INDEMNIFICATION AGREEMENT
Exhibit
10.1
This Indemnification Agreement, dated
as of ___, 200_, is made by and between Versar, Inc., a Delaware corporation
(the “Corporation”) and [name], a [director/officer] of the Corporation (the
“Indemnitee”).
RECITALS
A. The
Corporation recognizes that competent and experienced persons are increasingly
reluctant to serve or to continue to serve as directors or officers of
corporations unless they are protected by comprehensive liability insurance or
indemnification, or both, due to increased exposure to litigation costs and
risks resulting from their service to such corporations, the exposure frequently
bears no reasonable relationship to the compensation of such directors and
officers and plaintiffs often seek damages in such large amounts and the costs
of litigation may be so enormous (whether or not the case is meritorious), that
the defense and/or settlement of such litigation is beyond the personal
resources of directors and officers;
B. The
Corporation, after reasonable investigation, has determined that the liability
insurance coverage presently available to the Corporation may be inadequate in
certain circumstances to cover all possible exposure for which Indemnitee should
be protected and believes that the interests of the Corporation and its
stockholders would best be served by a combination of such insurance and the
indemnification by the Corporation of the directors and officers of the
Corporation;
C. The
Corporation’s Certificate of Incorporation requires the Corporation to indemnify
its directors and officers to the fullest extent permitted by the Delaware
General Corporation Law (the “DGCL”), but provides that the indemnification
provisions set forth therein are not exclusive, and contemplates that contracts
may be entered into between the Corporation and its directors and officers with
respect to indemnification;
D. Section
145 of the DGCL (“Section 145”) empowers the Corporation to indemnify its
officers, directors, employees and agents and persons who serve, at the request
of the Corporation, as the directors, officers, employees or agents of other
corporations or enterprises, by agreement and expressly provides that the
indemnification provided by Section 145 is not exclusive;
E. Section
102(b)(7) of the DGCL allows a corporation to include in its certificate of
incorporation a provision limiting or eliminating the personal liability of a
director for monetary damages in respect of claims by stockholders and
corporations for breach of certain fiduciary duties, and the Corporation has so
provided in its Certificate of Incorporation that each Director shall be
exculpated from such liability to the extent permitted by the DGCL;
F. The
Board of Directors has determined that contractual indemnification as set forth
herein is not only reasonable and prudent but also promotes the best interests
of the Corporation and its stockholders;
G. The
Corporation desires and has requested Indemnitee to serve or continue to serve
as a director or officer of the Corporation free from undue concern for
unwarranted claims for damages arising out of or related to such services to the
Corporation; and
H. Indemnitee
is willing to serve, continue to serve or to provide additional service for or
on behalf of the Corporation on the condition that he is furnished the indemnity
provided for herein.
NOW, THEREFORE, in consideration of the
mutual covenants and agreements set forth below, and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as
follows:
Section 1. Generally.
To the fullest extent permitted by the
laws of the State of Delaware:
(a) The Corporation shall indemnify
Indemnitee if Indemnitee was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit, proceeding or any
alternative dispute resolution process, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the Corporation,
except to the extent set forth in Section 1(c) below), by reason of the fact
that Indemnitee is or was or has agreed to serve at the request of the
Corporation as a director, officer, employee or agent of the Corporation, or
while serving as a director or officer of the Corporation, is or was serving or
has agreed to serve at the request of the Corporation as a director, officer,
employee or agent (which, for purposes hereof, shall include a trustee, partner
or manager or similar capacity) of another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise, or by reason of any
action alleged to have been taken or omitted in such capacity. For
the avoidance of doubt, the foregoing indemnification obligation includes,
without limitation, claims for monetary damages against Indemnitee in respect of
an alleged breach of fiduciary duties, to the fullest extent permitted under
Section 102(b)(7) of the DGCL as in existence on the date hereof.
(b) The indemnification provided by
this Section 1 shall be from and against expenses (including attorneys’ fees),
judgments, fines and amounts paid in settlement (if such settlement is approved
in advance by the Corporation, which approval shall not be unreasonably
withheld) actually and reasonably incurred by Indemnitee or on Indemnitee’s
behalf in connection with such action, suit, proceeding, or alternative dispute
resolution and any appeal therefrom, but shall only be provided if Indemnitee
acted in good faith and in a manner Indemnitee reasonably believed to be in or
not opposed to the best interests of the Corporation, and, with respect to any
criminal action, suit or proceeding, had no reasonable cause to believe
Indemnitee’s conduct was unlawful.
