MINDSPEED TECHNOLOGIES, INC. INDEMNIFICATION AGREEMENT
Exhibit 10.1
INDEMNIFICATION AGREEMENT, dated as of May 6, 2011 by and between MINDSPEED TECHNOLOGIES,
INC., a Delaware corporation (the “Corporation”), and Xxxxxxx X. Xxxxxxx, an officer of the
Corporation (“Indemnitee”).
RECITALS
WHEREAS, the Corporation desires to attract and retain the services of highly qualified
individuals to serve the Corporation and its related entities;
WHEREAS, the Corporation and Indemnitee recognize that highly competent persons are becoming
more reluctant to serve as directors or officers or in other capacities with corporations unless
they are provided with reasonable protection through liability insurance or indemnification against
risks of claims and actions against them arising out of their service to and activities on behalf
of the corporations they serve;
WHEREAS, the Corporation and Indemnitee further recognize the substantial increase in
corporate litigation in general, subjecting directors, officers, employees and agents of
corporations to expensive litigation risks at the same time as the availability and coverage of
liability insurance has been severely limited and the cost of such insurance has increased
significantly;
WHEREAS, Article III, Section 14 of the Corporation’s bylaws as in effect on the date hereof
(including the procedures attached as an Appendix thereto) provides for indemnification and
advancement of expenses of directors, officers, employees and agents to the maximum extent
permitted by Delaware law as in effect on the date hereof;
WHEREAS, the Board of Directors of the Corporation (the “Board of Directors”) has determined
that the Corporation should act to assure its directors and officers of such protection in order to
enhance their continued and effective service to the Corporation; and
WHEREAS, in order to induce Indemnitee to provide such services to the Corporation as an
officer, the Corporation desires to enter into this Agreement with Indemnitee providing for
indemnification and advancement of expenses as set forth herein;
NOW, THEREFORE, the Corporation and Indemnitee hereby agree as set forth below.
AGREEMENT
In consideration of the premises and the covenants contained herein, the Corporation and
Indemnitee do hereby covenant and agree as follows:
1. Definitions. For purposes of this Agreement:
(a) All references in this Agreement to Article III, Section 14 of the Corporation’s bylaws
(“Article III, Section 14”) and the Procedures for Submission and Determination of Claims for
Indemnification Pursuant to Article III, Section 14 of the Bylaws attached as an Appendix to the
Corporation’s bylaws (the “Procedures”) shall refer to such Section and Procedures as in effect on
the date hereof, copies of which are attached as Exhibit A hereto, and the terms of which are
incorporated by reference into and made a part of this Agreement.
(b) Capitalized terms used and not otherwise defined in this Agreement shall have the meanings
set forth in Article III, Section 14 or the Procedures.
(c) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
2. Service by Indemnitee. Indemnitee agrees to begin serving as the Corporation’s
Interim Chief Financial Officer, Principal Accounting Officer and Principal Financial Officer.
Notwithstanding anything contained herein, this Agreement shall not create a contract of employment
between the Corporation and Indemnitee, and the termination of Indemnitee’s relationship with the
Corporation by either party hereto shall not be restricted by this Agreement.
3. Indemnification. The Corporation agrees to indemnify Indemnitee for, and save,
defend and hold Indemnitee harmless from and against, any expenses (including attorneys’ fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee as a
result of her service as the Corporation’s Interim Chief Financial Officer, Principal Accounting
Officer and Principal Financial Officer as provided in Article III, Section 14 and the Procedures
and, to the extent the laws of the State of Delaware may from time to time hereafter be amended to
increase the scope of such permitted indemnification, to the fullest extent of such laws.
4. Non-Exclusivity. The rights of indemnification and to receive advances as provided
by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any
time be entitled under or by reason of applicable law, any
2
certificate of incorporation or bylaws, any agreement, any vote of stockholders or any
resolution of directors or otherwise. To the extent Indemnitee would be prejudiced thereby, no
amendment, alteration, rescission or replacement of this Agreement or any provision hereof shall be
effective as to Indemnitee with respect to any action taken or omitted by such Indemnitee in
Indemnitee’s position with the Corporation or any other entity which Indemnitee is or was serving
at the request of the Corporation prior to such amendment, alteration, rescission or replacement.
5. Successors and Assigns. This Agreement shall be binding upon the Corporation and
its successors and assigns and shall inure to the benefit of Indemnitee and Indemnitee’s spouse,
assigns, heirs, devisee, executors, administrators or other legal representatives.
