EXHIBIT 10.5
DIRECTOR INDEMNIFICATION AGREEMENT
This Agreement is made as of the 20th day of August 2001, by and between Engage,
Inc., a Delaware corporation (the "Corporation), and ___________ ("Indemnitee"),
a director of the Corporation.
WHEREAS, it is essential to the Corporation to retain and attract as directors
the most capable persons available, and
WHEREAS, it is the express policy of the Corporation to indemnify its directors
so as to provide them with the maximum possible protection permitted by law, and
WHEREAS, Indemnitee does not regard the protection available under the
Corporation's Certificate of Incorporation and insurance as adequate in the
present circumstances, and may not be willing to serve or remain as a director
without adequate protection, and
WHEREAS, the Corporation desires Indemnitee to serve, or continue to serve, as a
director of the Corporation.
NOW THEREFORE, the Corporation and Indemnitee do hereby agree as
follows:
1. AGREEMENT TO SERVE. Indemnitee agrees to serve or continue to
serve as a director of the Corporation for so long as he is duly elected or
appointed or until such time as he tenders his resignation in writing.
2. DEFINITIONS. As used in this Agreement:
(a) The term "Proceeding" shall include any threatened,
pending or completed action, suit, or proceeding, whether brought by or in the
right of the Corporation or otherwise and whether of a civil, criminal,
administrative or investigative nature, and any appeal therefrom.
(b) The term "Corporate Status" shall mean the status of a
person who is or was a director of the Corporation, or is or was serving, or has
agreed to serve, at the request of the Corporation, as a director, officer,
partner, trustee, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise.
(c) The term "Expenses" shall include, without limitation,
attorneys' fees, retainers, court costs, transcript costs, fees of experts,
travel expenses, duplicating costs, printing and binding costs, telephone
charges, postage, delivery service fees and other disbursements or expenses of
the types customarily incurred in connection with investigations, judicial or
administrative proceedings or appeals, but shall not include the amount of
judgments, fines or penalties against Indemnitee or amounts paid in settlement
in connection with such matters.
(d) References to "other enterprise" shall include employee
benefit plans; references to "fines" shall include any excise tax assessed with
respect to any employee benefit
plan; references to "serving at the request of the Corporation" shall include
any service as a director, officer, employee or agent of the Corporation 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 a person who acted in good faith and in a manner he
reasonably believed to be in the interests of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the Corporation" as referred to in this
Agreement.
3. INDEMNIFICATION IN THIRD-PARTY PROCEEDINGS. The Corporation
shall indemnify Indemnitee in accordance with the provisions of this Paragraph 3
if Indemnitee was or is a party to or threatened to be made a party to or
otherwise involved in any Proceeding (other than a Proceeding by or in the right
of the Corporation to procure a judgment in its favor) by reason of his
Corporate Status or by reason of any action alleged to have been taken or
omitted in connection therewith, against all Expenses, judgments, fines,
penalties and amounts paid in settlement actually and reasonably incurred by
Indemnitee or on his behalf in connection with such Proceeding, if Indemnitee
acted in good faith and in a manner which he reasonably believed to be in, or
not opposed to, the best interests of the Corporation and, with respect to any
criminal Proceeding, had no reasonable cause to believe that his conduct was
unlawful. The termination of any Proceeding by judgment, order, settlement,
conviction or upon a plea of NOLO CONTENDERE, or its equivalent, shall not, of
itself, create a presumption that Indemnitee did not act in good faith and in a
manner which he reasonably believed to be in, or not opposed to, the best
interests of the Corporation, and, with respect to any criminal Proceeding, had
reasonable cause to believe that his conduct was unlawful.