(c) Notwithstanding the foregoing
provisions of this Section 1, in the case of any threatened, pending or
completed action or suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that Indemnitee is or was a
director, officer, employee or agent of the Corporation, or while serving as a
director or officer of the Corporation, is or was serving or has agreed to serve
at the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise, no indemnification shall be made in respect of any claim,
issue or matter as to which Indemnitee shall have been adjudged to be liable to
the Corporation unless, and only to the extent that, the Delaware Court of
Chancery or the court in which such action or suit 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
indemnity for such expenses which the Delaware Court of Chancery or such other
court shall deem proper.
2
(d) The termination of any action, suit
or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
Indemnitee did not act in good faith and in a manner which Indemnitee reasonably
believed to be in or not opposed to the best interests of the Corporation, and,
with respect to any criminal action or proceeding, had reasonable cause to
believe that Indemnitee’s conduct was unlawful.
Section 2. Successful Defense; Partial
Indemnification.
(a) To the extent that Indemnitee has
been successful on the merits or otherwise in defense of any action, suit,
proceeding or alternative dispute resolution process referred to in Section 1
hereof or in defense of any claim, issue or matter therein, Indemnitee shall be
indemnified against expenses (including attorneys’ fees) actually and reasonably
incurred in connection therewith. For purposes of this Agreement and
without limiting the foregoing, if any action, suit or proceeding is disposed of
or alternative dispute is resolved, on the merits or otherwise (including a
disposition without prejudice), without (i) the disposition being adverse to
Indemnitee, (ii) an adjudication that Indemnitee was liable to the Corporation,
(iii) a plea of guilty or nolo contendere by Indemnitee, (iv) an adjudication
that Indemnitee did not act in good faith and in a manner Indemnitee reasonably
believed to be in or not opposed to the best interests of the Corporation, and
(v) with respect to any criminal proceeding, an adjudication that Indemnitee had
reasonable cause to believe Indemnitee’s conduct was unlawful, Indemnitee shall
be considered for the purposes hereof to have been wholly successful with
respect thereto.
(b) If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Corporation for some or a
portion of the expenses (including attorneys’ fees), judgments, fines or amounts
paid in settlement actually and reasonably incurred by Indemnitee or on
Indemnitee’s behalf in connection with any action, suit, proceeding or
investigation, or in defense of any claim, issue or matter therein, and any
appeal therefrom but not, however, for the total amount thereof, the Corporation
shall nevertheless indemnify Indemnitee for the portion of such expenses
(including attorneys’ fees), judgments, fines or amounts paid in settlement to
which Indemnitee is entitled.
Section 3. Determination That
Indemnification Is Proper.
(a) Any indemnification hereunder shall
(unless otherwise ordered by a court) be made by the Corporation unless a
determination is made that indemnification of such person is not proper in the
circumstances because he or she has not met the applicable standard of conduct
set forth in Section 1(b) hereof. Any such determination shall be made (i) by a
majority vote of the directors who are not parties to the action, suit,
proceeding or alternative dispute in question (“disinterested directors”), even
if less than a quorum, (ii) by a committee of disinterested directors designated
by majority vote of disinterested directors, even if less than a quorum, (iii)
by a majority vote of a quorum of the outstanding shares of stock of all classes
entitled to vote on the matter, voting as a single class, which quorum shall
consist of stockholders who are not at that time parties to the action, suit,
proceeding or alternative dispute in question, (iv) by independent legal
counsel meeting the standards of independence set forth in Section 3(b)
and, except to the extent set forth in Section 3(b) below, chosen by the
Corporation, or (v) by a court of competent jurisdiction (any such determining
body, the “Reviewing Party”). If there has not been a Change in
Control, the Reviewing Party shall be selected by the Board of Directors of the
Corporation, and if there has been a Change in Control, other than a Change in
Control which has been approved by a majority of the Corporation’s Board of
Directors who are directors immediately prior to such Change in Control, the
Reviewing Party shall be the special independent counsel referred to in
Section 3(b) below.
