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EXHIBIT 10.1
INDEMNIFICATION AGREEMENT
THIS AGREEMENT (the "Agreement"), is made and entered into
this ___ day of February, 1998, between Broadcom Corporation, a California
corporation (the "Corporation"), and ____________________ ("Director").
WHEREAS, Director, a member of the Board of Directors of the
Corporation, performs a valuable service in such capacity for the Corporation;
WHEREAS, the Articles of Incorporation and Bylaws of the Corporation
authorize and permit contracts between the Corporation and a member of its
Board of Directors with respect to indemnification of such directors;
WHEREAS, in accordance with the authorization as provided by the
California General Corporation Law, as amended ("Code"), the Corporation may
purchase and maintain a policy or policies of Directors and Officers Liability
Insurance ("D & O Insurance"), covering certain liabilities which may be
incurred by Director in his or her performance as a director of the
Corporation; and
WHEREAS, as a result of developments affecting the terms, scope and
availability of D & O Insurance there exists general uncertainty as to the
extent of protection afforded members of the Board of Directors by such D & O
Insurance and by statutory and bylaw indemnification provisions.
NOW, THEREFORE, in consideration of Director's service as a
director, the parties hereto agree as follows:
1. Indemnity of Director. The Corporation hereby agrees to hold
harmless and indemnify Director to the fullest extent authorized by the
provisions of the Code, as it may be amended from time to time.
2. Additional Indemnity. Subject only to the limitations set
forth in Section 3 hereof, the Corporation hereby further agrees to hold
harmless and indemnify Director:
a. against any and all expenses (including attorneys' fees),
witness fees, judgments, fines and amounts paid in settlement actually and
reasonably incurred by Director 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 the Corporation) to
which Director is, was, or at any time becomes a party, or is threatened to be
made a party, by reason of the fact that Director is, was, or at any time
becomes a director, officer, employee or agent of the Corporation, or is or was
serving or at any time serves at the request of the Corporation as a
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director, officer, employee or agent of another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise; and
b. otherwise to the fullest extent as may be provided to
Director by the Corporation under the Articles of Incorporation of the
Corporation and the Code.
3. Limitations on Additional Indemnity.
a. No indemnity pursuant to Section 2 hereof shall be paid
by the Corporation for any of the following:
(i) except to the extent the aggregate of losses to be
indemnified thereunder exceeds the sum of such losses for which the Director is
indemnified pursuant to Section 1 hereof or pursuant to any D & O Insurance
purchased and maintained by the Corporation;
(ii) in respect to remuneration paid to Director if it
shall be determined by a final judgment or other final adjudication that such
remuneration was in violation of law;
(iii) on account of Director's acts or omissions that
involve intentional misconduct or a knowing and culpable violation of law;
(iv) on account of any action, claim or proceeding
(other than a proceeding referred to in Section 8(b) hereof) initiated by
Director unless such action, claim or proceeding was authorized in the specific
case by action of the Board of Directors;
(v) on account of Director's conduct which is the
subject of an action, suit or proceeding described in Section 7(c)(ii) hereof;
or
(vi) if a final decision by a Court having
jurisdiction in the matter shall determine that such indemnification is not
lawful (and, in this respect, both the Corporation and Director have been
advised that the Securities and Exchange Commission believes that
indemnification for liabilities arising under the federal securities laws is
against public policy and is, therefore, unenforceable and that claims for
indemnification should be submitted to appropriate courts for adjudication).
b. In addition to those limitations set forth above in
paragraph (a) of this Section 3, no indemnity pursuant to Section 2 hereof in an
action by or in the right of the Corporation shall be paid by the Corporation
for any of the following:
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(i) on account of acts or omissions that Director
believes to be contrary to the best interests of the Corporation or its
shareholders or that involve the absence of good faith on the part of Director;
(ii) with respect to any transaction from which
Director derived an improper personal benefit;
(iii) on account of acts or omissions that show a
reckless disregard for Director's duty to the Corporation or its shareholders in
circumstances in which Director was aware, or should have been aware, in the
ordinary course of performing a director's duties, of a risk of serious injury
to the Corporation or its shareholders;
(iv) on account of acts or omissions that constitute
an unexcused pattern of inattention that amounts to an abdication of Director's
duty to the corporation or its shareholders;
(v) to the extent prohibited by Section 310 of the
California Corporations Code, "Contracts In Which Director Has Material
Financial Interest";
(vi) to the extent prohibited by Section 316 of the
California Corporations Code, "Corporate Actions Subjecting Directors To Joint
And Several Liability" (for prohibited distributions, loans and guarantees);
(vii) in respect of any claim, issue or matter as to
which Director shall have been adjudged to be liable to the Corporation in the
performance of Director's duty to the Corporation and its shareholders, unless
and only to the extent that the court in which such proceeding is or was pending
shall determine upon application that, in view of all the circumstances of the
case, Director is fairly and reasonably entitled to indemnity for expenses and
then only to the extent that the court shall determine;
(viii) of amounts paid in settling or otherwise
disposing of a pending action without court approval; or
(ix) of expenses incurred in defending a pending
action which is settled or otherwise disposed of without court approval.
