INDEMNIFICATION
AGREEMENT
This
Indemnification Agreement, dated as of ___, 2006, is entered into
by and between S1 Corporation, a Delaware corporation (the
“Corporation”), and
(the “Indemnitee”).
A.
The Corporation recognizes that competent and experienced persons
are increasingly reluctant to serve or to continue to serve as
directors or officers of corporations unless they are protected by
comprehensive liability insurance or indemnification, or
both;
B.
The Corporation believes that the interests of the Corporation and
its stockholders would best be served by a combination of liability
insurance presently available to the Corporation and the
indemnification by the Corporation of the directors and officers of
the Corporation;
C.
The Board of Directors has determined that contractual
indemnification as set forth herein is not only reasonable and
prudent but also promotes the best interests of the Corporation and
its stockholders;
D.
The Corporation desires and has requested Indemnitee to serve or
continue to serve as a director or officer of the Corporation, or a
Subsidiary of the Corporation, free from undue concern for
unwarranted claims for damages arising out of or related to such
services to the Corporation; and
E.
Indemnitee is willing to serve, continue to serve or to provide
additional service for or on behalf of the Corporation on the
condition that he is furnished the indemnity provided for
herein.
NOW,
THEREFORE, in consideration of Indemnitee continuing to serve the
Corporation and of the mutual covenants and agreements set forth
below, and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:
To the fullest
extent permitted by the laws of the State of Delaware:
(a) The
Corporation shall indemnify Indemnitee if Indemnitee was or is a
party to or witness or other participant or is threatened to be
made a party to or witness or other participant to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (including an action by
or in the right of the Corporation), by reason of the fact that
Indemnitee is or was or has agreed to serve at the request of the
Corporation as a director, officer, employee or agent of the
Corporation, or any Subsidiary, by reason of any action or inaction
on the part of the Indemnitee while serving as a director or
officer of the Corporation, or was serving or has agreed to serve
at the request of the Corporation as a director, officer, employee
or agent (which, for purposes hereof, shall include a trustee,
partner or manager or similar capacity) of another corporation,
partnership, joint venture, trust, employee benefit plan or other
enterprise against expenses (including attorneys’
fees
and costs),
judgments, fines, any interest, assessments, and other charges and
amounts paid in settlement (if such settlement is approved by the
Corporation, which approval shall not be unreasonably withheld)
actually and reasonably incurred by Indemnitee in connection with
such action, suit or proceeding if Indemnitee acted in good faith
and in a manner Indemnitee reasonably believed to be in or not
opposed to the best interests of the Corporation, and with respect
to a criminal action or proceeding, had no reasonable cause to
believe Indemnitee’s conduct was unlawful. For the avoidance
of doubt, the foregoing indemnification obligation includes,
without limitation, claims for monetary damages against Indemnitee
in respect of an alleged breach of fiduciary duties, to the fullest
extent permitted under Section 102(b)(7) of the Delaware
General Corporation Law (“DGCL”) as in existence on the
date hereof.
(b) Notwithstanding
the foregoing provisions of this Section 1, in the case of any
threatened, pending or completed action or suit by or in the right
of the Corporation to procure a judgment in its favor by reason of
the fact that Indemnitee is or was a director, officer, employee or
agent of the Corporation, or while serving as a director or officer
of the Corporation, is or was serving or has agreed to serve at the
request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, no indemnification shall
be made in respect of any claim, issue or matter as to which
Indemnitee shall have been adjudged to be liable to the Corporation
unless, and only to the extent that, the Delaware Court of Chancery
or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case,
Indemnitee is fairly and reasonably entitled to indemnity for such
expenses which the Delaware Court of Chancery or such other court
shall deem proper.
(c) The
termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that
Indemnitee did not act in good faith and in a manner which
Indemnitee reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal
action or proceeding, had reasonable cause to believe that
Indemnitee’s conduct was unlawful.