3
(b) The Corporation agrees that if
there is a Change in Control in the Corporation, other than a Change in Control
which has been approved by a majority of the Corporation’s Board of Directors
who were directors immediately prior to such Change in Control, then with
respect to all matters thereafter arising concerning the rights of the
Indemnitee to indemnification under this Agreement or any other agreement or
under applicable law or the Corporation’s Certificate of Incorporation or Bylaws
now or hereafter in effect relating to similar indemnification, the Corporation
shall submit any determination as to Indemnitee’s right to indemnification under
Section 3(a) only to special independent counsel selected by the Indemnitee and
approved by the Corporation, which approval shall not be unreasonably
withheld. Such special independent counsel shall not have otherwise
performed services for the Corporation or the Indemnitee, other than in
connection with such matters, within the last five years. Such
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 Corporation or the Indemnitee in an action
to determine the Indemnitee’s rights under this Agreement. Such
counsel, among other things, shall render its written opinion to the Corporation
and the Indemnitee as to whether and to what extent the Indemnitee would be
permitted to be indemnified under applicable law and this
Agreement. The Corporation agrees to pay the reasonable fees of the
special independent counsel referred to above and to indemnify fully such
counsel against any and all expenses (including attorneys’ fees), claims,
liabilities and damages arising out of or relating to this Agreement
or the engagement of such special independent counsel pursuant to this
Agreement.
Section 4. Advance Payment of Expenses;
Notification and Defense of Claim Repayment.
(a) Expenses (including attorneys’
fees) incurred by Indemnitee in defending a threatened or pending civil,
criminal, administrative or investigative action, suit, proceeding or
alternative dispute resolution process, or in connection with an enforcement
action pursuant to Section 5(b), shall be paid by the Corporation in
advance of the final disposition of such matter within thirty (30) days after
receipt by the Corporation of (i) a statement or statements from Indemnitee
requesting such advance or advances from time to time, and (ii) a confirmation
of Indemnitee’s obligation to repay such amount or amounts to the extent that,
it shall ultimately be determined that Indemnitee is not entitled to be
indemnified by the Corporation as authorized by this Agreement or otherwise as
set forth in Section 4(e) of this Agreement. Such undertaking
shall be accepted without reference to the financial ability of Indemnitee to
make such repayment. Advances shall be unsecured and interest-free.
(b) Promptly after receipt by
Indemnitee of notice of the commencement of any action, suit, proceeding or
alternative dispute resolution process, Indemnitee shall, if a claim thereof is
to be made against the Corporation hereunder, notify the Corporation of the
commencement thereof. The failure to promptly notify the Corporation
of the commencement of the action, suit, proceeding or alternative dispute
resolution process, or Indemnitee’s request for indemnification, will not
relieve the Corporation from any liability that it may have to Indemnitee
hereunder, except to the extent the Corporation is prejudiced in its defense of
such matter as a result of such failure.
4
(c) In the event the Corporation shall
be obligated to pay the expenses of Indemnitee with respect to an action, suit,
proceeding or alternative dispute resolution process, as provided in this
Agreement, the Corporation, if appropriate, shall be entitled to assume the
defense of such action, suit, proceeding or alternative dispute resolution
process, with counsel reasonably acceptable to Indemnitee, upon the delivery to
Indemnitee of written notice of its election to do so. After delivery
of such notice, approval of such counsel by Indemnitee and the retention of such
counsel by the Corporation, the Corporation will not be liable to Indemnitee
under this Agreement for any fees of counsel subsequently incurred by Indemnitee
with respect to the same action, suit, proceeding or alternative dispute,
provided that (1) Indemnitee shall have the right to employ Indemnitee’s own
counsel in such action, suit, proceeding or alternative dispute resolution
process at Indemnitee’s expense and (2) if (i) the employment of counsel by
Indemnitee has been previously authorized in writing by the Corporation, (ii)
counsel to the Corporation or Indemnitee shall have reasonably concluded that
there may be a conflict of interest or position, or reasonably believes that a
conflict is likely to arise, on any significant issue between the Corporation
and Indemnitee in the conduct of any such defense, (iii) after a Change in
Control, the employment of separate counsel by Indemnitee has been determined
appropriate by special independent counsel chosen pursuant to Section 3(b), or
(iv) the Corporation shall not, in fact, have employed counsel to assume such
defense, then the fees and expenses of Indemnitee’s counsel shall be at the
expense of the Corporation, except as otherwise expressly provided by this
Agreement. The Corporation shall not be entitled, without the consent
of Indemnitee, to assume the defense of any claim brought by or in the right of
the Corporation or as to which counsel for the Corporation or Indemnitee shall
have reasonably made the conclusion provided for in clause (ii)
above.