4. Contribution. If the indemnification provided in Sections 1
and 2 hereof is unavailable by reason of a Court decision described in
subsection 3(a)(vi) hereof based on grounds other than any of those set forth in
subsections 3(a)(ii) through (v) hereof or in subsections 3(b)(i) through (vi)
hereof, then in respect of any threatened, pending or completed action, suit or
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proceeding in which the Corporation is jointly liable with Director (or would
be if joined in such action, suit or proceeding), the Corporation shall
contribute to the amount of expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred and paid
or payable by Director in such proportion as is appropriate to reflect (i) the
relative benefits received by the Corporation on the one hand and Director on
the other hand from the transaction from which such action, suit or proceeding
arose, and (ii) the relative fault of the Corporation on the one hand and of
Director 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 the Corporation on the one
hand and of Director 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. The 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 the Corporation contained herein shall continue during the period Director is
a director, officer, employee or agent of the Corporation (or is or was serving
at the request of the Corporation as a director, officer employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise) and shall continue thereafter so long as Director shall be
subject to any possible claim or threatened, pending or completed action, suit
or proceeding, whether civil, criminal or investigative, by reason of the fact
that Director was a director of the Corporation or serving in any other capacity
referred to herein.
6. Notification and Defense of Claim. Not later than thirty
(30) days after receipt by Director of notice of the commencement of any action,
suit or proceeding, Director will, if a claim in respect thereof is to be made
against the Corporation under this Agreement, notify the Corporation of the
commencement thereof; but the omission so to notify the Corporation will not
relieve it from any liability which it may have to Director otherwise than under
this Agreement. With respect to any such action, suit or proceeding as to which
Director notifies the Corporation of the commencement thereof:
a. the Corporation will be entitled to participate therein
at its own expense;
b. except as otherwise provided below, to the extent that it
may wish, the Corporation jointly with any other indemnifying party similarly
notified will be entitled to assume the defense thereof, with counsel reasonably
satisfactory to Director. After notice from the Corporation to Director of its
election so as to assume the defense thereof, the Corporation will not be liable
to Director under this Agreement for any legal or other expenses subsequently
incurred by
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Director in connection with the defense thereof other than reasonable costs of
investigation or as otherwise provided below. Director shall have the right to
employ its counsel in such action, suit or proceeding but the fees and expenses
of such counsel incurred after notice from the Corporation of its assumption of
the defense thereof shall be at the expense of Director unless (i) the
employment of counsel by Director has been authorized by the Corporation, (ii)
Director shall have reasonably concluded that there may be a conflict of
interest between the Corporation and Director in the conduct of the defense of
such action or (iii) the 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 Director's separate counsel shall be at the expense of the Corporation. The
Corporation shall not be entitled to assume the defense of any action, suit or
proceeding brought by or on behalf of the Corporation or as to which Director
shall have made the conclusion provided for in (ii) above; and
c. the Corporation shall not be liable to indemnify Director
under this Agreement for any amounts paid in settlement of any action or claim
effected without its written consent. The Corporation shall be permitted to
settle any action except that it shall not settle any action or claim in any
manner which would impose any penalty or limitation on Director without
Director's written consent. Neither the Corporation nor Director will
unreasonably withhold its consent to any proposed settlement.
7. Advancement and Repayment of Expenses.
a. In the event that Director employs his own counsel
pursuant to Section 6(b)(i) through (iii) above, the Corporation shall advance
to Director, 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 Director for such expenses;
and
b. Director agrees that Director will reimburse the
Corporation for all reasonable expenses paid by the Corporation in defending any
civil or criminal action, suit or proceeding against Director in the event and
only to the extent it shall be ultimately determined by a final judicial
decision (from which there is no right of appeal) that Director is not entitled,
under applicable law, the Bylaws, this Agreement or otherwise, to be indemnified
by the Corporation for such expenses.
c. Notwithstanding the foregoing, the Corporation shall not
be required to advance such expenses to Director if Director (i) commences any
action, suit or proceeding as a plaintiff unless such advance is specifically
approved by a majority of the Board of Directors or (ii) is a party to an
action, suit or proceeding brought by the Corporation and approved by a majority
of the Board which alleges willful misappropriation of corporate assets by
Director, disclosure of
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confidential information in violation of Director's fiduciary or contractual
obligations to the Corporation, or any other willful and deliberate breach in
bad faith of Director's duty to the Corporation or its shareholders.
8. Enforcement. In the event Director is required to bring any
action to enforce rights or to collect moneys due under this Agreement and is
successful in such action, the Corporation shall reimburse Director for all of
Director's reasonable fees and expenses in bringing and pursuing such action.
9. Subrogation. In the event of payment under this Agreement,
the Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of Director, who shall execute all documents required and
shall do all acts that may be necessary to secure such rights and to enable the
Corporation effectively to bring suit to enforce such rights.
10. Non-Exclusivity of Rights. The rights conferred on Director
by this Agreement shall not be exclusive of any other right which Director may
have or hereafter acquire under any statute, provision of the Corporation's
Certificate of Incorporation or Bylaws, agreement, vote of stockholders or
directors, or otherwise, both as to action in his official capacity and as to
action in another capacity while holding office.
11. Survival of Rights. The rights conferred on Director by
this Agreement shall continue after Director has ceased to be a director,
officer, employee or other agent of the Corporation and shall inure to the
benefit of Director's heirs, executors and administrators.
12. Severability. 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 invalid or unenforceable for any reason,
such invalidity or unenforceability shall not affect the validity or
enforceability of the other provisions hereof.
13. Governing Law. This Agreement shall be interpreted and
enforced in accordance with the laws of the State of California.
14. Binding Effect. This Agreement shall be binding upon
Director and upon the Corporation, its successors and assigns, and shall inure
to the benefit of Director, his heirs, personal representatives and assigns and
to the benefit of the Corporation, its successors and assigns.
15. Amendment and Termination. No amendment, modification,
termination or cancellation of this Agreement shall be effective unless in
writing signed by both parties hereto.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on and as of the day and year first above written.
BROADCOM CORPORATION
By
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Xxxxx X. Xxxxxxxx
President and Chief Executive Officer
DIRECTOR
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