AUTOWEB, INC. INDEMNIFICATION AGREEMENT
Exhibit
10.3
This
Indemnification Agreement (“Agreement”) is
made and entered into as of October 22, 2018 by and between
AutoWeb, Inc., a Delaware corporation (“Company”), and
Xxxx Xxxxxx (“Indemnitee”).
Background
In
order to attract and retain the services of highly qualified
individuals, such as Indemnitee, to serve the Company and, in part,
to induce Indemnitee to continue to provide services to the
Company, the Company wishes to provide for indemnification and
advancement of expenses to Indemnitee to the maximum extent
permitted by law.
The
Company’s Seventh Amended and Restated Bylaws, as amended
(“Bylaws”), and
the Company’s Sixth Restated Certificate of Incorporation, as
amended (“Certificate”),
require that the Company indemnify the directors, officers,
employees and other agents of the Company, including persons
serving at the request of the Company in those capacities with
other corporations or enterprises, as authorized by the General
Corporation Law of the State of Delaware, as amended
(“DGCL”), and
the Bylaws and the Certificate each expressly provide that the
indemnification provided therein is not exclusive and contemplates
that the Company may enter into separate agreements with its
directors, officers, employees and other agents of the
Company.
Indemnitee does not
believe that the protection currently provided by applicable law,
the Bylaws, the Certificate and available insurance may be adequate
under the circumstances, and the Company has determined that
Indemnitee and other directors, officers, employees and agents of
the Company may not be willing to serve or continue to serve in
such capacities without additional protections. The Company desires
and has requested Indemnitee to serve or continue to serve as a
director, officer, employee or agent of the Company, as the case
may be, and has proffered this Agreement to Indemnitee as an
additional inducement to serve in such capacity. Indemnitee is
willing to serve, or to continue to serve, as a director, officer,
employee or agent of the Company, as the case may be, if Indemnitee
is furnished the indemnity provided herein by the
Company.
This
Agreement is a supplement to, and in furtherance of, the Bylaws,
the Certificate and any resolutions adopted pursuant thereto, and
must not be deemed a substitute therefor, nor to diminish or
abrogate any rights of Indemnitee thereunder.
In
consideration of Indemnitee’s agreement to serve and the
mutual agreements set forth herein, the sufficiency of which is
hereby acknowledged, the parties hereto, intending to be legally
bound, hereby agree as follows:
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Agreement
1. Services to the Company. Indemnitee will
serve, at the will of the Company (or its stockholders, as
applicable) or under separate contract if any such contract exists,
as Senior Vice President and Chief Human Resources Officer, or as a
director, officer, agent or other fiduciary of an affiliate of the
Company, including any subsidiary or employee benefit plan of the
Company (each, an “Affiliate”),
to the best of Indemnitee’s ability so long as Indemnitee
remains in such position(s); provided, however, that (i) Indemnitee may at any time and
for any reason resign from such position(s) (subject to any
contractual obligation that Indemnitee may have assumed apart from
this Agreement or any obligation imposed by operation of law), and
(ii) neither the Company nor any Affiliate have any obligation
under this Agreement to continue Indemnitee in any such
position(s). This Agreement is not an employment contract between
the Company (or any of its Affiliates) and Indemnitee. Nothing in
this Agreement may be construed or interpreted as giving Indemnitee
any right to be retained in the employ of the Company (or any of
its Affiliates). Indemnitee specifically acknowledges and agrees
that except as may be provided in a written employment contract
between Indemnitee and the Company or an Affiliate: (i)
Indemnitee’s employment with the Company or any of its
Affiliates is at-will, and (ii) Indemnitee may be discharged at any
time for any reason. The foregoing notwithstanding, this Agreement
will continue in force after Indemnitee has ceased to serve as
Senior Vice President and Chief Human Resources Officer of the
Company.
2. Indemnity of Indemnitee. The Company
hereby agrees to hold harmless and indemnify Indemnitee to the
fullest extent authorized or permitted by the provisions of the
Bylaws, the Certificate, the DGCL or other applicable law. The
phrase “to the fullest extent authorized or permitted”
includes to the fullest extent authorized or permitted by any
amendments or replacements of the Bylaws, the Certificate, or the
DGCL (or other applicable law) adopted or enacted after the date of
this Agreement that increase the extent to which a corporation may
indemnify its directors, officers, employees or
agents.
