INDEMNIFICATION
AGREEMENT
This
Indemnification Agreement (“ Agreement ”) is
effective as of [DATE], by and between Atmel Corporation, a
Delaware corporation (the “ Company ”), and
[INDIVIDUAL] (“ Indemnitee ”).
WHEREAS, the
Company desires to attract and retain the services of highly
qualified individuals, such as Indemnitee, to serve the Company and
its related entities;
WHEREAS,
Indemnitee is presently the beneficiary of an indemnification
agreement with the Company, dated ___;
WHEREAS, this
agreement is being executed because the Company desires to clarify
possible ambiguities in the present agreement and seeks to ensure
Indemnitee that he will be indemnified to the maximum extent
permitted by Delaware law;
WHEREAS,
Indemnitee currently serves as [a director of the Company]/[an
officer of the Company and also may serve at the request of the
Company as a director, officer, employee or agent of various
subsidiaries of the Company]/[a director and officer of the Company
and also may serve at the request of the Company as a director,
officer, employee or agent of various subsidiaries of the Company]
and Indemnitee is relying upon this Agreement in carrying out the
corporate strategy of the Company, including the restructuring of
the Company’s foreign operations, in furtherance of the
interests of the Company and its stockholders;
WHEREAS, the
Company and Indemnitee recognize the continued difficulty in
obtaining liability insurance for the Company’s directors,
officers, employees, agents and fiduciaries, the significant
increases in the cost of such insurance and the general reductions
in the coverage of such insurance;
WHEREAS, the
Company and Indemnitee further recognize the substantial increase
in corporate litigation in general, subjecting directors, officers,
employees, agents and fiduciaries to expensive litigation risks at
the same time as the availability and coverage of liability
insurance has been severely limited;
WHEREAS, the
Company and Indemnitee desire to continue to have in place the
additional protection provided by an indemnification agreement and
to provide indemnification and advancement of expenses to the
Indemnitee to the maximum extent permitted by Delaware
law;
WHEREAS, the
Company and Indemnitee acknowledge and agree that, as contemplated
by 6 Del. C. § 2708 (“Section 2708”),
this Agreement involves at least $100,000 and, therefore, the
Company and Indemnitee intend for Section 2708 and the related
legislative commentary, which specifies that Section 2708 was
intended to supersede all Delaware common law limitations on the
enforceability of choice of law provisions (including any
restrictions contained in the Restatement (Second) Conflict of
Laws), as well as limitations on contractual consent to
jurisdiction or service of process, to apply to this Agreement;
and
WHEREAS, in view
of the considerations set forth above, the Company desires that
Indemnitee shall be indemnified and advanced expenses by the
Company as set forth herein;
NOW, THEREFORE,
the Company and Indemnitee hereby agree as set forth
below.
(a)
“ Change in Control ” shall mean, and shall be
deemed to have occurred if, on or after the date of this Agreement,
(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 acting in such capacity 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, becomes the “ beneficial owner
” (as defined in Rule 13d-3 under said Exchange Act),
directly or indirectly, of securities of the Company representing
more than 50% 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 of
Directors of the Company and any new director whose election by the
Board of Directors 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 thereof, or (iii) the
stockholders of the Company approve a merger or consolidation of
the Company with any other corporation other than a merger or
consolidation which 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 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 of (in one transaction or a
series of related transactions) all or substantially all of the
Company’s assets.
(b)
“ Claim ” shall mean with respect to a Covered
Event: any threatened, pending or completed action, suit,
proceeding or alternative dispute resolution mechanism, or any
hearing, inquiry or investigation, in any federal, state, local or
foreign jurisdiction, that Indemnitee in good faith believes might
lead to the institution of any such action, suit, proceeding or
alternative dispute resolution mechanism, whether civil, criminal,
administrative, investigative or other. For the avoidance of doubt,
it is specified that, with respect to a foreign jurisdiction, the
terms action, suit, proceeding, dispute, hearing, inquiry or
investigation as used herein shall include all corresponding terms
usually describing such situations in said foreign
jurisdiction.
(c) References
to the “ Company ” shall include, in addition to
Atmel Corporation, any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or merger
to which Atmel Corporation (or any of its wholly owned
subsidiaries) is a party which, if its separate existence had
continued, would have had power and authority to indemnify its
directors, officers, employees, agents or fiduciaries, so that if
Indemnitee is or was a director, officer, employee, agent or
fiduciary of such constituent corporation, or is or was serving at
the request of such constituent corporation as a director, officer,
employee, agent or fiduciary of another corporation, partnership,
joint venture, employee benefit plan, trust or other enterprise,
Indemnitee shall stand in the same position under the provisions of
this Agreement with respect to the resulting or surviving
corporation as Indemnitee would have with respect to such
constituent corporation if its separate existence had
continued.
(d)
“ Covered Event ” shall mean any event or
occurrence, whether in each case occurring before or after the date
of this Agreement, related to the fact that Indemnitee is or was a
director, officer,
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employee, agent
or fiduciary of the Company, or any subsidiary of the Company
(including without limitation any foreign subsidiary whether or not
such subsidiary is wholly owned by the Company, directly or
indirectly), or is or was serving at the request of the Company as
a director, officer, employee, agent or fiduciary of another
corporation, partnership, joint venture, trust or other enterprise,
or by reason of any action or inaction on the part of Indemnitee
while serving in such capacity. Any reference in this Agreement to
director(s), officer(s), employee(s), agent(s) or fiduciary(ies)
shall include without limitation de facto , shadow or de
jure director(s), officer(s), employee(s), agent(s) or
fiduciary(ies).
