1
[FORM OF INDEMNIFICATION AGREEMENT]
AGREEMENT
This Agreement, made and entered into as of the 31st day of July,
1998 ("Agreement"), by and between AMERICAN MANAGEMENT SYSTEMS, INCORPORATED, a
Delaware corporation ("Corporation"), and _____________________ ("Indemnitee"):
WHEREAS, highly competent persons have become more reluctant to
serve publicly held corporations as directors or in other capacities unless they
are provided with adequate protection through insurance or adequate
indemnification against inordinate risks of claims and actions against them
arising out of their service to and activities on behalf of the corporation; and
WHEREAS, the Board of Directors of the Corporation (the "Board")
has determined that, in order to attract and retain qualified individuals, the
Corporation will attempt to maintain on an ongoing basis, at its sole expense,
liability insurance to protect persons serving the Corporation and its
subsidiaries from certain liabilities. Although the furnishing of such insurance
has been a customary and widespread practice among United States-based
corporations and other business enterprises, the Corporation believes that,
given current market conditions and trends, such insurance may be available to
it in the future only at higher premiums and with more exclusions. At the same
time, directors, officers, and other persons in service to corporations or
business enterprises are being increasingly subjected to expensive and
time-consuming litigation relating to, among other things, matters that
traditionally would have been brought only against the Corporation or business
enterprise itself; and
WHEREAS, the uncertainties relating to such insurance and to
indemnification have increased the difficulty of attracting and retaining such
persons; and
WHEREAS, the Board has determined that the increased difficulty
in attracting and retaining such persons is detrimental to the best interests of
the Corporation's stockholders and that the Corporation should act to assure
such persons that there will be increased certainty of such protection in the
future; and
WHEREAS, it is reasonable, prudent and necessary for the
Corporation contractually to obligate itself to indemnify, and to advance
expenses on behalf of, such persons to the fullest extent permitted by
applicable law so that they will serve or continue to serve the Corporation free
from undue concern that they will not be so indemnified; and
WHEREAS, this Agreement is a supplement to and in furtherance of
the By-laws of the Corporation and any resolutions adopted pursuant thereto, and
shall not be deemed a substitute therefor, nor shall it diminish or abrogate any
rights of Indemnitee thereunder; and
1
2
WHEREAS, each of Section 145 of the General Corporation Law of
the State of Delaware and Article VIII of the By-laws is nonexclusive, and
therefore contemplates that contracts may be entered into with respect to
indemnification of directors, officers and employees; and
WHEREAS, Indemnitee is willing to serve, continue to serve and to
take on additional service for or on behalf of the Corporation on the condition
that he be so indemnified;
NOW, THEREFORE, in consideration of the premises and the
covenants contained herein, the Corporation and Indemnitee do hereby covenant
and agree as follows:
Section 1. Services by Indemnitee. Indemnitee agrees to serve [as
a [director] [officer] [employee] of the Corporation] [,at the request of the
Corporation, as a [director] [officer] [employee] [agent] of [another
corporation, partnership, joint venture, trust, employee benefit plan or other
Enterprise]. Indemnitee may at any time and for any reason resign from such
position (subject to any other contractual obligation, if any, or any obligation
imposed by operation of law), in which event the Corporation shall have no
obligation under this Agreement to continue Indemnitee in such position. This
Agreement shall not be deemed an employment contract between the Corporation (or
any of its subsidiaries or any Enterprise) and Indemnitee. Indemnitee
specifically acknowledges that Indemnitee's employment with the Corporation (or
any of its subsidiaries or any Enterprise), if any, is at will, and the
Indemnitee may be discharged at any time for any reason, with or without cause,
except as may be otherwise provided in any written employment contract between
Indemnitee and the Corporation (or any of its subsidiaries or any Enterprise),
other applicable formal severance policies duly adopted by the Board, or, with
respect to service as a director or officer of the Corporation, by the
Corporation's Certificate of Incorporation, the Corporation's By-laws, and the
General Corporation Law of the State of Delaware. The foregoing notwithstanding,
this Agreement shall continue in force after Indemnitee has ceased to serve as
an [officer] [director] [employee] of the Corporation.
