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INDEMNIFICATION AGREEMENT
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This INDEMNIFICATION AGREEMENT
(the “Agreement”) is made and entered into as of this
____day of ________, 2005, by and between ____________________, a
____________________ corporation (the “Company”), and
______________________ (“Indemnitee”).
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A.
Competent and experienced persons are reluctant to serve or to
continue to serve corporations as directors or in other capacities
unless they are provided with adequate protection through insurance
or indemnification (or both) against claims and actions against
them arising out of their service to and activities on behalf of
those corporations.
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B.
The current uncertainties relating to the availability of adequate
insurance for directors and officers have increased the difficulty
for corporations to attract and retain competent and experienced
persons.
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C.
The Board of Directors of the Company has determined that the
continuation of present trends in litigation will make it more
difficult to attract and retain competent and experienced persons,
that this situation is detrimental to the best interests of the
Company’s stockholders, and that the Company should act to
assure its directors and officers that there will be increased
certainty of adequate protection in the future.
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D.
Despite provisions in the Articles of Incorporation and Bylaws of
the Company, full indemnification and advancement of expenses is
uncertain without this Agreement because: (1) the Bylaws give the
Company discretion whether to advance expenses, (2) the Articles of
Incorporation or Bylaws of the Company could be amended, and (3)
Georgia law could become more permissive than the Articles of
Incorporation or Bylaws of the Company.
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E.
It is reasonable, prudent and necessary for the Company to obligate
itself contractually to indemnify its directors and officers to the
fullest extent permitted by applicable law in order to induce them
to serve or continue to serve the Company.
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F.
Indemnitee is willing, to serve, continue to serve, and to take on
additional service for or on behalf of the Company on the condition
that he be indemnified to the fullest extent permitted by
law.
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G.
Concurrently with the execution of this Agreement, Indemnitee is
agreeing to serve or to continue to serve as a director or officer
of the Company.
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NOW, THEREFORE, in consideration of the foregoing premises,
Indemnitee’s agreement to serve as a director or officer of
the Company, and the covenants contained in this Agreement, the
Company and Indemnitee hereby covenant and agree as
follows:
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(a)
Acquiring Person : shall mean any Person other than the
Company, any of the Company’s Subsidiaries, any employee
benefit plan of the Company or of a Subsidiary of the Company or of
a corporation owned directly or indirectly by the stockholders of
the Company in substantially the same proportions as their
ownership of stock of the Company, or any trustee or other
fiduciary holding securities under an employee benefit plan of the
Company or of a Subsidiary of the Company or of a corporation owned
directly or indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of stock of
the Company.
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(b)
Change in Control : shall be deemed to have occurred
if:
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(i)
any Acquiring Person is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)),
directly or indirectly, of securities of the Company representing
twenty percent or more of the combined voting power of the then
outstanding Voting Securities of the Company; or
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(ii) members of
the Incumbent Board cease for any reason to constitute at least a
majority of the Board of Directors of the Company; or
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(iii) a public
announcement is made of a tender or exchange offer by any Acquiring
Person for fifty percent or more of the outstanding Voting
Securities of the Company, and the Board of Directors of the
Company approves or fails to oppose that tender or exchange offer
in its statements in Schedule 14D-9 under the Exchange Act;
or
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(iv) the
stockholders of the Company approve a merger or consolidation of
the Company with any other entity (or, if no such approval is
required, the consummation of such a merger or consolidation of the
Company), other than a merger or consolidation that would result in
the Voting Securities of the Company outstanding immediately prior
to the consummation thereof continuing to represent (either by
remaining outstanding or by being converted into Voting Securities
of the surviving entity or of a parent of the surviving entity) a
majority of the combined voting power of the Voting Securities of
the surviving entity (or its parent) outstanding immediately after
that merger or consolidation; or
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(v)
the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all the
Company’s assets (or, if no such approval is required, the
consummation of such a liquidation, sale, or disposition in one
transaction or series of related transactions) other than a
liquidation, sale or disposition of all or substantially all the
Company’s assets in one transaction or a series of related
transactions to a corporation owned directly or indirectly by the
stockholders of the Company in substantially the same proportions
as their ownership of stock of the Company.
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(c)
Claim : any threatened, pending or completed action, suit or
proceeding, or any inquiry or investigation (including discovery),
whether conducted by the Company or any other party, that
Indemnitee in good faith believes might lead to the institution of
any action, suit or proceeding, whether civil, criminal,
administrative, investigative or other.
