EXHIBIT 10.23
INDEMNITY AGREEMENT
AGREEMENT dated as of ________________, 1999 by and between Virata
Corporation, a Delaware corporation (the "Virata"), on the one hand, and
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___________________ (the "Indemnitee"), on the other.
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RECITALS
Indemnitee is a director and/or officer of Virata and/or an Affiliate
Indemnitee (as hereinafter defined) of a Virata Affiliate (as defined below).
Virata and Indemnitee recognize the high risk of litigation and other claims
being asserted against directors and officers in today's environment.
The Bylaws of Virata require Virata to indemnify its directors and officers
as currently provided therein, and Indemnitee has been serving and continues to
serve as a director and/or officer of Virata and/or an Affiliate Indemnitee of a
Virata Affiliate in part in reliance on such provisions. The Bylaws of Virata
permit Virata to purchase and maintain insurance or to furnish similar
protection or make other arrangements (any such insurance, protection or
arrangement, an "Indemnification Arrangement") on behalf of Indemnitee against
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personal liability (including, but not limited to, providing for Advanced
Amounts, as hereinafter defined) asserted against him or her or incurred by or
on behalf of him or her in such capacity as a director or officer of Virata or
as an Affiliate Indemnitee of a Virata Affiliate, or arising out of his or her
status as such, whether or not Virata would have the power to indemnify him or
her against such liability under the provisions of this Agreement or under the
Delaware General Corporation Law (the "DGCL"), as it may then be in effect.
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In part to provide Indemnitee with specific contractual assurance of
substantial protection against personal liability (regardless of, among other
things, any amendment to or revocation of the aforementioned provisions of
Virata's Bylaws or any change in the composition of Virata's Board of Directors
or control of Virata), Virata desires to enter into this Agreement. DGCL
Section 145(f) expressly recognizes that the indemnification provisions of the
DGCL are not exclusive of any other rights to which a person seeking
indemnification may be entitled under the Certificate of Incorporation or Bylaws
of Virata, or an agreement providing for indemnification, or a resolution of
stockholders or directors, or otherwise, and the Bylaws of Virata expressly
recognizes that the indemnification provisions of the Bylaws of Virata shall not
be deemed exclusive of, and shall not affect, any other rights to which a person
seeking indemnification may be entitled under any agreement, and this Agreement
is being entered into pursuant to the Bylaws of Virata, as permitted by the
DGCL.
In order to induce Indemnitee to serve as a director and/or officer of
Virata and/or and Affiliate Indemnitee of a Virata Affiliate, and in
consideration of Indemnitee's so serving, Virata desires to hold harmless and
indemnify Indemnitee and to make arrangements pursuant to which Indemnitee may
be advanced or reimbursed expenses incurred by Indemnitee in certain
proceedings, in every case to the fullest extent authorized or permitted by the
DGCL, or any other applicable law, or by any amendment thereof or other
statutory provisions authorizing or
permitting such indemnification which are adopted after the date hereof (but, in
the case of any such amendment, only to the extent that such amendment permits
Virata to provide broader indemnification rights than the DGCL, or other
applicable law, permitted Virata to provide prior to such amendment).
