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Exhibit (e)(14)
FORM OF INDEMNITY AGREEMENT
This Indemnity Agreement, dated as of ____________, ______ is
made by and between XxxxxxXxxxxx.xxx Inc., a Delaware corporation (the
"Company"), and ______________ (the "Indemnitee").
RECITALS
A. The Company is aware that competent and experienced
persons are increasingly reluctant to serve as directors or officers of
corporations unless they are protected by adequate indemnification, due to
increased exposure to litigation costs and risk resulting from their service to
such corporations, and due to the fact that the exposure frequently bears no
reasonable relationship to the compensation of such directors and officers;
B. The statutes and judicial decisions regarding the
duties of directors and officers are often difficult to apply, ambiguous, or
conflicting, and therefore fail to provide such directors and officers with
adequate, reliable knowledge of legal risks to which they are exposed or
information regarding the proper course of action to take;
C. Plaintiffs often seek damages in such large amounts
and the costs of litigation may be so great (whether or not the case is
meritorious), that the defense and/or settlement of such litigation is usually
beyond the personal resources of directors and officers;
D. Based upon their experience as business managers, the
Board of Directors of the Company (the "Board") has concluded that, to retain
and attract talented and experienced individuals to serve as directors and
officers of the Company and its "subsidiaries" (as defined in Section 1 below)
and to encourage such individuals to take the business risks necessary for the
success of the Company and its subsidiaries, it is necessary for the Company to
contractually indemnify its directors and certain of its officers, and the
directors and certain of the officers of its subsidiaries, and to assume for
itself maximum liability for expenses and damages in connection with claims
against such directors and officers in connection with their service to the
Company and its subsidiaries, and has further concluded that the failure to
provide such contractual indemnification could result in great harm to the
Company and its subsidiaries and the Company's stockholders;
E. Section 145 of the Delaware General Corporation Law
("Section 145"), which is applicable to the Company, empowers the Company to
indemnify by agreement its directors, officers, employees and agents, and
persons who serve at the request of the Company as the directors, officers,
employees or agents of other corporations, partnerships, joint ventures, trusts
or enterprises, and expressly provides that the indemnification provided by
Section 145 is not exclusive; and
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F. The Company desires and has requested the Indemnitee
to serve or continue to serve as a director and/or officer of the Company and/or
one or more of its subsidiaries free from undue concern for claims for damages
arising out of or related to such services to the Company and/or one or more of
its subsidiaries.
NOW, THEREFORE, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. Definitions. For the purposes of this Agreement, the
following terms shall have the meanings set forth below:
(a) Agent. "agent" means any person who (i) is
or was a director, officer, employee, or other agent of the
Company or a subsidiary of the Company, or (ii) is or was
serving at the request of, for the convenience of, or to
represent the "interest of the Company" or a subsidiary of the
Company as a director, officer, employee or agent of another
foreign or domestic corporation, partnership, joint venture,
trust or other enterprise.
(b) Controlled. "controlled" means subject to
the power to exercise a controlling influence over the
management or policies of a corporation, partnership, joint
venture, trust or other entity.
(c) Expenses. "expenses" includes all direct and
indirect costs of any type or nature whatsoever (including,
without limitation, all reasonable attorneys' fees and related
disbursements, other out-of-pocket costs and reasonable
compensation for time spent by the Indemnitee for which he is
not otherwise compensated by the Company or any third party)
actually and reasonably incurred by the Indemnitee in
connection with either the investigation, defense or appeal of
a proceeding or establishing or enforcing a right to
indemnification under this Agreement, Section 145 or
otherwise.
(d) Proceeding. "proceeding" means any
threatened, pending, or completed action, suit or other
proceeding, whether civil, criminal, administrative,
investigative or any other type whatsoever.
(e) Subsidiary. "subsidiary" means (i) any
corporation of which 50% or more of the outstanding voting
securities are owned directly or indirectly by the Company, or
which is otherwise controlled by the Company, and (ii) any
partnership, joint venture, trust or other entity of which 50%
or more of the equity interest is owned directly or indirectly
by the Company, or which is otherwise controlled by the
Company.