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3. Additional Indemnity. In addition to,
and not in limitation of, the indemnification otherwise provided
for herein, and subject only to the exclusions set forth in
Section 4 hereof, the Company hereby further agrees to hold
harmless and indemnify Indemnitee against any and all Expenses (as
defined below) that Indemnitee becomes legally obligated to pay
because of any claim or claims made against or by Indemnitee in
connection with any threatened, pending or completed action, suit
or proceeding whether by or in the right of the Company or
otherwise and whether civil, criminal, legislative, arbitrational,
administrative or investigative, and whether formal or informal
including any appeal therefrom, to which Indemnitee is, was or at
any time becomes a party, potential party, or a participant,
including as a non-party witness or otherwise, or is threatened to
be made a party, by reason of the fact that Indemnitee is, was or
at any time becomes a director, officer, employee or other agent of
the Company, or is or was serving, or at any time serves at the
request of, the Company or any Affiliate as a director, officer,
employee or other agent (including a trustee, partner or manager)
of another corporation, limited liability company, partnership,
joint venture, trust, employee benefit plan or other enterprise,
including an Affiliate (collectively, a “Proceeding”),
in each case whether or not Indemnitee was serving in that capacity
at the time any liability or Expense is incurred. The definition of
“Proceeding” must be considered met if Indemnitee in
good faith believes the situation might lead to or culminate in the
institution of a Proceeding. “Expenses” mean
all expenses, including attorneys’ fees, witness fees, fees
of experts, forensic consultants and other professionals,
retainers, court costs, travel expenses, photocopying, printing and
binding costs, telephone charges, and any other cost, disbursement
or expense customarily incurred in connection with defending,
prosecuting, preparing to prosecute or defend, investigating, being
prepared to be a witness in, responding to a subpoena or other
discovery request, or otherwise participating in, a Proceeding,
damages, penalties, interest charges thereon, judgments, fines, and
amounts paid in settlement, any federal, state, local or foreign
taxes imposed on Indemnitee as a result of the actual or deemed
receipt of any payments under this Agreement, ERISA excise taxes
and penalties imposed on Indemnitee, costs associated with any
appeals, including without limitation the premium, security for,
and other costs relating to any costs bond, supersedeas bond, or
other appeal bond or its equivalent, and any other amounts for time
spent by Indemnitee for which Indemnitee is not compensated by the
Company or any Affiliate or third party for any period during which
Indemnitee is not an agent, in the employment of, or providing
services for compensation to, the Company or any Affiliate. Without
limiting the generality of the foregoing, references to
“serving at the request of the Company as a director,
officer, employee or agent” includes:
(i) Indemnitee’s performance of services for, on behalf
of, or for the benefit of the Company or any Affiliate while
Indemnitee is serving as a director, officer, employee or other
agent of the Company or an Affiliate regardless of whether
Indemnitee is at the time a director, officer or employee of the
Company or the Affiliate for, on behalf of, or for the benefit of
which Indemnitee performed services; or (ii) any service by
Indemnitee that imposes duties on, involves services by, Indemnitee
with respect to an employment benefit plan, its participants or
beneficiaries, including as a deemed fiduciary
thereto.
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4. Limitations on Additional Indemnity. No
indemnity pursuant to Sections 2 or 3 hereof must be paid by
the Company:
(a)
On
account of any claim against Indemnitee solely for an accounting of
profits made from the purchase or sale by Indemnitee of securities
of the Company pursuant to the provisions of Section 16(b)
(“Section 16(b)”)
of the Securities Exchange Act of 1934, as amended
(“Exchange
Act”), or similar provisions of any federal, state or
local statutory law; provided, that with respect to a claim against
Indemnitee solely for
an accounting of profits made from the purchase or sale by
Indemnitee of securities of the Company pursuant to the provisions
of Section 16(b) or similar provisions of any federal, state
or local law, Indemnitee is entitled to the advancement of legal expenses
unless the Company reasonably determines that Indemnitee clearly
violated Section 16(b) and must disgorge profits to the
Company pursuant to the terms thereof. Notwithstanding anything to
the contrary stated or implied in this Section 4(a),
indemnification pursuant to this Agreement relating to any
Proceeding against Indemnitee for an accounting of profits made
from the purchase or sale by Indemnitee of securities of the
Company pursuant to the provisions of Section 16(b) or similar
provisions of any federal, state or local laws is not prohibited if
Indemnitee ultimately establishes in any Proceeding that no recovery of
such profits from Indemnitee is permitted under Section 16(b)
or similar provisions of any federal, state or local
laws;
(b)
On
account of 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 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 (“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), provided, Indemnitee is entitled to
advancement of Expenses related to, arising out of, or resulting
from a Proceeding to recover such compensation or profits prior to
the final adjudication of that Proceeding;
(c)
On account of
Indemnitee’s conduct that is established by a final judgment,
not subject to appeal, as knowingly fraudulent or deliberately
dishonest or that constituted willful misconduct;
(d)
On account of
Indemnitee’s conduct that is established by a final judgment,
not subject to appeal, as constituting a breach of
Indemnitee’s duty of loyalty to the Company or resulting in
any personal profit or advantage to which Indemnitee was not
legally entitled;
(e)
For which payment
is actually made to Indemnitee under a valid and collectible
insurance policy or under a valid and enforceable indemnity clause,
bylaw or agreement, except in respect of any excess beyond payment
under such insurance, clause, bylaw or agreement and such payment
fully compensates Indemnitee against all expenses. Notwithstanding
anything to the contrary stated or implied in this
Section 4(e), (i) Indemnitee has no obligation to reduce,
offset, allocate, pursue or apportion any indemnification, hold
harmless, exoneration, advancement, contribution or insurance
coverage among multiple persons possessing those obligations to
Indemnitee prior to the Company’s satisfaction and
performance of its obligations under this Agreement; and (ii) the
Company must perform fully its obligations under this Agreement
regardless of whether Indemnitee holds, may pursue or has pursued
any indemnification, advancement, hold harmless, exoneration,
contribution or insurance coverage rights against any person or
entity other than the Company;
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(f)
If indemnification
is not lawful, as established by the Company by a final judgment on
such issue not subject to appeal; or
(g)
In connection with
any Proceeding (or part thereof) initiated by Indemnitee, or any
Proceeding by Indemnitee against the Company or an Affiliate or the
directors, officers, employees or other agents of the Company or an
Affiliate, unless (i) such indemnification is expressly
required to be made by law, (ii) the Proceeding was authorized
by the Company’s Board of Directors (“Board”),
(iii) such indemnification is provided by the Company, in its
sole discretion, pursuant to the powers vested in the Company under
the DGCL or any other applicable law, (iv) the Proceeding is
initiated pursuant to Section 10 hereof, or (v) the
Proceeding initiated by Indemnitee is a cross-claim or counter-claim.
