Exhibit 10.3
INDEMNIFICATION
AGREEMENT
BETWEEN
POWER ONE, INC.
AND
[DIRECTOR
INDEMNITEE]
TABLE OF CONTENTS
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Page
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1.
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Definitions
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2
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2.
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Indemnification
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3
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2.1
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Indemnification in Third-Party
Actions
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3
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2.2
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Indemnification in Proceedings By or In the Name
of the Company
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3
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2.3
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Contribution/Jointly Indemnifiable
Claims
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3
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2.4
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Partial Indemnification
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4
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2.5
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Indemnification Hereunder Not
Exclusive
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4
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2.6
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Indemnification of Indemnified Costs of
Successful Party
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4
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2.7
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Indemnified Costs Advanced
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4
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2.8
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Limitations on Indemnification
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5
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3.
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Presumptions
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5
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3.1
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Presumption Regarding Standard of
Conduct
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5
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3.2
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Determination of Right to
Indemnification
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6
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3.2.1
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Burden
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6
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3.2.2
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Standard
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6
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4.
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Other Agreements
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6
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4.1
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Change in Control Event
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6
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4.2
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Maintenance of Liability Insurance
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6
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4.2.1
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Affirmative Covenant of the Company
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6
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4.2.2
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Indemnitee Named as Insured
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7
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4.3
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Agreement to Serve
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7
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4.4
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Effect of this Agreement on Employment
Agreement
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7
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4.5
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Nature of Rights; Separability
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7
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4.6
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Savings Clause
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7
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4.7
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Repayment of Indemnified Costs
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7
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4.8
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Repayment
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8
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4.9
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Mutual Acknowledgment
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8
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4.10
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Duration of Agreement
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8
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5.
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Indemnification Procedure
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8
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5.1
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Notice
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8
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i
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5.2
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Company Participation
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8
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5.3
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Settlement
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9
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5.4
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Subrogation
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9
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6.
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Miscellaneous Provisions
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9
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6.1
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Amendments; Waivers
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9
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6.2
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Interpretation; Governing Law
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9
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6.3
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Headings
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9
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6.4
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Consent to Jurisdiction
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9
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6.5
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Counterparts
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9
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6.6
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Successors and Assigns
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9
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6.7
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Expenses; Legal Fees
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10
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6.8
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Representation by Counsel;
Interpretation
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10
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6.9
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Specific Performance
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10
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6.10
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Time is of the Essence
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10
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6.11
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Notices
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10
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POWER ONE, INC.
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (this
“ Agreement ”) is made as of
[ ],
2009, by and between Power One, Inc., a Delaware corporation
(the “ Company ”), and the individual whose name
appears below the word “Indemnitee” on the signature
page of this Agreement (the “ Indemnitee
”). In consideration of the services of the Indemnitee
to the Company, and to induce the Indemnitee to provide services as
a director and/or officer of the Company or any of its
subsidiaries, the Company and the Indemnitee agree as
follows:
RECITALS
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A.
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The Indemnitee has agreed to serve, or as
applicable, to continue to provide service, as a director and/or
officer of the Company or any of its subsidiaries, and in such
capacity will render valuable services to the Company.
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B.
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The Company has concluded that insurance and
statutory indemnity provisions may provide inadequate protection to
individuals requested to serve as its directors and
officers.
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C.
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To induce and encourage the Indemnitee to serve
as a director and/or officer of the Company or any of its
subsidiaries, the Company’s Board of Directors has decided
that this Agreement is not only reasonable and prudent, but
necessary, to promote and ensure the best interests of the Company
and its stockholders.
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AGREEMENT
1.
Definitions
As used in this Agreement:
“ Agent ” means a director,
officer, employee, consultant, fiduciary or agent of the Company or
of any other corporation, partnership, joint venture, trust,
employee benefit plan, or other enterprise that the Indemnitee
served in any of such capacities at the request of the
Company.