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2. Agreement to Serve. The Indemnitee agrees to serve
and/or continue to serve as an agent of the Company, at its will (or under
separate agreement, if such agreement exists), in the capacity Indemnitee
currently serves as an agent of the Company; provided, however, that nothing
contained in this Agreement is intended to or shall (i) restrict the ability of
the Indemnitee to resign at any time and for any reason from its current
position, (ii) create any right to continued employment of the Indemnitee in its
current or any other position, or (iii) restrict the ability of the Company to
terminate the employment or agency of Indemnitee at any time and for any reason.
3. Indemnification as Agent.
a. Third Party Actions. If the 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 the fact that he is or was an agent of
the Company, or by reason of anything done or not done by him
in any such capacity or otherwise at the request of the
Company or any of its officers, directors, or stockholders,
the Company shall indemnify the Indemnitee against any and all
expenses and liabilities of any type whatsoever (including,
but not limited to, judgments, fines, excise taxes, penalties
and amounts paid in settlement) actually and reasonably
incurred by him in connection with the investigation, defense,
settlement or appeal of such proceeding, if he acted in good
faith and in a manner he reasonably believed to be in, or not
opposed to, the best interests of the Company, and, with
respect to any criminal action or proceeding, if he had no
reasonable cause to believe his conduct was unlawful.
b. Derivative Actions. If the 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 the fact that he is or was
an agent of the Company, or by reason of anything done or not
done by him in any such capacity, the Company shall indemnify
the Indemnitee against any amount paid in settlement of any
such proceeding and any and all expenses actually and
reasonably incurred by him in connection with the
investigation, defense, settlement, or appeal of such
proceeding, if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best
interests of the Company; except that no indemnification under
this subsection shall be made with respect to any claim, issue
or matter as to which such person has been finally adjudged to
have been liable to the Company, unless and only to the extent
that 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,
such person is fairly and reasonably entitled to indemnity for
such expenses as the court shall deem proper.
c. Other Actions and Amendments. In addition to
the indemnification provided above, the Company shall
indemnify Indemnitee to the full extent now
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or hereafter permitted by law, with respect to any expenses
and liabilities of any type whatsoever arising because the
Indemnitee was or is a party or is threatened to be made a
party to any proceeding by reason of the fact that he is or
was an agent of the Company, or by reason of anything done or
not done by him in any such capacity or otherwise at the
request of the Company or any of its officers, directors, or
stockholders. If the Delaware General Corporation Law (the
"Act") is amended after the date hereof to permit the Company
to indemnify Indemnitee for expenses or liabilities, or to
indemnify Indemnitee with respect to any action or proceeding,
not contemplated by this Agreement, then this Agreement
(without any further action be either party hereto) shall
automatically be deemed to be amended to require that the
Company indemnify Indemnitee to the fullest extent permitted
by the Act.
4. Indemnification as Witness. Notwithstanding any other
provision of this Agreement, to the extent the Indemnitee is, by reason of the
fact that he is or was an agent of the Company, a witness in any proceeding, the
Indemnitee shall be indemnified against any and all expenses actually and
reasonably incurred by or for him in connection therewith.
5. Advancement of Expenses. Subject to Section 8(a)
below, the Company shall advance all expenses actually and reasonably incurred
by the Indemnitee in connection with the investigation, defense, settlement or
appeal of any proceeding to which the Indemnitee is a party or is threatened to
be made a party by reason of the fact that the Indemnitee is or was an agent of
the Company. Indemnitee hereby agrees to repay such amounts advanced, without
interest, only if, and to the extent that, it shall ultimately be determined
pursuant to Section 7 below that the Indemnitee is not entitled to be
indemnified by the Company. The advances to be made hereunder shall be paid by
the Company to the Indemnitee within fifteen (15) days following delivery of a
written request therefor by the Indemnitee to the Company.
6. Indemnification Procedures.
(a) Notice by Indemnitee. Promptly after receipt by the
Indemnitee of notice of the commencement of or the threat of
commencement of any proceeding, the Indemnitee shall, if the Indemnitee
believes that indemnification with respect thereto may be sought from
the Company under this Agreement, notify the Company of the
commencement or threat of commencement thereof.
(b) Notice to Insurer. If, at the time of the receipt of
a notice of the commencement of a proceeding pursuant to Section 6(a)
above, the Company has directors' and officers' liability insurance in
effect, the Company shall give prompt notice of the commencement of
such proceeding to the insurers in accordance with the procedures set
forth in the respective 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 proceeding
in accordance with the terms of such policies.
