Exhibit 10.1
INDEMNIFICATION
AGREEMENT
This
Indemnification Agreement, dated as of ___, 200_, is made by and
between Versar, Inc., a Delaware corporation (the
“Corporation”) and [name], a [director/officer] of the
Corporation (the “Indemnitee”).
RECITALS
A. The
Corporation recognizes that competent and experienced persons are
increasingly reluctant to serve or to continue to serve as
directors or officers of corporations unless they are protected by
comprehensive liability insurance or indemnification, or both, due
to increased exposure to litigation costs and risks resulting from
their service to such corporations, the exposure frequently bears
no reasonable relationship to the compensation of such directors
and officers and plaintiffs often seek damages in such large
amounts and the costs of litigation may be so enormous (whether or
not the case is meritorious), that the defense and/or settlement of
such litigation is beyond the personal resources of directors and
officers;
B. The
Corporation, after reasonable investigation, has determined that
the liability insurance coverage presently available to the
Corporation may be inadequate in certain circumstances to cover all
possible exposure for which Indemnitee should be protected and
believes that the interests of the Corporation and its stockholders
would best be served by a combination of such insurance and the
indemnification by the Corporation of the directors and officers of
the Corporation;
C. The
Corporation’s Certificate of Incorporation requires the
Corporation to indemnify its directors and officers to the fullest
extent permitted by the Delaware General Corporation Law (the
“DGCL”), but provides that the indemnification
provisions set forth therein are not exclusive, and contemplates
that contracts may be entered into between the Corporation and its
directors and officers with respect to indemnification;
D. Section
145 of the DGCL (“Section 145”) empowers the
Corporation to indemnify its officers, directors, employees and
agents and persons who serve, at the request of the Corporation, as
the directors, officers, employees or agents of other corporations
or enterprises, by agreement and expressly provides that the
indemnification provided by Section 145 is not
exclusive;
E. Section
102(b)(7) of the DGCL allows a corporation to include in its
certificate of incorporation a provision limiting or eliminating
the personal liability of a director for monetary damages in
respect of claims by stockholders and corporations for breach of
certain fiduciary duties, and the Corporation has so provided in
its Certificate of Incorporation that each Director shall be
exculpated from such liability to the extent permitted by the
DGCL;
F. The
Board of Directors has determined that contractual indemnification
as set forth herein is not only reasonable and prudent but also
promotes the best interests of the Corporation and its
stockholders;
G. The
Corporation desires and has requested Indemnitee to serve or
continue to serve as a director or officer of the Corporation free
from undue concern for unwarranted claims for damages arising out
of or related to such services to the Corporation; and
H. Indemnitee
is willing to serve, continue to serve or to provide additional
service for or on behalf of the Corporation on the condition that
he is furnished the indemnity provided for herein.
NOW, THEREFORE,
in consideration of the mutual covenants and agreements set forth
below, and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:
Section 1.
Generally .
To the fullest
extent permitted by the laws of the State of Delaware:
(a) The
Corporation shall indemnify Indemnitee if Indemnitee was or is a
party or is threatened to be made a party to any threatened,
pending or completed action, suit, proceeding or any alternative
dispute resolution process, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the
Corporation, except to the extent set forth in Section 1(c) below),
by reason of the fact that Indemnitee is or was or has agreed to
serve at the request of the Corporation as a director, officer,
employee or agent of the Corporation, or while serving as a
director or officer of the Corporation, is or was serving or has
agreed to serve at the request of the Corporation as a director,
officer, employee or agent (which, for purposes hereof, shall
include a trustee, partner or manager or similar capacity) of
another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, or by reason of any action
alleged to have been taken or omitted in such
capacity. For the avoidance of doubt, the foregoing
indemnification obligation includes, without limitation, claims for
monetary damages against Indemnitee in respect of an alleged breach
of fiduciary duties, to the fullest extent permitted under Section
102(b)(7) of the DGCL as in existence on the date
hereof.
(b) The
indemnification provided by this Section 1 shall be from and
against expenses (including attorneys’ fees), judgments,
fines and amounts paid in settlement (if such settlement is
approved in advance by the Corporation, which approval shall not be
unreasonably withheld) actually and reasonably incurred by
Indemnitee or on Indemnitee’s behalf in connection with such
action, suit, proceeding, or alternative dispute resolution and any
appeal therefrom, but shall only be provided 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 action, suit or proceeding, had no
reasonable cause to believe Indemnitee’s conduct was
unlawful.
