EXHIBIT 10.2
MINDSPEED TECHNOLOGIES, INC.
INDEMNIFICATION AGREEMENT
INDEMNIFICATION AGREEMENT, dated as of June 27, 2003 by and between
MINDSPEED TECHNOLOGIES, INC., a Delaware corporation (the "Corporation"), and
_______________, a director and/or officer of the Corporation ("Indemnitee").
RECITALS
WHEREAS, the Corporation desires to attract and retain the services
of highly qualified individuals to serve the Corporation and its related
entities;
WHEREAS, the Corporation and Indemnitee recognize that highly
competent persons are becoming more reluctant to serve as directors or officers
or in other capacities with corporations unless they are provided with
reasonable protection through liability insurance or indemnification against
risks of claims and actions against them arising out of their service to and
activities on behalf of the corporations they serve;
WHEREAS, the Corporation and Indemnitee further recognize the
substantial increase in corporate litigation in general, subjecting directors,
officers, employees and agents of corporations to expensive litigation risks at
the same time as the availability and coverage of liability insurance has been
severely limited and the cost of such insurance has increased significantly;
WHEREAS, Article III, Section 14 of the Corporation's bylaws as in
effect on the date hereof (including the procedures attached as an Appendix
thereto) provides for indemnification and advancement of expenses of directors,
officers, employees and agents to the maximum extent permitted by Delaware law
as in effect on the date hereof;
WHEREAS, the Board of Directors of the Corporation (the "Board of
Directors") has determined that the Corporation should act to assure its
directors and officers of such protection in order to enhance their continued
and effective service to the Corporation; and
WHEREAS, in order to induce Indemnitee to provide such services to
the Corporation as a director and/or officer, the Corporation desires to enter
into this Agreement with Indemnitee providing for indemnification and
advancement of expenses as set forth herein;
NOW, THEREFORE, the Corporation and Indemnitee hereby agree as set
forth below.
AGREEMENT
In consideration of the premises and the covenants contained herein,
the Corporation and Indemnitee do hereby covenant and agree as follows:
1. Definitions. For purposes of this Agreement:
(a) All references in this Agreement to Article III, Section 14 of
the Corporation's bylaws ("Article III, Section 14") and the Procedures for
Submission and Determination of Claims for Indemnification Pursuant to Article
III, Section 14 of the Bylaws attached as an Appendix to the Corporation's
bylaws (the "Procedures") shall refer to such Section and Procedures as in
effect on the date hereof, copies of which are attached as Exhibit A hereto, and
the terms of which are incorporated by reference into and made a part of this
Agreement.
(b) Capitalized terms used and not otherwise defined in this
Agreement shall have the meanings set forth in Article III, Section 14 or the
Procedures.
(c) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
2. Service by Indemnitee. Indemnitee agrees to begin or continue to
serve the Corporation or one or more of its majority-owned subsidiaries as a
director, officer, employee or agent. Notwithstanding anything contained herein,
this Agreement shall not create a contract of employment between the Corporation
and Indemnitee, and the termination of Indemnitee's relationship with the
Corporation by either party hereto shall not be restricted by this Agreement.
3. Indemnification. The Corporation agrees to indemnify Indemnitee
for, and save, defend and hold Indemnitee harmless from and against, any
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by Indemnitee as provided in Article
III, Section 14 and the Procedures and, to the extent the laws of the State of
Delaware may from time to time hereafter be amended to increase the scope of
such permitted indemnification, to the fullest extent of such laws.
4. Non-Exclusivity. The rights of indemnification and to receive
advances as provided by this Agreement shall not be deemed exclusive of any
other rights to which Indemnitee may at any time be entitled under or by reason
of applicable law, any certificate of incorporation or bylaws, any agreement,
any vote of stockholders or any
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resolution of directors or otherwise. To the extent Indemnitee would be
prejudiced thereby, no amendment, alteration, rescission or replacement of this
Agreement or any provision hereof shall be effective as to Indemnitee with
respect to any action taken or omitted by such Indemnitee in Indemnitee's
position with the Corporation or any other entity which Indemnitee is or was
serving at the request of the Corporation prior to such amendment, alteration,
rescission or replacement.
