Exhibit 10.1
Employment Agreement
This Employment Agreement ("Agreement") is entered into as of
June 30, 2005 (the "Effective Date"), between Intelligroup, Inc. (the "Company")
and ▇▇▇▇▇▇ ▇▇▇▇▇▇ (the "Executive"). The purpose of the Agreement will be to
memorialize the terms and conditions of employment for the Executive.
NOW THEREFORE, in consideration of the mutual promises
contained in the Agreement and for other good and valuable consideration, the
sufficiency of which is hereby agreed, the Company and the Executive agree as
follows:
1. Employment.
The Company agrees to employ and engage the services of the
Executive as the Company's Chief Executive Officer and President and the
Executive agrees to serve the Company in such capacity. Executive shall report
directly to the Board of Directors of the Company (the "Board").
2. Term of Agreement.
The Company hereby agrees to employ the Executive, and the
Executive hereby accepts employment with the Company, upon the terms set forth
in this Agreement for a period of twelve (12) months from the date of this
Agreement.
3. General Employment Terms.
The Executive shall devote normal business hours and be
available to discuss the business and affairs of the Company five days per week.
The Executive shall further use his best efforts to promote the interests of the
Company, and perform faithfully and efficiently the responsibilities assigned to
him. While employed by Company, Executive shall not engage in other employment,
except with the prior consent of the Board. The Executive agrees to abide by the
rules, regulations, instructions, personnel practices and policies of the
Company and any changes thereto that may be adopted by the Company from time to
time. The Executive acknowledges receipt of copies of all such rules and
policies committed to writing as of the date of this Agreement.
4. Compensation.
4.1 Base Salary. Executive shall receive an annual base salary equivalent of US
$225,000.00 ("Base Salary"). The Base Salary shall be payable in cash, subject
to applicable withholdings, in accordance with the current payroll policies of
the Company.
4.2 Incentive Compensation Bonus. As further compensation, the Executive will be
eligible to participate in the Company's Executive Incentive. The Executive
shall be eligible under such plan for a bonus in the amount of one hundred
percent (100%) of the Base Salary, pro rated for the first year of employment.
The details of this plan will be documented within the first ninety (90) days of
Executive's employment and will include a combination of mutually agreed upon
financial, operational and organizational objectives. The Company and Executive
shall in good faith agree negotiate and agree to the details of the plan within
the first ninety (90) days. Executive may be eligible for additional incentive
compensation from time to time in the discretion of the Board.
4.3 Employee Benefits. In addition, the Executive shall be eligible for all
Executive benefits offered to the Company's Executives. In particular, the
Executive will be entitled to the following benefits:
(a) Vacation and Sick Leave. The Executive shall be eligible to
participate in the Company's standard vacation and sick leave benefit
plan and the number of vacation days afforded to Executive under the
terms of the plan shall be 20 days per year.
(b) Business Expense Reimbursement. The Executive shall receive
reimbursement of all legitimate and reasonable business expenses
incurred by the Executive on behalf of the Company pursuant to the
written policies of the Company in this regard.
(c) 401(k) Plan. The Executive is eligible to participate in the 401(k)
retirement benefit plan made available to the Executives of the Company
pursuant to the terms and conditions of such plan.
(d) Insurance Plans. The Executive is eligible to participate in the
life, health, dental, short and long-term disability plans made
available to the Executives of the Company pursuant to the terms and
conditions of such plans.
(e) Changes to Executive Benefit Plans. Nothing in this Agreement shall
prevent the Company from changing, modifying, amending or terminating
the Executive benefit plans of the Company so as to eliminate, reduce
or otherwise change any benefits payable under this Agreement.
(f) Indemnification. Executive will be a party to the standard
indemnification agreement for the Company's executive officers attached
as Exhibit B.
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5. Stock Options. The Executive will be eligible for an initial stock option
grant of 500,000 options ("Options") with a strike price of $1.45. The options
will vest in equal quarterly installments over four (4) years with the initial
term beginning April 1, 2005. The Options shall be governed by the terms and
conditions of the Company stock option plan under which the grant is made as
well as the standard Stock Option Agreement which must be signed by the
Executive and the Company prior to such grants being effective. The Company's
stock option plan currently prohibits grants to a single individual in excess of
500,000 shares over a three year period. The Company will introduce a
shareholders resolution to amend its Stock Option Plan to allow for a greater
grant to an individual and to allow the Committee to issue grants at a strike
price of less than Fair Market Value at the earliest opportunity, but no later
than the next annual shareholders meeting. Upon approval of such resolutions,
the Company will provide Executive with an additional grant of 400,000 options,
with a strike price of $1.25 and which will vest in equal quarterly installments
over four (4) years with the initial term beginning April 1, 2005.
