HALCYON JETS HOLDINGS, INC.
FORM OF DIRECTOR AND OFFICER INDEMNIFICATION
AGREEMENT
This
Director and Officer Indemnification Agreement, dated as of
August ___, 2007 (this
“Agreement” ),
is made by and between Halcyon Jets Holdings, Inc., a Delaware
corporation (the
“Company” ),
and Andrew Drykerman (the
“Indemnitee” ).
RECITALS:
A.
Section
141 of the Delaware General Corporation Law provides that the
business and affairs of a corporation shall be managed by or
under the direction of its board of directors.
B.
By
virtue of the managerial prerogatives vested in the directors
and officers of a Delaware corporation, directors and officers
act as fiduciaries of the corporation and its
stockholders.
C.
Thus,
it is critically important to the Company and its stockholders
that the Company be able to attract and retain the most
capable persons reasonably available to serve as directors and
officers of the Company.
D.
In
recognition of the need for corporations to be able to induce
capable and responsible persons to accept positions in
corporate management, Delaware law authorizes (and in some
instances requires) corporations to indemnify their directors
and officers, and further authorizes corporations to purchase
and maintain insurance for the benefit of their directors and
officers.
E.
The
Delaware courts have recognized that indemnification by a
corporation serves the dual policies of (1) allowing corporate
officials to resist unjustified lawsuits, secure in the
knowledge that, if vindicated, the corporation will bear the
expense of litigation, and (2) encouraging capable women and
men to serve as corporate directors and officers, secure in
the knowledge that the corporation will absorb the costs of
defending their honesty and integrity.
F.
The
number of lawsuits challenging the judgment and actions of
directors and officers of Delaware corporations, the costs of
defending those lawsuits and the threat to personal assets
have all materially increased over the past several years,
chilling the willingness of capable women and men to undertake
the responsibilities imposed on corporate directors and
officers.
G.
Recent
federal legislation and rules adopted by the Securities and
Exchange Commission and the national securities exchanges have
exposed such directors and officers to new and substantially
broadened civil liabilities.
H.
Under
Delaware law, a director’s or officer’s right to
be reimbursed for the costs of defense of criminal actions,
whether such claims are asserted under state or federal law,
does not depend upon the merits of the claims asserted against
the director or officer and is separate and distinct from any
right to indemnification the director may be able to
establish.
I.
Indemnitee
is, or will be, a director and/or officer of the Company and
his or her willingness to serve in such capacity is
predicated, in substantial part, upon the Company’s
willingness to indemnify him or her in accordance with the
principles reflected above, to the fullest extent permitted by
the laws of the State of Delaware, and upon the other
undertakings set forth in this Agreement.
J.
Therefore,
in recognition of the need to provide Indemnitee with
substantial protection against personal liability, in order to
procure Indemnitee’s continued service as a director
and/or officer of the Company and to enhance
Indemnitee’s ability to serve the Company in an
effective manner, and in order to provide such protection
pursuant to express contract rights (intended to be
enforceable irrespective of, among other things, any amendment
to the Company’s certificate of incorporation or bylaws
(collectively, the
“Constituent Documents”
),
any change in the composition of the Company’s Board of
Directors (the
“Board” )
or any change-in-control or business combination transaction
relating to the Company), the Company wishes to provide in this
Agreement for the indemnification and advancement of Expenses to
Indemnitee on the terms, and subject to the conditions, set forth
in this Agreement.
K.
In
light of the considerations referred to in the preceding
recitals, it is the Company’s intention and desire that
the provisions of this Agreement be construed liberally,
subject to their express terms, to maximize the protections to
be provided to Indemnitee hereunder.
AGREEMENT:
NOW,
THEREFORE, the parties hereby agree as follows:
1.
Certain Definitions .
In addition to terms defined elsewhere herein, the following terms
have the following meanings when used in this Agreement with
initial capital letters:
“Change in Control”
shall
have occurred at such time, if any, as Incumbent Directors cease
for any reason to constitute a majority of Directors. For purposes
of this Section 1(a),
“Incumbent Directors”
means
the individuals who, as of the date hereof, are Directors of the
Company and any individual becoming a Director subsequent to the
date hereof whose election, nomination for election by the
Company’s stockholders, or appointment, was approved by a
vote of at least a majority of the then Incumbent Directors (either
by a specific vote or by approval of the proxy statement of the
Company in which such person is named as a nominee for director,
without objection to such nomination);
provided, however, that
an individual shall not be an Incumbent Director if such
individual’s election or appointment to the Board occurs as a
result of an actual or threatened election contest (as described in
Rule 14a-12(c) of the Securities Exchange Act of 1934, as amended)
with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board.
