INDEMNIFICATION AGREEMENT
This Agreement
made and entered into this ___ day of
, (the “ Agreement ”), by and between Eagle Test
Systems, Inc., a Delaware corporation (the “ Company
,” which term shall include, where appropriate, any Entity
(as hereinafter defined) controlled, directly or indirectly, by the
Company) and
(the “ Indemnitee ”):
WHEREAS, it is
essential to the Company that it be able to retain and attract as
directors and executive officers the most capable persons
available;
WHEREAS, increased
corporate litigation has subjected directors and executive officers
to litigation risks and expenses, and the limitations on the
availability of directors and officers liability insurance have
made it increasingly difficult for the Company to attract and
retain such persons;
WHEREAS, the
Company’s By-laws as amended and in effect from time to time
(the “ By-laws ”) require it to indemnify its
directors and executive officers to the fullest extent permitted by
law and permit it to make other indemnification arrangements and
agreements;
WHEREAS, the
Company desires to provide Indemnitee with specific contractual
assurance of Indemnitee’s rights to full indemnification
against litigation risks and expenses (regardless, among other
things, of any amendment to or revocation of the Company’s
Certificate of Incorporation as amended and in effect from time to
time (the “ Certificate of Incorporation ”) or
By-laws or any change in the ownership of the Company or the
composition of its Board of Directors);
WHEREAS, the
Company intends that this Agreement provide Indemnitee with greater
protection than that which is provided by the Company’s
By-laws; and
WHEREAS,
Indemnitee is relying upon the rights afforded under this Agreement
in becoming or continuing as a director or executive officer of the
Company.
NOW, THEREFORE, in
consideration of the promises and the covenants contained herein,
the Company and Indemnitee do hereby covenant and agree as
follows:
(a) “
Corporate Status ” describes the status of a person
who is serving or has served (i) as a director of the Company,
(ii) as an executive officer of the Company, (iii) in any
capacity with respect to any employee benefit plan of the Company,
or (iv) as a director, partner, trustee, officer, employee, or
agent of any other Entity at the request of the Company. For
purposes of subsection (iv) of this Section 1(a), if
Indemnitee is serving or has served as a director, partner,
trustee,
officer,
employee or agent of a Subsidiary, Indemnitee shall be deemed to be
serving at the request of the Company.
(b) “
Entity ” shall mean any corporation, partnership,
limited liability company, joint venture, trust, foundation,
association, organization or other legal entity.
(c) “
Enterprise ” shall mean the Company and any other
corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise of which Indemnitee is or was serving at
the request of the Company as a director, officer, employee, agent
or fiduciary.
(d) “
Expenses ” shall mean all fees, costs and expenses
incurred by Indemnitee in connection with any Proceeding (as
defined below), including, without limitation, attorneys’
fees, disbursements and retainers (including, without limitation,
any such fees, disbursements and retainers incurred by Indemnitee
pursuant to Sections 13 and 14(c) of this Agreement), fees and
disbursements of expert witnesses, private investigators and
professional advisors (including, without limitation, accountants
and investment bankers), court costs, transcript costs, fees of
experts, travel expenses, duplicating, printing and binding costs,
telephone and fax transmission charges, postage, delivery services,
secretarial services, and other disbursements and
expenses.
(e) “
Indemnifiable Amounts ” shall have the meaning
ascribed to that term in Section 3 below.
(f) “
Liabilities ” shall mean judgments, damages,
liabilities, losses, penalties, excise taxes, fines and amounts
paid in settlement.
(g) “
Proceeding ” shall mean any threatened, pending or
completed claim, action, suit, arbitration, alternate dispute
resolution process, investigation, administrative hearing, appeal,
or any other proceeding, whether civil, criminal, administrative,
arbitrative or investigative, whether formal or informal, including
a proceeding initiated by Indemnitee pursuant to Section 13 of
this Agreement to enforce Indemnitee’s rights
hereunder.
(h) “
Subsidiary ” shall mean any corporation, partnership,
limited liability company, joint venture, trust or other Entity of
which the Company owns (either directly or through or together with
another Subsidiary of the Company) either (i) a general
partner, managing member or other similar interest or (ii)
(A) 50% or more of the voting power of the voting capital
equity interests of such corporation, partnership, limited
liability company, joint venture or other Entity, or (B) 50%
or more of the outstanding voting capital stock or other voting
equity interests of such corporation, partnership, limited
liability company, joint venture or other Entity.
2.
Services of Indemnitee . In consideration of the
Company’s covenants and commitments hereunder, Indemnitee
agrees to serve or continue to serve as a director or
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executive
officer of the Company. However, this Agreement shall not impose
any obligation on Indemnitee or the Company to continue
Indemnitee’s service to the Company beyond any period
otherwise required by law or by other agreements or commitments of
the parties, if any. 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), upon
which event the Company shall have no obligation under this
Agreement to continue Indemnitee in such position. Notwithstanding
the forgoing, this Agreement shall continue in force after
Indemnitee has ceased to serve as a director or executive officer
of the Company.