4. INDEMNIFICATION IN PROCEEDINGS BY OR IN THE RIGHT OF THE
CORPORATION. The Corporation shall indemnify Indemnitee in accordance with the
provisions of this Paragraph 4 if Indemnitee is a party to or threatened to be
made a party to or otherwise involved in any Proceeding by or in the right of
the Corporation to procure a judgment in its favor by reason of his Corporate
Status or by reason of any action alleged to have been taken or omitted in
connection therewith, against all Expenses and, to the extent permitted by law,
amounts paid in settlement actually and reasonably incurred by Indemnitee or on
his behalf in connection with such Proceeding, if he acted in good faith and in
a manner which he reasonably believed to be in, or not opposed to, the best
interests of the Corporation, except that no indemnification shall be made under
this Paragraph 4 in respect of any claim, issue, or matter as to which
Indemnitee shall have been adjudged to be liable to the Corporation, unless and
only to the extent that the Court of Chancery of Delaware shall determine upon
application that, despite the adjudication of such liability but in view of all
the circumstances of the case, Indemnitee is fairly and reasonably entitled to
indemnity for such Expenses as the Court of Chancery shall deem proper.
5. EXCEPTIONS TO RIGHT OF INDEMNIFICATION. Notwithstanding
anything to the contrary in this Agreement, except as set forth in Paragraph 10,
the Corporation shall not indemnify the Indemnitee in connection with a
Proceeding (or part thereof) initiated by the Indemnitee unless the initiation
thereof was approved by the Board of Directors of the Corporation.
Notwithstanding anything to the contrary in this Agreement, the Corporation
shall not indemnify the Indemnitee to the extent the Indemnitee is reimbursed
from the proceeds of insurance, and in the event the Corporation makes any
indemnification payments to the Indemnitee and the Indemnitee is subsequently
reimbursed from the proceeds of insurance, the Indemnitee shall promptly refund
such indemnification payments to the Corporation to the extent of such insurance
reimbursement.
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6. INDEMNIFICATION OF EXPENSES OF SUCCESSFUL PARTY.
Notwithstanding any other provision of this Agreement, to the extent that
Indemnitee has been successful, on the merits or otherwise, in defense of any
Proceeding or in defense of any claim, issue or matter therein, Indemnitee shall
be indemnified against all Expenses incurred by him or on his behalf in
connection therewith. Without limiting the foregoing, if any Proceeding or any
claim, issue or matter therein is disposed of, on the merits or otherwise
(including a disposition without prejudice), without (i) the disposition being
adverse to the Indemnitee, (ii) an adjudication that the Indemnitee was liable
to the Corporation, (iii) a plea of guilty or NOLO CONTENDERE by the Indemnitee,
(iv) an adjudication that the Indemnitee did not act in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Corporation, and (v) with respect to any criminal proceeding, an
adjudication that the Indemnitee had reasonable cause to believe his conduct was
unlawful, the Indemnitee shall be considered for the purposes hereof to have
been wholly successful with respect thereto.
7. NOTIFICATION AND DEFENSE OF CLAIM. The Indemnitee shall notify
the Corporation in writing as soon as practicable of any Proceeding for which
indemnity will or could be sought by him and provide the Corporation with a copy
of any summons, citation, subpoena, complaint, indictment, information or other
document relating to such Proceeding with which he is served; provided that a
failure to provide such notice shall not, in any way, limit the Indemnitee's
rights under this Agreement. With respect to any Proceeding of which the
Corporation is so notified, the Corporation will be entitled to participate
therein at its own expense and/or to assume the defense thereof at its own
expense, with legal counsel reasonably acceptable to the Indemnitee. After
notice from the Corporation to the Indemnitee of its election so to assume such
defense, the Corporation shall not be liable to the Indemnitee for any legal or
other expenses subsequently incurred by the Indemnitee in connection with such
claim, other than as provided below in this Paragraph 7. The Indemnitee shall
have the right to employ his own counsel in connection with such claim, 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 the Indemnitee
unless (i) the employment of counsel by the Indemnitee has been authorized by
the Corporation, (ii) counsel to the Indemnitee shall have reasonably concluded
that there may be a conflict of interest or position on any significant issue
between the Corporation and the Indemnitee 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 counsel for the Indemnitee shall be at the expense of the Corporation, except
as otherwise expressly provided by this Agreement. The Corporation shall not be
entitled, without the consent of the Indemnitee, to assume the defense of any
claim brought by or in the right of the Corporation or as to which counsel for
the Indemnitee shall have reasonably made the conclusion provided for in clause
(ii) above. The Corporation shall not be required to indemnify the Indemnitee
under this Agreement for any amounts paid in settlement of any Proceeding
effected without its written consent. The Corporation shall not settle any
Proceeding in any manner which would impose any penalty or limitation on
Indemnitee without Indemnitee's written consent. Neither the Corporation nor the
Indemnitee will unreasonably withhold their consent to any proposed settlement.
