Exhibit 10.5
INDEMNIFICATION
AGREEMENT
This Indemnification Agreement
(“ Agreement ”) is made as of [
] by and between Alphatec Holdings, Inc., a Delaware corporation
(the “ Company ”), and [
] (“ Indemnitee ”).
RECITALS
WHEREAS , highly competent persons have become more
reluctant to serve corporations as directors or in other capacities
unless they are provided with adequate protection through insurance
and adequate indemnification against inordinate risks of claims and
actions against them arising out of their service to and activities
on behalf of the corporation;
WHEREAS , the Board of Directors of the Company (the
“ Board ”) has determined that, in order
to attract and retain qualified individuals, the Company will
attempt to maintain on an ongoing basis, at its sole expense,
liability insurance to protect persons serving the Company and its
subsidiaries from certain liabilities. Although the furnishing of
such insurance has been a customary and widespread practice among
United States-based corporations and other business enterprises,
the Company believes that, given current market conditions and
trends, such insurance may be available to it in the future only at
higher premiums and with more exclusions. At the same time,
directors, officers and other persons in service to corporations or
business enterprises are being increasingly subjected to expensive
and time-consuming litigation relating to, among other things,
matters that traditionally would have been brought only against the
Company or business enterprise itself. The certificate of
incorporation and bylaws of the Company require indemnification of
the officers and directors of the Company. Indemnitee may also be
entitled to indemnification pursuant to the General Corporation Law
of the State of Delaware (“ DGCL ”). The
certificate of incorporation, bylaws and the 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, officers and
other persons with respect to indemnification;
WHEREAS , the uncertainties relating to such insurance
and to indemnification have increased the difficulty of attracting
and retaining such persons;
WHEREAS , The Board has determined that the increased
difficulty in attracting and retaining such persons is detrimental
to the best interests of the Company’s stockholders and that
the Company should act to assure such persons that there will be
increased certainty of such protection in the future;
WHEREAS , 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;
WHEREAS , this Agreement is a supplement to and in
furtherance of the certificate of incorporation and bylaws of the
Company and any resolutions adopted pursuant thereto and shall not
be deemed a substitute therefore, nor to limit, diminish or
abrogate any rights of Indemnitee thereunder; and
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WHEREAS , Indemnitee does not regard the protection
available under the Company’s certificate of incorporation,
bylaws and insurance as adequate in the present circumstances, and
may not be willing to serve as an officer or director without
adequate protection, and the Company desires Indemnitee to serve in
such capacity. Indemnitee is willing to serve, continue to serve
and to take an additional service for or on behalf of the Company
on the condition that he or she be so indemnified.
AGREEMENT
NOW, THEREFORE
, in consideration of the premises
and the covenants contained herein, the Company and Indemnitee do
hereby covenant and agree as follows:
1. Services to the Company .
Indemnitee will serve or continue to serve as an officer, director
or key employee of the Company for so long as Indemnitee is duly
elected or appointed or until Indemnitee tenders his or her
resignation.
2. Definitions . As used in
this Agreement:
(a) “ Beneficial
Owner ” shall have the meaning given to such term in
Rule 13d-3 under the Exchange Act; provided , however
, that Beneficial Owner shall exclude any Person otherwise becoming
a Beneficial Owner by reason of the stockholders of the Company
approving a merger of the Company with another entity.