5. Continuation of Indemnity. All
agreements and obligations of the Company contained herein continue
during the period Indemnitee is a director, officer, employee or
other agent of the Company (or is or was serving at the request of
the Company as a director, officer, employee or other agent
(including trustee, partner or manager) of another corporation,
limited liability company, partnership, joint venture, trust,
employee benefit plan or other enterprise) and will continue
thereafter so long as Indemnitee is subject to any Proceeding by
reason of the fact that Indemnitee was serving in the capacity
referred to herein.
6. Partial Indemnification. The Company
will indemnify Indemnitee for a portion of the Expenses that
Indemnitee becomes legally obligated to pay in connection with any
Proceeding even if not entitled hereunder to indemnification for
the total amount thereof, and the Company must indemnify Indemnitee
for the portion thereof to which Indemnitee is entitled and the
acceptance of such partial payment will not be an admission by
Indemnitee that he or she is not entitled to all of his or her
Expenses or a bar against Indemnitee seeking recovery of the full
amount of Expenses.
7. Notice
and Other Indemnification Procedures.
(a) Notification of Proceeding. Indemnitee
agrees to notify the Company in writing promptly upon being served
with any summons, citation, subpoena, complaint, indictment,
information or other document relating to any Proceeding. The
failure of Indemnitee to so notify the Company does not relieve the
Company of any obligation that it may have to Indemnitee under this
Agreement or otherwise and any delay in giving notice will not
constitute a waiver by Indemnitee of any rights under this
Agreement.
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(b) Request for Indemnification and Indemnification
Payments. Upon written request by Indemnitee for
indemnification, a determination, if required by applicable law,
with respect to Indemnitee’s entitlement thereto must be made
in the specific case: (i) if a Change in Control (as defined
in Section 8(b)) shall have occurred, by Independent Counsel (as
defined below) in a written opinion to the Board, a copy of which
must be delivered to Indemnitee; or (ii) if a Change in Control
shall not have occurred, (A) by a majority vote of the
Disinterested Directors (as defined below), 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 must 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 must be made promptly, but in no event more than ten
(10) days after such determination. Indemnitee agrees to
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 that 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 or
on behalf of Indemnitee in so cooperating with the person, persons
or entity making such determination must 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. The Company must
advise Indemnitee promptly in writing with respect to any
determination that Indemnitee is or is not entitled to
indemnification, including a description of any reason or basis for
which indemnification has been denied. Claims for advancement of
Expenses must be made under the provisions of Section 9 of
this Agreement.
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In the
event the determination of entitlement to indemnification is to be
made by Independent Counsel, the Independent Counsel must be
selected as provided in this Section 7(b). If a Change in
Control shall not have occurred, the Board must select the
Independent Counsel, and the Company must give prompt, written
notice to Indemnitee advising him of the identity of the
Independent Counsel so selected. If a Change in Control shall have
occurred, Indemnitee must select the Independent Counsel (unless
Indemnitee requests that the selection be made by the Board, in
which event the preceding sentence applies), and Indemnitee must
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 ten (10) days after
such written notice of selection has been given, deliver to the
Company or to Indemnitee, as the case may be, a written objection
to the selection; provided,
however, that the objection may be asserted only on the
basis that the Independent Counsel so selected does not meet the
requirements of “Independent Counsel” as defined below,
and the objection must set forth with particularity the factual
basis of such assertion. Absent a proper and timely objection, the
person so selected will act as Independent Counsel. If a written
objection is so made and substantiated, the Independent Counsel so
selected may not serve as Independent Counsel unless and until the
objection is withdrawn or the Delaware Court of Chancery has
determined that such objection is without merit. If, within twenty
(20) days after the later of submission by Indemnitee of a written
request for indemnification and the final disposition of the
Proceeding, no Independent Counsel has been selected and not
objected to, either the Company or Indemnitee may petition the
Delaware Court of Chancery 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 that
court or by such other person as that court may designate, and the
person with respect to whom all objections are so resolved or the
person so appointed will act as Independent Counsel. The Company
agrees to pay the reasonable fees and expenses, including any
retainer or advance, of the Independent Counsel referred to above
and to indemnify such counsel fully against any and all Expenses,
claims, liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto. “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. “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, any Affiliate or Indemnitee in any
matter material to any such person (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” does 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.