3.
Indemnity in Third-Party Proceedings . The Company shall
indemnify Indemnitee in accordance with the provisions of this
Section 3 if Indemnitee is, or is threatened to be made, by
reason of Indemnitee’s Corporate Status, a party to or a
participant in any Proceeding, other than a Proceeding by or in the
right of the Company to procure a judgment in its favor. Pursuant
to this Section 3, Indemnitee shall be indemnified against all
Expenses and Liabilities actually and reasonably incurred by
Indemnitee or on his behalf in connection with such Proceeding or
any claim, issue or matter therein (indemnifiable Expenses and
Liabilities collectively referred herein as “
Indemnifiable Amounts ”), if Indemnitee acted in good
faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company and, in the case of a
criminal Proceeding, had not reasonable cause to believe that his
conduct was unlawful. Indemnitee shall not enter into any
settlement in connection with a Proceeding without the consent of
the Company, which shall not be unreasonably held or
delayed.
4.
Indemnity in Proceedings by or in the Right of the Company .
The Company shall indemnify Indemnitee in accordance with the
provisions of this Section 4 if Indemnitee is, or is
threatened to be made, by reason of Indemnitee’s Corporate
Status, a party to or a participant in any Proceeding by or in the
right of the Company to procure a judgment in its favor. Pursuant
to this Section 4, Indemnitee shall be indemnified against all
Expenses actually and reasonably incurred by him or on his behalf
in connection with such Proceeding or any claim, issue or matter
therein, if Indemnitee acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests
of the Company. No indemnification for Expenses shall be made under
this Section 4 in respect of any claim, issue or matter as to
which Indemnitee shall have been finally adjudged by a court to be
liable to the Company, unless and only to the extent that the
Delaware Court of Chancery (the “ Delaware Chancery
Court ”) or any court in which the Proceeding was brought
shall determine 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 Delaware Chancery Court or such other court
shall deem proper.
5.
Indemnification for Expenses of a Party Who is Wholly or Partly
Successful . If Indemnitee is not wholly successful in such
Proceeding but is successful, on the merits or otherwise, as to one
or more but less than all claims, issues or matters in such
Proceeding, the Company shall indemnify Indemnitee against:
(a) all Expenses reasonably incurred by Indemnitee or on
Indemnitee’s behalf in connection with each successfully
resolved claim, issue or matter; and (b) any claim, issue or
matter related to any such successfully resolved claim, issue or
matter. For purposes of this Agreement, the termination of any
claim, issue or matter in such a Proceeding by dismissal, with or
without prejudice, by reason of settlement, judgment, order or
otherwise, shall be deemed to be a successful result as to such
claim, issue or matter.
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6.
Procedure for Payment of Indemnifiable Amounts . Indemnitee
shall submit to the Company a written request specifying the
Indemnifiable Amounts for which Indemnitee seeks payment under
Sections 3, 4 or 5 of this Agreement and the basis for the
claim. The Company shall pay such Indemnifiable Amounts to
Indemnitee promptly upon receipt of its request. At the request of
the Company, Indemnitee shall furnish such documentation and
information as are reasonably available to Indemnitee and necessary
to establish that Indemnitee is entitled to indemnification
hereunder.
7.
Indemnification For Expenses of a Witness . Notwithstanding
any other provision of this Agreement, to the extent that
Indemnitee is, by reason of his Corporate Status, a witness in any
Proceeding to which Indemnitee is not a party, he shall be
indemnified against all Expenses actually and reasonably incurred
by him or on his behalf in connection therewith.
8. Effect
of Certain Resolutions . Neither the settlement or termination
of any Proceeding nor the failure of the Company to award
indemnification or to determine that indemnification is payable
shall create a presumption that Indemnitee is not entitled to
indemnification hereunder. In addition, the termination of any
proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent shall not
create a presumption that Indemnitee did not act in good faith and
in a manner which Indemnitee reasonably believed to be in or not
opposed to the best interests of the Company or, with respect to
any criminal Proceeding, had reasonable cause to believe that
Indemnitee’s action was unlawful.
9.
Exclusions . Notwithstanding any provision in this Agreement
to the contrary, the Company shall not be obligated under this
Agreement to make any indemnity in connection with any claim made
against Indemnitee:
(a) for
which payment has actually been made to or on behalf of Indemnitee
under any insurance policy or other indemnity provision, except
with respect to any excess beyond the amount paid under any
insurance policy or other indemnity provisions;
(b) for 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 Securities Exchange Act of 1934, as
amended, or similar provisions of state statutory law or common
law; or
(c) for
which payment is prohibited by applicable law.
10.
Agreement to Advance Expenses; Undertaking . The Company
shall advance all Expenses incurred by or on behalf of Indemnitee
in connection with any Proceeding, including a Proceeding by or in
the right of the Company, in which Indemnitee is involved by reason
of such Indemnitee’s Corporate Status within thirty
(30) calendar days after t
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