6. Severability. Should any part, term or condition hereof be declared illegal or
unenforceable or in conflict with any law, the validity of the remaining portions or provisions of
this Agreement shall not be affected thereby, and the illegal or unenforceable portions of the
Agreement shall be and hereby are redrafted to conform with applicable law, while leaving the
remaining portions of this Agreement intact.
7. Counterparts. This Agreement may be executed in several counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
document.
8. Headings. Section headings are for convenience only and do not control or affect
the meaning or interpretation of any terms or provisions of this Agreement.
9. Modification and Waiver. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by each of the parties hereto. A waiver by
any party of any breach or violation of this Agreement shall not be deemed or construed as a waiver
of any other or subsequent breach or violation thereof.
10. No Duplicative Payment. The Corporation shall not be liable under this Agreement
to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that
Indemnitee has otherwise actually received such payment (net of expenses incurred in collecting
such payment) under this Agreement, any insurance policy, contract, agreement or otherwise.
11. Notices. All notices, requests, demands and other communications provided for by
this Agreement shall be in writing (including telecopier or similar writing) and shall be deemed to
have been given at the time when mailed in a registered or certified postpaid envelope in any
general or branch office of the United States Postal Service, or sent by Federal Express or other
similar overnight courier service, addressed to the address of the parties stated below or to such
changed address as such party may
3
have fixed by notice or, if given by telecopier, when such telecopy is transmitted and the
appropriate answer back is received.
(a) If to Indemnitee, to the address appearing on the signature page hereof.
(b) If to the Corporation to:
Mindspeed Technologies, Inc.
0000 XxxXxxxxx Xxxx., Xxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: General Counsel
0000 XxxXxxxxx Xxxx., Xxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: General Counsel
12. GOVERNING LAW. THE PARTIES AGREE THAT THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF DELAWARE WITHOUT
GIVING EFFECT TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
13. Entire Agreement. Subject to the provisions of Section 4 hereof, this Agreement
constitutes the entire understanding between the parties and supersedes all proposals, commitments,
writings, negotiations and understandings, oral and written, and all other communications between
the parties relating to the subject matter of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.
| MINDSPEED TECHNOLOGIES, INC. |
|||||
| Date: May 16, 2011 | By | /s/ Xxxxxxx X. Xxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxx | ||||
| Title: | Senior Vice President, Human Resources | ||||
| INDEMNITEE: |
||||
| Date: May 6, 2011 | /s/ Xxxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxxx | |||
| Title: | Vice President, Finance, and Interim Chief Financial Officer |
|||
| Address: | 0000 XxxXxxxxx Xxxx., Xxxx Xxxxx Xxxxxxx Xxxxx, XX 00000 |
|||
4
EXHIBIT A
ARTICLE III
of the
BYLAWS OF MINDSPEED TECHNOLOGIES, INC.
* * * * *
SECTION 14. Indemnification. (A) The Corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than an action by or in
the right of the Corporation), by reason of the fact that such person is or was a director,
officer, employee or agent of the Corporation or any of its majority-owned subsidiaries or is or
was serving at the request of the Corporation as a director, officer, employee or agent (except in
each of the foregoing situations to the extent any agreement, arrangement or understanding of
agency contains provisions that supersede or abrogate indemnification under this section) of
another corporation or of any partnership, joint venture, trust, employee benefit plan or other
enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in connection with such action, suit or
proceeding if such person acted in good faith and in a manner such person 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 no reasonable cause to believe his or her conduct was unlawful. 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 the
person did not act in good faith and in a manner which such person 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 his or her conduct was unlawful.
(B) The Corporation shall indemnify any person who was or is a party or is threatened to be
made a party to 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 such person is or was a
director, officer, employee or agent of the Corporation or any of its majority-owned subsidiaries,
or is or was serving at the request of the Corporation as a director, officer, employee or agent
(except in each of the foregoing situations to the extent any agreement, arrangement or
understanding of agency contains provisions that supersede or abrogate indemnification under this
section) of another corporation or of any partnership, joint venture, trust, employee benefit plan or other enterprise against expenses
(including attorneys’ fees) actually and reasonably incurred by such person in connection with the
defense or settlement of such action or suit if such person acted in good faith and in a manner
such person reasonably believed to be in or not opposed to the
A-1
best interests of the Corporation
and except that no indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Corporation unless and only to the
extent that the Court of Chancery of Delaware 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, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery of Delaware or such other court shall deem proper.