6. Change of Control.
Notwithstanding the foregoing, at the effective time of a
pending "Change in Control", the vesting and exercisability of your options
shall be accelerated by twelve months, effective as of the effective time of
such "Change in Control". Further, should the Company terminate your employment
or attempt to change the role as defined by this Agreement, or should Venture
Tech own less than 10% of the outstanding shares of Intelligroup, your options
shall be accelerated in full, effective as of the effective time of such "Change
in Control". "Change in Control" shall mean (i) a merger, acquisition, sale of
voting control or other business combination such that the shareholders of the
Company who hold shares on the date of this Agreement no longer hold more than
49% of the voting power following completion of such transaction or, in case of
a merger or other business combination, more than 49% of the voting power of the
acquiring or surviving corporation and/or (ii) the sale of all or substantially
all of the assets of the Company.
7. Termination.
7.1 Cause. The Company may terminate the Executive's
employment for Cause. For purposes of the Agreement, "Cause" shall mean (A) any
act of dishonesty or knowing and willful breach of fiduciary duty by the
Executive; (B) commission of a felony involving moral turpitude or unlawful,
dishonest, or unethical conduct that a reasonable person would consider damaging
to the reputation of the Company or any conduct which is in violation of the
Company's policies; (C) any material breach of any provision of the Agreement,
or any other agreements between the Executive and Company, by the Executive; or
(D) insubordination or refusal to perform assigned duties consistent with duties
of the Executive's position or to comply with the reasonable directions of the
Board. If the Executive's employment is terminated for Cause, the Executive
shall be paid his full accrued Base Salary through the date of termination at
the rate in effect at the time of such termination, and the Company shall have
no further obligation to the Executive under the Agreement or under any other
agreements or plans. All other compensation including, without limitation,
bonuses, severance and/or stock option grants shall be forfeited if the
Executive is terminated for Cause. Should Cause be determined to be (c) or (d),
the Company shall give the Executive a 21 day written notice and an opportunity
to correct the issues.
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7.2 Severance. Executive shall be eligible for twelve months of severance (base
salary) pay following the termination of this Agreement unless the agreement is
terminated for Cause. The payments shall commence upon the day following
termination and continue for a period of twelve months in accordance with the
Company's standard payroll practices. The unvested options at the time of
termination shall be cancelled and returned to the Company.
8. Miscellaneous.
8.1 Entire Agreement. The Agreement constitutes the entire agreement between the
parties and supersedes any prior understandings or agreements between the
parties, written or oral, to the extent they relate in any way to the subject
matter hereof. The Intelligroup Standard Executive Terms agreement as executed
by the Executive or executed in the future by the Executive, shall be made a
part of the Agreement and is attached hereto as Exhibit A. In addition, the
Company's standard Executive Indemnification Agreement shall be made a part of
this Agreement and is attached hereto as Exhibit B. In the event of any
inconsistencies between the Agreement and its Exhibits A and B, the terms and
conditions of this Agreement shall take precedence.
8.2 No Assignment; Assumption. The Agreement is personal to the Executive and
shall not be assignable by the Executive. The Agreement shall inure to the
benefit of and be binding upon any successor to the business or assets of the
company which assumes the Agreement, whether expressly or by operation of law.
8.3 Governing Law. This is a New Jersey contract and shall be construed under
and is governed in all respects by the laws of New Jersey, without giving effect
to any conflict of laws principles of New Jersey law. Any legal action or suit
related in any way to the Agreement shall be brought exclusively in the courts
of New Jersey. Both parties agree that the courts of New Jersey are the
exclusive convenient forum for the resolution of disputes.
8.4 Amendments. No amendments of any provision of the Agreement shall be valid
unless the same shall be in writing and signed by both the Company and the
Executive.
8.5 Severability. Any term or provision of the Agreement that is invalid or
unenforceable in any situation in any jurisdiction shall not affect the validity
or enforceability of the remaining terms and provisions hereof or the validity
or enforceability of the offending term or provision in any other situation or
in any other jurisdiction.
8.6 Relocation Expenses. All reasonable relocation expenses shall be covered by
the Company for the Executive's move from Dallas, Texas to New Jersey. This
shall include the following: transaction costs associated with the sale of the
Executive's primary residence, airfare for the Executive and family members to
relocate to New Jersey, and moving expenses associated with personal items.
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8.7. Insurance. The Company shall make best efforts to retain its existing
Directors & Officers Insurance Policy or shall obtain an equivalent policy from
another insurer.
IN WITNESS WHEREOF, the parties hereto have executed the Agreement as of the
date first above written.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Executive - ▇▇▇▇▇▇ ▇▇▇▇▇▇ Company
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chief Financial Officer and
Treasurer
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Exhibit A to
the Employment Agreement
of ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Intelligroup Standard Employee Terms ("Agreement")
Employee Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
In consideration of employment with the Company, and all the
benefits conferred by such employment including, without limitation, any stock
option grants now or in the future by the Company, as well as the future access
to confidential information to which I shall be privileged by virtue of entering
this Agreement, the receipt and sufficiency of which are acknowledged, I, the
above-named Employee, hereby agree with the Company as follows.
1.0. Definitions.
1.1. "Company" shall refer to Intelligroup, Inc. and/or its
direct or indirect subsidiaries and affiliates.
