Exhibit 10.2
Execution Copy
INDEMNIFICATION AGREEMENT
This Agreement is made as of the
29th day of July, 2008, by and between Vonage Holdings Corp., a
Delaware corporation (the “Corporation), and Marc P. Lefar
(the “Indemnitee”), a director or officer of the
Corporation.
WHEREAS, it is essential to the
Corporation to retain and attract as directors and officers the
most capable persons available, and
WHEREAS, the substantial increase in
corporate litigation subjects directors and officers to expensive
litigation risks at the same time that the availability of
directors’ and officers’ liability insurance has been
severely limited, and
WHEREAS, it is now and has always
been the express policy of the Corporation to indemnify its
directors and officers, and
WHEREAS, the Indemnitee does not
regard the protection available under the Corporation’s
Certificate of Incorporation and insurance as adequate in the
present circumstances, and may not be willing to serve or continue
to serve as a director or officer without adequate protection,
and
WHEREAS, the Corporation desires the
Indemnitee to serve, or continue to serve, as a director or officer
of the Corporation.
NOW THEREFORE, the Corporation and
the Indemnitee do hereby agree as follows:
1. Agreement to Serve . The
Indemnitee agrees to serve or continue to serve as a director or
officer of the Corporation for so long as the Indemnitee is duly
elected or appointed or until such time as the Indemnitee tenders a
resignation in writing.
2. Definitions . As used in
this Agreement:
(a) The term “Change in
Control” shall mean, and shall be deemed to have occurred if,
on or after the date of this Agreement, (i) any
“person” (as such term is used in Section 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended),
other than a trustee or other fiduciary holding securities under an
employee benefit plan of the Corporation acting in such capacity or
a corporation owned directly or indirectly by the stockholders of
the Corporation in substantially the same proportions as their
ownership of stock of the Corporation, becomes the
“beneficial owner” (as defined in Rule 13d-3 under said
Act), directly or indirectly, of securities of the Corporation
representing more than 50% of the total voting power represented by
the Corporation’s then outstanding Voting Securities (as
defined below), (ii) during any period of two consecutive
years, individuals who at the beginning of such period constitute
the Board of Directors of the Corporation and any new director
whose election by the Board of Directors or nomination for election
by the Corporation’s stockholders was approved by a vote of
at least two thirds (2/3) of the directors then still in
office who either were directors at the beginning of the period or
whose election or nomination for election was previously
so
approved, cease for any reason to
constitute a majority thereof, or (iii) the stockholders of
the Corporation approve a merger or consolidation of the
Corporation with any other entity other than a merger or
consolidation which would result in the Voting Securities of the
Corporation outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into Voting Securities of the surviving entity) at least 80% of the
total voting power represented by the Voting Securities of the
Corporation or such surviving entity outstanding immediately after
such merger or consolidation, or the stockholders of the
Corporation approve a plan of complete liquidation of the
Corporation or an agreement for the sale or disposition by the
Corporation of (in one transaction or a series of related
transactions) all or substantially all of the Corporation’s
assets.
(b) The term “Corporate
Status” shall mean the status of a person who is or was, or
has agreed to become, a director or officer of the Corporation, or
is or was serving, or has agreed to serve, at the request of the
Corporation, as a director, officer, fiduciary, partner, trustee,
member, employee or agent of, or in a similar capacity with,
another corporation, partnership, joint venture, trust or other
enterprise (including any employee benefit plan).
(c) References to the
“Corporation” shall include, in addition to Vonage
Holdings Corp., any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or merger
to which Vonage Holdings Corp. (or any of its wholly owned
subsidiaries) is a party which, if its separate existence had
continued, would have had the power and authority to indemnify its
directors, officers, employees, agents or fiduciaries, so that if
the Indemnitee is or was a director, officer, employee, agent or
fiduciary of such constituent corporation, or is or was serving at
the request of such constituent corporation as a director, officer,
employee, agent or fiduciary of another corporation, partnership,
joint venture, employee benefit plan, trust or other enterprise,
the Indemnitee shall stand in the same position under the
provisions of this Agreement with respect to the resulting or
surviving corporation as the Indemnitee would have with respect to
such constituent corporation if its separate existence had
continued.
