Exhibit 10.1
INDEMNIFICATION
AGREEMENT
This
Indemnification Agreement (this “Agreement”) is made
and entered into as of the 5th day of July, 2007, between CLST
Holdings, Inc. (formerly known as CellStar Corporation), a Delaware
corporation (the “Company”), and Sherrian Gunn
(“Indemnitee”).
WHEREAS,
Indemnitee is a director or an officer of the Company;
and
WHEREAS, the
Company is aware that because of the increased exposure to
litigation subjecting directors and officers to expensive
litigation risks, talented and experienced persons are increasingly
reluctant to serve or continue to serve as directors and officers
of corporations unless they are appropriately indemnified;
and
WHEREAS, the
Company is also aware that statutes and judicial decisions
regarding the duties of directors and officers are often difficult
to apply, ambiguous or conflicting and therefore fail to provide
directors with adequate guidance regarding the proper course of
action; and
WHEREAS, the
Company desires to attract and retain the services of highly
experienced and capable individuals, such as Indemnitee, to serve
as directors and officers of the Company and to indemnify its
directors and officers to provide them with the maximum protection
permitted by law; and
WHEREAS, the
Company believes that it is fair and proper to protect the
Company’s directors and officers from the risk of judgments,
settlements and other expenses which may occur as a result of their
service to the Company, even in cases in which such persons
received no personal profit or were not otherwise culpable;
and
WHEREAS, this
Agreement is separate from and in addition to the Bylaws of the
Company and any resolutions adopted pursuant thereto, and shall not
be deemed a substitute therefor, nor to diminish or abrogate any
rights of Indemnitee thereunder; and
WHEREAS, each of
Section 145 of the General Corporation Law of the State of Delaware
(“DGCL”) and the Bylaws of the Company is nonexclusive,
and therefore contemplates that contracts may be entered into with
respect to indemnification of directors, officers and
employees;
NOW, THEREFORE, in
consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Indemnitee, intending to be legally
bound, hereby agree as follows:
Section 1.
Definitions . For purposes of this Agreement, the following
terms shall have the meanings set forth below:
(a)
“ Change of Control ” shall mean any of
the following events:
(i) any
consolidation or merger of the Company in which the Company is not
the continuing or surviving corporation or pursuant to which shares
of the Company’s common stock
would be converted into
cash, securities or other property, other than a merger of the
Company in which the holders of the Company’s common stock
immediately prior to the merger have the same proportionate
ownership of common stock of the surviving corporation immediately
after the merger (subject to adjustment for rounding or fractional
interests resulting therefrom);
(ii) any sale,
lease, exchange or other transfer (in one transaction or a series
of related transactions) of all or substantially all of the assets
of the Company or of any significant business unit of the
Company;
(iii) any
approval by the stockholders of the Company of any plan or proposal
for the liquidation or dissolution of the Company;
(iv) the
cessation of control (by virtue of their not constituting a
majority of directors) of the Company’s Board of Directors by
the individuals (the “Continuing Directors”) who (x) at
the date of this Agreement were directors or (y) become directors
after the date of this Agreement and whose election 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 who
were directors at the date of this Agreement (or whose election or
nomination for election was previously so approved);
(v) (A) the
acquisition of beneficial ownership (“Beneficial
Ownership”), within the meaning of Rule 13d-3 under the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”), of an aggregate of fifteen percent (15%) or more of
the voting power of the Company’s outstanding voting
securities by any person or group (as such term is used in Rule
13d-5 under the Exchange Act) who Beneficially Owned less than ten
percent (10%) of the voting power of the Company’s
outstanding voting securities on the Effective Date of this
Agreement, (B) the acquisition of Beneficial Ownership of an
additional five percent (5%) of the voting power of the
Company’s outstanding voting securities by a person or group
who Beneficially Owned at least ten percent (10%) of the voting
power of the Company’s outstanding voting securities on the
Effective Date of this Agreement, or (C) the execution by the
Company and a stockholder of a contract that by its terms grants
such stockholder (in its, his or her capacity as a stockholder) or
such stockholder’s Affiliate (as defined in Rule 405
promulgated under the Securities Act of 1933 (an
“Affiliate”)) including, without limitation, such
stockholder’s nominee to the Company’s Board of
Directors (in its, his or her capacity as an Affiliate of such
stockholder), the right to veto or block decisions or actions of
the Company’s Board of Directors; provided ,
however , that notwithstanding the foregoing, the events
described in items (A), (B) or (C) above shall not constitute a
Change of Control hereunder if the acquiror is (1) a trustee or
other fiduciary holding securities under an employee benefit plan
of Employer, the Company or one of their affiliated entities and
acting in such capacity, (2) a corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of voting securities of the
Company, (3) a person or group meeting the requirements of clauses
(i) and (ii) of Rule 13d-1(b)(1) under the Exchange Act or (4) in
the case of an acquisition described in items (A) or (B) above (but
not in the case of an acquisition described in item (C) above), any
other person whose ownership or acquisition of shares of voting
securities is approved by a majority of the Continuing Directors;
provided further , that none of the following shall
constitute a Change of Control: (aa) the right of the holders of
any voting securities of the Company to vote as a class on any
matter or (bb) any vote required of disinterested or unaffiliated
directors or stockholders including, without limitation,
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pursuant to Section 144
of the Delaware General Corporation Law or Rule 16b-3 promulgated
pursuant to the Exchange Act; or
(vi) subject
to applicable law, in a Chapter 11 bankruptcy proceeding, the
appointment of a trustee or the conversion of a case involving The
Company to a case under Chapter 7.
