SONICWALL, INC.
INDEMNIFICATION AGREEMENT
This
Indemnification Agreement (“ Agreement ”) is
made as of July 27, 2005 by and between SonicWALL, Inc., a
California corporation (the “ Company ”), and
___(“ Indemnitee ”).
A. The
Company desires to attract and retain the services of highly
qualified individuals to serve as officers, directors and agents of
the Company.
B. The
Company and Indemnitee recognize the increased risk of litigation
and other claims being asserted against directors, officers and
other agents of the Company.
C. The
Company desires to provide indemnification and other rights to
Indemnitee in consideration for Indemnitee’s service to the
Company.
In
consideration of the covenants and promises set forth herein, and
for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as
follows:
(a)
Third Party Proceedings. 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, whether civil, criminal, administrative or
investigative (a “ Proceeding ”) (other than an
action by or in the right 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 other agent of the Company 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, settlements (if such settlement is approved in advance by
the Company, which approval shall not be unreasonably withheld) and
other amounts actually and reasonably incurred by Indemnitee in
connection with the Proceeding if Indemnitee acted in good faith
and in a manner Indemnitee reasonably believed to be in the best
interests of the Company, and, in the case of any criminal
Proceeding, had no reasonable cause to believe Indemnitee’s
conduct was unlawful. The termination of any Proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a
presumption that (i) Indemnitee did not act in good faith and
in a manner which Indemnitee reasonably believed to be in the best
interests of the Company or (ii) 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 by or in the right 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 other agent of the Company 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)
actually and reasonably incurred by Indemnitee in connection with
the defense or settlement of such action if Indemnitee acted in
good faith, in a manner Indemnitee believed to be in the best
interests of the Company and its shareholders, except that no
indemnification shall be made (i) in respect of any claim,
issue or matter as to which
Indemnitee
shall have been adjudged to be liable to the Company in the
performance of Indemnitee’s duty to the Company and its
shareholders unless and only to the extent that the court in which
such 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 expenses and then
only to the extent that the court shall determine, (ii) of amounts
paid in settling or otherwise disposing of a pending action without
court approval or (iii) of expenses incurred in defending a
pending action which is settled or otherwise disposed of without
court approval.
2.
Expenses; Indemnification Procedure .
(a)
Advancement of Expenses. The Company shall advance all
expenses incurred by Indemnitee in defending any Proceeding
referenced in Section 1(a) or (b) hereof prior to the final
disposition of the Proceeding (but not amounts actually paid in
settlement of any such Proceeding). Indemnitee hereby undertakes to
repay such amounts advanced if it shall be determined ultimately
that Indemnitee is not entitled to be indemnified by the Company as
authorized hereby or by Section 317 of the California General
Corporation Law. The advances to be made hereunder shall be paid by
the Company to Indemnitee within twenty (20) days following
delivery of a written request therefor by Indemnitee to the
Company.
(b)
Notice; Cooperation by Indemnitee. Indemnitee shall, as soon
as practicable and as a condition precedent to Indemnitee’s
right to be indemnified or to receive any advancement of expenses
under this Agreement, give the Company written notice of any claim
made against Indemnitee for which indemnification or advancement of
expenses will or could be sought under this Agreement, specifying
the nature of such claim in reasonable detail. Notice to the
Company shall be directed to the Chief Executive Officer of the
Company, or the Chief Financial Officer if Indemnitee is the Chief
Executive Officer, in accordance with Section 14 hereof. Any
delay in providing notice will not relieve the Company from its
obligations under this Agreement, except to the extent such failure
is prejudicial. 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 provided for in
Section 1 hereof shall be made no later than forty-five
(45) days after written notice by Indemnitee requesting
payment. If a claim under this Agreement, under any statute or
under any provision of the Company’s Articles of
Incorporation or Bylaws providing for indemnification is not paid
in full by the Company within forty-five (45) days after such
written notice, 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 13 hereof,
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
Proceeding in advance of its final disposition) that Indemnitee has
not met the standards of conduct which make it permissible under
this Agreement or applicable law for the Company to indemnify
Indemnitee for the amount claimed, and Indemnitee shall be entitled
to receive interim payments of expenses pursuant to Subsection 2(a)
hereof unless and until such defense may be finally adjudicated by
court order or judgment from which no further right of appeal
exists. It is the parties’ intention that if the Company
contests Indemnitee’s right to indemnification, the question
of Indemnitee’s right to indemnification shall be for the
court to decide, and neither the failure of the Company (including
its Board of Directors, any committee or subgroup of the Board of
Directors, independent legal counsel or its shareholders) to have
made a determination that indemnification of Indemnitee is proper
in the circumstances because Indemnitee has met the applicable
standard of conduct required by applicable law, nor an actual
determination by the Company (including its Board of Directors, any
committee or subgroup of the Board of Directors, independent legal
counsel or its shareholders) that Indemnitee has not met such
applicable standard of conduct, shall create a presumption that
Indemnitee has or has not met the applicable standard of
conduct.
-2-
(d)
Notice to Insurers. If, at the time of the receipt of a
notice of a claim pursuant to Section 2(b) hereof, the Company has
directors’ and officers’ liability insurance in effect,
the Company shall give prompt notice of the commencement of the
Proceeding to the insurers in accordance with the procedures set
forth in the respective policies. The Company shall thereafter take
all commercially reasonable action to cause such insurers to pay,
on behalf of the Indemnitee, all amounts payable as a result of
such Proceeding in accordance with the terms of such
policies.
(e)
Selection of Counsel. In the event the Company shall be
obligated under Section 2(a) hereof to pay the expenses of any
Proceeding against Indemnitee, the Company, if appropriate, shall
be entitled to assume the defense of such Proceeding, with counsel
approved by Indemnitee, which approval shall not be unreasonably
withheld, upon giving written notice to Indemnitee of its election
so to do. After giving such notice, approval of such counsel by
Indemnitee and the retention of such counsel by the Company, the
Company will not be liable to Indemnitee under this Agreement for
any fees or expenses of counsel subsequently incurred by Indemnitee
with respect to the same Proceeding, provided that
(i) Indemnitee shall have the right to employ
Indemnitee’s counsel in any such Proceeding at
Indemnitee’s expense; and (ii) if (A) the Company
has expressly authorized (and continues to authorize) the
employment of counsel by Indemnitee at the Company’s expense,
(B) the use of counsel chosen by the Company to represent
Indemnitee would present such counsel with a conflict of interest
or (C) the Company shall not, in fact, have employed counsel
reasonably satisfactory to Indemnitee within a reasonable time
after notice of the institution of such Proceeding, then Indemnitee
shall have the right to employ counsel at the expense of the
Company in accordance herewith.
3.
Additional Indemnification
|