Exhibit 10.9
INDEMNIFICATION
AGREEMENT
This Indemnification Agreement (the
“ Agreement ”) is made as of November 30, 2006,
by and between SM&A, a Delaware corporation (the “
Company ”), and Cathy L. McCarthy (the “
Indemnitee ”).
RECITALS
A.
The Company and Indemnitee recognize
the increasing difficulty in obtaining liability insurance for
directors, officers and key employees, the significant increases in
the cost of such insurance and the general reductions in the
coverage of such insurance.
B.
The Company and Indemnitee further
recognize the substantial increase in corporate litigation in
general, subjecting directors, officers and key employees to
expensive litigation risks at the same time as the availability and
coverage of liability insurance has been severely
limited.
C.
Indemnitee does not regard the
current protection available as adequate under the present
circumstances, and Indemnitee and agents of the Company may not be
willing to continue to serve as agents of the Company without
additional protection.
D.
The Company desires to attract and
retain the services of highly qualified individuals, such as
Indemnitee, and to indemnify its directors, officers and key
employees so as to provide them with the maximum protection
permitted by law.
AGREEMENT
In consideration of the mutual
promises made in this Agreement, and for other good and valuable
consideration, receipt of which is hereby acknowledged, the Company
and Indemnitee hereby agree as follows:
1.
Indemnification.
(a)
Third Party
Proceedings . The
Company shall indemnify Indemnitee if Indemnitee is or was a party
or is threatened to be made a party to any threatened, pending or
completed action, suit, proceeding, or investigation whether civil,
criminal, administrative or investigative (other than an action by
or in the right of the Company) by reason of the fact that
Indemnitee is or was a director, officer, employee or agent of the
Company, or any subsidiary of the Company, by reason of any action
or inaction on the part of Indemnitee while an officer or director
or by reason of the fact that Indemnitee is or was serving at the
request of the Company as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys’ fees),
judgments, fines and amounts paid in settlement (if such settlement
is approved in advance by the Company, which approval shall not be
unreasonably withheld) actually and reasonably incurred by
Indemnitee in connection with such action, suit or proceeding if
Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests
of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe Indemnitee’s
conduct was unlawful. The
termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself,
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 action or proceeding, that Indemnitee had reasonable
cause to believe that Indemnitee’s conduct was
unlawful.
(b)
Proceedings By or in the Right of
the Company . The
Company shall indemnify Indemnitee if Indemnitee was or is a party
or is threatened to be made a party to any threatened, pending or
completed action or proceeding by or in the right of the Company or
any subsidiary of the Company to procure a judgment in its favor by
reason of the fact that Indemnitee is or was a director, officer,
employee or agent of the Company, or any subsidiary of the Company,
by reason of any action or inaction on the part of Indemnitee while
an officer or director or by reason of the fact that Indemnitee is
or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses
(including attorneys’ fees) and, to the fullest extent
permitted by law, amounts paid in settlement (if such settlement is
approved in advance by the Company, which approval shall not be
unreasonably withheld), in each case to the extent actually and
reasonably incurred by Indemnitee in connection with the defense or
settlement of such action or suit if Indemnitee acted in good faith
and in a manner Indemnitee reasonably believed to be in or not
opposed to the best interests of the Company and its stockholders,
except that no indemnification shall be made in respect of any
claim, issue or matter as to which Indemnitee shall have been
finally adjudicated by court order or judgment to be liable to the
Company in the performance of Indemnitee’s duty to the
Company and its stockholders unless and only to the extent that the
court in which such action or proceeding is or was pending shall
determine upon application that, in view of all the circumstances
of the case, Indemnitee is fairly and reasonably entitled to
indemnity for such expenses which such court shall deem
proper.
(c)
Mandatory Payment of
Expenses . To the
extent that Indemnitee has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to
in Section 1(a) or Section 1(b) or the defense of any claim, issue
or matter therein, Indemnitee shall be indemnified against expenses
(including attorneys’ fees) actually and reasonably incurred
by Indemnitee in connection therewith.
(d)
Exceptions
. Any other provision herein to the
contrary notwithstanding, the Company shall not be obligated
pursuant to the terms of this Agreement:
(i)
Claims Initiated by
Indemnitee . To
indemnify or advance expenses to Indemnitee with respect to
proceedings or claims initiated or brought voluntarily by
Indemnitee and not by way of defense, except with respect to
proceedings brought to establish or enforce a right to
indemnification under this Agreement or any other statute or law or
otherwise as required under Section 145 of the Delaware General
Corporation Law, but such indemnification or advancement of
expenses
2
may be provided by the Company in
specific cases if the Board of Directors finds it to be
appropriate; or
(ii)
Claims under Section
16(b) . To
indemnify Indemnitee for expenses or the payment of profits arising
from the purchase and sale by Indemnitee of securities in violation
of Section 16(b) of the Securities Exchange Act of 1934, as
amended, or any similar successor statute.
2.
No Employment Rights.
Nothing contained in this
Agreement is intended to create in Indemnitee any right to
continued employment.
3.
Expenses; Indemnification
Procedure.
(a)
Advancement of
Expenses . The
Company shall advance all expenses incurred by Indemnitee in
connection with the investigation, defense, settlement or appeal of
any civil or criminal action, suit or proceeding referred to in
Section 1(a) or Section 1(b) hereof (including amounts actually
paid in settlement of any such action, suit or proceeding).
Indemnitee hereby undertakes to repay such amounts advanced only
if, and to the extent that, it shall ultimately be determined that
Indemnitee is not entitled to be indemnified by the Company as
authorized hereby.
(b)
Notice/Cooperation by
Indemnitee .
Indemnitee shall, as a condition precedent to his or her right to
be indemnified under this Agreement, give the Company notice in
writing as soon as practicable of any claim made against Indemnitee
for which indemnification will or could be sought under this
Agreement. Notice to the Company shall be directed to the
President or the Chief Executive Officer of the Company and shall
be given in accordance with the provisions of Section 11(d)
below. In addition, Indemnitee shall give the Company such
information and cooperation as it may reasonably require and as
shall be within Indemnitee’s power.
(c)
Procedure . Any indemnification and advances
provided for in Section 1 and this Section 3 shall be made no
later than thirty (30) days after receipt of the written request of
Indemnitee. If a claim under this Agreement, under any
statute, or under any provision of the Company’s Certificate
of Incorporation or Bylaws providing for indemnification, is not
paid in full by the Company within thirty (30) days after a written
request for payment thereof has first been received by the Company,
Indemnitee may, but need not, at any time thereafter bring an
action against the Company to recover the unpaid amount of the
claim and, subject to Section 10 of this Agreement, Indemnitee
shall also be entitled to be paid for the expenses (including
attorneys’ fees) of bringing such action. It shall be a
defense to any such action (other than an action brought to enforce
a claim for expenses incurred in connection with any action, suit
or proceeding in advance of its final disposition) that Indemnitee
has not met the standards of conduct which make it permissible
under applicable law for the Company to indemnify Indemnitee for
the amount claimed, but the burden of proving such defense shall be
on the Company and Indemnitee shall be entitled to receive interim
payments of expenses pursuant to Section 3(a) unless and until such
defense may be finally adjudicated b