5. Successors and Assigns. This Agreement shall be binding upon the
Corporation and its successors and assigns and shall inure to the benefit of
Indemnitee and Indemnitee's spouse, assigns, heirs, devisee, executors,
administrators or other legal representatives.
6. Severability. Should any part, term or condition hereof be
declared illegal or unenforceable or in conflict with any law, the validity of
the remaining portions or provisions of this Agreement shall not be affected
thereby, and the illegal or unenforceable portions of the Agreement shall be and
hereby are redrafted to conform with applicable law, while leaving the remaining
portions of this Agreement intact.
7. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document.
8. Headings. Section headings are for convenience only and do not
control or affect the meaning or interpretation of any terms or provisions of
this Agreement.
9. Modification and Waiver. No supplement, modification or amendment
of this Agreement shall be binding unless executed in writing by each of the
parties hereto. A waiver by any party of any breach or violation of this
Agreement shall not be deemed or construed as a waiver of any other or
subsequent breach or violation thereof.
10. No Duplicative Payment. The Corporation shall not be liable under
this Agreement to make any payment of amounts otherwise indemnifiable hereunder
if and to the extent that Indemnitee has otherwise actually received such
payment (net of expenses incurred in collecting such payment) under this
Agreement, any insurance policy, contract, agreement or otherwise.
11. Notices. All notices, requests, demands and other communications
provided for by this Agreement shall be in writing (including telecopier or
similar writing) and shall be deemed to have been given at the time when mailed
in a registered or certified postpaid envelope in any general or branch office
of the United States Postal Service, or sent by Federal Express or other similar
overnight courier service, addressed to the address of the parties stated below
or to such changed address as such party may
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have fixed by notice or, if given by telecopier, when such telecopy is
transmitted and the appropriate answer back is received.
(a) If to Indemnitee, to the address appearing on the signature page
hereof.
(b) If to the Corporation to:
Mindspeed Technologies, Inc.
4000 MacArthur Blvd., East Tower
Newport Beach, CA 92660
Attention: Chief Financial Officer
12. GOVERNING LAW. THE PARTIES AGREE THAT THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF
THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF.
13. Entire Agreement. Subject to the provisions of Section 4 hereof,
this Agreement constitutes the entire understanding between the parties and
supersedes all proposals, commitments, writings, negotiations and
understandings, oral and written, and all other communications between the
parties relating to the subject matter of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
MINDSPEED TECHNOLOGIES, INC.
Date: By
----------- -------------------------------------
Name:
Title:
INDEMNITEE:
Date:
----------- ----------------------------------------
Name:
Title:
Address:
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EXHIBIT A
ARTICLE III
OF THE
BYLAWS OF MINDSPEED TECHNOLOGIES, INC.
* * * * *
SECTION 14. INDEMNIFICATION. (A) The Corporation shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Corporation), by reason of the fact that such person is or was a
director, officer, employee or agent of the Corporation or any of its
majority-owned subsidiaries or is or was serving at the request of the
Corporation as a director, officer, employee or agent (except in each of the
foregoing situations to the extent any agreement, arrangement or understanding
of agency contains provisions that supersede or abrogate indemnification under
this section) of another corporation or of any partnership, joint venture,
trust, employee benefit plan or other enterprise, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding if such person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. The termination of
any action, suit 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 the person did not act in good faith and in a manner which such
person reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his or her conduct was unlawful.
