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EXHIBIT 10.2
INDEMNIFICATION AGREEMENT
THIS AGREEMENT, made and entered into the _____ day of ________________, 199__
between Giga-tronics Incorporated, a California corporation ("Corporation"),
and ______________________________ ("Officer"),
WITNESSETH THAT:
WHEREAS, Officer of the Corporation, performs a valuable service in such
capacity of Corporation; and
WHEREAS, the Articles of Incorporation of the Corporation authorizes and
permits contracts between Corporation and its officers with respect to
indemnification of such officers; and
WHEREAS, in accordance with the authorization as provided by the
California General Corporation Law, as amended ("Code"), Corporation may
purchase and maintain a policy or policies of Directors and Officers Liability
Insurance ("D&O Insurance"), covering certain liabilities which may be incurred
by its directors and officers in the performance as officers and directors of
Corporation; and
WHEREAS, as a result of recent developments affecting the terms, scope and
availability of D&O Insurance there exists general uncertainty as to the extent
of protection afforded officers and directors by such D&O Insurance and by
statutory and by-law indemnification provisions; and
WHEREAS, in order to induce Officer to continue to serve as an officer of
Corporation, Corporation has determined and agreed to enter into this contract
with Officer;
NOW, THEREFORE, in consideration of Officer's continued service as an
officer after the date hereof, the parties hereto agree as follows:
1. INDEMNITY OF OFFICER. Corporation hereby agrees to hold harmless
and indemnify Officer to the full extent authorized by the
provisions of the Code, as it may be amended from time to time.
2. ADDITIONAL INDEMNITY. Subject only to the limitations set forth in
Section 3 hereof, Corporation hereby further agrees to hold harmless
and indemnify Officer:
(a) Against any and all expenses (including attorney's fees),
judgments, fines and amounts paid in settlement actually and
reasonably incurred by Officer in connection with any
threatened, pending or completed action, suit or proceedings,
whether civil, criminal, administrative or investigative
(including an action by or in the right of
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Corporation) to which Officer is, was, or at any time becomes
a party, or is threatened to be made a party, by reason of the
fact that Officer is, was or at any time becomes a director,
officer, employee or agent of Corporation, or is or was
serving or at any time serves at the request of Corporation as
a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprises; and
(b) otherwise to the fullest extent as may be provided to Officer
by Corporation under the non-exclusivity provision of the
Articles of Incorporation of Corporation and the Code.
(3) LIMITATIONS ON ADDITIONAL INDEMNITY.
(a) No indemnity pursuant to Section 2 hereof shall be paid by
Corporation for any of the following:
(i) except to the extent the aggregate of losses to be
indemnified thereunder exceeds the sum of such losses
for which the Officer is indemnified pursuant to Section
1 hereof or pursuant to any D & O Insurance purchased
and maintained by Corporation;
(ii) in respect to remuneration paid to Officer if it shall
be determined by a final judgment or other final
adjudication that such remuneration was in violation of
law;
(iii) on account of any suit in which judgement is rendered
against Officer for an accounting of profits made from
the purchase or sale by Officer of securities of
Corporation pursuant to the provisions of Section 16(b)
of the Securities Exchange Act of 1934 and amendments
thereto or similar provisions of any federal, state or
local statutory law;
(iv) on account of Officer's acts or omissions that involve
intentional misconduct or a knowing and culpable
violation of laws;
(v) on account of any proceeding (other than a proceeding
referred to in Section 8(b) hereof) initiated by the
Officer unless such proceeding was authorized by the
Directors of the Corporation;
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(vi) if a final decision by a Court having jurisdiction in the
matter shall determine that such indemnification is not
lawful; or
(vii) on account of any action, suit or proceeding commenced by
the Officer against the Corporation or against any officer,
director or shareholder of the Corporation unless
authorized in the specific case by action of the Board of
Directors;
(b) In addition to those limitations set forth above in paragraph (a)
of this Section 3, no indemnity pursuant to Section 2 hereof in an
action by or in the right of Corporation shall be paid by
Corporation for any of the following:
(i) on account of acts or omissions that Officer believes to
be contrary to the best interests of the Corporation or its
shareholders or that involve the absence of good faith on
the part of Officer;
(ii) with respect to any transaction from which Officer derived
an improper personal benefit;
(iii) on account of acts or omissions that show a reckless
disregard for Officer's duty to the Corporation or its
shareholders in circumstances in which Officer was aware,
or should have been aware, in the ordinary course of
performing an officer's duties, of a risk of serious injury
to Corporation or its shareholders;
(iv) on account of acts or omissions that constitute an
unexcused pattern of inattention that amounts to an
abdication of Officer's duty to the Corporation or its
shareholders;
(v) to the extent prohibited by section 310 of the California
Corporations Code, "Contracts In Which Officer Has Material
Financial Interest;"
(vi) to the extent prohibited by Section 316 of the California
Corporations Code, "Corporate Actions Subjecting Officers
To Joint and Several Liability" (for prohibited
distributions, loans and guarantees);
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(vii) in respect to any claim, issue or matter as to which
Officer shall have been adjudged to be liable to
Corporation in the performance of Officer's duty to
Corporation and its shareholders, unless and only to the
extent that the court in which such proceeding is or was
pending shall determine upon application that, in view of
all the circumstances of the case, Officer is fairly and
reasonably entitled to indemnity for expenses and then only
to the extent that the court shall determine;
(viii) of amounts paid in settling or otherwise disposing of a
pending action without court approval; or
(ix) of expenses incurred in defending a pending action which is
settled or otherwise disposed of without court approval.
