EXHIBIT 10.1
INTERNET TRAVEL NETWORK
INDEMNIFICATION AGREEMENT
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This Indemnification Agreement ("Agreement") is made as of this ___ day of
_________, 1999, by and between Internet Travel Network, a California
corporation (the "Company"), and the indemnitees on the signature page hereto
(each individually referred to as an "Indemnitee").
WHEREAS, the Company and Indemnitee recognize the increasing difficulty in
obtaining directors' and officers' liability insurance, the significant
increases in the cost of such insurance and the general reductions in the
coverage of such insurance;
WHEREAS, the Company and Indemnitee further recognize the substantial
increase in corporate litigation in general, subjecting officers, directors and
major shareholders to expensive litigation risks at the same time as the
availability and coverage of liability insurance has been severely limited;
WHEREAS, the Company desires to attract and retain the services of highly
qualified individuals, such as Indemnitee or its representatives, to serve as
officers and directors of the Company and to indemnify its officers, directors
and major shareholders so as to provide them with the maximum protection
permitted by law; and
WHEREAS, the Company and Indemnitee believe that additional protection
should be made available to the current officers, directors and shareholders of
the Company in order to induce Indemnitee and the other officers, directors and
shareholders of the Company to continue to serve as, or have their
representatives serve as, officers and directors.
NOW, THEREFORE, the Company and Indemnitee hereby agree as follows:
1. Indemnification.
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(a) Third Party Proceedings. The Company shall indemnify
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Indemnitee if Indemnitee is or was a party or is threatened to be made
a party to any threatened, pending or completed action or proceeding,
whether civil, criminal, administrative or investigative (other than
an action by or in the right of the Company) by reason of the fact
that Indemnitee is or was a shareholder, director, officer, employee
or agent of the Company, or any subsidiary of the Company, by reason
of any action or inaction on the part of Indemnitee while an officer,
director or shareholder or by reason of the fact that Indemnitee is or
was serving at the request of the Company as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in
settlement (if such settlement is approved in advance by the Company,
which approval shall not be unreasonably withheld) actually and
reasonably incurred by Indemnitee in connection with such action or
proceeding if Indemnitee acted in good faith and in a manner
Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe Indemnitee's conduct
was unlawful. The termination of any action or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or
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its equivalent, shall not, of itself, create a presumption that (i)
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 (ii) with respect to any criminal action or
proceeding, Indemnitee had reasonable cause to believe that
Indemnitee's conduct was unlawful.
(b) Proceedings By or in the Right of the Company. The Company shall
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indemnify Indemnitee if Indemnitee was or is a party or is threatened to be made
a party to any threatened, pending or completed action or proceeding by or in
the right of the Company or any subsidiary of the Company to procure a judgment
in its favor by reason of the fact that Indemnitee is or was a director,
officer, shareholder, employee or agent of the Company, or any subsidiary of the
Company, by reason of any action or inaction on the part of Indemnitee while an
officer, director or shareholder or by reason of the fact that Indemnitee is or
was serving at the request of the Company as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees) and, to the fullest
extent permitted by law, amounts paid in settlement, in each case to the extent
actually and reasonably incurred by Indemnitee in connection with the defense or
settlement of such action or proceeding if Indemnitee acted in good faith and in
a manner Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company and its shareholders, except that no indemnification
shall be made in respect of any claim, issue or matter as to which Indemnitee
shall have been finally adjudicated by court order or judgment to be liable to
the Company in the performance of Indemnitee's duty to the Company and its
shareholders unless and only to the extent that the court in which such action
or proceeding is or was pending shall determine upon application that, in view
of all the circumstances of the case, Indemnitee is fairly and reasonably
entitled to indemnity for expenses and then only to the extent that the court
shall determine.
