Exhibit 10.15
INDEMNITY AGREEMENT
AGREEMENT, dated and effective as of the date set forth at the foot
hereof, by and between MIKRON INSTRUMENT COMPANY, INC. (the "Company") and the
undersigned, a director and/or officer of the Company (the "Indemnitee").
In view of the substantial increase in directors' and officers' litigation
costs and risks, and the periodic limitations on the availability and coverage
of liability insurance, and in view of the desire of the Company that the
Indemnitee render or continue to render valuable services to the Company, this
Agreement is intended to provide assurance that the Company will indemnify the
Indemnitee to the full extent permitted by the laws of New Jersey.
NOW, THEREFORE, in consideration of the Indemnitee's agreeing to serve or
continuing to serve as an officer and/or director of the Company, the parties
hereto agree as follows:
1. Indemnification. To the fullest extent permitted by the provisions of
the laws of New Jersey from time to time in effect, the Company shall indemnify
the Indemnitee and any persons referred to in the second sentence of Section 9
hereof against any expenses (including attorneys' fees), liabilities, judgments,
fines and amounts paid in settlement incurred in connection with any actual,
threatened or completed action, suit or proceeding, whether civil, criminal,
administrative or arbitrative, to which the Indemnitee or such person is made or
threatened to be made a party or is otherwise involved, by reason of the fact
that the Indemnitee then is or was a director or officer of the Company, or then
serves or has served any other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, in any capacity, at the request of
the Company. To the full extent so permitted, the foregoing shall apply to
actions by or in the right of the Company and shall require the Company to pay
expenses in advance of final disposition.
2. Notice to Company. Not later than sixty (60) days after receipt by
Indemnitee of notice of the commencement of any action, suit or proceeding to
which the Indemnitee is or may be named a party, or is otherwise involved,
Indemnitee shall, if a claim in respect thereof is to be made by the Indemnitee
against the Company under this Agreement, notify the Company of the commencement
thereof; but the omission so to notify the Company will not relieve it from any
liability which it may have to Indemnitee under this Agreement or otherwise.
With respect to any such action, suit or proceeding as to which Indemnitee
notifies the Company of the commencement thereof, the Company shall be entitled
to participate therein at its own expense; except as otherwise provided below,
the Company shall have the right but not the obligation, at its option and
jointly with any other indemnifying party similarly notified, to elect to assume
the defense thereof, with counsel reasonably satisfactory to Indemnitee. After
notice from the Company to Indemnitee of its election to assume the defense
thereof, the Company will not be liable under this Agreement, New Jersey law,
the Company's Certificate of Incorporation or
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otherwise for any legal fees or other expenses subsequently incurred by
Indemnitee in connection with the defense thereof. Indemnitee shall have the
right to employ separate counsel in such action, suit or proceeding, but the
fees and expenses of such counsel, incurred after notice from the Company of its
assumption of the defense thereof, shall be at the expense of Indemnitee unless
(i) Indemnitee is a non-employee director of the Company, (ii) the employment of
counsel by Indemnitee has been authorized by the Company, (iii) Indemnitee shall
have reasonably concluded that there may be a conflict of interest between the
Company and Indemnitee in the conduct of the defense of such action, or (iv) the
Company shall not in fact have employed counsel to assume the defense of such
action, in each of which cases the fees and expense of Indemnitee's separate
counsel shall be at the expense of the Company. If more than one non-employee
director shall be made a party to an action, the fees and expenses of only one
separate counsel to be employed on behalf of all such non-employee directors, as
a group, shall be borne by the Company unless one or more of such non-employee
directors shall have reasonably concluded that there may be a conflict of
interest among the non-employee directors, in which case, a sufficient number of
separate counsel may be employed, at the cost of the Company, to avoid such
conflict. The single separate counsel employed to represent the non-employee
directors, as a group, shall be satisfactory to all such directors but their
approval shall not be unreasonably withheld or delayed. The Company shall not be
entitled to assume the defense of any action, suit or proceeding brought by or
on behalf of the Company.
The Company shall not be liable to indemnify Indemnitee under this
Agreement, the Company's Certificate of Incorporation or otherwise, for any
amounts paid in settlement of any action or claim effected without the Company's
prior written consent which, in a case where Indemnitee is represented by
separate counsel, shall not be unreasonably withheld or delayed. The Company
shall not settle any action or claim in any manner which would impose any
damages, fines, penalties, limitations or restrictions on, or which would
otherwise adversely affect, Indemnitee without Indemnitee's written consent,
which consent shall not be unreasonably withheld or delayed.
3. Enforcement Procedure. Any right to indemnification or advances granted
by this Agreement to Indemnitee shall be enforceable by or on behalf of
Indemnitee in the forum in which the proceeding is or was pending or, if such
forum is not convenient or available, in any court of competent jurisdiction if
(i) the claim for indemnification or advances is denied by the Company, in whole
or in part, or (ii) no disposition of such claim is made within thirty (30) days
of request therefor. Indemnitee, in such enforcement action, shall be entitled
to be paid also the expense of prosecuting his or her claim. It shall be a
defense to any such action (other than an action brought to enforce a claim for
expenses incurred in connection with any proceeding in advance of its final
disposition when the required undertaking has been tendered to the Company) that
Indemnitee is not entitled to indemnification because of the limitations set
forth in Section 5 hereof, but the burden of proving such defense shall be on
the Company. Neither the failure of the Company (including its Board of
Directors or its shareholders) 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 its Board of Directors or its shareholders) that such indemnification
is improper shall be a defense to the action or create a presumption that
Indemnitee is not entitled to indemnification under this Agreement or otherwise.
