EXHIBIT 10.16
DIRECTOR INDEMNIFICATION AGREEMENT
This Indemnification Agreement is made and entered into this ____ day
of __________, 1997 ("Agreement"), by and between Xxx-Xxxx Corporation, a
Delaware corporation (together with any successor or successors thereto, the
"Company", which term shall include, where appropriate, any Entity (as
hereinafter defined) controlled directly or individually by the Company), and
name ("Indemnitee").
WHEREAS, it is essential to the Company that the Company be able to
retain and attract as directors 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, the Company's by-laws require the Company to indemnify its
directors to the fullest extent permitted by law and permit the Company to make
other 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 such 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 certificate of
incorporation, 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 initially becoming and for continuing in Indemnitee's position as a
director 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 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 10 of this Agreement), fees and disbursements of
expert witnesses, private investigators and professional advisors (including,
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 10 of this Agreement to
enforce Indemnitee's rights hereunder.
(g) "Subsidiary" shall mean any Entity that is directly or indirectly
wholly-owned or controlled by the Company.
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 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. Subject to the requirements of applicable
law, 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 and Limitations to Indemnification.
(a) EXCEPTIONS. Indemnitee shall be entitled to indemnification under
Sections 3(a) and 3(b) above in all circumstances other than the following:
(i) 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, Indemnitee had reasonable cause to believe that
Indemnitee's conduct was unlawful, Indemnitee shall not be entitled to
payment of Indemnifiable Amounts hereunder.
(ii) If indemnification is requested under Section 3(b) and
(A) 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
(B) 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, no
Indemnifiable Expenses shall be paid with respect to such claim, issue
or matter unless the Court of Chancery or another 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.
(b) LIMITATIONS. In the event Indemnitee has requested indemnification
by the Company for Indemnifiable Amounts as a result of Indemnitee's Corporate
Status as described in Section 1(a)(iii), then the Company shall indemnify the
Indemnitee for Indemnifiable Amounts to the extent the Indemnitee is not
otherwise indemnified for such Indemnifiable Amounts by such other Entity.
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 twenty (20) 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 prejudice, shall be deemed to
be a successful result as to such a 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 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 or competent jurisdiction that Indemnitee is not entitled under this
Agreement to indemnification with respect to such 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.
9. 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 twenty (20) calendar days after the Company's receipt of such request
and the undertaking required by Section 8.
10. Remedies of Indemnitee.
(a) RIGHT TO PETITION COURT. In the event that Indemnitee makes a
request for payment of Indemnifiable Amounts under Section 3 and 5 above or a
request for an advancement of Indemnifiable Expenses under Section 8 and 9 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 10(a) above, the Company shall have the burden of proving that
Indemnitee is not entitled to payment of Indemnifiable Amounts hereunder.
(c) EXPENSES. In the event that Indemnitee prevails on the merits
for any claims brought under Section 10(a) above, 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 10(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 10(a) above, that the provisions of this Agreement are not valid,
binding and enforceable or that there is 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 10(a) above, and shall not create a presumption that such payment or
advancement is not permissible.
11. Representations and Warranties of the Company. The Company hereby
represents and warrants to Indemnitee as follows:
(a) AUTHORITY. The Company has all necessary power and authority to
enter into, and be bound by the terms of, this Agreement, and by 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.
12. Insurance. The Company will use its commercially reasonable efforts
to obtain and maintain 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.
Notwithstanding the foregoing, if the Company, after employing commercially
reasonable efforts as provided in this section, determines in good faith that
such insurance is not reasonably available, if the premium costs for such
insurance are disproportionate to the amount of coverage provided, or if the
coverage provided by such insurance is limited by exclusions so as to provide an
insufficient benefit, the Company shall use its commercially reasonable efforts
to obtain and maintain a policy or policies of insurance with coverage having
features as similar as practicable to those described above.
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
certificate 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.
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 10(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 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:
(i) If to Indemnitee, at his mailing address as shown on the Signature
page hereto, or at any other address designated by the Indemnitee.
(ii) If to the Company, to:
Xxx-Xxxx Corporation
00 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Facsimile: (000) 000 0000
ATTN: Chief Executive Officer
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 jurisdiction in which the Company or its
successor or successors are incorporated from time to time (the "Jurisdiction")
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 Jurisdiction
and the United States District Court in the Jurisdiction. 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
Jurisdiction or the United States District Court in the Jurisdiction, 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
certificate of incorporation; however, in the event of a conflict between this
Agreement and such provisions, the provisions of this Agreement shall control.
IN WITNESS WHEREOF, the parties hereto have executed this Director
Indemnification Agreement as of the day and year first written above.
XXX-XXXX CORPORATION
By:
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Name:
Title:
INDEMNITEE:
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Name:
Address:
Telephone:
Facsimile:
DIRECTOR INDEMNIFICATION AGREEMENT
SCHEDULE OF SIGNORS
Name Date Signed
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Xxxxxxx X. XxxXxxxxx, Xx. October 22, 1997
Xxxx X. Xxxxxx October 22, 1997
Xxxxx X. Xxxxxxxx October 22, 1997
Xxxxxx X. Xxxxxxx October 22, 1997
Xxxxxxx X. Xxxxxxx, Xx. April 1, 1999
Xxxxxx X. Xxxxxxx October 19, 2000