4. CONTRIBUTION. If the indemnification provided in 1 and 2 is unavailable
and may not be paid to Officer for any reason other than those set forth
in Section 3 (excluding subsections 3(b) (viii) and (ix), then in respect
of any threatened, pending or completed action, suit or proceeding in
which Corporation is jointly liable with Officer (or would be if joined
in such action, suit or proceeding), Corporation shall contribute to the
amount of expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred and paid or
payable by Officer in such proportion as is appropriate to reflect (i)
the relative benefits received by Corporation on the one hand and Officer
on the other hand from the transaction from which such action, suit or
proceeding arose, and (ii) the relative fault of Corporation on the one
hand and of Officer on the other in connection with the events which
resulted in such expenses, judgments, fines or settlement amounts, as
well as any other relevant equitable considerations. The relative fault
of Corporation on the one hand and the Officer on the other shall be
determined by reference to, among other things, the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent the circumstances resulting in such expenses, judgments, fines or
settlement amounts. Corporation agrees that it would not be just and
equitable if contribution pursuant to this Section 4 were determined by
pro rata allocation or any other method of allocation which does not take
account of the foregoing equitable consideration.
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5. CONTINUATION OF OBLIGATIONS. All agreements and obligations of Corporation
contained herein shall continue during the period Officer is a director,
officer, employee or agent of Corporation (or is or was serving at the
request of Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise) and shall continue hereafter so long as Officer shall be
subject to any possible claim or threatened, pending or completed action,
suit or proceeding, whether civil, criminal or investigative by reason of
the fact that Officer was an officer of Corporation or serving in any
other capacity referred to herein.
6. NOTIFICATION AND DEFENSE OF CLAIM. Promptly after receipt by Officer of
notice of the commencement of any action, suit or proceeding, Officer
will, if a claim in respect thereof is to be made against Corporation
under this Agreement, notify Corporation of the commencement thereof; but
the omission so to notify Corporation will not relieve it from any
liability which it may have to Officer otherwise than under this
Agreement. With respect to any such action, suit or proceeding as to which
Office notifies Corporation of the commencement thereof;
(a) Corporation will be entitled to participate therein at its own
expense;
(b) except as otherwise provided below, to the extent that it may wish,
Corporation jointly with any other indemnifying party similarly
notified will be entitled to assume the defense thereof, with counsel
satisfactory to Officer. After notice from Corporation to Officer of
its election so as to assume the defense thereof, Corporation will
not be liable to Officer under this Agreement for any legal or other
expenses subsequently incurred by Officer in connection with the
defense thereof other than reasonable costs of investigation or as
otherwise provided below. Officer shall have the right to employ its
counsel in such action, suit or proceeding but the fees and expenses
of such counsel incurred after notice from Corporation of its
assumption of the defense thereof shall be at the expense of Officer
unless (i) the employment of counsel by Officer has been authorized
by Corporation, (ii) Officer shall have reasonably concluded that
there may be a conflict of interest between Corporation and Officer
in the conduct of the defense of such action, in each of which cases
the fees and expenses of counsel shall be at the
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expense of Corporation. Corporation shall not be entitled to assume
the defense of any action, suit or proceeding brought by or on behalf
of Corporation or as to which Officer shall have made the conclusion
provided for in (ii) above; and
(c) Corporation shall not be liable to indemnify Officer under this
Agreement for any amounts paid in settlement of any action or claim
effected without its written consent. Corporation shall not settle
any action or claim in any manner which would impose any penalty or
limitation on Officer without Officer's written consent. Neither
Corporation nor Officer will unreasonably withhold its consent to
any proposed settlement.
7. ADVANCEMENT AND REPAYMENT OF EXPENSES.
(a) In the event that Officer employs his own counsel pursuant to Section
6(b)(i) through (iii) above, Corporation shall advance to Officer,
prior to any final disposition of any threatened or pending action,
suit or proceeding, whether civil, criminal, administrative or
investigative, any and all reasonable expenses (including legal fees
and expenses) incurred in investigating or defending any such action,
suit or proceeding within ten (10) days after receiving copies of
invoices presented to Officer for such expenses; and
(b) Officer agrees that Officer will reimburse Corporation for all
reasonable expenses paid by Corporation in defending any civil or
criminal action, suit or proceeding against Officer in the event and
only to the extent it shall be ultimately determined by a final
judicial decision (from which there is no right of appeal) that
Officer is not entitled, under applicable law, the by-laws, this
Agreement or otherwise, to be indemnified by Corporation for such
expenses.
8. ENFORCEMENT.
(a) Corporation expressly confirms and agrees that it has entered into
this Agreement and assumed the obligations imposed on Corporation
hereby in order to induce Officer to continue as an Officer of
Corporation, and acknowledges that Officer is relying upon this
Agreement in continuing in such capacity.
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(b) In the event Officer is required to bring any action to enforce
rights or to collect monies due under this Agreement and is
successful in such action, Corporation shall reimburse Officer
for all of Officer's reasonable fees and expenses in bringing and
pursuing such action.
9. SEPARABILITY. Each of the provisions of this Agreement is a separate
and distinct agreement and independent of the others, so that if any
provision hereof shall be held to be valid or unenforceable for any
reason, such invalidity or unenforceability shall not affect the
validity or enforceability of the other provisions hereof.
10. GOVERNING LAW. This Agreement shall be interpreted and enforced in
accordance with the laws of the State of California.
11. BINDING EFFECT. This Agreement shall be binding upon Officer and upon
Corporation, its successors and assigns, and shall inure to the
benefit of Officer, his heirs, personal representatives and assigns
and to the benefit of Corporation, its successors and assigns.
12. AMENDMENT AND TERMINATION. No amendment, modification, termination or
cancellation of this Agreement shall be effective unless in writing
signed by both parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and
as of the day and year first above written.
GIGA-TRONICS, INCORPORATED
By ___________________________________________
[Name] [Title]
___________________________________________
[Name] [Officer]