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Exhibit 10.11
INDEMNITY AGREEMENT
This Indemnity Agreement, dated as of
,
is
made by and between Verigy US, Inc., a Delaware corporation ("
Verigy US ") , and
,
a director, officer or key employee of Verigy US or one of Verigy
US’s affiliates or other service provider who satisfies the
definition of Indemnifiable Person set forth below (the "
Indemnitee ").
RECITALS
WHEREAS, Verigy US is an indirect, wholly-owned subsidiary of
Verigy Ltd., a company organized under the laws of the Republic of
Singapore (" Verigy Ltd. "); and
WHEREAS, based upon their experience as business managers, the
members of the Board of Directors of Verigy US (the "
Board ") have concluded that attracting and retaining
competent and experienced persons to serve in key leadership roles
with Verigy US and with each of its Affiliates is essential to the
success of Verigy US; and
WHEREAS, Verigy US is aware that competent and experienced
persons are increasingly reluctant to serve as representatives of
corporations unless they are protected by comprehensive liability
insurance and/or indemnification, due to increased exposure to
litigation costs and risks resulting from their service to such
corporations, and due to the fact that the exposure frequently
bears no reasonable relationship to the compensation of such
representatives; and
WHEREAS, Verigy US believes that it is unfair for its
representatives and for the representatives of its Affiliates (as
defined below) to assume the risk of large judgments and Expenses
and Other Liabilities (as defined below) that may be incurred in
cases in which the representative received no personal profit and
in cases where the representative was not culpable; and
WHEREAS, Verigy Ltd. has entered into indemnity agreements
substantially similar to this Agreement with each of its directors,
executive officers and certain other key employees and service
providers (the " Singapore Indemnity Agreements ");
and
WHEREAS, the Singapore Companies Act provides that Singapore
companies may only indemnify officers and directors in very limited
circumstances which, as a practical matter, means that that Verigy
Ltd., may not be legally permitted to fulfill its obligations to
the indemnitees under the Singapore Indemnity Agreements; and
WHEREAS, Section 145 ("Section 145") of the Delaware General
Corporation Law (the "DGCL"), under which Verigy US is organized,
empowers Verigy US to indemnify by agreement its officers,
directors, employees and agents, and persons who serve, at the
request of Verigy US, as directors, officers, employees or agents
of other corporations, partnerships, joint ventures, trusts or
other enterprises, and expressly provides that the indemnification
provided by Section 145 is not exclusive;
WHEREAS, Verigy US has determined that the
liability insurance coverage available to Verigy US and its
Affiliates for their representatives as of the date hereof may be
inadequate. Verigy US believes, therefore, that the interests
of Verigy US’s stockholders would best be served by the
indemnification by Verigy US of selected representatives of Verigy
US and its Affiliates; and
WHEREAS, in recognition of Indemnitee’s need for
substantial protection against personal liability in order to
support and encourage Indemnitee’s continued service to
Verigy US and/or its Affiliates in an effective manner, Verigy US
wishes to provide in this Agreement for the indemnification of and
the advancement of Expenses to Indemnitee to the fullest extent
(whether partial or complete) permitted by law and as set forth in
this Agreement, and, to the extent insurance is maintained, for the
continued coverage of Indemnitee under the directors’ and
officers’ liability insurance policies of Verigy US and its
Subsidiaries and Affiliates.
AGREEMENT
NOW, THEREFORE, the parties hereto, intending to be legally
bound, hereby agree as follows:
1.
Definitions.
(a)
Affiliate . For purposes of this
Agreement, "Affiliate" of Verigy US means (i) Verigy Ltd.; (ii) any
direct or indirect subsidiary of Verigy US or of Verigy Ltd., (iii)
any corporation, partnership, joint venture, trust or other
enterprise in respect of which the Indemnitee is or was or will be
serving as a director, officer, advisory director, trustee,
manager, member, partner, employee, agent, attorney, consultant,
member of the entity’s governing body (whether constituted as
a board of directors, board of managers, general partner or
otherwise), fiduciary, or in any other similar capacity at the
direct or indirect request of Verigy US or of Verigy Ltd.,
including, but not limited to, any employee benefit plan of Verigy
US or of any Affiliate of Verigy US.
