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EXHIBIT 10.1
EXECUTION DOCUMENT
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this "Agreement"), is made and
entered
into as of ______________ , 20 , between COSI, INC., a Delaware
corporation (the
"Corporation"), and ____________________, a member of the
Corporation's Board of
Directors [an officer of the Corporation] ("Indemnitee").
RECITALS:
WHEREAS, the Corporation and Indemnitee each recognize the
ongoing
substantial risk of litigation and other claims being asserted
against directors
and officers of public companies arising out of their service to
and activities
on behalf of the corporation;
WHEREAS, the Corporation's Amended and Restated Articles of
Incorporation
and Amended and Restated Bylaws (individually and collectively,
the "Constituent
Documents") provide that the Corporation will indemnify its
directors and
officers, and the Corporation's Amended and Restated Bylaws (the
"Bylaws")
provide that the Corporation will advance expenses in connection
therewith;
WHEREAS, in recognition of the need for protection against such
litigation
and claims to enhance Indemnitee's continued effective service
to the
Corporation, and Indemnitee's reliance on the aforesaid
provisions of the
Constituent Documents, and to provide Indemnitee with express
contractual
indemnification, the Corporation wishes to provide in this
Agreement for the
indemnification, advancement, reimbursement and insurance of
certain liabilities
and expenses of Indemnitee to the fullest extent permitted by
law.
AGREEMENT:
NOW, THEREFORE, in consideration of these premises and of
Indemnitee's
continuation of service to the Corporation, the parties hereto
agree as follows:
1. Indemnification. The Corporation hereby agrees to and shall
hold
harmless and indemnify Indemnitee to the fullest extent
permitted by law as such
laws exist or may hereafter be amended (but, in the case of any
such amendment,
with respect to any action or inaction occurring prior to such
amendment, only
to the extent that such amendment permits the Corporation to
provide broader
indemnification rights than permitted prior thereto). In
furtherance of the
foregoing indemnification, and without limiting the generality
thereof:
(a) Proceedings Other than Those by or in the Right of the
Corporation. Indemnitee shall be entitled to the rights of
indemnification
provided in this Section 1(a) if, by reason of Indemnitee's
Corporate
Status (as defined in Section 13 below), Indemnitee is, or is
threatened
to be made, a party to or participant in any Proceeding (as
defined in
Section 13 below) other than a Proceeding by or in the right of
the
Corporation. Pursuant to this Section 1(a), Indemnitee shall
be
indemnified against all Expenses (as defined in Section 13
below),
liability and loss (including, without limitation, attorneys'
and other
professionals' fees and Expenses, claims, judgments, fines,
ERISA excise
taxes or penalties and amounts paid in settlement) actually and
reasonably
incurred by or on behalf of Indemnitee in connection with such
Proceeding
or any claim, issue or matter therein, if Indemnitee acted in
good faith
and in a manner 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 Indemnitee's
conduct was
unlawful. The termination of any Proceeding by judgment,
order,
settlement, conviction, or upon a plea of nolo contendere or
its
equivalent, shall not, of itself, create a presumption that the
person did
not act in good faith and in a manner reasonably believed to be
in or not
opposed to the best interests of the Corporation, and, with
respect to any
criminal action or proceeding, had reasonable cause to believe
that the
conduct was unlawful.
(b) Proceedings by or in the Right of the Corporation.
Indemnitee
shall be entitled to the rights of indemnification provided in
this
Section 1(b) if, by reason of Indemnitee's Corporate Status,
Indemnitee
is, or is threatened to be made, a party to or participant in
any
Proceeding brought by or in the right of the Corporation.
Pursuant to this
Section 1(b), Indemnitee shall be indemnified against all
Expenses
actually and reasonably incurred by or on behalf of Indemnitee
in
connection with such Proceeding if the Indemnitee acted in good
faith and
in a matter Indemnitee reasonably believed to be in or not
opposed to the
best interests of the Corporation except that no indemnification
shall be
made in respect of any claim, issue or matter in such Proceeding
as to
which Indemnitee shall have been adjudged to be liable to the
Corporation
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 circumstances of the case, such Indemnitee is
fairly and
reasonably entitled to indemnity for such Expenses which the
Court of
Chancery of the State of Delaware or such other court in which
such action
or suit was brought shall deem proper.
