EXHIBIT 10.11
FORM OF
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (this "AGREEMENT") is made and entered into,
effective March 28, 2003, by and between Dell Computer Corporation, a Delaware
corporation (the "COMPANY"), and [NAME OF NON-EMPLOYEE DIRECTOR] ("INDEMNITEE").
RECITALS
A. Competent and experienced persons are reluctant to serve or to continue
to serve as directors of corporations unless they are provided with
adequate protection through insurance or indemnification (or both)
against claims against them arising out of their service and activities
as directors.
B. The current uncertainties relating to the availability of adequate
insurance for directors have increased the difficulty for corporations
to attract and retain competent and experienced persons to serve as
directors.
C. The Board of Directors of the Company (the "BOARD") has determined that
the continuation of present trends in litigation will make it more
difficult to attract and retain competent and experienced persons to
serve as directors, that this situation is detrimental to the best
interests of the Company's stockholders and that the Company should act
to assure its directors that there will be increased certainty of
adequate protection in the future.
D. It is reasonable, prudent and necessary for the Company to obligate
itself contractually to indemnify its directors to the fullest extent
permitted by applicable law in order to induce them to serve or
continue to serve as directors of the Company.
E. Indemnitee is a director of the Company and his or her willingness to
continue to serve in such capacity is predicated, in substantial part,
upon the Company's willingness to indemnify him or her to the fullest
extent permitted by the laws of the State of Delaware and upon the
other undertakings set forth in this Agreement.
F. In recognition of the need to provide Indemnitee with substantial
protection against personal liability, in order to procure Indemnitee's
continued service as a director of the Company and to enhance
Indemnitee's ability to serve the Company in an effective manner, and
in order to provide such protection pursuant to express contract rights
(intended to be enforceable irrespective of any amendment to the
Company's Certificate of Incorporation or Bylaws (collectively, the
"CONSTITUENT DOCUMENTS"), any Change of Control (as defined in Section
1(a)) or any change in the composition of the Board), the Company
wishes to provide in this Agreement for the indemnification of and the
advancement of Expenses (as defined in Section 1(c)) to Indemnitee as
set forth in this Agreement.
Now, therefore, for and in consideration of the foregoing premises, Indemnitee's
agreement to continue to serve as a director of the Company and the mutual
covenants and agreements contained herein, the parties hereby agree as follows:
1. CERTAIN DEFINITIONS -- In addition to terms defined elsewhere herein,
the following terms shall have the respective meanings indicated below
when used in this Agreement:
(a) "CHANGE OF CONTROL" shall mean the occurrence of any of the
following events:
(i) The acquisition after the date of this Agreement by
any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934 (the "EXCHANGE ACT")) (a
"PERSON") of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of
15% or more of either the then outstanding shares of
common stock of the Company (the "OUTSTANDING COMPANY
COMMON STOCK") or the combined voting power of the
then outstanding voting securities of the Company
entitled to vote generally in the election of
directors (the "OUTSTANDING COMPANY VOTING
SECURITIES"); provided, however, that for purposes of
this paragraph (i), the following acquisitions shall
not constitute a Change of Control:
(A) Any acquisition directly from the Company or
any Subsidiary of the Company;
(B) Any acquisition by the Company or any
Subsidiary of the Company;
(C) Any acquisition by any employee benefit plan
(or related trust) sponsored or maintained
by the Company or any Subsidiary of the
Company;
(D) Any acquisition by Mr. Michael S. Dell, his
Affiliates or Associates (as such terms are
defined in Rule 12b-2 promulgated under the
Exchange Act), his heirs or any trust or
foundation to which he has transferred or
may transfer Outstanding Company Common
Stock or Outstanding Company Voting
Securities; or
(E) Any acquisition by any entity or its
security holders pursuant to a transaction
that complies with clauses (A), (B), and (C)
of paragraph (iii) below;
(ii) Individuals who, as of the date of this Agreement,
constitute the Board (collectively, the "INCUMBENT
DIRECTORS") cease for any reason to constitute at
least a majority of the Board; provided, however,
that any individual who becomes a director of the
Company subsequent to the date of this Agreement and
whose election or appointment by the Board or
nomination for election by the Company's stockholders
was approved by a vote of at least a majority of the
then Incumbent Directors, shall be considered as an
Incumbent Director, unless such individual's initial
assumption of office occurs as a result of an actual
or threatened election contest with respect to the
election or removal of directors or other actual or
threatened solicitation of proxies or consents by or
on behalf of a Person other than the Board;
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(iii) Consummation of a reorganization, merger,
consolidation, sale or other disposition of all or
substantially all the assets of the Company or an
acquisition of assets of another corporation (a
"BUSINESS COMBINATION"), unless, in each case,
following such Business Combination (A) all or
substantially all of the individuals and entities who
were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or
indirectly, more than 50% of, respectively, the then
outstanding shares of common stock and the combined
voting power of the then outstanding voting
securities entitled to vote generally in the election
of directors, as the case may be, of the corporation
resulting from such Business Combination (including a
corporation that as a result of such transaction owns
the Company or all or substantially all of the
Company's assets either directly or through one or
more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to
such Business Combination, of the Outstanding Company
Common Stock and Outstanding Company Voting
Securities, as the case may be, (B) no Person
(excluding any employee benefit plan (or related
trust) of the Company or the corporation resulting
from such Business Combination) beneficially owns,
directly or indirectly, 15% or more of, respectively,
the then outstanding shares of common stock of the
corporation resulting from such Business Combination
or the combined voting power of the then outstanding
voting securities of such corporation except to the
extent that such ownership of the Company existed
prior to the Business Combination and (C) at least a
majority of the members of the board of directors of
the corporation resulting from such Business
Combination were Incumbent Directors at the time of
the execution of the initial agreement, or of the
action of the Board, providing for such Business
Combination; or
(iv) Approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company.
