Exhibit 10.1
INDEMNIFICATION
AGREEMENT
This Indemnification Agreement (the
“ Agreement ”) dated as of December
, 2006, by and between Avici
Systems Inc., a Delaware corporation (the “ Company
”), and
, a director [and/or officer] of the Company (the “
Indemnitee ”):
WITNESSETH:
WHEREAS, the Indemnitee is presently
serving as a director [and/or officer] of the Company, and the
Company desires the Indemnitee to continue in such
capacity;
WHEREAS, highly competent persons
have become more reluctant to serve corporations as directors,
officers or in other capacities unless they are provided with
adequate protection through insurance or adequate indemnification
against inordinate risks of claims and actions against them arising
out of their service to and activities on behalf of the
corporation;
WHEREAS, it is reasonable, prudent
and necessary for the Company contractually to obligate itself to
indemnify, and to advance expenses on behalf of, such persons to
the fullest extent permitted by applicable law so that they will
serve or continue to serve the Company free from undue concern that
they will not be so indemnified; and
WHEREAS, the Indemnitee is willing,
subject to certain conditions, including the execution and
performance of this Agreement by the Company, to continue in that
capacity or in other capacities on behalf of the
Company;
NOW, THEREFORE, to induce the
Indemnitee to continue to serve the Company in various capacities
and in consideration of these premises and the mutual agreements
set forth in this Agreement, the Company and the Indemnitee agree
as follows:
1. Continued Service . The
Indemnitee will continue to serve as a director [and/or officer] of
the Company so long as he is duly elected and qualified in
accordance with the Company’s restated by-laws (the “
By-Laws ”) or until he resigns in writing or is
removed from office in accordance with applicable law.
2. Definitions . For purposes
of this Agreement:
(a) A “ Change in
Control ” shall be deemed to occur upon the earliest to
occur after the date of this Agreement of any of the following
events:
(i) Acquisition of Stock by Third
Party . Any Person is or becomes the Beneficial Owner, directly
or indirectly, of securities of the Company representing twenty
percent (20%) or more of the combined voting power of the
Company’s then outstanding securities;
(ii) Change in Board of
Directors . During any 24 month period (not including any
period prior to the execution of this Agreement), 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 stockholders was approved by a vote of at least
two-thirds of the directors then in office, cease for any reason to
constitute a least a majority of the members of the
Board;
(iii) Corporate Transactions
. The effective date of a merger of the Company with any other
entity, other than a merger which would result in the voting
securities of the Company outstanding immediately prior to such
merger continuing to represent (either by remaining outstanding or
by being converted into voting securities of the surviving entity)
more than 50% of the combined voting power of the voting securities
of the surviving entity outstanding immediately after such merger
or consolidation and with the power to elect at least a majority of
the board of directors or other governing body of such surviving
entity;
(iv) Liquidation . The
approval by the stockholders of the Company of a complete
liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the
Company’s assets; and
(v) Other Events . There
occurs any other event of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of
Regulation 14A (or a response to any similar item on any similar
schedule or form) promulgated under the Exchange Act (as defined
below), whether or not the Company is then subject to such
reporting requirement.
(vi) For purposes of this
Section 2(a), the following terms shall have the following
meanings:
“ Exchange Act ”
shall mean the Securities Exchange Act of 1934, as
amended.
“ Person ” shall
have the meaning as set forth in Sections 13(d) and 14(d) of the
Exchange Act; provided, however, that Person shall exclude
(i) the Company, (ii) any trustee or other fiduciary
holding securities under an employee benefit plan of the Company,
and (iii) any corporation owned, directly or indirectly, by
the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company.
“ Beneficial Owner
” shall have the meaning given to such term in Rule 13d-3
under the Exchange Act; provided, however, that Beneficial Owner
shall exclude any Person otherwise becoming a Beneficial Owner by
reason of the stockholders of the Company approving a merger of the
Company with another entity.
(b) “ Corporate Status
” describes the status of a person who is or was a director,
officer, employee, agent or fiduciary of the Company or of any
other corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise that such person is or was serving
at the express written request of the Company.
(c) “ Disinterested
Director ” means a director of the Company who is not and
was not a party to the Proceeding in respect of which
indemnification is sought by Indemnitee.
(d) “ Enterprise
” shall mean the Company and any other corporation,
partnership, joint venture, trust, employee benefit plan or other
enterprise that Indemnitee is or was serving at the express written
request of the Company as a director, officer, employee, agent or
fiduciary.
(e) “ Expenses ”
shall include all reasonable attorneys’ fees, retainers,
court costs, transcript costs, fees of experts, witness fees,
travel expenses, duplicating costs, printing and binding costs,
telephone charges, postage, delivery service fees and all other
disbursements or expenses of the types customarily incurred in
connection with prosecuting, defending, preparing to prosecute or
defend, investigating, participating, or being or preparing to be a
witness in a Proceeding. Expenses also shall include Expenses
incurred in connection with any appeal resulting from any
Proceeding, including without limitation the premium, security for,
and other costs relating to any cost bond, supersede as bond, or
other appeal bond or its equivalent. Expenses, however, shall not
include amounts paid in settlement by Indemnitee or the amount of
judgments or fines against Indemnitee.
