INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this "AGREEMENT") is made as of this ___
day of ______________, 2001, by and between SPYGLASS ENTERTAINMENT GROUP, INC.,
a Delaware corporation (the "COMPANY"), and ________________, an individual
("INDEMNITEE").
RECITALS
A. The Company and Indemnitee recognize the substantial increase in
corporate litigation in general, subjecting directors, officers, employees, and
agents to expensive litigation risk at the same time that the availability and
coverage of liability insurance has been severely limited.
B. Indemnitee does not regard the current protection available as
adequate under the present circumstances, and Indemnitee and other directors,
officers, employers and agents of the Company may not be willing to continue to
serve as directors, officers, employees and agents without additional
protection.
C. The Company desires to attract and retain the services of highly
qualified individuals, such as Indemnitee, to serve as directors, officers,
employees and agents of the Company and to indemnify its directors, officers,
employees and agents so as to provide them with the maximum protection permitted
by law.
AGREEMENT
The Company and Indemnitee hereby agree as follows:
1. AGREEMENT TO SERVE. Indemnitee agrees to serve and/or continue to
serve the Company, at the Company's will (or under separate written agreement
approved by the Board of Directors of the Company (the "BOARD"), if such
agreement exists), in the capacity Indemnitee currently serves the Company, as
long as Indemnitee is duly appointed or elected and qualified in accordance with
the applicable provisions of the Bylaws of the Company or any subsidiary of the
Company or (subject to any employment agreement between Indemnitee and the
Company) until such time as Indemnitee, in his sole discretion, tenders a
written resignation or is removed in accordance with the Bylaws; PROVIDED,
HOWEVER, that nothing contained in this Agreement is intended to or shall create
any right (express or implied) to continued employment by Indemnitee.
2. INDEMNIFICATION.
2.1 THIRD PARTY PROCEEDINGS. The Company shall indemnify Indemnitee if
Indemnitee is or was 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 Company) by reason in whole or in part of: (i) the fact that
Indemnitee is or was a director, officer, employee or agent of the Company, or
any subsidiary of the Company, (ii) any action or inaction on the part of
Indemnitee while a director, officer, employee or agent of the Company, or any
subsidiary of the Company, or (iii) the fact that Indemnitee is or was serving
at the request of the Company as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against all expenses (including, without limitation, attorneys' fees,
disbursements and retainers, accounting and witness fees, travel
and deposition costs, and expenses of investigations), judgments, fines and
amounts paid in settlement (if such settlement is approved in advance by the
Company which approval shall not be unreasonably withheld) and other amounts
actually incurred by Indemnitee in connection with such action, suit or
proceeding to the fullest extent permissible under Delaware Law as currently in
effect and as may be expanded in the future. 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
indemnification is unavailable under this Agreement.
2.2 PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY. The Company shall
indemnify Indemnitee if Indemnitee was or is a party or is threatened to be made
a party to any threatened, pending or completed action, suit or proceeding by or
in the right of the Company or any subsidiary of the Company arising in whole or
in part out of (i) the fact that Indemnitee is or was a director, officer,
employee or agent of the Company or any subsidiary of the Company, (ii) any
action or inaction on the part of Indemnitee while a director, officer, employee
or agent of the Company or any subsidiary of the Company, or (iii) the fact that
Indemnitee is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including, without limitation,
attorneys' fees, disbursements and retainers, accounting and witness fees,
travel and deposition costs, and expenses of investigations) and amounts paid in
settlement, in each case to the extent actually incurred by Indemnitee in
connection with such action, suit or proceeding, to the fullest extent
permissible under Delaware Law as currently in effect and as may be expanded in
the future. For purposes of this SECTION 2.2, indemnification shall include, to
the extent not prohibited by law, indemnification against all judgments, fines
and amounts paid in settlement actually incurred by Indemnitee in connection
with such action, suit or proceeding.
2.3 MANDATORY PAYMENT OF EXPENSES. Notwithstanding any limitations or
conditions upon the Company's indemnification obligations set forth in SECTIONS
2.1 and 2.2 above, to the extent that Indemnitee has been successful on the
merits or otherwise in defense of any action, suit or proceeding referred to in
SECTIONS 2.1 and 2.2 or in defense of any claim, issue or matter therein,
Indemnitee shall be indemnified against expenses (including, without limitation,
attorneys' fees, disbursements and retainers, accounting and witness fees,
travel and deposition costs, and expenses of investigations) actually incurred
by Indemnitee in connection therewith.