1.2. "Confidential Information" shall mean a) proprietary
information which the Company possesses, or to which the Company has rights,
which has commercial value including without limitation, trade secrets, product
ideas, designs, configurations, processes, techniques, formulas, software,
improvements, inventions, data, know-how, copyrightable materials, marketing
plans and strategies, sales and financial reports and forecasts, lists of
present and prospective customers, lists of present or former employees, and any
information relating to research, development, programming, purchasing,
accounting, engineering, merchandising and licensing as well as any information
developed by in the course of my employment with the Company including
information relating to inventions under Section 4 below, as well as any other
information to which I may have access in connection with your employment; b)
any other information of the Company which is designated as "Confidential" or
"Proprietary" or by its nature reasonably should be considered "Confidential";
or c) information of others including, without limitation, the customers,
partners or other companies or individuals with which the Company conducts
business, which is designated or otherwise would reasonably be designated as the
confidential or proprietary information of such companies under their policies,
procedures or agreements with the Company and, in the absence of such policies,
procedures or agreements, by applying the definition of "Confidential
Information" as described above to such information. I understand that as an
employee of Intelligroup it is my duty to understand the nature of Confidential
Information and I will request clarification as necessary.
2. This Section Left Intentionally Blank.
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3. Confidentiality. I understand and agree that my employment creates a
relationship of confidence and trust between myself and the Company with respect
all Confidential Information. At all times, both during my employment with the
Company and after its termination, I will keep in confidence and trust all such
Confidential Information, and will not use or disclose any such Confidential
Information without the advance written consent of the Company, except as may be
necessary in the ordinary course of performing my duties to the Company. The
restrictions set forth in this Section 2 will not apply to information which is
generally known to the public or in the trade, unless such knowledge results
from an unauthorized disclosure by me, but this exception will not affect the
application of any other provision of this Agreement to such information in
accordance with the terms of such provision. I likewise agree to immediately
report to my supervisor any violation of the Company's security measures or
prohibited disclosure of Confidential Information by any person or organization.
I agree to immediately report to my supervisor the names of any persons or
organizations that attempt to obtain Confidential Information from me.
4. Documents, records, etc. All documents, records, apparatus, equipment and
other physical property, including but not limited to papers, notebooks,
manuals, reports, desktops, laptops, printers, mobile phones, remote email
assistants, computer files, software, vehicles, tools, keys, entry cards or
badges, credit authorizations, user identifications and passwords, whether or
not pertaining to Proprietary Information, which are furnished to me by the
Company or are produced by me in connection with my employment will be and
remain the sole property of the Company. I will return to the Company all such
materials and property as and when requested by the Company. In any event, I
will return all such materials and property immediately upon termination of my
employment for any reason. I will not take with me any such material or property
or any copies thereof upon such termination.
5. Ownership of Inventions. I agree that any and all writings, inventions,
improvements, processes, procedures, and/or techniques, which I make, conceive,
discover or develop, in whole or in part, either alone or jointly with others,
during the term of my employment with the Company ("Work Product"), shall be the
sole property of the Company. The Company will be the sole owner of all patents,
copyrights and other proprietary rights in and with respect to such Work
Product. To the fullest extent permitted by law, such Work Product will be
deemed works made for hire. I hereby transfer and assign to the Company any
proprietary rights which I may have or acquire in any such Work Product, and I
waive any moral rights or other special rights which I may have or accrue
therein. I agree to execute any documents and take any actions that may be
required to effect and confirm such transfer and assignment and waiver. The
provisions of this Section 4 will apply to all Work Products which are conceived
or developed during the term of my employment with the Company, whether before
or after the date of this Agreement, and whether or not further development or
reduction to practice may take place after termination of my employment, for
which purpose it will be presumed that any Work Product conceived by me which
are reduced to practice within one year after termination of my employment were
conceived during the term of my employment with the Company unless I am able to
establish a later conception date by clear and convincing written evidence. The
provisions of this Section 5 will not apply, however, to any Inventions which
may be disclosed in a separate Schedule attached to this Agreement prior to its
acceptance by the Company, representing Inventions made by me prior to my
employment by the Company.
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6. Disclosure of Inventions. I agree promptly to disclose to the Company, or any
persons designated by it, in writing, all Work Products which are or may be
subject to the provisions of Section 5.
7. Obtaining and Enforcing Proprietary Rights. I agree to assist the Company, at
the Company's request from time to time and at the Company's expense, to obtain
and enforce patents, copyrights or other proprietary rights with respect to Work
Product in any and all countries. I will execute all documents reasonably
necessary or appropriate for this purpose. This obligation will survive the
termination of my employment, provided that the Company will compensate me at a
reasonable rate after such termination for time actually spent by me at the
Company's request on such assistance. In the event that the Company is unable
for any reason whatsoever to secure my signature to any document reasonably
necessary or appropriate for any of the foregoing purposes (including renewals,
extensions, continuations, divisions or continuations in part), I hereby
irrevocably designate and appoint the Company and its duly authorized officers
and agents as my agents and attorneys-in-fact to act for me and on my behalf,
but only for the purpose of executing and filing any such document and doing all
other lawfully permitted acts to accomplish the foregoing purposes with the same
legal force and effect as if executed by me.