(b)
Expenses . For purposes of this
Agreement, "Expenses" means all direct and indirect costs of any
type or nature whatsoever (including, without limitation, all
attorneys’ fees and related disbursements, and other
out-of-pocket costs, including, without limitation, experts’
fees, court costs, retainers, transcript fees, duplicating,
printing and binding costs, as well as telecommunications, postage
and courier charges) paid or incurred by the Indemnitee in
connection with the inquiry, investigation, defense or appeal of a
Proceeding (as defined below), establishing, defending or enforcing
a right to indemnification under this Agreement, Section 145 or
otherwise or being a witness in or participating in (including on
appeal) any Proceeding, or preparing for the inquiry, defense or
appeal of a Proceeding or for being a witness in or participating
in (including on appeal) any Proceeding; provided, however, that
Expenses shall not include any judgments, fines, ERISA (or other
employee benefit plan related) excise taxes or penalties or amounts
paid in settlement of a Proceeding.
(c)
Indemnifiable Event . For purposes of this Agreement,
"Indemnifiable Event" means any event or occurrence related to
Indemnitee’s service for Verigy US or its
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Affiliates as an Indemnifiable Person (as defined
below), or by reason of anything done or not done, or any act or
omission, by Indemnitee in any such capacity.
(d)
Indemnifiable Person . For the
purposes of this Agreement, "Indemnifiable Person" means any person
who is or was a director, officer, employee, attorney, advisory
director, trustee, manager, member, partner, consultant, member of
an entity’s governing body (whether constituted as a board of
directors, board of managers, general partner or otherwise) or
other agent or fiduciary of Verigy US or an Affiliate of Verigy US;
or is or was serving at the request of Verigy US or an Affiliate of
Verigy US, or for the convenience of, or to represent the interest
of Verigy US or an Affiliate of Verigy US as a director, officer,
employee, attorney, advisory director, trustee, manager, member,
partner, consultant, member of an entity’s governing body
(whether constituted as a board of directors, board of managers,
general partner or otherwise) or other agent or fiduciary of
another foreign or domestic corporation, partnership, limited
liability company, joint venture, trust, employee benefit plan or
other enterprise or entity; or was a director, officer, employee,
attorney, advisory director, trustee, manager, member, partner,
consultant, member of an entity’s governing body (whether
constituted as a board of directors, board of managers, general
partner or otherwise) or other agent or fiduciary of a foreign or
domestic corporation or other enterprise which was a predecessor of
Verigy US or of any of its Affiliates, or was a director, officer,
employee, attorney, advisory director, trustee, manager, member,
partner, consultant, member of an entity’s governing body
(whether constituted as a board of directors, board of managers,
general partner or otherwise) or other agent or fiduciary of
another corporation, partnership, limited liability company, joint
venture, trust, employee benefit plan or other enterprise or entity
at the request of, for the convenience of, or to represent the
interests of such predecessor.
(e)
Other Liabilities . For purposes of
this Agreement, "Other Liabilities" means any and all liabilities
of any type whatsoever (including, but not limited to, judgments,
fines, ERISA (or other benefit plan related) excise taxes or
penalties, and amounts paid in settlement and all interest, taxes,
assessments and other charges paid or payable in connection with or
in respect of any Expenses or any such judgments, fines, ERISA (or
other benefit plan related) excise taxes or penalties, or amounts
paid in settlement).