(B) The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Corporation to procure a judgment in
its favor by reason of the fact that such person is or was a director, officer,
employee or agent of the Corporation or any of its majority-owned subsidiaries,
or is or was serving at the request of the Corporation as a director, officer,
employee or agent (except in each of the foregoing situations to the extent any
agreement, arrangement or understanding of agency contains provisions that
supersede or abrogate indemnification under this section) of another corporation
or of any partnership, joint venture, trust, employee benefit plan or other
enterprise against expenses (including attorneys' fees) actually and reasonably
incurred by such person in connection with the defense or settlement of such
action or suit if such person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the
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best interests of the Corporation and except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall have
been adjudged to be liable to the Corporation unless and only to the extent that
the Court of Chancery of Delaware or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the Court of
Chancery of Delaware or such other court shall deem proper.
(C) To the extent that a director, officer, employee or agent of the
Corporation or any of its majority-owned subsidiaries has been successful on the
merits or otherwise in defense of any action, suit or proceeding referred to in
subsections (A) and (B), or in defense of any claim, issue or matter therein,
such person shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by or on behalf of such person in connection
therewith. If any such person is not wholly successful in any such action, suit
or proceeding but is successful, on the merits or otherwise, as to one or more
but less than all claims, issues or matters therein, the Corporation shall
indemnify such person against all expenses (including attorneys' fees) actually
and reasonably incurred by or on behalf of such person in connection with each
claim, issue or matter that is successfully resolved. For purposes of this
subsection and without limitation, the termination of any claim, issue or matter
by dismissal, with or without prejudice, shall be deemed to be a successful
result as to such claim, issue or matter.
(D) Notwithstanding any other provision of this section, to the
extent any person is a witness in, but not a party to, any action, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason
of the fact that such person is or was a director, officer, employee or agent of
the Corporation or any of its majority-owned subsidiaries, or is or was serving
at the request of the Corporation as a director, officer, employee or agent
(except in each of the foregoing situations to the extent any agreement,
arrangement or understanding of agency contains provisions that supersede or
abrogate indemnification under this section) of another corporation or of any
partnership, joint venture, trust, employee benefit plan or other enterprise,
such person shall be indemnified against all expenses (including attorneys'
fees) actually and reasonably incurred by or on behalf of such person in
connection therewith.
(E) Indemnification under subsections (A) and (B) shall be made only
as authorized in the specific case upon a determination that indemnification of
the director, officer, employee or agent is proper in the circumstances because
such person has met the applicable standard of conduct set forth in subsections
(A) and (B). Such determination shall be made (1) if a Change of Control (as
hereinafter defined) shall not have occurred, (a) with respect to a person who
is a present or former director or officer of the Corporation, (i) by the Board
of Directors by a majority vote of the Disinterested
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Directors (as hereinafter defined), even though less than a quorum, or (ii) if
there are no Disinterested Directors or, even if there are Disinterested
Directors, a majority of such Disinterested Directors so directs, by (x)
Independent Counsel (as hereinafter defined) in a written opinion to the Board
of Directors, a copy of which shall be delivered to the claimant, or (y) the
shareholders of the Corporation; or (b) with respect to a person who is not a
present or former director or officer of the Corporation, by the chief executive
officer of the Corporation or by such other officer of the Corporation as shall
be designated from time to time by the Board of Directors; or (2) if a Change of
Control shall have occurred, by Independent Counsel selected by the claimant in
a written opinion to the Board of Directors, a copy of which shall be delivered
to the claimant, unless the claimant shall request that such determination be
made by or at the direction of the Board of Directors (in the case of a claimant
who is a present or former director or officer of the Corporation) or by an
officer of the Corporation authorized to make such determination (in the case of
a claimant who is not a present or former director or officer of the
Corporation), in which case it shall be made in accordance with clause (1) of
this sentence. Any claimant shall be entitled to be indemnified against the
expenses (including attorneys' fees) actually and reasonably incurred by such
claimant in cooperating with the person or entity making the determination of
entitlement to indemnification (irrespective of the determination as to the
claimant's entitlement to indemnification) and, to the extent successful, in
connection with any litigation or arbitration with respect to such claim or the
enforcement thereof.