Section 2
Successful Defense; Partial Indemnification . To the extent
that Indemnitee has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in
Section 1 hereof or in defense of any claim, issue or matter
therein, Indemnitee shall be indemnified against expenses
(including attorneys’ fees) actually and reasonably incurred
in connection therewith. For purposes of this Agreement and without
limiting the foregoing, to the fullest extent permitted by law, if
any action, suit or proceeding is disposed of, on the merits or
otherwise (including a disposition without prejudice), without
(i) the disposition being adverse to Indemnitee, (ii) an
adjudication that Indemnitee was liable to the Corporation,
(iii) a plea of guilty or nolo contendere by Indemnitee,
(iv) an adjudication that Indemnitee did not act in good faith
and in a manner Indemnitee reasonably believed to be in or not
opposed to the best interests of the Corporation, and (v) with
respect to any criminal proceeding, an adjudication that Indemnitee
had reasonable cause to believe Indemnitee’s conduct was
unlawful, Indemnitee shall be considered for the purposes hereof to
have been wholly successful with respect thereto.
If Indemnitee is
entitled under any provision of this Agreement to indemnification
by the Corporation for some or a portion of the expenses (including
attorneys’ fees), judgments, fines or amounts paid in
settlement actually and reasonably incurred by Indemnitee or on
Indemnitee’s behalf in connection with any action, suit,
proceeding or investigation, or in defense of any claim, issue or
matter therein, and any appeal therefrom but not, however, for the
total amount thereof, the Corporation shall nevertheless indemnify
Indemnitee for the portion of such expenses (including
attorneys’ fees), judgments, fines or amounts paid in
settlement to which Indemnitee is entitled.
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Section 3
Determination That Indemnification Is Proper . Any
indemnification hereunder shall (unless otherwise ordered by a
court) be made by the Corporation unless a determination is made
that indemnification of such person is not proper in the
circumstances because he or she has not met the applicable standard
of conduct set forth in Section 1(a) hereof. Any such determination
shall be made (i) by a majority vote of the directors who are
not parties to the action, suit or proceeding in question
(“disinterested directors”), even if less than a
quorum, (ii) by a majority vote of a committee of
disinterested directors designated by majority vote of
disinterested directors, even if less than a quorum, (iii) by
a majority vote of a quorum of the outstanding shares of stock of
all classes entitled to vote on the matter, voting as a single
class, which quorum shall consist of stockholders who are not at
that time parties to the action, suit or proceeding in question,
(iv) by independent legal counsel, or (v) by a court of
competent jurisdiction.
Section 4
Advance Payment of Expenses; Notification and Defense of
Claim .
(a) Expenses
(including attorneys’ fees) incurred by Indemnitee in
defending a threatened or pending civil, criminal, administrative
or investigative action, suit or proceeding, or in connection with
an enforcement action pursuant to Section 5(b), shall be paid
by the Corporation in advance of the final disposition of such
action, suit or proceeding within twenty (20) days after
receipt by the Corporation of (i) a statement or statements
from Indemnitee requesting such advance or advances from time to
time, and (ii) an undertaking by or on behalf of Indemnitee to
repay such amount or amounts, only if, and to the extent that, it
shall ultimately be determined that Indemnitee is not entitled to
be indemnified by the Corporation as authorized by this Agreement
or otherwise. Such undertaking shall be accepted without reference
to the financial ability of Indemnitee to make such repayment.
Advances shall be unsecured and interest-free.
(b) Promptly
after receipt by Indemnitee of notice of the commencement of any
action, suit or proceeding, Indemnitee shall, if a claim thereof is
to be made against the Corporation hereunder, notify the
Corporation of the commencement thereof. The failure to promptly
notify the Corporation of the commencement of the action, suit or
proceeding, or Indemnitee’s request for indemnification, will
not relieve the Corporation from any liability that it may have to
Indemnitee hereunder, except to the extent the Corporation is
prejudiced in its defense of such action, suit or proceeding as a
result of such failure.