8. Solicitation of Employees. I agree that during and for a period of twelve
(12) months immediately following the termination of my employment with the
Company for any reason, whether with or without cause, I shall not either
directly or indirectly solicit, induce, recruit or encourage any of the
Company's employees or independent contractors to leave their employment or end
their business relationship with the Company, or take away such employees or
independent contractors, or attempt to solicit, induce, recruit, encourage, or
take away any of the Company's employees or independent contractors, either for
myself or for any other person or entity. I agree that if I breach, or propose
to breach, any portion of this Section 8, the Company shall be entitled, in
addition to all other remedies that it may have, to damages, damages associated
with recruiting costs and training costs for replacing Company's employee.
9. This Section Left Intentionally Blank.
10. Third-Party Agreements and Rights. I hereby confirm that I am not bound by
the terms of any agreement with any previous employer or other party which
restricts in any way my use or disclosure of information or my engagement in any
business, except as may be disclosed in a separate Schedule attached to this
Agreement prior to its acceptance by the Company. I have delivered to the
Company true and complete copies of any agreements listed on said Schedule. I
represent to the Company that my execution of this Agreement, my employment with
the Company and the performance of my proposed duties for the Company will not
violate any obligations I may have to any such previous employer or other party.
In my work for the Company, I will not disclose or make use of any information
in violation of any agreements with or rights of any such previous employer or
other party, and I will not bring to the premises of the Company any copies or
other tangible embodiments of non-public information belonging to or obtained
from any such previous employment or other party.
11. This Section Left Intentionally Blank.
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12. Equitable Remedies. I agree that it would be difficult to measure any
damages caused to the Company which might result from any breach of the terms of
this Agreement, and that in any event money damages would be an inadequate
remedy for any such breach. Accordingly, I agree that if I breach, or propose to
breach, any portion of this Agreement, the Company shall be entitled, in
addition to all other remedies that it may have, to an injunction or other
appropriate equitable relief to restrain any such breach without showing or
proving any actual damage to the Company. In addition, the party seeking to
enforce performance of the terms of this Agreement shall be entitled to all
reasonable attorneys fees and third party costs incurred in seeking enforcement
of this Agreement, regardless of whether suit or other legal or equitable is
commenced, including attorneys fees and costs incurred through engagement in
alternative dispute resolution procedures such as mediation or arbitration fees.
13. Binding Effect. This Agreement will be binding upon me and my heirs,
executors, administrators and legal representatives and will inure to the
benefit of the Company, any subsidiary of the Company, and its and their
respective successors and assigns.
14. Enforceability. If any portion or provision of this Agreement is to any
extent declared illegal or unenforceable by a court of competent jurisdiction,
then the remainder of this Agreement, or the application of such portion or
provision in circumstances other than those as to which it is so declared
illegal or unenforceable, will not be affected thereby, and each portion and
provision of this Agreement shall be valid and enforceable to the fullest extent
permitted by law. In the event that any provision of this Agreement is
determined by any court of competent jurisdiction to be unenforceable by reason
of excessive scope as to geographic, temporal or functional coverage, such
provision will be deemed to extend only over the maximum geographic, temporal
and functional scope as to which it may be enforceable.
15. This Section left Intentionally Blank.
16. This Section Left Intentionally Blank.
17. Notices. Any notices, requests, demands and other communications provided
for by this Agreement will be sufficient if in writing and delivered in person
or sent by registered or certified mail, postage prepaid, to me at the last
address which I have filed in writing with the Company or, in the case of any
notice to the Company, at its main offices, to the attention of its Chief
Executive Officer.
18. Governing Law. This is a New Jersey contract and shall be construed under
and be governed in all respects by the laws of New Jersey, without giving effect
to the conflict of laws principles of New Jersey law. Any legal action or suit
related to this Agreement shall be brought exclusively in the courts of New
Jersey. Both parties agree that exclusive jurisdiction lies in the state and
federal courts residing in New Jersey for the resolution of disputes.
I UNDERSTAND THAT THIS AGREEMENT AFFECTS IMPORTANT RIGHTS. I HAVE READ IT
CAREFULLY AND AM SATISFIED THAT I UNDERSTAND IT COMPLETELY.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Signature of Employee
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Date:
Accepted and Agreed to by
Intelligroup, Inc.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chief Financial Officer and Treasurer
Date:
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SCHEDULE OF PRIOR INVENTIONS AND THIRD PARTY AGREEMENTS
(IF ANY):
Blank
Accepted by Accepted by
Intelligroup, Inc. Employee
By: ________________________ By: _______________________
Name: Name: _____________________
Title: Date: _____________________
Date:
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EXHIBIT B TO
THE EMPLOYMENT AGREEMENT
OF ▇▇▇▇▇▇ ▇▇▇▇▇▇
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INTELLIGROUP, INC.
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is made as of June 30,
2005 by and between Intelligroup, Inc., a New Jersey corporation (the
"Company"), and ▇▇▇▇▇▇ ▇▇▇▇▇▇ ("Indemnitee").