2. Expenses: Indemnification Procedure.
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(a) Advancement of Expenses. The Company shall advance all
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expenses incurred by Indemnitee in connection with the investigation,
defense, settlement or appeal of any civil or criminal action or
proceeding referenced in Section 1(a) or (b) hereof (but not amounts
actually paid in settlement of any such action or proceeding which
amounts are not considered expenses which can be advanced). Indemnitee
hereby undertakes to repay such amounts advanced only if, and to the
extent that, it shall ultimately be determined that Indemnitee is not
entitled to be indemnified by the Company as authorized hereby. The
advances to be made hereunder shall be paid by the Company to
Indemnitee within forty-five
(45) days following delivery of a written request therefor by
Indemnitee to the Company.
(b) Notice/Cooperation by Indemnitee. Indemnitee shall, as a condition
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precedent to his right to be indemnified under this Agreement, give the Company
notice in writing as soon as reasonably practicable of any claim made against
Indemnitee for which indemnification is or will be sought under this Agreement.
Notice to the Company shall be directed to the Chief Executive Officer of the
Company at the address shown on the signature page of this Agreement (or such
other address as the Company shall designate in writing to Indemnitee). Notice
shall be deemed received three business days after the date postmarked if sent
by domestic certified or registered mail, properly addressed; otherwise notice
shall be deemed received when such notice shall actually be received by the
Company. In addition, Indemnitee shall give the Company such information and
cooperation as it may reasonably require and as shall be within Indemnitee's
power.
(c) Procedure. Any indemnification and advances provided for in
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Section 1 and this Section 2 shall be made no later than forty-five (45) days
after receipt of the written request of Indemnitee. If a claim under this
Agreement, under any statute, or under any provision of the Company's Restated
Articles of Incorporation or Bylaws providing for indemnification, is not paid
in full by the Company within forty-five (45) days after a written request for
payment thereof has first been received by the Company, Indemnitee may, but need
not, at any time thereafter bring an action against the Company to recover the
unpaid amount of the claim and, subject to Section 12 of this Agreement,
Indemnitee shall also be entitled to be paid for the expenses (including
attorneys' fees) of bringing such action. It shall be a defense to any such
action (other than an action brought to enforce a claim for expenses incurred in
connection with any action or proceeding in advance of its final disposition)
that Indemnitee has not met the standards of conduct which make it permissible
under applicable law for the Company to indemnify Indemnitee for the amount
claimed, but the burden of proving such defense shall be on the Company and
Indemnitee shall be entitled to receive interim payments of expenses pursuant to
Subsection 2(a) unless and until such defense may be finally adjudicated by
court order or judgment from which no further right of appeal exists. It is the
parties' intention that if the Company contests Indemnitee's right to
indemnification, the question of Indemnitee's right to indemnification shall be
for the court to decide, and neither the failure of the Company (including its
Board of Directors, any committee or subgroup of the Board of Directors,
independent legal counsel, or its shareholders) to have made a determination
that indemnification of Indemnitee is proper in the circumstances because
Indemnitee has met the applicable standard of conduct required by applicable
law, nor an actual determination by the Company (including its Board of
Directors, any committee or subgroup of the Board of Directors, independent
legal counsel, or its shareholders) that Indemnitee has not met such applicable
standard of conduct, shall create a presumption that Indemnitee has or has not
met the applicable standard of conduct.
(d) Notice to Insurers. If, at the time of the receipt of a notice of
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a claim pursuant to Section 2(b) hereof, the Company has director and officer
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.
(e) Selection of Counsel. In the event the Company shall be obligated
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under Section 2(a) hereof to pay the expenses of any proceeding against
Indemnitee, the Company, if appropriate, shall be entitled to assume the defense
of such proceeding, with counsel approved by Indemnitee, which approval shall
not be unreasonably withheld, upon the delivery to Indemnitee of written notice
of its election so to do. After delivery of such notice, approval of such
counsel by Indemnitee and the retention of such counsel by the Company, the
Company will not be liable to Indemnitee under this Agreement for any fees of
counsel subsequently incurred by Indemnitee with respect to the same proceeding,
provided that (i) Indemnitee shall have the right to employ his counsel in any
such proceeding at Indemnitee's expense; and (ii) if (A) the employment of
counsel by Indemnitee has been previously authorized by the Company, (B)
Indemnitee shall have reasonably concluded that there may be a conflict of
interest between the Company and Indemnitee in the conduct of any such defense,
or (C) the Company shall not, in fact, have employed counsel to assume the
defense of such proceeding, then the fees and expenses of Indemnitee's counsel
shall be at the expense of the Company.