(b) "CLAIM" shall mean (i) any threatened, asserted, pending or
completed claim, demand, action, suit or proceeding (including
any cross claim or counterclaim in any action, suit or
proceeding), whether civil, criminal, administrative,
arbitrative, investigative or other and whether made pursuant
to federal, state or other law (including securities laws);
and (ii) any inquiry or investigation (including discovery),
whether made, instituted or conducted by the Company or any
other party, including any federal, state or other
governmental entity, that Indemnitee in good faith believes
might lead to the institution of any such claim, demand,
action, suit or proceeding.
(c) "CONTROLLED AFFILIATE" shall mean any corporation, limited
liability company, partnership, joint venture, trust or other
entity or enterprise, whether or not for profit, that is
directly or indirectly controlled by the Company. For purposes
of this definition, the term "control" shall mean the
possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of an entity
or enterprise, whether through the ownership of voting
securities, through other voting rights, by contract or
otherwise; provided, however, that direct or indirect
beneficial ownership of capital stock or other interests in an
entity or enterprise entitling the holder to
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cast 20% or more of the total number of votes generally
entitled to be cast in the election of directors (or persons
performing comparable functions) of such entity or enterprise
shall be deemed to constitute "control" for purposes of this
definition.
(d) "DISINTERESTED DIRECTOR" shall mean a director of the Company
who is not and was not a party to the Claim with respect to
which indemnification is sought by Indemnitee.
(e) "EXPENSES" shall mean all costs, expenses (including
attorneys' and experts' fees and expenses) and obligations
paid or incurred in connection with investigating, defending
(including affirmative defenses and counterclaims), being a
witness in or participating in (including on appeal), or
preparing to investigate, defend, be a witness in or
participate in (including on appeal), any Claim relating to an
Indemnifiable Claim.
(f) "INDEMNIFIABLE CLAIM" shall mean any Claim based upon, arising
out of or resulting from any of the following:
(i) Any actual, alleged or suspected act or failure to
act by Indemnitee in his or her capacity as a
director of the Company or as a director, officer,
employee, member, manager, trustee, fiduciary or
agent of any other corporation, limited liability
company, partnership, joint venture, employee benefit
plan, trust or other entity or enterprise, whether or
not for profit, as to which Indemnitee is or was
serving at the request of the Company as a director,
officer, employee, member, manager, trustee or agent;
(ii) Any actual, alleged or suspected act or failure to
act by Indemnitee with respect to any business,
transaction, communication, filing, disclosure or
other activity of the Company or any other entity or
enterprise referred to in clause (i) of this Section
1(f); or
(iii) Indemnitee's status as a current or former director
of the Company or as a current or former director,
officer, employee, member, manager, trustee,
fiduciary or agent of the Company or any other entity
or enterprise referred to in clause (i) of this
Section 1(f) or any actual, alleged or suspected act
or failure to act by Indemnitee in connection with
any obligation or restriction imposed upon Indemnitee
by reason of such status.
In addition to any service at the actual request of the
Company, for purposes of this Agreement, Indemnitee shall be
deemed to be serving or to have served at the request of the
Company as a director, officer, employee, member, manager,
trustee, fiduciary or agent of another entity or enterprise if
Indemnitee is or was serving as a director, officer, employee,
member, manager, trustee, fiduciary or employee of such entity
or enterprise and (A) such entity or enterprise is or at the
time of such service was a Controlled Affiliate, (B) such
entity or enterprise is or at the time of such service was an
employee benefit plan (or related trust) sponsored or
maintained by the Company or a Controlled Affiliate or (C) the
Company or a Controlled Affiliate directly or indirectly
caused Indemnitee to be nominated, elected, appointed,
designated, employed, engaged or selected to serve in such
capacity.