“ Change in Control Event ”
has the same meaning as a “Change in Control Event” as
defined in the Company’s 2004 Stock Incentive Plan (as it may
be amended from time to time).
“ DGCL ” means the General
Corporation Law of the State of Delaware.
“ Expenses ” includes, but is
not limited to, attorneys’ fees, disbursements and retainers,
accounting and witness fees, travel and deposition costs, expenses
of investigations judicial or administrative proceedings or appeals
and amounts paid in settlement by or on behalf of the Indemnitee,
and any expenses of establishing a right to indemnification
pursuant to this Agreement, to the extent actually and reasonably
incurred by the Indemnitee in connection with any Proceeding.
“Expenses” does not include the amount of judgments,
fines, penalties or ERISA excise taxes actually levied against the
Indemnitee.
“ Final Determination ” or
“ Finally Determined ” means a determination
made by a court of competent jurisdiction as to which there is no
further right or option of appeal or as to which the time within
which an appeal must be filed has expired without such
filing.
“ Indemnified Costs ” means
all Expenses, judgments, fines, penalties and ERISA excise taxes
actually and reasonably incurred by the Indemnitee in connection
with the investigation, defense, appeal, or settlement of any
Proceeding.
“ Indemnitee-Related Entities
” means any corporation, limited liability company,
partnership, joint venture, trust, employee benefit plan or other
enterprise (other than the Company or any other corporation,
limited liability company, partnership, joint venture, trust,
employee benefit plan or other enterprise for which the Indemnitee
has agreed, on behalf of the Company or at the Company’s
request, to serve as a director, officer, employee, consultant,
fiduciary or agent and which service is covered by the indemnity
described in this Agreement) from whom the Indemnitee may be
entitled to indemnification or advancement of expenses with respect
to which, in whole or in part, the Company may also have an
indemnification or advancement obligation (other than as a result
of obligations under an insurance policy).
“ Jointly Indemnifiable Claims
” shall be broadly construed and shall include, without
limitation, any action, suit or proceeding for which the Indemnitee
shall be entitled to indemnification or advancement of expenses
from both the Indemnitee-Related Entities and the Company pursuant
to applicable law, any agreement or the certificate of
incorporation, bylaws, partnership agreement, operating agreement,
certificate of formation, certificate of limited partnership or
comparable organizational documents of the Company, or any parent
or subsidiary of the Company, or the Indemnitee-Related Entities,
as applicable.
2
A “ Potential Change in Control
Event ” will be deemed to have occurred if:
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(a)
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the Company enters into an agreement or
arrangement that would constitute a Change in Control Event if
consummated;
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(b)
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any person (including the Company) publicly
announces an intention to take or to consider taking actions that
would constitute a Change in Control Event if consummated;
or
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(c)
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the Board of Directors adopts a resolution to
the effect that, for purposes of this Agreement, a Potential Change
in Control Event has occurred.
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“ Proceeding ” means any
threatened, pending or completed action, suit or proceeding
(including appeals thereof), whether brought by or in the name of
the Company or otherwise and whether of a civil, criminal or
administrative or investigative nature, in which the Indemnitee is
or will be a party, witness or other participant in, because the
Indemnitee is or was an Agent, whether or not the Indemnitee is
serving in such capacity at the time any liability or Expense is
incurred for which indemnification or reimbursement is to be
provided under this Agreement.
2.
Indemnification
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2.1
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Indemnification in Third-Party
Actions . The Company
will indemnify the Indemnitee if the Indemnitee becomes a party to,
is threatened to be made a party to, is a witness or other
participant in, or is otherwise involved in any Proceeding (other
than a Proceeding by or in the name of the Company to procure a
judgment in its favor), because the Indemnitee is or was an Agent,
against all Indemnified Costs, to the fullest extent permitted by
applicable law.