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(c) Assumption of Defense. In the event the Company shall
be obligated to pay the expenses of the Indemnitee with respect to any
proceeding, the Company shall be entitled to assume the defense of such
proceeding, with counsel of its choosing, upon the delivery to the
Indemnitee of written notice of its election so to do. After delivery
of such notice, the Company will not be liable to the Indemnitee under
this Agreement for any fees and expenses of counsel which are
subsequently incurred by the Indemnitee with respect to the same
proceeding; provided, however, that the Indemnitee shall have the right
to employ his counsel in any such proceeding at the Indemnitee's
expense; and provided further, that if (i) the employment of counsel by
the Indemnitee has been previously authorized by the Company, or (ii)
the Indemnitee shall have reasonably concluded that there may be a
conflict of interest between the Company and the Indemnitee in the
conduct of any such defense, or (iii) the Company shall not, in fact,
have employed counsel to assume the defense of such proceeding, then,
in any such case, the fees and expenses of Indemnitee's counsel shall
be at the expense of the Company.
(d) 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 the Indemnitee. Indemnitee
shall execute all documents required and shall do everything that may
be necessary to secure such rights, including the execution of such
documents necessary to enable the Company to effectively bring suit to
enforce such rights.
7. Determination of Right to Indemnification.
(a) Successful Proceeding. To the extent the Indemnitee
has been successful, on the merits or otherwise, in the defense of any
proceeding referred to in Section 3 above, the Company shall indemnify
the Indemnitee against any and all expenses actually and reasonably
incurred by him 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 any and all expenses actually and reasonably incurred by or for
him in connection with each successfully resolved claim, issue or
matter. For purposes of this Section 7(a), the termination of any
proceeding, or 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 proceeding, claim, issue or matter, so
long as there has been no finding (either adjudicated or pursuant to
Section 7(c) below) that Indemnitee (i) did not act in good faith, or
(ii) did not act in a manner reasonably believed to be in, or not
opposed to, the best interests of the Company, or (iii) with respect to
any criminal proceeding, had reasonable grounds to believe his conduct
was unlawful.
(b) Other Proceeding. In the event that Section 7(a)
above is inapplicable, or applicable only in part, the Company shall
nevertheless indemnify the Indemnitee unless, and only to the extent
that, the Company shall prove by clear and convincing evidence to a
forum listed in Section 7(c) below that the Indemnitee has not met the
applicable standard of conduct set forth in Section 3 above, if any,
which entitles Indemnitee to such indemnification.
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(c) Forum in Event of Dispute. The Indemnitee shall be
entitled to select the forum in which the validity of the Company's
claim under Section 7(b) hereof that the Indemnitee is not entitled to
indemnification will be heard, from among the following:
(1) a quorum of the Board consisting of
directors who are not parties to the proceeding for which
indemnification is being sought;
(2) if a quorum of the Board is not obtainable
(or, even if obtainable, if a quorum of the Board described in
clause (1) above concurs), legal counsel (with no prior
relationship to Indemnitee) selected by the Indemnitee, and
reasonably approved by the Board, which counsel shall make
such determination in a written opinion; or
(3) the stockholders of the Company.
(d) Submission of Company's Claim. As soon as
practicable, and in no event later than thirty (30) days after written
notice of the Indemnitee's choice of forum pursuant to Section 7(c)
above, the Company shall, at its own expense, submit to the selected
forum in such manner as the Indemnitee or the Indemnitee's counsel may
reasonably request, its claim that the Indemnitee is not entitled to
indemnification; and the Company shall act in the utmost good faith to
assure the Indemnitee a complete opportunity to defend against such
claim.
(e) Appeal to Court. Notwithstanding a determination by
any forum listed in Section 7(c) above that Indemnitee is not entitled
to indemnification with respect to a specific proceeding, the
Indemnitee shall have the right to apply to the court in which that
proceeding is or was pending or any other court of competent
jurisdiction, for the purpose of enforcing the Indemnitee's right to
indemnification pursuant to this Agreement.
(f) Indemnity for Expenses in Enforcement of Agreement.
Notwithstanding any other provision in this Agreement to the contrary,
the Company shall indemnify the Indemnitee against all expenses
incurred by the Indemnitee in connection with any hearing or proceeding
under this Section 7 involving the Indemnitee and against all expenses
incurred by the Indemnitee in connection with any other proceeding
between the Company and the Indemnitee involving the interpretation or
enforcement of the rights of the Indemnitee under this Agreement unless
a court of competent jurisdiction finds that each of the claims and/or
defenses of the Indemnitee in any such proceeding was frivolous or made
in bad faith.