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and of
Indemnitee's continuing to serve Virata as a director and/or officer and/or a
Virata Affiliate as an Affiliate Indemnitee, the parties agree as follows:
1. Indemnification. To the fullest extent allowed by law, Virata shall
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hold harmless and indemnify Indemnitee, his or her executors, administrators or
assigns against any and all expenses, liabilities and losses (including, without
limitation, investigation expenses, expert witnesses' and attorneys' fees and
expenses, judgments, penalties, fines, amounts paid or to be paid in settlement
any interest, assessments, or other charges imposed thereon and any federal,
state, local or foreign taxes imposed as a result of actual or deemed receipt of
any payment hereunder) actually incurred by Indemnitee (net of any related
insurance proceeds or other amounts received by Indemnitee or paid by or on
behalf of Virata on Indemnitee's behalf in compensation of such expenses,
liabilities or losses) in connection with any actual or threatened action, suit
or proceeding, whether civil, criminal, administrative or investigative or in
arbitration, to which Indemnitee is a party or participant or is threatened to
be made a party or participant (a "Proceeding"), as a plaintiff, defendant,
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respondent, witness or otherwise, based upon, arising from, relating to or by
reason of the fact that Indemnitee: (a) is, was, shall be or shall have been a
director and/or officer of Virata or (b) is or was serving, shall serve, or
shall have served at the request of Virata as a director, officer, partner,
trustee, fiduciary, employee or agent ("Affiliate Indemnitee") of another
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foreign or domestic corporation or non-profit corporation, cooperative,
partnership, joint venture, trust, employee benefit plan, or other incorporated
or unincorporated enterprise (each, a "Virata Affiliate"); or arising from or
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relating to any action or omission to act taken by Indemnitee in any of the
foregoing capacities; provided, however, that, except as provided in Section
9(b) hereof, Virata shall indemnify Indemnitee in connection with a Proceeding
initiated by Indemnitee only if such proceeding (or part thereof) was authorized
by a two-thirds vote of the Board of Directors of Virata.
Indemnitee shall be presumed to be entitled to such indemnification under
this Agreement upon submission of a written claim pursuant to Section 4 hereof.
Thereafter, Virata shall have the burden of proof to overcome the presumption
that Indemnitee is so entitled. Such presumption shall only be overcome by a
judgment or other final adjudication, after all appeals and all time for appeals
has expired ("Final Determination"), which is adverse to Indemnitee and which
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establishes (a) that his acts were committed in bad faith, or were the result of
active and deliberate dishonesty, and were material to the cause of action so
adjudicated and (b) that Indemnitee in fact personally gained a financial profit
or other advantage to which he was not legally entitled. If Indemnitee is not
wholly successful in any 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, Virata agrees to indemnify Indemnitee to the maximum extent
permitted by law
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against all losses and expenses incurred by Indemnitee in connection with each
successfully resolved claim, issue or matter. Neither the failure of Virata
(including its Boards of Directors, legal counsel or stockholders) to have made
a determination prior to the commencement of such Proceeding that
indemnification of Indemnitee is proper in the circumstances because such person
has met the applicable standard of conduct set forth in the DGCL, nor an actual
determination by Virata (including its Board of Directors, its legal counsel or
its stockholders) that Indemnitee has not met the 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. The purchase,
establishment or maintenance of any Indemnification Arrangement shall not in any
way diminish, restrict, limit or adversely affect the rights and obligations of
Virata or of Indemnitee under this Agreement, except as expressly provided
herein, and the execution and delivery of this Agreement by Virata and
Indemnitee shall not in any way diminish, restrict, limit or adversely affect
Indemnitee's right to indemnification from Virata or any other party or parties
under any other Indemnification Arrangement, the Certificate of Incorporation or
Bylaws of Virata, or the DGCL.
2. Period of Limitations. No legal action shall be brought and no cause
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of action shall be asserted by or on behalf of Virata or any affiliate of Virata
against Indemnitee, Indemnitee's spouse, heirs, executors, or personal or legal
representatives after the expiration of two years from the date of accrual of
such cause of action, or such longer period as may be required by applicable law
under the circumstances. Any claim or cause of action of Virata or its
affiliate shall be extinguished and deemed released unless asserted by the
timely filing of a legal action within such period; provided, however, that if
any shorter period of limitations is otherwise applicable to any such cause of
action the shorter period shall govern.
