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Exhibit 10.11
FORM OF INDEMNIFICATION AGREEMENT
This Agreement is made and entered into this [Date] (the "Agreement"),
by and between Concord Communications, Inc., a Massachusetts corporation (the
"Company", which term shall include any one or more of its subsidiaries where
appropriate), and [Name] ("Indemnitee"). Certain capitalized terms are used in
this Agreement as specifically defined in Section 7.
In consideration of the premises and the covenants contained herein,
the Company and Indemnitee do hereby covenant and agree as follows:
1. SERVICES BY INDEMNITEE. Indemnitee agrees to serve or continue
to serve as a director or executive officer of the Company for so long as he is
duly elected or appointed or until his written resignation.
2. INDEMNIFICATION AND ADVANCES.
2.1 The Company shall advance all Expenses incurred by or on
behalf of Indemnitee in connection with any Proceeding within fifteen days after
the receipt by the Company of a request therefor, accompanied or preceded by
reasonable evidence of such Expenses and by an undertaking to repay all Expenses
advanced to the extent Indemnitee shall be adjudicated, or determined pursuant
to Section 3.2 or 3.3, to be not entitled to indemnification therefor (which
undertaking shall be accepted by the Company without reference to Indemnitee's
financial ability to repay any such advances).
2.2 Except as specifically provided in Sections 3.1, 3.2 and
3.3, within 60 days after receipt of a request therefor the Company shall
indemnify Indemnitee to the full extent permitted by law against all Expenses,
judgments, penalties, fines and amounts paid in settlement actually and
reasonably incurred by him or on his behalf in connection with any Proceeding or
any claim, issue or matter therein. A request for indemnification must be
accompanied by reasonable evidence of the amount for which indemnification is
requested, and must indicate a choice of Independent Counsel, if any, to make
any determination pursuant to Section 3.3.
2.3 Notwithstanding any other provision of this Agreement,
Indemnitee shall be indemnified against all Expenses attributable to any
Proceeding (or any claim, issue or matter relating thereto) which was
adjudicated or determined by a court of competent jurisdiction, on the merits or
otherwise, in Indemnitee's favor or which was terminated by dismissal or
withdrawal with or without prejudice.
3. EXCEPTIONS.
3.1 No indemnification shall be provided hereunder with
respect to any claim, issue or matter to the extent that Indemnitee has been
adjudicated not to have acted in good faith in the reasonable belief that his
action was in the best interest of the Company (or, in the case of
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service with respect to an employee benefit plan, in the best interests of the
participants or beneficiaries of such employee benefit plan).
3.2 If a Change of Control has not occurred, no
indemnification shall be provided hereunder to the extent that, within 60 days
of the receipt by the Company of a request for indemnification, Indemnitee has
been determined (after investigation) by (a) the Board of Directors of the
Company by majority vote of a quorum of Disinterested Directors, or (b) if such
a quorum is not "obtainable, or if directed by majority vote of a quorum of
Disinterested Directors, Independent Counsel (selected by majority vote of the
Disinterested Directors or, if none, by majority vote of the Board of Directors)
in a written opinion, not to have acted in good faith in the reasonable belief
that his action was in the best interest of the Company (or, in the case of
service with respect to an employee benefit plan, in the best interests of the
participants or beneficiaries of such employee benefit plan).
3.3 If a Change in Control has occurred, no indemnification
shall be provided hereunder to the extent that, within 60 days of the receipt by
the Company of a request for indemnification, Indemnitee has been determined
(after investigation) by (a) the Independent Counsel specified by Indemnitee in
the request for indemnification or (b) if no such specification is made, by a
person, persons or entity who would be entitled to make such a determination
pursuant to Section 3.2 if a Change in Control had not occurred, not to have
acted in good faith in the reasonable belief that his action was in the best
interest of the Company (or, in the case of service with respect to an employee
benefit plan, in the best interests of the participants or beneficiaries of such
employee benefit plan). A person, persons or entity making a determination
pursuant to this Section 3.3 shall presume that Indemnitee acted so as to be
entitled to indemnification, and the Company shall have the burden of proof in
overcoming that presumption.