Section 2. Indemnification - General. The Corporation shall
indemnify, and advance Expenses (as hereinafter defined) to, Indemnitee (a) as
provided in this Agreement and (b) (subject to the provisions of this Agreement)
to the fullest extent permitted by applicable law in effect on the date hereof
and as such law may be amended from time to time. The rights of Indemnitee
provided under the preceding sentence shall include, but shall not be limited
to, the rights set forth in the other Sections of this Agreement.
Section 3. Proceedings Other Than Proceedings by or in the Right
of the Corporation. Subject to the provisions of this Agreement, Indemnitee
shall be entitled to the rights of indemnification provided in this Section 3
if, by reason of his Corporate Status (as hereinafter defined), he is, or is
threatened to be made, a party to or a participant in any
2
3
Proceeding (as hereinafter defined), other than a Proceeding by or in the right
of the Corporation. Pursuant to this Section 3 but subject to the provisions of
this Agreement, Indemnitee shall be indemnified against all Expenses, judgments,
penalties, fines and amounts paid in settlement actually and reasonably incurred
by him or on his behalf in connection with such Proceeding or any claim, issue
or matter therein, if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Corporation and,
with respect to any criminal Proceeding, had no reasonable cause to believe his
conduct was unlawful.
Section 4. Proceedings by or in the Right of the Corporation.
Indemnitee shall be entitled to the rights of indemnification provided in this
Section 4 but subject to the provisions of this Agreement if, by reason of his
Corporate Status, he is, or is threatened to be made, a party to or a
participant in any Proceeding brought by or in the right of the Corporation to
procure a judgment in its favor. Pursuant to this Section but subject to the
provisions of this Agreement, Indemnitee shall be indemnified against all
Expenses actually and reasonably incurred by him or on his behalf in connection
with such Proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Corporation;
provided, however, that, if applicable law so provides, no indemnification
against such Expenses shall be made in respect of any claim, issue or matter in
such Proceeding as to which Indemnitee shall have been adjudged to be liable to
the Corporation unless and to the extent that the Court of Chancery of the State
of Delaware, or the court in which such Proceeding shall have been brought or is
pending, shall determine that such indemnification may be made.
Section 5. Indemnification for Expenses of a Party Who is Wholly
or Partly Successful. Notwithstanding any other provision of this Agreement, to
the extent that Indemnitee is, by reason of his Corporate Status, a party to (or
a participant in) and is successful, on the merits or otherwise, in any
Proceeding, he shall be indemnified to the maximum extent permitted by law
against all Expenses actually and reasonably incurred by him or on his behalf in
connection therewith. If Indemnitee is not wholly successful in such Proceeding
but is successful, on the merits or otherwise, as to one or more but less than
all claims, issues or matters in such Proceeding, the Corporation shall
indemnify Indemnitee against all Expenses actually and reasonably incurred by
him or on his behalf in connection with each successfully resolved claim, issue
or matter. For purposes of this Section and without limitation, the termination
of any claim, issue or matter in such a Proceeding by dismissal, with or without
prejudice, shall be deemed to be a successful result as to such claim, issue or
matter.
Section 6. Indemnification for Expenses of a Witness.
Notwithstanding any other provision of this Agreement, to the extent that
Indemnitee is, by reason of his Corporate Status, a witness in any Proceeding to
which Indemnitee is not a party, he shall be indemnified against all Expenses
actually and reasonably incurred by him or on his behalf in connection
therewith.
3
4
Section 7. Advancement of Expenses. Notwithstanding any provision
of this Agreement to the contrary, the Corporation shall advance all reasonable
Expenses incurred by or on behalf of Indemnitee in connection with any
Proceeding in which Indemnitee is involved with by reason of Indemnitee's
Corporate Status within ten days after the receipt by the Corporation of a
statement or statements from Indemnitee requesting such advance or advances from
time to time, whether prior to or after final disposition of such Proceeding.
