You and the Company agree:
Background and Purposeb4201b2bc614299146b6687faf93a5b46711053466e01b2419fac29b685a48e7
Serving as a director, officer, or key employee of a corporation brings risk of involvement in lawsuits and other legal matters. Some refuse to serve in those roles without the corporation's promise to pay for their attorney fees and other expenses, called Indemnification. Because those expenses can be great, some refuse to serve in those roles without the corporation's promise to advance expenses to them, so they do not have to pay out of their own pocket, called Advancement.
Directors, officers, and key employees of Delaware corporations like the Company can get Indemnification and Advancement in a few ways:
The current Delaware General Corporation Law, as interpreted by Delaware courts (the Corporation Law) addresses Indemnification and Advancement in section 145. 145(c) requires Indemnification in some situations, called Required Indemnification. 145(a) and 145(b) allow, but do not require, Indemnification in other situations, called Allowed Indemnification. 145(e) allows, but does not require, Advancement in some situations, called Allowed Advancement.
The corporation may purchase a directors and officers liability insurance policy, or D&O Policy.
The corporation may give Indemnification or Advancement in its certificate of incorporation, bylaws, or in an agreement.
The purpose of the Agreement is to promise You Indemnification and Advancement You need to serve with the Company.
Subject to You Must Give Notice, the Company promises You and Yours the following Indemnification.
Legal Matters Related to the Company63b10bf654c208b775f426e58ca42d7f0ce2e1e1503ea1151eddf7aac0f399b9
The Company promises You and Yours all Required Indemnification and Allowed Indemnification the Corporation Law allows, except the Company does not promise any Indemnification for Expenses of any Legal Matter that You start without approval of the Board.
Enforcing the Agreemente9089f732d61d50b5c9f94e2b54768aa228fff725f2dedbf61ccfd3ee83569eb
The Company promises You and Yours Indemnification and Advancement for Expenses of suing the Company to successfully enforce Your rights to Indemnification or Advancement under the Agreement, another agreement, or Company Governing Documents.
Subject to You Must Give Notice, the Company promises You and Yours all Allowed Advancement the Corporation Law allows.
Service as a Witnessb1f65cba2f00ffa2469807a06b7655142f60e22714c71e635ce1d40510bb7831
The Company promises You Indemnification and Advancement for Expenses of serving as a witness because of Your service as a director, officer, employee, or agent of the Company in any Legal Matter that You are not a party to.
"Expenses" in the Corporation Law8579ec236703e47d11cf78203b91fdb57704c2e57554572b58ae64287944d955
The Corporation Law uses the term "expenses", but does not define it. For purposes of determining the scope of Indemnification and Advancement under the Agreement, "expenses" in the Corporation Law means the same as Expenses in the Agreement.
"Independent Legal Counsel" in the Corporation Law4882f60d488cecd0ec885d073276d7eb00a43396e041bc298a40e4da8438524d
The Corporation Law uses the term "independent legal counsel", but does not define it. For purposes of determining the scope of Indemnification and Advancement under the Agreement, "independent legal counsel" in the Corporation Law means the same as Independent Lawyer in the Agreement.
Notice for Indemnification78faa9ab9906d1746fa1c3af3d692cc21badd78c05f661b4ecc8ac95ec770a15
To exercise any right to Indemnification under the Agreement, You must first give the Company Notice of the amount covered by Indemnification.
Notice and Undertaking for Advancementd651169a485432fbaa182df55c59faf4b047c365c9667cf350c9c03738028d45
To exercise any right to Advancement under the Agreement, You must first give the Company Notice of Expenses to advance and an undertaking using Undertaking Form, whether the Corporation Law requires an "undertaking" or not. You do not need to include any information in a written claim for Expenses that Your attorney believes protected by attorney-client privilege.
Under the Corporation Law, payment under Required Indemnification and Allowed Indemnification require a decision that the person receiving Indemnification met a particular Standard of Conduct involving "good faith", "the best interests of the corporation", and no intent to break the law.
