Exhibit 10.26
INDEMNIFICATION
AGREEMENT
Agreement between Open Text
Corporation, a corporation existing under the laws of Canada (the
“ Company ,” which for the purposes of this
Agreement shall include any Subsidiary as defined herein), and
(the “ Indemnitee ”).
WHEREAS, the Company desires to
attract and retain highly qualified individuals, such as the
Indemnitee, to serve the Company;
WHEREAS, the Indemnitee currently
providing valuable services to the Company and the Company desires
the Indemnitee to continue to do so;
WHEREAS, the Company and the
Indemnitee recognize the significant risk of personal liability for
Personnel (as defined herein) which arises from corporate
litigation practices;
WHEREAS, the Company and the
Indemnitee further recognize that liability insurance for the
Company’s Personnel, when available, is often available only
at significant expense and provides for coverage of limited scope
and that competent and experienced persons are often unable or
unwilling to serve as Personnel unless they are protected by
comprehensive liability insurance and indemnification;
WHEREAS, the Indemnitee is willing
to continue to serve the Company, subject to certain conditions,
including execution and delivery of this Agreement by the Company
in order that the Indemnitee be furnished the indemnity provided
for herein;
WHEREAS, the Company’s
Articles of Continuance (“ Articles ”) and
By-Laws do not prohibit or restrict contracts between the Company
and its Personnel with respect to indemnification of such
Personnel; and
WHEREAS, in view of such
considerations, the Company desires to provide, independent from
the indemnification to which the Indemnitee is otherwise entitled
by law and under the Company’s Articles and By-Laws,
indemnification to the Indemnitee and the Expense Advances (as
defined herein), all as set forth in this Agreement to the maximum
extent permitted by law;
NOW, THEREFORE, to induce the
Indemnitee to continue to serve the Company and in consideration of
these premises and the mutual agreements set forth in this
Agreement, as well as other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
Company and the Indemnitee hereby agree as follows:
1. Definitions . For the
purposes of this Agreement,
(a) Change in Control .
“ Change in Control ” means that after the date
of this Agreement any of the following shall occur: (i) any
“person” (as such term is used in Sections 13(d) and
14(d) of the U.S. Securities Exchange Act of 1934, as amended (the
“ Act ”)), other than a trustee or other
fiduciary holding securities under an employee benefit plan of the
Company acting in such capacity or a corporation owned directly or
indirectly by the shareholders of the Company in substantially the
same proportions as their ownership of stock of
the Company, becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Act), directly or
indirectly, of securities of the Company representing 25% 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
constitute the board of directors of the Company (the “
Board of Directors ”) cease to be a majority thereof
(otherwise than through death, disability or retirement in
accordance with the Company’s normal retirement policies);
(iii) the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, limited
liability company, partnership, joint venture, trust or other
entity other than a merger or consolidation which would result in
the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or
by being converted into voting securities of the surviving entity)
at least 50% of the total voting power represented by the voting
securities of the Company or such surviving entity Outstanding
immediately after such a merger or consolidation; or (iv) the
shareholders of the Company approve a plan of complete or
substantial liquidation of the Company or an agreement for the sale
or disposition by the Company of (in one transaction or a series of
related transactions) all or substantially all of the
Company’s assets.
(b) Claim . “
Claim ” means any threatened, pending or completed
action, suit, proceeding, arbitration or alternative dispute
resolution mechanism, or any hearing, inquiry or investigation,
whether conducted by the Company or any other party, which the
Indemnitee believes in good faith might lead to the institution of
any such action, suit, proceeding, alternative dispute resolution
mechanism, hearing, inquiry or investigation, whether civil,
criminal, administrative, investigative or any other type
whatsoever, with respect to an Indemnifiable Event.
(c) Expenses . “
Expenses ” means all costs, charges, expenses and
liabilities of any type or nature whatsoever (including, without
limitation, all attorneys’ fees, retainers and related
disbursements and other out-of-pocket costs, judgments, awards,
fines, penalties and amounts paid in settlements) paid or incurred
by or imposed upon the Indemnitee in the investigation, defence,
settlement or appeal of, or otherwise in connection with, a Claim
(including, without limitation, being a witness) or in establishing
or enforcing a right to indemnification under this Agreement, the
Company’s Articles or By-Laws, applicable provisions of the
Canada Business Corporations Act or otherwise, and any federal,
provincial, state, local or foreign taxes imposed on the Indemnitee
as a result of the actual or deemed receipt of any payments under
this Agreement.
