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Exhibit 99.1
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT, is made as of _______, 2007 by and
between Renaissance Learning, Inc., a Wisconsin corporation (the
“Company”), and [Insert Name]
(“Indemnitee”).
WHEREAS, Indemnitee is a member of the Board of Directors of the
Company; and
WHEREAS, directors, in connection with the performance of their
duties as such, are increasingly being subjected to costly and
time-consuming liabilities and claims relating to, among other
things, matters that traditionally would have been brought only
against the corporation itself; and
WHEREAS, it will be difficult to attract and retain directors of
the Company unless such persons are adequately indemnified against
liabilities incurred and claims made in connection with performance
of their duties as directors of the Company; and
WHEREAS, it is in the best interests of the Company and its
shareholders that the Company take such actions as are reasonable,
prudent and necessary to attract and retain highly competent
directors; and
WHEREAS, the Company’s Amended and Restated By-laws (the
“By-laws”) provide for the indemnification by the
Company of directors of the Company and, as additional
consideration for the services of Indemnitee, the Company has
obtained at its expense directors’ and officers’
liability insurance (“D&O Insurance”) covering
Indemnitee with respect to Indemnitee’s position with the
Company; and
WHEREAS, the Company recognizes that certain limitations and
uncertainties exist with respect to the indemnification protection
provided under the By-laws and the D&O Insurance; and
WHEREAS, to induce Indemnitee to continue to serve as a member of
the Board of Directors of the Company, the Company has determined
that it is in its best interests to assure Indemnitee of the
protection currently provided by the By-laws and D&O Insurance
and to provide certain enhancements to such protection to the
extent permitted by the Wisconsin Business Corporation Law (the
“WBCL”); and
WHEREAS, Section 180.0858 of the WBCL provides that directors of a
Wisconsin corporation can, subject to certain limitations, be
granted indemnification rights in addition to those provided in the
WBCL pursuant to a written agreement between a director and the
Wisconsin corporation;
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and
agree as follows:
1.
Indemnification . The Company agrees to indemnify and
hold Indemnitee harmless to the fullest extent permitted under the
WBCL and the By-laws as in effect on the date hereof and as either
may be amended to provide more advantageous rights to Indemnitee.
In furtherance of the foregoing indemnification, and without
limiting the generality thereof:
(a)
The Company shall indemnify and hold harmless Indemnitee to the
extent that he or she has been successful on the merits or
otherwise in the defense of a Proceeding (including, but not
limited to, termination of any Proceeding by dismissal, with or
without prejudice) for all Expenses incurred in the Proceeding (i)
if Indemnitee was a Party to the Proceeding because he or she is a
Director or Officer of the Company or (ii) if the Proceeding arises
out of any action taken by, or alleged to have been taken by, or
inaction, or alleged inaction, on the part of, Indemnitee in his or
her capacity as a Director or Officer of the Company. If
Indemnitee is successful on the merits or otherwise as to one or
more but less than all claims, issues or matters in any Proceeding,
the Company shall indemnify Indemnitee for all Expenses incurred by
Indemnitee or on his or her behalf in connection with each
successfully resolved claim, issue or matter and any claim, issue
or matter related to such successfully resolved claim, issue or
matter.
(b)
In cases not included in Clause (a), above, the Company shall
indemnify and hold harmless Indemnitee for all Liabilities and
Expenses incurred in a Proceeding (i) if Indemnitee was a Party to
the Proceeding because he or she is a Director or Officer of the
Company or (ii) if the Proceeding arises out any action taken by,
or alleged to have been taken by, or inaction, or alleged inaction,
on the part of, Indemnitee in his or her capacity as a Director or
Officer of the Company, unless and only to the extent that the
Liabilities and Expenses were incurred because of a Breach of Duty
by Indemnitee.
(c)
Notwithstanding any other provision in this Agreement, to the
extent that Indemnitee is, because he or she is a Director or
Officer of the Company, a witness in any Proceeding to which he or
she is not a Party, Indemnitee shall be indemnified against all
Expenses incurred by him or her or on his or her behalf in
connection therewith.
2.
Contribution .
(a)
Whether or not the indemnification provided in Section 1 hereof is
available, nothing in this Agreement shall be construed as a
limitation on Indemnitee’s statutory, common-law or other
legal rights to contribution from the Company, or from its
directors, officers, employees and/or shareholders where otherwise
appropriate and to the extent permitted by law.