You may give the Company Notice of Your right to Indemnification under Legal Matters Related to the Company after a final, non-appealable decision in the Legal Matter. On receiving Your Notice, the secretary of the Company will write the Board about it, and the Company will promptly determine if You met the Standard of Conduct by one of the methods or described by the Corporation Law. However, if a Change of Control has happened since the date of the Agreement, the decision will instead be made by Independent Lawyer You choose in a written opinion to the Board. The Company promises to provide You a copy of Independent Lawyer's opinion. The Company promises to pay all expenses of deciding whether You meet the Standard of Conduct, however it decides.
145(a) of the Corporation Law prevents termination of Legal Matter from creating any presumption that You did not meet the Standard of Conduct for Required Indemnification. No termination of any Legal Matter described by 145(a), or any part of a Legal Matter, will create any presumption that You did not meet the Standard of Conduct for Allowed Indemnification under the Agreement, either.
The Company will consider only what You do and do not do, and not what others, who may also have Indemnification, do or do not do, in deciding whether You get Indemnification or Advancement.
Handling Legal Matters0479d6aa7f3396deb85dca223a6019e60d7aa7b4bb0d6fd9325bc23618f9fcea
You Must Give Noticeb90bb86486d60e64f8e1fa69423c48c0fdfcc61955d7e0ae4e7618abc1a1b483
You promise to give the Company prompt Notice of any Legal Matter that may be covered by Indemnification or Advancement under the Agreement. Your failure to give Notice will not relieve Company from any liability to You, but the Company will not pay Expenses You incur before giving Notice under Indemnification or Advancement.
Taking Over Defense119f8a710bd35ec4782b3c36ef190eccb336c9e62eec371110ef74dcc81daf71
any Legal Matter brought by or on behalf of the Company
any Conflicted Legal Matter
the Company may take over the defense of any Legal Matter covered by Indemnification or Advancement under the Agreement, alone or with others providing Indemnification, by giving You Notice. The Company will not pay You for any Expenses for a Legal Matter incurred after the Company takes over the defense, except the Company will pay Expenses for Your own lawyer in any of these situations:
The Company agrees in writing to pay for Your lawyer.
The Legal Matter becomes a Conflicted Legal Matter.
The Company fails to hire its own counsel to defend the Legal Matter within 60 days of giving You Notice that it has taken over the defense.
The Company will not pay any amount under a settlement without Company Permission. The Company will not agree to any settlement that would penalize, limit, or require payment from You without Your Permission. Neither You nor the Company will unreasonably refuse to give Permission to agree to a settlement.
Taking on Rights to Payment from Otherse463114d34a25f33ed271ba6e4c474e504c509553332c610d2edeea31761691f
These provisions address "subrogation":
When the Company pays You any amount under the Agreement, the Company will take on any rights You have to recover that amount from another. You promise to help the Company exercise these rights, by signing documents so the Company can sue and otherwise.
When You pay any amount covered by Advancement under the Agreement that the Company does not advance, and when You incur any Expenses or other amount covered by Indemnification under the Agreement, You will take on any rights the Company has to recover those amounts from another to the same extent as if the Company had paid that amount under the Agreement.
Deadlines and Your Rightsd4fcff56b545678646e599d932fb4b9b8ba04779b517e0b6cb0a405d51cc8781
You may sue the Company in the Delaware Court of Chancery if any of these happen:
Eligibility Decision Against Youb6af56b8e3ffa78d635695842197166b4d1ea9e98126bb163e01b2b614976199
It is decided that You did not meet the Standard of Conduct under Eligibility.
No Eligibility Decision8e19fb0d2cbc25109821c73637703a28c99703f3b14b2927602a02ec0e022a1e
There is no decision about whether You met the Standard of Conduct under Eligibility within 60 days of the Company receiving Notice under Process.
Late Indemnification Payment534cbdb2b617f20cfa3fe23ea77c1700d785b11618999ce362a0ed1c3af73692
The Company does not pay money covered by Indemnification under Legal Matters Related to the Company within 15 days of decision that You met the Standard of Conduct under Eligibility.
Other Late Indemnification Payment338551d8cc03f91fafae95247d88d8f9f4a3b72b08bb6873c00c57f1d24f1335
The Company does not pay money covered by Indemnification under Enforcing the Agreement or Service as a Witness within 15 days of receiving Your Notice under Notice for Indemnification.
