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EXHIBIT 10.17
DIRECTOR INDEMNIFICATION AGREEMENT
This DIRECTOR INDEMNIFICATION AGREEMENT (the "AGREEMENT") made and
entered into this _____ day of ______________, 2000, by and between
Synchronicity Software, Inc., a Delaware corporation (the "COMPANY"), and
_____________ (the "INDEMNITEE").
WHEREAS, it is essential to the Company that it be able to retain and
attract as directors, officers and employees the most capable persons available;
WHEREAS, increased corporate litigation has subjected directors to
litigation risks and expenses and the limitations on the availability of
directors and officers liability insurance have made it increasingly difficult
for the Company to attract and retain such persons;
WHEREAS, its By-laws permit the Company to enter into indemnification
arrangements and agreements;
WHEREAS, the Company desires to provide Indemnitee with specific
contractual assurance of Indemnitee's rights to full indemnification against
litigation risks and expenses (regardless, among other things, of any amendment
to or revocation of the Company's Second Amended and Restated Certificate of
Incorporation ("Charter") or By-laws or any change in the ownership of the
Company or the composition of its Board of Directors), which indemnification is
intended to be greater than that which is afforded by the Company's Charter and
By-laws and, to the extent insurance is available, the coverage of Indemnitee
under the Company's directors and officers liability insurance policies; and
WHEREAS, Indemnitee is relying upon the rights afforded under this
Agreement in accepting Indemnitee's position as a director, officer or employee
of the Company.
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:
1. DEFINITIONS.
(a) "CORPORATE STATUS" describes the status of a person who is serving
or has served (i) as a director, officer or employee of the Company,
(ii) in any capacity with respect to any employee benefit plan of the
Company, or (iii) as a director, partner, member, trustee, officer,
employee, or agent of any other Entity at the request of the Company.
(b) "ENTITY" shall mean any corporation, partnership, limited liability
company, joint venture, trust, foundation, association, organization or
other legal entity and any group or division of the Company or any of
its subsidiaries.
(c) "EXPENSES" shall mean all reasonable fees, costs and expenses
incurred in connection with any Proceeding (as defined below),
including, without limitation, attorneys' fees, disbursements and
retainers (including, without limitation, any such fees, disbursements
and retainers incurred by Indemnitee pursuant to Section 9 of this
Agreement), fees and disbursements of expert witnesses, private
investigators and professional advisors (including,
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without limitation, accountants and investment bankers), court costs,
transcript costs, fees of experts, travel expenses, duplicating,
printing and binding costs, telephone and fax transmission charges,
postage, delivery services, secretarial services, and other
disbursements and expenses.
(d) "INDEMNIFIABLE EXPENSES," "INDEMNIFIABLE LIABILITIES" and
"INDEMNIFIABLE AMOUNTS" shall have the meanings ascribed to those terms
in Section 3(a) below.
(e) "LIABILITIES" shall mean judgments, damages, liabilities, losses,
penalties, excise taxes, fines and amounts paid in settlement.
(f) "PROCEEDING" shall mean any threatened, pending or completed claim,
action, suit, arbitration, alternate dispute resolution process,
investigation, administrative hearing, appeal, or any other proceeding,
whether civil, criminal, administrative or investigative, whether
formal or informal, including a proceeding initiated by Indemnitee
pursuant to Section 9 of this Agreement to enforce Indemnitee's rights
hereunder.
2. SERVICES OF INDEMNITEE. In consideration of the Company's covenants
and commitments hereunder, Indemnitee agrees to serve or continue to serve as a
director, officer or employee of the Company. However, this Agreement shall not
impose any obligation on Indemnitee or the Company to continue Indemnitee's
service to the Company beyond any period otherwise required by law or by other
agreements or commitments of the parties, if any.
3. AGREEMENT TO INDEMNIFY. The Company agrees to indemnify Indemnitee
as follows:
(a) Subject to the exceptions contained in Section 4(a) below,
if Indemnitee was or is a party or is threatened to be made a party to
any Proceeding (other than an action by or in the right of the Company)
by reason of Indemnitee's Corporate Status, Indemnitee shall be
indemnified by the Company against all Expenses and Liabilities
incurred or paid by Indemnitee in connection with such Proceeding
(referred to herein as "INDEMNIFIABLE EXPENSES" and "INDEMNIFIABLE
LIABILITIES," respectively, and collectively as "INDEMNIFIABLE
AMOUNTS").