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(g) "INDEMNIFIABLE LOSSES" shall mean any and all Losses relating
to, arising out of or resulting from any Indemnifiable Claim.
(h) "INDEPENDENT COUNSEL" shall mean a law firm, or a member of a
law firm, that is experienced in matters of corporation law
and, as of the time of selection with respect to any
Indemnifiable Claim, is not nor in the past five years has
been, retained to represent (i) the Company or Indemnitee in
any matter material to either such party (other than with
respect to matters concerning Indemnitee under this Agreement
or other indemnitees under similar indemnification agreements)
or (ii) any other party to the Indemnifiable Claim giving rise
to a claim for indemnification hereunder. Notwithstanding the
foregoing, the term "Independent Counsel" shall not include
any person who, under the applicable standards of professional
conduct then prevailing, would have a conflict of interest in
representing either the Company or Indemnitee in an action to
determine Indemnitee's rights under this Agreement.
(i) "LOSSES" means any and all Expenses, damages (including
punitive, exemplary and the multiplied portion of any
damages), losses, liabilities, judgments, payments, fines,
penalties (whether civil, criminal or other), awards and
amounts paid in settlement (including all interest,
assessments and other charges paid or incurred in connection
with or with respect to any of the foregoing).
2. INDEMNIFICATION OBLIGATION -- Subject to Section 7, the Company shall
indemnify, defend and hold harmless Indemnitee, to the fullest extent
permitted by the laws of the State of Delaware in effect on the date
hereof or as such laws may from time to time hereafter be amended to
increase the scope of such permitted indemnification, against any and
all Indemnifiable Claims and Indemnifiable Losses; provided, however,
that, except as provided in Sections 5 and 21, Indemnitee shall not be
entitled to indemnification pursuant to this Agreement in connection
with any Claim initiated by Indemnitee against the Company or any
director or officer of the Company unless the Company has joined in or
consented to the initiation of such Claim.
3. ADVANCEMENT OF EXPENSES -- Indemnitee shall have the right to
advancement by the Company prior to the final disposition of any
Indemnifiable Claim of any and all Expenses relating to, arising out of
or resulting from any Indemnifiable Claim paid or incurred by
Indemnitee or which Indemnitee determines are reasonably likely to be
paid or incurred by Indemnitee. Indemnitee's right to such advancement
is not subject to the satisfaction of any standard of conduct. Without
limiting the generality or effect of the foregoing, within five
business days after any request by Indemnitee, the Company shall, in
accordance with such request (but without duplication), (a) pay such
Expenses on behalf of Indemnitee, (b) advance to Indemnitee funds in an
amount sufficient to pay such Expenses or (c) reimburse Indemnitee for
such Expenses; provided, however, that Indemnitee shall repay, without
interest, any amounts actually advanced to Indemnitee that, at the
final disposition of the Indemnifiable Claim to which the advance
related, were in excess of amounts paid or incurred by Indemnitee with
respect to Expenses relating to, arising out of or resulting from such
Indemnifiable Claim. In connection with any such payment, advancement
or reimbursement, Indemnitee shall execute and deliver to the Company
an undertaking, which need not be secured and shall be accepted without
reference to Indemnitee's ability to repay the Expenses, by or on
behalf of Indemnitee, to repay any amounts paid, advanced or reimbursed
by the
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Company with respect to Expenses relating to, arising out of or
resulting from any Indemnifiable Claim with respect to which it shall
have been determined, following the final disposition of such
Indemnifiable Claim and in accordance with Section 7, that Indemnitee
is not entitled to indemnification hereunder.
4. INDEMNIFICATION FOR ADDITIONAL EXPENSES -- Without limiting the
generality or effect of the foregoing, the Company shall indemnify and
hold harmless Indemnitee against and, if requested by Indemnitee, shall
reimburse Indemnitee for, or advance to Indemnitee, within five
business days of such request, any and all Expenses paid or incurred by
Indemnitee or which Indemnitee determines are reasonably likely to be
paid or incurred by Indemnitee in connection with any Claim made,
instituted or conducted by Indemnitee for (a) indemnification or
reimbursement or advance payment of Expenses by the Company under any
provision of this Agreement or under any other agreement or provision
of the Constituent Documents now or hereafter in effect relating to
Indemnifiable Claims or (b) recovery under any directors' and officers'
liability insurance policies maintained by the Company, regardless in
each case of whether Indemnitee ultimately is determined to be entitled
to such indemnification, reimbursement, advance or insurance recovery,
as the case may be; provided, however, that Indemnitee shall return,
without interest, any such advance of Expenses (or portion thereof)
that remains unspent at the final disposition of the Claim to which the
advance related.