Such statement or statements shall reasonably evidence the Expenses incurred by
Indemnitee and shall include or be preceded or accompanied by an undertaking by
or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately
be determined that Indemnitee is not entitled to be indemnified against such
Expenses. Any advances and undertakings to repay pursuant to this Section 7
shall be unsecured and interest free.
Section 8. Procedure for Determination of Entitlement to
Indemnification.
(a) To obtain indemnification under this Agreement,
Indemnitee shall 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 Secretary of the Corporation
shall, promptly upon receipt of such a request for indemnification, advise the
Board in writing that Indemnitee has requested indemnification.
(b) Upon written request by Indemnitee for
indemnification pursuant to Section 8(a) hereof, a determination, if required by
applicable law, with respect to Indemnitee's entitlement thereto shall be made
in the specific case: (i) if a Change in Control (as hereinafter defined) shall
have occurred, by Independent Counsel (as hereinafter defined) in a written
opinion to the Board of Directors, a copy of which shall be delivered to
Indemnitee; or (ii) if a Change in Control shall not have occurred, (A) by a
majority vote of the Disinterested Directors (as hereinafter defined), even
though less than a quorum of the Board, or (B) if there are no such
Disinterested Directors or, if such Disinterested Directors so direct, by
Independent Counsel in a written opinion to the Board, a copy of which shall be
delivered to Indemnitee and, if it is so determined that Indemnitee is entitled
to indemnification, payment to Indemnitee shall be made within ten (10) days
after such determination. Indemnitee shall cooperate with the person, persons or
entity making such determination with respect to Indemnitee's entitlement to
indemnification, including providing to such person, persons or entity upon
reasonable advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination. Any
costs or expenses (including attorneys' fees and disbursements) incurred by
Indemnitee in so cooperating with the person, persons or entity making such
determination shall be borne by the Corporation (irrespective of the
determination as to Indemnitee's entitlement to indemnification) and the
Corporation hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
4
5
(c) In the event the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to Section 8(b)
hereof, the Independent Counsel shall be selected as provided in this Section
8(c). If a Change in Control shall not have occurred, the Independent Counsel
shall be selected by the Disinterested Directors or, if there are no such
Disinterested Directors, by the Board of Directors, and the Corporation shall
give written notice to Indemnitee advising him of the identity of the
Independent Counsel so selected. If a Change in Control shall have occurred, the
Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall
request that such selection be made by the Board of Directors, in which event
the preceding sentence shall apply), and Indemnitee shall give written notice to
the Corporation advising it of the identity of the Independent Counsel so
selected. In either event, Indemnitee or the Corporation, as the case may be,
may, within 10 days after such written notice of selection shall have been
given, deliver to the Corporation or to Indemnitee, as the case may be, a
written objection to such selection; provided, however, that such objection may
be asserted only on the ground that the Independent Counsel so selected does not
meet the requirements of "Independent Counsel" as defined in Section 17 of this
Agreement, and the objection shall set forth with particularity the factual
basis of such assertion. Absent a proper and timely objection, the person so
selected shall act as Independent Counsel. If such written objection is so made
and substantiated, the Independent Counsel so selected may not serve as
Independent Counsel unless and until such objection is withdrawn or the Court of
Chancery of the State of Delaware or other court of competent jurisdiction has
determined that such objection is without merit. If, within 20 days after
submission by Indemnitee of a written request for indemnification pursuant to
Section 8(a) hereof, no Independent Counsel shall have been selected and not
objected to, either the Corporation or Indemnitee may petition the Court of
Chancery of the State of Delaware or other court of competent jurisdiction for
resolution of any objection which shall have been made by the Corporation or
Indemnitee to the other's selection of Independent Counsel and/or for the
appointment as Independent Counsel of a person selected by the Court or by such
other person as the Court shall designate, and the person with respect to whom
all objections are so resolved or the person so appointed shall act as
Independent Counsel under Section 8(b) hereof. Upon the due commencement of any
judicial proceeding pursuant to Section 10(a) of this Agreement, Independent
Counsel shall be discharged and relieved of any further responsibility in such
capacity (subject to the applicable standards of professional conduct then
prevailing).