(b) Subject to the exceptions contained in Section 4(b) below,
if Indemnitee was or is a party or is threatened to be made a party to
any Proceeding by or in the right of the Company to procure a judgment
in its favor by reason of Indemnitee's Corporate Status, Indemnitee
shall be indemnified by the Company against all Indemnifiable Expenses.
4. EXCEPTIONS TO INDEMNIFICATION. Indemnitee shall be entitled to
indemnification under Sections 3(a) and 3(b) above in all circumstances other
than the following:
(a) If indemnification is requested under Section 3(a) and it
has been adjudicated finally by a court of competent jurisdiction that,
in connection with the subject of the Proceeding out of which the claim
for indemnification has arisen, Indemnitee failed to act in good faith
and in a manner Indemnitee reasonably believed to be in or not opposed
to the best interests of the Company or, with respect to any criminal
action or proceeding,
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Indemnitee had reasonable cause to believe that Indemnitee's conduct
was unlawful, Indemnitee shall not be entitled to payment of
Indemnifiable Amounts hereunder.
(b) If indemnification is requested under Section 3(b) and
(1) it has been adjudicated finally by a court of
competent jurisdiction that, in connection with the subject of
the Proceeding out of which the claim for indemnification has
arisen, Indemnitee failed to act in good faith and in a manner
Indemnitee reasonably believed to be in or not opposed to the
best interests of the Company, Indemnitee shall not be
entitled to payment of Indemnifiable Expenses hereunder; or
(2) it has been adjudicated finally by a court of
competent jurisdiction that Indemnitee is liable to the
Company with respect to any claim, issue or matter involved in
the Proceeding out of which the claim for indemnification has
arisen, including, without limitation, a claim that Indemnitee
received an improper personal benefit or improperly took
advantage of a corporate opportunity, Indemnitee shall not be
entitled to payment of Indemnifiable Expenses hereunder with
respect to such claim, issue or matter unless the court in
which such Proceeding was brought shall determine upon
application that, despite the adjudication of liability, but
in view of all the circumstances of the case, Indemnitee is
fairly and reasonably entitled to indemnity for such
Indemnifiable Expenses which such court shall deem proper.
5. PROCEDURE FOR PAYMENT OF INDEMNIFIABLE AMOUNTS. Indemnitee shall
submit to the Company a written request specifying the Indemnifiable Amounts for
which Indemnitee seeks payment under Section 3 of this Agreement and the basis
for the claim. The Company shall pay such Indemnifiable Amounts to Indemnitee
within thirty (30) calendar days of receipt of the request. At the request of
the Company, Indemnitee shall furnish such documentation and information as are
reasonably available to Indemnitee and necessary to establish that Indemnitee is
entitled to indemnification hereunder.
6. INDEMNIFICATION FOR EXPENSES OF A PARTY WHO IS WHOLLY OR PARTLY
SUCCESSFUL. Notwithstanding any other provision of this Agreement, and without
limiting any such provision, to the extent that Indemnitee is, by reason of
Indemnitee's Corporate Status, a party to and is successful, on the merits or
otherwise, in any Proceeding, Indemnitee shall be indemnified against all
Expenses reasonably incurred by Indemnitee or on Indemnitee's behalf in
connection therewith. If Indemnitee is not wholly successful in such Proceeding
but is successful, on the merits or otherwise, as to one or more but less than
all claims, issues or matters in such Proceeding, the Company shall indemnify
Indemnitee against all Expenses reasonably incurred by Indemnitee or on
Indemnitee's behalf in connection with each successfully resolved claim, issue
or matter. For purposes of this Agreement, the termination of any claim, issue
or matter in such a Proceeding by dismissal, with or without prejudice, shall be
deemed to be a successful result as to such claim, issue or matter.
7. EFFECT OF CERTAIN RESOLUTIONS. Neither the settlement or termination
of any Proceeding nor the failure of the Company to award indemnification or to
determine that indemnification is payable shall create an adverse presumption
that Indemnitee is not entitled to
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indemnification hereunder. In addition, the termination of any proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent shall not create a presumption that Indemnitee did not act in
good faith and in a manner which Indemnitee reasonably believed to be in or not
opposed to the best interests of the Company or, with respect to any criminal
action or proceeding, had reasonable cause to believe that Indemnitee's action
was unlawful.
