INDEMNIFICATION AGREEMENT
THIS AGREEMENT, effective as of , is between XOMA CORPORATION, a Delaware
corporation ("Corporation"), and OFFICER ("Officer").
WITNESSETH THAT:
WHEREAS, Officer is an executive officer of Corporation and performs a
valuable service in such capacity for Corporation; and
WHEREAS, the stockholders of Corporation have adopted Bylaws (the "Bylaws")
providing for the indemnification of the officers, directors, agents and
employees of Corporation to the maximum extent authorized by Section 145 of the
Delaware Corporations Code, as amended ("Code"); and
WHEREAS, such Bylaws and the Code, by their non-exclusive nature, permit
contracts between Corporation and its directors and officers with respect to
indemnification of such directors and officers; and
WHEREAS, in accordance with the authorization as provided by the Code,
Corporation has purchased and presently maintains a policy or policies of
liability insurance for directors and officers ("D & O Insurance"), covering
certain liabilities which may be incurred by its directors and officers in the
performance as officers of Corporation; and
WHEREAS, as a result of recent developments affecting the terms, scope and
availability of D & O Insurance there exists general uncertainty as to the
extent of protection afforded officers of Corporation by such D & O Insurance
and by statutory and by-law indemnification provisions; and
WHEREAS, in order to induce Officer to continue to serve as an officer of
Corporation, Corporation has determined and agreed to enter into this contract
with Officer;
NOW, THEREFORE, in consideration of Officer's continued service as an
officer after the date hereof, the parties hereto agree as follows:
1. Indemnity of Officer. Subject to Section 5 hereof, Corporation hereby
agrees to hold harmless and indemnify Officer to the full extent authorized or
permitted by the provisions of the Code, as may be amended from time to time.
2. Additional Indemnity. Subject to Section 5 hereof and to the exclusions
set forth in Section 3 hereof, Corporation hereby further agrees to hold
harmless and indemnify Officer:
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(a) against any and all expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by Officer
in connection with any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (including
an action by or in the right of Corporation) to which Officer is, was or at any
time becomes a party, or is threatened to be made a party, by reason of the fact
that Officer is or was an officer, director, employee or agent of Corporation,
or is or was serving at the request of Corporation as an officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise; and
(b) otherwise to the fullest extent as may be provided to Officer by
Corporation under the non-exclusivity provisions of Article VII of Section 6 of
the Bylaws of Corporation and the Code.
3. Limitations on Additional Indemnity. No indemnity pursuant to Section 2
hereof shall be paid by Corporation:
(a) except to the extent the aggregate of losses to be indemnified
thereunder exceeds the amount of such losses for which Officer is indemnified
either pursuant to Section 1 hereof or pursuant to any other indemnification
arrangement or any D & O Insurance purchased and maintained by Corporation;
(b) in respect to remuneration paid to Officer if it shall be determined by
a final judgment or other final adjudication that such remuneration was in
violation of law;
(c) on account of any suit in which judgment is rendered against Officer
for an accounting of profits made from the purchase or sale by Officer of
securities of Corporation pursuant to the provisions of Section 16(b) of the
Securities Exchange Act of 1934 and amendments thereto or similar provisions of
any federal, state or local statutory law;
(d) on account of Officer's conduct which is finally adjudged to have been
knowingly fraudulent or deliberately dishonest, or to constitute willful
misconduct; or
(e) if a final decision by a court having jurisdiction in the matter shall
determine that such indemnification is not lawful.
4. Contribution. If the indemnification provided in Sections 1 and 2 is
unavailable and may not be paid to Officer for any reason other than those set
forth in paragraphs (b), (c) and (d) of Section 3, then in respect of any
threatened, pending or completed action, suit or proceeding in which Corporation
is jointly liable with Officer (or would be if joined in such action, suit or
proceeding), Corporation shall contribute to the amount of expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred and paid
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or payable by Officer in such proportion as is appropriate to reflect (i) the
relative benefits received by Corporation on the one hand and Officer on the
other hand from the transaction from which such action, suit or proceeding
arose, and (ii) the relative fault of Corporation on the one hand and of Officer
on the other in connection with the events which resulted in such expenses,
judgments, fines or settlement amounts, as well as any other relevant equitable
considerations. The relative fault of Corporation on the one hand and of Officer
on the other shall be determined by reference to, among other things, the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent the circumstances resulting in such expenses, judgments,
fines or settlement amounts. Corporation agrees that it would not be just and
equitable if contribution pursuant to this Section 4 were determined by pro rata
allocation or any other method of allocation which does not take account of the
foregoing equitable considerations.
