Exhibit 10.21
[FORM OF INDEMNIFICATION AGREEMENT]
HEALTH BENEFITS DIRECT CORPORATION
DIRECTOR AND OFFICER INDEMNIFICATION AGREEMENT
This
Director
and
Officer
Indemnification
Agreement,
dated
as of
November 10, 2005 (this
"AGREEMENT"),
is made by and between
Health
Benefits
Direct Corporation, a Delaware corporation (the "COMPANY"), and
Anthony R. Verdi
(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:
(a) "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.
2
(b) "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.
(c) "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.
(d) "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.
(e) "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.
(f) "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
3
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.
(g)
"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.
(h) "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.
(i)
"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.
(j)
"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.
(k)
"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).
4
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 othe