2.4 INDEMNIFICATION FOR SERVING AS A WITNESS. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee is, by reason of
Indemnitee's status as a director, officer, employee or agent of the Company or
any subsidiary of the Company, a witness in any action, suit or proceeding,
whether civil, criminal, administrative or investigative, Indemnitee shall be
indemnified against expenses actually incurred by Indemnitee in connection
therewith.
3. EXPENSES; INDEMNIFICATION PROCEDURE.
3.1 ADVANCEMENT OF EXPENSES. The Company shall advance all expenses
incurred by Indemnitee in connection with the investigation, defense, settlement
or appeal of any civil, criminal, administrative or investigative action, suit
or proceeding referenced in SECTIONS 2.1 or 2.2 hereof. Indemnitee hereby
undertakes to repay such amounts advanced only if, and to the extent that, it
shall ultimately be determined that Indemnitee is not entitled to be indemnified
by the Company as authorized hereby. The advances to be made hereunder shall be
paid by the Company
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to Indemnitee within 30 days following delivery of a written request therefor by
Indemnitee to the Company.
3.2 NOTICE/COOPERATION BY INDEMNITEE. Indemnitee shall, as a condition
precedent to his right to be indemnified under this Agreement, give the Company
notice, in accordance with SECTION 14 hereof, of any claim made against
Indemnitee for which indemnification will or could be sought under this
Agreement. Notice to the Company shall be directed to the Chief Executive
Officer of the Company at the principal executive offices of the Company. In
addition, Indemnitee shall give the Company, at the Company's expense, such
information and cooperation as it may reasonably require and as shall be within
Indemnitee's power.
3.3 PROCEDURE. Any indemnification and advances provided for in SECTION
2 and this SECTION 3 shall be made no later than 30 days after receipt of the
written request of Indemnitee. If a claim under this Agreement is not paid in
full by the Company within 30 days after a written request for payment therefor
has first been received by the Company, Indemnitee may, but need not, at any
time thereafter bring an action against the Company to recover the unpaid amount
of the claim and, subject to SECTION 13 of this Agreement, Indemnitee shall also
be entitled to be paid for the expenses (including attorneys' fees) of bringing
such action. 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 action,
suit or proceeding in advance of its final disposition) that Indemnitee has not
met the standards of conduct which make it permissible under applicable law for
the Company to indemnify Indemnitee, but the burden of proving such defense
shall be on the Company and Indemnitee shall be entitled to receive interim
payments of expenses pursuant to SECTION 3.1 unless and until such defense is
finally adjudicated by court order or judgment from which no further right of
appeal exists. It is the intention of the parties that if the Company contests
Indemnitee's right to indemnification under this Agreement or applicable law,
the question of Indemnitee's right to indemnification shall be for the court to
decide, and neither the failure of the Company (including its officers, its
Board, any committee or subgroup of its Board, independent legal counsel, or its
stockholders) to have made a determination that indemnification of Indemnitee is
proper in the circumstances because Indemnitee has met the applicable standard
of conduct required by this Agreement or by applicable law, nor an actual
determination by the Company (including its officers, its Board, any committee
or subgroup of its Board, independent legal counsel, or its stockholders) that
Indemnitee has not met such applicable standard of conduct, shall create a
presumption that Indemnitee has not met the applicable standard of conduct.
3.4 NOTICE TO INSURERS. If, at the time of the receipt of a notice of a
claim pursuant to SECTION 3.2 hereof, the Company has director and officer
liability insurance in effect, the Company shall give prompt notice of the
commencement of such proceeding to the insurers in accordance with the
procedures set forth in the respective policies. The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay, on behalf
of the Indemnitee, all amounts payable as a result of such proceeding in
accordance with the terms of such policies.