(c) Notice to Insurers. If, at the time of
the receipt by the Company of a notice pursuant to
Section 7(a) hereof, the Company has liability insurance in
effect which may cover that Proceeding, the Company must give
prompt notice of the commencement of that Proceeding to the
insurers in accordance with the procedures set forth in the
respective policies. The Company must thereafter take all necessary
or desirable action to cause those insurers to pay, on behalf of
Indemnitee, all Expenses payable to Indemnitee in respect of such
Proceeding in accordance with the terms of their policies, but any
such action by the Company will not relieve it of its obligations
hereunder.
(d) Notwithstanding
anything in this Agreement to the contrary, no determination as to
entitlement to indemnification under this Agreement may be required
to be made prior to the final disposition of the Proceeding as to
Indemnitee.
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8. Assumption
of Defense.
(a) In the event the
Company is requested by Indemnitee to pay the Expenses of any
Proceeding, the Company, if appropriate, will be entitled to assume
the defense of that Proceeding, or to participate to the extent
permissible in that Proceeding, with counsel approved by
Indemnitee, which approval may not be unreasonably withheld or
delayed. Upon assumption of the defense by the Company and the
retention of such counsel by the Company, the Company will not be
liable to Indemnitee under this Agreement for any fees of counsel
subsequently incurred by Indemnitee with respect to the same
Proceeding; provided, that
Indemnitee will have the right to employ separate counsel in that
Proceeding at Indemnitee’s sole cost and expense. After the
Company has assumed the defense of a Proceeding, Indemnitee will be
entitled to, at Indemnitee’s own expense, engage counsel for
the purpose of monitoring the defense being provided by counsel
retained by the Company, and the Company must direct that counsel
to cooperate with and provide requested information to
Indemnitee’s monitoring counsel. Notwithstanding the
foregoing, if (i) Indemnitee’s counsel delivers a
written notice to the Company stating that such counsel has
reasonably concluded that there may be a conflict of interest
between the Company and Indemnitee in the conduct of any defense in
the Proceeding, (ii) the Company has not, in fact, employed
counsel or otherwise actively pursued the defense of the Proceeding
within a reasonable time, or thereafter reasonably maintained the
defense of the Proceeding, (iii) there has been a Change in
Control (as defined below), or (iv) Indemnitee reasonably
concludes that counsel engaged by the Company on behalf of
Indemnitee may not adequately represent Indemnitee, then in any
such event the fees and expenses of Indemnitee’s counsel to
defend the Proceeding must be at the expense of the Company and
subject to the indemnification and advancement of expenses
provisions of this Agreement. Provided, however, that in the event
there are other defendants in a Proceeding who are entitled to
counsel other than counsel engaged by the Company, the Company will
only be obligated to pay the fees and expenses of one (1) counsel
for all those defendants, including Indemnitee, unless
Indemnitee’s counsel delivers a written notice to the Company
stating that such counsel has reasonably concluded that there may
be a conflict of interest that would prevent one (1) counsel from
representing all such defendants, including
Indemnitee.
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(b) For purposes of
this Agreement, a “Change in
Control” is 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 a 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, (A) who is or
becomes the beneficial owner, directly or indirectly, of securities
of the Company representing ten percent (10%) or more of the
combined voting power of the Company’s then outstanding
Voting Securities (as defined below), increases his, her or its
beneficial ownership of such securities by five percent (5%) or
more over the percentage so owned by such person, or
(B) becomes the “beneficial owner” (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing more than twenty percent
(20%) of the total voting power represented by the Company’s
then outstanding Voting Securities, (ii) during any period of
two (2) consecutive years, individuals who at the beginning of that
period constitute the Board and any new director 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 majority thereof, or (iii) the Company merges or
consolidates with any other corporation other than a merger or
consolidation that 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, or its ultimate
parent) at least sixty percent (60%) of the total voting power
represented by the Voting Securities, as defined below, of the
Company or such surviving entity, or its ultimate parent,
outstanding immediately after such merger or consolidation, or 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 (in one (1) transaction or a series of transactions) all
or substantially all of the Company’s assets, (iv) the
Company commences any case, action or proceeding before any court
or governmental body (or a third party commences any such
proceeding that remains undismissed by or consented to within sixty
(60) days) relating to bankruptcy, reorganization, insolvency,
liquidation, receivership, dissolution, winding-up or relief of
debtors, or (v) the Company commences any general assignment
for the benefit of creditors, composition, marshaling of assets for
creditors, or other similar arrangement in respect of its creditors
generally or any substantial portion of its creditors.
(c) For
purposes of this Agreement, “Voting
Securities” means any securities of the Company that
vote generally in the election of directors.
(d) Notwithstanding
any other provision of this Agreement, to the extent that
Indemnitee has been successful on the merits or otherwise,
including, without limitation, the dismissal of an action without
prejudice, in defense of any Proceeding or in the defense of any
claim, issue or matter therein, the Company must indemnify
Indemnitee against all Expenses incurred by Indemnitee in
connection therewith.
9. Advances
of Expenses.
