Exhibit 10.23
FORM OF INDEMNIFICATION
AGREEMENT
THIS INDEMNIFICATION AGREEMENT
(“ Agreement ”) is made as of this
day of
, 200 , by and between Kenexa Corporation, a
Pennsylvania corporation (the “ Company
”), and
(“ Indemnitee ”).
WHEREAS, the Company and Indemnitee
recognize the increasing difficulty in obtaining directors’
and officers’ liability insurance, the significant increases
in the cost of such insurance and the general reduction in the
coverage of such insurance; and
WHEREAS, the Company and Indemnitee
further recognize the substantial increase in corporate litigation,
in general, subjecting officers and directors to expensive
litigation risks at the same time as liability insurance has been
severely limited; and
WHEREAS, Indemnitee does not regard
the current protection available as adequate given the present
circumstances, and Indemnitee and other officers and directors of
the Company may not be willing to serve as officers and directors
without adequate protection; and
WHEREAS, the Company desires to
attract and retain the services of highly qualified individuals,
such as Indemnitee, to serve as officers and directors of the
Company and to indemnify its officers and directors so as to
provide them with the maximum protection permitted by
law.
NOW, THEREFORE, the Company and
Indemnitee, intending to be legally bound, 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 or proceeding, 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, trustee, fiduciary,
employee or agent of the Company, or any affiliate 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, trustee, fiduciary, 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 pursuant to Section 2(f) ) 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, in and 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 or not opposed to the best
interests of the Company, and, (ii) with respect to any criminal
action or proceeding, Indemnitee did not have reasonable cause to
believe his conduct was lawful.
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 suit 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, trustee, fiduciary, employee or agent of
the Company, or any affiliate 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, trustee,
fiduciary, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses
(including attorneys’ fees) and amounts paid in settlement
(if such settlement is approved pursuant to Section 2(f) )
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,
except that 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 Company unless and only to the extent
that 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 court shall deem proper.
c. Mandatory 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 Sections 1(a) and 1(b) or in 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. For
purposes of this Section 1(c) , the term “
successful on the merits or otherwise ” shall
include, but not be limited to, (i) any termination, withdrawal, or
dismissal (with or without prejudice) of any claim, action, suit or
proceeding against Indemnitee without any express finding of
liability or guilt against him, or (ii) the expiration of a
reasonable period of time after the making of any claim or threat
of an action, suit or proceeding without the institution of the
same and without any promise or payment made to induce a
settlement.
2. Expenses and
Indemnification Procedure .
a. Advancement of Expenses .
The Company shall advance all reasonable out-of-pocket expenses
incurred by Indemnitee in connection with the investigation,
defense, settlement or appeal of any civil or criminal action, suit
or proceeding referenced in Section 1(a) or Section
1(b) . For purposes of any advancement hereunder, the
Indemnitee shall be deemed to have acted (i) in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interest of the Company, and (ii) with respect to any criminal
action or procedure, to have had no reasonable cause to believe his
conduct was unlawful if, under either (i) or (ii), his action is
based on the records or books of account of the Company, or the
records or books of account of another corporation, partnership,
joint venture, trust or other enterprise (collectively, the “
other enterprises ”), including financial
statements, or on information supplied to him by the officers of
the Company or other enterprises in the course of their duties, or
on the advice of legal counsel for the Company or other enterprises
or on information or records given or reports made to the Company
or other enterprises by an independent certified public accountant
or by an appraiser or other expert selected with reasonable care by
the Company or other enterprises. Indemnitee hereby undertakes to
repay such amounts advanced only if, and to
-2-
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
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 Kenexa
Corporation, 650 East Swedesford Road, Wayne, Pennsylvania 19087,
Facsimile: 610.971.2435, Attention: __________________________ (or
such other address as the Company may from time to time designate
in writing to Indemnitee). Notice shall be deemed received on the
third business day after the date postmarked if sent by domestic
certified or registered mail, properly addressed; otherwise, notice
shall be deemed received when such notice shall actually be
received by the Company. 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 2 shall be made no later than 45 days after
receipt of the written request of Indemnitee, coupled with
appropriate documentation to support the requested 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 45 days after receipt of a fully documented 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 13 , 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 2(a) 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, as the case may be, met the applicable standard of
conduct.
d. Notice to Insurers . If,
at the time of the receipt of a notice of claim pursuant to
Section 2(b) , the Company has directors’ and
officers’ liability insurance in effect, the Company shall
give prompt notice of the commencement of such proceeding to the
insurers
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in accordance with the procedures
set forth in the respective policies. The Company shall thereafter
take all necessary or desirable action to cause such insurers to
pay, on behalf of Indemnitee, all amounts payable as a result of
such proceeding in accordance with the terms of such
policies.
e. Selection of Counsel . If
the Company shall be obligated under Section 1 or Section
2 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, 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 Company, the
Company will not be liable to Indemnitee under this Agreement for
any fees of counsel subsequently incurred by Indemnitee with
respect to the same proceeding; provided that (i) Indemnitee
shall have the right to employ separate counsel in any such
proceeding at Indemnitee’s expense; and (ii) if (A) the
employment of counsel by Indemnitee has been previously authorized
by the Company, (B) Indemnitee shall have reasonably concluded that
there may be a conflict of interest between the Company and
Indemnitee in the conduct of any such defense, or (C) the Company
shall not, in fact, have employed counsel to assume the defense of
such proceeding, then the reasonable fees and expenses of
Indemnitee’s counsel shall be at the expense of the
Company.
f. Settlements . The Company
shall not be liable to Indemnitee under this Agreement for any
amounts paid in settlement of any action or claim effected without
its written consent. The Company shall not settle any action or
claim in any manner which would impose any penalty or limitation on
Indemnitee without Indemnitee’s written consent. Neither the
Company nor Indemnitee will unreasonably withhold consent to any
proposed settlement.
g. Change in Control
.
(1) If, at any time subsequent to
the date of this Agreement, members of the Incumbent Board do not
constitute a majority of the
