuneration paid or other
financial benefit provided to Director by the Corporation if it shall be
determined by a final judgment or other final adjudication that such
remuneration or financial benefit was paid or provided in violation of
Director's duties and obligations to the Corporation;
(b) On account of any suit in which judgment is rendered against a
Director for an accounting of profits, made from the purchase or sale by
Director of securities of the Corporation, 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, or on account of any payment by Director to the Corporation in
respect of any claim for such an accounting;
(c) On account of Director's conduct if it shall be determined by a
final judgment or other final adjudication to have been knowingly
fraudulent, deliberately dishonest, or grossly negligent, or to have
constituted willful misconduct; or
(d) If a final decision by a Court having jurisdiction in the matter
shall determine that such indemnity is prohibited by the State Statute
or otherwise is not lawful.
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5. Contribution. If the indemnification provided in Sections 1, 2(c) and 3
is unavailable and may not be paid to Director for any reason other than those
set forth in paragraphs (a), (b) and (c) of Section 4, or as a result of
prohibitions set forth in the State Statute, then in respect of any
threatened, pending or completed action, suit or proceeding in which the
Company is jointly liable with Director (or would be if joined in such action,
suit or proceeding), the Company shall contribute to the amount of expenses,
judgments, fines and settlements paid or payable by Director in such
proportion as is appropriate to reflect (i) the relative benefits received by
the Company on the one hand and the Director on the other hand from the
transaction from which such action, suit or proceeding arose, and (ii) the
relative fault of the Company on the one hand and of the Director on the other
in connection with the events which resulted in such expenses, judgments,
fines or settlement amounts, as well as any other relevant equitable
considerations. The relative fault of the Company on the one hand and of the
Director on the other shall be determined by reference to, among other things,
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent the circumstances resulting in such expenses, judgments,
fines or settlement amounts. The Company agrees that it would not be just and
equitable if contribution pursuant to this Section 5 were determined by pro
rata allocation or any other method of allocation which does not take account
of the foregoing equitable considerations.
6. Continuation of Obligations. All agreements and obligations of the
Corporation contained herein shall continue during the period Director is a
director, officer, employee or agent of the Corporation (or is serving at the
request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise),
and shall continue thereafter for so long as Director shall be subject to any
possible claim or threatened, pending or completed action, suit or proceeding,
whether civil, criminal or investigative, by reason of the fact that Director
was a director of the Corporation or serving in any other capacity referred to
herein.
7. Notification and Defense of Claim. Promptly after receipt by Director
of notice of the commencement of any action, suit or proceeding, Director
will, if a claim in respect thereof is to be made against the Corporation
under this Agreement (other than under Section 1 hereof), notify the
Corporation of the commencement thereof, but the omission so to notify the
Corporation will not relieve it from any liability which it may have to
Director otherwise than under this Agreement. With respect to any such
action, suit or proceeding as to which Director so notifies the Corporation:
(a) The Corporation will be entitled to participate therein at its own
expense;
(b) The Corporation will directly pay, or promptly reimburse Director
for, all expenses reasonably incurred by Director in the defense
thereof; and
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(c) Except as otherwise provided below, the Corporation may assume the
defense thereof. After notice from the Corporation to Director of its
election so to assume such defense, the Corporation will not be liable
to Director under this Agreement for any legal or other expenses
subsequently incurred by Director in connection with the defense
thereof, other than reasonable costs of investigation or as otherwise
provided below. Director shall have the right to employ his separate
counsel in such action, suit or proceeding, but the fees and expenses of
such counsel incurred after notice from the Corporation of its
assumption of the defense thereof shall be at the expense of Director
unless (i) the employment of counsel by Director has been authorized by
the Corporation, (ii) counsel designated by the Corporation to conduct
such defense shall not be reasonably satisfactory to Director, or (iii)
the Corporation shall not in fact have employed counsel to assume the
defense of such action, in each of which cases the fees and expenses of
such counsel shall be at the expense of the Corporation. For the
purposes of clause (ii) above, Director shall be entitled to determine
that counsel designated by the Corporation is not reasonably
satisfactory if, among other reasons, Director shall have been advised
by qualified counsel that, because of actual or potential conflicts of
interest in the matter between Director, other officers or directors
similarly indemnified by the Corporation, and/or the Corporation,
representation of Director by counsel designated by the Corporation is
likely to materially and adversely affect Director's interests or would
not be permissible under applicable canons of legal ethics.
The Corporation shall not be liable to indemnify Director under this
Agreement for any amounts paid in settlement of any action or claim effected
without its written consent. The Corporation shall not settle any action or
claim in any manner which would impose any penalty or limitation on Director
without Director's written consent. Neither the Corporation nor Director will
unreasonably withhold their consent to any proposed settlement.
8. Repayment of Expenses. Director agrees to reimburse the Corporation for
all reasonable expenses paid by the Corporation in defending any civil or
criminal action, suit or proceeding against Director in the event, and only to
the extent, that it shall be ultimately determined that Director is not
entitled to be indemnified by the Corporation for such expenses under the
provisions of the State Statute, the Bylaws, this Agreement or otherwise.
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9. Enforcement.
(a) The Corporation expressly confirms and agrees that it has entered
into this Agreement and assumed the obligations imposed on it hereby in
order to induce Director to continue as a director of the Corporation
and to otherwise provide such services to the Corporation as may be
provided by Director from time to time, and acknowledges that Director
is relying upon this Agreement in continuing to serve in such capacity
or capacities.
(b) In the event Director is required to bring any action to enforce
rights or to collect moneys due under this Agreement and is successful
in such action, the Corporation shall reimburse Director for all of
Director's reasonable fees and expenses in bringing and pursuing such
action.
10. Separability. 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 in whole or in part for
any reason, such invalidity or unenforceability shall not affect the validity
or enforceability of the other provisions hereof.
11. Governing Law; Successors; Amendment and Termination.
(a) This Agreement shall be interpreted and enforced in accordance with
the laws of the State of Florida.
(b) This Agreement shall be binding upon Director and the Corporation,
its successors and assigns, and shall inure to the benefit of Director,
his heirs, personal representatives and assigns and to the benefit of
the Corporation, its successors and assigns.
(c) No amendment, modification, termination or cancellation of this
Agreement shall be effective unless in writing signed by both parties
hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
REFLECTONE, INC.
___________________ By: ____________________
Director Chairman of the Board
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