(c) Indemnification for Expenses of a Party Who is Wholly or
Partially Successful. Notwithstanding any other provision of
this
Agreement, to the extent that Indemnitee is, by reason of
Indemnitee's
Corporate Status, a party to and is successful, on the merits
or
otherwise, in any Proceeding, Indemnitee shall be indemnified to
the
maximum extent permitted by law, as such laws may be amended
from time to
time, against all Expenses actually and reasonably incurred by
or on
behalf of Indemnitee in connection therewith. If Indemnitee is
not wholly
successful in such Proceeding but is successful, on the merits
or
otherwise, as to one or more but less than all claims, issues or
matters
in such Proceeding, the Corporation shall indemnify Indemnitee
against all
Expenses actually and reasonably incurred by or on behalf of
Indemnitee in
connection with each successfully resolved claim, issue or
matter. For
purposes of this Section and without limitation, the termination
of any
claim, issue or matter in such a Proceeding by dismissal, with
or without
prejudice, shall be deemed to be a successful result as to such
claim,
issue or matter.
2. Additional Indemnity. In addition to, and without regard to
any
limitations on, the indemnification provided for in Section 1 of
this Agreement,
the Corporation shall and hereby does indemnify and hold
harmless Indemnitee
against all Expenses, judgments, penalties, fines and amounts
paid in settlement
actually and reasonably incurred by Indemnitee or on
Indemnitee's behalf if, by
reason of Indemnitee's Corporate Status, Indemnitee is, or is
threatened to be
made, a party to or participant in any Proceeding (including a
Proceeding by or
in the right of the Corporation), including, without limitation,
all liability
arising out of the negligence or active or passive wrongdoing of
Indemnitee. The
only limitation that shall exist upon the Corporation's
obligations pursuant to
this Agreement shall be that the Corporation shall not be
obligated to make any
payment to Indemnitee that is finally determined (under the
procedures, and
subject to the presumptions, set forth in Sections 6 and 7
below) to be
unlawful.
3. Contribution.
(a) Whether or not the indemnification provided in Sections 1
and 2
above is available, in respect of any threatened, pending or
completed
action, suit or proceeding in which the Corporation is jointly
liable with
Indemnitee (or would be if joined in such action, suit or
proceeding), the
Corporation shall pay, in the first instance, the entire amount
of any
judgment or settlement of such action, suit or proceeding
without
requiring Indemnitee to contribute to such payment and the
Corporation
hereby waives and relinquishes any right of contribution it may
have
against Indemnitee. The Corporation shall not enter into any
settlement of
any action, suit or proceeding in which the Corporation is
jointly liable
with Indemnitee (or would be if joined in such action, suit or
proceeding)
unless such settlement provides for a full and final release of
all claims
asserted against Indemnitee.
(b) Without diminishing or impairing the obligations of the
Corporation set forth in the preceding paragraph, if, for any
reason,
Indemnitee shall elect or be required to pay all or any portion
of any
judgment or settlement in any threatened, pending or completed
action,
suit or proceeding in which the Corporation is jointly liable
with
Indemnitee (or would be if joined in such action, suit or
proceeding), the
Corporation shall contribute to the amount of Expenses
(including
attorneys' fees), judgments, fines and amounts paid in
settlement actually
and reasonably incurred and paid or payable by Indemnitee in
proportion to
the relative benefits received by the Corporation and all
officers,
directors or employees of the Corporation, other than
Indemnitee, who are
jointly liable with Indemnitee (or would be if joined in such
action, suit
or proceeding), on the one hand, and Indemnitee on the other
hand, from
the transaction from which such action, suit or 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 Corporation
and all
officers, directors or employees of the Corporation other than
Indemnitee
who are jointly liable with Indemnitee (or would be if joined in
such
action, suit or proceeding), on the one hand, and Indemnitee, on
the other
hand, in connection with the events that resulted in such
expenses,
judgments, fines or settlement amounts, as well as any other
equitable
considerations which the law may require to be considered. The
relative
fault of the Corporation and all officers, directors or
employees of the
Corporation, other than Indemnitee, who are jointly liable with
Indemnitee
(or would be if joined in such action, suit or proceeding), on
the one
hand, and Indemnitee, on the other hand, shall be determined by
reference
to, among other things, the degree to which their actions were
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 is
active or passive.
