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Exhibit
10.3
1
AGREEMENT
This Agreement, made and
entered into this day of
,
19
(‘Agreement’), by and between Galen Health Care, Inc.,
a Delaware corporation (‘Company’), and
(‘Indemnitee’):
WHEREAS, highly competent
person are becoming more reluctant to serve publicly-held
corporations as directors or in other capacities unless they are
provided with adequate protection through insurance or adequate
indemnification against inordinate risks of claims and actions
against them arising out of their service to and activities on
behalf of the corporation; and
WHEREAS, the increasing
difficulties of obtaining adequate insurance and the uncertainties
relating to indemnification may impair the ability of the Company
to continue to attract and retain such persons; and
WHEREAS, the Board of
Directors of the Company (the ‘Board’) has determined
that the potential inability to attract and retain such persons is
detrimental to the best interest of the Company’s
stockholders and that the Company should act to assure such persons
that there will be increased certainty of such protection in the
future; and
WHEREAS, it is reasonable,
prudent and necessary for the Company contractually to obligate
itself to indemnify such persons to the fullest extent permitted by
applicable law so that they will serve or continue to serve the
Company free from undue concern that they will not be so
indemnified; and
WHEREAS, Indemnitee is
willing to serve, continue to serve and to take on additional
service for or on behalf of the Company on the condition that he be
so indemnified;
NOW, THEREFORE, in
consideration of the premises and the covenants contained herein,
the Company and Indemnitee do hereby covenant and agree as
follows:
Section 1. Services by
Indemnitee. Indemnitee agrees to serve (as a director, officer,
employee, agent or fiduciary of the Company) (at the request of the
Company, as a director, officer, employee, agent or fiduciary of
another corporation, partnership, joint venture, trust or other
enterprise). Indemnitee may at any time and for any reason resign
from such position (subject to any other contractual obligation or
any obligation imposed by operation of law), in which event the
Company shall have no obligation under this Agreement to continue
Indemnitee in any such position.
Section 2.
Indemnification — General. The Company shall indemnify, and
advance Expenses (as hereinafter defined), to Indemnitee as
provided in this Agreement and to the fullest extent permitted by
applicable law in effect on the date hereof and to such greater
extent as applicable law may thereafter from time to time permit.
The rights of Indemnitee provided under the preceding sentence
shall include, but shall not be limited to, the rights set forth in
the other Sections of the Agreement.
Section 3. Proceedings
Other Than Proceedings by or in the Right of the Company.
Indemnitee shall be entitled to the rights of indemnification
provided in this Section 3 if, by reason of his Corporate
Status (as hereinafter defined), he is, or is threatened to be
made, a party to any threatened, pending, or completed Proceeding
(as hereinafter defined), other than a Proceeding by or in the
right of the Company. Pursuant to this Section 3, Indemnitee
shall be indemnified against Expenses, judgments, penalties, fines
and amounts paid in settlement actually and reasonably incurred by
him or on his behalf in connection with such Proceeding or any
claim, issue or matter therein, if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal
Proceeding, had no reasonable cause to believe his conduct was
unlawful.
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Section 4. Proceeding by
or in the Right of the Company. Indemnitee shall be entitled to the
rights of indemnification provided in this Section 4 if, by
reason of his Corporate Status, he is, or is threatened to be made,
a party to any threatened, pending or completed Proceeding brought
by or in the right of the Company to procure a judgment in its
favor. Pursuant to this Section, Indemnitee shall be indemnified
against Expenses actually and reasonably incurred by him or on his
behalf in connection with such Proceeding if he acted in
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good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the
Company. Notwithstanding the foregoing, no indemnification against
such Expenses shall be made in respect of any claim, issue or
matter in such Proceeding as to which Indemnitee shall have been
adjudged to be liable to the Company if applicable law prohibits
such indemnification; provided, however, that, if applicable law so
permits, indemnification against Expenses shall nevertheless be
made by the Company in such event if and only to the extent that
the Court of Chancery of the State of Delaware, or the court in
which such Proceeding shall have been brought or is pending, shall
determine.
Section 5.
Indemnification for Expenses of a Party Who is Wholly or Partly
Successful. Notwithstanding any other provision of this Agreement,
to the extent that Indemnitee is, by reason of his Corporate
Status, a party to and is successful, on the merits or otherwise,
in any Proceeding, he shall be indemnified against all Expenses
actually and reasonably incurred by him or on his behalf in
connection therewith. If Indemnitee is not wholly successful in
such Proceeding but is successful, on the merits or otherwise, as
to one or more but less than all claims, issues or matters in such
Proceeding, the Company shall indemnify Indemnitee against all
Expenses actually and reasonably incurred by him or on his behalf
in connection with each successfully resolved claim, issue or
matter. For purposes of this Section and without limitation, the
termination of any claim, issue or matter in such a Proceeding by
dismissal, with or without prejudice, shall be deemed to be a
successful result as to such claim, issue or matter.
