EXHIBIT 99.4
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is made as of this ____ day
of ________, 1994 by and between Magma Power Company, a Nevada corporation
(the "Company") and ________________________ ("Indemnitee").
WHEREAS, highly competent persons are becoming more reluctant to serve
publicly-held corporations as directors unless they are provided with
adequate protection through insurance or adequate indemnification against
inordinate risks of claims and actions against them arising out of their
service to and activities on behalf of the corporation; and
WHEREAS, the current impracticability of obtaining adequate insurance and
the uncertainties relating to indemnification have increased the difficulty
of attracting and retaining such persons;
WHEREAS, the Board of Directors of the Company has determined that the
inability to attract and retain such persons is detrimental to the best
interests of the Company's stockholders and that the Company should act to
assure such persons that there will be increased certainty of such protection
in the future; and
WHEREAS, Indemnitee is willing to serve and continue to serve as a
director of the Company on the condition that he be so indemnified;
NOW, THEREFORE, the Company and Indemnitee hereby agree as follows:
1. Indemnification.
(a) Third Party Proceedings. The Company shall indemnify 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
director of the Company or any subsidiary of the Company, by reason of any
action or inaction on the part of Indemnitee while a director of the Company
or any subsidiary of the Company, by reason of the fact that the Indemnitee is
or was an officer of the Company or any subsidiary of the Company, or by
reason of the fact that Indemnitee is or was serving at the request of the
Company as a director of another corporation or other enterprise, against
expenses (including without limitation attorneys' fees, disbursements and
retainers, accounting and witness fees, travel and deposition costs,
expenses of investigations, judicial or administrative proceedings or appeals
actually and reasonably incurred by him in connection with the defense or
settlement thereof), judgments, fines, penalties, excise taxes under the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") 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 its equivalent, shall not, of itself, create
a presumption that Indemnitee did not act in good faith and in a manner which
Indemnitee reasonably believed to be in the best interests of the Company,
or, with respect to any criminal action or proceeding, had no reasonable cause
to believe that Indemnitee's conduct was unlawful.
(b) Proceedings By or in the Right of the Company. The Company shall
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 of the Company or any subsidiary of the Company, by reason of
any action or inaction on the part of Indemnitee while a director of the
Company or any
subsidiary of the Company, by reason of the fact that the Indemnitee is or was
an officer of the Company or any subsidiary of the Company, or by reason of the
fact that Indemnitee is or was serving at the request of the Company as a
director of another corporation or other enterprise, against expenses (including
without limitation attorneys' fees, disbursements and retainers, accounts and
witness fees, travel and deposition costs, expenses of investigation, judicial
or administrative proceedings, or appeals actually and reasonably incurred by
him in connection with the defense or settlement thereof) 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 adjudged 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. Agreement to Serve. Indemnitee agrees to continue to serve as a director
of the Company and/or the Company's subsidiaries, as the case may be, so long as
he is duly appointed or elected and qualified in accordance with the applicable
provisions of the By-laws of the Company or any subsidiary of the Company or
until such time as he tenders his registration in writing. Nothing contained in
this Agreement is intended to create in Indemnitee any right to continued
employment.
3. Expenses; Indemnification Procedure.
(a) Advancement of Expenses. The Company shall advance all expenses incurred
by Indemnitee in connection with the investigation, defense, settlement or
appeal of any civil or criminal action or proceeding referenced herein (but only
amounts actually paid in settlement of any such action or proceeding).
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 twenty (20) days
following delivery of a written request therefor by Indemnitee to the Company.
(b) Notice/Cooperation by Indemnitee. Indemnitee shall give the Company
notice in writing as soon as practicable of any claim made against Indemnitee
for which indemnification will or could be sought under this Agreement. Notice
to the Company shall be directed to the President 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 the 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. The
omission to so notify the Company will not relieve the Company from any
liability which it may have under this Agreement or otherwise. 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 under this Agreement, other than pursuant
to Section 4, shall be made no later than 45 days after receipt by the Company
of the written request of Indemnitee, accompanied by substantiating
documentation, unless a determination is made within said 45-day period by (1)
the Board of Directors by a majority vote of a quorum consisting of directors
who are or were not parties to such Proceeding, or (2) independent legal counsel
in a written opinion (which counsel shall be appointed if such quorum is not
obtainable), that Indemnitee has not met the relevant standards for
indemnification set forth herein.
In the event the Company does not indemnify Indemnitee within such 45-day
period, whether or not the Company (including its Board of Directors or
independent legal counsel) has made a determination that
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Indemnitee has not met the applicable standard of conduct, Indemnitee may at any
time thereafter bring suit against the Company to recover the unpaid amount in
any court of competent jurisdiction. The burden of proving by clear and
convincing evidence that indemnification is not appropriate shall be on the
Company. Neither the failure of the Company (including its Board of Directors or
independent legal counsel) 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 Company (including its Board of Directors or independent
legal counsel) that Indemnitee has not met such 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 reasonably
incurred in connection with successfully establishing his right to
indemnification hereunder, in whole or in part, shall also be indemnified by the
Company.
(d) Notice to Insurers. If, at the time of receipt of a notice of a claim
pursuant to Section 3(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.
