Exhibit
10.1
FORM OF INDEMNIFICATION
AGREEMENT
This Indemnification Agreement (this “
Agreement ”) dated the _____ day of _____ 200_,
by and between PhotoMedex, Inc., a Delaware corporation (the
“ Company ”), and_____________, an
individual (“ Indemnitee ”).
RECITALS
A. Competent
and experienced persons are reluctant to serve or to continue to
serve as directors and officers of corporations or in other
capacities unless they are provided with adequate protection
through insurance or indemnification (or both) against claims
against them arising out of their service and activities on behalf
of the corporation.
B. The
current uncertainties relating to the availability of adequate
insurance have increased the difficulty for corporations of
attracting and retaining competent and experienced persons to serve
in such capacities.
C. The
Board of Directors of the Company (the “ Board of
Directors ”) has determined that the continuation of
present trends in litigation will make it more difficult to attract
and retain competent and experienced persons to serve as directors
and officers of the Company, that this situation is detrimental to
the best interests of the Company’s stockholders, and that
the Company should act to assure such persons that there will be
increased certainty of adequate protection.
D. As
a supplement to and in the furtherance of the Company’s
Restated Certificate of Incorporation, as may be amended (the
“ Certificate ”), and Amended and
Restated By-laws, as may be amended (the “
By-laws ”), it is reasonable, prudent,
desirable and necessary for the Company contractually to obligate
itself to indemnify, and to pay in advance expenses on behalf of,
officers and directors to the fullest extent permitted by law so
that they will serve or continue to serve the Company free from
concern that they will not be so indemnified and that their
expenses will not be so paid in advance.
E. This
Agreement is not a substitute for, nor does it diminish or abrogate
any rights of Indemnitee under, the Certificate and the By-laws or
any resolutions adopted pursuant thereto (including any contractual
rights of Indemnitee that may exist).
F. Indemnitee
is a director and/or officer of the Company and his or her
willingness to continue to serve in such capacity is predicated, in
substantial part, upon the Company’s willingness to indemnify
him or her to the fullest extent permitted by the laws of the State
of Delaware and upon the other undertakings set forth in this
Agreement.
[Indemnification
Agreement]
NOW, THEREFORE , in consideration of the premises and covenants
contained herein, the Company and Indemnitee hereby agree as
follows:
ARTICLE 1
CERTAIN
DEFINITIONS
Capitalized
terms used but not otherwise defined in this Agreement have the
meanings set forth below:
“ Beneficial Owner ”
shall have the meaning given to such term in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended; provided, however,
that “Beneficial Owner” shall exclude any Person
otherwise becoming a Beneficial Owner by reason of (i) the
stockholders of the Company approving a merger of the Company with
another entity or (ii) the Board of Directors approving a sale
of securities by the Company to such Person.
A “ Change in Control
” shall be deemed to occur upon the earliest to occur after
the date of this Agreement of any of the following
events:
(i)
Acquisition of Stock by Third Party . Any Person (as defined
below) is or becomes the Beneficial Owner (as defined below),
directly or indirectly, of securities of the Company representing
twenty percent (20%) or more of the combined voting power of
the Company’s then outstanding securities entitled to vote
generally in the election of directors, unless (1) the change in
the relative Beneficial Ownership of the Company’s securities
by any Person results solely from a reduction in the aggregate
number of outstanding shares of securities entitled to vote
generally in the election of directors, or (2) such acquisition was
approved in advance by the Incumbent Directors (as defined below)
and such acquisition would not constitute a Change in Control under
part (iii) of this definition;
(ii)
Change in Board Composition . During any period of two
(2) consecutive years (not including any period prior to the
execution of this Agreement), individuals who at the beginning of
such period constitute the Board of Directors, and any new
directors (other than a director designated by a person who has
entered into an agreement with the Company to effect a transaction
described in paragraphs (i), (iii) or (iv)) 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 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 (collectively,
the “ Incumbent Directors ”), cease for
any reason to constitute at least a majority of the members of the
Board of Directors;
(iii)
Corporate Transactions . The effective date of a
reorganization, merger or consolidation of the Company (a “
Business Combination ”), in each case, unless,
following such Business Combination: (a) all or substantially all
of the individuals and entities who were the Beneficial Owners of
securities entitled to vote generally in the election of directors
immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 51% of the combined voting power