(d) Notwithstanding any other provision
of this Agreement to the contrary, to the extent that Indemnitee is, by reason
of Indemnitee’s corporate status with respect to the Corporation or any
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise which Indemnitee is or was serving or has agreed to serve at the
request of the Corporation, a witness or otherwise participates in any action,
suit, proceeding or alternative dispute process at a time when Indemnitee is not
a party in the action, suit, proceeding or alternative dispute, the Corporation
shall indemnify Indemnitee against all expenses (including attorneys’ fees)
actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in
connection therewith.
(e) Indemnitee agrees that Indemnitee
will reimburse the Corporation for all advances of expenses received by
Indemnitee pursuant to Section 4(a) or 4(d) of this Agreement in the event
and only to the extent that it shall be ultimately determined by a final
judicial decision (from which there is no right of appeal) that Indemnitee is
not entitled, under the provisions of the Delaware Law, the Certificate of
Incorporation of the Corporation, this Agreement or otherwise, to be indemnified
by the Corporation for such expenses. The Corporation shall be
entitled to offset any amounts owed by Indemnitee to the Corporation under this
Section 4(e) against any amounts owed by the Corporation to Indemnitee for
any reason.
5
Section 5. Procedure for
Indemnification
(a) To obtain indemnification,
Indemnitee shall promptly submit to the Corporation 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. The Corporation shall,
promptly upon receipt of such a request for indemnification, advise the Board of
Directors in writing that Indemnitee has requested indemnification.
(b) The Corporation’s determination
whether to grant Indemnitee’s indemnification request shall be made promptly,
and in any event within 60 days following receipt of a request for
indemnification pursuant to Section 5(a). The right to indemnification as
granted by Section 1 of this Agreement shall be enforceable by Indemnitee in any
court of competent jurisdiction if the Corporation denies such request, in whole
or in part, or fails to respond within such 60-day period. It shall
be a defense to any such action (other than an action brought to enforce a claim
for the advance of costs, charges and expenses under Section 4 hereof where the
required undertaking, if any, has been received by the Corporation) that
Indemnitee has not met the standard of conduct set forth in Section 1 hereof,
but the burden of proving such defense by clear and convincing evidence shall be
on the Corporation. Neither the failure of the Corporation (including its Board
of Directors or one of its committees, its independent legal counsel, and its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of Indemnitee is proper in the circumstances because
Indemnitee has met the applicable standard of conduct set forth in Section 1
hereof, nor the fact that there has been an actual determination by the
Corporation (including its Board of Directors or one of its committees, its
independent legal counsel, and its stockholders) that Indemnitee has not met
such applicable standard of conduct, shall be a defense to the action or create
a presumption that Indemnitee has or has not met the applicable standard of
conduct. The Indemnitee’s expenses (including attorneys’ fees)
incurred in connection with successfully establishing Indemnitee’s right to
indemnification, in whole or in part, in any such proceeding or otherwise shall
also be indemnified by the Corporation.
(c) The Indemnitee shall be presumed to
be entitled to indemnification under this Agreement upon submission of a request
for indemnification pursuant to this Section 5, and the Corporation shall have
the burden of proof in overcoming that presumption in reaching a determination
contrary to that presumption.
Section 6. Insurance and
Subrogation.