(C) To the extent that a director, officer, employee or agent of the Corporation or any of
its majority-owned subsidiaries has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (A) and (B), or in defense of any claim,
issue or matter therein, such person shall be indemnified against expenses (including attorneys’
fees) actually and reasonably incurred by or on behalf of such person in connection therewith. If
any such person is not wholly successful in any such action, suit or proceeding but is successful,
on the merits or otherwise, as to one or more but less than all claims, issues or matters therein,
the Corporation shall indemnify such person against all expenses (including attorneys’ fees)
actually and reasonably incurred by or on behalf of such person in connection with each claim,
issue or matter that is successfully resolved. For purposes of this subsection and without
limitation, the termination of any claim, issue or matter by dismissal, with or without prejudice,
shall be deemed to be a successful result as to such claim, issue or matter.
(D) Notwithstanding any other provision of this section, to the extent any person is a
witness in, but not a party to, any action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that such person is or was a director,
officer, employee or agent of the Corporation or any of its majority-owned subsidiaries, or is or
was serving at the request of the Corporation as a director, officer, employee or agent (except in
each of the foregoing situations to the extent any agreement, arrangement or understanding of
agency contains provisions that supersede or abrogate indemnification under this section) of
another corporation or of any partnership, joint venture, trust, employee benefit plan or other
enterprise, such person shall be indemnified against all expenses (including attorneys’ fees)
actually and reasonably incurred by or on behalf of such person in connection therewith.
(E) Indemnification under subsections (A) and (B) shall be made only as authorized in the
specific case upon a determination that indemnification of the director, officer, employee or agent
is proper in the circumstances because such person has met the applicable standard of conduct set forth in subsections (A) and (B). Such determination shall
be made (1) if a Change of Control (as hereinafter defined) shall not have occurred, (a) with
respect to a person who is a present or former director or officer of the Corporation, (i) by the
Board of Directors by a majority vote of the Disinterested
A-2
Directors (as hereinafter defined), even though less than a quorum, or (ii) if there are no Disinterested Directors or, even if there are
Disinterested Directors, a majority of such Disinterested Directors so directs, by (x) Independent
Counsel (as hereinafter defined) in a written opinion to the Board of Directors, a copy of which
shall be delivered to the claimant, or (y) the shareholders of the Corporation; or (b) with respect
to a person who is not a present or former director or officer of the Corporation, by the chief
executive officer of the Corporation or by such other officer of the Corporation as shall be
designated from time to time by the Board of Directors; or (2) if a Change of Control shall have
occurred, by Independent Counsel selected by the claimant in a written opinion to the Board of
Directors, a copy of which shall be delivered to the claimant, unless the claimant shall request
that such determination be made by or at the direction of the Board of Directors (in the case of a
claimant who is a present or former director or officer of the Corporation) or by an officer of the
Corporation authorized to make such determination (in the case of a claimant who is not a present
or former director or officer of the Corporation), in which case it shall be made in accordance
with clause (1) of this sentence. Any claimant shall be entitled to be indemnified against the
expenses (including attorneys’ fees) actually and reasonably incurred by such claimant in
cooperating with the person or entity making the determination of entitlement to indemnification
(irrespective of the determination as to the claimant’s entitlement to indemnification) and, to the
extent successful, in connection with any litigation or arbitration with respect to such claim or
the enforcement thereof.