of the then outstanding securities of the Company entitled to vote
generally in the election of directors resulting from such Business
Combination (including, without limitation, a corporation which as
a result of such transaction owns the Company or all or
substantially all of the Company’s assets either directly or
through one or more Subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business
Combination, of the securities entitled to vote generally in the
election of directors and with the power to elect at least a
majority of the Board of Directors or other governing body of the
surviving entity; (b) no Person (excluding any corporation
resulting from such Business Combination) is the Beneficial Owner,
directly or indirectly, of 20% or more of the combined voting power
of the then outstanding securities entitled to vote generally in
the election of directors of such corporation except to the extent
that such ownership existed prior to the Business Combination; and
(c) at least a majority of the Board of Directors of the
corporation resulting from such Business Combination were Incumbent
Directors at the time of the execution of the initial agreement, or
of the action of the Board of Directors, providing for such
Business Combination;
(iv)
Liquidation . The approval by the stockholders of the
Company of a complete liquidation of the Company or an agreement or
series of agreements for the sale or disposition by the Company of
all or substantially all of the Company’s assets;
and
(v)
Other Events . Any other event of a nature that would be
required to be reported in response to Item 6(e) of Schedule
14A of Regulation 14A (or in response to any similar item on any
similar schedule or form) promulgated under the Securities Exchange
Act of 1934, as amended, whether or not the Company is then subject
to such reporting requirement.
“ Controlled Affiliate
” means any corporation, limited liability company,
partnership, joint venture, trust or other Enterprise, whether or
not for profit, that is directly or indirectly controlled by the
Company. For purposes of this definition, the term
“control” means the possession, directly or indirectly,
of the power to direct, or cause the direction of, the management
or policies of an Enterprise, whether through the ownership of
voting securities, through other voting rights, by contract or
otherwise; provided , however , that direct or
indirect beneficial ownership of capital stock or other interests
in an Enterprise entitling the holder to cast 30% or more of the
total number of votes generally entitled to be cast in the election
of directors (or persons performing comparable functions) of such
Enterprise will be deemed to constitute “control” for
purposes of this definition.
“ Corporate Status
” means the status of a person who is or was a director,
officer, employee, partner, member, manager, trustee, fiduciary or
agent of the Company or of any other Enterprise which such person
is or was serving at the request of the Company. In addition to any
service at the actual request of the Company, Indemnitee will be
deemed, for purposes of this Agreement, to be serving or to have
served at the request of the Company as a director, officer,
employee, partner, member, manager, trustee, fiduciary or agent of
another Enterprise if Indemnitee is or was serving as a director,
officer, employee, partner, member, manager, fiduciary, trustee or
agent of such Enterprise and (i) such Enterprise is or at the
time of such service was a Controlled Affiliate, (ii) such
Enterprise is or at the time of such service was an employee
benefit plan (or related trust) sponsored on maintained by the
Company or a Controlled Affiliate or (iii) the Company or a
Controlled Affiliate directly or indirectly caused Indemnitee to be
nominated, elected, appointed, designated, employed, engaged or
selected to serve in such capacity.
“ Disinterested Director
” means a director of the Company who is not and was not a
party to the Proceeding in respect of which indemnification is
sought by Indemnitee.
“ Enterprise ” means
the Company and any other corporation, partnership, limited
liability company, joint venture, employee benefit plan, trust or
other entity or other enterprise.
“ Expenses ” shall be
broadly construed and shall include, without limitation, all
attorney’s fees, disbursements and retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses,
food and lodging expenses, duplicating costs, printing and binding
costs, telephone charges, postage, fax transmission charges,
secretarial services, delivery service fees and all other
disbursements or expenses paid or incurred in connection with
prosecuting, defending, preparing to prosecute or defend,
investigating, being or preparing to be a witness in, or otherwise
participating in, a Proceeding, or in connection with seeking
indemnification under this Agreement. Expenses will also include
Expenses paid or incurred in connection with any appeal resulting
from any Proceeding, including the premium, security for, and other
costs relating to any appeal bond or its
equivalent. Expenses, however, shall not include amounts
paid in settlement by Indemnitee or the amount of judgments or
fines against Indemnitee.