(a) The Corporation may, but shall not
be required to, purchase and maintain insurance on behalf of Indemnitee who is
or was or has agreed to serve at the request of the Corporation as a director or
officer of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
against any liability asserted against, and incurred by, Indemnitee or on
Indemnitee’s behalf in any such capacity, or arising out of Indemnitee’s status
as such, whether or not the Corporation would have the power to indemnify
Indemnitee against such liability under the provisions of this Agreement. If the
Corporation has such insurance in effect at the time the Corporation receives
from Indemnitee any notice of the commencement of a proceeding, the Corporation
shall give prompt notice of the commencement of such proceeding to the insurers
in accordance with the procedures set forth in the policy. The
Corporation 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
policy.
6
(b) In the event of any payment by the
Corporation under this Agreement, the Corporation shall be subrogated to the
extent of such payment to all of the rights of recovery of Indemnitee with
respect to any insurance policy. Indemnitee 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 Corporation to bring
suit to enforce such rights in accordance with the terms of such insurance
policy. The Corporation shall pay or reimburse all expenses actually and
reasonably incurred by Indemnitee in connection with such
subrogation.
(c) The Corporation shall not be liable
under this Agreement to make any payment of amounts otherwise indemnifiable
hereunder (including, but not limited to, judgments, fines, ERISA excise taxes
or penalties, and amounts paid in settlement) if and to the extent that
Indemnitee has otherwise actually received such payment under this Agreement or
any insurance policy, contract, agreement or otherwise.
Section 7. Establishment of
Trust. In the event of a Change in Control, the Corporation
shall, upon written request by the Indemnitee, create a trust (the “Trust”) for
the benefit of the Indemnitee, and from time to time upon written request of the
Indemnitee shall fund such Trust, to the extent permitted by law, in an amount
sufficient to satisfy any and all expenses reasonably anticipated at the time of
each such request to be incurred in connection with investigating, preparing for
and defending any matter for which indemnification may be available under this
Agreement from time to time actually paid or claimed, reasonably anticipated or
proposed to be paid. The amount or amounts to be deposited in the
Trust pursuant to the foregoing funding obligation shall be determined by the
Reviewing Party, in any case in which the special independent counsel referred
to in Section 3(b) is involved. The terms of the Trust shall provide
that (i) the Trust shall not be revoked or the principal thereof invaded,
without the written consent of the Indemnitee, (ii) the trustee of the Trust
(the “Trustee”) shall advance, within ten business days of a request by the
Indemnitee, any and all expenses to the Indemnitee, to the extent permitted by
law (and the Indemnitee hereby agrees to reimburse the Trust under the
circumstances under which the Indemnitee would be required to reimburse the
Corporation pursuant to the undertaking required by Section 4(a) of this
Agreement), (iii) the Trust shall continue to be funded by the Corporation
in accordance with the funding obligation set forth above, (iv) the Trustee
shall promptly pay to the Indemnitee all amounts for which the Indemnitee shall
be entitled to indemnification pursuant to this Agreement or otherwise, and (v)
all unexpended funds in the Trust shall revert to the Corporation upon a final
determination by the Reviewing Party or a court of competent jurisdiction, as
the case may be, that the Indemnitee has been fully indemnified under the terms
of this Agreement. The Trustee shall be a bank or trust company or
other individual or entity chosen by the Indemnitee and acceptable to and
approved of by the Corporation. Nothing in this Section 7 shall
relieve the Corporation of any of its obligations under this
Agreement. All income earned on the assets held in the Trust shall be
reported as income by the Corporation for federal, state, local and foreign tax
purposes.
7
Section 8. Certain Definitions.
For purposes of this Agreement, the following definitions shall
apply:
(a) The term “action, suit or
proceeding” shall be broadly construed and shall include, without limitation,
the investigation, preparation, prosecution, defense, settlement, arbitration
and appeal of, and the giving of testimony in, any threatened, pending or
completed claim, action, suit or proceeding, whether civil, criminal,
administrative or investigative.
(b) The term “by reason of the fact
that Indemnitee is or was a director, officer, employee or agent of the
Corporation, or while serving as a director or officer of the Corporation, is or
was serving or has agreed to serve at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise” shall be broadly
construed and shall include, without limitation, any actual or alleged act or
omission to act.