For purposes of this Agreement, the
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termination of any claim, action, suit or proceeding, by judgment, order,
settlement (whether with or without court approval) or conviction, or upon a
plea of nolo contendere, or its equivalent, shall not create a presumption that
Indemnitee did not meet any particular standard of conduct or have any
particular belief or that a court or governmental agency has determined that
indemnification is not permitted by applicable law.
4. Change in Control. Following a Change in Control (as hereinafter
defined), any finding of whether indemnification is permitted by the laws of New
Jersey shall, if the Indemnitee so elects, be based upon the written opinion of
special independent counsel selected by the Indemnitee and approved by the
Company (which approval shall not be unreasonably withheld or delayed).
A. Such counsel shall render an opinion to the Board of Directors
and the Indemnitee as to whether indemnification is permitted by the laws of New
Jersey. The Company shall pay the reasonable fees of such counsel.
B. A "Change in Control" shall be deemed to have occurred on: (i)
the date on which more than one half of the members of the Board of Directors
shall consist of persons other than Current Directors (for these purposes, a
"Current Director" shall mean any member of the Board of Directors as of the
date set forth at the foot hereof, and any successor of a Current Director who
has been approved by a majority of the Current Directors then on the Board); or
(ii) the date of approval by the shareholders of the Company of an agreement
providing for (1) the merger or consolidation of the Company with another
corporation where the shareholders of the Company immediately prior to the
merger or consolidation would not beneficially own, immediately after the merger
or consolidation, shares entitling such shareholders to 50% or more of all votes
(without consideration of the rights of any class of stock to elect directors by
a separate class vote) to which all shareholders of the corporation issuing cash
or securities in the merger or consolidation would be entitled in the election
of directors or where the members of the Board of Directors of the Company
immediately prior to the merger or consolidation, would not, constitute more
than one half of the Board of Directors of the Company immediately after the
merger or consolidation, or (2) the sale or other disposition of all or
substantially all the assets of the Company.
5. Limitations on Indemnity. No indemnity pursuant to Sections 1 or 6
hereof, New Jersey law, the Company's Certificate of Incorporation or otherwise
shall be paid by the Company:
A. in respect of any suit in which judgment is rendered 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) of the Securities Exchange Act of 1934 and amendments thereto or similar
provisions of any federal, state or local statutory law;
B. in respect of Indemnitee's conduct which is finally adjudged to
have been not in good faith or to have been undertaken in knowing violation of
law;
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C. in respect of Indemnitee's conduct which is finally adjudged to
have constituted a breach of Indemnitee's duty of loyalty to the Company or
resulted in the receipt by Indemnitee of an improper personal benefit;
D. for which payment is actually made to Indemnitee under a valid
and collectible insurance policy or under a valid and enforceable indemnity
clause, by-law or agreement, except in respect of any excess beyond payment
under such insurance, clause by-law or agreement;
E. if a final decision by a court having jurisdiction in the matter
shall determine that such indemnification is not lawful; (and, in this respect,
both the Company and Indemnitee acknowledge their understanding to the effect
that the Securities and Exchange Commission believes that indemnification for
liabilities arising under the federal securities laws is against public policy
and is, therefore, unenforceable and that claims for indemnification should be
submitted to appropriate courts for adjudication, which belief shall have no
effect on Indemnitee's rights to receive indemnification hereunder); or
F. in connection with any proceeding (or part thereof) initiated by
Indemnitee or any proceeding by Indemnitee against the Company or its directors,
officers, employees or other agents, prior to a Change of Control unless (i)
such indemnification is expressly required to be made by law, (ii) the
proceeding was authorized by the Board of Directors of the Company, or (iii)
such indemnification is available from the Company under New Jersey law.
6. Partial Indemnification. Indemnitee shall be entitled under this
Agreement to indemnification by the Company for a portion of the expenses
(including attorney's fees), witness fees, damages, judgment, fines and amounts
paid in settlement and any other amounts that Indemnitee becomes legally
obligated to pay in connection with any action, suit or proceeding referred to
in Section 1 hereof, even if not entitled hereunder to indemnification for the
total amount thereof, and the Company shall indemnify Indemnitee for the portion
thereof to which Indemnitee is entitled.