Lawsuits About Eligibility3321c69966d46dc4d9a85825c7086ad956c5ad9883b58b89126b2f7ccf376ebc
The Company promises to "stipulate", or agree, that these rules apply in any lawsuit under Eligibility Decision Against You, No Eligibility Decision, or Late Indemnification Payment:
If either a decision was made under Eligibility that You did not meet the Standard of Conduct or no decision was made, the lawsuit will address the Standard of Conduct anew, without use of any prior decision about the Standard of Conduct or failure to make a decision as evidence, or against You in any other way. If You seek Indemnification for a criminal matter, the Company will have to prove that You did not meet the Standard of Conduct by "clear and convincing evidence", and otherwise by "preponderance of the evidence".
If a decision was made under Eligibility that You met the Standard of Conduct, the Company will not claim that You did not meet the Standard of Conduct unless You mislead those who made the decision, directly or by omission.
After Your Service05e2e744bcb8afe23d8fa730b5fec7d582d47abd982e87aeddd3ef7284aef8ed
Indemnification and Advancement under the Agreement will continue if You are no longer a director, officer, employee, or agent of the Company, and the benefits will go to Your estate if You pass away.
Other Sources of Protection05aca9a3ab7420d49f5ce1ac947da985ed9248a79cc5e24e2b203240305d18c2
Indemnification and Advancement under the Agreement do not exclude other rights You may have under law, Company Governing Documents, a vote of the stockholders of the Company, or otherwise. The Agreement does not change other agreements You may have with the Company.
The Company promises to name You as an insured in any D&O Policy is purchases, so that You have rights under the D&O Policy on par with other named insureds serving in similar Company roles. The Company promises to give You prompt Notice of any decision not to provide D&O Policy coverage, and if any D&O Policy lapses or terminates.
The Company, on its own behalf and that of any successor, promises to continue (or purchase) and continue a Tail Policy for at least the 6 years immediately following any Change of Control. A Tail Policy is a D&O Policy that covers You for wrongful acts on or before the Change of Control, without any bad effect on Your rights under the Agreement, that the insurer cannot cancel for any reason but failure to pay its premium.
If You ever have rights to Indemnification or Advancement, or a D&O Policy, through an investment fund or other entity on behalf of which You serve the Company (Fund Indemnification), then:
The Company promises that it will be "indemnitor of first resort", so that its Indemnification and Advancement obligations to You are primary and Fund Indemnification secondary.
The Company will pay and advance all amounts covered by Indemnification and Advancement under the Agreement, any other agreement with the Company, and Company Governing Documents, ignoring Fund Indemnification.
The Company waives any claim against providers of Fund Indemnification for contribution, subrogation, or any other, related recovery.
If providers of Fund Indemnification advance or pay You any amount covered by Indemnification or Advancement from the Company, that will not affect the Company's obligations, and providers of Fund Indemnification will have rights of contribution and subrogation from the Company for the amounts they paid.
Providers of Fund Indemnification are entitled to the benefits of Investment Funds as third-party beneficiaries.
Words and Phrasesd9cb7e2f34fd069c2c2eff3fb914449abe978289a3de6456df37a4b9740f947c
Throughout the Agreement:
Asset Sale means the Company sells all or substantially all the Company's assets to other than an Excluded Entity.
Board means the board of directors of the Company.
Business Entity means corporation, limited liability company, or other legal entity.
Change of Control means any of these:
an Asset Sale
The Company merges, consolidates, or changes, by other capital reorganization or business combination transaction, with or into into another Business Entity, other than an Excluded Entity.
any transaction or series of related transactions are consummated in which any "person" (as used in Sections 13(d) and 14(d) of the Exchange Act) becomes the "beneficial owner" (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of all the Company's then outstanding voting securitiesHowever, a transaction will not constitute a Change of Control if its purpose is any of these:
Change the jurisdiction of the Company's incorporation.
Create a holding company owned in substantially the same proportions by the those who hold the Company's securities immediately before the transaction.
Fund the Company in a financing approved by the Board.
Company Governing Documents means the certificate of incorporation of the Company and the bylaws of the Company.
Conflicted Legal Matter means a legal matter in which both You and Your lawyer, in a written opinion to the Company, reasonably conclude that You and the Company have a conflict of interest.