3.4 Indemnitee shall cooperate with any person, persons or
entity making an investigation pursuant to Section 3.2 or 3.3 to the extent
reasonably requested. Any costs or expenses (including attorneys fees and
disbursements) incurred by Indemnitee in so cooperating shall be borne by the
Company (irrespective of the determination as to Indemnitee's entitlement to
indemnification), and the Company hereby indemnifies and agrees to hold
Indemnitee harmless therefrom.
4. REMEDIES OF INDEMNITEE.
4.1 In the event that (i) a determination is made that
Indemnitee is not entitled to indemnification under this Agreement, (ii) a
required advancement of Expenses is not timely made or (iii) payment of any
required indemnification is not timely made within the 60 day period prescribed
in Sections 3.2 and 3.3, Indemnitee shall be entitled to an adjudication in an
appropriate court of the Commonwealth of Massachusetts, or in any other court of
competent jurisdiction, of his entitlement to such indemnification or
advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an
award in arbitration to be conducted by a single arbitrator pursuant to the
rules of the American Arbitration Association, and judgment upon any arbitration
award may be entered in any court having jurisdiction. Indemnitee shall
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commence a proceeding seeking such an adjudication or an award in arbitration
within 180 days following the date on which Indemnitee first has the right to
commence such proceeding. The Company shall not oppose Indemnitee's right to
seek any such adjudication or award in arbitration.
4.2 In the event that a determination shall have been made
pursuant to this Agreement that Indemnitee is not entitled to indemnification,
any such judicial proceeding or arbitration shall be conducted in all respects
as a DE NOVO trial, or arbitration, on the merits and Indemnitee shall not be
prejudiced by reason of such adverse determination. If a Change of Control shall
have occurred, in any such judicial proceeding or arbitration the Company shall
have the burden of proving that Indemnitee is not entitled to indemnification or
advancement of Expenses, as the case may be, notwithstanding such adverse
determination.
4.3 The Company shall be precluded from asserting in any
judicial proceeding or arbitration that the procedures and presumptions of this
Agreement are not valid, binding and enforceable and shall stipulate in any such
court or before any such arbitrator that the Company is bound by all the
provisions of this Agreement.
4.4 In the event that Indemnitee seeks a judicial adjudication
of or an award in arbitration to enforce his rights under, or to recover damages
for breach of, this Agreement, Indemnitee shall be entitled to recover from the
Company, and shall be indemnified by the Company against, any and all expenses
(of the types described in the definition of Expenses) actually and reasonably
incurred by him in such judicial adjudication or arbitration, if he prevails
therein or if such recovery is ordered by the court or the arbitrator. If it
shall be determined in such judicial adjudication that Indemnitee is entitled to
receive part but not all of the indemnification or advancement of expenses
sought, the expenses incurred by Indemnitee in connection with such judicial
adjudication or arbitration shall be appropriately pro-rated.
5. SECURITY. To the extent requested by the Indemnitee and
approved by the Company's Board of Directors, the Company may at any time and
from time to time provide security to the Indemnitee for the Company's
obligations hereunder through an irrevocable bank letter of credit, funded trust
or other collateral. Any such security, once provided to the Indemnitee, may not
be revoked or released without the prior written consent of Indemnitee.
6. INSURANCE. To the extent that the Company maintains an
insurance policy or policies providing liability insurance for directors or
executive officers of the Company (or fiduciaries of any other enterprise),
Indemnitee shall be covered by such policy or policies in accordance with its or
their terms to the maximum extent of the coverage available for any director or
executive officer (or fiduciary) under such policy or policies, whether or not
Indemnitee is still a director or executive officer of the Company. The Company
shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable hereunder if and to the extent Indemnitee has otherwise
actually received such payment under any insurance policy, contract, agreement
or otherwise.
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7. DEFINITIONS.