(F) If a Change of Control shall not have occurred, or if a Change of Control shall have
occurred and a director, officer, employee or agent requests pursuant to clause (2) of the second
sentence in subsection (E) that the determination as to whether the claimant is entitled to
indemnification be made by or at the direction of the Board of Directors (in the case of a claimant
who is a present or former director or officer of the Corporation) or by an officer of the
Corporation authorized to make such determination (in the case of a claimant who is not a present
or former director or officer of the Corporation), the claimant shall be conclusively presumed to
have been determined pursuant to subsection (E) to be entitled to indemnification if (1) in the
case of a claimant who is a present or former director or officer of the Corporation, (a)(i) within
fifteen days after the next regularly scheduled meeting of the Board of Directors following receipt
by the Corporation of the request therefor, the Board of Directors shall not have resolved by
majority vote of the Disinterested Directors to submit such determination to (x) Independent
Counsel for its determination or (y) the shareholders for their determination at the next annual
meeting, or any special meeting that may be held earlier, after such receipt, and (ii) within sixty days after receipt by the Corporation of the request therefor
(or within ninety days after such receipt if the Board of Directors in good faith determines that
additional time is required by it for the determination and, prior to expiration of such sixty-day
period, notifies the claimant thereof), the Board of Directors
A-3
shall not have made the
determination by a majority vote of the Disinterested Directors, or (b) after a resolution of the
Board of Directors, timely made pursuant to clause (a)(i)(y) above, to submit the determination to
the shareholders, the shareholders meeting at which the determination is to be made shall not have
been held on or before the date prescribed (or on or before a later date, not to exceed sixty days
beyond the original date, to which such meeting may have been postponed or adjourned on good cause
by the Board of Directors acting in good faith), or (2) in the case of a claimant who is not a
present or former director or officer of the Corporation, within sixty days after receipt by the
Corporation of the request therefor (or within ninety days after such receipt if an officer of the
Corporation authorized to make such determination in good faith determines that additional time is
required for the determination and, prior to expiration of such sixty-day period, notifies the
claimant thereof), an officer of the Corporation authorized to make such determination shall not
have made the determination; provided, however, that this sentence shall not apply
if the claimant has misstated or failed to state a material fact in connection with his or her
request for indemnification. Such presumed determination that a claimant is entitled to
indemnification shall be deemed to have been made (I) at the end of the sixty-day or ninety-day
period (as the case may be) referred to in clause (1)(a)(ii) or (2) of the immediately preceding
sentence or (II) if the Board of Directors has resolved on a timely basis to submit the
determination to the shareholders, on the last date within the period prescribed by law for holding
such shareholders meeting (or a postponement or adjournment thereof as permitted above).
(G) Expenses (including attorneys’ fees) incurred in defending a civil, criminal,
administrative or investigative action, suit or proceeding shall be paid by the Corporation in
advance of the final disposition of such action, suit or proceeding to a present or former director
or officer of the Corporation, promptly after receipt of a request therefor stating in reasonable
detail the expenses incurred, and to a person who is not a present or former director or officer of
the Corporation as authorized by the chief executive officer of the Corporation or such other
officer of the Corporation as shall be designated from time to time by the Board of Directors;
provided that in each case the Corporation shall have received an undertaking by or on behalf of
the present or former director, officer, employee or agent to repay such amount if it shall
ultimately be determined that such person is not entitled to be indemnified by the Corporation as
authorized in this section.
(H) The Board of Directors shall establish reasonable procedures for the submission of claims
for indemnification pursuant to this section, determination of the entitlement of any person
thereto and review of any such determination. Such procedures shall be set forth in an appendix to these bylaws and shall be deemed for all purposes to be a
part hereof.
(I) For purposes of this section,
A-4
(1) “Change of Control” means any of the following occurring at any time after the
distribution of the shares of capital stock of the Corporation to the holders of capital stock of
Conexant Systems, Inc. (the “Distribution”):
(a) The acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then outstanding
shares of common stock of the Corporation (the “Outstanding Corporation Common Stock”) or (ii) the
combined voting power of the then outstanding voting securities of the Corporation entitled to vote
generally in the election of directors (the “Outstanding Corporation Voting Securities”);
provided, however, that for purposes of this subparagraph (a), the following
acquisitions shall not constitute a Change of Control: (v) any acquisition directly from the
Corporation, (w) any acquisition by the Corporation, (x) any acquisition by Conexant Systems, Inc.,
(y) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the
Corporation, Conexant Systems, Inc. or any corporation controlled by the Corporation or Conexant
Systems, Inc. or (z) any acquisition pursuant to a transaction which complies with clauses (i),
(ii) and (iii) of subsection (c) of this Paragraph 14(I)(1); or
(b) Individuals who, as of the date of the Distribution, constitute the Board of Directors
(the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board of
Directors; provided, however, that any individual becoming a director subsequent to
that date whose election, or nomination for election by the Corporation’s shareholders, was
approved by a vote of at least a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of office occurs as a result of an
actual or threatened election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the
Board of Directors; or
(c) Consummation of a reorganization, merger or consolidation or sale or other disposition of
all or substantially all of the assets of the Corporation or the acquisition of assets of another
entity (a “Corporate Transaction”), in each case, unless, following such Corporate Transaction, (i)
all or substantially all of the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Corporation Common Stock and Outstanding Corporation Voting
Securities immediately prior to such Corporate Transaction beneficially own, directly or indirectly, more than 60% of,
respectively, the then outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Corporate Transaction (including, without
limitation, a corporation which as a result of such
A-5
transaction owns the Corporation or all or
substantially all of the Corporation’s assets either directly or through one or more subsidiaries)
in substantially the same proportions as their ownership, immediately prior to such Corporate
Transaction, of the Outstanding Corporation Common Stock and Outstanding Corporation Voting
Securities, as the case may be, (ii) no Person (excluding Conexant Systems, Inc., any employee
benefit plan (or related trust) of the Corporation, of Conexant Systems, Inc. or of such
corporation resulting from such Corporate Transaction) beneficially owns, directly or indirectly,
20% or more of, respectively, the then outstanding shares of common stock of the corporation
resulting from such Corporate Transaction or the combined voting power of the then outstanding
voting securities of such corporation except to the extent that such ownership existed prior to the
Corporate Transaction and (iii) at least a majority of the members of the board of directors of the
corporation resulting from such Corporate Transaction were members of the Incumbent Board at the
time of the execution of the initial agreement, or of the action of the Board of Directors,
providing for such Corporate Transaction; or
(d) Approval by the Corporation’s shareholders of a complete liquidation or dissolution of
the Corporation.