(f)
Proceeding . For the purposes of
this Agreement, "Proceeding" means any threatened, pending, or
completed action, suit or other proceeding, whether civil, criminal
or administrative and including any appeal thereof, or any inquiry
or investigation, whether instituted by Verigy US or any of its
Affiliates or by any governmental agency or any other party, that
Indemnitee in good faith believes might lead to the institution of
any such action, suit or other proceeding, whether civil, criminal,
administrative, investigative or any other type whatsoever,
including any arbitration or other alternative dispute resolution
mechanism.
2.
Agreement to Serve . The Indemnitee
agrees to serve and/or continue to serve Verigy US or the Affiliate
of Verigy US in the capacity or capacities in which Indemnitee
currently serves Verigy US or such Affiliate(s) as an Indemnifiable
Person, and any additional capacity in which Indemnitee may agree
to serve, until such time as Indemnitee’s service in a
particular capacity shall end according to the terms of an
agreement, governing law, or otherwise. Nothing contained in
this Agreement is intended to create any right to continued
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employment or other form of service for Verigy US
or any Affiliate of Verigy US by Indemnitee.
3.
Mandatory Indemnification . 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 Proceeding by reason of (or arising in
part out of) an Indemnifiable Event, Verigy US shall hold harmless
and indemnify the Indemnitee to the fullest extent not prohibited
(a) by the provisions of Verigy US’s Certificate of
Incorporation and Bylaws as the same may be amended from time to
time (but only to the extent that such amendment permits Verigy US
to provide broader indemnification rights than the Certificate of
Incorporation and/or Bylaws permitted prior to the adoption of such
amendment) and (b) by the DGCL. In addition to and not in
limitation of the indemnification otherwise provided for herein,
and subject only to the exclusions set forth in Section 10 below,
Verigy US hereby further agrees to hold harmless and indemnify
Indemnitee as follows:
(a)
Third Party Actions . If the
Indemnitee is a person who was or is a party or is threatened to be
made a party to any Proceeding (other than an action by or in the
right of Verigy US, which actions are addressed in Section 3(b)
below) by reason of the fact that he or she is or was serving
Verigy US or an Affiliate of Verigy US as an Indemnifiable Person,
or by reason of anything done or not done by Indemnitee in any such
capacity as an Indemnifiable Person, or by reason of an
Indemnifiable Event, against any and all Expenses and Other
Liabilities incurred by Indemnitee in connection with (including in
preparation for) the inquiry, investigation, defense, settlement or
appeal of such Proceeding if Indemnitee acted in good faith and in
a manner he or she reasonably believed to be in or not opposed to
the best interests of Verigy US, and, with respect to any criminal
action or Proceeding, had no reasonable cause to believe his or her
conduct was unlawful; and
(b)
Derivative Actions . If the
Indemnitee is a person who was or is a party or is threatened to be
made a party to any Proceeding by or in the right of Verigy US to
procure a judgment in its favor by reason of the fact that he or
she is or was serving Verigy US or an Affiliate of Verigy US as an
Indemnifiable Person, or by reason of anything done or not done by
Indemnitee in any such capacity as an Indemnifiable Person, or by
reason of an Indemnifiable Event, against any and all Expenses and
Other Liabilities incurred by Indemnitee in connection with the
inquiry, investigation, defense, settlement, or appeal of such
Proceeding if Indemnitee acted in good faith and in a manner he or
she reasonably believed to be in or not opposed to the best
interests of Verigy US; except that no indemnification under this
subsection shall be made in respect of any claim, issue or matter
as to which such person shall have been finally adjudged to be
liable to Verigy US, unless and only to the extent that the court
in which such Proceeding was brought shall determine upon
application that, despite the adjudication of liability but in view
of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such amounts which the court
shall deem proper; provided, however, that in the event that
Indemnitee shall be adjudged to be liable to Verigy US, Verigy US
shall use its best efforts to obtain a ruling of the court in which
the Proceeding is brought to the effect that Indemnitee is
nevertheless fairly and reasonably entitled to indemnification to
the greatest extent possible.
