EXHIBIT 10.5
FORM OF INDEMNIFICATION AGREEMENT
This Indemnity Agreement, dated as of ________,
2009, is made by and between Unify Corporation, a Delaware
corporation (the “ Company ”), and
_________________________ (the “ Indemnitee
”).
RECITALS
A. The
Company and Indemnitee recognize the continued difficulty in
obtaining liability insurance for the Company’s directors,
officers, employees and other agents, the cost of such insurance
and the general reductions in the coverage of such
insurance;
B. The
Company and Indemnitee recognize the substantial increase in
corporate litigation in general, subjecting directors, officers,
employees and other agents to expensive litigation risks at the
same time as the availability and coverage of liability insurance
has been severely limited;
C. The
Company desires to attract and retain the services of talented and
experienced individuals, such as Indemnitee, to serve as directors,
officers, employees and agents of the Company and its subsidiaries
and wishes to indemnify its directors, officers, employees and
other agents to the maximum extent permitted by law;
D. Section
145 of the General Corporation Law of Delaware, under which the
Company is organized ( “ Section 145 ”), empowers the Company to indemnify its
directors, officers, employees and agents by agreement and to
indemnify persons who serve, at the request of the Company, as the
directors, officers, employees or agents of other corporations or
enterprises, and expressly provides that the indemnification
provided by Section 145 is not exclusive.
E. In
order to induce Indemnitee to serve or continue to serve as a
director, officer, employee or agent of the Company and/or one or
more subsidiaries of the Company free from undue concern for claims
for damages arising out of or related to such services to the
Company and/or one or more subsidiaries of the Company, the Company
has determined and agreed to enter into this Agreement with
Indemnitee.
AGREEMENT
NOW, THEREFORE, the Indemnitee and the Company
hereby agree as follows:
1. Definitions . As used in this Agreement:
(a) “ Agent ” means any person
who is or was a director, officer, employee or other agent of the
Company or a subsidiary of the Company; or is or was serving at the
request of, for the convenience of, or to represent the interests
of the Company or a subsidiary of the Company as a director,
officer, employee or agent of another foreign or domestic
corporation, partnership, joint venture, trust or other enterprise;
or was a director, officer, employee or agent of a foreign or
domestic corporation which was a predecessor corporation of the
Company or a subsidiary of the Company, or was a director, officer,
employee or agent of another enterprise at the request of, for the
convenience of, or to represent the interests of such predecessor
corporation.
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(b) “ Board ”
means the Board of Directors of the Company.
(c) A “ Change in
Control ” shall be deemed to have occurred if (i) any
“person,” as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), other than a trustee or other
fiduciary holding securities under an employee benefit plan of the
Company or a corporation owned directly or indirectly by the
stockholders of the Company in substantially the same proportions
as their ownership of stock of the Company, is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company
representing 20% or more of the total voting power represented by
the Company’s then outstanding voting securities, (ii) during
any period of two consecutive years, individuals who at the
beginning of such period constituted the Board, together with any
new directors whose election by the Board 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 was previously so approved, cease for any
reason to constitute a majority of the Board, (iii) the
stockholders of the Company approve a merger or consolidation or a
sale of all or substantially all of the Company’s assets with
or to another entity, other than a merger, consolidation or asset
sale that would result in the holders of the Company’s
outstanding voting securities immediately prior thereto continuing
to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least 80% of the
total voting power represented by the voting securities of the
Company or such surviving or successor entity outstanding
immediately thereafter, or (iv) the stockholders of the Company
approve a plan of complete liquidation of the Company.
(d) “
Expenses ” shall include all out-of-pocket costs of
any type or nature whatsoever (including, without limitation, all
attorneys’ fees and related disbursements), actually and
reasonably incurred by the Indemnitee in connection with either the
investigation, defense or appeal of a Proceeding or establishing or
enforcing a right to indemnification under this Agreement, or
Section 145 or otherwise; provided, however, that
“Expenses” shall not include any judgments, fines,
ERISA excise taxes or penalties, or amounts paid in settlement of a
Proceeding.
(e) “
Independent Counsel ” means a law firm, or a partner
(or, if applicable, member) of such a law firm, that is experienced
in matters of corporation law and neither currently is, nor in the
past five years has been, retained to represent: (i) the Company or
the Indemnitee in any matter material to either such party or (ii)
any other party to or witness in the proceeding giving rise to a
claim for indemnification hereunder. Notwithstanding the foregoing,
the term “Independent Counsel” shall 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 the Indemnitee in an action to determine the
Indemnitee’s rights under this Agreement.
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(f) “ Proceeding
” means any threatened, pending, or completed action, suit or
other proceeding, whether civil, criminal, administrative, or
investigative.
(g) “ Subsidiar
y” means any corporation of which more than 50% of the
outstanding voting securities is owned directly or indirectly by
the Company, by the Company and one or more other subsidiaries, or
by one or more other subsidiaries.
2.