(2) “Disinterested Director” means a director of the Corporation who is not and was not a
party to an action, suit or proceeding in respect of which indemnification is sought by a director,
officer, employee or agent.
(3) “Independent Counsel” means a law firm, or a member of a law firm, that (i) is
experienced in matters of corporation law; (ii) neither presently is, nor in the past five years
has been, retained to represent the Corporation, the director, officer, employee or agent claiming
indemnification or any other party to the action, suit or proceeding giving rise to a claim for
indemnification under this section, in any matter material to the Corporation, the claimant or any
such other party; and (iii) would not, under applicable standards of professional conduct then
prevailing, have a conflict of interest in representing either the Corporation or such director,
officer, employee or agent in an action to determine the Corporation’s or such person’s rights
under this section.
(J) The indemnification and advancement of expenses herein provided, or granted pursuant
hereto, shall not be deemed exclusive of any other rights to which any of those indemnified or
eligible for advancement of expenses may be entitled under any agreement, vote of shareholders or
Disinterested Directors or otherwise, both as to action in such person’s official capacity and as
to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee
or agent and shall inure to the benefit of the heirs, executors and administrators of such person.
Notwithstanding any amendment, alteration or repeal of this section or any of its provisions, or of
any of the procedures established by the Board of Directors pursuant to subsection (H) hereof, any
person who is or was a director, officer, employee
A-6
or agent of the Corporation or any of its majority-owned subsidiaries or is or was serving at the request of the Corporation as a director,
officer, employee or agent of another corporation or of any partnership, joint venture, employee
benefit plan or other enterprise shall be entitled to indemnification in accordance with the
provisions hereof and thereof with respect to any action taken or omitted prior to such amendment,
alteration or repeal except to the extent otherwise required by law.
(K) No indemnification shall be payable pursuant to this section with respect to any action
against the Corporation commenced by an officer, director, employee or agent unless the Board of
Directors shall have authorized the commencement thereof or unless and to the extent that this
section or the procedures established pursuant to subsection (H) shall specifically provide for
indemnification of expenses relating to the enforcement of rights under this section and such
procedures.
* * * * *
A-7
APPENDIX
Procedures for Submission and
Determination of Claims for Indemnification
Pursuant to Article III, Section 14 of the Bylaws.
Determination of Claims for Indemnification
Pursuant to Article III, Section 14 of the Bylaws.
SECTION 1. Purpose. The Procedures for Submission and Determination of Claims for
Indemnification Pursuant to Article III, Section 14 of the bylaws (the “Procedures”) are to
implement the provisions of Article III, Section 14 of the bylaws of the Corporation (the “bylaws”)
in compliance with the requirement of subsection (H) thereof.
SECTION 2. Definitions. For purposes of these Procedures:
(A) All terms that are defined in Article III, Section 14 of the bylaws shall have the
meanings ascribed to them therein when used in these Procedures unless otherwise defined herein.
(B) “Expenses” include all reasonable attorneys’ fees, 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, or being or preparing to be a witness in, a Proceeding; and shall also include such
retainers as counsel may reasonably require in advance of undertaking the representation of an
Indemnitee in a Proceeding.