(b)
Without diminishing or impairing the rights set forth in Clause
(a), above, if, for any reason, Indemnitee shall elect or be
required to pay all or any portion of any Liabilities or Expenses
in any Proceeding in which the Company is jointly liable with
Indemnitee, the Company shall contribute to the amount of
Liabilities and Expenses incurred and paid or payable by Indemnitee
in proportion to the relative benefits received by the Company and
all Directors and Officers of the Company and employees and agents
of the Company, other than Indemnitee, who are jointly liable with
Indemnitee, on the one hand, and Indemnitee, on the other hand,
from the event(s) or transaction(s), the action or inaction, or
alleged action or inaction, from which the Proceeding arose;
provided, however, that the proportion determined on the basis of
relative benefit may, to the extent necessary to conform to law, be
further adjusted by reference to the relative fault of the Company
and all Directors and Officers of the Company and employees and
agents of the Company, other than Indemnitee, who are jointly
liable with Indemnitee, on the one hand, and Indemnitee, on the
other hand, in connection with the event(s) or transaction(s),
action
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or inaction, or alleged action or inaction, from which the
Proceeding arose, as well as any other equitable considerations
which may be required to be considered under applicable law.
The relative fault of the Company and all Directors and
Officers of the Company and employees and agents of the Company,
other than Indemnitee, who are jointly liable with Indemnitee, on
the one hand, and Indemnitee, on the other hand, shall be
determined by reference to, among other things, the degree to which
the event(s) or transaction(s), their action or inaction, or their
alleged action or inaction, was motivated by intent to gain
personal profit or advantage, the degree to which their liability
is primary or secondary and the degree to which their conduct was
active or passive.
3.
Defense of Claims .
(a)
The Company will be entitled to participate in the defense of any
Proceeding at its own expense. The Company will not settle
any Proceeding (in whole or in part) which would impose any
Expense, Liability or limitation on Indemnitee without
Indemnitee’s prior written consent, such consent not to be
unreasonably withheld nor, where applicable, without the consent of
the Company’s D&O Insurance carriers. Indemnitee
will not settle any Proceeding (in whole or in part) which would
impose any Expense, Liability or limitation on the Company without
the Company’s prior written consent, such consent not be
unreasonably withheld nor, where applicable, without the consent of
the Company’s D&O Insurance carriers.
(b)
Notwithstanding the provisions set forth in Clause (a) above, the
defense of any Proceeding shall be conducted in all respects in
accordance with the terms of the Company’s D&O Insurance
policy in effect at the time such Proceeding takes place.
4.
Allowance of Expenses as Incurred . Within 20 days
after receipt of a written request therefor by Indemnitee, the
Company shall pay or reimburse Indemnitee for all Expenses as
incurred by or on behalf of Indemnitee in connection with the
investigation, defense, settlement or appeal of any Proceeding to
which Indemnitee is a Party or is threatened to be made a Party.
The request by Indemnitee pursuant to this Section 4 must
include all of the following: (i) a written affirmation of
Indemnitee’s good faith belief that he or she has not engaged
in a Breach of Duty; and (ii) a written undertaking, executed
personally or on Indemnitee’s behalf, to repay the Expenses,
without interest, to the extent that there is a final determination
hereunder (as to which all rights of appeal have been exhausted or
lapsed) that indemnification under Section 1 is not required and
that indemnification is not ordered by a court under Section
180.0854(2)(b) of the WBCL. Indemnitee shall not be required
to repay Expenses until such final determination (as to which all
rights of appeal have been exhausted or lapsed) has been made.
The undertaking under this Section 4 shall be an unlimited
general obligation of Indemnitee, shall be accepted without
reference to Indemnitee’s ability to repay the Expenses and
shall be unsecured.
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5.
Request for and Determination of Right to Indemnification .
(a)
Indemnitee shall notify the Company in writing as soon as
reasonably practicable (i) after being served with any summons,
citation, subpoena, complaint, indictment, information or other
document relating to any Proceeding or (ii) if the Company has not
been previously notified, after receipt of written notice of any
other matter with respect to which Indemnitee intends to seek
indemnification or advancement of expenses under Section 1 and
Section 4. The omission by Indemnitee to so notify the
Company will not relieve the Company from any liability which it
may have to Indemnitee (i) under this Agreement except and only to
the extent the Company can establish that such omission to notify
resulted in actual material prejudice to the Company or (ii)
otherwise than under this Agreement.
(b)
Indemnitee may thereafter deliver to the Company a written request
for indemnification pursuant to this Agreement at such time and
from time to time as Indemnitee deems appropriate in his sole
discretion, which request shall also be deemed a request for
advancement of expenses under Section 4.
