Exhibit
10.44
INDEMNIFICATION
AGREEMENT
This Agreement is made
as of ___________, 200__, between Network Equipment Technologies,
Inc. a Delaware corporation (the “Company”), and
____________ (the “Indemnitee”).
RECITALS
Both the Company and
Indemnitee recognize that highly competent persons have become more
reluctant to serve publicly-held corporations as directors 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.
In recognition of
Indemnitee’s need for substantial protection against personal
liability in order to enhance Indemnitee’s continued service
to the Company in an effective manner and Indemnitee’s
reliance on the provisions of the Company’s Restated
Certificate of Incorporation (“Certificate of
Incorporation”) and the Company’s By-laws (the
“By-laws”) requiring indemnification of the Indemnitee
to the fullest extent permitted by law, and in part to provide
Indemnitee with specific contractual assurance that the protection
promised by such Certificate of Incorporation and By-laws will be
available to Indemnitee (regardless of, among other things, any
amendment to or revocation of such Certificate of Incorporation or
By-laws or any change in the composition of the Company’s
Board of Directors or acquisition transaction relating to the
Company), the Company wishes to provide in this Agreement for the
indemnification of and the advancing of expenses to Indemnitee to
the fullest extent (whether partial or complete) permitted by law
and as set forth in this Agreement.
The Certificate of
Incorporation, the By-laws and the General Corporation Law of the
State of Delaware (“DGCL”) expressly provide that the
indemnification provisions set forth therein are not exclusive and
thereby contemplate that contracts may be entered into between the
Company and members of the board of directors, officers and other
persons with respect to indemnification.
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.
This Agreement is a
supplement to and in furtherance of the Certificate of
Incorporation and By-laws and any resolutions adopted pursuant
thereto and shall not be deemed a substitute therefor, nor to
diminish or abrogate any rights of Indemnitee
thereunder.
AGREEMENT
In consideration of the
premises and of Indemnitee agreeing to serve or continuing to serve
the Company directly or, at its request, with another enterprise,
and intending to be legally bound hereby, the parties hereto agree
as follows:
1.
Basic
Indemnification Agreement .
(a)
In the event Indemnitee
was, is or becomes a party to or witness or other participant in,
or is threatened to be made a party to or witness or other
participant in, a Claim (as defined in Section 9(b)) by reason of
(or arising in part out of) an Indemnifiable Event (as defined in
Section 9(d)), the Company shall indemnify Indemnitee to the
fullest extent permitted by law as soon as practicable but in any
event no later than 30 days after written demand is presented to
the Company, against any and all Expenses (as defined in Section
9(c)), judgments, fines, penalties and amounts paid in settlement
(including all interest, assessments and other charges paid or
payable in connection therewith) of such Claim actually and
reasonably incurred by or on behalf of Indemnitee in connection
with such Claim and any federal, state, local or foreign taxes
imposed on Indemnitee as a result of the actual or deemed receipt
of any payments under this Agreement. If requested by
Indemnitee in writing, the Company shall advance (within ten
business days of such written request) any and all Expenses to
Indemnitee (an “Expense Advance”).
Notwithstanding anything in this Agreement to the contrary,
prior to a Change of Control (as defined in Section 9(a)) and
except as set forth in Sections 1(b), 3 and 7, Indemnitee shall not
be entitled to indemnification pursuant to this Agreement in
connection with any Claim (i) initiated by Indemnitee against the
Company or any director or officer of the Company unless the
Company has joined in or consented to the initiation of such Claim;
(ii) made on account of Indemnitee’s conduct which
constitutes a breach of Indemnitee’s duty of loyalty to the
Company or its stockholders or is an act or omission not in good
faith or which involves intentional misconduct or a knowing
violation of the law; or (iii) 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 (the “Exchange
Act”).