(a) The Company will
advance to Indemnitee, prior to the final adjudication of any
Proceeding of this Agreement, any and all Expenses relating to,
arising out of or resulting from any Proceeding (other than a
Proceeding for which indemnification is excluded pursuant to
Section 4(g)) paid or incurred by Indemnitee or which Indemnitee
determines are reasonably likely to be paid or incurred by
Indemnitee. The right to advances under this Section 9 in all
events continues until final disposition of any Proceeding,
including all possible appeals therefrom. Advances must 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 must be unsecured and interest free. Advances include any
and all reasonable Expenses incurred in pursuing an action to
enforce this right of advancement, including Expenses incurred in
preparing and forwarding statements to the Company or its insurance
carrier(s) to support the advances claimed.
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(b) Indemnitee’s
right to such advancement is not subject to the satisfaction of any
standard of conduct. Without limiting the generality or effect of
the foregoing, within fifteen (15) business days after any request
by Indemnitee, the Company must, in accordance with such request
(but without duplication), (i) pay such Expenses on behalf of
Indemnitee, (ii) advance to Indemnitee funds in an amount
sufficient to pay such Expenses, or (iii) reimburse Indemnitee
for such Expenses.
(c) Indemnitee
undertakes to the fullest extent permitted by law to repay the
amounts advanced pursuant to this Agreement (without interest) if
and to the extent that it is ultimately determined by a court of
competent jurisdiction in a final judgment, not subject to appeal,
that Indemnitee is not entitled to be indemnified therefor by the
Company. No other form of undertaking may be required other than
the execution of this Agreement.
(d) Indemnitee must use
commercially reasonable efforts to provide documentation to the
Company relating to Expenses as incurred in order to permit the
Company to properly deduct the advancement of Expenses pursuant to
this Section 9; provided,
however, that Indemnitee will only be required to provide
such documentation to the extent that such provision will not
constitute a waiver of the attorney-client privilege or the work
product doctrine.
10.
Enforcement; Presumption of Entitlement.
(a) Any right to
indemnification or advances granted by this Agreement to Indemnitee
is enforceable by or on behalf of Indemnitee in any court of
competent jurisdiction if (i) the claim for indemnification is
denied, in whole or in part; (ii) no disposition of such claim
is made within seventy (70) days of request therefor; (iii) payment
of indemnification is not made to Indemnitee within ten (10) days
of a determination that Indemnitee is entitled to indemnification;
(iv) advancement of Expenses is not timely made; or (v) the Company
or any other person takes or threatens to take action to declare
this Agreement unenforceable or institutes litigation or other
action or proceeding to deny or recover from Indemnitee the
benefits provided by, or intended to be provided by, this
Agreement. Indemnitee, in such enforcement action, if successful in
whole or in part, must be entitled to be paid also the Expenses of
prosecuting Indemnitee’s claim. The Company must pay interest
at the legal rate under Delaware law on all amounts that the
Company is obligated to advance or indemnify pursuant to this
Agreement, commencing on the date on which the Company must advance
Expenses or the earlier of the date of determination of
indemnification or seventy (70) days of a request therefor and
ending on the date on which payment is made.
(b) It is a defense to
any action for which a claim for indemnification is made under
Sections 2 and 3 hereof (other than an action brought to
enforce a claim for Expenses pursuant to Section 8 hereof)
that Indemnitee is not entitled to indemnification because of the
limitations set forth in Section 4 hereof.
(c) In any such
Proceeding instituted by Indemnitee pursuant to this
Section 10, the Company must be precluded, to the fullest
extent permitted by law, from asserting that the procedures and
presumptions of this Agreement are not valid, binding and
enforceable and must stipulate in any such court that the Company
is bound by all the provisions of this Agreement and is precluded
from making any assertion to the contrary.
-10-
(d) In making any
determination concerning Indemnitee’s right to
indemnification, it must be presumed that Indemnitee has satisfied
the applicable standard of conduct, and to the fullest extent not
prohibited by law, the Company has the burden of proof to overcome
that presumption by its adducing clear and convincing evidence to
the contrary. Neither the failure of the Company (including the
Disinterested Directors, the Company’s stockholders, or
Independent Counsel) to have made a determination prior to the
commencement of such enforcement action that indemnification of
Indemnitee is proper in the circumstances, nor an actual
determination by the Company (including the Disinterested
Directors, the Company’s stockholders, or Independent
Counsel) that such indemnification is improper is a defense to the
action or creates a presumption that Indemnitee is not entitled to
indemnification under this Agreement or otherwise. Any judicial
proceeding must be conducted in all respects as a trial
de novo on the merits and
Indemnitee must not be prejudiced by any actual determination by
the Company any assertion to the contrary.
(e) For purposes of any
determination of good faith, Indemnitee must be deemed to have
acted in good faith if Indemnitee’s action is based on the
records or books of account of the Company or any Affiliate,
including financial statements, or on information supplied to
Indemnitee by the directors or officers of the Company or any
Affiliate in the course of their duties, or on the advice of legal
counsel for the Company or an Affiliate or on information or
records given or reports made to the Company or an Affiliate 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 10(e) must 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. Whether or not the foregoing
provisions of this Section 10(e) are satisfied, it must in any
event be presumed that Indemnitee has at all times acted in good
faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company.