(F) If a Change of Control shall not have occurred, or if a Change of
Control shall have occurred and a director, officer, employee or agent requests
pursuant to clause (2) of the second sentence in subsection (E) that the
determination as to whether the claimant is entitled to indemnification be made
by or at the direction of the Board of Directors (in the case of a claimant who
is a present or former director or officer of the Corporation) or by an officer
of the Corporation authorized to make such determination (in the case of a
claimant who is not a present or former director or officer of the Corporation),
the claimant shall be conclusively presumed to have been determined pursuant to
subsection (E) to be entitled to indemnification if (1) in the case of a
claimant who is a present or former director or officer of the Corporation,
(a)(i) within fifteen days after the next regularly scheduled meeting of the
Board of Directors following receipt by the Corporation of the request therefor,
the Board of Directors shall not have resolved by majority vote of the
Disinterested Directors to submit such determination to (x) Independent Counsel
for its determination or (y) the shareholders for their determination at the
next annual meeting, or any special meeting that may be held earlier, after such
receipt, and (ii) within sixty days after receipt by the Corporation of the
request therefor (or within ninety days after such receipt if the Board of
Directors in good faith determines that additional time is required by it for
the determination and, prior to expiration of such sixty-day period, notifies
the claimant thereof), the Board of Directors
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shall not have made the determination by a majority vote of the Disinterested
Directors, or (b) after a resolution of the Board of Directors, timely made
pursuant to clause (a)(i)(y) above, to submit the determination to the
shareholders, the shareholders meeting at which the determination is to be made
shall not have been held on or before the date prescribed (or on or before a
later date, not to exceed sixty days beyond the original date, to which such
meeting may have been postponed or adjourned on good cause by the Board of
Directors acting in good faith), or (2) in the case of a claimant who is not a
present or former director or officer of the Corporation, within sixty days
after receipt by the Corporation of the request therefor (or within ninety days
after such receipt if an officer of the Corporation authorized to make such
determination in good faith determines that additional time is required for the
determination and, prior to expiration of such sixty-day period, notifies the
claimant thereof), an officer of the Corporation authorized to make such
determination shall not have made the determination; provided, however, that
this sentence shall not apply if the claimant has misstated or failed to state a
material fact in connection with his or her request for indemnification. Such
presumed determination that a claimant is entitled to indemnification shall be
deemed to have been made (I) at the end of the sixty-day or ninety-day period
(as the case may be) referred to in clause (1)(a)(ii) or (2) of the immediately
preceding sentence or (II) if the Board of Directors has resolved on a timely
basis to submit the determination to the shareholders, on the last date within
the period prescribed by law for holding such shareholders meeting (or a
postponement or adjournment thereof as permitted above).
(G) Expenses (including attorneys' fees) incurred in defending a
civil, criminal, administrative or investigative action, suit or proceeding
shall be paid by the Corporation in advance of the final disposition of such
action, suit or proceeding to a present or former director or officer of the
Corporation, promptly after receipt of a request therefor stating in reasonable
detail the expenses incurred, and to a person who is not a present or former
director or officer of the Corporation as authorized by the chief executive
officer of the Corporation or such other officer of the Corporation as shall be
designated from time to time by the Board of Directors; provided that in each
case the Corporation shall have received an undertaking by or on behalf of the
present or former director, officer, employee or agent to repay such amount if
it shall ultimately be determined that such person is not entitled to be
indemnified by the Corporation as authorized in this section.
(H) The Board of Directors shall establish reasonable procedures for
the submission of claims for indemnification pursuant to this section,
determination of the entitlement of any person thereto and review of any such
determination. Such procedures shall be set forth in an appendix to these bylaws
and shall be deemed for all purposes to be a part hereof.