5. Continuation of Obligations. All agreements and obligations of
Corporation contained herein shall terminate on the third anniversary of the
date hereof (the "Termination Date"); provided, however, that such agreements
and obligations shall continue thereafter with respect to any claim or
threatened, pending or completed action, suit or proceeding, whether civil,
criminal or investigative, to which Officer is or becomes subject on or
subsequent to the Termination Date by reason of the fact that Officer was an
officer of Corporation or serving in any other capacity referred to herein on or
prior to the Termination Date.
6. Notification and Defense of Claim. Promptly after receipt by Officer of
notice of the commencement of any action, suit or proceeding, Officer will, if a
claim in respect thereof is to be made against Corporation under this Agreement,
notify Corporation of the commencement thereof; but the omission so to notify
Corporation will not relieve it from any liability which it may have to Officer
otherwise than under this Agreement. With respect to any such action, suit or
proceeding as to which Officer notifies Corporation of the commencement thereof:
(a) Corporation will be entitled to participate therein at its own expense;
(b) except as otherwise provided below, to the extent that it may wish,
Corporation jointly with any other indemnifying party similarly notified will be
entitled to assume the defense thereof, with counsel satisfactory to Officer.
After notice from Corporation to Officer of its election so as to assume the
defense thereof, Corporation will not be liable to Officer under this Agreement
for any legal or other expenses subsequently incurred by Officer in connection
with the defense thereof other than reasonable costs of investigation or as
otherwise provided below. Officer shall have the right to employ counsel to
represent Officer in such action, suit or proceeding but the fees and expenses
of
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such counsel incurred after notice from Corporation of its assumption of the
defense thereof shall be at the expense of Officer unless such counsel is
reasonably satisfactory to Corporation and (i) Officer shall have reasonably
concluded that there may be a conflict of interest between Corporation and
Officer in the conduct of the defense of such action, or (ii) Corporation shall
not in fact have employed counsel to assume the defense of such action, in each
of which cases the fees and expenses of counsel shall be at the expense of
Corporation. Corporation shall not be entitled to assume the defense of any
action, suit or proceeding brought by or on behalf of Corporation or as to which
Officer shall have made the conclusion provided for in (ii) above. Officer also
shall have the right to employ counsel reasonably satisfactory to Corporation to
represent Officer in any such action, suit or proceeding with respect to which
Corporation does not assume the defense; and
(c) Corporation shall not be liable to indemnify Officer under this
Agreement for any amounts paid in settlement of any action or claim effected
without its written consent. Corporation shall not settle any action or claim in
any manner which would impose any penalty or limitation on Officer without
Officer's written consent. Neither Corporation nor Officer will unreasonably
withhold its consent to any proposed settlement.
7. Advancement and Repayment of Expenses.
(a) In the event that Officer employs Officer's own counsel pursuant to
Section 6(b) above, Corporation shall advance to Officer, prior to any final
disposition of any threatened or pending action, suit or proceeding, whether
civil, criminal, administrative or investigative, any and all reasonable
expenses (including legal fees and expenses) incurred in investigating or
defending any such action, suit or proceeding within ten (10) days after
receiving copies of invoices presented to Officer for such expenses.
(b) Officer agrees that Officer will reimburse Corporation for all
reasonable expenses paid by Corporation in defending any civil or criminal
action, suit or proceeding against Officer in the event and only to the extent
it shall be ultimately determined pursuant to the procedure specified in Section
145(d) of the Code that Officer is not entitled, under the provisions of the
Code, the Bylaws, this Agreement or otherwise, to be indemnified by Corporation
for such expenses.
8. Enforcement.
(a) Corporation expressly confirms and agrees that it has entered into this
Agreement and assumed the obligations imposed on Corporation hereby in order to
induce Officer to continue as an officer of Corporation, and acknowledges that
Officer is relying upon this Agreement in continuing such capacity.
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(b) In the event Officer is required to bring any action to enforce rights
or to collect moneys due under this Agreement and is successful in such action,
Corporation shall reimburse Officer for all of Officer's reasonable fees and
expenses in bringing and pursuing such action.
9. Separability. Each of the provisions of this Agreement is a separate and
distinct agreement and independent of the others, so that if any provision
hereof shall be held to be valid or unenforceable for any reason, such
invalidity or unenforceability shall not affect the validity or enforceability
of the other provisions hereof.
10. Governing Law. This Agreement shall be interpreted and enforced in
accordance with the laws of the State of Delaware.
11. Binding Effect. This Agreement shall be binding upon Officer and upon
Corporation, its successors and assigns, and shall inure to the benefit of
Officer, his heirs, personal representatives and assigns, to the benefit of
Corporation, its successors and assigns.
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12. Amendment and Termination. No amendment, modification, termination or
cancellation of this Agreement shall be effective unless in writing signed by
both parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement this
day of and it shall be effective as of the day and year first above written.
XOMA CORPORATION
By:
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Xxxx X. Xxxxxxxx
Chairman of the Board,
President and
Chief Executive Officer
OFFICER
Title: Title
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