(c) The Corporation hereby agrees to fully indemnify and
hold
Indemnitee harmless from any claims of contribution which may be
brought
by officers, directors or employees of the Corporation, other
than
Indemnitee, who may be jointly liable with Indemnitee.
(d) To the fullest extent permissible under applicable law, if
the
indemnification provided for in this Agreement is unavailable
to
Indemnitee for any reason whatsoever, the Corporation, in lieu
of
indemnifying Indemnitee, shall contribute to the amount incurred
by
Indemnitee, whether for judgments, fines, penalties, excise
taxes, amounts
paid or to be paid in settlement and/or for Expenses, in
connection with
any claim relating to an indemnifiable event under this
Agreement, in such
proportion as is deemed fair and reasonable in light of all of
the
circumstances of such Proceeding in order to reflect (i) the
relative
benefits received by the Corporation and Indemnitee as a result
of the
event(s) and/or transaction(s) giving cause to such Proceeding;
and/or
(ii) the relative fault of the Corporation (and its directors,
officers,
employees and agents) and Indemnitee in connection with such
event(s)
and/or transaction(s).
4. Indemnification for Expenses of a Witness. Notwithstanding
any other
provision of this Agreement, to the extent that Indemnitee is,
by reason of
Indemnitee's Corporate Status, a witness in any Proceeding to
which Indemnitee
is not a party, Indemnitee shall be indemnified against all
Expenses actually
and reasonably incurred by or on Indemnitee's behalf in
connection therewith.
5. Expenses Payable in Advance. The Corporation shall advance
all Expenses
reasonably incurred by or on behalf of Indemnitee in connection
with any
Proceeding by reason of Indemntitee's Corporate Status promptly
after receipt by
the Corporation of a statement or statements from Indemnitee
requesting such
advance or advances from time to time, whether prior to or after
final
disposition of such Proceeding. Such statement or statements
shall reasonably
evidence the Expenses incurred by Indemnitee and shall include
or be preceded or
accompanied by an undertaking by or on behalf of Indemnitee to
repay any
Expenses advanced if it shall ultimately be determined that
Indemnitee is not
entitled to be indemnified against such Expenses. Any advances
and undertakings
to repay pursuant to this Section 3 shall be unsecured and
interest free.
6. Procedures and Presumptions for Determination of Entitlement
to
Indemnification. It is the intent of this Agreement to secure
for Indemnitee
rights of indemnity that are as favorable as may be permitted
under the Delaware
General Corporation Law and public policy of the State of
Delaware. Accordingly,
the parties agree that the following procedures and presumptions
shall apply in
the event of any question as to whether Indemnitee is entitled
to
indemnification under this Agreement:
(a) To obtain indemnification under this Agreement, Indemnitee
shall
submit to the Corporation a written request, including therein
or
therewith such documentation and information as is reasonably
available to
Indemnitee and is reasonably necessary to determine whether and
to what
extent Indemnitee is entitled to indemnification. The Secretary
of the
Corporation shall, promptly upon receipt of such a request
for
indemnification, advise the Board of Directors in writing that
Indemnitee
has requested indemnification.