(c) The term “Change in
Control” means the first of the following to occur after the date of this
Agreement:
(1) Acquisition of Controlling
Interest
Any
Person becomes the beneficial owner (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended), directly or indirectly, of
securities of the Corporation representing 25% or more of the combined voting
power of the Corporation’s then outstanding securities. In applying the
preceding sentence, securities acquired directly from the Corporation or its
affiliates with the Corporation’s approval by or for the person shall not be
taken into account.
(2) Change
in Board Control
During
the term of this Agreement, individuals who constituted the Board of Directors
of the Corporation as of the date of this Agreement (or their approved
replacements, as defined in the next sentence) cease for any reason to
constitute a majority of the Board. A new director shall be considered an
"approved replacement" director if his or her election (or nomination for
election) 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 were
themselves approved replacement directors; provided that any individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest (as the term is used in Rule 14a-11 of Regulation 14A issued
under the Securities Exchange Act of 1934, as amended) or other actual or
threatened solicitation of proxies or consents by or on behalf of a person other
than the Board shall not be considered an “approved
replacement”.
(3) Merger
Approved
The
stockholders of the Corporation approve a merger or consolidation of the
Corporation with any other corporation unless: (a) the voting securities of the
Corporation outstanding immediately before the merger or consolidation would
continue to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least 75% of the combined
voting power of the voting securities of the Corporation or such surviving
entity outstanding immediately after such merger or consolidation; and (b) no
person acquires more than 25% of the combined voting power of the Corporation’s
then outstanding securities.
8
(4) Sale
of Assets
The
stockholders of the Corporation approve an agreement for the sale or disposition
by the Corporation of all or substantially all of the Corporation’s
assets.
(5) Liquidation
or Dissolution
A
complete liquidation or dissolution of the Corporation.
(d) The term “Corporation” shall
include, without limitation and 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, and employees
or agents, so that any person who is or was a director, officer, employee or
agent of such constituent corporation, or is or was serving at the request of
such constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise, shall stand in the same position under the provisions of this
Agreement with respect to the resulting or surviving corporation as he or she
would have with respect to such constituent corporation if its separate
existence had continued.
(e) The term “expenses” shall be
broadly and reasonably construed and shall include, without limitation, all
direct and indirect costs of any type or nature whatsoever (including, without
limitation, all attorneys’ fees and related disbursements, appeal bonds, other
out-of-pocket costs and reasonable compensation for time spent by Indemnitee for
which Indemnitee is not otherwise compensated by the Corporation or any third
party, provided that the rate of compensation and estimated time involved is
approved by the Board, which approval shall not be unreasonably withheld),
actually and reasonably incurred by Indemnitee in connection with either the
investigation, defense or appeal of a proceeding or establishing or enforcing a
right to indemnification under this Agreement, Section 145 of the DGCL or
otherwise.
(f) The term “judgments, fines and
amounts paid in settlement” shall be broadly construed and shall include,
without limitation, all direct and indirect payments of any type or nature
whatsoever (including, without limitation, all penalties and amounts required to
be forfeited or reimbursed to the Corporation, as well as any penalties or
excise taxes assessed on a person with respect to an employee benefit
plan).
(g) The term “serving at the request of
the Corporation” shall include, without limitation, any service as a director,
officer, employee or agent of the Corporation 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.
(h) A person who acted in good faith
and in a manner such person reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan shall be deemed to
have acted in a manner “not opposed to the best interests of the Corporation” as
referred to in this Agreement.
Section 9. Limitation on
Indemnification. Notwithstanding any other provision herein to
the contrary, the Corporation shall not be obligated pursuant to this
Agreement:
(a) Claims Initiated by
Indemnitee. To indemnify or advance expenses to Indemnitee with respect
to an action, suit, proceeding or alternative dispute resolution process (or
part thereof) initiated by Indemnitee, except with respect to an action, suit,
proceeding or alternative dispute resolution process brought to establish or
enforce a right to indemnification (which shall be governed by the provisions of
Section 9(b) of this Agreement), unless such action, suit, proceeding or
alternative dispute resolution process (or part thereof) was authorized or
consented to by the Board of Directors of the Corporation.