WHEREAS, Indemnitee is an officer and/or director of the Company and
performs a valuable service in such capacity for the Company;
WHEREAS, the Company and Indemnitee recognize the substantial increase
in corporate litigation in general, subjecting directors, officers, employees,
agents and fiduciaries to expensive litigation risks at the same time as the
availability and coverage of liability insurance may be limited;
WHEREAS, the Company and Indemnitee further recognize the difficulty in
obtaining liability insurance for its directors, officers, employees, agents and
fiduciaries, the significant increases in the cost of such insurance and the
general reductions in the coverage of such insurance;
WHEREAS, Indemnitee does not regard the current protection available as
adequate under the present circumstances, and the Indemnitee and other
directors, officers, employees, agents and fiduciaries of the Company may not be
willing to continue to serve in such capacities without additional protection;
and
WHEREAS, the Company desires to attract and retain the services of
highly qualified individuals, such as Indemnitee, to serve the Company and, in
part, in order to induce Indemnitee to continue to provide services to the
Company as an officer and/or director, the Company wishes to provide for the
indemnification and advancing of expenses to Indemnitee to the maximum extent
permitted by law.
NOW, THEREFORE, the Company and Indemnitee hereby agree as follows:
1. Indemnification.
(a) Indemnification of Expenses. The Company shall indemnify
Indemnitee to the fullest extent permitted by law if Indemnitee was or is or
becomes a party to or witness or other participant in, or is threatened to be
made a party to or witness or other participant in, any threatened, pending or
completed action, suit, proceeding or alternative dispute resolution mechanism,
or any hearing, inquiry or investigation that Indemnitee in good faith believes
might lead to the institution of any such action, suit, proceeding or
alternative dispute resolution mechanism, whether civil, criminal,
administrative, investigative or other (hereinafter a "Claim") by reason of (or
arising in part out of) any event or occurrence related to the fact that
Indemnitee is or was a director, officer, employee, agent or fiduciary of the
Company, or any subsidiary of the Company, or is or was serving at the request
of the Company as a director, officer, employee, agent or fiduciary of another
corporation, partnership, joint venture, trust or other enterprise, or by reason
of any action or inaction on the part of Indemnitee while serving in such
capacity (hereinafter an "Indemnifiable Event") against any and all reasonable
expenses (including attorneys' fees and all other costs, expenses and
obligations incurred in connection with investigating, defending, being a
witness in or participating in (including on appeal), or preparing to defend, be
a witness in or participate in, any such action, suit, proceeding, alternative
dispute resolution mechanism, hearing, inquiry or investigation), judgments,
fines, penalties and amounts paid in settlement (if such settlement is approved
in advance by the Company, which approval shall not be unreasonably withheld) of
such Claim and any federal, state, local or foreign taxes imposed on the
Indemnitee as a result of the actual or deemed receipt of any payments under
this Agreement (collectively, hereinafter "Expenses"), including all interest,
assessments and other charges paid or payable in connection with or in respect
of such Expenses. Such payment of Expenses shall be made by the Company as soon
as practicable but in any event no later than thirty (30) days after written
demand by Indemnitee therefor is presented to the Company.
(b) Reviewing Party. Notwithstanding the foregoing, (i) the
obligations of the Company under Section l(a) shall be subject to the condition
that the Reviewing Party (as described in Section 10(e) hereof) shall not have
determined (in a written opinion, in any case in which the Independent Legal
Counsel referred to in Section 1(c) hereof is involved) that Indemnitee would
not be permitted to be indemnified under New Jersey Statutes and any other
applicable law, and (ii) the obligation of the Company to make an advance
payment of Expenses to Indemnitee pursuant to Section 2(a) (an "Expense
Advance") shall be subject to the condition that, if, when and to the extent
that the Reviewing Party determines that Indemnitee would not be permitted to be
so indemnified under applicable law, the Company shall be entitled to be
reimbursed by Indemnitee (who hereby agrees to reimburse the Company) for all
such amounts theretofore paid; provided, however, that if Indemnitee has
commenced or thereafter commences legal proceedings in a court of competent
jurisdiction to secure a determination that Indemnitee should be indemnified
under applicable law, any determination made by the Reviewing Party that
Indemnitee would not be permitted to be indemnified under applicable law shall
not be binding and Indemnitee shall not be required to reimburse the Company for
any Expense Advance until a final judicial determination is made with respect
thereto (as to which all rights of appeal therefrom have been exhausted or
lapsed). Indemnitee's obligation to reimburse the Company for any Expense
Advance shall be unsecured and no interest shall be charged thereon. If there
has not been a Change in Control (as defined in Section 10(c) hereof), the
Reviewing Party shall be selected by the Board of Directors, and if there has
been such a Change in Control (other than a Change in Control which has been
approved by a majority of the Company's Board of Directors who were directors
immediately prior to such Change in Control), the Reviewing Party shall be the
Independent Legal Counsel referred to in Section l(c) hereof. If there has been
no determination by the Reviewing Party or if the Reviewing Party determines
that Indemnitee substantively would not be permitted to be indemnified in whole
or in part under applicable law, Indemnitee shall have the right to commence
litigation seeking an initial determination by the court or challenging any such
determination by the Reviewing Party or any aspect thereof, including the legal
or factual bases therefor, and the Company hereby consents to service of process
and to appear in any such proceeding. Any determination by the Reviewing Party
otherwise shall be conclusive and binding on the Company and Indemnitee.