5. PARTIAL INDEMNITY -- If Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a portion
of any Indemnifiable Loss but not for all of the total amount thereof,
the Company shall nevertheless indemnify Indemnitee for the portion
thereof to which Indemnitee is entitled.
6. PROCEDURE FOR NOTIFICATION -- To obtain indemnification under this
Agreement with respect to an Indemnifiable Claim or Indemnifiable Loss,
Indemnitee shall submit to the Company a written request therefor,
including a brief description (based upon information then available to
Indemnitee) of such Indemnifiable Claim or Indemnifiable Loss. If, at
the time of the receipt of such request, the Company has directors' and
officers' liability insurance in effect under which coverage for such
Indemnifiable Claim or Indemnifiable Loss is potentially available, the
Company shall give prompt written notice of such Indemnifiable Claim or
Indemnifiable Loss to the applicable insurers in accordance with the
procedures set forth in the applicable policies. The Company shall
provide to Indemnitee a copy of such notice delivered to the applicable
insurers and copies of all subsequent correspondence between the
Company and such insurers regarding the Indemnifiable Claim or
Indemnifiable Loss, in each case substantially concurrently with the
delivery or receipt thereof by the Company. The failure by Indemnitee
to timely notify the Company of any Indemnifiable Claim or
Indemnifiable Loss shall not relieve the Company from any liability
hereunder unless, and only to the extent that, the Company did not
otherwise learn of such Indemnifiable Claim or Indemnifiable Loss and
such failure results in forfeiture by the Company of substantial
defenses, rights or insurance coverage.
7. DETERMINATION OF RIGHT TO INDEMNIFICATION --
(a) To the extent that Indemnitee shall have been successful on
the merits or otherwise in defense of any Indemnifiable Claim
or any portion thereof or in defense of any issue or matter
therein, including dismissal without prejudice, Indemnitee
shall be indemnified against all Indemnifiable Losses relating
to,
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arising out of or resulting from such Indemnifiable Claim in
accordance with Section 2 and no Standard of Conduct
Determination (as defined in paragraph (b) below) shall be
required.
(b) To the extent that the provisions of Section 7(a) are
inapplicable to an Indemnifiable Claim that shall have been
finally disposed of, any determination of whether Indemnitee
has satisfied any applicable standard of conduct under
Delaware law that is a legally required condition precedent to
indemnification of Indemnitee hereunder against Indemnifiable
Losses relating to, arising out of or resulting from such
Indemnifiable Claim (a "STANDARD OF CONDUCT DETERMINATION")
shall be made as follows:
(i) If a Change of Control has not occurred, or if a
Change of Control has occurred but Indemnitee has
requested that the Standard of Conduct Determination
be made pursuant to this clause (i):
(A) By a majority vote of the Disinterested
Directors, even if less than a quorum of the
Board;
(B) If such Disinterested Directors so direct,
by a majority vote of a committee of
Disinterested Directors designated by a
majority vote of all Disinterested
Directors; or
(C) If there are no such Disinterested
Directors, by Independent Counsel in a
written opinion addressed to the Board, a
copy of which shall be delivered to
Indemnitee; and
(ii) If a Change of Control has occurred and Indemnitee
has not requested that the Standard of Conduct
Determination be made pursuant to clause (i) above,
by Independent Counsel in a written opinion addressed
to the Board, a copy of which shall be delivered to
Indemnitee.
Indemnitee will cooperate with the person or persons making
such Standard of Conduct Determination, including providing to
such person or persons, upon reasonable advance request, any
documentation or information which is not privileged or
otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such
determination. The Company shall indemnify and hold harmless
Indemnitee against and, if requested by Indemnitee, shall
reimburse Indemnitee for, or advance to Indemnitee, within
five business days of such request, any and all costs and
expenses (including attorneys' and experts' fees and expenses)
incurred by Indemnitee in so cooperating with the person
making such Standard of Conduct Determination.
(c) The Company shall use its reasonable best efforts to cause any
Standard of Conduct Determination required under Section 7(b)
to be made as promptly as practicable. If (i) the person or
persons empowered or selected under Section 7(b) to make the
Standard of Conduct Determination shall not have made a
determination within 30 days after the later of (A) receipt by
the Company of written notice from Indemnitee advising the
Company of the final disposition of the applicable
Indemnifiable Claim (the date of such receipt being the
"NOTIFICATION DATE") and (B) the selection of an Independent
Counsel, if such determination is to be made by Independent
Counsel, that is
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permitted under the provisions of Section 7(e) to make such
determination and (ii) Indemnitee shall have fulfilled his or
her obligations set forth in the second sentence of Section
7(b), then Indemnitee shall be deemed to have satisfied the
applicable standard of conduct; provided, however, that such
30-day period may be extended for a reasonable time, not to
exceed an additional 30 days, if the person making such
determination in good faith requires such additional time to
obtain or evaluate documentation or information relating
thereto.