If the Indemnitee is required to testify (in a court proceeding, deposition,
informal interview or otherwise), consult with counsel, furnish documents or
take any other action, by
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reason of the Indemnitee's present or former Corporate Status, in connection
with any Proceeding, whether or not the Indemnitee was or is a party to or
threatened to be made a party to such Proceeding, the Corporation shall pay the
Indemnitee a fee at a per diem rate of $750 (to be prorated in the event of any
partial day), and shall reimburse the Indemnitee for all Expenses; provided that
the Corporation shall not have any obligation under this sentence to pay such
fee or reimburse any such Expense in connection with any Proceeding to the
extent this Agreement expressly entitles the Corporation not to indemnify
Indemnitee for Expenses incurred in that Proceeding.
8. ADVANCEMENT OF EXPENSES. Any Expenses incurred by the
Indemnitee in connection with any such Proceeding to which the Indemnitee was or
is a party or is threatened to be a party by reason of his Corporate Status or
by reason of any action alleged to have been taken or omitted in connection
therewith shall be paid by the Corporation in advance of the final disposition
of such matter; PROVIDED, HOWEVER, that the payment of such Expenses incurred by
the Indemnitee in advance of the final disposition of such matter shall be made
only upon receipt of an undertaking by or on behalf of the Indemnitee to repay
all amounts so advanced in the event that it shall ultimately be determined that
the Indemnitee is not entitled to be indemnified by the Corporation as
authorized in this Agreement. No security shall be required for such an
undertaking, and such undertaking will be accepted without reference to the
Indemnitee's financial ability to make repayment. Such Expenses shall be paid
immediately upon the written request of the Indemnitee to the Corporation.
9. PROCEDURE FOR INDEMNIFICATION. In order to obtain
indemnification pursuant to Paragraphs 3, 4 or 6 of this Agreement, Indemnitee
shall submit to the Corporation a written request, including in such request
such documentation and information as is reasonably available to Indemnitee and
is reasonably necessary to determine whether and to what extent Indemnitee is
entitled to indemnification or advancement of Expenses. Any such indemnification
shall be made promptly, and in any event within 60 days after receipt by the
Corporation of the written request of the Indemnitee, unless with respect to
requests under Paragraphs 3 or 4 the Corporation determines within such 60-day
period that such Indemnitee did not meet the applicable standard of conduct set
forth in Paragraph 3 or 4, as the case may be. Such determination, and any
determination pursuant to Section 8 that advanced Expenses must be repaid to the
Corporation, shall be made in each instance (a) by a majority vote of the
directors of the Corporation consisting of persons who are not at that time
parties to the Proceeding ("disinterested directors"), whether or not a quorum,
(b) by a committee of disinterested directors designated by majority vote of
disinterested directors, whether or not a quorum, (c) if there are no
disinterested directors, or if disinterested directors so direct, by independent
legal counsel (who may, to the extent permitted by applicable law, be regular
legal counsel to the Corporation) in a written opinion, or (d) by the
stockholders.
10. REMEDIES. The right to indemnification and immediate
advancement of Expenses as provided by this Agreement shall be enforceable by
the Indemnitee in any court of competent jurisdiction. Unless otherwise required
by law, the burden of proving that indemnification is not appropriate shall be
on the Corporation. Neither the failure of the Corporation to have made a
determination prior to the commencement of such action that indemnification is
proper in the circumstances because Indemnitee has met the applicable standard
of conduct, nor an actual determination by the Corporation pursuant to Paragraph
9 that Indemnitee has not met such
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applicable standard of conduct, shall be a defense to the action or create a
presumption that Indemnitee has not met the applicable standard of conduct.
