Exhibit 10.1
ALIEN TECHNOLOGY
CORPORATION
INDEMNIFICATION
AGREEMENT
THIS AGREEMENT is entered into,
effective as of __________, 2006 by and between Alien Technology
Corporation, a Delaware corporation (the “ Company
”), and __________ (“ Indemnitee ”),
effective as of the date that the Registration Statement on Form
S-1 related to the initial public offering of the Company’s
Common Stock is declared effective by the United States Securities
and Exchange Commission.
WHEREAS, it is essential to the
Company to retain and attract as directors and officers the most
capable persons available;
WHEREAS, Indemnitee is a director
and/or officer of the Company;
WHEREAS, both the Company and
Indemnitee recognize the increased risk of litigation and other
claims currently being asserted against directors and officers of
corporations;
WHEREAS, the Certificate of
Incorporation and Bylaws of the Company require the Company to
indemnify and advance expenses to its directors and officers to the
fullest extent permitted under Delaware law, and the Indemnitee has
been serving and continues to serve as a director and/or officer of
the Company in part in reliance on the Company’s Certificate
of Incorporation and Bylaws; and
WHEREAS, in recognition of
Indemnitee’s need for (i) substantial protection against
personal liability based on Indemnitee’s reliance on the
aforesaid Certificate of Incorporation and Bylaws,
(ii) specific contractual assurance that the protection
promised by the Certificate of Incorporation and Bylaws will be
available to Indemnitee (regardless of, among other things, any
amendment to or revocation of the Certificate of Incorporation and
Bylaws or any change in the composition of the Company’s
Board of Directors or acquisition transaction relating to the
Company) and (iii) an inducement to provide effective services
to the Company as a director and/or officer, the Company wishes to
provide in this Agreement for the indemnification of and the
advancing of expenses to Indemnitee to the fullest extent (whether
partial or complete) permitted under Delaware law and as set forth
in this Agreement, and, to the extent insurance is maintained, to
provide for the continued coverage of Indemnitee under the
Company’s directors’ and officers’ liability
insurance policies.
NOW, THEREFORE, in consideration of
the above premises and of Indemnitee continuing to serve the
Company directly or, at its request, with another enterprise, and
intending to be legally bound hereby, the parties agree as
follows:
1. Certain Definitions:
(a) “ Board ”
shall mean the Board of Directors of the Company.
(b) “ Affiliate ”
shall mean any corporation or other person or entity that directly,
or indirectly through one or more intermediaries, controls or is
controlled by or is under common control with, the person
specified, including, without limitation, with respect to the
Company, any direct or indirect subsidiary of the
Company.
(c) A “ Change in
Control ” shall be deemed to have occurred if
(i) any “person” (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended
(the “ Exchange Act ”)) (other than a trustee or
other fiduciary holding securities under an employee benefit plan
of the Company or a corporation owned directly or indirectly by the
stockholders of the Company in substantially the same proportions
as their ownership of stock of the Company, and other than any
person holding shares of the Company on the date that the Company
first registers under the Act or any transferee of such individual
if such transferee is a spouse or lineal descendant of the
transferee or a trust for the benefit of the individual, his or her
spouse or lineal descendants), is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing
[3 0 %] or more of the total voting power represented by the
Company’s then outstanding Voting Securities,
(ii) during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board and any
new director whose election by the Board or nomination for election
by the Company’s stockholders was approved by a vote of at
least two-thirds (2/3) of the directors then still in office
who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved,
cease for any reason to constitute a majority of the Board,
(iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other entity, other than a
merger or consolidation that would result in the Voting Securities
of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into Voting Securities of the surviving entity) at least 80% of the
total voting power represented by the Voting Securities of the
Company or such surviving entity outstanding immediately after such
merger or consolidation or (iv) the stockholders of the
Company approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company (in one
transaction or a series of transactions) of all or substantially
all of the Company’s assets.
(d) “ Expenses ”
shall mean any expense, liability or loss, including
attorneys’ fees, judgments, fines, ERISA excise taxes and
penalties, amounts paid or to be paid in settlement, any interest,
assessments or other charges imposed thereon, any federal, state,
local or foreign taxes imposed as a result of the actual or deemed
receipt of any payments under this Agreement and all other costs
and obligations, paid or incurred in connection with investigating,
defending, being a witness in, participating in (including on
appeal) or preparing for any of the foregoing in, any Proceeding
relating to any Indemnifiable Event.
(e) “ Indemnifiable
Event ” shall mean any event or occurrence that takes
place either prior to or after the execution of this Agreement,
related to the fact that Indemnitee is or was a director or officer
of the Company or an Affiliate of the Company, or while a director
or officer is or was serving at the request of the Company or an
Affiliate of the Company as a director, officer, employee, trustee,
agent or fiduciary of another foreign or domestic corporation,
partnership, joint venture, employee benefit plan, trust or other
enterprise or was a director, officer, employee or agent of a
foreign or domestic corporation that was a predecessor corporation
of the Company or of
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another enterprise at the request of
such predecessor corporation, or related to anything done or not
done by Indemnitee in any such capacity, whether or not the basis
of the Proceeding is alleged action in an official capacity as a
director, officer, employee or agent or in any other capacity while
serving as a director, officer, employee or agent of the Company or
an Affiliate of the Company, as described above.
(f) “ Independent
Counsel ” shall mean the person or body appointed in
connection with Section 3.