9
(b) Action for
Indemnification. To indemnify Indemnitee for any expenses incurred by
Indemnitee with respect to any action, suit or proceeding instituted by
Indemnitee to enforce or interpret this Agreement, unless Indemnitee is
successful in establishing Indemnitee’s right to indemnification in such action,
suit or proceeding, in whole or in part, or unless and to the extent that the
court in such action, suit, proceeding shall determine that, despite
Indemnitee’s failure to establish their right to indemnification, Indemnitee is
entitled to indemnity for such expenses; provided, however, that nothing in this
Section 9(b) is intended to limit the Corporation’s obligation with respect to
the advancement of expenses to Indemnitee in connection with any such action,
suit or proceeding instituted by Indemnitee to enforce or interpret this
Agreement, as provided in Section 4 hereof.
(c) Section 16
Violations. To indemnify Indemnitee on account of any proceeding with
respect to which final judgment is rendered against Indemnitee for payment or an
accounting of profits arising from the purchase or sale by Indemnitee of
securities in violation of Section 16(b) of the Securities Exchange Act of 1934,
as amended, or any similar successor statute whether or not such violation was
willful or inadvertent.
(d) Non-compete and
Non-disclosure. To indemnify Indemnitee in connection with
proceedings or claims involving the enforcement of non-compete and/or
non-disclosure agreements or the non-compete and/or non-disclosure provisions of
employment, consulting or similar agreements the Indemnitee may be a party to
with the Corporation, or any subsidiary of the Corporation or any other
applicable foreign or domestic corporation, partnership, joint venture, trust or
other enterprise, if any.
Section 10. Certain Settlement
Provisions. The Corporation shall have no obligation to
indemnify Indemnitee under this Agreement for amounts paid in settlement of any
action, suit, proceeding or alternative dispute resolution process without the
Corporation’s prior written consent, which shall not be unreasonably
withheld. The Corporation shall not settle any action, suit,
proceeding or alternative dispute resolution process in any manner that would
impose any fine or other obligation on Indemnitee without Indemnitee’s prior
written consent, which shall not be unreasonably withheld.
Section 11. Savings Clause. If
any provision or provisions of this Agreement shall be invalidated on any ground
by any court of competent jurisdiction, then the Corporation shall nevertheless
indemnify Indemnitee as to costs, charges and expenses (including attorneys’
fees), judgments, fines and amounts paid in settlement with respect to any
action, suit, proceeding or alternative dispute resolution process, whether
civil, criminal, administrative or investigative, including an action by or in
the right of the Corporation, to the full extent permitted by any applicable
portion of this Agreement that shall not have been invalidated and to the full
extent permitted by applicable law.
10
Section 12. Contribution. In
order to provide for just and equitable contribution in circumstances in which
the indemnification provided for herein is held by a court of competent
jurisdiction to be unavailable to Indemnitee in whole or in part, it is agreed
that, in such event, the Corporation shall, to the fullest extent permitted by
law, contribute to the payment of Indemnitee’s costs, charges and expenses
(including attorneys’ fees), judgments, fines and amounts paid in settlement
with respect to any action, suit, proceeding or alternative dispute resolution
process, whether civil, criminal, administrative or investigative, in an amount
that is just and equitable in the circumstances, taking into account, among
other things, contributions by other directors and officers of the Corporation
or others pursuant to indemnification agreements or otherwise; provided, that,
without limiting the generality of the foregoing, such contribution shall not be
required where such holding by the court is due to (i) the failure of Indemnitee
to meet the standard of conduct set forth in Section 1 hereof, or (ii) any
limitation on indemnification set forth in Section 6(c), 9 or 10
hereof.
Section 13. Form and Delivery of
Communications. Any notice, request or other communication
required or permitted to be given to the parties under this Agreement shall be
in writing and either delivered in person or sent by telecopy, telex, telegram,
overnight mail or courier service, or certified or registered mail, return
receipt requested, postage prepaid, to the parties at the following addresses
(or at such other addresses for a party as shall be specified by like
notice):
If to the Corporation:
Versar, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxx, Senior
Vice President and General Counsel
Facsimile: (000)
000-0000
If to Indemnitee: [to
come]
Section 14. Subsequent
Legislation. If the DGCL is amended after adoption of this Agreement to
expand further the indemnification permitted to directors or officers, then the
Corporation shall indemnify Indemnitee to the fullest extent permitted by the
DGCL, as so amended.