“ Independent Counsel
” means an attorney or firm of attorneys that is experienced
in matters of corporation law and neither currently is, nor in the
past three (3) years has been, retained to represent:
(i) the Company or Indemnitee in any matter material to either
such party (other than with respect to matters concerning the
Indemnitee under this Agreement and/or the indemnification
provisions of the Certificate or By-laws, or of other indemnitees
under similar indemnification agreements), or (ii) any other
party to the Proceeding giving rise to a claim for indemnification
hereunder. Notwithstanding the foregoing, the term
“Independent Counsel” does not include any person who,
under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing
either the Company or Indemnitee in an action to determine
Indemnitee’s rights under this Agreement.
“ Losses ” means
losses of any type whatsoever, and shall include, without
limitation, any liability, judgments, damages, amounts paid in
settlement, fines (including excise taxes and penalties assessed
with respect to employee benefit plans), penalties (whether civil,
criminal or otherwise) and all interest, assessments and other
charges paid or payable in connection with or in respect of any of
the foregoing incurred by the Indemnitee in connection with a
Proceeding.
“ Person ” shall have
the meaning as set forth in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended; provided, however,
that “Person” shall exclude (i) the Company,
(ii) any trustee or other fiduciary holding securities under
an employee benefit plan of the Company, and (iii) any
corporation owned, directly or indirectly, by the stockholders of
the Company in substantially the same proportions as their
ownership of stock of the Company.
“ Proceeding ” means
any threatened, pending or completed action, suit, claim, demand,
arbitration, alternate dispute resolution mechanism, investigation,
inquiry, administrative hearing or any other actual, threatened or
completed proceeding, whether formal or informal, including any and
all appeals, whether brought by or in the right of the Company or
otherwise, whether civil, criminal, administrative or
investigative, whether formal or informal, and in each case whether
or not commenced prior to the date of this Agreement, in which
Indemnitee was, is or will be involved as a party or otherwise, by
reason of or relating to Indemnitee’s Corporate Status and by
reason of or relating to either (i) any action or alleged action
taken by Indemnitee (or failure or alleged failure to act) or of
any action or alleged action (or failure or alleged failure to act)
on Indemnitee’s part, while acting in his or her Corporate
Status, or (ii) the fact of Indemnitee’s Corporate Status,
whether or not serving in such capacity at the time any Loss or
Expense is paid or incurred for which indemnification or
advancement of Expenses can be provided under this Agreement,
except one initiated by Indemnitee to enforce his or her rights
under this Agreement. For purposes of this definition,
the term “threatened” will be deemed to include
Indemnitee’s good faith belief that a claim or other
assertion may lead to institution of a Proceeding.
References to “ serving at the
request of the Company ” include any service as a
director, officer, employee or agent of the Company which imposes
duties on, or involves services by, such director, officer,
employee or agent with respect to any employee benefit plan, its
participants or beneficiaries; and a person who acted in good faith
and in a manner he or she reasonably believed to be in the best
interests of the participants and beneficiaries of an employee
benefit plan will be deemed to have acted in a manner “
not opposed to the best interests of the Company
” as referred to under applicable law or in this
Agreement.
ARTICLE 2
SERVICES TO THE
COMPANY
2.1
Services to the
Company . Indemnitee
agrees to serve as a director of the Company. Indemnitee may at any
time and for any reason resign from such position (subject to any
other contractual obligation or any obligation imposed by operation
of law), in which event the Company will have no obligation to
continue to allow Indemnitee to serve in such position either
pursuant to this Agreement or otherwise, but such resignation shall
have no effect on the Company’s obligations hereunder. This
Agreement will not be construed as giving Indemnitee any right to
be retained in the employ of the Company (or any other
Enterprise).
ARTICLE 3
INDEMNIFICATION
3.1
Company
Indemnification . Except
as otherwise provided in Section 3.4 , if Indemnitee was, is
or becomes a party to, or was or is threatened to be made a party
to, or was or is otherwise involved in, any Proceeding, the Company
will indemnify and hold harmless Indemnitee to the fullest extent
permitted by applicable law, as the same exists or may hereafter be
amended, interpreted or replaced (but in the case of any such
amendment, interpretation or replacement, only to the extent that
such amendment, interpretation or replacement permits the Company
to provide broader indemnification rights than were permitted prior
thereto), against any and all Expenses and Losses, and any federal,
state, local or foreign taxes imposed as a result of the actual or
deemed receipt of any payments under this Agreement, that are paid
or incurred by Indemnitee in connection with such Proceeding. For
purposes of this Agreement, the meaning of the phrase “
to the fullest extent permitted by law ” will
include to the fullest extent permitted by Section 145 of the
Delaware General Corporation Law (“ DGCL
”) or any section that replaces or succeeds Section 145
of the DGCL with respect to such matters. For avoidance
of doubt, such indemnification shall apply with respect to any
Proceeding that pertains to the Indemnitee’s Corporate
Status, whether or not the facts underlying any claim made in such
Proceeding occurred prior to, on or after the date of this
Agreement.