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2.2
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Indemnification in Proceedings By or In the Name
of the Company . The
Company will indemnify the Indemnitee if the Indemnitee is a party
to, is threatened to be made a party to, is a witness or other
participant in, or is otherwise involved in any Proceeding by or in
the name of the Company to procure a judgment in its favor because
the Indemnitee was or is an Agent of the Company against all
Indemnified Costs in connection with the defense or settlement of
the Proceeding, to the fullest extent permitted by applicable
law.
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2.3
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Contribution/Jointly Indemnifiable
Claims .
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a.
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In order to provide for just and equitable
contribution in circumstances in which the indemnification provided
for herein is Finally Determined to be unavailable to the
Indemnitee in whole or in part, it is agreed that, in such event,
the Company shall, to the fullest extent permitted by law,
contribute to the payment of all of the Indemnitee’s
Indemnified Costs, in an amount that is just and equitable in the
circumstances; provided, that, without limiting the generality of
the foregoing, such contribution shall not be required where such
holding by the court is due to any limitation on indemnification
set forth in Section 2.7 or 5.3 hereof.
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b.
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Given that certain Jointly
Indemnifiable Claims may arise due to the service of the Indemnitee
as an Agent of the Company at the request of the
Indemnitee-
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3
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Related Entities, the Company acknowledges and
agrees that the Company shall be fully and primarily responsible
for the payment to the Indemnitee in respect of indemnification or
advancement of expenses in connection with any such Jointly
Indemnifiable Claim, pursuant to and in accordance with the terms
of this Agreement, irrespective of any right of recovery the
Indemnitee may have from the Indemnitee-Related Entities.
Under no circumstance shall the Company be entitled to any right of
subrogation or contribution by the Indemnitee-Related Entities and
no right of advancement or recovery the Indemnitee may have from
the Indemnitee-Related Entities shall reduce or otherwise alter the
rights of the Indemnitee or the obligations of the Company
hereunder. In the event that any of the Indemnitee-Related
Entities shall make any payment to the Indemnitee in respect of
indemnification or advancement of expenses with respect to any
Jointly Indemnifiable Claim, the Indemnitee-related entity making
such payment shall be subrogated to the extent of such payment to
all of the rights of recovery of the Indemnitee against the
Company, and the Indemnitee shall execute all papers reasonably
required and shall do all things that may be reasonably necessary
to secure such rights, including the execution of such documents as
may be necessary to enable the Indemnitee-Related Entities
effectively to bring suit to enforce such rights. The Company
and the Indemnitee agree that each of the Indemnitee-Related
Entities shall be third-party beneficiaries with respect to this
Section 2.3(b) entitled to enforce this
Section 2.3(b) as though each such Indemnitee-related
entity were a party to this Agreement.
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2.4
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Partial Indemnification . If the Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for
some or a portion of, but not the total amount of, the Indemnified
Costs, the Company will nevertheless indemnify the Indemnitee for
the portion of the Indemnified Costs to which the Indemnitee is
entitled.
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2.5
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Indemnification Hereunder Not
Exclusive . The
indemnification provided by this Agreement is not exclusive of any
other rights to which the Indemnitee may be entitled under the
Company’s Certificate of Incorporation, the Bylaws, any
agreement, any vote of stockholders or disinterested directors,
applicable law, or otherwise, both as to action in the
Indemnitee’s official capacity and as to action in another
capacity on behalf of the Company.
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2.6
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Indemnification of Indemnified Costs of
Successful Party .
Notwithstanding any other provisions of this Agreement, to the
extent that the Indemnitee has been successful in defense of any
Proceeding or in defense of any claim, issue or matter in the
Proceeding, on the merits or otherwise, including, but not limited
to, the dismissal of a Proceeding without prejudice (unless such
dismissal is based upon a settlement that would not be covered
under this Agreement), the Indemnitee will be indemnified against
all Indemnified Costs incurred in connection therewith to the
fullest extent permitted by applicable law.
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2.7
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Indemnified Costs Advanced
. The Indemnified Costs incurred by
the Indemnitee in any Proceeding will be paid promptly by the
Company in advance of the final disposition of the Proceeding at
the written request of the Indemnitee to the fullest e
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