Section 6.
Indemnification for Expenses of a Witness. Notwithstanding any
other provision of this Agreement, to the extent that Indemnitee
is, by reason of his Corporate Status, a witness in any Proceeding,
he shall be indemnified against all Expenses actually and
reasonably incurred by him or on his behalf in connection
therewith.
Section 7. Advancement
of Expenses. The Company shall advance all reasonable Expenses
incurred by or on behalf of Indemnitee in connection with any
Proceeding within twenty days after the receipt by the Company of a
statement or statements from Indemnitee requesting such advance or
advances from time to time, whether prior to or after final
disposition of such Proceeding. Such statement or statements shall
reasonably evidence the Expenses incurred by Indemnitee and shall
include or be preceded or accompanied by an undertaking by or on
behalf of Indemnitee to repay any Expenses advanced if it shall
ultimately be determined that Indemnitee is not entitled to be
indemnified against such Expenses.
Section 8. Procedure for
Determination of Entitlement to indemnification.
(a) To obtain indemnification
under this Agreement, Indemnitee shall submit to the Company a
written request, including therein or therewith such documentation
and information as is reasonably available to Indemnitee and is
reasonably necessary to determine whether and to what extent
Indemnitee is entitled to indemnification. The Secretary of the
Company shall, promptly upon receipt of such a request for
indemnification, advise the Board of Directors in writing that
Indemnitee has requested indemnification.
(b) Upon written request by
Indemnitee for indemnification pursuant to the first sentence of
Section 8(a) hereof, a determination, if required by
applicable law, with respect to Indemnitee’s entitlement
thereto shall be made in the specific case: (i) if a Change in
Control (as hereinafter defined) shall have occurred, by
Independent Counsel (as hereinafter defined) (unless Indemnitee
shall request that such determination be made by the Board of
Directors or the stockholders, in which case by the person or
persons or in the manner provided for in clauses (ii) or
(iii) of this Section 8(b)) in a written opinion to the
Board of Directors, a copy of which shall be delivered to
Indemnitee; (ii) if a Change of Control shall not have
occurred, (A) by the Board of Directors by a majority vote of
a quorum consisting of Disinterested Directors (as hereinafter
defined), or (B) if a quorum of the Board of
Directors
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consisting of Disinterested Directors is
not obtainable or, even if obtainable, if such quorum of
Disinterested Directors so directs, by Independent Counsel in a
written opinion to the Board of Directors, a copy of which shall be
delivered to Indemnitee or (C) by the stockholders of the
Company; or (iii) as provided in Section 9(b) of this
Agreement; and, if it is so determined that Indemnitee is entitled
to indemnification, payment to Indemnitee shall be made within ten
(10) days after such determination. Indemnitee shall cooperate
with the person, persons or entity making such determination with
respect to 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
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otherwise protected from disclosure and
which is reasonably available to Indemnitee and reasonably
necessary to such determination. Any costs or expenses (including
attorneys’ fees and disbursements) incurred by Indemnitee in
so cooperating with the person, persons or entity making such
determination 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.
(c) In the event the
determination of entitlement to indemnification is to be made by
Independent Counsel pursuant to Section 8(b) hereof, the
Independent Counsel shall be selected as provided in this Section
8(c). If a Change of Control shall not have occurred, the
Independent Counsel shall be selected by the Board of Directors,
and the Company shall give written notice to Indemnitee advising
him of the identity of the Independent Counsel so selected. If a
Change of Control shall have occurred, the Independent Counsel
shall be selected by Indemnitee (unless Indemnitee shall request
that such selection be made by the Board of Directors, in which
event the preceding sentence shall apply), and Indemnitee shall
give written notice to the Company advising it of the identity of
the Independent Counsel so selected. In either event, Indemnitee or
the Company, as the case may be, may, within seven (7) days
after such written notice of selection shall have been given,
deliver to the Company or to 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 in Section 17 of this Agreement, 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 (20) days after submission by Indemnitee of
a written request for indemnification pursuant to Section 8(a)
hereof, no Independent Counsel shall have been selected and not
objected to, either the Company or 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 Company or 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 so resolved or the person so
appointed shall act as Independent Counsel under Section 8(b)
hereof. The Company shall pay any and all reasonable fees and
expenses of Independent Counsel incurred by such Independent
Counsel in connection with acting pursuant to Section 8(b)
hereof, and the Company shall pay all reasonable fees and expenses
incident to the procedures of this Section 8(c), regardless of
the manner in which such Independent Counsel was selected or
appointed. Upon the due commencement of any judicial
proceedi
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