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(c)
Determination of "Good Faith" . For
purposes of any determination of "good faith" hereunder,
Indemnitee shall be deemed to have acted in good faith if in taking
such action Indemnitee relied on the records or books of account of
Verigy US or an Affiliate of Verigy US, including financial
statements, or on information, opinions, reports or statements
provided to Indemnitee by the officers or other employees of Verigy
US or an Affiliate of Verigy US in the course of their duties, or
on the advice of legal counsel for Verigy US or an Affiliate of
Verigy US, or on information or records given or reports made to
Verigy US or an Affiliate of Verigy US by an independent certified
public accountant or by an appraiser or other expert selected by
Verigy US or an Affiliate of Verigy US, or by any other person
(including legal counsel, accountants and financial advisors) as to
matters Indemnitee reasonably believes are within such other
person’s professional or expert competence and who has been
selected with reasonable care by or on behalf of Verigy US.
In connection with any determination as to whether Indemnitee is
entitled to be indemnified hereunder, the Reviewing Party (as
defined below) or court shall presume that the Indemnitee has
satisfied the applicable standard of conduct and is entitled to
indemnification, and the burden of proof shall be on Verigy US to
establish, by clear and convincing evidence, that Indemnitee is not
so entitled. The provisions of this Section 3(c) shall not be
deemed to be exclusive or to limit in any way the other
circumstances in which the Indemnitee may be deemed to have met the
applicable standard of conduct set forth in this Agreement.
In addition, the knowledge and/or actions, or failures to act, of
any other person serving Verigy US or an Affiliate of Verigy US as
an Indemnifiable Person shall not be imputed to Indemnitee for
purposes of determining the right to indemnification
hereunder.
4.
Partial Indemnification . If the
Indemnitee is entitled under any provision of this Agreement to
indemnification by Verigy US for some or a portion of any Expenses
or Other Liabilities incurred by Indemnitee (a) in connection with
(including in preparation for) the inquiry, investigation, defense,
settlement or appeal of a Proceeding, (b) as or in preparation to
be a witness or participant in a Proceeding, or (c) otherwise, but
not entitled, however, to indemnification for the total amount of
such Expenses or Other Liabilities, Verigy US shall nevertheless
indemnify the Indemnitee for such total amount except as to the
portion thereof to which the Indemnitee is not entitled as
determined pursuant to the standard set forth in Section 3
above. For avoidance of doubt, if 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, Verigy US shall indemnify Indemnitee in
connection with each successfully resolved claim, issue or
matter. Indemnitee’s satisfaction of the applicable
standard of conduct described in Section 3 above with respect to a
particular claim, issue or matter shall be considered a successful
resolution as to such claim, issue or matter. Furthermore,
for purposes of this Agreement and without limitation, the
termination of any claim, issue or matter by dismissal with or
without prejudice shall be deemed to be a successful resolution as
to such claim, issue or matter. In any review or Proceeding
to determine the extent of indemnification, Verigy US shall bear
the burden to establish, by clear and convincing evidence, the lack
of a successful resolution of a particular claim, issue or matter
and which amounts sought in indemnity are allocable to claims,
issues or matters which were not successfully resolved.
5.
Liability Insurance . So long as
Indemnitee shall continue to serve Verigy US or an Affiliate of
Verigy US as an Indemnifiable Person and thereafter so long as
Indemnitee shall be subject to any possible claim or threatened,
pending or completed Proceeding as a result of an
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Indemnifiable Event, Verigy US shall use its best
efforts to maintain in full force and effect for the benefit of
Indemnitee as an insured (i) liability insurance issued by one or
more reputable insurers and having the policy amount and deductible
deemed appropriate by the Board and providing in all respects
coverage at least comparable to and in the same amount as that then
being provided to the Chairman of the Board or the Chief Executive
Officer of Verigy US and (ii) any replacement or substitute
policies issued by one or more reputable insurers pro
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