3. Additional Indemnification Rights: Nonexclusivitv.
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(a) Scope. Notwithstanding any other provision of this
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Agreement, the Company hereby agrees to indemnify the Indemnitee to the
fullest extent permitted by law, notwithstanding that such
indemnification is not specifically authorized by the other provisions
of this Agreement, the Company's Restated Articles of Incorporation,
the Company's Bylaws or by statute. In the event of any change, after
the date of this Agreement, in any applicable law, statute or rule
which expands the right of a California corporation to indemnify a
member of its Board of Directors, an officer, shareholder or other
corporate agent, such changes shall be ipso facto, within the purview
of Indemnitee's rights and Company's obligations, under this Agreement.
In the event of any change in any applicable law, statute or rule which
narrows the right of a California corporation to indemnify a member of
its Board of Directors, an officer, shareholder or other corporate
agent, such changes, to the extent not otherwise required by such law,
statute or rule to be applied to this Agreement shall have no effect on
this Agreement or the parties' rights and obligations hereunder.
(b) Nonexclusivity. The indemnification provided by this Agreement
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shall not be deemed exclusive of any rights to which Indemnitee may be entitled
under the Company's Restated Articles of Incorporation, its Bylaws, any
agreement, any vote of shareholders or disinterested Directors, the Corporation
Law of the State of California, or otherwise, both as to action in Indemnitee's
official capacity and as to action in another capacity while holding such
office. The indemnification provided under this Agreement shall continue as to
Indemnitee for any action taken or not taken while serving in an indemnified
capacity even though he may have ceased to serve in such capacity at the time of
any action, suit or other covered proceeding.
4. Partial Indemnification. If Indemnitee is entitled under any provision
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of this Agreement to indemnification by the Company for some or a
portion of the expenses, judgments, fines or penalties actually or
reasonably incurred by him in the investigation, defense, appeal or
settlement of any civil or criminal action or proceeding, but not,
however, for the total amount thereof, the Company shall nevertheless
indemnify Indemnitee for the portion of such expenses, judgments, fines
or penalties to which Indemnitee is entitled.
5. Mutual Acknowledgment. Both the Company and Indemnitee acknowledge that
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in certain instances, Federal law or applicable public policy may
prohibit the Company from indemnifying its directors, shareholders and
officers under this Agreement or otherwise. Indemnitee understands and
acknowledges that the Company has undertaken or may be required in the
future to undertake with the Securities and Exchange Commission to
submit the question of indemnification to a court in certain
circumstances for a determination of the Company's right under public
policy to indemnify Indemnitee.
6. Officer and Director Liability Insurance. The Company shall, from time
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to time, make the good faith determination whether or not it is practicable for
the Company to obtain and maintain a policy or policies of insurance with
reputable insurance companies providing the officers and directors of the
Company with coverage for losses from wrongful acts, or to ensure the Company's
performance of its indemnification obligations under this Agreement. Among other
considerations, the Company will weigh the costs of obtaining such insurance
coverage against the protection afforded by such coverage. In all policies of
director and officer liability insurance, each Indemnitee serving in the
capacity as a director shall be named as an insured in such a manner as to
provide such Indemnitee the same rights and benefits as are accorded to the most
favorably insured of the Company's directors, if Indemnitee is a director; or of
the Company's officers, if Indemnitee is not a director of the Company but is an
officer; or of the Company's key employees, if Indemnitee is not an officer or
director but is a key employee. Notwithstanding the foregoing, the Company shall
have no obligation to obtain or maintain such insurance if the Company
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, if the coverage provided by such insurance is limited by exclusions so
as to provide an insufficient benefit, or if Indemnitee is covered by similar
insurance maintained by a subsidiary or parent of the Company.