(c)
Except as otherwise provided pursuant to Sections 1(a) or 1(c),
upon the final disposition of the matter that is the subject of the
request for indemnification delivered pursuant to Section 5(b), a
determination shall be made with respect to Indemnitee’s
entitlement thereto (including entitlement to payment or
reimbursement of Expenses under Section 4) in the specific
case. If a Triggering Event shall not have occurred, such
determination shall be made (i) by a majority vote of a quorum of
the members of the Board consisting of directors who are not at the
time parties to the same or related Proceedings
(“Disinterested Directors”) or of a committee of
Disinterested Directors designated by a majority vote of the
Disinterested Directors (in either case, even though less than a
quorum of the Board) or (ii) if there are no Disinterested Director
or the Disinterested Directors so direct, by Independent Counsel
(selected in accordance with Clause (d) below). If a
Triggering Event shall have occurred, such determination shall be
made by Independent Counsel. Any determination made by
Independent Counsel pursuant to this Clause (c) shall be in the
form of a written opinion to the Board, a copy of which shall be
delivered to Indemnitee. Indemnitee shall reasonably
cooperate with the person or persons making such determination
including providing to such person or persons upon reasonable
advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is
reasonably available to Indemnitee and reasonably necessary to such
determination. Any costs or expenses (including fees and
expenses of counsel) incurred by Indemnitee in so cooperating with
the person or persons making such determination shall be borne by
the Company (irrespective of the determination as to
Indemnitee’s entitlement to indemnification), and the Company
hereby indemnifies and agrees to hold Indemnitee harmless
therefrom.
(d)
If the determination is to be made by Independent Counsel, such
Independent Counsel shall be selected as provided in this Clause
(d). If a Triggering Event shall not have occurred, the
Independent Counsel shall be selected by the Board, and the Company
shall give written notice to Indemnitee advising him of the
identity of the Independent Counsel so selected. If a
Triggering Event shall have occurred, the Independent Counsel shall
be selected by Indemnitee (unless Indemnitee shall request that
such selection be made by the Board, in which event the preceding
sentence shall apply), and Indemnitee shall give written notice to
the Company advising it of the identity of the Independent Counsel
so selected within 10 days after the final disposition of the
matter that is the subject of the request for indemnification.
In either case, the party receiving the notice may, within 10
days after receipt thereof, deliver to the other
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a written objection to such selection; provided that such
objection may be asserted only on the ground that the Independent
Counsel so selected does not meet the requirements of
“Independent Counsel” as defined in Section 11, and the
objection shall set forth with particularity the factual basis of
such assertion. Absent a proper and timely objection, the
person so selected shall act as Independent Counsel. If a
proper and timely objection is made, the counsel selected may not
serve as Independent Counsel unless and until such objection is
withdrawn or a court of competent jurisdiction (or, at
Indemnitee’s option pursuant to Section 6, an arbitration)
has determined that such objection is without merit. If,
within 20 days after receipt by the Company of a request for
indemnification pursuant to Clause (b) above, no Independent
Counsel shall have been selected and not objected to, either the
Company or Indemnitee may petition a court of competent
jurisdiction (or, at Indemnitee’s option pursuant to Section
6, an arbitration) for resolution of any objection which shall have
been made to the selection of Independent Counsel and/or for the
appointment of another person as Independent Counsel, and the
person with respect to whom all objections are so resolved or the
person so appointed shall act as Independent Counsel. The
Company agrees to pay the reasonable fees and expenses of any
Independent Counsel appointed pursuant to this Section and to
indemnify such person against any and all expenses, claims,
liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto except for gross
negligence or willful misconduct.
(e)
If it is determined that Indemnitee is entitled to indemnification,
payment to Indemnitee shall be made within 10 days after such
determination.
(f)
In making any determination as to Indemnitee’s entitlement to
indemnification hereunder, Indemnitee shall be entitled to a
presumption that he is entitled to indemnification under this
Agreement if Indemnitee has submitted a request for indemnification
in accordance with Clause (b) above, and the Company shall have the
burdens of coming forward with evidence and of persuasion to
overcome that presumption.
(g)
The termination of any Proceeding or of any claim, issue or matter
therein by judgment, order, settlement or conviction, or upon a
plea of nolo contendere or its equivalent, shall not of itself
create a presumption (i) that there was a Breach of Duty on
the part of the Indemnitee or (ii) that Indemnitee did not
otherwise satisfy the applicable standard of conduct to be
indemnified pursuant to this Agreement.
(h)
The knowledge or actions or failure to act of any other director,
officer, employee or agent of the Company, employee benefit plan or
other entity, as applicable, shall not be imputed to Indemnitee for
purposes of determining Indemnitee’s right to indemnification
under this Agreement.
(i)
If a determination as to Indemnitee’s entitlement to
indemnification shall not have been made pursuant to this Agreement
within 60 days after the final disposition of the matter that is
the subject of the request for indemnification, the requisite
determination of entitlement to indemnification shall be deemed to
have been made in favor of Indemnitee, and Indemnitee shall be
entitled to such indemnification, absent a misstatement of a
material fact in the information provided by Indemnitee pursuant to
Clause (b) and Clause (c) above or an omission of a material fact
necessary in order to make the information provided not misleading;
provided that such 60-day period will be extended for a period up
to an additional 30 days after the selection of Independent Counsel
pursuant to Clause (d) if such determination is to be made by
Independent
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