(c)
Notwithstanding the foregoing provisions of this Section 1, in the
case of any threatened, pending or completed action or suit by or
in the right of the Corporation to procure a judgment in its favor
by reason of the fact that Indemnitee is or was a director,
officer, employee or agent of the Corporation, or while serving as
a director or officer of the Corporation, is or was serving or has
agreed to serve at the request of the Corporation as a director,
officer, employee or agent of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise, no
indemnification shall be made in respect of any claim, issue or
matter as to which Indemnitee shall have been adjudged to be liable
to the Corporation unless, and only to the extent that, the
Delaware Court of Chancery 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 the circumstances of
the case, Indemnitee is fairly and reasonably entitled to indemnity
for such expenses which the Delaware Court of Chancery or such
other court shall deem proper.
(d) The
termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that
Indemnitee did not act in good faith and in a manner which
Indemnitee 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
Indemnitee’s conduct was unlawful.
Section 2.
Successful Defense; Partial Indemnification .
(a) To the
extent that Indemnitee has been successful on the merits or
otherwise in defense of any action, suit, proceeding or alternative
dispute resolution process referred to in Section 1 hereof or in
defense of any claim, issue or matter therein, Indemnitee shall be
indemnified against expenses (including attorneys’ fees)
actually and reasonably incurred in connection therewith. For
purposes of this Agreement and without limiting the
foregoing, if any action, suit or proceeding is disposed of or
alternative dispute is resolved, on the merits or otherwise
(including a disposition without prejudice), without (i) the
disposition being adverse to Indemnitee, (ii) an adjudication that
Indemnitee was liable to the Corporation, (iii) a plea of guilty or
nolo contendere by Indemnitee, (iv) an adjudication that Indemnitee
did not act in good faith and in a manner 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 Indemnitee had reasonable cause to believe
Indemnitee’s conduct was unlawful, Indemnitee shall be
considered for the purposes hereof to have been wholly successful
with respect thereto.
(b) If
Indemnitee is entitled under any provision of this Agreement to
indemnification by the Corporation for some or a portion of the
expenses (including attorneys’ fees), judgments, fines or
amounts paid in settlement actually and reasonably incurred by
Indemnitee or on Indemnitee’s behalf in connection with any
action, suit, proceeding or investigation, or in defense of any
claim, issue or matter therein, and any appeal therefrom but not,
however, for the total amount thereof, the Corporation shall
nevertheless indemnify Indemnitee for the portion of such expenses
(including attorneys’ fees), judgments, fines or amounts paid
in settlement to which Indemnitee is entitled.
Section 3.
Determination That Indemnification Is Proper .
(a) Any
indemnification hereunder shall (unless otherwise ordered by a
court) be made by the Corporation unless a determination is made
that indemnification of such person is not proper in the
circumstances because he or she has not met the applicable standard
of conduct set forth in Section 1(b) hereof. Any such determination
shall be made (i) by a majority vote of the directors who are not
parties to the action, suit, proceeding or alternative dispute in
question (“disinterested directors”), even if less than
a quorum, (ii) by a committee of disinterested directors designated
by majority vote of disinterested directors, even if less than a
quorum, (iii) by a majority vote of a quorum of the outstanding
shares of stock of all classes entitled to vote on the matter,
voting as a single class, which quorum shall consist of
stockholders who are not at that time parties to the action, suit,
proceeding or alternative dispute in question, (iv) by independent
legal counsel meeting the standards of independence set forth
in Section 3(b) and, except to the extent set forth in Section 3(b)
below, chosen by the Corporation, or (v) by a court of competent
jurisdiction (any such determining body, the “Reviewing
Party”). If there has not been a Change in
Control, the Reviewing Party shall be selected by the Board of
Directors of the Corporation, and if there has been a Change in
Control, other than a Change in Control which has been approved by
a majority of the Corporation’s Board of Directors who are
directors immediately prior to such Change in Control, the
Reviewing Party shall be the special independent counsel referred
to in Section 3(b) below.