7. Severability Nothing in this Agreement is intended to require
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or shall be construed as requiring the Company to do or fail to do any
act in violation of applicable law. The Company's inability, pursuant to
court order, to perform its obligations under this Agreement shall not
constitute a breach of this Agreement. The provisions of this Agreement
shall be severable as provided in this Section 7. If this Agreement or
any portion hereof shall be invalidated on any ground by any court of
competent jurisdiction, then the Company shall nevertheless indemnify
Indemnitee to the full extent permitted by any applicable portion of
this Agreement that shall not have been invalidated, and the balance of
this Agreement not so invalidated shall be enforceable in accordance
with its terms.
8. Exceptions. Any other provision herein to the contrary
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notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:
(a) Excluded Acts. To indemnify Indemnitee for any acts or omissions
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or transactions from which a director may not be relieved of liability under the
California General Corporation Law; or
(b) Claims Initiated by Indemnitee. To indemnify or advance expenses
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to Indemnitee with respect to proceedings or claims initiated or brought
voluntarily by Indemnitee and not by way 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 317 of the California Corporation Law, but such indemnification or
advancement of expenses may be provided by the Company in specific cases if the
Board of Directors has approved the initiation or bringing of such suit; or
(c) Lack of Good Faith. To indemnify Indemnitee for any expenses
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incurred by the Indemnitee with respect to any proceeding instituted by
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 not made in good faith or was frivolous; or
(d) Insured Claims. To indemnify Indemnitee for expenses or
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liabilities of any type whatsoever (including, but not limited to, judgments,
fines, ERISA excise taxes or penalties, and amounts paid in settlement) which
have been paid directly to Indemnitee by an insurance carrier under a policy of
officers' and directors' liability insurance maintained by the Company; or
(e) Claims Under Section 16(b). To indemnify Indemnitee for expenses
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and the payment of profits arising from the purchase and sale by Indemnitee of
securities in violation of Section 16(b) of the Securities Exchange Act of 1934,
as amended, or any similar successor statute.
9. Construction of Certain Phrases.
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(a) For purposes of this Agreement, references to the
"Company" shall include, in addition to the resulting corporation, any
constituent corporation (including any constituent of a constituent)
absorbed in a consolidation or merger which, if its separate existence
had continued, would have had power and authority to indemnify its
directors, officers, and employees or agents, so that if Indemnitee is
or was a director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise,
Indemnitee shall
stand in the same position under the provisions of this Agreement with
respect to the resulting or surviving corporation as Indemnitee would
have with respect to such constituent corporation if its separate
existence had continued.
(b) For purposes of this Agreement, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include any
excise taxes assessed on Indemnitee with respect to an employee benefit plan;
and references to "serving at the request of the Company" shall include any
service as a director, officer, employee or agent of the Company which imposes
duties on, or involves services by, such director, officer, employee or agent
with respect to an employee benefit plan, its participants, or beneficiaries;
and if Indemnitee acted in good faith and in a manner Indemnitee reasonably
believed to be in the interest of the participants and beneficiaries of an
employee benefit plan, Indemnitee shall be deemed to have acted in a manner "not
opposed to the best interests of the Company" as referred to in this Agreement.
10. Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall constitute an original.
11. Binding Effect; Successors and Assigns. This Agreement shall be
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binding upon the Company and its successors and assigns (including any
direct or indirect successor by purchase, merger, consolidation or
otherwise to all or substantially all of the business or assets of the
Company), and shall inure to the benefit of Indemnitee and
Indemnitee's estate, heirs, legal representatives and assigns. The
Company shall require and cause any successor (whether direct or
indirect, and whether by purchase, merger, consolidation or otherwise)
to all, substantially all, or a substantial part, of the business or
assets of the Company, by written agreement in form and substance
satisfactory to Indemnitee, expressly to assume and agree to perform
this Agreement in the same manner and to the same extent that the
Company would be required to perform if no such succession had taken
place. This Agreement shall continue in effect regardless of whether
Indemnitee continues to serve as a director, officer, employee or
agent (as applicable) of the Company or of any other enterprise at the
Company's request.