3.5 SELECTION OF COUNSEL. In the event the Company shall be obligated
under SECTION 3.1 hereof to pay the expenses of any proceedings against
Indemnitee, the Company, if appropriate, shall be entitled to assume the defense
of such proceeding, with counsel approved by Indemnitee, upon the delivery to
Indemnitee of written notice of its election so to do, provided, however, that
(i) the Company shall have no right to assume the defense of any claim, action
or other matter which seeks, in whole or in part, any remedy other than monetary
damages (e.g.,
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injunction, specific performance, criminal sanctions) or which could, if
Indemnitee were not to prevail therein, materially damage Indemnitee's personal
or business reputation, and (ii) the Company shall have no right to assume the
defense of any claim, action or other matter unless the Company first agrees
fully and unconditionally, in writing, that the Company is obligated to
indemnify Indemnitee in full with respect thereto, and waives any and all
defenses, counterclaims or set-offs which might otherwise be asserted in
limitation or mitigation of such indemnification obligation. After delivery of
such notice, approval of such counsel by Indemnitee and the retention of such
counsel by the Company, the Company will not be liable to Indemnitee under this
Agreement for any fees of counsel subsequently incurred by Indemnitee with
respect to the same proceeding, provided that (i) Indemnitee shall have the
right to employ separate counsel in any such proceeding at Indemnitee's expense;
and (ii) if (A) the employment of counsel by Indemnitee has been previously
authorized by the Company, (B) Indemnitee shall have reasonably concluded that
there may be a conflict of interest between the Company and Indemnitee in the
conduct of any such defense, or (C) the Company shall not, in fact, have
employed counsel to assume the defense of such proceeding, then the fees and
expenses of Indemnitee's counsel shall be at the expense of the Company.
4. ADDITIONAL INDEMNIFICATION RIGHTS; NONEXCLUSIVITY.
4.1 SCOPE. Notwithstanding any other provision of this Agreement, in the
event of any change in any applicable law, statute or rule which narrows the
right of the Company to indemnify Indemnitee, such change, to the extent not
otherwise required by such law, statute or rule to be applied to this Agreement,
shall have no effect on this Agreement or the parties' rights and obligations
hereunder.
4.2 NONEXCLUSIVITY. The indemnification rights provided to Indemnitee by
this Agreement shall be in addition to, and not in lieu of, any rights to which
Indemnitee may be entitled under the Company's Certificate of Incorporation, its
Bylaws, any agreement, any vote of stockholders or disinterested directors,
applicable law or otherwise, both as to action in Indemnitee's official capacity
and as to action in another capacity while holding such office. The
indemnification provided under this Agreement shall continue as to Indemnitee
with respect to (i) any action taken or not taken while serving in an
indemnified capacity and (ii) any claim, action or other matter arising out of
or relating to the period prior to the date upon which Indemnitee ceased to
serve in an indemnified capacity, even though he may have ceased to serve in
such capacity at the time of any action, suit or other covered proceeding.
5. PARTIAL INDEMNIFICATION. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of the expenses, judgments, fines or penalties actually incurred by him
in the investigation, defense, appeal or settlement of any civil or criminal
action, suit or proceeding, but not, however, for the total amount thereof, the
Company shall nevertheless indemnify Indemnitee for the portion of such
expenses, judgments, fines or penalties to which Indemnitee is entitled.
6. MUTUAL ACKNOWLEDGMENT. Both the Company and Indemnitee acknowledge
that in certain instances, federal or state law or regulation may prohibit the
Company from indemnifying Indemnitee under this Agreement or otherwise.
Indemnitee understands and acknowledges that the Company has undertaken or may
be required in the future to undertake with the Securities and Exchange
Commission to submit the question of indemnification to a court in certain
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circumstances for a determination of the Company's right under law to indemnify
Indemnitee. The Company agrees to assert vigorously, in any such action
pertaining to the Company's right to indemnify Indemnitee, the position that the
Company has the full and unfettered right to so indemnify Indemnitee, and
further agrees that Indemnitee may, at any time and in Indemnitee's sole
discretion, assume control of the Company's defense of such right (including
without limitation selection of counsel and determination of strategy), with
such defense nonetheless being conducted at the Company's expense.