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(I) For purposes of this section,
(1) "Change of Control" means any of the following
occurring at any time after the distribution of the shares of capital stock of
the Corporation to the holders of capital stock of Conexant Systems, Inc. (the
"Distribution"):
(a) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a
"Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 20% or more of either (i) the then outstanding shares
of common stock of the Corporation (the "Outstanding Corporation Common Stock")
or (ii) the combined voting power of the then outstanding voting securities of
the Corporation entitled to vote generally in the election of directors (the
"Outstanding Corporation Voting Securities"); provided, however, that for
purposes of this subparagraph (a), the following acquisitions shall not
constitute a Change of Control: (v) any acquisition directly from the
Corporation, (w) any acquisition by the Corporation, (x) any acquisition by
Conexant Systems, Inc., (y) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Corporation, Conexant Systems,
Inc. or any corporation controlled by the Corporation or Conexant Systems, Inc.
or (z) any acquisition pursuant to a transaction which complies with clauses
(i), (ii) and (iii) of subsection (c) of this Paragraph 14(I)(1); or
(b) Individuals who, as of the date of the Distribution,
constitute the Board of Directors (the "Incumbent Board") cease for any reason
to constitute at least a majority of the Board of Directors; provided, however,
that any individual becoming a director subsequent to that date whose election,
or nomination for election by the Corporation's shareholders, was approved by a
vote of at least a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the Incumbent
Board, but excluding, for this purpose, any such individual whose 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 of Directors; or
(c) Consummation of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all of the
assets of the Corporation or the acquisition of assets of another entity (a
"Corporate Transaction"), in each case, unless, following such Corporate
Transaction, (i) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Corporation Common
Stock and Outstanding Corporation Voting Securities immediately prior to such
Corporate Transaction beneficially own, directly or indirectly, more than 60%
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 Corporate Transaction (including, without limitation, a
corporation which as a result of such
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transaction owns the Corporation or all or substantially all of the
Corporation's assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to such
Corporate Transaction, of the Outstanding Corporation Common Stock and
Outstanding Corporation Voting Securities, as the case may be, (ii) no Person
(excluding Conexant Systems, Inc., any employee benefit plan (or related trust)
of the Corporation, of Conexant Systems, Inc. or of such corporation resulting
from such Corporate Transaction) beneficially owns, directly or indirectly, 20%
or more of, respectively, the then outstanding shares of common stock of the
corporation resulting from such Corporate Transaction or the combined voting
power of the then outstanding voting securities of such corporation except to
the extent that such ownership existed prior to the Corporate Transaction and
(iii) at least a majority of the members of the board of directors of the
corporation resulting from such Corporate Transaction were members of the
Incumbent Board at the time of the execution of the initial agreement, or of the
action of the Board of Directors, providing for such Corporate Transaction; or
(d) Approval by the Corporation's shareholders of a
complete liquidation or dissolution of the Corporation.
(2) "Disinterested Director" means a director of the
Corporation who is not and was not a party to an action, suit or proceeding in
respect of which indemnification is sought by a director, officer, employee or
agent.
(3) "Independent Counsel" means a law firm, or a member of
a law firm, that (i) is experienced in matters of corporation law; (ii) neither
presently is, nor in the past five years has been, retained to represent the
Corporation, the director, officer, employee or agent claiming indemnification
or any other party to the action, suit or proceeding giving rise to a claim for
indemnification under this section, in any matter material to the Corporation,
the claimant or any such other party; and (iii) would not, under applicable
standards of professional conduct then prevailing, have a conflict of interest
in representing either the Corporation or such director, officer, employee or
agent in an action to determine the Corporation's or such person's rights under
this section.
(J) The indemnification and advancement of expenses herein provided,
or granted pursuant hereto, shall not be deemed exclusive of any other rights to
which any of those indemnified or eligible for advancement of expenses may be
entitled under any agreement, vote of shareholders or Disinterested Directors or
otherwise, both as to action in such person's official capacity and as to action
in another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such person.