3.2
Mandatory Indemnification if
Indemnitee is Wholly or Partly Successful . Notwithstanding any other provision of this
Agreement (other than Section 6.9 ), to the extent that
Indemnitee has been successful, on the merits or otherwise, in
defense of any Proceeding or any part thereof, the Company will
indemnify Indemnitee against all Expenses that are paid or incurred
by Indemnitee in connection therewith. If Indemnitee is not wholly
successful in such Proceeding, but is successful, on the merits or
otherwise, as to one or more but fewer than all claims, issues or
matters in such Proceeding, the Company will indemnify and hold
harmless Indemnitee against all Expenses paid or incurred by
Indemnitee in connection with each successfully resolved claim,
issue or matter on which Indemnitee was successful. For purposes of
this Section 3.2 , the termination of any Proceeding,
or any claim, issue or matter in such Proceeding, by dismissal,
settlement or a plea of nolo contendere with or without
prejudice will be deemed to be a successful result as to such
Proceeding, claim, issue or matter.
3.3
Indemnification for Expenses of a
Witness . Notwithstanding
any other provision of this Agreement, to the extent that
Indemnitee is, by reason of his or her Corporate Status, a witness
in any Proceeding to which Indemnitee is not a party, the Company
will indemnify Indemnitee against all Expenses paid or incurred by
Indemnitee on his or her behalf in connection therewith.
3.4
Exclusions
. Notwithstanding any other
provision of this Agreement, the Company will not be obligated
under this Agreement to provide indemnification in connection with
the following:
(a) Any
Proceeding (or part of any Proceeding) initiated or brought
voluntarily by Indemnitee against the Company or its directors,
officers, employees or other indemnities, unless the Board of
Directors has authorized or consented to the initiation of the
Proceeding (or such part of any Proceeding) or the Proceeding was
commenced following a Change in Control; provided ,
however , that nothing in this Section 3.4(a)
shall limit the right of Indemnitee to be indemnified under
Section 8.4 .
(b) Any
claim made against Indemnitee for (i) an accounting of profits made
from the purchase and sale (or sale and purchase) by Indemnitee of
securities of the Company within the meaning of Section 16(b) of
the Exchange Act or similar provisions of state statutory law or
common law, or (ii) any reimbursement of the Company by the
Indemnitee of any bonus or other incentive based or equity-based
compensation or of any profits realized by the Indemnitee from the
sale of securities of the Company, as required in each case under
the Exchange Act (including any such reimbursements that arise from
an accounting restatement of the Company pursuant to Section 304 of
the Sarbanes-Oxley Act of 2002 (the “ Sarbanes-Oxley
Act ”), or the payment to the Company of profits
arising from the purchase and sale by Indemnitee of securities in
violation of Section 306 of the Sarbanes Oxley Act).
ARTICLE 4
ADVANCEMENT OF
EXPENSES
4.1
Expense Advances
. Except as set forth in
Section 4.2 , the Company will, if requested by
Indemnitee, advance, to the fullest extent permitted by law, to
Indemnitee (hereinafter an “ Expense Advance
”) any and all Expenses paid or incurred by Indemnitee in
connection with any Proceeding (whether prior to or after its final
disposition). Indemnitee’s right to each Expense Advance will
not be subject to the satisfaction of any standard of conduct and
will be made without regard to Indemnitee’s ultimate
entitlement to indemnification under the other provisions of this
Agreement, or under provisions of the Certificate or By-laws or
otherwise. Each Expense Advance will be unsecured and interest-free
and will be made by the Company without regard to
Indemnitee’s ability to repay the Expense Advance. The
Indemnitee shall qualify for Expense Advances upon the execution
and delivery to the Company of this Agreement, which shall
constitute an undertaking providing that the Indemnitee undertakes
to the fullest extent permitted by law, by or on behalf of
Indemnitee, to repay such Expense Advance if it is ultimately
determined, by final decision by a court or arbitrator, as
applicable, from which there is no further right to appeal, that
Indemnitee is not entitled to be indemnified for such Expenses
under the Certificate, By-laws, the DGCL, this Agreement or
otherwise. No other form of undertaking shall be required other
than the execution of this Agreement.