4. Additional Indemnification Rights; Nonexclusivity.
(a) Scope. Notwithstanding any other provision of this Agreement, the
Company 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 or any subsidiary's
Articles of Incorporation, the Company's or any subsidiary'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 Nevada
corporation to indemnify a member of its board of directors, 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 Nevada corporation to
indemnify a member of its Board of Directors, 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 shall not
be deemed exclusive of any rights to which Indemnitee may be entitled under the
Company's Articles of Incorporation, its Bylaws, any agreement, any vote of
shareholders or disinterested directors, the General Corporation Law of the
State of Nevada, 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 or
other covered proceeding.
5. Partial Indemnification. If Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a portion of the
judgments, fines, penalties, ERISA excise taxes or amounts paid in settlement
actually or reasonably incurred by him in any civil or criminal action or
proceeding, or the settlement thereof, but not, however, for the total amount
thereof, the Company shall nevertheless indemnify Indemnitee for the portion of
such judgments, fines, penalties, ERISA excise taxes or amounts paid in
settlement to which Indemnitee is entitled and shall indemnify Indemnitee for
100% of the expenses (including without limitation attorneys' fees,
disbursements and retainers, accounting and witness fees, travel and deposition
costs, expenses of investigations, judicial or administrative proceedings or
appeals) actually and reasonably incurred by him in connection with the defense
of any such civil or criminal action or proceeding.
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6. Mutual Acknowledgment. Both the Company and Indemnitee acknowledge that
in certain instances, Federal law or applicable public policy may prohibit the
Company from indemnifying its directors 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.
7. Directors' and Officers' Liability Insurance. The Company shall, from
time 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.
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, or if the coverage
provided by such insurance is limited by exclusions so as to provide an
insufficient benefit.
8. Severability. Nothing in this Agreement is intended to require 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 8. 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.
9. Exceptions. Any other provision herein to the contrary notwithstanding,
the Company shall not be obligated pursuant to the terms of this Agreement:
(a) Claims Initiated by Indemnitee. To indemnify or advance expenses 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, under any provision of the Articles of Incorporation or the
Bylaws of the Company or under or any of the Nevada General 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
(b) Lack of Good Faith. To indemnify Indemnitee for any expenses
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
(c) Insured Claims. To indemnify Indemnitee for expenses or liabilities
of any type whatsoever (including, but not limited to: judgments, fines,
penalties or ERISA excise taxes, and amounts paid in settlement) which have
been paid directly to Indemnitee by an insurance carrier under a policy of
directors' and officers' liability maintained by the Company; or
(d) Claims Under Section 16(b). To indemnify Indemnitee for expenses 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 provisions of any federal, state or local
statutory law; or
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(e) To indemnify the Indemnitee for any expenses or liabilities of any
type whatsoever (including but not limited to: judgments, fines, penalties
or ERISA excise taxes and amounts paid in settlement) for which the
Indemnitee has been or is indemnified by the Company otherwise than pursuant
to this Agreement.
10. Effectiveness of Agreement. This Agreement shall be effective as of the
date set forth on the first page and will apply to acts or omissions of
Indemnitee which occurred prior to such date if Indemnitee was a director of
the Company at the time such act or omission occurred.
11. Construction of Certain Phrases. 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 with, if its separate
existence had continued, would have had power and authority to indemnify its
directors so that if Indemnitee is or was a director of such constituent
corporation, or is or was serving at the request of such constituent corporation
as a director of another corporation 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.
12. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original.
13. Successors and Assigns. This Agreement shall be binding upon the Company
and its successors and assigns, and shall inure to the benefit of Indemnitee
and Indemnitee's estate, heirs, legal representatives and assigns.
14. Attorneys' Fees. In the event that any action is instituted by
Indemnitee under this Agreement to enforce or interpret any of the terms hereof,
Indemnitee shall be entitled to be paid all court 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 court costs and expenses, including 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 the Indemnitee's material defenses
to such action were made in bad faith or were frivolous.
15. Notice. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and receipted for by the party addressee, on the date of
such receipt, or (ii) if mailed by domestic certified or registered mail with
postage prepaid, on the third business day after the date postmarked. Addresses
for notice to either party are as shown on the signature page of this Agreement,
or as subsequently modified by written notice.
16. Consent to Jurisdiction. The Company and Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of the State of Nevada 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 Nevada.
17. Choice of Law. This Agreement shall be governed by and its provisions
construed in accordance with the laws of the State of Nevada as applied to
contracts between Nevada residents entered into and to be performed entirely
within Nevada.
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18. Subrogation. In the event of any payment under this Agreement to or
on behalf of the Indemnitee, the Company shall be subrogated to the extent
of such payment to all of the rights of recovery of the Indemnitees against
any person, firm, corporation or other entity (other than the Company) and
the Indemnitee shall execute all papers requested by the Company and shall
do any and all things that may be necessary or desirable to secure such
rights for the Company, including the execution of such documents necessary
or desirable to enable the Company to effectively bring suit to enforce
such rights.
19. Subject Matter and Parties. The intended purpose of this Agreement is
to provide for indemnification and advancement of expenses, and this Agreement
is not intended to affect any other aspect of any relationship between the
Indemnitee and the Company and is not intended to and shall not create any
rights in any person as a third party beneficiary hereunder.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
Magma Power Company
4365 Executive Drive, Suite 900
San Diego, CA 92121
By: _____________________________
Title: _____________________________
AGREED TO AND ACCEPTED:
INDEMNITEE:
- -----------------------------------
(type name)
- -----------------------------------
(signature)
- -----------------------------------
- -----------------------------------
(address)
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