Agreement to Serve . The Indemnitee agrees to serve and/or
continue to serve as an Agent of the Company, at its will (or under
separate agreement, if such agreement exists), in the capacity the
Indemnitee currently serves as an Agent of the Company, so long as
the Indemnitee is duly appointed or elected and qualified in
accordance with the applicable provisions of the Bylaws of the
Company or any subsidiary of the Company or until such time as the
Indemnitee tenders his or her resignation in writing; provided,
however, that nothing contained in this Agreement is intended to
create any right to continued employment by the
Indemnitee.
3.
Liability Insurance .
(a) Maintenance of D&O
Insurance . The Company hereby covenants and agrees that, so
long as the Indemnitee shall continue to serve as an Agent of the
Company and thereafter so long as the Indemnitee shall be subject
to any possible Proceeding by reason of the fact that the
Indemnitee was an Agent of the Company, the Company, subject to
Section 3(c), shall promptly obtain and maintain in full force and
effect directors’ and officers’ liability insurance
(“ D&O Insurance ”) in reasonable amounts
from established and reputable insurers, as more fully described
below.
(b) Rights and Benefits . In
all policies of D&O Insurance, the Indemnitee shall qualify as
an insured in such a manner as to provide the Indemnitee the same
rights and benefits as are accorded to the most favorably insured
of the Company’s independent directors (as defined by the
insurer) if the Indemnitee is such an independent director; of the
Company’s non-independent directors if the Indemnitee is not
an independent director; of the Company’s officers if the
Indemnitee is an officer of the Company; or of the Company’s
key employees, if the Indemnitee is not a director or officer but
is a key employee.
(c) Limitation on Required
Maintenance of D&O Insurance . Notwithstanding the
foregoing, the Company shall have no obligation to obtain or
maintain D&O Insurance if the Company determines in good faith
that: such insurance is not reasonably available; the premium costs
for such insurance are disproportionate to the amount of coverage
provided; the coverage provided by such insurance is limited by
exclusions so as to provide an insufficient benefit; the Indemnitee
is covered by similar insurance maintained by a subsidiary of the
Company; the Company is to be acquired and a tail policy of
reasonable terms and duration is purchased for pre-closing acts or
omissions by the Indemnitee; or the Company is to be acquired and
D&O Insurance will be maintained by the acquirer that covers
pre-closing acts and omissions by the Indemnitee.
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4.
Mandatory Indemnification . Subject to the terms of this
Agreement:
(a) Third Party Actions . If
the Indemnitee is a person who was or is a party or is threatened
to be made a party to any Proceeding (other than an action by or in
the right of the Company) by reason of the fact that the Indemnitee
is or was an Agent of the Company, or by reason of anything done or
not done by the Indemnitee in any such capacity, the Company shall
indemnify the Indemnitee against all Expenses and liabilities of
any type whatsoever (including, but not limited to, judgments,
fines, ERISA excise taxes and penalties, and amounts paid in
settlement) actually and reasonably incurred by the Indemnitee in
connection with the investigation, defense, settlement or appeal of
such Proceeding, provided the Indemnitee acted in good faith and in
a manner the 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
his or her conduct was unlawful.
(b) Derivative Actions . If
the Indemnitee is a person who was or is a party or is threatened
to be made a party to any Proceeding by or in the right of the
Company by reason of the fact that the Indemnitee is or was an
Agent of the Company, or by reason of anything done or not done by
the Indemnitee in any such capacity, the Company shall indemnify
the Indemnitee against all Expenses actually and reasonably
incurred by the Indemnitee in connection with the investigation,
defense, settlement or appeal of such Proceeding, provided the
Indemnitee acted in good faith and in a manner the Indemnitee
reasonably believed to be in or not opposed to the best interests
of the Company; except that no indemnification under this Section
4(b) shall be made in respect to any claim, issue or matter as to
which the Indemnitee shall have been finally adjudged to be liable
to the Company by a court of competent jurisdiction unless and only
to the extent that the Delaware Court of Chancery or the court in
which such Proceeding was brought shall determine upon application
that, despite the adjudication of liability but in view of all the
circumstances of the case, the Indemnitee is fairly and reasonably
entitled to indemnity for such amounts which the Delaware Court of
Chancery or such other court shall deem proper.
(c) Actions where Indemnitee is
Deceased . If the Indemnitee is a person who was or is a party
or is threatened to be made a party to any Proceeding by reason of
the fact that the Indemnitee is or was an Agent of the Company, or
by reason of anything done or not done by the Indemnitee in any
such capacity, and if, prior to, during the pendency of or after
completion of such Proceeding the Indemnitee is deceased, the
Company shall indemnify the Indemnitee’s heirs, executors and
administrators against all Expenses and liabilities of any type
whatsoever to the extent the Indemnitee would have been entitled to
indemnification pursuant to this Agreement were the Indemnitee
still alive.
(d) Certain Terminations .
The termination of any Proceeding or of any claim, issue, or matter
therein by judgment, order, settlement, or conviction, or upon a
plea of nolo contendere or its
equivalent, shall not (except as otherwise expressly provided in
this Agreement) of itself create a presumption that the Indemnitee
did not act in good faith and