7.1 "Change in Control" means a change in control of the
Company of a nature that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on
any similar schedule or form) promulgated under the Securities Exchange Act of
1934 (the "Act"), whether or not the Company is then subject to such reporting
requirement; provided, however, that, without limitation, such a Change in
Control shall be deemed to have occurred if (i) any "Person" (as such term is
used in Section 13(d) of the Act) is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Act), directly or indirectly, of securities of
the Company representing 20% or more of the combined voting power of the
Company's then outstanding securities without the prior approval of at least two
thirds of the members of the Board of Directors in office immediately prior to
such person attaining such percentage interest; (ii) the Company is a party to a
merger, consolidation, sale of assets or other reorganization, or a proxy
contest, as a consequence of which members of the Board of Directors in office
immediately prior to such transaction or event constitute less than a majority
of the Board of Directors thereafter; or (iii) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Board of Directors (including for this purpose any new director whose
election or nomination for election by the Company's stockholders was approved
by a vote of at least two thirds of the directors then still in office who were
directors at the beginning of such period) cease for any reason to constitute at
least a majority of the Board of Directors.
7.2 "Disinterested Director" means a director of the Company
who is not and was not a party to the Proceeding in respect of which
indemnification is sought by Indemnitee.
7.3 "Expenses" shall include all reasonable 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 all other disbursements or expenses of the type
customarily incurred in connection with prosecuting, defending, appearing as a
witness in, preparing to prosecute or defend or appear as a witness in, or
investigating a Proceeding.
7.4 "Independent Counsel" means a law firm, or a member of a
law firm, that is experienced in matters of corporation law and neither
presently is, nor in the past five years has been, retained to represent: (i)
the Company or Indemnitee in any matter material to either such party, or (ii)
any other party to the Proceeding 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 any action to determine Indemnitee's rights
under this Agreement.
7.5 "Proceeding" means any pending, threatened or completed
action, suit, arbitration, alternate dispute resolution mechanism,
investigation, administrative hearing or any other proceeding whether civil,
criminal, administrative or investigative in which Indemnitee is or may be
involved as a witness or defendant by reason of being, having been or having
agreed to
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become a director or executive officer of the Company or, at the request of the
Company, being, having been or having agreed to become a director, officer or
fiduciary of any other entity or enterprise, except such a proceeding initiated
by Indemnitee.
8. GENERAL.
8.1 The rights provided by this Agreement shall not be
exclusive of any other rights to which Indemnitee may at any time be entitled
under applicable law, the Company's articles of incorporation or by-laws, any
other agreement, a vote of stockholders or a resolution of directors, or
otherwise.
8.2 This Agreement shall continue until and terminate upon the
later of: (a) ten (10) years after the date that Indemnitee shall have ceased to
serve as a director or executive officer of the Company or fiduciary of any
other corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise which Indemnitee served at the request of the Company; or (b)
the final termination of all pending Proceedings in respect of which Indemnitee
is granted rights hereunder and of any proceeding commenced by Indemnitee
relating thereto. This Agreement shall be binding upon the Company and its
successors and assigns and shall inure to the benefit of Indemnitee and his
heirs, executors and administrators.
8.3 In the event of any payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee, who shall take all action necessary to secure such
rights, including execution of such documents as are necessary to enable the
Company to bring suit to enforce such rights.
8.4 If any provision or provisions of this Agreement shall be
held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the
validity, legality and enforceability of the remaining provisions of this
Agreement shall not in any way be affected or impaired thereby; and (b) to the
fullest extent possible, the provisions of this Agreement shall be construed so
as to give effect to the intent manifested by the provision held invalid,
illegal or unenforceable.
8.5 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 (whether or not similar) nor
shall such waiver constitute a continuing waiver.
8.6 Indemnitee agrees promptly to notify the Company in
writing upon being served with any summons, citation, subpoena, complaint,
indictment, information or other document relating to any Proceeding or matter
which may be subject to indemnification or advancement of Expenses covered
hereunder; provided, however, that the failure to give any such notice shall not
disqualify the Indemnitee from indemnification hereunder.
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8.7 All notices, requests, demands and other communications
hereunder shall be in writing and shall have been duly given if (i) actually
received, or (ii) mailed by certified or registered mail, postage prepaid, on
the third business day after the date on which it is so mailed.
8.8 This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the Commonwealth of Massachusetts.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
Attest: CONCORD COMMUNICATIONS, INC.
By: By:
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INDEMNITEE
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[Name]
[Address1]
[Address2]