(d) Expense Advance . “
Expense Advance ” means a payment to the Indemnitee of
Expenses in advance of the settlement of or final judgment or award
on any Claim.
(e) Indemnifiable Event .
“ Indemnifiable Event ” means any event or
occurrence related to the fact that the Indemnitee is, or was, a
Personnel or by reason of anything done or not done, or allegedly
done or not done, by the Indemnitee in the Indemnitee’s
capacity as a Personnel.
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(f) Independent Legal Counsel
. “ Independent Legal Counsel ” means an
attorney or firm of attorneys, selected in accordance with the
provisions of Section 8(a), whether or not in the event of a
Change in Control.
(g) Personnel . “
Personnel ” means any person who (i) is or was a
director, officer, employee, trustee or other Personnel or
fiduciary of the Company; (ii) is or was serving at the
request, for the convenience, or to represent the interests, of the
Company or a Company employee benefit plan, its participants or its
beneficiaries, as a director, officer, employee, trustee or other
Personnel or fiduciary of another corporation, limited liability
company, partnership, joint venture, trust or other entity
(including, without limitation, any employee benefit plan); or
(iii) was a director, officer, employee, trustee or other
Personnel or fiduciary of a corporation, limited liability company,
partnership, joint venture, trust or other entity which was a
predecessor of the Company, or was a director, officer, employee,
trustee or other Personnel or fiduciary of any other such entity at
the request of such predecessor. The use of the term
“Personnel” shall not be construed to alter the legal
relationship between a Personnel, as defined herein, and the
Company.
(h) Potential Change in
Control . “ Potential Change in Control ”
means that after the date of this Agreement any of the following
shall occur: (i) any person or entity publicly announces an
intention to take or to consider taking actions which if
consummated might result in a Change in Control; or (ii) the
Company’s Board of Directors adopts a resolution to the
effect that, for purposes of this Agreement, a Potential Change in
Control has occurred.
(i) Reviewing Party . “
Reviewing Party ” means the person or body appointed
by the Company’s Board of Directors pursuant to
Section 12(c) and in accordance with applicable law, which
person or body shall be either (i) members of the
Company’s Board of Directors who are not interested in the
particular Claim; or (ii) Independent Legal Counsel. If there
has been a Change in Control or Potential Change in Control, the
Reviewing Party shall be Independent Legal Counsel.
(j) Subsidiary . “
Subsidiary ” means any corporation, limited liability
company, partnership, joint venture, trust or other entity of which
more than 50% of the outstanding voting securities are 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 continue to serve the Company as a Personnel,
at its will (or under separate agreement, if such agreement
exists), in the capacity in which the Indemnitee currently serves
as such Personnel, or such other capacity as the Indemnitee is
appointed or elected to from time to time, so long as the
Indemnitee is duly appointed or elected and qualified in accordance
with the Articles and By-Laws of the Company, or until such time as
the Indemnitee tenders the Indemnitee’s resignation in
writing; provided , however , that nothing contained
in this Agreement is intended to create any right to continued
service by the Indemnitee.
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3. Basic Indemnification . Subject to the
terms of this Agreement:
(a) Claims Other than Derivative
Claims on Behalf of and in Favour of the Company . Subject to
subsection 3(b), as to all Claims other than derivative Claims on
behalf of and in favor of the Company, the Company shall indemnify
the Indemnitee against all Expenses.
(b) Derivative Claims on Behalf
of and in Favour of the Company . As to all derivative Claims
on behalf of and in favor of the Company, the Company shall
indemnify the Indemnitee against all Expenses, provided that no
indemnification shall be made as to such derivative Claim if the
Indemnitee has been finally adjudged to be liable to the Company in
connection with such Claim or any claim, issue or matter therein,
unless and only to the extent that the court in which the Claim was
brought shall determine that, despite the adjudication of liability
but in view of all the circumstances, the Indemnitee is fairly and
reasonably entitled to indemnity for such Expenses which such court
shall deem proper.