Section 15. Nonexclusivity. The
provisions for indemnification and advancement of expenses set forth in this
Agreement shall not be deemed exclusive of any other rights which Indemnitee may
have under any provision of law, the Corporation’s Certificate of Incorporation
or Bylaws, in any court in which a proceeding is brought, the vote of the
Corporation’s stockholders or disinterested directors, other agreements or
otherwise, and Indemnitee’s rights hereunder shall continue after Indemnitee has
ceased acting as an officer, director, employee or agent of the Corporation and
shall inure to the benefit of the heirs, executors and administrators of
Indemnitee. However, no amendment or alteration of the Corporation’s
Certificate of Incorporation or Bylaws or any other agreement shall adversely
affect the rights provided to Indemnitee under this Agreement
11
Section 16. Enforcement. The
Corporation shall be precluded from asserting in any judicial proceeding that
the procedures and presumptions of this Agreement are not valid, binding and
enforceable. The Corporation agrees that its execution of this Agreement shall
constitute a stipulation by which it shall be irrevocably bound in any court of
competent jurisdiction in which a proceeding by Indemnitee for enforcement of
his rights hereunder shall have been commenced, continued or appealed, that its
obligations set forth in this Agreement are unique and special, and that failure
of the Corporation to comply with the provisions of this Agreement will cause
irreparable and irremediable injury to Indemnitee, for which a remedy at law
will be inadequate. As a result, in addition to any other right or remedy
Indemnitee may have at law or in equity with respect to breach of this
Agreement, Indemnitee shall be entitled to injunctive or mandatory relief
directing specific performance by the Corporation of its obligations under this
Agreement.
Section 17. Interpretation of
Agreement. It is understood that the parties hereto intend
this Agreement to be interpreted and enforced so as to provide indemnification
to Indemnitee to the fullest extent now or hereafter permitted by
law.
Section 18. Entire
Agreement. This Agreement and the documents expressly referred
to herein constitute the entire agreement between the parties hereto with
respect to the matters covered hereby, and any other prior or contemporaneous
oral or written understandings or agreements with respect to the matters covered
hereby are expressly superceded by this Agreement.
Section 19. Modification and
Waiver. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both of the parties
hereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provision hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.
Section 20. Successor and
Assigns. All of the terms and provisions of this Agreement
shall be binding upon, shall inure to the benefit of and shall be enforceable by
the parties hereto and their respective successors, assigns, heirs, executors,
administrators and legal representatives. The Corporation shall require and
cause any direct or indirect successor (whether by purchase, merger,
consolidation or otherwise) to all or substantially all of the business or
assets of the Corporation, by written agreement in form and substance reasonably
satisfactory to Indemnitee, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Corporation would
be required to perform if no such succession had taken place.
Section 21. Service of Process and
Venue. For purposes of any claims or proceedings to enforce
this agreement, the Corporation consents to the jurisdiction and venue of any
federal or state court of competent jurisdiction in the states of Delaware and
Virginia, and waives and agrees not to raise any defense that any such court is
an inconvenient forum or any similar claim.
Section 22. Governing
Law. This Agreement shall be governed exclusively by and
construed according to the laws of the State of Delaware, as applied to
contracts between Delaware residents entered into and to be performed entirely
within Delaware. If a court of competent jurisdiction shall make a
final determination that the provisions of the law of any state other than
Delaware govern indemnification by the Corporation of its officers and
directors, then the indemnification provided under this Agreement shall in all
instances be enforceable to the fullest extent permitted under such law,
notwithstanding any provision of this Agreement to the contrary.
12
Section 23. Employment Rights.
Nothing in this Agreement is intended to create in Indemnitee any right to
employment or continued employment.
Section 24. Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed to be an original and all of which together shall be deemed to be one and
the same instrument, notwithstanding that both parties are not signatories to
the original or same counterpart.
Section 25. Headings. The section
and subsection headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
IN WITNESS WHEREOF, this Agreement has
been duly executed and delivered to be effective as of the date first above
written.
| VERSAR, INC. | |||
|
By
|
|
||
|
Name:
|
|||
|
Title:
|
|||
| INDEMNITEE: | |||
|
By
|
|
||
|
Name:
|
|||
13