(b) A “ Change in
Control ” shall be deemed to occur upon the earliest
to occur after the date of this Agreement of any of the following
events:
(i) Acquisition of Stock by Third
Party . Any Person (as defined below) is or becomes the
Beneficial Owner, directly or indirectly, of securities of the
Company representing fifty percent (50%) or more of the
combined voting power of the Company’s then outstanding
securities;
(ii) Change in Board of
Directors . During any period of two (2) consecutive years
(not including any period prior to the execution of this
Agreement), individuals who at the beginning of such period
constitute the Board, and any new director (other than a director
designated by a person who has entered into an agreement with the
Company to effect a transaction described in Sections 2(b)(i),
2(b)(iii) or 2(b)(iv)) whose election by the Board or nomination
for election by the Company’s stockholders was approved by a
vote of at least two-thirds 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 at least a majority of the
members of the Board;
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(iii) Corporate Transactions
. The effective date of a merger or consolidation of the Company
with any other entity, other than a merger or consolidation which
would result in the voting securities of the Company outstanding
immediately prior to such merger or consolidation continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than 50.1% of
the combined voting power of the voting securities of the surviving
entity outstanding immediately after such merger or consolidation
and with the power to elect at least a majority of the board of
directors or other governing body of such surviving
entity;
(iv) Liquidation . The
approval by the stockholders of the Company of a complete
liquidation of the Company or an agreement or services of
agreements for the sale or disposition by the Company of all or
substantially all of the Company’s assets; or
(v) Other Events . There
occurs any other event of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of
Regulation 14A (or a response to any similar item on any similar
schedule or form) promulgated under the Exchange Act (as defined
below), whether or not the Company is then subject to such
reporting requirement.
(c) “ Corporate
Status ” describes the status of a person who is or
was a director, officer, trustee, general partner, managing member,
fiduciary, employee or agent of the Company or of any other
Enterprise (as defined below) which such person is or was serving
at the request of the Company.
(d) “ Disinterested
Director ” means a director of the Company who is not
and was not a party to the Proceeding in respect of which
indemnification is sought by Indemnitee.
(e) “ Enterprise
” shall mean the Company and any other corporation , limited
liability company, partnership, joint venture, trust, employee
benefit plan or other enterprise of which Indemnitee is or was
serving at the request of the Company as a director, officer,
trustee, general partner, managing member, fiduciary, employee or
agent.
(f) “ Exchange
Act ” shall mean the Securities Exchange Act of 1934,
as amended.
(g) “ Expenses
” shall include all reasonable attorneys’ feeds,
retainers, court costs, transcript costs, fees of experts, witness
fees, travel expenses, duplicating costs, printing and binding
costs, telephone charges, postage, delivery service fees and all
other disbursements or expenses of the type customarily incurred in
connection with prosecuting, defending, preparing to prosecute or
defend, investigating, being or preparing to be a witness in, or
otherwise participating in, a Proceeding. Expenses also shall
include Expenses incurred in connection with any appeal resulting
from any Proceeding, including, without limitation, the premium,
security for and other costs relating to any cost bond, supersedeas
bond or other appeal bond or its equivalent. Expenses, however,
shall not include amounts paid in settlement by Indemnitee or the
amount of judgments or fines against Indemnitee.
(h) “ Independent
Counsel ” means a law firm, or a member of a law
firm, that is experienced in matters of corporation law and neither
presently is, nor in the past five years has been, retained to
represent: (i) the Company or Indemnitee in any matter
material to either such party (other than with respect to matters
concerning Indemnitee under this agreement, or of other
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indemnitees under similar
indemnification agreements), or (ii) any other party to the
Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term “ Independent
Counsel ” shall not include any person who, under the
applicable standards of professional conduct then prevailing, would
have conflict of interest in representing either the Company or
Indemnitee in an action to determine Indemnitee’s rights
under this Agreement. The Company agrees to pay the reasonable fees
and expenses of the Independent Counsel referred to above and to
fully indemnify such counsel against any and all Expenses, claims,
liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto.
(i) “ Person
” shall have the meaning set forth in Sections 13(d) and
14(d) of the Exchange Act; provided , however , that
Person shall exclude (i) the Company, (ii) any trustee or
other fiduciary holding securities under an employee benefit plan
of the Company and (iii) any corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the
Company.