8. Exceptions.
(a) Claims Initiated by Indemnitee. Any other provision
herein to the contrary notwithstanding, the Company shall not be
obligated pursuant to the terms of this Agreement to indemnify or
advance expenses to the Indemnitee with respect to proceedings or
claims initiated or brought voluntarily by the Indemnitee and not by
way
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of defense, except with respect to proceedings brought to establish or
enforce a right to indemnification under this Agreement or any other
statute or law or otherwise as required under Section 145, but such
indemnification or advancement of expenses may be provided by the
Company in specific cases if the Board finds it to be appropriate.
(b) Lack of Good Faith. Any other provision herein to the
contrary notwithstanding, the Company shall not be obligated pursuant
to the terms of this Agreement to indemnify the Indemnitee for any
expenses incurred by the Indemnitee with respect to any proceeding
instituted by the 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 frivolous or
made in bad faith.
(c) Unauthorized Settlements. Any other provision herein
to the contrary notwithstanding, the Company shall not be obligated
pursuant to the terms of this Agreement to indemnify the Indemnitee for
any amount paid in settlement of a proceeding effected without the
prior written consent of the Company. The Company agrees not to
unreasonably withhold its consent to any settlement.
(d) No Duplicative Payment. The Company shall not be
liable under this Agreement to make any payment of amounts otherwise
indemnifiable hereunder if and to the extent that Indemnitee has
otherwise actually received such payment under any insurance policy,
contract, agreement or otherwise.
9. Non-exclusivity. The provisions for indemnification
and advancement of expenses set forth in this Agreement shall not be deemed
exclusive of any other rights which the Indemnitee may have under any provision
of law, the Company's Certificate of Incorporation or By-laws, the vote of the
Company's stockholders or disinterested directors, other agreements, or
otherwise, both as to action in his official capacity and as to action in
another capacity while occupying a position as an agent of the Company.
10. Interpretation of Agreement. It is understood that
the parties hereto intend this Agreement to be interpreted and enforced so as to
provide indemnification to the Indemnitee to the fullest extent now or hereafter
permitted by law.
11. Burden of Proof. In making a determination with
respect to entitlement to indemnification hereunder, the person or persons or
entity making such determination shall presume that Indemnitee is entitled to
indemnification under this Agreement, and the Company shall have the burden of
proof to overcome that presumption in connection with the making by any person,
persons or entity of any determination contrary to that presumption.
12. Severability. If any provision or provisions of this
Agreement shall be held to be invalid, illegal or unenforceable for any reason
whatsoever, (i) the validity, legality and enforceability of the remaining
provisions of the Agreement (including, without limitation, all portions of any
paragraphs of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that are not themselves invalid, illegal or
unenforceable) shall not in any way be affected or impaired thereby, and (ii) to
the fullest extent possible, the
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provisions of this Agreement (including, without limitation, all portions of any
paragraph of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that are not themselves invalid, illegal or
unenforceable) shall be construed so as to give effect to the intent manifested
by the provision held invalid, illegal or unenforceable and to give effect to
Section 10 hereof.
13. Modification and Waiver. Except as contemplated by
Section 3(c), no supplement, modification or amendment of this Agreement shall
be binding unless executed in writing by both 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 hereof (whether or not similar) nor shall such
waiver constitute a continuing waiver.
14. Survival, Successors and Assigns. The Indemnitee's
rights under this Agreement shall continue after the Indemnitee has ceased
acting as an agent of the Company. The terms of this Agreement shall be binding
on and inure to the benefit of the Company and its successors and assigns and
shall be binding on and inure to the benefit of Indemnitee and Indemnitee's
heirs, executors and administrators.
15. Gender. The masculine, feminine or neuter pronouns
used herein shall be interpreted without regard to gender, and the use of the
singular or plural shall be deemed to include the other whenever the context so
requires.
16. Governing Law. This Agreement shall be governed by
and construed and enforced in accordance with the laws of the State of Delaware
applicable to contracts made and to be performed in such state without giving
effect to the principles of conflicts of laws.
The parties hereto have entered into this Indemnity Agreement
effective as of the date first above written.
XxxxxxXxxxxx.xxx Inc.
By:________________________________________
Its:_______________________________________
INDEMNITEE:
___________________________________________
Name:
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