(d) The Corporation shall not be required to obtain the
consent of the Indemnitee to the settlement of any Proceeding which the
Corporation has undertaken to defend if the Corporation assumes full and sole
responsibility for such settlement and the settlement grants the Indemnitee a
complete and unqualified release in respect of the potential liability. The
Corporation shall not be liable for any amount paid by the Indemnitee in
settlement of any Proceeding that is not defended by the Corporation, unless the
Corporation has consented to such settlement, which consent shall not be
unreasonably withheld.
5
6
Section 9. Presumptions and Effect of Certain Proceedings.
(a) In making a determination with respect to
entitlement to indemnification under this Agreement, the person or persons or
entity making such determination shall presume that Indemnitee is entitled to
indemnification under this Agreement if Indemnitee has submitted a request for
indemnification in accordance with Section 8(a) of this Agreement, and the
Corporation shall have the burden of proof to overcome that presumption in
connection with the making by any person, persons or entity of any determination
contrary to that presumption. Neither the failure of the Corporation (including
by its directors or Independent Counsel) to have made a determination prior to
the commencement of any action pursuant to this Agreement that indemnification
is proper in the circumstances because Indemnitee has met the applicable
standard of conduct, nor an actual determination by the Corporation (including
by its directors or Independent Counsel) that Indemnitee has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that Indemnitee has not met the applicable standard of conduct.
(b) If the person, persons or entity empowered or
selected under Section 8 of this Agreement to determine whether Indemnitee is
entitled to indemnification shall not have made a determination within sixty
(60) days after receipt by the Corporation of the request therefor, the
requisite determination of entitlement to indemnification shall be deemed to
have been made and Indemnitee shall be entitled to such indemnification, absent
(i) a misstatement by Indemnitee of a material fact, or an omission of a
material fact necessary to make Indemnitee's statement not materially
misleading, in connection with the request for indemnification, or (ii) a
prohibition of such indemnification under applicable law; provided, however,
that such 60-day period may be extended for a reasonable time, not to exceed an
additional thirty (30) days, if the person, persons or entity making the
determination with respect to entitlement to indemnification in good faith
requires such additional time for the obtaining or evaluating of documentation
and/or information relating thereto; and provided, further, that the foregoing
provisions of this Section 9(b) shall not apply if the determination of
entitlement to indemnification is to be made by Independent Counsel pursuant to
Section 8(b) of this Agreement.
(c) The termination of any Proceeding or of any claim,
issue or matter therein, by judgment, order, settlement or conviction, or upon a
plea of nolo contendere or its equivalent, shall not (except as otherwise
expressly provided in this Agreement or as otherwise required by law) of itself
adversely affect the right of Indemnitee to indemnification or create a
presumption that Indemnitee did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Corporation or, with respect to any criminal Proceeding, that Indemnitee had
reasonable cause to believe that his conduct was unlawful.
(d) Reliance as Safe Harbor. For purposes of any
determination of Good Faith, Indemnitee shall be deemed to have acted in Good
Faith if Indemnitee's
6
7
action is based on the records or books of account of the Enterprise, including
financial statements, or on information supplied to Indemnitee by the officers
of the Enterprise in the course of their duties, or on the advice of legal
counsel for the Enterprise or on information or records given or reports made to
the Enterprise by an independent certified public accountant or by an appraiser
or other expert selected with reasonable care by the Enterprise. The provisions
of this Section 9(d) shall not be deemed to be exclusive or to limit in any way
the other circumstances in which the Indemnitee may be deemed to have met the
applicable standard of conduct set forth in this Agreement.
(e) Actions of Others. The knowledge and/or actions, or
failure to act, of any director, officer, agent or employee of the Enterprise
shall not be imputed to Indemnitee for purposes of determining the right to
indemnification under this Agreement.
Section 10. Remedies of Indemnitee.