(b) Upon written request by Indemnitee for indemnification
pursuant
to the first sentence of Section 6(a) above, a determination, if
required
by applicable law, with respect to Indemnitee's entitlement
thereto shall
be made in the specific case, in a reasonably prompt manner, by
one of the
following methods, which shall be at the election of the
Corporation's
Board of Directors (the "Board"): (i) by a majority vote of
directors who
were not parties to such Proceeding, whether or not they
constitute a
quorum of the Board, (ii) by a Board committee designated by a
majority
vote of directors who were not parties to such Proceeding,
whether or not
they constitute a quorum, (iii) if there are no such directors
who were
not parties to such Proceeding, or if such directors so direct,
or
following a Change in Control (as defined in Section 13 below),
by
Independent Legal Counsel (as defined in Section 13 below) in a
written
opinion to the Board, a copy of which shall be delivered to
Indemnitee,
(iv) by the stockholders of the Corporation, or (v) as Delaware
law may
otherwise permit. Notwithstanding the foregoing in this Section
6(b), to
the extent that Indemnitee has been successful on the merits or
otherwise
in defense of any Proceeding, or in defense of any claim, issue
or matter
therein, Indemnitee shall be indemnified against Expenses
actually and
reasonably incurred by Indemnitee in connection therewith,
without the
necessity of authorization in the specific case.
(c) If the determination of entitlement to indemnification is to
be
made by Independent Legal Counsel pursuant to Section 6(b)(iii)
above, the
Independent Legal Counsel shall be selected as provided in this
Section
6(c). The Independent Legal Counsel shall be selected by the
Board.
Indemnitee may, within ten (10) days after such written notice
of
selection shall have been given, deliver to the Corporation, as
the case
may be, a written objection to such selection; provided,
however, that
such objection may be asserted only on the ground that the
Independent
Legal Counsel so selected does not meet the requirements of
"Independent
Legal Counsel" as defined in Section 13 of this Agreement, 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 Legal Counsel. If a written objection
is made and
substantiated, the Independent Legal Counsel selected may not
serve as
Independent Legal Counsel unless and until such objection is
withdrawn or
a court has determined that such objection is without merit. If,
within
twenty (20) days after submission by Indemnitee of a written
request for
indemnification pursuant to Section 6(a) hereof, no Independent
Legal
Counsel shall have been selected and not objected to, either
the
Corporation or Indemnitee may petition the Court of Chancery of
the State
of Delaware or other court of competent jurisdiction for
resolution of any
objection which shall have been made by Indemnitee to the
Corporation's
selection of Independent Legal Counsel and/or for the
appointment as
Independent Legal Counsel of a person selected by the court or
such other
person as the court shall designate, and the person with respect
to whom
all objections are so resolved or the person so appointed shall
act as
Independent Legal Counsel under Section 6(b) hereof. The
Corporation shall
pay any and all reasonable fees and expenses of Independent
Legal Counsel
incurred by such Independent Legal Counsel in connection with
acting
pursuant to Section 6(b) hereof, and the Corporation shall pay
all
reasonable fees and expenses incident to the procedures of this
Section
6(c), regardless of the manner in which such Independent Legal
Counsel was
selected or appointed.
(d) In making the determination with respect to entitlement
to
indemnification hereunder, the person or persons or entity
making such
determination shall presume that Indemnitee is entitled to
indemnification
under this Agreement. Anyone seeking to overcome this
presumption shall
have the burden of proof and the burden of persuasion by clear
and
convincing evidence. Neither the failure of the Corporation
(including by
its directors or independent legal counsel) to have made a
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, nor any actual determination
by the
Corporation (including by its directors or independent legal
counsel) that
Indemnitee has not met such applicable standard of conduct,
shall be a
defense to the action or create a presumption that Indemnitee
has not met
the applicable standard of conduct.
(e) For purposes of any determination under this Section 6,
Indemnitee shall be deemed to have acted in good faith if
Indemnitee's
action is based on (i) the records or books of account of the
Corporation
or another enterprise, or on information supplied to Indemnitee
by the
officers of the Corporation or another enterprise in the course
of their
duties, or (b) the advice of legal counsel for the Corporation
or another
enterprise, or on information or records given or reports made
to the
Corporation or another enterprise by an independent certified
public
accountant, independent financial adviser, appraiser or other
expert
selected with reasonable care by the Corporation or other
enterprise. In
addition, the knowledge and/or actions, or failure to act, of
any
director, officer, agent or
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