INDEMNIFICATION
AGREEMENT
This Agreement is
made as of the
day of
, 20___, by and between Analog Devices, Inc., a Massachusetts
corporation (the “Corporation”), and
(“Indemnitee”), a director or officer of the
Corporation.
WHEREAS, it is
essential to the Corporation to retain and attract as directors and
officers the most capable persons available, and
WHEREAS, the
substantial increase in corporate litigation subjects directors and
officers to expensive litigation risks, and
WHEREAS, it is the
policy of the Corporation to indemnify its directors and officers
so as to provide them with the maximum protection permitted by law,
and
WHEREAS, the
parties desire to adopt indemnification provisions consistent with
Chapter 156D of the General Laws of the Commonwealth of
Massachusetts (“Chapter 156D”), which became
effective subsequent to the Corporation’s most recent
Articles of Amendment containing indemnification
protection.
NOW THEREFORE, for
valuable consideration, the receipt of which is hereby
acknowledged, the Corporation and Indemnitee do hereby agree as
follows:
1.
Definitions. As used in this Agreement:
(a) A
“Change in Control” shall be deemed to occur upon the
earliest of the following to occur:
(i) the
acquisition by an individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”)) (a
“Person”) of beneficial ownership of any capital stock
of the Corporation if, after such acquisition, such Person
beneficially owns (within the meaning of Rule 13d-3
promulgated under the Exchange Act) 30% or more of either
(x) the then-outstanding shares of common stock of the
Corporation (the “Outstanding Company Common Stock”) or
(y) the combined voting power of the then outstanding
securities of the Corporation entitled to vote generally in the
election of directors (the “Outstanding Company Voting
Securities”);
(ii) individuals
who, as of the date hereof, constitute the Board of Directors of
the Corporation (the “Incumbent Board”) cease for any
reason to constitute at least a majority of the Board;
provided , however , that any individual becoming a
director subsequent to the date hereof 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 or entity (“Person”) other
than the Board;
(iii) the
consummation of a reorganization, merger or consolidation or sale
or other disposition of all or substantially all of the assets of
the Corporation (a “Business Combination”), in each
case, unless, following such Business Combination, (i) all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior
to the such Business Combination 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 Business Combination (including, without
limitation, a corporation which as a result of such 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 Business Combination of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (ii) no Person (excluding any
corporation resulting from such Business Combination or any
employee benefit plan (or related trust) of the Corporation or such
corporation resulting from such business Combination) beneficially
owns, directly or indirectly, 30% or more of, respectively, the
then outstanding shares of common stock of the corporation
resulting from such Business Combination 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
Business Combination and (iii) at least a majority of the
members of the Board of Directors of the corporation resulting from
such Business Combination were members of the Incumbent Board at
the time of the execution of the initial agreement, or of the
action of the Board, providing for such Business
Combination.
(b) The
term “Corporate Status” shall mean the status of a
person who is or was, or has agreed to become, a director or
officer of the Corporation or who, while a director or officer of
the Corporation, is or was serving at the Corporation’s
request as a director, officer, fiduciary, partner, trustee,
employee or agent of, or in a similar capacity with, another
corporation, partnership, joint venture, trust, employee benefit
plan or other entity. A director or officer is considered to be
serving an employee benefit plan at the Corporation’s request
if his or her duties to the Corporation also impose duties on, or
otherwise involve services by, him or her to the plan or to
participants in or beneficiaries of the plan.
(c) The
term “Disinterested Director” shall mean a director of
the Corporation who, at the time of a vote referred to in
Paragraph 8, is not (i) a party to the Proceeding, or
(ii) an individual having a familial, financial, professional
or employment relationship with Indemnitee, which relationship
would, in the circumstances, reasonably be expected to exert an
influence on the director’s judgment when voting on the
decision being made.
(d) The
term “Expenses” shall include, without limitation,
attorneys’ fees, retainers, court costs, transcript costs,
fees and expenses of experts, travel expenses, duplicating costs,
printing and binding costs, telephone and telecopy charges,
postage, delivery service fees
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and other
disbursements or expenses of the type customarily incurred in
connection with a Proceeding, but shall not include the amount of
judgments, fines or penalties against Indemnitee or amounts paid in
settlement in connection with such matters.