8. AGREEMENT TO ADVANCE INTERIM EXPENSES; CONDITIONS. The Company shall
pay to Indemnitee all Indemnifiable Expenses incurred by Indemnitee in
connection with any Proceeding, including a Proceeding by or in the right of the
Company, in advance of the final disposition of such Proceeding, if Indemnitee
furnishes the Company with a written undertaking to repay the amount of such
Indemnifiable Expenses advanced to Indemnitee if it is finally determined by a
court of competent jurisdiction that Indemnitee is not entitled under this
Agreement to indemnification with respect to such Indemnifiable Expenses. Such
undertaking shall be an unlimited general obligation of Indemnitee, shall be
accepted by the Company without regard to the financial ability of Indemnitee to
make repayment, and in no event shall be required to be secured.
(a) PROCEDURE FOR PAYMENT OF INTERIM EXPENSES. Indemnitee
shall submit to the Company a written request specifying the
Indemnifiable Expenses for which Indemnitee seeks an advancement under
Section 8 of this Agreement, together with documentation evidencing
that Indemnitee has incurred such Indemnifiable Expenses. Payment of
Indemnifiable Expenses under Section 8 shall be made no later than
thirty (30) calendar days after the Company's receipt of such request
and the undertaking required by Section 8.
9. REMEDIES OF INDEMNITEE.
(a) RIGHT TO PETITION COURT. In the event that Indemnitee
makes a request for payment of Indemnifiable Amounts under Sections 3
and 5 above or a request for an advancement of Indemnifiable Expenses
under Sections 8 above and the Company fails to make such payment or
advancement in a timely manner pursuant to the terms of this Agreement,
Indemnitee may petition the appropriate judicial authority to enforce
the Company's obligations under this Agreement.
(b) BURDEN OF PROOF. In any judicial proceeding brought under
Section 9(a) above, the Company shall have the burden of proving that
Indemnitee is not entitled to payment of Indemnifiable Amounts
hereunder.
(c) EXPENSES. If such judicial authority determines that
Indemnitee is entitled to at least two-thirds of the Indemnifiable
Amounts or Indemnifiable Expenses sought by Indemnitee, the Company
agrees to reimburse Indemnitee in full for any Expenses incurred by
Indemnitee in connection with investigating, preparing for, litigating,
defending or settling any action brought by Indemnitee under Section
9(a) above, or in connection with any claim or counterclaim brought by
the Company in connection therewith.
(d) VALIDITY OF AGREEMENT. The Company shall be precluded from
asserting in any Proceeding, including, without limitation, an action
under Section 9(a) above, that the provisions of this Agreement are not
valid, binding and enforceable or that there is
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insufficient consideration for this Agreement and shall stipulate in
court that the Company is bound by all the provisions of this
Agreement.
(e) FAILURE TO ACT NOT A DEFENSE. The failure of the Company
(including its Board of Directors or any committee thereof, independent
legal counsel, or stockholders) to make a determination concerning the
permissibility of the payment of Indemnifiable Amounts or the
advancement of Indemnifiable Expenses under this Agreement shall not be
a defense in any action brought under Section 9(a) above, and shall not
create a presumption that such payment or advancement is not
permissible.
10. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to Indemnitee as follows:
(a) AUTHORITY. The Company has all necessary corporate power
and authority to enter into, and be bound by the terms of, this
Agreement, and the execution, delivery and performance of the
undertakings contemplated by this Agreement have been duly authorized
by the Company.
(b) ENFORCEABILITY. This Agreement, when executed and
delivered by the Company in accordance with the provisions hereof,
shall be a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy,
insolvency, moratorium, reorganization or similar laws affecting the
enforcement of creditors' rights generally.
11. INSURANCE. The Company will obtain and maintain, in effect, a
policy or policies of insurance with reputable insurance companies providing the
Indemnitee with coverage for losses from wrongful acts, and to ensure the
Company's performance of its indemnification obligations under this Agreement.
In all policies of director and officer liability insurance, Indemnitee shall be
named as an insured in such a manner as to provide Indemnitee at least the same
rights and benefits as are accorded to the most favorably insured of the
Company's officers and directors.
12. FEES AND EXPENSES. During the term of the Indemnitee's service as a
director, the Company shall promptly reimburse the Indemnitee for all expenses
incurred by him in connection with his service as a director or member of any
board committee or otherwise in connection with the Company's business and,
after the Company's initial public offering, shall pay or provide the Indemnitee
with fees and other compensation, including stock options or awards, in amounts
and value which are at least equal to those provided to any of the Company's
other directors from time to time.
