INDEMNIFICATION
AGREEMENT
THIS AGREEMENT
(“Agreement”), which provides for indemnification,
expense advancement and other rights under the terms and conditions
set forth, is made and entered into as of the 25th day of February,
2009 between Cardiovascular Systems, Inc., a Delaware corporation
(the “Company”), and
(“Indemnitee”).
WHEREAS,
Indemnitee is serving as a director and/or officer of the Company,
and as such is performing a valuable service for the Company;
and
WHEREAS,
competent and experienced persons are becoming increasingly
reluctant to serve publicly-held corporations as directors and/or
officers or in other fiduciary capacities at the request of their
companies unless they are provided with adequate protection through
liability insurance and adequate company indemnification against
risks of claims and actions against them arising out of their
service to the corporation; and
WHEREAS,
the Board of Directors has determined that the ability to attract
and retain qualified persons to serve as directors and/or officers
is in the best interests of the Company and its stockholders, and
that the Company should act to assure such persons that there will
be adequate certainty of protection through insurance and
indemnification against risks of claims and actions against them
arising out of their service to and activities on behalf of the
Company; and
WHEREAS,
Section 145 of the General Corporation Law of Delaware permits
the Company to indemnify and advance expenses to its officers and
directors and to indemnify and advance expenses to persons who
serve at the request of the Company as directors, officers,
employees, or agents of other corporations or enterprises;
and
WHEREAS,
the Company has adopted provisions in its Bylaws addressing
indemnification and advancement of expenses to its officers and
directors, and providing that the Company may enter into
indemnification agreements which specify the rights and obligations
of the Company and such persons with respect to indemnification,
advancement of expenses and related matters; and
WHEREAS,
the Company desires to have Indemnitee continue to serve in an
Official Capacity (as defined below), and Indemnitee desires to
continue so to serve the Company, provided, and on the express
condition, that Indemnitee is furnished with the indemnity and
other rights set forth in this Agreement;
Now,
therefore, in consideration of Indemnitee’s continued service
to the Company in Indemnitee’s Official Capacity, the parties
hereto agree as follows:
1.
Definitions . For purposes of this Agreement:
(a) “Change
of Control” means a change in control of the Company
occurring after the Effective Date of a nature that would be
required to be reported in response to Item 5.01 of Current
Report on Form 8-K (or in response to any similar item on any
similar schedule or form) promulgated under the Securities Exchange
Act of 1934 (the “Act”), whether or not the Company is
then subject to such reporting requirement; provided, however,
that, without limitation, such a Change of Control shall be deemed
to have occurred if after the Effective Date (i) any
“person” (as such term is used in Sections 13(d) and
14(d) of the Act) becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Act), directly or indirectly,
of securities of the Company representing thirty percent (30%) or
more of the combined voting power of the Company’s then
outstanding securities without the prior approval of at least
two-thirds of the members of the Board of Directors in office
immediately prior to such person attaining such percentage;
(ii) the Company is a party to a merger, consolidation, sale
of assets or other reorganization, or a proxy contest, as a
consequence of which members of the Board of Directors in office
immediately prior to such transaction or event constitute less than
a majority of the Board of Directors of the surviving corporation
or parent corporation (in the case of a merger in which the Company
becomes a wholly-owned subsidiary of another entity) thereafter; or
(iii) during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board of
Directors (including for this purpose any new director whose
election or nomination for election by the Company’s
shareholders was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning
of such period) cease for any reason to constitute at least a
majority of the Board of Directors.
(b) “Official
Capacity” means Indemnitee’s corporate status as an
officer and/or director and any other fiduciary capacity in which
Indemnitee serves the Company, its subsidiaries and affiliates, and
any other entity which Indemnitee serves in such capacity at the
request of the Company’s CEO, its Board of Directors or any
committee of its Board of Directors. “Official
Capacity” also refers to all actions which Indemnitee takes
or does not take while serving in such capacity.
(c) “Disinterested
Director” means a director of the Company who is not and was
not a party to the Proceeding in respect of which indemnification
or advancement of expenses is sought by Indemnitee.
(d) “Effective
Date” means the date first above written.
(e) “Expenses”
shall include all direct and indirect costs including, but not
limited to, reasonable attorneys’ fees, retainers, court
costs, transcript costs, fees of experts, witness fees, advisory
fees, travel expenses, duplicating costs, printing and binding
costs, telephone charges, postage, delivery service fees, and all
other disbursements or expenses of the types customarily
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incurred in
connection with investigating, prosecuting, defending (or preparing
to investigate, prosecute or defend) a Proceeding, or being or
preparing to be a witness in a Proceeding.
(f) “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 (5) years has been, retained to
represent: (i) the Company or 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 “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 Company or
Indemnitee in an action to determine Indemnitee’s rights
under this Agreement.
(g) “Proceeding”
includes any actual or threatened inquiry, investigation, action,
suit, arbitration, or any other such actual or threatened action or
occurrence, whether civil, criminal, administrative or
investigative, whether or not initiated prior to the Effective
Date, except a proceeding initiated by an Indemnitee pursuant to
Section 8 of this Agreement to enforce his or her rights under
this Agreement.
2.