(f) Subject to Section
7(d), if a determination of whether Indemnitee is entitled to
indemnification is not made within forty (40) days after receipt by
the Company of the request therefor, the requisite determination of
entitlement to indemnification must, to the fullest extent not
prohibited by law, be deemed to have been made and Indemnitee must
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 40-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 10(f) do not apply (i) if the determination of
entitlement to indemnification is to be made by the and if (A)
within ten (10) days after receipt by the Company of the request
for such determination the Board has resolved to submit such
determination to the stockholders for their consideration at an
annual meeting thereof to be held within sixty (60) days after such
receipt and such determination is made thereat, or (B) a special
meeting of stockholders is called within ten (10) days after such
receipt for the purpose of making such determination, such meeting
is held 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 7(a) of this
Agreement.
-11-
(g) The remedies
provided for in this Section 10 are in addition to any other
remedies available to Indemnitee at law or in equity or pursuant to
the Certificate, the Bylaws or other written agreement between the
Company and Indemnitee.
11. Unauthorized Settlements. Any provision
herein to the contrary notwithstanding, the Company is not
obligated pursuant to the terms of this Agreement to indemnify
Indemnitee under this Agreement for any amounts paid in settlement
of a Proceeding effected by Indemnitee without the Company’s
written consent. Further, the Company must not, without the prior
written consent of Indemnitee, effect any settlement of:
(a) any Proceeding if Indemnitee is or could have been a
party, or (b) any Proceeding in which the Company is, or could
be, jointly liable with Indemnitee (or would be if joined in such
Proceeding) unless such settlement solely involves the payment of
money and includes a complete and unconditional release of
Indemnitee from all liability on any claims that are the subject
matter of such Proceeding. Neither the Company nor Indemnitee may
unreasonably withhold, delay or condition consent to any proposed
settlement; provided,
however, that: (i) the Company may in any event decline
to consent to (or to otherwise admit or agree to any liability for
indemnification hereunder in respect of) any proposed settlement if
the Company is also a party in such Proceeding and determines in
good faith that such settlement is not in the best interests of the
Company and its stockholders, and (ii) Indemnitee may withhold
consent to any settlement that does not provide a complete and
unconditional release of Indemnitee requires Indemnitee to take any
action other than executing a release of parties providing a
release of Indemnitee, or imposes any penalty or other limitation
or disqualification on Indemnitee. The Company must notify
Indemnitee promptly of the receipt of any settlement offer or if it
intends to submit a settlement offer and must provide Indemnitee a
reasonable time to consider the offer.
12. Mutual Acknowledgment. Both the Company
and Indemnitee acknowledge that in certain instances, Federal or
state law or applicable public policy may prohibit the Company from
indemnifying its directors, officers, employees, agents or
fiduciaries under this Agreement or otherwise. Indemnitee
understands and acknowledges that the Company has undertaken or may
be required in the future to undertake with the Securities and
Exchange Commission to submit the question of indemnification to a
court in certain circumstances for a determination of the
Company’s right under public policy to indemnify
Indemnitee.
13. Period of Limitations. No legal action
may be brought and no cause of action may be asserted by or in the
right of the Company against Indemnitee, Indemnitee’s estate,
spouse, heirs, executors or personal or legal representatives after
the expiration of two (2) years from the date of accrual of such
cause of action, and any claim or cause of action of the Company
will be extinguished and deemed released unless asserted by the
timely filing of a legal action within such two (2)-year period;
provided, however, that if
any shorter period of limitations is otherwise applicable to any
such cause of action, such shorter period must govern.
14. Subrogation. In the event of payment
under this Agreement and after Indemnitee has no more Expenses in
respect of a Proceeding, the Company will be subrogated to the
extent of such payment to all of the rights of recovery of
Indemnitee, who must execute all documents required and must do all
acts that may be necessary to secure such rights and to enable the
Company effectively to bring suit to enforce such
rights.
15. Non-Exclusivity of Rights. The rights
conferred on Indemnitee by this Agreement are not exclusive of any
other right which Indemnitee may have or hereafter acquire under
any statute, provision of the Certificate or the Bylaws, each as
may be amended from time to time, agreement, vote of stockholders
or directors, or otherwise.
-12-
16. Survival
of Rights; Change in Control.
(a) The rights
conferred on Indemnitee by this Agreement continue after Indemnitee
has ceased to be a director, officer, employee or other agent of
the Company or to serve at the request of the Company as a
director, officer, trustee, fiduciary, partner, manager, employee
or other agent of another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise and will inure to
the benefit of Indemnitee’s heirs, executors and
administrators.
(b) The Company must
require and cause any successor thereto (whether direct or
indirect) in connection with a Change in Control, by written
agreement, expressly to assume and agree to perform this Agreement
in the same manner and to the same extent that the Company would be
required to perform if no such Change in Control
occurred.