13. CONTRACT RIGHTS NOT EXCLUSIVE. The rights to payment of
Indemnifiable Amounts and advancement of Indemnifiable Expenses provided by this
Agreement shall be in addition to, but not exclusive of, any other rights which
Indemnitee may have at any time under applicable law, the Company's By-laws or
Articles of Incorporation, or any other agreement, vote of stockholders or
directors, or otherwise, both as to action in Indemnitee's official capacity and
as to action in any other capacity as a result of Indemnitee's serving as a
director of the Company.
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14. SUCCESSORS. This Agreement shall be (a) binding upon all successors
and assigns of the Company (including any transferee of all or a substantial
portion of the business, stock and/or assets of the Company and any direct or
indirect successor by merger or consolidation or otherwise by operation of law)
and (b) binding on and shall inure to the benefit of the heirs, personal
representatives, executors and administrators of Indemnitee. This Agreement
shall continue for the benefit of Indemnitee and such heirs, personal
representatives, executors and administrators after Indemnitee has ceased to
have Corporate Status.
15. SUBROGATION. In the event of any payment of Indemnifiable Amounts
under this Agreement, the Company shall be subrogated to the extent of such
payment to all of the rights of contribution or recovery of Indemnitee against
other persons, and Indemnitee shall take, at the request of the Company, all
reasonable action necessary to secure such rights, including the execution of
such documents as are necessary to enable the Company to bring suit to enforce
such rights.
16. CHANGE IN LAW. To the extent that a change in applicable law
(whether by statute or judicial decision) shall permit broader indemnification
than is provided under the terms of the By-laws of the Company and this
Agreement, Indemnitee shall be entitled to such broader indemnification and this
Agreement shall be deemed to be amended to such extent.
17. SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement, or any clause thereof,
shall be determined by a court of competent jurisdiction to be illegal, invalid
or unenforceable, in whole or in part, such provision or clause shall be limited
or modified in its application to the minimum extent necessary to make such
provision or clause valid, legal and enforceable, and the remaining provisions
and clauses of this Agreement shall remain fully enforceable and binding on the
parties.
18. INDEMNITEE AS PLAINTIFF. Except as provided in Section 9(c) of this
Agreement and in the next sentence, Indemnitee shall not be entitled to payment
of Indemnifiable Amounts or advancement of Indemnifiable Expenses with respect
to any Proceeding brought by Indemnitee against the Company, any Entity which it
controls, any director or officer thereof, or any third party, unless the
Company has consented to the initiation of such Proceeding. This Section shall
not apply to counterclaims or affirmative defenses asserted by Indemnitee in an
action brought against Indemnitee.
19. MODIFICATIONS AND WAIVER. Except as provided in Section 16 above
with respect to changes in applicable law which broaden the right of Indemnitee
to be indemnified by the Company, no supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by each of the
parties hereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions of this Agreement
(whether or not similar), nor shall such waiver constitute a continuing waiver.
20. GENERAL NOTICES. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given (a) when delivered by
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hand, (b) when transmitted by facsimile and receipt is acknowledged, or (c) if
mailed by certified or registered mail with postage prepaid, on the third
business day after the date on which it is so mailed:
If to Indemnitee, to: _________________
If to the Company, to: Synchronicity Software, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
or to such other address as may have been furnished in the same manner by any
party to the others.
21. GOVERNING LAW. This Agreement shall be governed by and construed
and enforced under the laws of the State of Delaware without giving effect to
the provisions thereof relating to conflicts of law.
22. CONSENT TO JURISDICTION. The Company hereby irrevocably and
unconditionally consents to the jurisdiction of the courts of the State of
Delaware or the United States District Court for Delaware. The Company hereby
irrevocably and unconditionally waives any objection to the laying of venue of
any Proceeding arising out of or relating to this Agreement in the courts of the
State of Delaware or the United States District Court for the Delaware, and
hereby irrevocably and unconditionally waives and agrees not to plead or claim
that any such Proceeding brought in any such court has been brought in an
inconvenient forum.
23. AGREEMENT GOVERNS. This Agreement is to be deemed consistent
wherever possible with relevant provisions of the Company's By-laws and Charter;
however, in the event of a conflict between this Agreement and such provisions,
the provisions of this Agreement shall control.
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IN WITNESS WHEREOF, the parties hereto have executed this Director
Indemnification Agreement as of the day and year first above written.
COMPANY:
SYNCHRONICITY SOFTWARE, INC.
By: ________________________________
Name:_______________________________
Title:______________________________
INDEMNITEE:
____________________________________
____________________________________