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(c) Change in Control. The Company agrees that if there is a
Change in Control of the Company (other than a Change in Control which has been
approved by a majority of the Company's Board of Directors who were directors
immediately prior to such Change in Control) then with respect to all matters
thereafter arising concerning the rights of Indemnitee to payments of Expenses
and Expense Advances under this Agreement or any other agreement or under the
Company's Amended and Restated Certificate of Incorporation or Amended and
Restated By-laws as now or hereafter in effect, the Company shall seek legal
advice only from Independent Legal Counsel (as defined in Section 10(d) hereof)
selected by Indemnitee and approved by the Company (which approval shall not be
unreasonably withheld). Such counsel, among other things, shall render its
written opinion to the Company and Indemnitee as to whether and to what extent
Indemnitee would be permitted to be indemnified under applicable law. The
Company agrees to pay the reasonable fees of the Independent Legal Counsel
referred to above and to fully indemnify such counsel against any and all
expenses (including attorneys' fees), claims, liabilities and damages arising
out of or relating to this Agreement or its engagement pursuant hereto.
(d) Mandatory Payment of Expenses. Notwithstanding any other
provision of this Agreement other than Section 8 hereof, to the extent that
Indemnitee has been successful on the merits or otherwise, including, without
limitation, the dismissal of an action without prejudice, in defense of any
action, suit, proceeding, inquiry or investigation referred to in Section (1)(a)
hereof or in the defense of any claim, issue or matter therein, Indemnitee shall
be indemnified against all Expenses incurred by Indemnitee in connection
therewith.
2. Expenses; Indemnification Procedure.
(a) Advancement of Expenses. The Company shall advance all
Expenses incurred by Indemnitee. The advances to be made hereunder shall be paid
by the Company to Indemnitee as soon as practicable but in any event no later
than five (5) days after written demand by Indemnitee therefor to the Company.
(b) Notice/Cooperation by Indemnitee. Indemnitee shall, as a
condition precedent to Indemnitee's right to be indemnified under this
Agreement, give the Company notice in writing as soon as practicable 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 President
of the Company at the address shown on the signature page of this Agreement (or
such other address as the Company shall designate in writing to Indemnitee). In
addition, Indemnitee shall give the Company such information and cooperation as
it may reasonably require and as shall be within Indemnitee's power.
-3-
(c) No Presumptions; Burden of Proof. For purposes of this
Agreement, the termination of any claim, action, suit or proceeding, by
judgment, order, settlement (whether with or without court approval) or
conviction, or upon a plea of nolo contendere, or its equivalent, shall not
create a presumption that Indemnitee did not meet any particular standard of
conduct or have any particular belief or that a court has determined that
indemnification is not permitted by applicable law. In addition, neither the
failure of the Reviewing Party to have made a determination as to whether
Indemnitee has met any particular standard of conduct or had any particular
belief, nor an actual determination by the Reviewing Party that Indemnitee has
not met such standard of conduct or did not have such belief, prior to the
commencement of legal proceedings by Indemnitee to secure a judicial
determination that Indemnitee should be indemnified under applicable law, shall
be a defense to Indemnitee's claim or create a presumption that Indemnitee has
not met any particular standard of conduct or did not have any particular
belief. In connection with any determination by the Reviewing Party or otherwise
as to whether the Indemnitee is entitled to be indemnified hereunder, the burden
of proof shall be on the Company to establish that Indemnitee is not so
entitled.
(d) Notice to Insurers. If, at the time of the receipt by the
Company of a notice of a Claim pursuant to Section 2(b) hereof, the Company has
liability insurance in effect which may cover such Claim, the Company shall give
prompt notice of the commencement of such Claim to the insurers in accordance
with the procedures set forth in such policy or 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 action,
suit, proceeding, inquiry or investigation in accordance with the terms of such
policies.
(e) Assumption of Defense; Selection of Counsel. In the event
the Company shall be obligated hereunder to pay the Expenses of any action,
suit, proceeding, inquiry or investigation, the Company, if appropriate, shall
be entitled to assume the defense of such action, suit, proceeding, inquiry or
investigation with counsel approved by Indemnitee (which approval shall not be
unreasonably withheld), upon the delivery to Indemnitee of written notice of its
election so to do. 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 action, suit,
proceeding, inquiry or investigation; provided that, (i) Indemnitee shall have
the right to employ Indemnitee's counsel in any such action, suit, proceeding,
inquiry or investigation at Indemnitee's expense and (ii) if (A) the employment
of counsel by Indemnitee has been previously authorized by the Company or (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.
Notwithstanding the foregoing, in the event the Company shall not continue to
retain such counsel to defend such action, suit, proceeding, inquiry or
investigation, then the fees and expenses of Indemnitee's counsel shall be at
the expense of the Company.