Notwithstanding any amendment, alteration or repeal of this section or any of
its provisions, or of any of the procedures established by the Board of
Directors pursuant to subsection (H) hereof, any person who is or was a
director, officer, employee
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or agent of the Corporation or any of its majority-owned subsidiaries or is or
was serving at the request of the Corporation as a director, officer, employee
or agent of another corporation or of any partnership, joint venture, employee
benefit plan or other enterprise shall be entitled to indemnification in
accordance with the provisions hereof and thereof with respect to any action
taken or omitted prior to such amendment, alteration or repeal except to the
extent otherwise required by law.
(K) No indemnification shall be payable pursuant to this section with
respect to any action against the Corporation commenced by an officer, director,
employee or agent unless the Board of Directors shall have authorized the
commencement thereof or unless and to the extent that this section or the
procedures established pursuant to subsection (H) shall specifically provide for
indemnification of expenses relating to the enforcement of rights under this
section and such procedures.
* * * * *
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APPENDIX
PROCEDURES FOR SUBMISSION AND
DETERMINATION OF CLAIMS FOR INDEMNIFICATION
PURSUANT TO ARTICLE III, SECTION 14 OF THE BYLAWS.
SECTION 1. PURPOSE. The Procedures for Submission and Determination
of Claims for Indemnification Pursuant to Article III, Section 14 of the bylaws
(the "Procedures") are to implement the provisions of Article III, Section 14 of
the bylaws of the Corporation (the "bylaws") in compliance with the requirement
of subsection (H) thereof.
SECTION 2. DEFINITIONS. For purposes of these Procedures:
(A) All terms that are defined in Article III, Section 14 of the
bylaws shall have the meanings ascribed to them therein when used in these
Procedures unless otherwise defined herein.
(B) "Expenses" include all reasonable attorneys' fees, court costs,
transcript costs, fees of experts, witness fees, travel expenses, duplicating
costs, printing and binding costs, telephone charges, postage, delivery service
fees, and all other disbursements or expenses of the types customarily incurred
in connection with prosecuting, defending, preparing to prosecute or defend,
investigating, or being or preparing to be a witness in, a Proceeding; and shall
also include such retainers as counsel may reasonably require in advance of
undertaking the representation of an Indemnitee in a Proceeding.
(C) "Indemnitee" includes any person who was or is, or is threatened
to be made, a witness in or a party to any Proceeding by reason of the fact that
such person is or was a director, officer, employee or agent of the Corporation
or any of its majority-owned subsidiaries or is or was serving at the request of
the Corporation as a director, officer, employee or agent (except in each of the
foregoing situations to the extent any agreement, arrangement or understanding
of agency contains provisions that supersede or abrogate indemnification under
Article III, Section 14 of the bylaws) of another corporation or of any
partnership, joint venture, trust, employee benefit plan or other enterprise.
(D) "Proceeding" includes any action, suit, arbitration, alternative
dispute resolution mechanism, investigation, administrative hearing or any other
proceeding, whether civil, criminal, administrative or investigative, except one
initiated by an Indemnitee unless the Board of Directors shall have authorized
the commencement thereof.
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SECTION 3. SUBMISSION AND DETERMINATION OF CLAIMS.
(A) To obtain indemnification or advancement of Expenses under
Article III, Section 14 of the bylaws, an Indemnitee shall submit to the
Secretary of the Corporation a written request therefor, including therein or
therewith such documentation and information as is reasonably available to the
Indemnitee and is reasonably necessary to permit a determination as to whether
and what extent the Indemnitee is entitled to indemnification or advancement of
Expenses, as the case may be. The Secretary shall, promptly upon receipt of a
request for indemnification, advise the Board of Directors (if the Indemnitee is
a present or former director or officer of the Corporation) or the officer of
the Corporation authorized to make the determination as to whether an Indemnitee
is entitled to indemnification (if the Indemnitee is not a present or former
director or officer of the Corporation) thereof in writing if a determination in
accordance with Article III, Section 14(E) of the bylaws is required.