Indemnitee's expenses (of the type described in the definition of "Expenses" in
Paragraph 2(c)) reasonably incurred in connection with successfully establishing
his right to indemnification, in whole or in part, in any such Proceeding shall
also be indemnified by the Corporation.
11. PARTIAL INDEMNIFICATION. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Corporation for some or a
portion of the Expenses, judgments, fines, penalties or amounts paid in
settlement actually and reasonably incurred by him or on his behalf in
connection with any Proceeding but not, however, for the total amount thereof,
the Corporation shall nevertheless indemnify Indemnitee for the portion of such
Expenses, judgments, fines, penalties or amounts paid in settlement to which
Indemnitee is entitled.
12. SUBROGATION. In the event of any payment under this Agreement,
the Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of Indemnitee, who shall execute all papers required and take
all action necessary to secure such rights, including execution of such
documents as are necessary to enable the Corporation to bring suit to enforce
such rights.
13. TERM OF AGREEMENT. This Agreement shall continue until and
terminate upon the later of (a) six years after the date that Indemnitee shall
have ceased to serve as a director of the Corporation or, at the request of the
Corporation, as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise or (b) the final
termination of all Proceedings pending on the date set forth in clause (a) in
respect of which Indemnitee is granted rights of indemnification or advancement
of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to
Paragraph 10 of this Agreement relating thereto.
14. INDEMNIFICATION HEREUNDER NOT EXCLUSIVE. The indemnification
and advancement of Expenses provided by this Agreement shall not be deemed
exclusive of any other rights to which Indemnitee may be entitled under the
Certification of Incorporation, the By-Laws, any agreement, any vote of
stockholders or disinterested directors, the General Corporation Law of
Delaware, any other law (common or statutory), or otherwise, both as to action
in his official capacity and as to action in another capacity while holding
office for the Corporation. Nothing contained in this Agreement shall be deemed
to prohibit the Corporation from purchasing and maintaining insurance, at its
expense, to protect itself or the Indemnitee against any expense, liability or
loss incurred by it or him in any such capacity, or arising out of his status as
such, whether or not the Indemnitee would be indemnified against such expense,
liability or loss under this Agreement; provided that the Corporation 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.
15. NO SPECIAL RIGHTS. Nothing herein shall confer upon Indemnitee
any right to continue to serve as a director of the Corporation for any period
of time or at any particular rate of compensation.
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16. SAVINGS CLAUSE. If this Agreement or any portion thereof shall
be invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify Indemnitee as to Expenses, judgments,
fines, penalties and amounts paid in settlement with respect to any Proceeding
to the full extent permitted by any applicable portion of this Agreement that
shall not have been invalidated and to the fullest extent permitted by
applicable law.
17. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall constitute the original.
18. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
the Corporation and its successors and assigns and shall inure to the benefit of
the estate, heirs, executors, administrators and personal representatives of
Indemnitee.
19. HEADINGS. The headings of the paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.
20. MODIFICATION AND WAIVER. This Agreement may be amended from
time to time to reflect changes in Delaware law or for other reasons. 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 provision hereof nor shall any such waiver constitute a continuing waiver.
21. NOTICES. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
given (i) when delivered by hand or (ii) if mailed by certified or registered
mail with postage prepaid, on the third day after the date on which it is so
mailed:
(a) if to the Indemnitee, to:
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(b) if to the Corporation, to:
Engage, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attn: General Counsel
or to such other address as may have been furnished to Indemnitee by the
Corporation or to the Corporation by Indemnitee, as the case may be.
22. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
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23. ENFORCEMENT. The Corporation expressly confirms and agrees
that it has entered into this Agreement in order to induce Indemnitee to
continue to serve as a director of the Corporation, and acknowledges that
Indemnitee is relying upon this Agreement in continuing in such capacity.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
ENGAGE, INC.
By:
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Name:
Title:
INDEMNITEE:
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