3. Additional Indemnification Rights; Nonexclusivity.
(a) Scope. The Company hereby agrees to indemnify the
Indemnitee to the fullest extent permitted by law, notwithstanding that such
indemnification is not specifically authorized by the other provisions of this
Agreement, the Company's Amended and Restated Certificate of Incorporation, the
Company's Amended and Restated By-laws or by statute. In the event of any change
after the date of this Agreement in any applicable law, statute or rule which
expands the right of a New Jersey corporation to indemnify a member of its board
of directors or an officer, employee, agent or fiduciary, it is the intent of
the parties hereto that Indemnitee shall enjoy by this Agreement the greater
benefits afforded by such change. In the event of any change in any applicable
law, statute or rule which narrows the right of a New Jersey corporation to
indemnify a member of its board of directors or an officer, employee, agent or
fiduciary, 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-
(b) Nonexclusivity. The indemnification provided by this
Agreement shall be in addition to any rights to which Indemnitee may be entitled
under the Company's Amended and Restated Certificate of Incorporation, its
Amended and Restated By-laws, any agreement, any vote of shareholders or
disinterested directors, the New Jersey Business Corporation Act, or otherwise.
The indemnification provided under this Agreement shall continue as to
Indemnitee for any action taken or not taken while serving in an indemnified
capacity even though Indemnitee may have ceased to serve in such capacity.
-5-
4. No Duplication of Payments. The Company shall not be liable under
this Agreement to make any payment in connection with any action, suit,
proceeding, inquiry or investigation made against Indemnitee to the extent
Indemnitee has otherwise actually received payment (under any insurance policy,
Amended and Restated Certificate of Incorporation, By-laws or otherwise) of the
amounts otherwise indemnifiable hereunder.
5. Partial Indemnification. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of Expenses in the investigation, defense, appeal or settlement of any
civil or criminal action, suit, proceeding, inquiry or investigation, but not,
however, for all of the total amount thereof, the Company shall nevertheless
indemnify Indemnitee for the portion of such Expenses to which Indemnitee is
entitled.
6. Mutual Acknowledgment. Both the Company and Indemnitee acknowledge
that in certain instances, Federal law or applicable public policy may prohibit
the Company from indemnifying its directors, officers, employees, agents or
fiduciaries 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 circumstances for a determination of the
Company's right under public policy to indemnify Indemnitee.
7. Liability Insurance. To the extent the Company maintains liability
insurance applicable to directors, officers, employees, agents or fiduciaries,
Indemnitee shall be covered by such policies 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 key employees, agents or fiduciaries, if Indemnitee
is not an officer or director but is a key employee, agent or fiduciary.
8. Exceptions. Any other provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:
(a) Excluded Action or Omissions. To indemnify Indemnitee for
acts, omissions or transactions from which Indemnitee may not be relieved of
liability under applicable law.
(b) 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 (i) with
respect to proceedings brought to establish or enforce a right to
indemnification under this Agreement or any other agreement or insurance policy
or under the Company's Amended and Restated Certificate of Incorporation or
Amended and Restated By-laws now or hereafter in effect relating to Claims for
Indemnifiable Events, (ii) in specific cases if the Board of Directors has
approved the initiation or bringing of such suit, or (iii) as otherwise required
under Section 14A:3-5 of the New Jersey Business Corporation Act, regardless of
whether Indemnitee ultimately is determined to be entitled to such
indemnification, advance expense payment or insurance recovery, as the case may
be.
-6-
(c) Lack of Good Faith. To indemnify Indemnitee for any
expenses incurred by the 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 the
Indemnitee in such proceeding was not made in good faith or was frivolous; or
(d) 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. Period of Limitations. No legal action shall be brought and no cause
of action shall be asserted by or in the right of the Company against
Indemnitee, Indemnitee's estate, spouse, heirs, executors or personal or legal
representatives after the expiration of two years from the date of accrual of
such cause of action, and any claim or cause of action of the Company shall be
extinguished and deemed released unless asserted by the timely filing of a legal
action within such two-year period; provided, however, that if any shorter
period of limitations is otherwise applicable to any such cause of action, such
shorter period shall govern.
10. Construction of Certain Phrases.
(a) 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,
agents or fiduciaries, so that if Indemnitee is or was a director, officer,
employee, agent or fiduciary of such constituent corporation, or is or was
serving at the request of such constituent corporation as a director, officer,
employee, agent or fiduciary of another corporation, partnership, joint venture,
employee benefit plan, 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.
(b) 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, agent or fiduciary of the
Company which imposes duties on, or involves services by, such director,
officer, employee, agent or fiduciary with respect to an employee benefit plan,
its participants or its beneficiaries; and if Indemnitee acted in good faith and
in a manner Indemnitee reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan, Indemnitee shall be
deemed to have acted in a manner "not opposed to the best interests of the
Company" as referred to in this Agreement.