“Claim” means
(i) any threatened, asserted, pending or completed claim, demand,
action, suit or proceeding, whether civil, criminal,
administrative, arbitrative, investigative or other, and whether
made pursuant to federal, state or other law; and (ii) any inquiry
or investigation, whether made, instituted or conducted by the
Company or any other Person, including, without limitation, any
federal, state or other governmental entity, that Indemnitee
reasonably determines might lead to the institution of any such
claim, demand, action, suit or proceeding. For the avoidance of
doubt, the Company intends indemnity to be provided hereunder in
respect of acts or failure to act prior to, on or after the date
hereof.
“Controlled Affiliate”
means
any corporation, limited liability company, partnership, joint
venture, trust or other entity or enterprise, whether or not for
profit, that is directly or indirectly controlled by the Company.
For purposes of this definition,
“control” means
the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of an entity or
enterprise, whether through the ownership of voting securities,
through other voting rights, by contract or otherwise;
provided that
direct or indirect beneficial ownership of capital stock or other
interests in an entity or enterprise entitling the holder to cast
15% 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 entity or enterprise shall be deemed to
constitute control for purposes of this definition.
“Disinterested Director”
means
a director of the Company who is not and was not a party to the
Claim in respect of which indemnification is sought by
Indemnitee.
“Expenses” means
attorneys’ and experts’ fees and expenses and all other
costs and expenses paid or payable in connection with
investigating, defending, being a witness in or participating in
(including on appeal), or preparing to investigate, defend, be a
witness in or participate in (including on appeal), any
Claim.
“Indemnifiable Claim”
means
any Claim based upon, arising out of or resulting from (i) any
actual, alleged or suspected act or failure to act by Indemnitee in
his or her capacity as a director, officer, employee or agent of
the Company or as a director, officer, employee, member, manager,
trustee or agent of any other corporation, limited liability
company, partnership, joint venture, trust or other entity or
enterprise, whether or not for profit, as to which Indemnitee is or
was serving at the request of the Company, (ii) any actual, alleged
or suspected act or failure to act by Indemnitee in respect of any
business, transaction, communication, filing, disclosure or other
activity of the Company or any other entity or enterprise referred
to in clause (i) of this sentence, or (iii) Indemnitee’s
status as a current or former director, officer, employee or agent
of the Company or as a current or former director, officer,
employee, member, manager, trustee or agent of the Company or any
other entity or enterprise referred to in clause (i) of this
sentence or any actual, alleged or suspected act or failure to act
by Indemnitee in connection with any obligation or restriction
imposed upon Indemnitee by reason of such status. In addition to
any service at the actual request of the Company, for purposes of
this Agreement, Indemnitee shall be deemed to be serving or to have
served at the request of the Company as a director, officer,
employee, member, manager, trustee or agent of another entity or
enterprise if Indemnitee is or was serving as a director, officer,
employee, member, manager, agent, trustee or other fiduciary of
such entity or enterprise and (i) such entity or enterprise is or
at the time of such service was a Controlled Affiliate, (ii) such
entity or enterprise is or at the time of such service was an
employee benefit plan (or related trust) sponsored or maintained by
the Company or a Controlled Affiliate, or (iii) the Company or a
Controlled Affiliate (by action of the Board, any committee thereof
or the Company’s Chief Executive Officer (“CEO”)
(other than as the CEO him or herself)) caused or authorized
Indemnitee to be nominated, elected, appointed, designated,
employed, engaged or selected to serve in such
capacity.
“Indemnifiable Losses”
means
any and all Losses relating to, arising out of or resulting from
any Indemnifiable Claim;
provided, however, that
Indemnifiable Losses shall not include Losses incurred by
Indemnitee in respect of any Indemnifiable Claim (or any matter or
issue therein) as to which Indemnitee shall have been adjudged
liable to the Company, unless and only to the extent that the
Delaware Court of Chancery or the court in which such Indemnifiable
Claim was brought shall have determined 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 indemnification for such Expenses as the court shall
deem proper.
“Independent Counsel”
means
a nationally recognized law firm, or a member of a nationally
recognized law firm, that is experienced in matters of Delaware
corporate law and neither presently is, nor in the past five years
has been, retained to represent: (i) the Company (or any
subsidiary) or Indemnitee in any matter material to either such
party (other than with respect to matters concerning the Indemnitee
under this Agreement, or of other indemnitees under similar
indemnification agreements) or (ii) any other named (or, as to a
threatened matter, reasonably likely to be named) party to the
Indemnifiable Claim 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 Indemnitee in an action to determine
Indemnitee’s rights under this Agreement.