(C) “Indemnitee” includes any person who was or is, or is threatened to be made, a witness in
or a party to any Proceeding by reason of the fact that such person is or was a director, officer,
employee or agent of the Corporation or any of its majority-owned subsidiaries or is or was serving
at the request of the Corporation as a director, officer, employee or agent (except in each of the
foregoing situations to the extent any agreement, arrangement or understanding of agency contains
provisions that supersede or abrogate indemnification under Article III, Section 14 of the bylaws)
of another corporation or of any partnership, joint venture, trust, employee benefit plan or other
enterprise.
(D) “Proceeding” includes any action, suit, arbitration, alternative dispute resolution
mechanism, investigation, administrative hearing or any other proceeding, whether civil, criminal,
administrative or investigative, except one initiated by an Indemnitee unless the Board of
Directors shall have authorized the commencement thereof.
A-8
SECTION 3. Submission and Determination of Claims.
(A) To obtain indemnification or advancement of Expenses under Article III, Section 14 of the
bylaws, an Indemnitee shall submit to the Secretary of the Corporation a written request therefor,
including therein or therewith such documentation and information as is reasonably available to the
Indemnitee and is reasonably necessary to permit a determination as to whether and what extent the
Indemnitee is entitled to indemnification or advancement of Expenses, as the case may be. The
Secretary shall, promptly upon receipt of a request for indemnification, advise the Board of
Directors (if the Indemnitee is a present or former director or officer of the Corporation) or the
officer of the Corporation authorized to make the determination as to whether an Indemnitee is
entitled to indemnification (if the Indemnitee is not a present or former director or officer of
the Corporation) thereof in writing if a determination in accordance with Article III, Section
14(E) of the bylaws is required.
(B) Upon written request by an Indemnitee for indemnification pursuant to Section 3(A)
hereof, a determination with respect to the Indemnitee’s entitlement thereto in the specific case,
if required by the bylaws, shall be made in accordance with Article III, Section 14(E) of the
bylaws, and, if it is so determined that the Indemnitee is entitled to indemnification, payment to
the Indemnitee shall be made within ten days after such determination. The Indemnitee shall
cooperate with the person, persons or entity making such determination, with respect to the
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 the Indemnitee and
reasonably necessary to such determination.
(C) If entitlement to indemnification is to be made by Independent Counsel pursuant to
Article III, Section 14(E) of the bylaws, the Independent Counsel shall be selected as provided in
this Section 3(C). If a Change of Control shall not have occurred, the Independent Counsel shall
be selected by the Board of Directors, and the Corporation shall give written notice to the
Indemnitee advising the Indemnitee of the identity of the Independent Counsel so selected. If a
Change of Control shall have occurred, the Independent Counsel shall be selected by the Indemnitee
(unless the Indemnitee shall request that such selection be made by the Board of Directors, in
which event the immediately preceding sentence shall apply), and the Indemnitee shall give written
notice to the Corporation advising it of the identity of the Independent Counsel so selected. In
either event, the Indemnitee or the Corporation, as the case may be, may, within seven days after
such written notice of selection shall have been given, deliver to the Corporation or to the
Indemnitee, as the case may be, a written objection to such selection. 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
A-9
in Article III, Section 14 of the bylaws, and the objection shall set forth with particularity
the factual basis of such assertion. If such written objection is made, the Independent Counsel so
selected may not serve as Independent Counsel unless and until a court has determined that such
objection is without merit. If, within twenty days after the next regularly scheduled Board of
Directors meeting following submission by the Indemnitee of a written request for indemnification
pursuant to Section 3(A) hereof, no Independent Counsel shall have been selected and not objected
to, either the Corporation or the 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 the 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 an objection is
favorably resolved or the person so appointed shall act as Independent Counsel under Article III,
Section 14(E) of the bylaws. The Corporation shall pay any and all reasonable fees and expenses
(including without limitation any advance retainers reasonably required by counsel) of Independent
Counsel incurred by such Independent Counsel in connection with acting pursuant to Article III,
Section 14(E) of the bylaws, and the Corporation shall pay all reasonable fees and expenses
(including without limitation any advance retainers reasonably required by counsel) incident to the
procedures of Article III, Section 14(E) of the bylaws and this Section 3(C), regardless of the
manner in which Independent Counsel was selected or appointed. Upon the delivery of its opinion
pursuant to Article III, Section 14 of the bylaws or, if earlier, the due commencement of any
judicial proceeding or arbitration pursuant to Section 4(A)(3) of these Procedures, 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) If a Change of Control shall have occurred, in making a determination with respect to
entitlement to indemnification under the bylaws, the person, persons or entity making such
determination shall presume that an Indemnitee is entitled to indemnification under the bylaws if
the Indemnitee has submitted a request for indemnification in accordance with Section 3(A) hereof,
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.