(f) “ Independent
Counsel ” means a law firm, or a member of a law firm,
that is experienced in matters of corporation law and neither
presently is, nor in the past five years has been, retained to
represent: (i) the Company or Indemnitee in any matter
material to either such party (other than with respect to matters
concerning Indemnitee under this Agreement, or of other indemnitees
under similar indemnification agreements), or (ii) any other
party to the Proceeding giving rise to a claim for indemnification
hereunder.
(g) “ Proceeding
” includes any threatened, pending or completed action, suit,
arbitration, alternate dispute resolution mechanism, investigation,
inquiry, administrative hearing or any other actual, threatened or
completed proceeding, whether brought by or in the right of the
Company or otherwise, in which Indemnitee was, is or will be
involved as a party or otherwise, by reason of the fact that
Indemnitee is or was an officer or director of the Company, by
reason of any action taken by him or her or of any inaction on his
or her part while acting as an officer or director of the Company,
or by reason of the fact that he or she is or was serving at the
request of the Company as a director, officer, employee, agent or
fiduciary of another Enterprise; in each case whether or not he or
she is acting or serving in any such capacity at the time any
liability or expense is
incurred for which indemnification
can be provided under this Agreement; including those pending on or
before the date of this Agreement, but excluding those initiated by
an Indemnitee pursuant to Section 5 of this Agreement
to enforce his or her rights under this Agreement.
3. Indemnity of Indemnitee .
The Company hereby agrees to hold harmless and indemnify Indemnitee
to the fullest extent permitted by law, as such may be amended from
time to time.
(a) Proceedings Other Than
Proceedings by or in the Right of the Company . Indemnitee
shall be entitled to the rights of indemnification provided in this
Section 3(a) if, by reason of his Corporate Status, the
Indemnitee is, or is threatened to be made, a party to or
participant in any Proceeding other than a Proceeding by or in the
right of the Company. Pursuant to this Section 3(a),
Indemnitee shall be indemnified against all Expenses, judgments,
penalties, fines and amounts paid in settlement actually and
reasonably incurred by him, or on his behalf, in connection with
such Proceeding or any claim, issue or matter therein, if the
Indemnitee acted in good faith and in a manner the Indemnitee
reasonably believed to be in or not opposed to the best interests
of the Company, and with respect to any criminal Proceeding, had no
reasonable cause to believe the Indemnitee’s conduct was
unlawful.
(b) Proceedings by or in the
Right of the Company . Indemnitee shall be entitled to the
rights of indemnification provided in this Section 3(b) if, by
reason of his Corporate Status, the Indemnitee is, or is threatened
to be made, a party to or participant in any Proceeding brought by
or in the right of the Company. Pursuant to this Section 3(b),
Indemnitee shall be indemnified against all Expenses actually and
reasonably incurred by the Indemnitee, or on the Indemnitee’s
behalf, in connection with such Proceeding if the Indemnitee acted
in good faith and in a manner the Indemnitee reasonably believed to
be in or not opposed to the best interests of the Company;
provided, however, if applicable law so provides, no
indemnification against such Expenses shall be made in respect of
any claim, issue or matter in such Proceeding as to which
Indemnitee shall have been adjudged to be liable to the Company
unless and to the extent that the Court of Chancery of the State of
Delaware shall determine that such indemnification may be
made.
(c) Indemnification for Expenses
of a Party Who is Wholly or Partly Successful . Notwithstanding
any other provision of this Agreement, to the extent that
Indemnitee is, by reason of his Corporate Status, a party to and is
successful, on the merits or otherwise, in any Proceeding, he shall
be indemnified to the maximum extent permitted by law, as such may
be amended from time to time, against all Expenses actually and
reasonably incurred by him or on his behalf in connection
therewith. 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 all
Expenses actually and reasonably incurred by him or on
his
behalf in connection with each
successfully resolved claim, issue or matter. For purposes of this
Section and without limitation, the termination of any claim, issue
or matter in such a Proceeding by dismissal, with or without
prejudice, shall be deemed to be a successful result as to such
claim, issue or matter
4. Advancement of Expenses .
Notwithstanding any other provision of this Agreement, the Company
shall advance all reasonable Expenses incurred by or on behalf of
Indemnitee in connection with any Proceeding by reason of
Indemnitee’s Corporate Status within thirty (30) days
after the receipt by the Company of a statement or statements from
Indemnitee requesting such advance or advances from time to time,
whether prior to or after final disposition of such Proceeding.
Such statement or statements shall reasonably evidence the Expenses
incurred by Indemnitee and shall include or be preceded or
accompanied by an undertaking by or on behalf of Indemnitee to
repay any Expenses advanced if it shall ultimately be determined
that Indemnitee is not entitled to be indemnified against such
Expenses. Any advances and undertakings to repay pursuant to this
Section 4 shall be unsecured and interest
free.
5. Procedures and Presumptions
for Determination of Entitlement to Indemnification . It is the
intent of this Agreement to secure for Indemnitee right