(c) Standard of Conduct Required
for Entitlement to Basic Indemnification . The Indemnitee shall
be entitled to indemnification under Sections 3(a) and
(b) above if the Indemnitee (i) acted honestly and in
good faith with a view to the best interests of the Company or, as
the case may be, to the best interests of the other entity for
which the Indemnitee acted as Personnel at the Company’s
request; and (ii) in the case of a criminal or administrative
action or proceeding that is enforced by a monetary penalty, the
Indemnitee had reasonable grounds for believing that the
Indemnitee’s conduct was lawful and, in the case of
Section 3(b), subject to the exclusion set forth therein. The
termination of any Claim by judgment, award, order, settlement
(whether with or without court approval), conviction or upon a plea
of nolo contendere or its equivalent shall not, of itself,
create a presumption that (i) the Indemnitee did not act
honestly and in good faith with a view to the best interests of the
Company or, as applicable, such other entity, (ii) the
Indemnitee did not have reasonable grounds to believe that the
Indemnitee’s conduct was lawful or (iii) a court
determined that indemnification is not permitted by applicable law
or pursuant to Section 3(b). In addition, neither the failure
of any Reviewing Party to have made a determination as to whether
the Indemnitee has met the standard of conduct set forth in this
Section 3(c) or had any particular belief, nor an actual
determination by any Reviewing Party that the Indemnitee has not
met such standard of conduct or did not have such belief, shall be
a defence to the Indemnitee’s right to indemnification or
create a presumption that the Indemnitee did not meet any
particular standard of conduct or did not have any particular
belief. If the Indemnitee acted honestly and in good faith with a
view to the best interests of the participants and beneficiaries of
an employee benefit plan, the Indemnitee shall be deemed to have
acted with a view to the best interests of the Company.
(d) Success on the Merits .
To the extent that the Indemnitee has been successful on the merits
or otherwise (including, without limitation, dismissal or
withdrawal of a Claim with or without prejudice) in defence of any
Claim or in defence of any claim, issue or matter therein, the
Company shall indemnify the Indemnitee against Expenses in
connection therewith.
(e) Proceedings initiated by the
Indemnitee . Except as provided in Section 16 of this
Agreement, notwithstanding anything to the contrary in Sections 3
and 4, the Company shall not be obligated to indemnify the
Indemnitee in connection with a proceeding (or part
thereof)
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initiated by the Indemnitee unless such
proceeding (or part thereof) was authorized in advance, or
unanimously consented to, by the Company’s Board of
Directors.
4. Additional Indemnification
. The Company further agrees to indemnify the Indemnitee in
connection with any Claim and to make Expense Advances to the
Indemnitee, in each case to the fullest extent as may be provided
for under the Company’s Articles, By-Laws, any vote of the
shareholders or disinterested directors and/or applicable law
notwithstanding that any such indemnification or Expense Advance is
not specifically authorized by the other provisions of this
Agreement. It is the intent of the parties hereto that (i) in
the event of any change, after the date of this Agreement, in any
applicable law which expands the right of a corporation organized
under the laws of Canada to indemnify or make Expense Advances to a
Personnel to a greater degree than would be afforded currently
under the Company’s Articles, By-Laws, any vote of the
shareholders or disinterested directors, applicable law and this
Agreement, the Indemnitee shall enjoy by this Agreement the greater
benefits afforded by such change, and (ii) this Agreement be
interpreted and enforced so as to provide indemnification and
Expense Advances under such circumstances as set forth in this
Agreement, if any, in which the providing of indemnification or
Expense Advances would otherwise be discretionary. Without limiting
the generality of the foregoing, the Company shall use its best
efforts to obtain any approval required under the Canada Business
Corporations Act or otherwise (including court approval) in respect
of any indemnification required, or contemplated, to be made under
this Agreement.
5. Exclusions . Any other
provision of this Agreement to the contrary notwithstanding, the
Company shall not be obligated to indemnify or provide Expense
Advances to the Indemnitee:
(a) to the extent any such
indemnification or Expense Advance would be unlawful; or
(b) to the extent that the
Indemnitee actually received from any other source (including an
insurer) amounts otherwise payable hereunder;
provided that notwithstanding the
foregoing provisions of this Section 5, the Indemnitee shall
be entitled under Section 6 to receive Expense Advances with
respect to any Claim unless and until a court having jurisdiction
over such Claim shall have made a final determination (as to which
all rights of appeal therefrom shall have been exhausted or lapsed)
that t
