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Exhibit 10.66
INDEMNIFICATION AGREEMENT
This Indemnification Agreement
(this "Agreement") is executed on and effective as of November 13,
2001 (the "Effective Date"), by and between Cyberonics, Inc., a
Delaware corporation (the "Company"), and
("Director").
WHEREAS, the Company and Director
recognize the difficulty in obtaining directors’ and
officers’ liability insurance, the increases in the cost of
such insurance, and the general limitations in the coverage of such
insurance;
WHEREAS, the Company and Director
further recognize the substantial increase in corporate litigation
in general, subjecting officers and directors to expensive
litigation risks at the same time as the availability and coverage
of liability insurance has been severely limited;
WHEREAS, Director does not regard
the current protection available as adequate under the present
circumstances, and Director and other officers and directors of the
Company may not be willing to serve or continue to serve as
officers and directors without additional protection; and
WHEREAS, the Company desires to
attract and retain the services of highly qualified individuals,
such as Director, to serve as officers and directors of the Company
and to indemnify its officers and directors so as to provide them
with the maximum protection permitted by law.
NOW, THEREFORE, the Company and
Director hereby agree as follows:
1. Indemnification.
(a) Third Party Proceedings. The
Company shall indemnify Director and any partnership, corporation,
trust, or other entity of which Director is or was a partner,
stockholder, trustee, director, officer, employee, or agent
(Director and each such partnership, corporation, trust, or other
entity being referred to as an "Indemnitee") if Indemnitee is or
was a party or is threatened to be made a party to any threatened,
pending, or completed action, suit or proceeding, whether civil,
criminal, administrative, or investigative (other than an action by
or in the right of the Company) by reason of the fact that Director
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 Director while an officer or director or by
reason of the fact that Director 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 Director acted in good faith and in a manner
Director 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 Director’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 Director did not act in good faith and in
a manner that
Director 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 reasonable cause to believe that
Director’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 suit 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 Director 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 Director while an officer or director or by reason of
the fact that Director 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,
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 Director acted in good faith and in a manner
Director reasonably believed to be in or not opposed to the best
interests of the Company, except that no indemnification shall be
made in respect of any claim, issue, or matter as to which Director
shall have been adjudged to be liable to the Company unless and
only to the extent that the Court of Chancery of the State of
Delaware or the court in which such action or suit 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 indemnity for such
expenses that the Court of Chancery of the State of Delaware or
such other 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 Sections 1(a) and (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.
2. Expenses: Indemnification
Procedure.
(a) Advancement of Expenses. The
Company shall advance all expenses incurred by Indemnitee, and, to
the fullest extent permitted by law, amounts paid in settlement by
Indemnitee, in connection with the investigation, defense,
settlement, or appeal of any civil or criminal action, suit, or
proceeding referenced in Section 1(a) or (b) hereof.
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. The advances to be made hereunder shall be paid
by the Company to Indemnitee within 20 days following delivery
of a written request therefor by Indemnitee to the Company.
(b) Notice/Cooperation by
Indemnitee. Indemnitee shall, as a condition precedent to his or
its 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 of the Company at the address
shown on the signature page of this Agreement, or such other
address as the Company shall designate in writing to Indemnitee.
Notice shall be deemed received three business days after the date
postmarked if sent by domestic certified or registered mail,
properly addressed; otherwise notice shall be deemed received when
such notice shall actually be received by the Company. 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 2
shall be made no later than 45 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
45 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 12 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
that 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
Subsection 2(a) unless and until such defense may be finally
adjudicated by court order or judgment from which no further right
of appeal exists. It is the parties’ intention that if the
Company contests Indemnitee’s right to indemnification, the
question of Indemnitee’s right to indemnification shall be
for the court to decide, and neither the failure of the Company
(including its Board of Directors, any committee or subgroup of
the
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