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(d)
Expenses : all costs, expenses (including attorneys’
and expert witnesses’ fees) and obligations paid or incurred
in connection with investigating, defending, being a witness in or
participating in (including on appeal), or preparing to defend, be
a witness in or participate in any Claim relating to any
Indemnifiable Event.
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(e)
Incumbent Board : individuals who, as the date hereof,
constitute the Board of Directors of the Company and any other
individual who becomes a director of the Company after that date
and whose election or appointment by the Board of Directors or
nomination for election by the Company’s stockholders was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board.
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(f)
Indemnifiable Event : any event or occurrence related to the
fact that Indemnitee is or was a director, officer, employee, agent
or fiduciary of the Company, or is or was serving at the request of
the Company as a director, officer, employee, trustee, agent or
fiduciary of another corporation, partnership, joint venture,
employee benefit plan, trust or other enterprise, or by reason of
any thing done or not done by Indemnitee in any such capacity. For
purposes of this Agreement, the Company agrees that
Indemnitee’s service on behalf of or with respect to any
Subsidiary of the Company shall be deemed to be at the request of
the Company.
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(g)
Person : shall mean any person or entity of any nature
whatsoever, specifically including an individual, a firm, a
company, a corporation, a partnership, a trust or other entity. A
Person, together with that Person’s Affiliates and Associates
(as those terms are defined in Rule 12b-2 under the Exchange Act),
and any Persons acting as a partnership, limited partnership, joint
venture, association, syndicate or other group (whether or not
formally organized), or otherwise acting jointly or in concert or
in a coordinated or consciously parallel manner (whether or not
pursuant to any express agreement), for the purpose of acquiring,
holding, voting or disposing of securities of the Company with such
Person, shall be deemed a single “Person.”
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(h)
Potential Change in Control : shall be deemed to have
occurred if (i) the Company enters into an agreement, the
consummation of which would result in the occurrence of a Change in
Control; (ii) any Person (including the Company) publicly announces
an intention to take or to consider taking actions that, if
consummated, would constitute a Change in Control; (iii) any
Acquiring Person who is or becomes the beneficial owner, directly
or indirectly, of securities of the Company representing 10% or
more of the combined voting power of the then outstanding Voting
Securities of the Company, increases his beneficial ownership of
such securities by 5% or more over the percentage so owned by that
Person on the date hereof; or (iv) the Board of Directors of the
Company adopts a resolution to the effect that, for purposes of
this Agreement, a Potential Change in Control has
occurred.
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(i)
Reviewing Party : any appropriate person or body consisting
of a member or members of the Company’s Board of Directors or
any other person or body appointed by the Board (including Special
Counsel referred to in Section 3) who is not a party to the
particular Claim for which Indemnitee is seeking
indemnification.
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(j)
Special Counsel : special, independent counsel selected by
Indemnitee and approved by the Company (which approval shall not be
unreasonably withheld), and who has not otherwise performed
services for the Company within the last three years (other than as
Special Counsel under this Agreement or similar agreements) or for
Indemnitee.
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(k)
Subsidiary : with respect to any Person, any corporation or
other entity of which a majority of the voting power of the voting
equity securities or equity interest is owned, directly or
indirectly, by that Person or that Person otherwise directly or
indirectly controls such corporation or other entity.
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(l)
Voting Securities : any securities that vote generally in
the election of directors, in the admission of general partners, or
in the selection of any other similar governing body.
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2.
Basic Indemnification Arrangements .
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(a)
In the event Indemnitee was, is or becomes a party to or witness or
other participant in, or is threatened to be made a party to or
witness or other participant in, a Claim by reason of (or arising
in part out of) an Indemnifiable Event, the Company shall indemnify
Indemnitee to the fullest extent permitted by law as soon as
practicable but in any event no later than 30 days after written
demand is presented to the Company, against any and 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 or amounts paid in settlement) of that
Claim. If so requested by Indemnitee, the Company shall advance
(within two business days of that request) any and all Expenses to
Indemnitee (an “Expense Advance”).
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(b)
Notwithstanding the foregoing, (i) the obligations of the Company
under Section 2(a) shall be subject to the condition that the
Reviewing Party shall not have determined (in a written opinion, in
any cas
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