(j) The term “
Proceeding ” shall include any threatened,
pending or completed action, suite, arbitration, alternate dispute
resolution mechanism, investigation, formal or informal inquiry,
administrative hearing, request for documents or information,
subpoena, or any other actual, threatened or completed proceeding,
whether brought in the right of the Company or otherwise and
whether of a civil, criminal, administrative or investigative
nature, in which Indemnitee was, is or will be involved as a party,
witness or otherwise by reason of the fact that indemnitee is or
was a director or officer of the Company, by reason of any action
taken (or failure to act) by him or her or of any action (or
failure to act) on his or her part while acting as a director or
officer of the Company, or by reason of the fact that he or she is
or was serving at the request of the Company as a director,
officer, trustee, general partner, managing member, fiduciary,
employee or agent of any Enterprise, in each case whether or not
serving in such capacity at the time any liability or Expenses are
incurred for which indemnification, reimbursement or advancement of
Expenses can be provided under this Agreement.
(k) References to “
other enterprise ” shall include employee
benefit plans; references to “ serving at the request
of the Company ” shall include any service as a
director, officer, employee or agent of the Company which imposes
duties on, or involves services by, such director, officer,
employee or agent with respect to an employee benefit plan, its
participants or beneficiaries; and a person who acted in good faith
and in a manner he or she reasonably believed to be in the best
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 Company
” as referred to in this Agreement.
3. Indemnity in Third-Party
Proceedings . The Company shall indemnify Indemnitee in
accordance with the provisions of this Section 3 if Indemnitee
is, or is threatened to be made, a party to or a participant (as a
witness or otherwise) in any Proceeding, other than a Proceeding by
or in the right of the Company to procure a judgment in its favor.
Pursuant to this Section 3, Indemnitee shall be indemnified
against all Expenses, judgments, fines, penalties and amounts paid
in settlement (including all interest, assessments and other
charges paid or payable in connection with or in respect of such
Expenses, judgments, fines, penalties and amounts paid in
settlement) actually and reasonably incurred by Indemnitee or on
his or her behalf in connection with such Proceeding or any claim,
issue or matter therein, if Indemnitee acted in good faith and in a
manner he or she reasonable believed to be in or not opposed to the
best interests of the Company and, in the case of a criminal
proceeding, he or she had no reasonable cause to believe that his
or her conduct was unlawful.
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4. Indemnity in Proceedings by or
in the Right of the Company . The Company shall indemnify
Indemnitee in accordance with the provisions of this Section 4
if Indemnitee is, or is threatened to be made, a party to or a
participant (as a witness or otherwise) in any Proceeding by or in
the right of the Company to procure a judgment in its favor.
Pursuant to this Section 4, Indemnitee shall be indemnified
against all Expenses actually and reasonably incurred by Indemnitee
or on his or her behalf in connection with such Proceeding or any
claim, issue or matter therein, if Indemnitee acted in good faith
and in a manner he or she reasonable believed to be in or not
opposed to the best interests of the Company. No indemnification
for Expenses shall be made under this Section 4 in respect of
any claim, issue or matter as to which Indemnitee shall have been
finally adjudged by a court to be liable to the Company, unless and
only to the extent that any court in which the Proceeding was
brought or the Delaware Court of Chancery shall determine upon
application that, despite the adjudication of liability but in view
of all the circumstances of the case, Indemnitee is fairly and
reasonable entitled to indemnification.
5. Indemnification for Expenses
of a Party Who is Wholly or Partly Successful . Not
withstanding any other provisions of this Agreement, to the extent
that Indemnitee is a party to (or a participant in) and is
successful, on the merits or otherwise, in any Proceeding or in
defense of any claim, issue or matter therein, in whole or in part,
the Company shall indemnify Indemnitee against all Expenses
actually and reasonably incurred by him or her in connection
therewith. In 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 Company shall indemnify Indemnitee against all
Expenses actually and reasonably incurred by him or her or on his
or her behalf in connection with each successfully resolved claim,
issue or matter. If Indemnitee is not wholly successful in such
Proceeding, the Company also shall indemnify Indemnitee against all
Expenses reasonably incurred in connection with a claim, issue or
matter related to any claim, issue or matter on which Indemnitee
was successful. For purposes of this Section and without
limitation, the termination of any claim, issue or matter n such a
Proceeding by dismissal, with or without prejudice, shall be deemed
to be a successful result as to such claim, issue or
matter.