(d) The term “Expenses”
shall include, without limitation, attorneys’ fees,
retainers, court costs, transcript costs, fees and expenses of
experts, travel expenses, duplicating costs, printing and binding
costs, telephone charges, postage, delivery service fees and other
disbursements or expenses of the types customarily incurred in
connection with actions, suits, proceedings, alternative dispute
resolution mechanisms, hearings, inquiries or investigations,
including any costs or expenses incurred defending, being a witness
in or participating in, or preparing to defend, to be a witness in
or to participate in, such actions, suits, proceedings, alternative
dispute resolution mechanisms, hearings, inquiries or
investigations, including any federal, state, local or foreign
taxes imposed on the Indemnitee as a result of actual or deemed
receipt of payments for the foregoing, but shall not include the
amount of judgments, fines or penalties against the Indemnitee or
amounts paid in settlement in connection with such
matters.
(e) References to “other
enterprise” shall include employee benefit plans; references
to “fines” shall include any excise tax assessed with
respect to any employee benefit plan; references to “serving
at the request of the Corporation” shall include any service
as a director, officer, employee, agent or fiduciary of the
Corporation which imposes duties on, or involves services by, such
director, officer, employee, agent or fiduciary with respect to
an
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employee benefit plan, its
participants or beneficiaries; and a person who acted in good faith
and in a manner such person reasonably believed to be in the
interests of the participants and beneficiaries of an employee
benefit plan shall be deemed to have acted in a manner “not
opposed to the best interests of the Corporation” as referred
to in this Agreement.
(f) The term
“Proceeding” shall include any threatened, pending or
completed action, suit, arbitration, alternative dispute resolution
mechanism, hearing, inquiry, investigation or other proceeding,
whether brought by or in the right of the Corporation or otherwise
and whether of a civil, criminal, administrative or investigative
nature, and any appeal therefrom.
(g) The term “Special
Independent Counsel” shall mean a law firm, or a member of a
law firm, that is experienced in matters of corporation law and
neither currently is, nor in the past three years has been,
retained to represent: (i) the Corporation or the Indemnitee
in any matter material to either such party or (ii) any other
party to the Proceeding giving rise to a claim for indemnification
hereunder. Notwithstanding the foregoing, the term “Special
Independent Counsel” shall not include any person who, under
the applicable standards of professional conduct then prevailing,
would have a conflict of interest in representing either the
Corporation or the Indemnitee in an action to determine the
Indemnitee’s rights under this Agreement.
(h) The term “Voting
Securities” shall mean any securities of the Corporation that
vote generally in the election of directors.
3. Indemnity of Indemnitee .
Subject to Sections 6, 7 and 9, the Corporation shall indemnify the
Indemnitee in connection with any Proceeding as to which the
Indemnitee is, was or is threatened to be made a party (or is a
witness or participant in or otherwise involved with) by reason of
the Indemnitee’s Corporate Status, to the fullest extent
permitted by law (as such may be amended from time to time). To the
extent that a change in applicable law (whether by statute or
judicial decision) permits greater indemnification than would be
afforded currently hereunder, the Indemnitee shall enjoy the
greater benefits so afforded by such change without any further
action by the Corporation. In furtherance of the foregoing and
without limiting the generality thereof:
(a) Indemnification in
Third-Party Proceedings . The Corporation shall indemnify the
Indemnitee in accordance with the provisions of this
Section 3(a) if the Indemnitee was or is a party to or
threatened to be made a party to or otherwise involved in any
Proceeding (other than a Proceeding by or in the right of the
Corporation to procure a judgment in its favor or a Proceeding
referred to in Section 6 below) by reason of the
Indemnitee’s Corporate Status or by reason of any action
alleged to have been taken or omitted in connection therewith,
against all Expenses, liabilities, losses, judgments, fines, ERISA
taxes or penalties and amounts paid in settlement actually and
reasonably incurred by or on behalf of the Indemnitee in connection
with such Proceeding, if the Indemnitee acted in good faith and in
a manner which the Indemnitee reasonably believed to be in, or not
opposed to, the best interests of the Corporation and, with respect
to any criminal Proceeding, had no reasonable cause to believe that
his or her conduct was unlawful.
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(b) Indemnification in
Proceedings by or in the Right of the Corporation . The
Corporation shall indemnify the Indemnitee in accordance with the
provisions of this Section 3(b) if the Indemnitee was or is a
party to or threatened to be made a party to or otherwise involved
in any Proceeding by or in the right of the Corporation to procure
a judgment in its favor by reason of the Indemnitee’s
Corporate Status or by reason of any action alleged to have been
taken or omitted in connection therewith, against all Expenses and,
to the extent permitted by law, amounts paid in settlement actually
and reasonably incurred by or on behalf of the Indemnitee in
connection with such Proceeding, if the Indemnitee acted in good
faith and in a manner which the Indemnitee reasonably believed to
be in, or not opposed to, the best interests of the Corporation,
except that, if applicable law so provides, no indemnification
shall be made under this Section 3(b) in respect of any claim,
issue or matter as to which the Indemnitee shall have been adjudged
to be liable to the Corporation, unless, and only to the extent,
that the Court of Chancery of Delaware or the court in which such
action or suit was brought shall determine upon application that,
despite the adjudication of such liability but in view of all the
circumstances of the case, the Indemnitee is fairly and reasonably
entitled to indemnity for such Expenses as the Court of Chancery or
such other court shall deem proper.