7. LIABILITY INSURANCE. The Company shall, from time to time, make the
good faith determination whether or not it is practicable for the Company to
obtain and maintain a policy or policies of insurance with reputable insurance
companies providing the directors, officers, employees and agents of the Company
with coverage for losses from wrongful acts, or to ensure the Company's
performance of its indemnification obligations under this agreement. Among other
considerations, the Company will weigh the costs of obtaining such insurance
coverage against the protection afforded by such coverage. In all such policies
of liability insurance, Indemnitee shall be named as an insured in such a manner
as to provide Indemnitee the same rights and benefits as are accorded to the
most favorably insured of the Company's directors, if Indemnitee is a director;
or of the Company's officers, if Indemnitee is not a director of the Company but
is an officer; or of the Company's employees, if Indemnitee is not a director or
officer but is an employee; or of the Company's agents, if Indemnitee is not a
director, officer or employee but is an agent. Notwithstanding the foregoing,
the Company shall have no obligation to obtain or maintain such insurance if the
Company determines in good faith that such insurance is not reasonably
available, if the premium costs for such insurance are disproportionate to the
amount of coverage provided, if the coverage provided by such insurance is
limited by exclusions so as to provide an insufficient benefit, or if Indemnitee
is covered by similar insurance maintained by a subsidiary or parent of the
Company.
8. SEVERABILITY. Nothing in this Agreement is intended to require or
shall be construed as requiring the Company to do or fail to do any act in
violation of applicable law. The Company's inability, pursuant to law,
regulation or court order, to perform its obligations under this Agreement shall
not constitute a breach of this Agreement. The provisions of this Agreement
shall be severable as provided in this SECTION 8. If this Agreement or any
portion hereof shall be invalidated on any ground by any court of competent
jurisdiction, then the Company shall nevertheless indemnify Indemnitee to the
full extent permitted by any applicable portion of this entire Agreement that
shall not have been invalidated, and the balance of this Agreement not so
invalidated shall be enforceable in accordance with its terms.
9. EXCEPTIONS. Any other provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:
9.1 CLAIMS INITIATED BY INDEMNITEE. To indemnify or advance expenses to
Indemnitee with respect to proceedings or claims initiated or brought
voluntarily by Indemnitee and not by way of defense, except with respect to
proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other statute or otherwise but such indemnification or
advancement of expenses may be provided by the Company in specific cases if the
Board has approved the initiation or bringing of such suit;
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9.2 FRIVOLOUS PROCEEDINGS. To indemnify Indemnitee for any expenses
incurred by Indemnitee with respect to any proceeding instituted by Indemnitee
to enforce or interpret this Agreement, if a court of competent jurisdiction
determines that each of the material assertions made by Indemnitee in such
proceedings were frivolous;
9.3 INSURED CLAIMS. To make any payment in connection with any claim
made against Indemnitee to the extent Indemnitee has otherwise received payment
(under any insurance policy, the Certificate of Incorporation or Bylaws of the
Company, contract or otherwise) of the amounts otherwise indemnifiable
hereunder. If the Company makes any indemnification payment to Indemnitee in
connection with any particular expense indemnified hereunder and Indemnitee has
already received or thereafter receives, and is entitled to retain, duplicate
payments in reimbursement of the same particular expense, then Indemnitee shall
reimburse the Company in an amount equal to the lesser of (i) the amount of such
duplicate payment and (ii) the full amount of such indemnification payment made
by the Company;
9.4 CLAIMS UNDER SECTION 16(B). To indemnify Indemnitee for expenses and
the payment of profits arising from the purchase and sale by Indemnitee of
securities in violation of Section 16(b) of the Securities Exchange Act of 1934,
as amended, or any similar successor statute;
9.5 UNLAWFUL CLAIMS. To indemnify Indemnitee in any manner which a court
of competent jurisdiction has finally determined to be unlawful;
9.6 FAILURE TO SETTLE PROCEEDING. In the event that Indemnitee Fails to
Pursue a Recommended Settlement of a Qualifying Claim, to indemnify Indemnitee
(i) for amounts paid or payable in settlement of such Qualifying Claim in excess
of the amount of such Recommended Settlement thereof, or (ii) for any cost
and/or expenses directly related to such Qualifying Claim incurred by Indemnitee
following the date upon which Indemnitee Fails To Pursue such Recommended
Settlement. For purposes of this clause, "Qualifying Claim" shall mean any claim
the defense of which may be assumed by the Company under SECTION 3.5 above
(i.e., any claim that (A) is not described in the first clause (i) of said
SECTION 3.5 and (B) with respect to which the Company has acknowledged its
unconditional duty to indemnify as described in first clause (ii) of said
SECTION 3.5), "Recommended Settlement" shall mean a reasonable written
settlement proposal, in full and final executable form in all material respects,
and "Fails To Pursue" shall mean either (i) Indemnitee's failure to communicate
a Recommended Settlement to the principal adverse party in the subject matter
within 30 days after Indemnitee' receipt thereof from the Company, or (ii)
Indemnitee's failure to agree to any Recommended Settlement that has been
accepted by all adverse parties in the subject matter within 30 days after
receipt thereof, provided the Company has (A) irrevocably deposited all funds
necessary to satisfy all of Indemnitee's obligations under such Recommended
Settlement in an account subject to Indemnitee's or a third party's control and
(B) irrevocably taken all actions and given all instructions necessary or
appropriate to permit such funds to be applied in satisfaction of such
obligations of Indemnitee.