(d) If (i) Indemnitee shall be entitled to indemnification
hereunder against any Indemnifiable Losses pursuant to Section
7(a), (ii) no determination of whether Indemnitee has
satisfied any applicable standard of conduct under Delaware
law is a legally required condition precedent to
indemnification of Indemnitee hereunder against any
Indemnifiable Losses or (iii) Indemnitee has been determined
or deemed pursuant to Section 7(b) or (c) to have satisfied
any applicable standard of conduct under Delaware law that is
a legally required condition precedent to indemnification of
Indemnitee hereunder against any Indemnifiable Losses, then
the Company shall pay to Indemnitee, within five business days
after the later of (x) the Notification Date with respect to
the Indemnifiable Claim or portion thereof to which such
Indemnifiable Losses are related, out of which such
Indemnifiable Losses arose or from which such Indemnifiable
Losses resulted and (y) the earliest date on which the
applicable criterion specified in clause (i), (ii) or (iii)
above shall have been satisfied.
(e) If a Standard of Conduct Determination is to be made by
Independent Counsel pursuant to Section 7(b)(i), the
Independent Counsel shall be selected by the Board and the
Company shall give written notice to Indemnitee advising him
or her of the identity of the Independent Counsel so selected.
If a Standard of Conduct Determination is to be made by
Independent Counsel pursuant to Section 7(b)(ii), the
Independent Counsel shall be selected by Indemnitee and
Indemnitee shall give written notice to the Company advising
it of the identity of the Independent Counsel so selected. In
either case, Indemnitee or the Company, as applicable, may,
within five business days after receiving written notice of
selection from the other, deliver to the other a written
objection to such selection; provided, however, that such
objection may be asserted only on the ground that the
Independent Counsel so selected does not satisfy the criteria
set forth in the definition of "Independent Counsel" in
Section 1(h) and the objection shall set forth with
particularity the factual basis of such assertion. Absent a
proper and timely objection, the person or firm so selected
shall act as Independent Counsel. If such written objection is
properly and timely made and substantiated, (i) the
Independent Counsel so selected may not serve as Independent
Counsel unless and until such objection is withdrawn or a
court has determined that such objection is without merit and
(ii) the non-objecting party may, at its option, select an
alternative Independent Counsel and give written notice to the
other party advising such other party of the identity of the
alternative Independent Counsel so selected, in which case the
provisions of the two immediately preceding sentences and
clause (i) of this sentence shall apply to such subsequent
selection and notice. If applicable, the provisions of clause
(ii) of the immediately preceding sentence shall apply to
successive alternative selections. If no Independent Counsel
that is permitted under the foregoing provisions of this
Section 7(e) to make the Standard of Conduct Determination
shall have been selected within 30 days after the
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Company gives its initial notice pursuant to the first
sentence of this Section 7(e) or Indemnitee gives its initial
notice pursuant to the second sentence of this Section 7(e),
as the case may be, either the Company or Indemnitee may
petition the Court of Chancery of the State of Delaware for
resolution of any objection that has been made by the Company
or Indemnitee to the other's selection of Independent Counsel
or for the appointment as Independent Counsel of a person
selected by the Court or by such other person as the Court
shall designate, and the person or firm with respect to whom
all objections are so resolved or the person or firm so
appointed will act as Independent Counsel. In all events, the
Company shall pay all of the reasonable fees and expenses of
the Independent Counsel incurred in connection with the
Independent Counsel's determination pursuant to Section 7(b).
8. PRESUMPTION OF ENTITLEMENT -- In making any Standard of Conduct
Determination, the person or persons making such determination shall
presume that Indemnitee has satisfied the applicable standard of
conduct, and the Company may overcome such presumption only by its
adducing clear and convincing evidence to the contrary. Any Standard of
Conduct Determination that is adverse to Indemnitee may be challenged
by Indemnitee in the Court of Chancery of the State of Delaware. No
determination by the Company (including by its directors or any
Independent Counsel) that Indemnitee has not satisfied any applicable
standard of conduct shall be a defense to any Claim by Indemnitee for
indemnification or reimbursement or advance payment of Expenses by the
Company hereunder or create a presumption that Indemnitee has not met
any applicable standard of conduct.