17. Contribution.
(a) If the
indemnification provided for by this Agreement is unavailable in
whole or in part and may not be paid to Indemnitee for any reason
other than those set forth in Section 4 hereof, then in
respect to any Proceeding in which the Company is jointly liable
with Indemnitee (or would be if joined in such Proceeding), to the
fullest extent permissible under applicable law, the Company, in
lieu of indemnifying and holding harmless Indemnitee, must pay, in
the first instance, the entire amount of Expenses incurred by
Indemnitee in connection with any Proceeding without requiring
Indemnitee to contribute to such payment, and the Company hereby
waives and relinquishes any right of contribution it may have at
any time against Indemnitee.
(b) The Company hereby
agrees to indemnify and hold harmless fully to the extent
permissible under applicable law Indemnitee from any claims for
contribution that may be brought by officers, directors or
employees of the Company (other than Indemnitee) who may be jointly
liable with Indemnitee.
18. Liability
Insurance.
(a) For the duration of
Indemnitee’s service as a director and/or officer of the
Company, and thereafter for so long as Indemnitee may be subject to
any pending or possible indemnifiable claim, the Company must use
best efforts (taking into account the scope and amount of coverage
available relative to the cost thereof) to cause to be maintained
in effect policies of directors’ and officers’
liability insurance, errors and omissions insurance and employment
practices insurance providing coverages for directors and/or
officers of the Company that are at least substantially comparable
in scope and amount to that provided by the Company’s current
policies covering directors and officers. The minimum AM Best
rating for the insurance carriers of such insurance must be not
less than A-VI.
(b) In the event of a
Change in Control, the Company must (i) maintain in force any
and all insurance policies then maintained by the Company providing
liability insurance in respect of Indemnitee, or (ii) require
and cause any successor thereto (whether direct or indirect) to
obtain and maintain a directors’ and officers’
liability insurance policy (and any other liability insurance
policies, including errors and omissions and employment practices,
to the extent such liability policies were claims-made policies
immediately prior to the Change in Control) that provides coverage
for Indemnitee that is at least substantially comparable in scope
and amount to that provided to Indemnitee by the Company as of
immediately prior to the Change in Control, in each case for the
six-year period immediately following the Change in Control. This
“tail coverage” must be placed by the Company’s
insurance broker and be placed with a carrier or carriers having an
AM Best rating that is not less than A-VI.
-13-
(c) In the event that
any action is instituted by Indemnitee under this Agreement or
under any liability insurance policies maintained by the Company to
enforce or interpret any of the terms hereof or thereof, Indemnitee
is entitled to be paid all Expenses incurred by Indemnitee with
respect to that action, regardless of whether Indemnitee is
ultimately successful in that action, and is entitled to the
advancement of Expenses with respect to that action, unless as a
part of that action a court of competent jurisdiction over that
action determines that each of the material assertions made by
Indemnitee as a basis for such action was not made in good faith or
was frivolous.
(d) The Company must
make available to Indemnitee a copy of all applications, binders,
policies, declarations, endorsements and other related materials in
respect of policies required to be obtained or maintained pursuant
to this Agreement. The Company must not discontinue or
significantly reduce the scope or amount of coverage from one (1)
policy period to the next without the prior approval thereof by a
majority vote of the incumbent directors of the Company, even if
less than a quorum. The Company must provide Indemnitee with at
least thirty (30) days’ notice of the non-renewal of,
cancellation of or failure to pay any premium due in respect of
such insurance policies.
19. Optional Trust. The Company may, but is
not required to, create a trust fund, grant a security interest or
use other means, including without limitation a letter of credit,
to ensure the payment of such amounts as may be necessary to
satisfy its obligations to indemnify and advance Expenses pursuant
to this Agreement.
20. No Imputation. The knowledge and/or
actions, or failure to act, of any director, officer, agent or
employee of the Company or the Company itself must not be imputed
to Indemnitee for purposes of determining any rights under this
Agreement.
21. Severability. The provisions of this
Agreement are 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, including without limitation in the same section,
paragraph or sentence, must remain enforceable to the fullest
extent permitted by law. Furthermore, to the fullest extent
possible, the provisions of this Agreement (including, without
limitations, each portion of this Agreement containing any
provision held to be invalid, void or otherwise unenforceable, that
is not itself invalid, void or unenforceable) must be construed so
as to give effect to the intent manifested by the provision held
invalid, illegal or unenforceable.
22. Coverage. This Agreement applies with
respect to Indemnitee’s service as Senior Vice President and
Chief Human Resources Officer of the Company prior to the date of
this Agreement.
23. Governing Law. This Agreement and the
relationship of the parties hereto with respect to the subject
matter hereof are governed by and construed and enforced in
accordance with the laws of the State of Delaware, as applied to
contracts between Delaware residents, entered into and to be
performed entirely within the State of Delaware, without regard to
the conflict of laws principles thereof.
24. Amendment and Termination. No amendment,
modification, termination or cancellation of this Agreement is
effective unless it is in writing signed by both the parties
hereto. No waiver of any of the provisions of this Agreement may be
deemed or shall constitute a waiver of any other provisions hereof
(whether or not similar) nor may such waiver constitute a
continuing waiver.