(b)
“ Enterprise ” means any Person of which
Indemnitee is or was a Fiduciary.
(c)
“ Expenses ” means all direct and indirect costs
(including, without limitation, attorneys’ fees, retainers,
court costs, transcripts, fees of experts, witness fees, travel
expenses, duplicating costs, printing and binding costs, telephone
charges, postage, delivery service fees, expenses incurred in
connection with any appeal resulting from any Proceeding, including
without limitation, the premium, security fee and other costs
relating to any cost bond, supersedeas bond, or other appeal bond
or its equivalent, and all other disbursements or out-of-pocket
expenses) actually incurred in connection with (i) any Proceeding,
(ii) establishing or enforcing any right to indemnification for
Liabilities and expenses or advancement of expenses under this
Agreement, applicable law, any other agreement or provision of the
Company’s Certificate of Incorporation or Bylaws now or
hereafter in effect or otherwise, or (iii) the review and
preparation of this Agreement on behalf of Indemnitee;
provided , however , that “Expenses”
shall not include any Liabilities.
(d)
“ Fiduciary ” means an individual serving as a
director, officer, trustee, general partner, managing member,
fiduciary, board of directors’ committee member (including,
without limitation, a committee chairman), employee or agent of (i)
the Company or any Subsidiary, (ii) any resulting corporation in
connection with a consolidation or merger to which the Company or
any Subsidiary is a party, or (iii) any other Person (including an
employee benefit plan) at the request of the Company or any
Subsidiary, including any service with respect to an employee
benefit plan, its participants or its beneficiaries.
(e)
“ Independent Counsel ” means a nationally
recognized law firm, or a member of a nationally recognized law
firm, that is experienced in matters of corporate law and neither
currently is, nor in the five years previous to its selection or
appointment has been, retained to represent the Company or the
Indemnitee in any matter material to either such party. For the
avoidance of doubt, any law firm or member of a law firm that shall
have advised either party with respect to the review and
preparation of this Agreement shall not be Independent Counsel for
the purposes of this Agreement.
(f)
“ Liabilities ” means liabilities of any type
whatsoever incurred by reason of (i) the fact that Indemnitee is or
was a Fiduciary, or (ii) any action taken (or failure to act) by
him or on his behalf in his capacity as a Fiduciary, including, but
not limited to, any judgments, fines (including any excise taxes
assessed on Indemnitee with respect to an employee benefit plan),
ERISA excise taxes and penalties, and penalties and amounts paid in
settlement of any Proceeding (including all interest, assessments
and other charges paid or payable in connection with or in respect
of such judgments, fines, penalties or amounts paid in
settlement).
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(g)
“ Person ” means any individual, partnership,
joint venture, firm, corporation, association, limited liability
company, trust, estate, governmental unit or other enterprise or
entity, or as the term person is used for purposes of Section 13(d)
or 14(d) of the Securities Exchange Act of 1934, as amended (the
“1934 Act”).
(h)
“
Potential Change of Control ” means if (i) the Company
enters into an agreement, the consummation of which would result in
the occurrence of a Change of Control; (ii) any Person, including
the Company, publicly announces an intention to take or to consider
taking actions that, if consummated, would constitute a Change of
Control; or (iii) the Board of Directors of the Company adopts a
resolution to the effect that, for purposes of this Agreement, a
Potential Change of Control has occurred.
(i)
“ Proceeding ” means any pending or completed
investigation, civil or criminal action, third-party action,
derivative action, claim, suit, arbitration, counterclaim, cross
claim, alternative dispute resolution mechanism, inquiry,
administrative hearing or any other proceeding whether civil,
criminal, administrative, legislative or investigative, including
any appeal therefrom, in any such case in which Indemnitee was
involved as a party, potential party, non-party witness or
otherwise by reason of (i) the fact that Indemnitee is or was a
Fiduciary, or (ii) any action taken (or failure to act) by him or
on his behalf in his capacity as a Fiduciary.
(j)
“ Subsidiary ” means any Person of which a
majority of the outstanding voting securities or other voting
equity interests are owned, directly or indirectly, by the
Company.
Section 2.
Services by the Indemnitee . The Indemnitee agrees to serve
as a director or an officer of the Company at the will of the
Company for so long as the Indemnitee is duly elected and
qualified, appointed or until such time as the Indemnitee tenders a
resignation or is removed as a director or an officer. This
Agreement shall not be deemed to be an employment contract between
the Company (or any Subsidiary of the Company) and Indemnitee, and
the Indemnitee may at any time and for any reason resign from such
position.
Section 3.
Indemnification .
