EXHIBIT 10.1
INDEMNIFICATION AGREEMENT
This
INDEMNIFICATION AGREEMENT (this " Agreement "), is made and
entered into this ____ day of _____________, 2006 (the "
Effective Date "), by and between Mentor Corporation, a
Minnesota corporation (the " Company "), and [
] (the " Indemnitee ").
WHEREAS,
the Company believes it is essential to retain and attract
qualified directors and officers;
WHEREAS,
the Indemnitee is a director and/or officer of the
Company;
WHEREAS,
both the Company and the Indemnitee recognize the increased risk of
litigation and other claims being asserted against directors and
officers of public companies;
WHEREAS,
the Company's Amended and Restated Bylaws (the " Bylaws ")
require the Company to indemnify its directors and officers to the
extent permitted by the MBCA (as hereinafter defined);
WHEREAS,
the Indemnitee has been serving and intends to continue serving as
a director and/or officer of the Company in part in reliance on the
Bylaws; and
WHEREAS,
in recognition of the Indemnitee's need for (i) substantial
protection against personal liability based on the Indemnitee's
reliance on the Bylaws, (ii) specific contractual assurance
that the protection promised by the Bylaws will be available to the
Indemnitee, regardless of, among other things, any amendment to or
revocation of the Bylaws or any change in the composition of the
Company's Board of Directors (the " Board ") or acquisition
transaction relating to the Company, and (iii) an inducement
to continue to provide effective services to the Company as a
director and/or officer thereof, the Company wishes to provide for
the indemnification of the Indemnitee and to advance expenses to
the Indemnitee to the fullest extent permitted by law and as set
forth in this Agreement, and, to the extent insurance is maintained
by the Company, to provide for the continued coverage of the
Indemnitee under the Company's directors' and officers' liability
insurance policies;
NOW,
THEREFORE, in consideration of the premises contained herein and of
the Indemnitee continuing to serve the Company directly or, at its
request, with another enterprise, and intending to be legally bound
hereby, the parties hereto agree as follows:
1.
Certain Definitions.
(a)
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, and the rules
and regulations thereunder (the " Exchange Act "), other
than: (a) a trustee or other fiduciary holding securities
under an employee benefit plan of the Company; (b) 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; or (c) any current beneficial shareholder or group,
as defined by Rule 13d-5 of the Exchange Act, including the heirs,
assigns and successors thereof, of beneficial ownership, within the
meaning of Rule 13d-3 of the Exchange Act, of securities possessing
more than 50% of the total combined voting power of the Company's
outstanding securities; hereafter becomes the "beneficial owner,"
as defined in Rule 13d-3 of the Exchange Act, directly or
indirectly, of securities of the Company representing 20% or more
of the total combined 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 and any new director
whose election by the Board or nomination for election by the
Company's shareholders was approved by a vote of at least
two-thirds of the directors then in office who either were
directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any
reason to constitute a majority thereof; or
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(iii)
the shareholders of the Company approve a merger or consolidation
of the Company with any other corporation, 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 80% of the
total voting power represented by the Voting Securities of the
Company or such surviving entity outstanding immediately after such
merger or consolidation, or the shareholders of the Company approve
a plan of complete liquidation of the Company or an agreement for
the sale or disposition by the Company, in one transaction or a
series of transactions, of all or substantially all of the
Company's assets.
(b)
" Expense " shall mean attorneys' fees and all other costs,
expenses and obligations paid or incurred in connection with
investigating, defending, being a witness in or participating in
(including on appeal), or preparing for any of the foregoing, any
Proceeding relating to any Indemnifiable Event.
(c)
" Indemnifiable Event " shall mean any event or occurrence
that takes place either prior to or after the execution of this
Agreement, related to the fact that the Indemnitee is or was a
director or officer of the Company, or is or was serving at the
request of the Company as a director, officer, employee, or agent
of another corporation or of a partnership, joint venture, trust or
other enterprise, including service with respect to employee
benefit plans, or by reason of anything done or not done by the
Indemnitee in any such capacity.
(d)
" MBCA " shall mean the Minnesota Business Corporation Act,
as the same exists or may hereafter be amended or interpreted;
provided, however, that in the case of any such amendment or
interpretation, only to the extent that such amendment or
interpretation permits the Company to provide broader
indemnification rights than were permitted prior
thereto.
(e)
" Proceeding " shall mean any threatened, pending or
completed action, suit, investigation or proceeding, and any appeal
thereof, whether civil, criminal, administrative or investigative
and/or any inquiry or investigation, whether conducted by the
Company or any other party, that the Indemnitee in good faith
believes might lead to the institution of any such
action.
(f)
" Reviewing Party " shall mean any appropriate person or
body consisting of a member or members of the Company's Board or
any other person or body appointed by the Board (including the
special independent counsel referred to in Section 6) who is
not a party to the particular Proceeding with respect to which the
Indemnitee is seeking indemnification or such other appropriate
person or body as specified in the MBCA.
(g)
" Voting Securities " shall mean any securities of the
Company which vote generally in the election of
directors.
2.
Indemnification. In the event the Indemnitee was or is
a party to or is involved (as a party, witness, or otherwise) in
any Proceeding by reason of (or arising in part out of) an
Indemnifiable Event, whether the basis of the Proceeding is the
Indemnitee's alleged action in an official capacity as a director
or officer or in any other capacity while serving as a director or
officer, the Company shall indemnify the Indemnitee to the fullest
extent permitted by the MBCA against any and all Expenses,
liability, and loss (including judgments, fines, ERISA excise taxes
or penalties, and amounts paid or to be paid in settlement, and any
interest, assessments, or other charges imposed thereon, and any
federal, state, local, or foreign taxes imposed on any director or
officer as a result of the actual or deemed receipt of any payments
under this Agreement) (collectively, " Liabilities ")
reasonably incurred or suffered by such person in connection with
such Proceeding. The Company shall provide indemnification
pursuant to this Section 2 as soon as practicable, but in no event
later than 30 days after it receives written demand from the
Indemnitee. Notwithstanding anything in this Agreement to the
contrary and except as provided in Section 5 below, the
Indemnitee shall not be entitled to indemnification pursuant to
this Agreement (i) in connection with any Proceeding initiated by
the 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 Proceeding, (ii) on account of any suit in which
judgment is rendered against the Indemnitee pursuant to Section
16(b) of the Exchange Act for an accounting of profits made from
the purchase or sale by the Indemnitee of securities of the Company
or (iii) if the MBCA or the Company's Articles of Incorporation or
Bylaws prohibit such indemnification.
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3.
Advancement of Expenses. The Company shall advance
Expenses to the Indemnitee within 30 business days of such request
(an " Expense Advance ") to the fullest extent permitted by
the MBCA and the Company's Articles of Incorporation and Bylaws;
provided, however, that if required by the MBCA or other applicable
corporate laws such Expenses shall be advanced only upon delivery
to the Company of an undertaking by or on behalf of the Indemnitee
to repay such amount if it is ultim