-14-
25. Identical Counterparts; Facsimile. This
Agreement may be executed in one (1) or more counterparts,
including counterparts transmitted by facsimile or other electronic
communication, each of which shall for all purposes be deemed to be
an original but all of which together constitute but one (1) and
the same Agreement. Only one (1) such counterpart need be produced
to evidence the existence of this Agreement. Facsimile signatures,
or signatures delivered by other electronic transmission, are as
effective as original signatures.
26. Headings. The headings of the sections
of this Agreement are inserted for convenience only and must not be
deemed to constitute part of this Agreement or to affect the
construction hereof.
27. Construction
of Certain Phrases.
(a) For purposes of
this Agreement, references to the “Company” includes,
in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed
in a consolidation or merger which, if its separate existence had
continued, would have had power and authority to indemnify its
directors, officers, employees, agents or fiduciaries, so that if
Indemnitee is or was a director, officer, employee, agent or
fiduciary of such constituent corporation, or is or was serving at
the request of such constituent corporation as a director, officer,
employee, agent or fiduciary of another corporation, partnership,
joint venture, employee benefit plan, trust or other enterprise,
Indemnitee will stand in the same position under the provisions of
this Agreement with respect to the resulting or surviving
corporation as Indemnitee would have with respect to such
constituent corporation if its separate existence had
continued.
(b) For purposes of
this Agreement, references to “other enterprise”
includes employee benefit plans; references to “fines”
includes any excise taxes assessed on Indemnitee with respect to an
employee benefit plan; and references to “serving at the
request of the Company” includes any service as a director,
officer, employee, agent or fiduciary of the Company that imposes
duties on, or involves services by, such director, officer,
employee, agent or fiduciary with respect to an employee benefit
plan, its participants or its beneficiaries; and if Indemnitee
acted in good faith and in a manner Indemnitee reasonably believed
to be in the interest of the participants and beneficiaries of an
employee benefit plan, Indemnitee must be deemed to have acted in a
manner “not opposed to the best interests of the
Company” as referred to in this Agreement.
28. Notices. All notices and other
communications required or permitted hereunder must be in writing,
shall be effective when given, and must in any event be deemed to
be given (a) five (5) days after deposit with the U.S. Postal
Service or other applicable postal service, if delivered by first
class mail, postage prepaid, (b) upon delivery, if delivered
by hand or by electronic transmission, (c) one (1) business
day after the business day of deposit with overnight courier,
freight prepaid, or (d) one (1) day after the business day of
delivery by facsimile transmission with answer-back received, if
delivered by facsimile transmission, with copy by first class mail,
postage prepaid, and must be addressed if to Indemnitee, at
Indemnitee’s address as set forth beneath Indemnitee’s
signature to this Agreement and if to the Company at the address of
its principal corporate offices (attention: secretary) or at such
other address as such party may designate by ten (10) days’
advance written notice to the other party hereto.
29. Consent to Jurisdiction. The Company and
Indemnitee each hereby irrevocably consent to the jurisdiction of
the Courts of Chancery of the State of Delaware for all purposes in
connection with any action or proceeding which arises out of or
relates to this Agreement and agree that any action instituted
under this Agreement must be commenced, prosecuted and continued
only in that Court, which is the exclusive and only proper forum
for adjudicating such a claim
-15-
30. Equitable Relief. The Company and
Indemnitee agree that a monetary remedy for breach of this
Agreement may be inadequate, impracticable and difficult of proof,
and further agree that such breach may cause Indemnitee irreparable
harm. Accordingly, the Company and Indemnitee agree that Indemnitee
may enforce this Agreement by seeking equitable remedies, including
injunctive relief and/or specific performance, without any showing
of actual damage or irreparable harm and that by seeking equitable
remedies, Indemnitee will not be precluded from seeking or
obtaining any other relief to which Indemnitee may be entitled. The
Company and Indemnitee further agree that Indemnitee is entitled to
such equitable remedies without the necessity of posting bonds or
other undertaking in connection therewith. The Company hereby
waives any requirement of a bond or other undertaking.
31. Integration and Entire Agreement. This
Agreement sets forth the entire understanding between the parties
hereto and supersedes and merges all previous written and oral
negotiations, commitments, understandings and agreements relating
to the subject matter hereof between the parties hereto;
provided, however, that
this Agreement is a supplement to and in furtherance of the
Certificate, the Bylaws, the DGCL and any other applicable law, and
must not be deemed a substitute therefor, and does not diminish or
abrogate any rights of Indemnitee thereunder, and this Agreement
does not release the Company from its obligations to the extent
such obligations have been incurred under the Prior Indemnification
Agreement.
[Signature page follows]
-16-
IN WITNESS WHEREOF, the parties hereto
have executed this Agreement on and as of the day and year first
above written.
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By:/s/ Xxxxx X.
Xxxxxx
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Xxxxx X.
Xxxxxx
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Executive Vice
President, Chief Legal
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and Administrative
Officer and
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Secretary
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INDEMNITEE
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/s/ Xxxx Xxxxxx
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Signature
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Print Name: Xxxx
Xxxxxx
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Address: AutoWeb,
Inc.
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00000 XxxXxxxxx
Xxxx.
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Xxxxx
000
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Xxxxxx,
XX 00000
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-17-