9.7 BREACH OF EMPLOYMENT AGREEMENT. To indemnify Indemnitee for any
breach by Indemnitee of any employment agreement between Indemnitee and the
Company or any of its subsidiaries.
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10. CONSTRUCTION OF CERTAIN PHRASES.
10.1 For purposes of this Agreement, references to the "COMPANY" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, employees and/or agents, so that
if Indemnitee is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, Indemnitee shall stand in
the same position under the provisions of this Agreement with respect to the
resulting or surviving corporation as Indemnitee would have with respect to such
constituent corporation if its separate existence had continued.
10.2 For purposes of this Agreement, references to "OTHER ENTERPRISES"
shall include employee benefit plans; references to "FINES" shall include any
excise taxes assessed on Indemnitee with respect to an employee benefit plan;
and references to "SERVING AT THE REQUEST OF THE COMPANY" shall include any
service as a director, officer, employee or agent of the Company or any
subsidiary of the Company which imposes duties on, or involves services by, such
director, officer, employee or agent with respect to an employee benefit plan,
its participants, or beneficiaries.
11. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original.
12. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Company and its successors and assigns, and shall inure to the benefit of
Indemnitee and Indemnitee's estate, heirs, legal representatives and assigns.
13. ATTORNEYS' FEES. In the event that any action is instituted by
Indemnitee under this Agreement to enforce or interpret any of the terms hereof,
Indemnitee shall be entitled to be paid all court costs and expenses, including
reasonable attorneys' fees, incurred by Indemnitee with respect to such action,
unless as a part of such action, the court of competent jurisdiction determines
that each of the material assertions made by Indemnitee as a basis for such
action were frivolous. In the event of an action instituted by or in the name of
the Company under this Agreement to enforce or interpret any of the terms of
this Agreement, Indemnitee shall be entitled to be paid all court costs and
expenses, including attorneys' fees, incurred by Indemnitee in defense of such
action (including with respect to Indemnitee's counterclaims and cross-claims
made in such action), unless as a part of such action the court determines that
each of Indemnitee's material defenses to such action were frivolous.
14. NOTICE. Addresses for notice to either party are as shown on the
signature page of this Agreement, or as subsequently modified by written notice.
All notices, requests, demands and other communications under this Agreement
shall be in writing and shall be deemed duly given (i) if delivered by hand and
receipted for by the party addressee, on the date of such receipt, or (ii) if
mailed by domestic certified or registered mail with postage prepaid, on the
third business day after the date postmarked if addressed as provided for on the
signature page of this Agreement, unless sooner received, or as subsequently
modified by written notice.
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15. CONSENT TO JURISDICTION. The Company and Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of the State of California
for all purposes in connection with any action or proceeding which arises out of
or relates to this Agreement and agree that any action instituted under this
Agreement shall be brought only in the state courts of the State of California,
or in federal courts located in such State.
16. CHOICE OF LAW. This Agreement shall be governed by and its
provisions construed in accordance with the laws of the State of Delaware,
without regard to conflicts of law principles of such state.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
COMPANY:
SPYGLASS ENTERTAINMENT GROUP, INC.,
a Delaware corporation
By:
--------------------------------
Xxxx Xxxxxx
Title: Chief Executive Officer
Notice Address:
Spyglass Entertainment Group, Inc.
000 Xxxxx Xxxxx Xxxxx Xxxxxx
Animation Building, 3
Xxxxxxx, XX 00000-0000
Attn: Chief Executive Officer
AGREED TO AND ACCEPTED:
INDEMNITEE:
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(Signature)
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(Print Name)
Notice Address:
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(Print Address)