9. NO OTHER PRESUMPTION -- For purposes of this Agreement, the termination
of any Claim by judgment, order, settlement (whether with or without
court approval) or conviction, or upon a plea of nolo contendere or its
equivalent, or an entry of an order of probation prior to judgment,
shall not create a presumption that Indemnitee did not meet any
applicable standard of conduct or that indemnification hereunder is
otherwise not permitted.
10. NON-EXCLUSIVITY -- The rights of Indemnitee hereunder shall be in
addition to any other rights Indemnitee may have under the Constituent
Documents, the substantive laws of the State of Delaware, any other
contract or otherwise (collectively, "OTHER INDEMNITY PROVISIONS");
provided, however, that (a) to the extent that Indemnitee otherwise
would have any greater right to indemnification under any Other
Indemnity Provision, Indemnitee shall be deemed to have such greater
right hereunder and (b) to the extent that any change is made to any
Other Indemnity Provision that permits any greater right to
indemnification than that provided under this Agreement as of the date
hereof, Indemnitee shall be deemed to have such greater right
hereunder. The Company shall not adopt any amendment to any of the
Constituent Documents the effect of which would be to deny, diminish or
encumber Indemnitee's right to indemnification under this Agreement or
any Other Indemnity Provision.
11. LIABILITY INSURANCE AND FUNDING -- For the duration of Indemnitee's
service as a director of the Company and thereafter for so long as
Indemnitee shall be subject to any pending or possible Indemnifiable
Claim, to the extent the Company maintains policies of directors' and
officers' liability insurance providing coverage for directors and
officers of the Company, Indemnitee shall be covered by such policies,
in accordance with their terms, to the maximum extent of the coverage
available for any other director or officer of the Company. Upon
request of Indemnitee, the
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Company shall provide Indemnitee with a copy of all directors' and
officers' liability insurance applications, binders, policies,
declarations, endorsements and other related materials and shall
provide Indemnitee with a reasonable opportunity to review and comment
on the same. Without limiting the generality or effect of the two
immediately preceding sentences, no discontinuation or significant
reduction in the scope or amount of coverage from one policy period to
the next shall be effective (a) without the prior approval thereof by a
majority vote of the Incumbent Directors, even if less than a quorum,
or (b) if at the time that any such discontinuation or significant
reduction in the scope or amount of coverage is proposed there are no
Incumbent Directors, without the prior written consent of Indemnitee
(which consent shall not be unreasonably withheld or delayed). In all
policies of directors' and officers' liability insurance obtained by
the Company, Indemnitee shall be named as an insured in such a manner
as to provide Indemnitee the same rights and benefits, subject to the
same limitations, as are accorded to the Company's directors and
officers most favorably insured by such policy. The Company may, but
shall not be required to, create a trust fund, grant a security
interest or use other means, including a letter of credit, to ensure
the payment of such amounts as may be necessary to satisfy its
obligations to indemnify and advance expenses pursuant to this
Agreement.
12. SUBROGATION -- In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the
related rights of recovery of Indemnitee against other persons or
entities (other than Indemnitee's successors), including any entity or
enterprise referred to in clause (i) of the definition of
"Indemnifiable Claim" in Section 1(f). Indemnitee shall execute all
papers reasonably required to evidence such rights (all of Indemnitee's
reasonable Expenses, including attorneys' fees and charges, related
thereto to be reimbursed by or, at the option of Indemnitee, advanced
by the Company).
13. NO DUPLICATION OF PAYMENTS -- The Company shall not be liable under
this Agreement to make any payment to Indemnitee with respect to any
Indemnifiable Losses to the extent Indemnitee has otherwise actually
received payment (net of Expenses incurred in connection therewith)
under any insurance policy, the Constituent Documents or Other
Indemnity Provisions or otherwise (including from any entity or
enterprise referred to in clause (i) of the definition of
"Indemnifiable Claim" in Section 1(f)) with respect to such
Indemnifiable Losses otherwise indemnifiable hereunder.