(c) In
the event the Corporation shall be obligated to pay the expenses of
Indemnitee with respect to an action, suit or proceeding, as
provided in this Agreement, the Corporation, if appropriate, shall
be entitled to assume the defense of such action, suit or
proceeding, with counsel reasonably acceptable to Indemnitee, upon
the delivery to Indemnitee of written notice of its election to do
so. After delivery of such notice, approval of such counsel by
Indemnitee and the retention of such counsel by the Corporation,
the Corporation will not be liable to Indemnitee under this
Agreement for any fees of counsel subsequently incurred by
Indemnitee with respect to the same action, suit or proceeding,
provided that (1) Indemnitee shall have the right to employ
Indemnitee’s own counsel in such action, suit or proceeding
at Indemnitee’s expense and (2) if (i) the employment of
counsel by Indemnitee has been previously authorized in writing by
the Corporation, (ii) counsel to the Corporation or Indemnitee
shall have reasonably concluded that there may be a conflict of
interest or position, or reasonably believes that a conflict is
likely to arise, on any significant issue between the Corporation
and Indemnitee in the conduct of any such defense or (iii) the
Corporation shall not, in fact, have employed counsel to assume the
defense of such action, suit or proceeding, then the fees and
expenses of Indemnitee’s counsel shall be at the expense of
the Corporation, except as otherwise expressly provided by this
Agreement. The Corporation shall not be entitled, without the
consent of Indemnitee, to assume the defense of any claim brought
by or in the right of the Corporation or as to which counsel for
the Corporation or Indemnitee shall have reasonably made the
conclusion provided for in clause (ii) above.
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(d) Notwithstanding
any other provision of this Agreement to the contrary, to the
extent that Indemnitee is, by reason of Indemnitee’s
corporate status with respect to the Corporation or any
corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise which Indemnitee is or was serving or has
agreed to serve at the request of the Corporation, a witness or
otherwise participates in any action, suit or proceeding at a time
when Indemnitee is not a party in the action, suit or proceeding,
the Corporation shall indemnify Indemnitee against all expenses
(including attorneys’ fees) actually and reasonably incurred
by Indemnitee or on Indemnitee’s behalf in connection
therewith.
Section 5
Procedure for Indemnification .
(a) To
obtain indemnification, Indemnitee shall promptly submit to the
Corporation 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
Corporation shall, promptly upon receipt of such a request for
indemnification, advise the Board of Directors in writing that
Indemnitee has requested indemnification.
(b) The
Corporation’s determination whether to grant
Indemnitee’s indemnification request shall be made promptly,
and in any event within 30 calendar days following receipt of a
request for indemnification pursuant to Section 5(a). The
right to indemnification as granted by Section 1 of this
Agreement shall be enforceable by Indemnitee in any court of
competent jurisdiction if the Corporation denies such request, in
whole or in part, or fails to respond within such 30-calendar day
period. It shall be a defense to any such action (other than an
action brought to enforce a claim for the advance of costs, charges
and expenses under Section 4 hereof where the required
undertaking, if any, has been received by the Corporation) that
Indemnitee has not met the standard of conduct set forth in
Section 1 hereof, but the burden of proving such defense by
clear and convincing evidence shall be on the Corporation. Neither
the failure of the Corporation (including its Board of Directors or
one of its committees, its independent legal counsel, and its
stockholders) to have made a determination prior to the
commencement of such action that indemnification of Indemnitee is
proper in the circumstances because Indemnitee has met the
applicable standard of conduct set forth in Section 1 hereof,
nor the fact that there has been an actual determination by the
Corporation (including its Board of Directors or one of its
committees, its independent legal counsel, and its stockholders)
that Indemnitee has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that
Indemnitee has or has not met the applicable standard of conduct.
The Indemnitee’s expenses (including attorneys’ fees)
incurred in connection with successfully establishing
Indemnitee’s right to indemnification, in whole or in part,
in any such proceeding or otherwise shall also be indemnified by
the Corporation.
(c) To
the fullest extent permitted by law, the Indemnitee shall be
presumed to be entitled to indemnification under this Agreement
upon submission of a request for indemnification pursua
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