SECTION 4. Review and Enforcement of Determination.
(A) In the event that (1) advancement of Expenses is not timely made pursuant to Article III,
Section 14(G) of the bylaws, (2) payment of indemnification is not made pursuant to Article III,
Section 14(C) or (D) of the bylaws within ten days after receipt by the Corporation of written
request therefor, (3) a determination is made pursuant to Article III, Section 14(E) of the bylaws
that an Indemnitee is not entitled to
A-10
indemnification under the bylaws, (4) the determination of entitlement to indemnification is
to be made by Independent Counsel pursuant to Article III, Section 14(E) of the bylaws and such
determination shall not have been made and delivered in a written opinion within ninety days after
receipt by the Corporation of the written request for indemnification, or (5) payment of
indemnification is not made within ten days after a determination has been made pursuant to Article
III, Section 14(E) of the bylaws that an Indemnitee is entitled to indemnification or within ten
days after such determination is deemed to have been made pursuant to Article III, Section 14(F) of
the bylaws, the Indemnitee shall be entitled to an adjudication in an appropriate court of the
State of Delaware, or in any other court of competent jurisdiction, of the Indemnitee’s entitlement
to such indemnification or advancement of Expenses. Alternatively, the Indemnitee, at his or her
option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the
rules of the American Arbitration Association. The Indemnitee shall commence such proceeding
seeking an adjudication or an award in arbitration within one year following the date on which the
Indemnitee first has the right to commence such proceeding pursuant to this Section 4(A). The
Corporation shall not oppose the Indemnitee’s right to seek any such adjudication or award in
arbitration.
(B) In the event that a determination shall have been made pursuant to Article III, Section
14(E) of the bylaws that an Indemnitee is not entitled to indemnification, any judicial proceeding
or arbitration commenced pursuant to this Section 4 shall be conducted in all respects as a de novo
trial, or arbitration, on the merits and the Indemnitee shall not be prejudiced by reason of that
adverse determination. If a Change of Control shall have occurred, the Corporation shall have the
burden of proving in any judicial proceeding or arbitration commenced pursuant to this Section 4
that the Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may
be.
(C) If a determination shall have been made or deemed to have been made pursuant to Article
III, Section 14(E) or (F) of the bylaws that an Indemnitee is entitled to indemnification, the
Corporation shall be bound by such determination in any judicial proceeding or arbitration
commenced pursuant to this Section 4, absent (1) a misstatement or omission of a material fact in
connection with the Indemnitee’s request for indemnification, or (2) a prohibition of such
indemnification under applicable law.
(D) The Corporation shall be precluded from asserting in any judicial proceeding or
arbitration commenced pursuant to this Section 4 that the procedures and presumptions of these
Procedures are not valid, binding and enforceable, and shall stipulate in any such judicial
proceeding or arbitration that the Corporation is bound by all the provisions of these Procedures.
A-11
(E) In the event that an Indemnitee, pursuant to this Section 4, seeks to enforce the
Indemnitee’s rights under, or to recover damages for breach of, Article III, Section 14 of the
bylaws or these Procedures in a judicial proceeding or arbitration, the 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 2 of these
Procedures) actually and reasonably incurred in such judicial proceeding or arbitration, but only
if the Indemnitee prevails therein. If it shall be determined in such judicial proceeding or
arbitration that the Indemnitee is entitled to receive part but not all of the indemnification or
advancement of Expenses sought, the expenses incurred by the Indemnitee in connection with such
judicial proceeding or arbitration shall be appropriately prorated.
SECTION 5. Amendments. These Procedures may be amended at any time and from time to time in
the same manner as any bylaw of the Corporation in accordance with the Certificate of
Incorporation; provided, however, that notwithstanding any amendment, alteration or
repeal of these Procedures or any provision hereof, any Indemnitee shall be entitled to utilize
these Procedures with respect to any claim for indemnification arising out of any action taken or
omitted prior to such amendment, alteration or repeal except to the extent otherwise required by
law.
A-12