(a) In the event that (i) a determination is made
pursuant to Section 8 of this Agreement that Indemnitee is not entitled to
indemnification under this Agreement, (ii) advancement of Expenses is not timely
made pursuant to Section 7 of this Agreement, (iii) no determination of
entitlement to indemnification shall have been made pursuant to Section 8(b) of
this Agreement within 60 days after receipt by the Corporation of the request
for indemnification, (iv) payment of indemnification required under Section 5,6,
the last sentence of Section 8(b) or the last sentence of Section 17(h) of this
Agreement is not made within ten (10) days after receipt by the Corporation of a
written request therefor, or (v) payment of indemnification pursuant to Section
3 or 4 of this Agreement is not made within ten (10) days after a determination
has been made that Indemnitee is entitled to indemnification, Indemnitee shall
be entitled to an adjudication by the Court of Chancery of the State of Delaware
of his entitlement to such indemnification or advancement of Expenses.
(b) In the event that a determination shall have been
made pursuant to Section 8(b) of this Agreement that Indemnitee is not entitled
to indemnification, any judicial proceeding commenced pursuant to this Section
10 shall be conducted in all respects as a de novo trial on the merits and
Indemnitee shall not be prejudiced by reason of that adverse determination.
(c) If a determination shall have been made pursuant to
Section 8(b) of this Agreement that Indemnitee is entitled to indemnification,
the Corporation shall be bound by such determination in any judicial proceeding
commenced pursuant to this Section 10, absent (i) a misstatement by Indemnitee
of a material fact, or an omission of a material fact necessary to make
Indemnitee's statement not materially misleading, in connection with the request
for indemnification, or (ii) a prohibition of such indemnification under
applicable law.
(d) In the event that Indemnitee, pursuant to this
Section 10, seeks a judicial adjudication of to enforce his rights under, or to
recover damages for
7
8
breach of, this Agreement, Indemnitee shall be entitled to recover from the
Corporation, and shall be indemnified by the Corporation against, any and all
expenses (of the types described in the definition of Expenses in Section 17 of
this Agreement) actually and reasonably incurred by him in such judicial
adjudication, but only if (and only to the extent) he prevails therein. If it
shall be determined in said judicial that Indemnitee is entitled to receive part
but not all of the indemnification or advancement of Expenses sought, the
expenses incurred by Indemnitee in connection with such judicial adjudication
shall be appropriately prorated.
(e) The Corporation shall be precluded from asserting
in any judicial proceeding commenced pursuant to this Section 10 that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court that the Corporation is bound
by all the provisions of this Agreement.
Section 11. Non-Exclusivity; Survival of Rights; Insurance;
Subrogation.
(a) The rights of indemnification and to receive
advancement of Expenses as provided by this Agreement shall not be deemed
exclusive of any other rights to which Indemnitee may at any time be entitled
under applicable law, the Corporation's Certificate of Incorporation, the
Corporation's By-laws, any other agreement, a vote of stockholders or a
resolution of directors, or otherwise. No amendment, alteration or repeal of
this Agreement or of any provision hereof shall limit or restrict any right of
Indemnitee under this Agreement in respect of any action taken or omitted by
such Indemnitee in his Corporate Status prior to such amendment, alteration or
repeal. To the extent that a change in the General Corporation Law of the State
of Delaware, whether by statute or judicial decision, permits greater
indemnification or advancement of Expenses than would be afforded currently
under the Corporation's By-laws and this Agreement, it is the intent of the
parties hereto that Indemnitee shall enjoy by this Agreement the greater
benefits so afforded by such change. No right or remedy herein conferred is
intended to be exclusive of any other right or remedy, and every other right and
remedy shall be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other right or remedy.
(b) To the extent that the Corporation maintains an
insurance policy or policies providing liability insurance for directors,
officers, employees, or agents of the Corporation or of any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
which such person serves at the request of the Corporation, Indemnitee shall be
covered by such policy or policies in accordance with its or their terms to the
maximum extent of the coverage available for any such director, officer,
employee or agent under such policy or policies.
(c) In the event of any payment under this Agreement, the
Corporation shall be subrogated to the extent of such payment to all of the
rights of
8
9
recovery of Indemnitee, and 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.