14. DEFENSE OF CLAIMS -- The Company shall be entitled to participate in
the defense of any Indemnifiable Claim or to assume the defense
thereof, with counsel reasonably satisfactory to Indemnitee; provided,
however, that if Indemnitee believes, after consultation with counsel
selected by Indemnitee, that (a) the use of counsel chosen by the
Company to represent Indemnitee would present such counsel with an
actual or potential conflict, (b) the named parties in any such
Indemnifiable Claim (including any impleaded parties) include both the
Company and Indemnitee and Indemnitee shall conclude that there may be
one or more legal defenses available to him or her that are different
from or in addition to those available to the Company or (c) any such
representation by such counsel would be precluded under the applicable
standards of professional conduct then prevailing, then Indemnitee
shall be entitled to retain separate counsel (but not more than one law
firm plus, if applicable, local counsel with respect to any particular
Indemnifiable Claim) at the Company's expense. The Company shall not be
liable to Indemnitee under this Agreement for any amounts paid in
settlement of any threatened or pending Indemnifiable Claim effected
without the Company's prior written consent. The Company shall not,
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without the prior written consent of Indemnitee, effect any settlement
of any threatened or pending Indemnifiable Claim that Indemnitee is or
could have been a party unless such settlement solely involves the
payment of money and includes a complete and unconditional release of
Indemnitee from all liability on any claims that are the subject matter
of such Indemnifiable Claim. Neither the Company nor Indemnitee shall
unreasonably withhold its consent to any proposed settlement; provided,
however, that Indemnitee may withhold consent to any settlement that
does not provide a complete and unconditional release of Indemnitee.
15. SUCCESSORS AND BINDING AGREEMENT --
(a) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation, reorganization
or otherwise) to all or substantially all the business or
assets of the Company, by agreement in form and substance
satisfactory to Indemnitee and his or her counsel, expressly
to assume and agree to perform this Agreement in the same
manner and to the same extent the Company would be required to
perform if no such succession had taken place. This Agreement
shall be binding upon and inure to the benefit of the Company
and any successor to the Company, including any person
acquiring directly or indirectly all or substantially all the
business or assets of the Company whether by purchase, merger,
consolidation, reorganization or otherwise (and such successor
will thereafter be deemed the "Company" for purposes of this
Agreement), but shall not otherwise be assignable or
delegatable by the Company.
(b) This Agreement shall inure to the benefit of and be
enforceable by Indemnitee's personal or legal representatives,
executors, administrators, successors, heirs, distributees,
legatees and other successors.
(c) This Agreement is personal in nature and neither of the
parties hereto shall, without the consent of the other, assign
or delegate this Agreement or any rights or obligations
hereunder except as expressly provided in Sections 15(a) and
15(b). Without limiting the generality or effect of the
foregoing, Indemnitee's right to receive payments hereunder
shall not be assignable, whether by pledge, creation of a
security interest or otherwise, other than by a transfer by
Indemnitee's will or by the laws of descent and distribution,
and in the event of any attempted assignment or transfer
contrary to this Section 15(c), the Company shall have no
liability to pay any amount so attempted to be assigned or
transferred.
16. NOTICES -- For all purposes of this Agreement, all communications,
including notices, consents, requests or approvals, required or
permitted to be given hereunder shall be in writing and shall be deemed
to have been duly given when hand delivered or dispatched by electronic
facsimile transmission (with receipt thereof orally confirmed), or five
business days after having been mailed by United States registered or
certified mail, return receipt requested, postage prepaid or one
business day after having been sent for next-day delivery by a
nationally recognized overnight courier service, addressed to the
Company (to the attention of the Secretary of the Company) and to
Indemnitee at the addresses shown on the signature page hereto, or to
such other address as any party may have furnished to the other in
writing and in accordance herewith, except that notices of changes of
address will be effective only upon receipt.
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17. GOVERNING LAW -- The validity, interpretation, construction and
performance of this Agreement shall be governed by and construed in
accordance with the substantive laws of the State of Delaware, without
giving effect to the principles of conflict of laws of such State. The
Company and Indemnitee each hereby irrevocably consent to the
jurisdiction of the Chancery Court of the State of Delaware for all
purposes in connection with any action or proceeding that arises out of
or relates to this Agreement and agree that any action instituted under
this Agreement shall be brought only in the Chancery Court of the State
of Delaware.
18. VALIDITY -- If any provision of this Agreement or the application of
any provision hereof to any person or circumstance is held invalid,
unenforceable or otherwise illegal, the remainder of this Agreement and
the application of such provision to any other person or circumstance
shall not be affected, and the provision so held to be invalid,
unenforceable or otherwise illegal shall be reformed to the extent, and
only to the extent, necessary to make it enforceable, valid or legal.
In the event that any court or other adjudicative body shall decline to
reform any provision of this Agreement held to be invalid,
unenforceable or otherwise illegal as contemplated by the immediately
preceding sentence, the parties thereto shall take all such action as
may be necessary or appropriate to replace the provision so held to be
invalid, unenforceable or otherwise illegal with one or more
alternative provisions that effectuate the purpose and intent of the
original provisions of this Agreement as fully as possible without
being invalid, unenforceable or otherwise illegal.
19. AMENDMENTS; WAIVERS -- No provision of this Agreement may be amended,
modified, waived or discharged unless such amendment, modification,
waiver or discharge is agreed to in writing signed by Indemnitee and
the Company. No waiver by either party hereto at any time of any breach
by the other party hereto or compliance with any condition or provision
of this Agreement to be performed by such other party shall be deemed a
waiver of similar or dissimilar provisions or conditions at the same or
at any prior or subsequent time.