7. Litigation Expenses - Payment in Advance. In the event the Indemnitee
becomes involved in any action, suit or proceeding regarding any matter with
respect to which Indemnitee believes that he is entitled to indemnification
under Sections 1 or 6 hereunder, including actions brought by or in the right of
the Company to procure a judgment in its favor (each of which shall hereinafter
be referred to as a "Covered Proceeding"), the Indemnitee shall have the right
to have his expenses, including, but not limited to all of his legal fees in
prosecuting or defending such proceeding, paid by the Company as such expenses
are incurred during the course of such Covered Proceeding, provided, however,
that Indemnitee shall be obligated to repay all such expenses to the Company in
the event that it shall be finally determined by a court or arbitrator of
competent jurisdiction that Indemnitee shall not have been entitled to
indemnification hereunder in such Covered Proceeding. This right shall be in
addition to any other rights of indemnification the Indemnitee may have under
the Certificate of Incorporation or by-laws of the Company, or pursuant to any
Employment Agreement or to applicable law. Anything contained in this Section 7
to the contrary notwithstanding, the Company shall not be required to make
advance payment of the Indemnitee's expenses in any Covered Proceeding in which
the judge,
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arbitrator or other authority having jurisdiction over such proceeding enters an
order on good cause shown, pursuant to a pre-trial or pre-proceeding motion made
on notice to the Indemnitee, denying such right to the Indemnitee. Such "good
cause" shall be shown to exist if such judge, arbitrator or other authority
determines that sufficient facts exist to establish a likelihood that Indemnitee
is not entitled to indemnification with respect to the claims in question by
reason of the application of one or more of the provisions of Section 5 hereof.
The provisions of this Article shall survive the termination of this Agreement.
8. Subrogation. In the event of payment under this Agreement, New Jersey
law, the Company's Certificate of Incorporation or otherwise, the Company shall
be subrogated to the extent of such payment to all of the rights, remedies and
recoveries of Indemnitee, who shall execute all documents required and shall do
all acts that may be necessary or desirable to secure such rights, remedies and
recoveries and to enable the Company effectively to bring suit to enforce such
rights.
9. Other Rights; Continuation of Right to Indemnification. The
indemnification and advances provided by this Agreement shall not be deemed
exclusive of any other rights consistent with the laws of New Jersey to which a
director or officer seeking indemnification may be entitled under any law
(common or statutory), provision of the Company's Certificate of Incorporation
or by-laws, resolution of shareholders or directors, other agreement or
otherwise, both as to action in the Indemnitee's official capacity and as to
action in another capacity while holding office or while employed by or acting
as agent for the Company, and shall continue notwithstanding that the Indemnitee
may have ceased to be a director or officer or to act as such employee or agent.
The provisions of this Agreement shall inure to the benefit of the estate,
heirs, executors, administrators and other personal representatives of the
Indemnitee. If the Company grants to any other person indemnification terms more
favorable than those contained in this Agreement, the Indemnitee thereupon will
be entitled to the benefit of the more favorable indemnification terms granted
to such other person.
10. Amendments. This Agreement may not be amended without the agreement in
writing of the Company and the Indemnitee.
11. Savings Clause. If any portion of this Agreement shall be deemed
invalid, illegal or enforceable in any respect, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby, and the Company shall nevertheless indemnity the Indemnitee as
to expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement to the full extent permitted by any portion of this Agreement that
shall not have been invalidated and to the full extent permitted by applicable
law.
12. Survival Clause. The Company acknowledges that, in providing services
to the Company, the Indemnitee is relying on this Agreement. Accordingly, the
Company agrees that regardless of when a claim is made or an action is
threatened or commenced, its obligations hereunder will survive (i) any actual
or purported termination of this Agreement by the Company or its successors or
assigns either by operation of law or otherwise, (ii) any changes in the
Company's Certificate of Incorporation or by-laws, and (iii) termination of the
Indemnitee's
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services to the Company (whether such services were terminated by the Company or
the Indemnitee).
13. Successors and Assigns of the Company. This Agreement shall be binding
on the successors and assigns of the Company whether by operation of law or
otherwise.
14. Governing Law. This Agreement shall be governed in all respects,
including validity, interpretation and effect, by the laws of the State of New
Jersey (without giving effect to the provisions thereof relating to conflict of
laws).
15. Notices. Each notice required or permitted under this Agreement shall
be in writing and signed by a duly authorized representative of the party
initiating the same and shall be sent by registered or certified mail, return
receipt requested, postage prepaid or delivered by facsimile, by hand or by
guaranteed overnight courier, to the following addresses unless changed by
written notice given by notice delivered in accordance with this paragraph:
To Indemnitee: at the address and fax. no. indicated on the
signature page hereof
To the Company: 00 Xxxxxxxx Xxxx
Xxxxxxx, Xxx Xxxxxx 00000
Attention: Chief Executive Officer
Fax. No. (000) 000-0000
16. Amendment of Certificate of Incorporation. The Company shall undertake
all actions necessary to obtain authorization to amend its Certificate of
Incorporation to provide for the limitation of the liability of its directors to
the fullest extent permitted by N.J.S.A. 14A:2-7(3), and if the shareholders of
the Corporation grant such authority, the Company shall promptly file a
Certificate of Amendment of the Company's Certificate of Incorporation providing
for such limitation of liability.
IN WITNESS WHEREOF, this Agreement has been executed by the parties
pursuant to Board Resolutions adopted on, and with effect from [ ], 1999.
MIKRON INSTRUMENT COMPANY, INC.
By:
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INDEMNITEE:
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