(d) The Corporation shall not be liable under this
Agreement to make any payment of amounts otherwise indemnifiable (or for which
advancement is provided hereunder) hereunder if and to the extent that
Indemnitee has otherwise actually received such payment under any insurance
policy, contract, agreement or otherwise.
(e) The Corporation's obligation to indemnify or
advance Expenses hereunder to Indemnitee who is or was serving at the request of
the Corporation as a director, officer, employee or agent of any other
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise shall be reduced by any amount Indemnitee has actually received as
indemnification or advancement of expenses from such other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise.
Section 12. Duration of Agreement. This Agreement shall continue
until and terminate upon the later of: (a) 10 years after the date that
Indemnitee shall have ceased to serve as a [director], [officer], [employee],
[or agent] of the Corporation [or of any Enterprise which Indemnitee served at
the request of the Corporation]; or (b) the final termination of any Proceeding
then pending in respect of which Indemnitee is granted rights of indemnification
or advancement of Expenses hereunder and of any proceeding commenced by
Indemnitee pursuant to Section 10 of this Agreement relating thereto. This
Agreement shall be binding upon the Corporation and its successors and assigns
and shall inure to the benefit of Indemnitee and his heirs, executors and
administrators.
Section 13. Severability. If any provision or provisions of this
Agreement shall be held to be invalid, illegal or unenforceable for any reason
whatsoever: (a) the validity, legality and enforceability of the remaining
provisions of this Agreement (including without limitation, each portion of any
Section of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that is not itself invalid, illegal or unenforceable)
shall not in any way be affected or impaired thereby and shall remain
enforceable to the fullest extent permitted by law; (b) such provision or
provisions shall be deemed reformed to the extent necessary to conform to
applicable law and to give the maximum effect to the intent of the parties
hereto; and (c) to the fullest extent possible, the provisions of this Agreement
(including, without limitation, each portion of any Section of this Agreement
containing any such provision held to be invalid, illegal or unenforceable, that
is not itself invalid, illegal or unenforceable) shall be construed so as to
give effect to the intent manifested thereby.
Section 14. Exception to Right of Indemnification or Advancement
of Expenses. Notwithstanding any other provision of this Agreement, but subject
to Section 10(d) hereof, Indemnitee shall not be entitled to indemnification or
advancement of Expenses under this Agreement with respect to any Proceeding
brought by Indemnitee, or
9
10
any claim therein, unless the bringing of such Proceeding or making of such
claim shall have been approved by the Board of Directors.
Section 15. Identical Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall for all purposes be
deemed to be an original but all of which together shall constitute one and the
same Agreement. Only one such counterpart signed by the party against whom
enforceability is sought needs to be produced to evidence the existence of this
Agreement.
Section 16. Headings. The headings of the paragraphs of this
Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction thereof.
Section 17. Definitions. For purposes of this Agreement:
(a) "Change in Control" means a change in control of
the Corporation occurring after the Effective Date of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of Regulation
14A (or in response to any similar item on any similar schedule or form)
promulgated under the Securities Exchange Act of 1934 (the "Act"), whether or
not the Corporation is then subject to such reporting requirement; provided,
however, that, without limitation, such a Change in Control shall be deemed to
have occurred if after the Effective Date (i) any "person" or "group" (as such
terms are used in Sections 13(d) and 14(d) of the Act) other than the
Corporation or a trustee or other fiduciary holding securities under an employee
benefit plan of the Corporation or a corporation owned directly or indirectly by
the stockholders of the Corporation in substantially the same proportions as
their ownership of stock of the Corporation is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Act), directly or indirectly, of securities
of the Corporation representing 15 percent or more of the combined voting power
of the Corporation's then outstanding securities without the prior approval of
at least two-thirds of the members of the Board in office immediately prior to
such person attaining such percentage interest; (ii) there occurs a proxy
contest, or the Corporation is a party to a merger, consolidation, sale of
assets, plan of liquidation or other reorganization, as a consequence of which
members of the Board in office immediately prior to such transaction or event
constitute less than a majority of the Board thereafter; or (iii) during any
period of two consecutive years, other than as a result of an event described in
clause (a)(ii) of this Section 17, individuals who at the beginning of such
period constituted the Board (including for this purpose any new director whose
election or nomination for election by the Corporation's stockholders was
approved by a vote of at least two-thirds of the directors then still in office
who were directors at the beginning of such period) cease for any reason to
constitute at least a majority of the Board.