12. Attorneys' Fees. In the event that any action is instituted by
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Indemnitee under this Agreement to enforce or interpret any of the
terms hereof, Indemnitee shall be entitled to be paid all costs and
expenses, including reasonable attorneys' fees, incurred by Indemnitee
with respect to such action, unless as a part of such action, the
court of competent jurisdiction determines that each of the material
assertions made by Indemnitee as a basis for such action were not made
in good faith or were frivolous. In the event of an action instituted
by or in the name of the Company under this Agreement or to enforce or
interpret any of the terms of this Agreement, Indemnitee shall be
entitled to be paid all costs and expenses, including reasonable
attorneys' fees, incurred by Indemnitee in defense of such action
(including with respect to Indemnitee's counterclaims and cross-claims
made in such action), unless as a part of such action the court
determines that each
of Indemnitee's material defenses to such action were made in bad
faith or were frivolous.
13. Notice. All notices, requests, demands and other communications under
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this Agreement shall be in writing, shall be effective upon receipt,
and shall be delivered by Federal Express or a similar courier,
personal delivery, certified or registered air mail, or by facsimile
transmission. Addresses for notice to either party are as shown on the
signature page of this Agreement, or as subsequently modified by
written notice.
14. Consent to Jurisdiction. The Company and Indemnitee each hereby
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irrevocably consent to the jurisdiction of the courts of the State of
California for all purposes in connection with any action or
proceeding which arises out of or relates to this Agreement and agree
that any action instituted under this Agreement shall be brought only
in the state courts of the State of California.
15. Choice of Law. This Agreement shall be governed by and its provisions
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construed in accordance with the laws of the State of California, as
applied to contracts between California residents entered into and to
be performed entirely within California.
16. Severability. The provisions of this Agreement shall be severable in
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the event that any of the provisions hereof (including any provision
within a single section, paragraph or sentence) are held by a court of
competent jurisdiction to be invalid, void or otherwise unenforceable,
and the remaining provisions shall remain enforceable to the fullest
extent permitted by law. Furthermore, to the fullest extent possible,
the provision of this Agreement (including, without limitations, each
portion of this Agreement containing any provision held to be invalid,
void or otherwise unenforceable, that is not itself invalid, void or
unenforceable) shall be construed so as to give effect to the intent
manifested by the provision held invalid, illegal or unenforceable.
17. Subrogation. In the event of payment under this Agreement, the Company
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shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee, who shall execute all documents required
and shall do all acts that may be necessary to secure such rights and
to enable to corporation effectively to bring suit to enforce such
rights.
18. Continuation of Indemnification. All agreements and obligations of the
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Company contained herein shall continue during the period that
Indemnitee is a director, officer or agent of the Company and shall
continue thereafter so long as Indemnitee shall be subject to any
possible claim or threatened, pending or completed action, suit or
proceeding, whether civil, criminal, arbitrational, administrative or
investigative, by reason of the fact that Indemnitee was serving in
the capacity referred to herein.
19. Amendment and Termination. Subject to Section 17, no amendment,
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modification, termination or cancellation of this Agreement shall be
effective unless in writing signed by both parties hereto.
20. Integration and Entire Agreement. This Agreement sets forth the entire
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understanding between the parties hereto and supersedes and merges all
previous written and oral negotiations, commitments, understandings
and agreements relating to the subject matter hereof between the
parties hereto.
21. No Construction as Employment Agreement. Nothing contained in this
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Agreement shall be construed as giving Indemnitee any right to be
retained in the employ of the Company or any of its subsidiaries or
affiliated entities.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
[COMPANY NAME]
By: _____________________________
Title:___________________________
AGREED TO AND ACCEPTED
INDEMNITEES
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