-7-
(c) For purposes of this Agreement a "Change in Control" shall
be deemed to have occurred if (i) any "person" (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other than
a trustee or other fiduciary holding securities under an employee benefit plan
of the Company or a corporation owned directly or indirectly by the shareholders
of the Company in substantially the same proportions as their ownership of stock
of the Company, is or becomes the "beneficial owner" (as determined in
accordance with Rule 13d-3 under such Act), directly or indirectly, of
securities of the Company representing more than 20% of the total voting power
represented by the Company's then outstanding Voting Securities, (ii) during any
period of two consecutive years, individuals who at the beginning of such period
constitute the Board of Directors of the Company and any new director whose
election by the Board of Directors or nomination for election by the Company's
shareholders was approved by a vote of at least two thirds (2/3) of the
directors then still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so approved,
cease for any reason to constitute a majority thereof, or (iii) the shareholders
of the Company approve a merger or consolidation of the Company with any other
corporation other than a merger or consolidation which would result in the
Voting Securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into Voting Securities of the surviving entity) at least 80% of the total voting
power represented by the Voting Securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation, or the
shareholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of (in one
transaction or a series of transactions) all or substantially all of the
Company's assets.
(d) For purposes of this Agreement, "Independent Legal
Counsel" shall mean an attorney or firm of attorneys, selected in accordance
with the provisions of Section 1(c) hereof, who shall not have otherwise
performed services for the Company or Indemnitee within the last three years
(other than with respect to matters concerning the rights of Indemnitee under
this Agreement, or of other indemnitees under similar indemnity agreements).
(e) For purposes of this Agreement, a "Reviewing Party" shall
mean any appropriate person or body consisting of a member or members of the
Company's Board of Directors or any other person or body appointed by the Board
of Directors who is not a party to the particular Claim for which Indemnitee is
seeking indemnification, or Independent Legal Counsel.
(f) For purposes of this Agreement, "Voting Securities" shall
mean any securities of the Company that vote generally in the election of
directors.
-8-
11. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original.
12. Binding Effect; Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors and assigns, including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Company, spouses, heirs,
and personal and legal representatives. The Company shall require and cause any
successor (whether direct or indirect by purchase, merger, consolidation or
otherwise) to all, substantially all, or a substantial part, of the business
and/or assets of the Company, by written agreement in form and substance
satisfactory to Indemnitee, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform if no such succession had taken place. This Agreement shall
continue in effect regardless of whether Indemnitee continues to serve as a
director of the Company or of any other enterprise at the Company's request.
13. Attorneys' Fees. In the event that any action is instituted by
Indemnitee under this Agreement or under any liability insurance policies
maintained by the Company to enforce or interpret any of the terms hereof or
thereof, Indemnitee shall be entitled to be paid all Expenses incurred by
Indemnitee with respect to such action, regardless of whether Indemnitee is
ultimately successful in such action, and shall be entitled to the advancement
of Expenses with respect to such action, unless as a part of such action the
court of competent jurisdiction over such action determines that each of the
material assertions made by Indemnitee as a basis for such action were not made
in good faith or 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 Expenses
incurred by Indemnitee in defense of such action (including costs and expenses
incurred with respect to Indemnitee's counterclaims and cross-claims made in
such action), and shall be entitled to the advancement Expenses with respect to
such action, unless as a part of such action the court having jurisdiction over
such action determines that each of Indemnitee's material defenses to such
action were made in bad faith or were frivolous.
14. 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. Addresses for
notice to either party are as shown on the signature page of this Agreement, or
as subsequently modified by written notice.
15. Consent to Jurisdiction. The Company and Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of the State of New Jersey
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 commenced, prosecuted and continued only in the Superior
Court of the State of New Jersey in and for Middlesex County, which shall be the
exclusive and only proper forum for adjudicating such a claim.
-9-
16. Severability. The provisions of this Agreement shall be severable
in the event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) are held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, and the remaining
provisions shall remain enforceable to the fullest extent permitted by law.
Furthermore, to the fullest extent possible, the provisions of this Agreement
(including, without limitations, each portion of this Agreement containing any
provision held to be invalid, void or otherwise unenforceable, that is not
itself invalid, void or unenforceable) shall be construed so as to give effect
to the intent manifested by the provision held invalid, illegal or
unenforceable.
17. Choice of Law. This Agreement shall be governed by and its
provisions construed and enforced in accordance with the laws of the State of
New Jersey, as applied to contracts between New Jersey residents, entered into
and to be performed entirely within the State of New Jersey, without regard to
the conflict of laws principles thereof.
18. Subrogation. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee, who shall execute all documents required and shall do
all acts that may be necessary to secure such rights and to enable the Company
effectively to bring suit to enforce such rights.
19. Amendment and Termination. No amendment, modification, termination
or cancellation of this Agreement shall be effective unless it is in writing
signed by both 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.
20. Integration and Entire Agreement. This Agreement sets forth the
entire understanding between the parties hereto and supersedes and merges all
previous written and oral negotiations, commitments, understandings and
agreements relating to the subject matter hereof between the parties hereto.
21. No Construction as Employment Agreement. Nothing contained in this
Agreement shall be construed as giving Indemnitee any right to be retained in
the employ of the Company or any of its subsidiaries.
**********
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
INTELLIGROUP, INC.
By:
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Name:
Title:
Address: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
AGREED TO AND ACCEPTED:
INDEMNITEE:
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(signature)
▇▇▇▇▇▇ ▇▇▇▇▇▇
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(name of Indemnitee)
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(address)