(b) "Corporate Status" describes the status of a person
who is or was a director, officer, employee or agent of the Corporation or of
any other corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise which such
10
11
person is or was serving at the request of the Corporation in accordance with
this Agreement.
(c) "Disinterested Director" means a director of the
Corporation who is not and was not a party to the Proceeding in respect of which
indemnification is sought by Indemnitee.
(d) "Effective Date" means July 31, 1998.
(e) "Enterprise" shall mean (i) the Corporation and/or
any entity in which the Corporation has an equity interest, and/or (ii) any
other corporation, partnership, joint venture, trust, employee welfare or
benefit plan of the Corporation and/or of any entity in which the Corporation
has an equity interest or other enterprise of which Indemnitee is or was serving
at the express written request of the Corporation as a director, officer,
employee, or agent.
(f) "Expenses" shall include all reasonable attorneys'
fees, retainers, court costs, transcript costs, fees of experts, witness fees,
travel expenses, duplicating costs, printing and binding costs, telephone
charges, postage, delivery service fees, and all other disbursements or expenses
of the types customarily incurred in connection with prosecuting, defending,
preparing to prosecute or defend, investigating, being or preparing to be a
witness in, or otherwise participating in, a Proceeding.
(g) "Good Faith" shall mean Indemnitee having 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 Proceeding, having had no reasonable cause to believe Indemnitee's
conduct was unlawful.
(h) "Independent Counsel" means a law firm, or a member
of a law firm, that is experienced in matters of corporation law and, at the
time of their engagement pursuant to Section 8 hereof, neither presently is, nor
in the past five years has been, retained to represent: (i) the Corporation or
Indemnitee in any matter material to either such party (other than with respect
to matters concerning the Indemnitee under this Agreement, or of other
indemnitees under similar indemnification agreements), or (ii) any other party
to the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term "Independent Counsel" shall not include
any person who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the
Corporation or Indemnitee in an action to determine Indemnitee's rights under
this Agreement. The Corporation agrees to pay the reasonable fees and expenses
of the Independent Counsel referred to above and to fully indemnify such counsel
against any and all Expenses, claims, liabilities and damages arising out of or
relating to this Agreement or its engagement pursuant hereto.
(i) "Proceeding" includes any threatened, pending or
completed action, suit, alternate dispute resolution mechanism, investigation,
inquiry, administrative
11
12
hearing or any other actual, threatened or completed proceeding, whether brought
by or in the right of the Corporation or otherwise, including any counterclaims
therein, and whether civil, criminal, administrative or investigative, in which
Indemnitee was, is or will be involved as a party or otherwise, by reason of the
fact that Indemnitee is or was a director or officer of the Corporation, by
reason of any action taken by him or of any inaction on his part while acting as
director or officer of the Corporation, or by reason of the fact that he is or
was serving at the request of the Corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, in each case whether or not he is acting or serving in any such
capacity at the time any liability or expense is incurred for which
indemnification or advancement of expenses can be provided under this Agreement;
except one initiated by a Indemnitee pursuant to Section 10 of this Agreement to
enforce his rights under this Agreement.
(j) References to "other enterprise" shall include
employee welfare or benefit plans; references to "fines" shall include any
excise tax assessed with respect to any employee welfare or benefit plan;
references to "serving at the request of the Corporation" shall include 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 welfare or benefit plan, as participants or
beneficiaries; and a person who acted in good faith and in the manner he
reasonably believed to be in the interests of the participants and beneficiaries
of an employee welfare or benefit plan shall be deemed to have acted in manner
"not opposed to the best interests of the Corporation" as referred to in this
Agreement.
Section 18. Enforcement.