(B) Upon written request by an Indemnitee for indemnification
pursuant to Section 3(A) hereof, a determination with respect to the
Indemnitee's entitlement thereto in the specific case, if required by the
bylaws, shall be made in accordance with Article III, Section 14(E) of the
bylaws, and, if it is so determined that the Indemnitee is entitled to
indemnification, payment to the Indemnitee shall be made within ten days after
such determination. The Indemnitee shall cooperate with the person, persons or
entity making such determination, with respect to the Indemnitee's entitlement
to indemnification, including providing to such person, persons or entity upon
reasonable advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is reasonably
available to the Indemnitee and reasonably necessary to such determination.
(C) If entitlement to indemnification is to be made by Independent
Counsel pursuant to Article III, Section 14(E) of the bylaws, the Independent
Counsel shall be selected as provided in this Section 3(C). If a Change of
Control shall not have occurred, the Independent Counsel shall be selected by
the Board of Directors, and the Corporation shall give written notice to the
Indemnitee advising the Indemnitee of the identity of the Independent Counsel so
selected. If a Change of Control shall have occurred, the Independent Counsel
shall be selected by the Indemnitee (unless the Indemnitee shall request that
such selection be made by the Board of Directors, in which event the immediately
preceding sentence shall apply), and the Indemnitee shall give written notice to
the Corporation advising it of the identity of the Independent Counsel so
selected. In either event, the Indemnitee or the Corporation, as the case may
be, may, within seven days after such written notice of selection shall have
been given, deliver to the Corporation or to the Indemnitee, as the case may be,
a written objection to such selection. Such objection may be asserted only on
the ground that the Independent Counsel so selected does not meet the
requirements of "Independent Counsel" as defined
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in Article III, Section 14 of the bylaws, and the objection shall set forth with
particularity the factual basis of such assertion. If such written objection is
made, the Independent Counsel so selected may not serve as Independent Counsel
unless and until a court has determined that such objection is without merit.
If, within twenty days after the next regularly scheduled Board of Directors
meeting following submission by the Indemnitee of a written request for
indemnification pursuant to Section 3(A) hereof, no Independent Counsel shall
have been selected and not objected to, either the Corporation or the Indemnitee
may petition the Court of Chancery of the State of Delaware or other court of
competent jurisdiction for resolution of any objection which shall have been
made by the Corporation or the Indemnitee to the other's selection of
Independent Counsel and/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 with respect to whom an objection is favorably
resolved or the person so appointed shall act as Independent Counsel under
Article III, Section 14(E) of the bylaws. The Corporation shall pay any and all
reasonable fees and expenses (including without limitation any advance retainers
reasonably required by counsel) of Independent Counsel incurred by such
Independent Counsel in connection with acting pursuant to Article III, Section
14(E) of the bylaws, and the Corporation shall pay all reasonable fees and
expenses (including without limitation any advance retainers reasonably required
by counsel) incident to the procedures of Article III, Section 14(E) of the
bylaws and this Section 3(C), regardless of the manner in which Independent
Counsel was selected or appointed. Upon the delivery of its opinion pursuant to
Article III, Section 14 of the bylaws or, if earlier, the due commencement of
any judicial proceeding or arbitration pursuant to Section 4(A)(3) of these
Procedures, Independent Counsel shall be discharged and relieved of any further
responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).
(D) If a Change of Control shall have occurred, in making a
determination with respect to entitlement to indemnification under the bylaws,
the person, persons or entity making such determination shall presume that an
Indemnitee is entitled to indemnification under the bylaws if the Indemnitee has
submitted a request for indemnification in accordance with Section 3(A) hereof,
and the Corporation shall have the burden of proof to overcome that presumption
in connection with the making by any person, persons or entity of any
determination contrary to that presumption.
SECTION 4. REVIEW AND ENFORCEMENT OF DETERMINATION.