4.2
Exclusions
. Indemnitee will not be entitled to
any Expense Advance in connection with any of the matters for which
indemnity is excluded pursuant to Section 3.4
.
4.3
Timing . An Expense Advance pursuant to
Section 4.1 will be made within 10 business days after
the receipt by the Company of a written statement or statements
from Indemnitee requesting such Expense Advance (which statement or
statements will include, if requested by the Company, reasonable
detail underlying the Expenses for which the Expense Advance is
requested), whether such request is made prior to or after final
disposition of such Proceeding.
ARTICLE 5
CONTRIBUTION IN THE EVENT OF
JOINT LIABILITY
5.1
Contribution by
Company . To the fullest
extent permitted by law, if the indemnification provided for in
this Agreement is unavailable to Indemnitee for any reason
whatsoever, the Company, in lieu of indemnifying Indemnitee, will
contribute to the amount of Expenses and Losses incurred or paid by
Indemnitee in connection with any Proceeding in proportion to the
relative benefits received by the Company and all officers,
directors and employees of the Company other than Indemnitee who
are jointly liable with Indemnitee (or would be if joined in such
Proceeding), on the one hand, and Indemnitee, on the other hand,
from the transaction from which such Proceeding arose;
provided , however , that the proportion determined
on the basis of relative benefit may, to the extent necessary to
conform to law, be further adjusted by reference to the relative
fault of the Company and all officers, directors and employees of
the Company other than Indemnitee who are jointly liable with
Indemnitee (or would be if joined in such Proceeding), on the one
hand, and Indemnitee, on the other hand, in connection with the
events that resulted in such Expenses and Losses, as well as any
other equitable considerations which applicable law may require to
be considered. The relative fault of the Company and all officers,
directors and employees of the Company other than Indemnitee who
are jointly liable with Indemnitee (or would be if joined in such
Proceeding), on the one hand, and Indemnitee, on the other hand,
will be determined by reference to, among other things, the degree
to which their actions were motivated by intent to gain personal
profit or advantage, the degree to which their liability is primary
or secondary, and the degree to which their conduct was active or
passive; provided that in the case of an Indemnitee who is a
director of the Company, the amount of Losses paid by such
Indemnitee shall not exceed the amount of fees paid to such
Indemnitee for serving as a director during the 12 months preceding
the commencement of the Proceeding.
5.2
Indemnification for Contribution
Claims by Others . To the
fullest extent permitted by law, the Company will fully indemnify
and hold Indemnitee harmless from any claims of contribution which
may be brought by other officers, directors or employees of the
Company who may be jointly liable with Indemnitee for any Loss or
Expense arising from a Proceeding.
ARTICLE 6
PROCEDURES AND PRESUMPTIONS FOR
THE
DETERMINATION OF ENTITLEMENT TO
INDEMNIFICATION
6.1
Notification of Claims; Request
for Indemnification .
Indemnitee agrees to notify promptly the Company in writing of any
claim made against Indemnitee for which indemnification will or
could be sought under this Agreement; provided ,
however , that a delay in giving such notice will not
deprive Indemnitee of any right to be indemnified under this
Agreement unless the Company did not otherwise learn of the
Proceeding and such delay is materially prejudicial to the
Company’s ability to defend such Proceeding, and, if such
omission does materially prejudice such Corporation’s rights,
it will relieve such Corporation from liability only to the extent
of such prejudice; and, provided , further , that
notice will be deemed to have been given without any action on the
part of Indemnitee in the event the Company is a party to the same
Proceeding. The omission to notify the Company will not relieve the
Company from any liability for indemnification which it may have to
Indemnitee otherwise than under this Agreement. Indemnitee may
deliver to the Company a written request to have the Company
indemnify and hold harmless Indemnitee in accordance with this
Agreement. Subject to Section 6.9 , such request may be
delivered from time to time and at such time(s) as Indemnitee deems
appropriate in his o