(b)
Notwithstanding the
foregoing, (i) the indemnification obligations of the Company under
Section 1(a) shall not be applicable if the Reviewing Party (as
defined in Section 9(f)) has determined (in a written opinion, in
any case in which the special independent counsel referred to in
Section 2 is involved) that Indemnitee would not be permitted to be
indemnified under applicable law, and (ii) the obligation of the
Company to make an Expense Advance pursuant to Section 1(a) shall
be subject to the condition that the Company receives an
undertaking that, if, when and to the extent that the Reviewing
Party determines that Indemnitee would not be permitted to be so
indemnified under applicable law, the Company shall be entitled to
be reimbursed by Indemnitee (who hereby agrees to reimburse the
Company) for all such amounts theretofore paid; provided, however,
that if Indemnitee has commenced legal proceedings in the Court of
Chancery of the State of Delaware (the “Delaware
Court”) to secure a determination that Indemnitee should be
indemnified under applicable law, any determination made by the
Reviewing Party that Indemnitee would not be permitted to be
indemnified under applicable law shall not be binding and
Indemnitee shall not be required to reimburse the Company for any
Expense Advance until a final judicial determination is made with
respect thereto (as to which all rights of appeal therefrom have
been exhausted or lapsed). Indemnitee’s obligation to
reimburse the Company for Expense Advances shall be unsecured and
no interest shall be charged thereon. If there has not been a
Change in Control, the Reviewing Party shall be selected by the
Board of Directors, and if there has been such a Change in Control,
the Reviewing Party shall be the special independent counsel
referred to in Section 2. If there has been no determination
by the Reviewing Party or if the Reviewing Party determines that
Indemnitee substantively would not be permitted to be indemnified
in whole or in part under applicable law, Indemnitee shall have the
right to commence litigation in the Delaware Court seeking an
initial determination by the court or challenging any such
determination by the Reviewing Party or any aspect thereof and the
Company hereby consents to service of process and to appear in any
such proceeding. Any determination by the Reviewing Party
otherwise shall be conclusive and binding on the Company and
Indemnitee. The Company shall indemnify Indemnitee for
Expenses incurred by Indemnitee in connection with the successful
establishment or enforcement, in whole or in part, by Indemnitee of
Indemnitee’s right to indemnification or advances.
2.
Change in
Control . The Company agrees that if
there is a Change in Control of the Company (other than a Change in
Control which has been approved by two- thirds or more of the
Company’s Board of Directors who were directors immediately
prior to such Change in Control) then with respect to all matters
thereafter arising concerning the rights of Indemnitee to indemnity
payments and Expense Advances under this Agreement or any other
agreement, the By-laws or Certificate of Incorporation now or
hereafter in effect relating to Claims for Indemnifiable Events,
the Company shall seek legal advice only from special independent
counsel selected by Indemnitee and approved by the Company (which
approval shall not be unreasonably withheld or delayed) and who has
not otherwise performed services for the Company within the last
five years (other than in connection with such matters) or for
Indemnitee. In the event that Indemnitee and the Company are
unable to agree on the selection of the special independent
counsel, such special independent counsel shall be selected by lot
from among at least five law firms with offices in the State of
Delaware having more than fifty attorneys, having a rating of
“av” or better in the then current Martindale Hubbell
Law Directory and having attorneys which specialize in corporate
law. Such selection shall be made in the presence of
Indemnitee (and his legal counsel or either of them, as Indemnitee
may elect). Such counsel, among other things, shall, within
90 days of its retention, render its written opinion to the Company
and Indemnitee as to whether and to what extent Indemnitee would be
permitted to be indemnified under applicable law. The Company
agrees to pay the reasonable fees of the special independent
counsel referred to above and to fully indemnify such counsel
against any and all expenses (including attorneys’ fees),
claims, liabilities, and damages arising out of or relating to this
Agreement or its engagement pursuant hereto.
3.
Indemnification
for Additional Expenses . The Company shall indemnify
Indemnitee against any and all expenses (including attorneys’
fees) and, if requested by Indemnitee in writing, shall (within ten
business days of such written request) advance such expenses to
Indemnitee, which are incurred by Indemnitee in connection with any
Claim asserted against or action brought by Indemnitee for (i)
indemnification or advance payment of Expenses by the Company under
this Agreement or any other agreement, the By-laws or Certificate
of Incorporation now or hereafter in effect relating to Claims for
Indemnifiable Events and/or (ii) recovery under any
directors’ and officers’ liability insurance policies
maintained by the Company, regardless of whether the Company
believes that Indemnitee is entitled to such indemnification,
advance expense payment or insurance recovery, as the case may be.
The Indemnitee shall qualify for advances solely upon the
execution and delivery to the Company of an undertaking providing
that the Indemnitee undertakes to repay the advance to the extent
that it is ultimately determined that the Indemnitee is not
entitled to be indemnified by the Company.
4.
Partial
Indemnity . If Indemnitee is entitled under any
provisions of this Agreement to indemnification by the Company of
some but not all of the Expenses, liabilities, judgments, fines,
penalties and amounts paid in settlement of a Claim, the Company
shall nevertheless indemnify Indemnitee for the portion thereof to
which Indemnitee is entitled. Moreover, notwithstanding any
other provision of this Agreement, to the extent that Indemnitee
has been successful on the merits or otherwise in defense of any or
all Claims relating in whole or in part to an Indemnifiable Event
or in defense of any issue or matter therein, including dismissal
without prejudice, Indemnitee shall be indemnified against all
Expenses incurred in connection therewith. In connection with
any determination by the Reviewing Party or otherwise as to whether
Indemnitee is entitled to be indemnified hereunder the burden of
proof shall be on the Company to establish that Indemnitee is not
so entitled.
5.
No
Presumption . For purposes of this
Agreement, the termination of any action, suit or proceeding by
judgment, order, settlement (whether with or without court
approval) or conviction, or upon a plea of nolo contendere, or its
equivalent, shall not create