Exchange Act means the Securities Exchange Act of 1934.
Excluded Entity means, for a transaction, any Business Entity that, immediately after the transaction, will be in Voting Control of Persons who held capital stock of the Company immediately before the transaction.
Expenses means all of the following reasonable attorneys' fees, retainers, court costs, transcript costs, fees of experts, witness fees, advisory fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, bond premiums, the costs of collecting, processing, producing, and hosting electronic materials and documents, and all other disbursements or expenses of the types customarily incurred in connection with investigating, prosecuting, and defending a Legal Matter, or preparing to do those things, plus any other kinds of direct and indirect costs.
Independent Lawyer means a lawyer (or law firm) with experience in Delaware corporation law that has not represented You, the Company, or anyone else involved in the Legal Matter during the last five years, but could represent either You or the Company in a Legal Matter to determine Your rights under the Agreement without any conflict of interest.
Legal Matter means any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative. An internal investigation that You receive a warning about under Upjohn Co. v. United States is a Legal Matter.
Permission means advance Notice of permission.
Person (plural, Persons) means a natural person or Business Entity.
Voting Control means ownership of securities of a Business Entity that represent most of the votes entitled to be cast by all outstanding voting securities of that Business Entity.
You and Yours mean You, as well as the members of Your immediate family and Your spouse, representatives, guardians, conservators, estate, executors, administrators, trustees, to the extent they or their property are subject to a Legal Matter covered by Indemnification or Advancement by the Company.
The validity, interpretation, construction, and performance of this agreement, all acts and transactions under this agreement, and the rights and obligations of the parties to this agreement, will be governed, construed, and interpreted under the laws of the State of Delaware, without giving effect to principles of conflicts of law.
Not an Employment Agreementd8a17e70b759713bd8fd5369625528e4f44a6f37c95536a15189730bc55f6415
The Agreement is not an employment agreement. The Agreement does not require You to continue service in any role with the Company.
This agreement states the entire agreement and understanding of the parties on its subject matter, and supersedes all prior or contemporaneous discussions, understandings, and agreements between the parties, oral or written, on that subject matter.
Amendments and Waivers207fa40a985a456d275e7895ec0724e31c6b53b73a0b59ef79c8253b4c192d98
No change or amendment to this agreement, nor any waiver of any rights under this agreement, will be effective unless written and signed by the parties. No delay or failure to require performance of any obligation under this agreement will constitute a waiver, then or in the future.
Successors and Assigns68c9e06d3397193e09beaf05c7ffcce7180a2aa69550e6e0a9e8719fbb8b898d
Except as otherwise provided in this agreement, this agreement, and the rights and obligations of the parties to this agreement, will be binding on and inure to the benefit of their respective successors, assigns, heirs, executors, administrators, and legal representatives. The Company may assign any of its rights and obligations under this agreement. No other party to this agreement may assign or delegate, whether voluntarily or by operation of law, any of its rights or obligations under this agreement, except with the prior written consent of the Company. Any assignment or delegation in violation of this agreement is void.
Any notice, demand, or request required or allowed by this agreement (Notice) will be in writing and will be deemed given when delivered personally or by overnight courier or sent by e-mail, or 48 hours after being deposited in the U.S. mail as certified or registered mail with postage prepaid, addressed to the party to be notified at such party's address as written on the signature page, as later modified by written notice, or if no address is specified for the Company on the signature page, at the most recent address recorded in the Company's books and records.
If one or more provisions of this agreement are held unenforceable, the parties agree to renegotiate those provisions in good faith. If the parties cannot agree on enforceable replacements, then those provisions shall be excluded from this agreement, the rest of this agreement shall be interpreted as if the provisions were excluded, and this agreement shall be enforceable in accordance with its remaining terms.
This agreement is the result of negotiations between the parties, and has been reviewed by each of them and their respective counsel, if any. This agreement will be deemed product of all the parties, not to construed against any of them for playing any greater part in its preparation.
This agreement may be executed in any number of counterparts, each of which, when signed and delivered, will be deemed an original, and all of which together will constitute one and the same agreement. Execution of a facsimile copy will have the same effect as signing an original, and a facsimile signature will be deemed an original and valid signature.