3. Insurance. Subject only to the provisions of this Section 3, as long
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as Indemnitee shall continue to serve as a director and/or officer of Virata (or
shall continue at the request of Virata to serve as an Affiliate Indemnitee or a
Virata Affiliate) and, thereafter, as long as Indemnitee shall be subject to any
possible Proceeding by reason of the fact that Indemnitee was a director and/or
officer of Virata and/or an Affiliate Indemnitee of a Virata Affiliate (or
served in any of said other capacities), Virata shall, unless no such policies
are available in any market, purchase and maintain in effect for the benefit of
Indemnitee one or more valid, binding and enforceable policies (the "Insurance
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Policies") of directors' and officers' liability insurance ("D&O Insurance")
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providing adequate liability coverage for Indemnitee's acts as a director and/or
officer of Virata or as an Affiliate Indemnitee of a Virata Affiliate. Virata
shall promptly notify Indemnitee of any lapse, amendment or failure to renew
said policy or policies or any provision thereof relating to the extent or
nature of coverage provided thereunder. In the event any Virata does not
purchase and maintain in effect said policy or policies of D&O Insurance
pursuant to the provisions of this Section 3, Virata shall, in addition to and
not in limitation of the other rights granted Indemnitee under this Agreement,
hold harmless and indemnify Indemnitee to the full extent of coverage which
would otherwise have been provided for the benefit of Indemnitee pursuant to the
Insurance Policies.
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4. Claims for Payments. Indemnitee shall have the right to receive from
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Virata on demand or, at his or her option, to have Virata pay promptly on his or
her behalf, in advance of a Final Determination of a Proceeding, all amounts
payable by Virata pursuant to the terms of this Agreement as corresponding
amounts are expended or incurred by Indemnitee in connection with any Proceeding
or otherwise (such amounts so expended or incurred being referred to as
"Advanced Amounts"). In making any claim for payment by Virata of any amount,
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including any Advanced Amount, pursuant to this Agreement, Indemnitee shall
submit to Virata a written request for payment (a "Claim") which includes a
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schedule setting forth in reasonable detail the dollar amount expended (or
incurred or expected to be expended or incurred). Each item on such schedule
shall be supported by the xxxx, agreement, or other documentation relating
thereto, a copy of which shall be appended to the schedule as an exhibit.
Where Indemnitee is requesting Advanced Amounts, Indemnitee must also
provide an undertaking to repay such Advanced Amounts if a Final Determination
is made that Indemnitee is not entitled to indemnification hereunder.
5. Section 16(b) Liability. Notwithstanding anything herein to the
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contrary, Virata shall not be liable under this Agreement to make any payment in
connection with any claim made against Indemnitee for an accounting of profits
made from the purchase or sale by Indemnitee of securities of Virata within the
meaning of Section 16(b) of the Securities Exchange Act of 1934, and amendments
thereto, or similar provisions of any state statutory law or common law.
6. Continuation of Indemnity. All agreements and obligations of Virata
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contained herein shall continue during the period Indemnitee is a director
and/or officer of Virata (or is serving at the request of Virata as an Affiliate
Indemnitee of a Virata Affiliate) and shall continue thereafter so long as
Indemnitee shall be subject to any possible Proceeding by reason of the fact
that Indemnitee was a director or officer of Virata or served as such an
Affiliate Indemnitee of a Virata Affiliate.
7. Successors: Binding Agreement. This Agreement shall be binding on,
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and shall inure to the benefit of and be enforceable by, each of Virata's
successors and assigns and by Indemnitee's personal or legal representatives,
executors, administrators, successors, heirs, distributees, divisees and
legatees. Virata shall require any successor or assignee (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of Virata, by written agreement
in form and substance reasonably satisfactory to Virata and to Indemnitee,
expressly to assume and agree to perform this Agreement in the same manner and
to the same extent that Virata would be required to perform if no such
succession or assignment had taken place.
8. Notification and Defense of Claim. Promptly after receipt by
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Indemnitee of notice of the commencement of any Proceeding, Indemnitee shall, if
a claim in respect thereof is to be made against Virata under this Agreement,
notify Virata of the commencement thereof, but the failure to so notify Virata
will not relieve Virata from any liability which it may have to Indemnitee.