20. COMPLETE AGREEMENT -- No agreements or representations, oral or
otherwise, expressed or implied with respect to the subject matter
hereof have been made by either party that are not set forth expressly
in this Agreement.
21. LEGAL FEES AND EXPENSES -- It is the intent of the Company that
Indemnitee not be required to incur legal fees or other Expenses
associated with the interpretation, enforcement or defense of
Indemnitee's rights under this Agreement by litigation or otherwise
because the cost and expense thereof would substantially detract from
the benefits intended to be extended to Indemnitee hereunder.
Accordingly, without limiting the generality or effect of any other
provision hereof, if it should appear to Indemnitee that the Company
has failed to comply with any of its obligations under this Agreement
or in the event that the Company or any other person takes or threatens
to take any action to declare this Agreement void or unenforceable or
institutes any litigation or other action or proceeding designed to
deny, or to recover from, Indemnitee the benefits provided or intended
to be provided to Indemnitee hereunder, the Company irrevocably
authorizes Indemnitee from time to time to retain counsel of
Indemnitee's choice, at the expense of the Company as hereafter
provided, to advise and represent Indemnitee in connection with any
such interpretation, enforcement or defense, including the initiation
or defense of any litigation or other legal action, whether by or
against the Company or any director, officer, stockholder or other
person affiliated with the Company, in any jurisdiction.
Notwithstanding any existing or prior attorney-client relationship
between the Company and such counsel, the Company irrevocably consents
to Indemnitee's
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entering into an attorney-client relationship with such counsel, and in
that connection the Company and Indemnitee agree that a confidential
relationship shall exist between Indemnitee and such counsel. Without
respect to whether Indemnitee prevails, in whole or in part, in
connection with any of the foregoing, the Company will pay and be
solely financially responsible for any and all attorneys' and related
fees and expenses incurred by Indemnitee in connection with any of the
foregoing.
22. CERTAIN INTERPRETIVE MATTERS --
(a) No provision of this Agreement shall be interpreted in favor
of, or against, either of the parties hereto by reason of the
extent to which any such party or its counsel participated in
the drafting thereof or by reason of the extent to which any
such provision is inconsistent with any prior draft hereof or
thereof.
(b) It is the Company's intention and desire that the provisions
of this Agreement be construed liberally, subject to their
express terms, to maximize the protections to be provided to
Indemnitee hereunder.
(c) All references in this Agreement to Sections, paragraphs,
clauses and other subdivisions refer to the corresponding
Sections, paragraphs, clauses and other subdivisions of this
Agreement unless expressly provided otherwise. Titles
appearing at the beginning of any Sections, subsections or
other subdivisions of this Agreement are for convenience only,
do not constitute any part of such Sections, subsections or
other subdivisions and shall be disregarded in construing the
language contained in such subdivisions. The words "THIS
AGREEMENT," "HEREIN," "HEREBY," "HEREUNDER," and "HEREOF," and
words of similar import, refer to this Agreement as a whole
and not to any particular subdivision unless expressly so
limited. The word "OR" is not exclusive, and the word
"INCLUDING" (in its various forms) means "including without
limitation." Pronouns in masculine, feminine or neuter genders
shall be construed to state and include any other gender, and
words, terms and titles (including terms defined herein) in
the singular form shall be construed to include the plural and
vice versa, unless the context otherwise expressly requires.
23. COUNTERPARTS -- This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original but all of
which together shall constitute one and the same agreement.
In witness whereof, Indemnitee has executed, and the Company has caused its duly
authorized representative to execute, this Agreement as of the date first above
written.
DELL COMPUTER CORPORATION INDEMNITEE
Address: One Dell Way Address:
Round Rock, Texas 78682
Facsimile: 512-728-3773 Facsimile:
By:
------------------------------ -----------------------------
Thomas B. Green
Senior Vice President,
Law & Administration
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SCHEDULE TO EXHIBIT 10.11 -- FORM OF INDEMNIFICATION AGREEMENT
DELL HAS ENTERED INTO AN INDEMNIFICATION AGREEMENT WITH EACH
OF THE FOLLOWING PERSONS:
DONALD J. CARTY
WILLIAM H. GRAY, III
JUDY C. LEWENT
THOMAS W. LUCE III
KLAUS S. LUFT
ALEX J. MANDL
MICHAEL A. MILES
SAMUEL A. NUNN, JR.
MORTON L. TOPFER
IDENTICAL TO THE FORM PROVIDED HEREIN.
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