Exhibit 10.5
INDEMNIFICATION
AGREEMENT
This Indemnification Agreement (the
“ Agreement ”) is made as of November 30, 2006,
by and between SM&A, a Delaware corporation (the “
Company ”), and Dr. Joseph B. Reagan (the “
Indemnitee ”).
RECITALS
A.
The Company and Indemnitee recognize the increasing difficulty in
obtaining liability insurance for directors, officers and key
employees, the significant increases in the cost of such insurance
and the general reductions in the coverage of such
insurance.
B.
The Company and Indemnitee further recognize the substantial
increase in corporate litigation in general, subjecting directors,
officers and key employees to expensive litigation risks at the
same time as the availability and coverage of liability insurance
has been severely limited.
C.
Indemnitee does not regard the current protection available as
adequate under the present circumstances, and Indemnitee and agents
of the Company may not be willing to continue to serve as agents of
the Company without additional protection.
D.
The Company desires to attract and retain the services of highly
qualified individuals, such as Indemnitee, and to indemnify its
directors, officers and key employees so as to provide them with
the maximum protection permitted by law.
AGREEMENT
In consideration of the mutual
promises made in this Agreement, and for other good and valuable
consideration, receipt of which is hereby acknowledged, the Company
and Indemnitee hereby agree as follows:
1.
Indemnification.
(a)
Third Party Proceedings . The Company shall indemnify
Indemnitee if Indemnitee is or was a party or is threatened to be
made a party to any threatened, pending or completed action, suit,
proceeding, or investigation whether civil, criminal,
administrative or investigative (other than an action by or in the
right of the Company) by reason of the fact that Indemnitee is or
was a director, officer, employee or agent of the Company, or any
subsidiary of the Company, by reason of any action or inaction on
the part of Indemnitee while an officer or director or by reason of
the fact that Indemnitee is or was serving at the request of the
Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys’ fees), judgments,
fines and 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 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 Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe Indemnitee’s
conduct was unlawful. 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 Company, or, with respect to
any criminal action or proceeding, that Indemnitee had reasonable
cause to believe that Indemnitee’s conduct was
unlawful.
(b)
Proceedings By or in the Right of the Company . The
Company shall indemnify Indemnitee if Indemnitee was or is a party
or is threatened to be made a party to any threatened, pending or
completed action or proceeding by or in the right of the Company or
any subsidiary of the Company 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 Company, or any subsidiary of the Company,
by reason of any action or inaction on the part of Indemnitee while
an officer or director or by reason of the fact that Indemnitee is
or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses
(including attorneys’ fees) and, to the fullest extent
permitted by law, amounts paid in settlement (if such settlement is
approved in advance by the Company, which approval shall not be
unreasonably withheld), in each case to the extent actually and
reasonably incurred by Indemnitee in connection with the defense or
settlement of such action or suit 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 Company and its stockholders,
except that no indemnification shall be made in respect of any
claim, issue or matter as to which Indemnitee shall have been
finally adjudicated by court order or judgment to be liable to the
Company in the performance of Indemnitee’s duty to the
Company and its stockholders unless and only to the extent that the
court in which such action or proceeding is or was pending shall
determine upon application that, in view of all the circumstances
of the case, Indemnitee is fairly and reasonably entitled to
indemnity for such expenses which such court shall deem
proper.
(c)
Mandatory Payment of Expenses . 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(a) or Section 1(b) or the defense of any claim, issue or matter
therein, Indemnitee shall be indemnified against expenses
(including attorneys’ fees) actually and reasonably incurred
by Indemnitee in connection therewith.
(d)
Exceptions . Any other provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the
terms of this Agreement:
(i)
Claims Initiated by Indemnitee . To indemnify or
advance expenses to Indemnitee with respect to proceedings or
claims initiated or brought voluntarily by Indemnitee and not by
way of defense, except with respect to proceedings brought to
establish or enforce a right to indemnification under this
Agreement or any other statute or law or otherwise as required
under Section 145 of the Delaware General Corporation Law, but such
indemnification or advancement of expenses
2
may be provided by the Company in
specific cases if the Board of Directors finds it to be
appropriate; or
(ii)
Claims under Section 16(b) . To indemnify Indemnitee
for expenses or the payment of profits arising from the purchase
and sale by Indemnitee of securities in violation of Section 16(b)
of the Securities Exchange Act of 1934, as amended, or any similar
successor statute.
2.
No Employment Rights. Nothing contained in this
Agreement is intended to create in Indemnitee any right to
continued employment.
3.
Expenses; Indemnification Procedure.
(a)
Advancement of Expenses . The Company shall advance
all expenses incurred by Indemnitee in connection with the
investigation, defense, settlement or appeal of any civil or
criminal action, suit or proceeding referred to in Section 1(a) or
Section 1(b) hereof (including amounts actually paid in settlement
of any such action, suit or proceeding). Indemnitee hereby
undertakes to repay such amounts advanced only if, and to the
extent that, it shall ultimately be determined that Indemnitee is
not entitled to be indemnified by the Company as authorized
hereby.
(b)
Notice/Cooperation by Indemnitee . Indemnitee shall,
as a condition precedent to his or her right to be indemnified
under this Agreement, give the Company notice in writing as soon as
practicable of any claim made against Indemnitee for which
indemnification will or could be sought under this Agreement.
Notice to the Company shall be directed to the President or the
Chief Executive Officer of the Company and shall be given in
accordance with the provisions of Section 11(d) below. In
addition, Indemnitee shall give the Company such information and
cooperation as it may reasonably require and as shall be within
Indemnitee’s power.
(c)
Procedure . Any indemnification and advances provided
for in Section 1 and this Section 3 shall be made no later
than thirty (30) days after receipt of the written request of
Indemnitee. If a claim under this Agreement, under any
statute, or under any provision of the Company’s Certificate
of Incorporation or Bylaws providing for indemnification, is not
paid in full by the Company within thirty (30) days after a written
request for payment thereof has first been received by the Company,
Indemnitee may, but need not, at any time thereafter bring an
action against the Company to recover the unpaid amount of the
claim and, subject to Section 10 of this Agreement, Indemnitee
shall also be entitled to be paid for the expenses (including
attorneys’ fees) of bringing such action. It shall be a
defense to any such action (other than an action brought to enforce
a claim for expenses incurred in connection with any action, suit
or proceeding in advance of its final disposition) that Indemnitee
has not met the standards of conduct which make it permissible
under applicable law for the Company to indemnify Indemnitee for
the amount claimed, but the burden of proving such defense shall be
on the Company and Indemnitee shall be entitled to receive interim
payments of expenses pursuant to Section 3(a) unless and until such
defense may be finally adjudicated