“Losses” means
any and all Expenses, damages, losses, liabilities, judgments,
fines, penalties (whether civil, criminal or other) and amounts
paid or payable in settlement, including, without limitation, all
interest, assessments and other charges paid or payable in
connection with or in respect of any of the foregoing.
“Person” means
any individual, entity or group, within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended.
“Standard of Conduct”
means
the standard for conduct by Indemnitee that is a condition
precedent to indemnification of Indemnitee hereunder against
Indemnifiable Losses relating to, arising out of or resulting from
an Indemnifiable Claim. The Standard of Conduct is (i) good faith
and a reasonable belief by Indemnitee that his action was in or not
opposed to the best interests of the Company and, with respect to
any criminal action or proceeding, that Indemnitee had no
reasonable cause to believe that his conduct was unlawful, or (ii)
any other applicable standard of conduct that may hereafter be
substituted under Section 145(a) or (b) of the Delaware General
Corporation Law or any successor to such provision(s).
2.
Indemnification Obligation .
Subject only to Section 7 and to the proviso in this Section, the
Company shall indemnify, defend and hold harmless Indemnitee, to
the fullest extent permitted or required by the laws of the State
of Delaware in effect on the date hereof or as such laws may from
time to time hereafter be amended to increase the scope of such
permitted indemnification, against any and all Indemnifiable Claims
and Indemnifiable Losses;
provided, however, that,
except as provided in Section 5, Indemnitee shall not be entitled
to indemnification pursuant to this Agreement in connection with
(i) any Claim initiated by Indemnitee against the Company or any
director or officer of the Company unless the Company has joined in
or consented to the initiation of such Claim, or (ii) the purchase
and sale by Indemnitee of securities in violation of Section 16(b)
of the Securities Exchange Act of 1934, as amended. The Company
acknowledges that the foregoing obligation may be broader than that
now provided by applicable law and the Company’s Constituent
Documents and intends that it be interpreted consistently with this
Section and the recitals to this Agreement.
3.
Advancement of Expenses .
Indemnitee
shall have the right to advancement by the Company prior to the
final disposition of any Indemnifiable Claim of any and all actual
and reasonable Expenses relating to, arising out of or resulting
from any Indemnifiable Claim paid or incurred by Indemnitee.
Without limiting the generality or effect of any other provision
hereof, Indemnitee’s right to such advancement is not subject
to the satisfaction of any Standard of Conduct. Without limiting
the generality or effect of the foregoing, within five business
days after any request by Indemnitee that is accompanied by
supporting documentation for specific reasonable Expenses to be
reimbursed or advanced, the Company shall, in accordance with such
request (but without duplication), (a) pay such Expenses on behalf
of Indemnitee, (b) advance to Indemnitee funds in an amount
sufficient to pay such Expenses, or (c) reimburse Indemnitee for
such Expenses;
provided that
Indemnitee shall repay, without interest, any amounts actually
advanced to Indemnitee that, at the final disposition of the
Indemnifiable Claim to which the advance related, were in excess of
amounts paid or payable by Indemnitee in respect of Expenses
relating to, arising out of or resulting from such Indemnifiable
Claim. In connection with any such payment, advancement or
reimbursement, at the request of the Company, Indemnitee shall
execute and deliver to the Company an undertaking, which need not
be secured and shall be accepted without reference to
Indemnitee’s ability to repay the Expenses, by or on behalf
of the Indemnitee, to repay any amounts paid, advanced or
reimbursed by the Company in respect of Expenses relating to,
arising out of or resulting from any Indemnifiable Claim in respect
of which it shall have been determined, following the final
disposition of such Indemnifiable Claim and in accordance with
Section 7, that Indemnitee is not entitled to indemnification
hereunder.
4.
Indemnification for Additional Expenses .
Without
limiting the generality or effect of the foregoing, the Company
shall indemnify and hold harmless Indemnitee against and, if
requested by Indemnitee, shall reimburse Indemnitee for, or advance
to Indemnitee, within five business days of such request
accompanied by supporting documentation for specific Expenses to be
reimbursed or advanced, any and all actual and reasonable Expenses
paid or incurred by Indemnitee in connection with any Claim made,
instituted or conducted by Indemnitee for (a) indemnification or
reimbursement or advance payment of Expenses by the Company under
any provision of this Agreement, or under any other agreement or
provision of the Constituent Documents now or hereafter in effect
relating to Indemnifiable Claims, and/or (b) recovery under any
directors’ and officers’ liability insurance policies
maintained by the Company;
provided
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