(g) “ Proceeding
” shall mean any threatened, pending or completed action,
suit or proceeding or any alternative dispute resolution mechanism
(including an action by or in the right of the Company or an
Affiliate of the Company) or any inquiry, hearing or investigation,
whether conducted by the Company or an Affiliate of the Company or
any other party, that Indemnitee in good faith believes might lead
to the institution of any such action, suit or proceeding, whether
civil, criminal, administrative, investigative or other.
(h) “ Reviewing Party
” shall mean the person or body appointed in accordance with
Section 3.
(i) “ Voting Securities
” shall mean any securities of the Company that vote
generally in the election of directors.
2. Agreement to Indemnify
.
(a) General Agreement . In
the event Indemnitee was, is or becomes a party to or witness or
other participant in, or is threatened to be made a party to or
witness or other participant in, a Proceeding by reason of (or
arising in part out of) an Indemnifiable Event, the Company shall
indemnify Indemnitee from and against any and all Expenses to the
fullest extent permitted by law, as the same exists or may
hereafter be amended or interpreted (but in the case of any such
amendment or interpretation, only to the extent that such amendment
or interpretation permits the Company to provide broader
indemnification rights than were permitted prior thereto). The
parties hereto intend that this Agreement shall provide for
indemnification in excess of that expressly permitted by statute,
including, without limitation, any indemnification provided by the
Company’s Certificate of Incorporation, its Bylaws, vote of
its stockholders or disinterested directors or applicable
law.
(b) Initiation of Proceeding
. Notwithstanding anything in this Agreement to the contrary,
Indemnitee shall not be entitled to indemnification pursuant to
this Agreement in connection with any Proceeding initiated by
Indemnitee against the Company or any director or officer of the
Company unless (i) the Company has joined in or the Board has
consented to the initiation of such Proceeding, (ii) the
Proceeding is one to enforce indemnification rights under
Section 5 or (iii) the Proceeding is instituted after a
Change in Control (other than a Change in Control approved by a
majority of the directors on the Board who were directors
immediately prior to such Change in Control) and Independent
Counsel has approved its initiation.
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(c) Expense Advances . If so
requested by Indemnitee, the Company shall advance (within thirty
(30) days of such request) any and all Expenses to Indemnitee
(an “Expense Advance”). The Indemnitee shall qualify
for such Expense Advances upon the execution and delivery to the
Company of this Agreement which shall constitute an undertaking
providing that the Indemnitee undertakes to repay such Expense
Advances if and to the extent that it is ultimately determined by a
court of competent jurisdiction in a final judgment, not subject to
appeal, that Indemnitee is not entitled to be indemnified by the
Company. Indemnitee’s obligation to reimburse the Company for
Expense Advances shall be unsecured and no interest shall be
charged thereon. This Section 2(c) shall not apply to any
claim made by Indemnitee for which indemnity is excluded pursuant
to Section 2(b) or 2(f).
(d) Mandatory Indemnification
. Notwithstanding any other provision of this Agreement, to the
extent that Indemnitee has been successful on the merits or
otherwise in defense of any Proceeding relating in whole or in part
to an Indemnifiable Event or in defense of any issue or matter
therein, Indemnitee shall be indemnified against all Expenses
incurred in connection therewith.
(e) Partial Indemnification .
If Indemnitee is entitled under any provision of this Agreement to
indemnification by the Company for some or a portion of Expenses,
but not, however, for the total amount thereof, the Company shall
nevertheless indemnify Indemnitee for the portion thereof to which
Indemnitee is entitled.
(f) Prohibited
Indemnification . No indemnification pursuant to this Agreement
shall be paid by the Company on account of any Proceeding in which
a final judgment is rendered against Indemnitee or Indemnitee
enters into a settlement, in each case (i) for an accounting
of profits made from the purchase or sale by Indemnitee of
securities of the Company pursuant to the provisions of
Section 16(b) of the Exchange Act or similar provisions of any
federal, state or local laws; (ii) for which payment has
actually been made to or on behalf of Indemnitee under any
insurance policy or other indemnity provision, except with respect
to any excess beyond the amount paid under any insurance policy or
other indemnity provision; or (iii) for which payment is
prohibited by law. Notwithstanding anything to the contrary stated
or implied in this Section 2(f), indemnification pursuant to
this Agreement relating to any Proceeding against Indemnitee for an
accounting of profits made from the purchase or sale by Indemnitee
of securities of the Company pursuant to the provisions of
Section 16(b) of the Exchange Act or similar provisions of any
federal, state or local laws shall not be prohibited if Indemnitee
ultimately establishes in any Proceeding that no recovery of such
profits from Indemnitee is permitted under Section 16(b) of
the Exchange Act or similar provisions of any federal, state or
local laws.
3. Reviewing Party . Prior to
any Change in Control, the Reviewing Party shall be any appropriate
person or body consisting of a member or members of the Board or
any other person or body appointed by the Board who is not a party
to the particular Proceeding with respect to which Indemnitee is
seeking indemnification; provided that if all members of the Board
are parties to the particular Proceeding with respect to which
Indemnitee is seeking indemnification, the Independent Counsel
referred to below shall become the Reviewing Party; after a Change
in Control, the Independent Counsel referred to below shall become
the Reviewing Party. With respect to all matters arising before a
Change in Control for which Independent Counsel shall be the
Reviewing
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Party and all matters arising after
a Change in Control, in each case concerning the rights of
Indemnitee to indemnity payments and Expense Advances under this
Agreement or any other agreement or under applicable law or the
Company’s Certificate of Incorporation or Bylaws now or
hereafter in effect relating to indemnification for Indemnifiable
Events, the Company shall seek legal advice only from Independent
Counsel selected by Indemnitee and approved by the Company (which
approval shall not be unreasonably withheld or delayed), and who
has not otherwise performed servic