With respect to any such Proceeding:
x. Xxxxxx shall be entitled to participate therein at its own
expense;
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b. Except with prior written consent of Indemnitee, Virata shall not
be entitled to assume the defense of any Proceeding; and
x. Xxxxxx shall not settle any Proceeding in any manner which would
impose any penalty or limitation on Indemnitee without Indemnitee's prior
written consent, which consent shall not be unreasonably withheld.
Indemnitee shall not settle any Proceeding with respect to which Indemnitee
has received indemnified amounts or Advanced Amounts without Virata's prior
written consent, which consent shall not be unreasonably withheld.
9. Enforcement.
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(a) Virata has entered into this Agreement and assumed the obligations
imposed on Virata hereby in order to induce Indemnitee to act as a director
and/or officer of Virata and/or as an Affiliate Indemnitee of a Virata
Affiliate and acknowledges that Indemnitee is relying upon this Agreement
in continuing in such capacity.
(b) All expenses incurred by Indemnitee in connection with the
preparation and submission of Indemnitee's request for indemnification
hereunder shall be borne by Virata, unless Indemnitee is found in a Final
Determination not to be entitled to such indemnification. In the event
Indemnitee has requested payment of any amount under this Agreement and has
not received payment thereof within thirty (30) days of such request,
Indemnitee may bring any action to enforce rights or collect moneys due
under this Agreement, and, if Indemnitee is successful in such action,
Virata shall reimburse Indemnitee for all of Indemnitee's fees and expenses
in bringing and pursuing such action. If it is determined that Indemnitee
is entitled to indemnification for part (but not all) of the
indemnification so requested, expenses incurred in seeking enforcement of
such partial indemnification shall be reasonably prorated among the claims,
issues or matters for which Indemnitee is entitled to indemnification for
claims, issues or matter for which Indemnitee is not so entitled.
Indemnitee shall be entitled to the advancement of such amounts to the full
extent contemplated by Section 4 hereof in connection with such Proceeding.
10. Separability. If any provision or provisions of this Agreement shall
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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, all portions of any sections or
subsections of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that are not by themselves invalid, illegal or
unenforceable) shall not in any way be affected or impaired thereby, and (b) to
the fullest extent possible, the provisions of any section or subsections of
this Agreement containing any such provisions held to be invalid, illegal or
unenforceable shall be construed so as to give effect to the intent of the
parties that Virata provide protection to Indemnitee to the fullest extent
enforceable.
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11. Miscellaneous. No provision of this Agreement may be modified, waived
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or discharged unless such modification, waiver or discharge is agreed to in
writing signed by Indemnitee and an authorized officer of Virata, designated by
the Board of Directors of Virata. No waiver by either party at any time of any
breach by the other party of, or of compliance with, any condition or provision
of this Agreement to be performed by such other party shall be deemed a waiver
of similar or dissimilar provisions or conditions at the same time or at any
prior or subsequent time. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Delaware, without giving effect to the principles of conflicts of laws thereof.
Indemnitee may bring an action seeking resolution of disputes or controversies
arising under, or in any way related to, this Agreement in the state or federal
court jurisdiction in which Indemnitee resides or in which his place of business
is located and in any related appellate courts, and Virata hereby consents to
the jurisdiction of such courts and to such venue.
12. Notices. For the purposes of this Agreement, notices and all other
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communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, as follows:
If to Indemnitee: ___________________
___________________
___________________
___________________
If to Virata: Virata Corporation
0000 Xxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Facsimile: (408) 566-___
Attention: Chief Executive Officer
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
13. Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
13. Effectiveness. This Agreement shall be effective as of the day and
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year first above written.
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed as of the day and year first above written.
VIRATA CORPORATION
By:_______________________________
Name:
Title:
INDEMNITEE
__________________________________
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