(b) The
Corporation agrees that if there is a Change in Control in the
Corporation, other than a Change in Control which has been approved
by a majority of the Corporation’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 the Indemnitee to indemnification under this Agreement or
any other agreement or under applicable law or the
Corporation’s Certificate of Incorporation or Bylaws now or
hereafter in effect relating to similar indemnification, the
Corporation shall submit any determination as to Indemnitee’s
right to indemnification under Section 3(a) only to special
independent counsel selected by the Indemnitee and approved by the
Corporation, which approval shall not be unreasonably
withheld. Such special independent counsel shall not
have otherwise performed services for the Corporation or the
Indemnitee, other than in connection with such matters, within the
last five years. Such 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. Such counsel, among other things, shall
render its written opinion to the Corporation and the Indemnitee as
to whether and to what extent the Indemnitee would be permitted to
be indemnified under applicable law and this
Agreement. The Corporation agrees to pay the reasonable
fees of the special independent counsel referred to above and to
indemnify fully such counsel against any and all expenses
(including attorneys’ fees), claims, liabilities and damages
arising out of or relating to this Agreement or the
engagement of such special independent counsel pursuant to this
Agreement.
Section 4.
Advance Payment of Expenses; Notification and Defense of Claim
Repayment .
(a) Expenses
(including attorneys’ fees) incurred by Indemnitee in
defending a threatened or pending civil, criminal, administrative
or investigative action, suit, proceeding or alternative dispute
resolution process, or in connection with an enforcement action
pursuant to Section 5(b), shall be paid by the Corporation in
advance of the final disposition of such matter within thirty (30)
days after receipt by the Corporation of (i) a statement or
statements from Indemnitee requesting such advance or advances from
time to time, and (ii) a confirmation of Indemnitee’s
obligation to repay such amount or amounts to the extent that, it
shall ultimately be determined that Indemnitee is not entitled to
be indemnified by the Corporation as authorized by this Agreement
or otherwise as set forth in Section 4(e) of this
Agreement. Such undertaking shall be accepted without
reference to the financial ability of Indemnitee to make such
repayment. Advances shall be unsecured and
interest-free.
(b) Promptly
after receipt by Indemnitee of notice of the commencement of any
action, suit, proceeding or alternative dispute resolution process,
Indemnitee shall, if a claim thereof is to be made against the
Corporation hereunder, notify the Corporation of the commencement
thereof. The failure to promptly notify the Corporation
of the commencement of the action, suit, proceeding or alternative
dispute resolution process, or Indemnitee’s request for
indemnification, will not relieve the Corporation from any
liability that it may have to Indemnitee hereunder, except to the
extent the Corporation is prejudiced in its defense of such matter
as a result of such failure.
(c) In the
event the Corporation shall be obligated to pay the expenses of
Indemnitee with respect to an action, suit, proceeding or
alternative dispute resolution process, as provided in this
Agreement, the Corporation, if appropriate, shall be entitled to
assume the defense of such action, suit, proceeding or alternative
dispute resolution process, with counsel reasonably acceptable to
Indemnitee, upon the delivery to Indemnitee of written notice of
its election to do so. After delivery of such notice,
approval of such counsel by Indemnitee and the retention of such
counsel by the Corporation, the Corporation will not be liable to
Indemnitee under this Agreement for any fees of counsel
subsequently incurred by Indemnitee with respect to the same
action, suit, proceeding or alternative dispute, provided that (1)
Indemnitee shall have the right to employ Indemnitee’s own
counsel in such action, suit, proceeding or alternative dispute
resolution process at Indemnitee’s expense and (2) if (i) the
employment of counsel by Indemnitee has been previously authorized
in writing by the Corporation, (ii) counsel to the Corporation or
Indemnitee shall have reasonably concluded that there may be a
conflict of interest or position, or reasonably believes that a
conflict is likely to arise, on any significant issue between the
Corporation and Indemnitee in the conduct of any such defense,
(iii) after a Change in Control, the employment of separate counsel
by Indemnitee has been determined appropriate by special
independent counsel chosen pursuant to Section 3(b), or (iv) the
Corporation shall not, in fact, have employed counsel to assume
such defense, then the fees and expenses of Indemnitee’s
counsel 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
Indemnitee, to assume the defense of any claim brought by or in the
right of the Corporation or as to which counsel for the Corporation
or Indemnitee shall have reasonably made the conclusion provided
for in clause (ii) above.
(d)
Notwithstanding any other provision of this Agreement to the
contrary, to the extent that Indemnitee is, by reason of
Indemnitee’s corporate status with respect to the Corporation
or any corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise which Indemnitee is or was serving
or has agreed to serve at the request of the Corporation, a witness
or otherwise participates in any action, suit, proceeding or
alternative dispute process at a time when Indemnitee is not a
party in the action, suit, proceeding or alternative dispute, the
Corporation shall