Service by Indemnitee . Indemnitee will serve and/or
continue to serve in Indemnitee’s Official Capacity
faithfully and to the best of Indemnitee’s ability so long as
Indemnitee has or holds such Official Capacity. Indemnitee may at
any time and for any reason resign from Indemnitee’s Official
Capacity (subject to any other contractual obligation or any
obligation imposed by operation of law).
(a)
General . Except as otherwise provided in this Agreement,
the Company shall indemnify Indemnitee to the fullest extent
permitted by the Delaware General Corporation Law as such law may
from time to time be amended. Indemnitee shall be entitled to the
indemnification provided in this Section if, by reason of his or
her Official Capacity, Indemnitee is a party or is threatened to be
made a party to any Proceeding or by reason of anything done or not
done by Indemnitee in his or her Official Capacity. The Company
shall indemnify Indemnitee against all costs, judgments, penalties,
fines, liabilities, amounts paid in settlement by or on behalf of
Indemnitee in any Proceeding, and Expenses actually and reasonably
incurred by Indemnitee in connection with such Proceeding, if
Indemnitee is determined to have met the standard of conduct set
forth in Section 7(a).
(b)
Exceptions . Indemnitee shall receive no indemnification
hereunder:
(i) to the
extent such indemnification is expressly prohibited by Delaware law
or the public policies of Delaware, the United States of America or
agencies of any governmental authority in any jurisdiction
governing the matter in question;
(ii) to
the extent payment is actually made to Indemnitee for the amount to
which Indemnitee would otherwise have been entitled under this
Agreement pursuant to an insurance policy, or another indemnity
agreement or arrangement from the Company or other person or
entity;
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(iii) in
connection with any Proceeding, or part thereof (including claims
and permissive counterclaims) initiated by Indemnitee, except a
judicial proceeding pursuant to Section 8 to enforce rights
under this Agreement, unless the Proceeding (or part thereof) was
authorized by the Board of Directors of the Company;
(iv) with
respect to any Proceeding brought by or on behalf of the Company
against Indemnitee if Indemnitee failed to act in good faith and in
a manner the Indemnitee reasonably believed to be in or not opposed
to the best interests of the Company;
(v) with
respect to any claim, issue, or matter as to which Delaware law
expressly prohibits such indemnification by reason of any
adjudication of liability of Indemnitee to the Company, 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 an adjudication of liability but in
view of all the circumstances of the case, Indemnitee is entitled
to indemnification for such Expenses as such court shall deem
proper.
4.
Advancement of Expenses .
(a)
General . Except as otherwise provided in this Agreement,
the Company shall advance Expenses to Indemnitee to the fullest
extent permitted by the Delaware General Corporation Law as such
law may from time to time be amended. Indemnitee shall be entitled
to the advancement provided in this Section if, by reason of his or
her Official Capacity, Indemnitee is a party or is threatened to be
made a party to any Proceeding or by reason of anything done or not
done by Indemnitee in his or her Official Capacity. The Company
shall advance to Indemnitee Expenses actually and reasonably
incurred by Indemnitee in connection with such Proceeding.
Notwithstanding the foregoing, unless otherwise determined pursuant
to Section 5, the Company will not advance or continue to
advance Expenses to any person (except by reason of the fact that
such person is or was a director of the Company in which event this
sentence will not apply) in any proceeding if a determination is
reasonably and promptly made (i) by the Board of Directors by
a majority vote of Disinterested Directors, even though less than a
quorum (ii) if there are no Disinterested Directors or the
Disinterested Directors so direct, by Independent Counsel in a
written opinion or (iii) by a majority vote of a committee of
Disinterested Directors designated by a majority vote of
Disinterested Directors, that the facts known to the
decision-making party at the time such determination is made
demonstrate that such person acted in bad faith or in a manner that
such person did not believe to be in or not opposed to the best
interests of the Company, or, with respect to any criminal
proceeding, that such person had reasonable cause to believe his
conduct was unlawful.
(b)
Undertaking In Connection With Request For Advancement . As
a condition precedent to the Company’s advancement of
Expenses to Indemnitee, Indemnitee shall provide the Company with
(a) a written affirmation by such person of his or her good
faith belief that he or she has met the standard of conduct
necessary for indemnification under §145 of the Delaware
General Corporation Laws, and (b) an undertaking, in
substantially the form attached as Exhibit 1 , by or on
behalf of Indemnitee to reimburse such amount if it is finally
determined, after all
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appeals by a
court of competent jurisdiction that Indemnitee is not entitled to
be indemnified against such Expenses by the Company as provided by
this Agreement or otherwise. Indemnitee’s undertaking to
reimburse any such amounts is not required to be
secured.
(c)
Exceptions . The Company shall not be obligated to advance
Expenses to Indemnitee with respect to claims initiated or brought
voluntarily by such Indemnitee and not by way of defense, except
(i) as set forth in Section 8(e); (ii) in specific
cases if the Company’s Board of Directors has approved the
initiation or bringing of such a claim; or (iii) as otherwise
required under Section 145 of the DGCL.
5.
Indemnification for Expenses of Successful Party
.
Notwithstanding
the limitations of any other provisions of this Agreement, to the
extent that Indemnitee is successful on the merits or otherwise in
defense of any Proceeding, or in defense of any claim, issue or
matter therein, including, without limitation, the dismissal of any
action without prejudice, or if it is ultimately determined that
Indemnitee is otherwise entitled to be indemnified against
Expenses
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