(e)
“ Expenses ” shall mean any and all expenses
(including attorneys’ fees and all other costs, expenses and
obligations incurred in connection with investigating, defending,
being a witness in or participating in (including on appeal), or
preparing to defend, to be a witness in or to participate in, any
action, suit, proceeding, alternative dispute resolution mechanism,
hearing, inquiry or investigation), civil, criminal and/or
administrative judgments (including, without limitation, all
punitive and/or remedial damages to be paid by Indemnitee as a
result of a Covered Event qualifying as a criminal offence, or
triggering indemnification obligations in connection with
insolvency procedures), fines, penalties and any amounts paid in
settlement (if such settlement is approved in advance by the
Company, which approval shall not be unreasonably withheld),
actually and reasonably incurred, of any Claim and any federal,
state, local or foreign taxes imposed on the Indemnitee as a result
of the actual or deemed receipt of any payments under this
Agreement.
(f)
“ Expense Advance ” shall mean a payment to
Indemnitee pursuant to Section 3 of Expenses in advance of the
settlement of or final judgement in any action, suit, proceeding or
alternative dispute resolution mechanism, hearing, inquiry or
investigation which constitutes a Claim.
(g)
“ Independent Legal Counsel ” shall mean an
attorney or firm of attorneys, selected in accordance with the
provisions of Section 2(d) hereof, who shall not have otherwise
performed services for the Company or Indemnitee within the last
three years (other than with respect to matters concerning the
rights of Indemnitee under this Agreement, or of other indemnitees
under similar indemnity agreements).
(h)
“Law” shall mean Delaware and U.S. laws (but in
the case of U.S. laws, only with respect to the applicable
indemnification provisions of the federal securities laws), without
reference to any foreign laws.
(i) References
to “ other enterprises ” shall include employee
benefit plans; references to “ fines ” shall
include any excise taxes assessed on Indemnitee with respect to an
employee benefit plan; and references to “ serving at the
request of the Company ” shall include any service as a
director, officer, employee, agent or fiduciary of the Company
which imposes duties on, or involves services by, such director,
officer, employee, agent or fiduciary with respect to an employee
benefit plan, its participants or its beneficiaries; and if
Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan, Indemnitee shall be
deemed to have acted in a manner “ not opposed to the best
interests of the Company ” as referred to in this
Agreement.
(j)
“ Reviewing Party ” shall mean, subject to the
provisions of Section 2(d), any person or body appointed by
the Board of Directors in accordance with Law to review the
Company’s obligations hereunder and under Law, which may
include a member or members of the Company’s Board of
Directors, Independent Legal Counsel or any other person or body
not a party to the particular Claim for which Indemnitee is seeking
indemnification.
(k)
“ Section ” refers to a section of this
Agreement unless otherwise indicated.
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(l)
“ Voting Securities ” shall mean any securities
of the Company that vote generally in the election of
directors.
(a)
Indemnification of Expenses . Subject to the provisions of
Section 2(b) below, the Company shall indemnify Indemnitee for
Expenses to the fullest extent permitted by Law, if Indemnitee was
or 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, any Claim (whether by reason of or arising in part out of a
Covered Event), including all interest, assessments and other
charges paid or payable in connection with or in respect of such
Expenses.
(b)
Review of Indemnification Obligations . Notwithstanding the
foregoing, in the event any Reviewing Party shall have determined
(in a written opinion, in any case in which Independent Legal
Counsel is the Reviewing Party) that Indemnitee is not entitled to
be indemnified hereunder under Law, (i) the Company shall have
no further obligation under Section 2(a) to make any payments to
Indemnitee not made prior to such determination by such Reviewing
Party, and (ii) the Company shall be entitled to be reimbursed by
Indemnitee (who hereby agrees to reimburse the Company) for all
Expenses theretofore paid in indemnifying Indemnitee; provided,
however, that if Indemnitee has commenced or thereafter commences
legal proceedings in a court of competent jurisdiction to secure a
determination that Indemnitee is entitled to be indemnified
hereunder under Law, any determination made by any Reviewing Party
that Indemnitee is not entitled to be indemnified hereunder under
Law shall not be binding and Indemnitee shall not be required to
reimburse the Company for any Expenses theretofore paid in
indemnifying Indemnitee until a final judicial determination is
made with respect thereto (as to which all rights of appeal
therefrom have been exhausted or lapsed). Indemnitee’s
obligation to reimburse the Company for any Expenses shall be
unsecured and no interest shall be charged thereon.
(c)
Indemnitee Rights on Unfavorable Determination; Binding
Effect. If any Reviewing Party determines that Indemnitee
substantively is not entitled to be indemnified hereunder in whole
or in part under Law, Indemnitee shall have the right to commence
litigation seeking an initial determination by the court or
challenging any such determination by such Reviewing Party or any
aspect thereof, including the legal or factual bases therefor, and,
subject to the provisions of Section 15, the Company hereby
consents to service of process and to appear in any such
proceeding. Absent such litigation, any determination by any
Reviewing Party shall be conclusive and binding on the Company and
Indemnitee.
(d)
Selection of Reviewing Party; Change in Control . If there
has not been a Change in Control, any Reviewing Party shall be
selected by the Board of Directors, and if there has been such a
Change in Control (other than a Change in Control which has been
approved by a majority of the Company’s Board of Directors
who were directors immediately prior to such Change in Control),
any Reviewing Party with respect to all matters thereafter arising
concerning the rights of Indemnitee to in
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