(a)
Indemnification . Subject to the further provisions of this
Agreement, the Company shall indemnify Indemnitee and hold him
harmless from and against any and all Expenses and Liabilities
incurred by Indemnitee or on Indemnitee’s behalf, to the
fullest extent permitted by applicable law in effect on the date
hereof, and to such greater extent as applicable law may thereafter
permit or authorize.
(b)
Presumptions .
(i)
Upon making any request for indemnification for Expenses and
Liabilities, or advancement of Expenses under this Agreement,
Indemnitee shall be presumed to be entitled to such indemnification
for Expenses and Liabilities or advancement of Expenses, as the
case may be, under this Agreement and, in connection with any
determination with respect to entitlement to indemnification under
Section 4(c) below, the Company shall have the burdens of coming
forward with evidence and by a preponderance of the evidence
to
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overcome that
presumption in connection with the making by any Person of any
determination contrary to that presumption. It shall not be a
defense or admissible as evidence in any such action by Indemnitee,
nor shall it create a presumption that Indemnitee has not met the
applicable standard of conduct, if (i) any Person fails to have
made such determination prior to the commencement of any action
pursuant to this Agreement that indemnification is proper in the
circumstances because Indemnitee has met the applicable standard of
conduct, or (ii) any Person fails to make an actual determination
that Indemnitee has not met any applicable standard of
conduct.
(ii)
For purposes of any determination of good faith, Indemnitee shall
be deemed to have acted in good faith if Indemnitee’s action
is based on (w) the records or books of account of any Enterprise,
including, without limitation, financial statements, (x)
information supplied to Indemnitee by the officers, employees or
other appropriate agents of such Enterprise in the course of their
duties, or (y) the advice of legal counsel for such Enterprise or
on information or records given or reports made to such Enterprise
by an independent certified public accountant or by an appraiser or
other expert selected by such Enterprise. The provisions of this
Section 3(b) shall not be deemed to be exclusive or to limit in any
way the other circumstances in which Indemnitee may be deemed or
found to have met the applicable standard of conduct set forth in
this Agreement.
(iii)
If the Person empowered or selected under Section 4(c) below to
determine whether Indemnitee is entitled to indemnification for
Liabilities and Expenses or advancement of Expenses shall not have
made a determination within twenty (20) calendar days after receipt
by the Company of the request therefor, the requisite determination
of entitlement to indemnification for Liabilities and Expenses or
advancement of Expenses shall be deemed to have been made and
Indemnitee shall be entitled to such indemnification for
Liabilities and Expenses or advancement of Expenses, absent (A) a
misstatement by Indemnitee of a material fact in connection with
the request for indemnification for Liabilities and Expenses or
advancement of Expenses, or (B) a prohibition of such
indemnification for Liabilities and Expenses or advancement of
Expenses under applicable law ;
provided that such 20-day period may be extended for a reasonable
time, not to exceed an additional 20 days, if the Person empowered
or selected under Section 4(c) below to determine whether
Indemnitee is entitled to indemnification for Liabilities and Expenses or
advancement of Expenses in good
faith requests in writing such additional time for the obtaining or
evaluating of documentation and/or information relating
thereto.
(iv)
The knowledge and/or actions, or failure to act, of any other
Fiduciary shall not be imputed to Indemnitee for purposes of
determining any right to indemnification for Liabilities and
Expenses or advancement of Expenses under this
Agreement.
(c)
Effect of Certain Proceedings . The termination of any
Proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contendre or its equivalent, shall not, of
itself, create a presumption that Indemnitee did not act in good
faith and in a manner reasonably believed to be in or not opposed
to the best interests of the Company, and with respect to any
criminal Proceeding, that Indemnitee had reason to believe his
conduct was unlawful.
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Section 4.
Expenses; Indemnification Procedure .
(a)
Advancement of Expenses . The Company shall advance or
reimburse Indemnitee for all Expenses incurred by Indemnitee or on
Indemnitee’s behalf, without regard to Indemnitee’s
ultimate entitlement to indemnification under the other provisions
of this Agreement. Indemnitee hereby undertakes to repay such
amounts advanced if, and only to the extent that, it shall be
determined by a final judgment or other final adjudication, not
subject to further appeal or review, that Indemnitee is not
entitled to be indemnified by the Company as authorized hereby, or
under applicable law or otherwise. The advances to be made
hereunder shall be paid by the Company to Indemnitee within twenty
(20) calendar days following delivery of any written request, which
shall reasonably evidence the Expenses incurred or to be incurred,
from time to time, by Indemnitee to the Company. Advances payable
hereunder shall include any and all reasonable Expenses incurred
pursuing an action to enforce this right of advancement, including
Expenses incurred preparing and forwarding any statements to the
Company to support the advances claimed.
(b)
Notice by Indemnitee . Indemnitee shall, as promptly
as reasonably practicable under the circumstances, use commercially
reasonable efforts to notify the Company in writing upon being
served with any summons, citation, subpoena, complaint, indictment,
information or other document relating to any Proceeding or any
other matter which may be subject to indemnification for
Liabilities and Expenses or advancement of Expenses covered by this
Agreement; provided , however , that any delay or
failure to so notify the Company shall relieve the Company of its
obligations hereunder only to the extent, if at