6. Indemnification for Expenses
of a Witness . Notwithstanding any other provision of this
Agreement, to the extent that Indemnitee is, by reason of his
Corporate Status, a witness in any Proceeding to which Indemnitee
is not a party, he shall be indemnified against all Expenses
actually and reasonably incurred by him or her or on his or her
behalf in connection therewith.
7. Additional Indemnification
.
(a) Notwithstanding any limitation
in Sections 3, 4 or 5, the Company shall indemnify Indemnitee to
the fullest extent permitted by law if Indemnitee is a party to or
threatened to be made a party to any Proceeding (including a
Proceeding by or in the right of the Company to procure a judgment
in its favor) against all Expenses, judgments, fines, penalties and
amounts paid in settlement (including all interest, assessments and
other charges paid or payable in connection with or in respect of
such
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Expenses, judgments, fines,
penalties and amounts paid in settlement) actually and reasonably
incurred by Indemnitee in connection with the Proceeding. No
indemnity shall be made under this Section 7(a) on account of
Indemnitee’s conduct which is finally determined by a court
of competent jurisdiction to constitute a breach of
Indemnitee’s duty of loyalty to the Company or its
stockholders or to be an act or omission not in good faith or which
involves intentional misconduct or a knowing violation of the
law.
(b) For purposes of
Section 7(a), the meaning of the phrase “ to the
fullest extent permitted by law ” shall include, but
not be limited to:
(i) to the fullest extent permitted
by the provision of the DGCL that authorizes or contemplates
additional indemnification by agreement, or the corresponding
provision of any amendment to or replacement of the DGCL;
and
(ii) to the fullest extent
authorized or permitted by any amendments to or replacements of the
DGCL adopted after the date of this Agreement that increase the
extent to which a corporation may indemnify its officers and
directors.
8. Exclusions .
Notwithstanding any other provision in this Agreement, the Company
shall not be obligated under this Agreement to make any indemnity
in connection with any claim made against Indemnitee:
(a) for which payment has actually
been received by or on behalf of Indemnitee under any insurance
policy or other indemnity provision, except with respect to any
excess beyond the amount actually received under any insurance
policy or other indemnity provision;
(b) for an accounting of profits
made from the purchase and sale (or sale and purchase) by
Indemnitee of securities of the Company within the meaning of
Section 16(b) of the Exchange Act or similar provisions of
state statutory law or common law; or
(c) except as otherwise provided in
Sections 13(d)-(f) hereof, in connection with any Proceeding
(9or any part of any Proceeding) initiated by Indemnitee, including
any Proceeding (or any part of any Proceeding) initiated by
Indemnitee against the Company or its directors, officers,
employees or other indemnitees, unless (i) the Board of
Directors of the Company authorized the Proceeding (or any part of
any Proceeding) prior to its initiation or (ii) the Company
provides the indemnification, in its sole discretion, pursuant to
the powers vested in the Company under applicable law.
9. Advances of Expenses; Defense
of Claim .
(a) Notwithstanding any provision of
this Agreement to the contrary, the Company shall advance the
Expenses incurred by Indemnitee in connection with any Proceeding
within ten (10) days after the receipt by the Company of a
statement or statements requesting such advances from time to time,
whether prior to or after final disposition of any Proceeding.
Advances shall be unsecured and interest free. Advances shall be
made without regard to Indemnitee’s ability to repay the
expenses and without regard to Indemnitee’s ultimate
entitlement to indemnification under the other provisions of this
Agreement. Advances
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shall include any and all reasonable
Expenses incurred pursuing an action to enforce this right of
advancement, including Expenses incurred preparing and forwarding
statements to the Company to support the advances claimed.
Indemnitee shall qualify for advances solely upon the execution and
delivery to the Company of an undertaking providing that Indemnitee
undertakes to repay the advance to the extent that it is ultimately
determined by a final decision by a court of competent jurisdiction
that Indemnitee is not entitled to be indemnified by the Company.
This Section 9(a) shall not apply to any claim made by
Indemnitee for which inde