(A) In the event that (1) advancement of Expenses is not timely made
pursuant to Article III, Section 14(G) of the bylaws, (2) payment of
indemnification is not made pursuant to Article III, Section 14(C) or (D) of the
bylaws within ten days after receipt by the Corporation of written request
therefor, (3) a determination is made pursuant to Article III, Section 14(E) of
the bylaws that an Indemnitee is not entitled to
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indemnification under the bylaws, (4) the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to Article III,
Section 14(E) of the bylaws and such determination shall not have been made and
delivered in a written opinion within ninety days after receipt by the
Corporation of the written request for indemnification, or (5) payment of
indemnification is not made within ten days after a determination has been made
pursuant to Article III, Section 14(E) of the bylaws that an Indemnitee is
entitled to indemnification or within ten days after such determination is
deemed to have been made pursuant to Article III, Section 14(F) of the bylaws,
the Indemnitee shall be entitled to an adjudication in an appropriate court of
the State of Delaware, or in any other court of competent jurisdiction, of the
Indemnitee's entitlement to such indemnification or advancement of Expenses.
Alternatively, the Indemnitee, at his or her option, may seek an award in
arbitration to be conducted by a single arbitrator pursuant to the rules of the
American Arbitration Association. The Indemnitee shall commence such proceeding
seeking an adjudication or an award in arbitration within one year following the
date on which the Indemnitee first has the right to commence such proceeding
pursuant to this Section 4(A). The Corporation shall not oppose the Indemnitee's
right to seek any such adjudication or award in arbitration.
(B) In the event that a determination shall have been made pursuant
to Article III, Section 14(E) of the bylaws that an Indemnitee is not entitled
to indemnification, any judicial proceeding or arbitration commenced pursuant to
this Section 4 shall be conducted in all respects as a de novo trial, or
arbitration, on the merits and the Indemnitee shall not be prejudiced by reason
of that adverse determination. If a Change of Control shall have occurred, the
Corporation shall have the burden of proving in any judicial proceeding or
arbitration commenced pursuant to this Section 4 that the Indemnitee is not
entitled to indemnification or advancement of Expenses, as the case may be.
(C) If a determination shall have been made or deemed to have been
made pursuant to Article III, Section 14(E) or (F) of the bylaws that an
Indemnitee is entitled to indemnification, the Corporation shall be bound by
such determination in any judicial proceeding or arbitration commenced pursuant
to this Section 4, absent (1) a misstatement or omission of a material fact in
connection with the Indemnitee's request for indemnification, or (2) a
prohibition of such indemnification under applicable law.
(D) The Corporation shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section 4 that the
procedures and presumptions of these Procedures are not valid, binding and
enforceable, and shall stipulate in any such judicial proceeding or arbitration
that the Corporation is bound by all the provisions of these Procedures.
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(E) In the event that an Indemnitee, pursuant to this Section 4,
seeks to enforce the Indemnitee's rights under, or to recover damages for breach
of, Article III, Section 14 of the bylaws or these Procedures in a judicial
proceeding or arbitration, the Indemnitee shall be entitled to recover from the
Corporation, and shall be indemnified by the Corporation against, any and all
expenses (of the types described in the definition of Expenses in Section 2 of
these Procedures) actually and reasonably incurred in such judicial proceeding
or arbitration, but only if the Indemnitee prevails therein. If it shall be
determined in such judicial proceeding or arbitration that the Indemnitee is
entitled to receive part but not all of the indemnification or advancement of
Expenses sought, the expenses incurred by the Indemnitee in connection with such
judicial proceeding or arbitration shall be appropriately prorated.
SECTION 5. AMENDMENTS. These Procedures may be amended at any time
and from time to time in the same manner as any bylaw of the Corporation in
accordance with the Certificate of Incorporation; provided, however, that
notwithstanding any amendment, alteration or repeal of these Procedures or any
provision hereof, any Indemnitee shall be entitled to utilize these Procedures
with respect to any claim for indemnification arising out of any action taken or
omitted prior to such amendment, alteration or repeal except to the extent
otherwise required by law.
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