4. Indemnification of Expenses of
Successful Party . Notwithstanding any other provision of this
Agreement, to the extent that the Indemnitee has been successful,
on the merits or otherwise, in defense of any Proceeding or in
defense of any claim, issue or matter therein (other than a
Proceeding referred to in Section 6), the Indemnitee shall be
indemnified against all Expenses actually and reasonably incurred
by or on behalf of the Indemnitee in connection therewith. Without
limiting the foregoing, if any Proceeding or any claim, issue or
matter therein is disposed of, on the merits or otherwise
(including a disposition without prejudice), without (i) the
disposition being adverse to the Indemnitee, (ii) an
adjudication that the Indemnitee was liable to the Corporation,
(iii) a plea of guilty or nolo contendere by the
Indemnitee, (iv) an adjudication that the Indemnitee did not
act in good faith and in a manner the Indemnitee reasonably
believed to be in or not opposed to the best interests of the
Corporation, and (v) with respect to any criminal proceeding,
an adjudication that the Indemnitee had reasonable cause to believe
his or her conduct was unlawful, the Indemnitee shall be considered
for the purposes hereof to have been wholly successful with respect
thereto.
5. Indemnification for Expenses
of a Witness . To the extent that the Indemnitee is, by reason
of the Indemnitee’s Corporate Status, a witness in any
Proceeding to which the Indemnitee is not a party, the Indemnitee
shall be indemnified against all Expenses actually and reasonably
incurred by or on behalf of the Indemnitee in connection
therewith.
6. Exceptions to Right of
Indemnification . Notwithstanding anything to the contrary in
this Agreement, except as set forth in Section 10, the
Corporation shall not indemnify the Indemnitee in connection with a
Proceeding (or part thereof) initiated by the Indemnitee unless
(a) the initiation thereof was approved by the Board of
Directors of the Corporation or (b) the Proceeding was
commenced following a Change in Control. Notwithstanding anything
to the contrary in this Agreement, the Corporation shall not
indemnify the Indemnitee to the extent the Indemnitee is reimbursed
from the proceeds of insurance, and in the event the Corporation
makes any indemnification payments to the Indemnitee and the
Indemnitee is subsequently
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reimbursed from the proceeds of insurance, the
Indemnitee shall promptly refund such indemnification payments to
the Corporation to the extent of such insurance
reimbursement.
7. Notification and Defense of
Claim . As a condition precedent to the Indemnitee’s
right to be indemnified, the Indemnitee must notify the Corporation
in writing as soon as practicable of any Proceeding for which
indemnity will or could be sought. With respect to any Proceeding
of which the Corporation is so notified, the Corporation will be
entitled to participate therein at its own expense and/or to assume
the defense thereof at its own expense, with legal counsel
reasonably acceptable to the Indemnitee. After notice from the
Corporation to the Indemnitee of its election so to assume such
defense, the Corporation shall not be liable to the Indemnitee for
any legal or other expenses subsequently incurred by the Indemnitee
in connection with such Proceeding, other than as provided below in
this Section 7. The Indemnitee shall have the right to employ
his or her own counsel in connection with such Proceeding, but the
fees and expenses of such counsel incurred after notice from the
Corporation of its assumption of the defense thereof shall be at
the expense of the Indemnitee unless (i) the employment of
counsel by the Indemnitee has been authorized by the Corporation,
(ii) counsel to the Indemnitee shall have reasonably concluded
that there may be a conflict of interest or position on any
significant issue between the Corporation and the Indemnitee in the
conduct of the defense of such Proceeding or (iii) the
Corporation shall not in fact have employed counsel to assume the
defense of such Proceeding, in each of which cases the fees and
expenses of counsel for the Indemnitee shall be at the expense of
the Corporation, except as otherwise expressly provided by this
Agreement. The Corporation shall not be entitled, without the
consent of the Indemnitee, to assume the defense of any claim
brought by or in the right of the Corporation or as to which
counsel for the Indemnitee shall have reasonably made the
conclusion p