(a) The Corporation expressly confirms and agrees that
it has entered into this Agreement and assumed the obligations imposed on it
hereby in order to induce Indemnitee to serve as a [director] [and] [officer]
[employee] of the Corporation, and the Corporation acknowledges that Indemnitee
is relying upon this Agreement in serving as a [director] [and] [officer]
[employee] of the Corporation.
(b) This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings, oral, written and implied,
between the parties hereto with respect to the subject matter hereof.
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
provisions hereof (whether or not similar) nor shall such waiver constitute a
continuing waiver.
Section 20. Notice by Indemnitee. Indemnitee agrees promptly to
notify the Corporation in writing upon being served with any summons, citation,
subpoena,
12
13
complaint, indictment, information or other document relating to any Proceeding
or matter which may be subject to indemnification or advancement of Expenses
covered hereunder. The failure of Indemnitee to so notify the Corporation shall
not relieve the Corporation of any obligation which it may have to the
Indemnitee under this Agreement or otherwise, except to the extent the
Corporation is materially prejudiced by such failure.
Section 21. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if (i) delivered by hand and receipted for by the party to whom said
notice or other communication shall have been directed, or (ii) mailed by
certified or registered mail with postage prepaid, on the third business day
after the date on which it is so mailed; or (iii) sent by facsimile with receipt
confirmed:
(a) If to Indemnitee, to:
(b) If to the Corporation, to:
American Management Systems, Incorporated
0000 Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxx 00000
fax: (000) 000-0000
Attention: Chief Financial Officer
With a copy (which shall not constitute notice) to:
Xxxx Xxxxxxx Xxxxx & Xxxxxxxxxx
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
or to such other address as may have been furnished to Indemnitee by the
Corporation or to the Corporation by Indemnitee, as the case may be.
Section 22. Contribution. To the fullest extent permissible under
applicable law, if the indemnification provided for in this Agreement is
unavailable to Indemnitee for any reason whatsoever, the Corporation, in lieu of
indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee,
whether for judgments, fines, penalties, excise taxes, amounts paid or to be
paid in settlement and/or for Expenses, in connection with any claim relating to
an indemnifiable event under this Agreement, in such proportion as is deemed
fair and reasonable in light of all of the circumstances of such Proceeding in
order to reflect (i) the relative benefits received by the Corporation and
Indemnitee as a result of the event(s) and/or transaction(s) giving cause to
such Proceeding; and/or (ii) the relative fault of the Corporation (and its
directors, officers,
13
14
employees and agents) and Indemnitee in connection with such event(s) and/or
transaction(s).
Section 23. Governing Law; Submission to Jurisdiction:
Appointment of Agent for Service of Process. This Agreement and the legal
relations among the parties shall be governed by, and construed and enforced in
accordance with, the laws of the State of Delaware, without regard to its
conflict of laws rules. The Corporation and Indemnitee hereby irrevocably and
unconditionally (i) agree that any action or proceeding arising out of or in
connection with this Agreement shall be brought only in the Chancery Court of
the State of Delaware (the "Delaware Court"), and not in any other state or
federal court in the United States of America or any court in any other country,
(ii) consent to submit to the exclusive jurisdiction of the Delaware Court for
purposes of any action or proceeding arising out of or in connection with this
Agreement, (iii) appoint, to the extent such party is not a resident of the
State of Delaware, irrevocably The Corporation Trust Company, Corporate Trust
Center, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 as its agent in the State
of Delaware as such party's agent for acceptance of legal process in connection
with any such action or proceeding against such party with the same legal force
and validity as if served upon such party personally within the State of
Delaware, (iv) waive any objection to the laying of venue of any such action or
proceeding in the Delaware Court, and (v) waive, and agree not to plead or to
make, any claim that any such action or proceeding brought in the Delaware Court
has been brought in an improper or otherwise inconvenient forum.
14
15
Section 24. Miscellaneous. Use of the masculine pronoun shall
be deemed to include usage of the feminine pronoun where appropriate.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year first above written.
AMERICAN MANAGEMENT SYSTEMS,
INCORPORATED
By:
----------------------------
Name:
Title:
-------------------------------
Indemnitee:
15