(e) The
term “Independent Counsel” shall mean 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 Corporation or Indemnitee in
any matter material to either such party (other than with respect
to matters concerning Indemnitee under this Agreement, or of other
indemnitees under similar indemnification agreements), 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 Corporation or Indemnitee in an action to determine
Indemnitee’s rights under this Agreement. The Corporation
agrees to pay the reasonable fees and expenses of the Independent
Counsel referred to above and to fully indemnify such counsel
against any and all Expenses, claims, liabilities and damages
arising out of or relating to this Agreement or its engagement
pursuant hereto.
(f) The
term “Liability” shall mean the obligation to pay a
judgment, settlement, penalty, fine (including an excise tax
assessed with respect to an employee benefit plan) and all
reasonable Expenses incurred in connection with a
Proceeding.
(g) The
term “Proceeding” shall mean any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative, arbitrative or investigative and whether formal or
informal.
(a) The
Corporation shall, to the fullest extent permitted by law (as such
may be amended from time to time), indemnify Indemnitee in
connection with any Proceeding as to which Indemnitee is, was or is
threatened to be made a party (or is otherwise involved) by reason
of Indemnitee’s Corporate Status. In furtherance of the
foregoing and without limiting the generality thereof:
(i) the
Corporation shall indemnify Indemnitee if Indemnitee was, is or is
threatened to be made a defendant or respondent in a Proceeding
because of Indemnitee’s Corporate Status as a director
against Liability incurred in the Proceeding if (A)
(1) Indemnitee conducted himself or herself in good faith, and
(2) Indemnitee reasonably believed that his or her conduct was
in the best interests of the Corporation or that his or her conduct
was at least not opposed to the best interests of the Corporation,
and (3) in the case of any criminal proceeding, Indemnitee had
no reasonable cause to believe his or her conduct was unlawful, or
(B) Indemnitee engaged in conduct for which Indemnitee shall
not be liable under a provision of the Corporation’s Articles
of Organization authorized by Section 2.02(b)(4) of
Chapter 156D of the General Laws of the Commonwealth of
Massachusetts or any successor provision to such Section;
and
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(ii) the
Corporation shall indemnify Indemnitee if Indemnitee was, is or is
threatened to be made a defendant or respondent in a Proceeding
because of Indemnitee’s Corporate Status as an officer
against Liability incurred in the Proceeding, except for Liability
arising out of acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law.
(b) Indemnitee’s
conduct with respect to an employee benefit plan for a purpose
Indemnitee reasonably believed to be in the interests of the
participants in, and the beneficiaries of, the plan is conduct that
satisfies the requirement that Indemnitee’s conduct was at
least not opposed to the best interests of the
Corporation.
(c) The
termination of a Proceeding by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its
equivalent, is not, of itself, determinative that Indemnitee did
not meet the relevant standard of conduct described in this
Paragraph 2.
3.
Exceptions to Right of Indemnification. Notwithstanding
anything to the contrary in this Agreement, except as set forth in
Paragraphs 9 and 10 :
(a) the
Corporation shall not indemnify, or advance Expenses to, Indemnitee
in connection with a Proceeding (or part thereof) initiated by
Indemnitee unless (i) the initiation thereof was approved by
the Board of Directors of the Corporation (the “Board of
Directors”) or (ii) the Proceeding is instituted after a
Change in Control (other than a Change in Control approved by a
majority of the Incumbent Board); and
(b) the
Corporation shall not be required to make an indemnification
payment to Indemnitee to the extent Indemnitee has otherwise
actually received such payment under any insurance policy,
agreement or otherwise, and in the event the Corporation makes any
indemnification payments to Indemnitee and Indemnitee is
subsequently reimbursed from the proceeds of insurance, Indemnitee
shall promptly refund such indemnification payments to the
Corporation to the extent of such insurance
reimbursement.
4.
Indemnification of Expenses of Successful Party.
Notwithstanding any other provision of this Agreement, in addition
to and not in limitation of the rights set forth in
Paragraph 2, to the extent that Indemnitee has been wholly
successful, on the merits or otherwise, in the defense of any
Proceeding to which Indemnitee was a party because of
Indemnitee’s Corporate Status, Indemnitee shall be
indemnified, to the fullest extent permitted by law (as such may be
amended from time to time), against all reasonable Expenses
incurred by Indemnitee or on Indemnitee’s behalf in
connection therewith.
5.
Indemnification for Expenses of a Witness. Notwithstanding
any other provision of this Agreement, to the extent that
Indemnitee is, by reason of Indemnitee’s Corporate Status, a
witness in any Proceeding to which Indemnitee is not a party,
Indemnitee shall be indemnified against all reasonable Expenses
incurred by or on behalf of Indemnitee in connection
therewith.
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