INDEMNITY
AGREEMENT
This Indemnity Agreement (this
“ Agreement ”) dated the
day of February, 2009, by and
between Conexant Systems, Inc., a Delaware corporation (the “
Company ”), and
, an individual
(“ Indemnitee ”).
RECITALS
A. Competent and experienced persons are reluctant to serve
or to continue to serve as directors and officers of corporations
or in other capacities unless they are provided with adequate
protection through insurance or indemnification (or both) against
claims against them arising out of their service and activities on
behalf of the corporation.
B. The current uncertainties relating to the availability
of adequate insurance have increased the difficulty for
corporations of attracting and retaining competent and experienced
persons to serve in such capacity.
C. The Board of Directors of the Company (the “
Board of Directors ”) has determined that the
continuation of present trends in litigation will make it more
difficult to attract and retain competent and experienced persons
to serve as directors and officers of the Company, that this
situation is detrimental to the best interests of the
Company’s stockholders and that the Company should act to
assure such persons that there will be increased certainty of
adequate protection in the future.
D. As a supplement to and in the furtherance of the
Company’s Restated Certificate of Incorporation, as may be
amended (the “ Certificate ”), and
Bylaws, as may be amended (the “ Bylaws
”), it is reasonable, prudent, desirable and necessary for
the Company contractually to obligate itself to indemnify, and to
pay in advance expenses on behalf of, officers and directors to the
fullest extent permitted by law so that they will serve or continue
to serve the Company free from concern that they will not be so
indemnified and that their expenses will not be so paid in
advance.
E. This Agreement is not a substitute for, nor does it
diminish or abrogate any rights of Indemnitee under, the
Certificate and the Bylaws or any resolutions adopted pursuant
thereto (including any contractual rights of Indemnitee that may
exist).
F. Indemnitee is a director, officer and/or key employee of
the Company, and his or her willingness to continue to serve in
such capacity is predicated, in substantial part, upon the
Company’s willingness to indemnify him or her to the fullest
extent permitted by the laws of the State of Delaware and upon the
other undertakings set forth in this Agreement.
AGREEMENT
NOW, THEREFORE , in
consideration of the premises and covenants contained herein, the
Company and Indemnitee hereby agree as follows:
ARTICLE 1
CERTAIN DEFINITIONS
Capitalized terms used but not
otherwise defined in this Agreement have the meanings set forth
below:
A. “ Change in
Control ” shall be deemed to occur upon the earliest
to occur after the date of this Agreement of any of the following
events:
(i) Acquisition of Stock by
Third Party . Any Person (as defined below) is or becomes the
Beneficial Owner (as defined below), directly or indirectly, of
securities of the Company representing twenty percent (20%) or
more of the combined voting power of the Company’s then
outstanding securities, provided that the foregoing shall not
include any Person having such status prior to the consummation of
the initial public offering of the Company’s securities
unless after the initial public offering such Person is or becomes
the Beneficial Owner, directly or indirectly, of additional
securities of the Company representing in the aggregate an
additional five percent (5%) or more of the combined voting
power of the Company’s then outstanding securities;
(ii) Change in Board
Composition . During any period of two (2) consecutive
years (not including any period prior to the execution of this
Agreement), individuals who at the beginning of such period
constitute the Company’s board of directors, and any new
directors (other than a director designated by a person who has
entered into an agreement with the Company to effect a transaction
described in paragraphs (i), (iii) or (iv)) whose election by
the board of directors or nomination for election by the
Company’s stockholders was approved by a vote of at least
two-thirds of the directors then still in office who either were
directors at the beginning of the period or whose election or
nomination for election was previously so approved (collectively,
the “ Incumbent Directors ”), cease for
any reason to constitute at least a majority of the members of the
Company’s board of directors;
(iii) Corporate
Transactions . The effective date of a merger or consolidation
of the Company with any other entity, other than a merger or
consolidation which would result in the voting securities of the
Company outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the
voting securities of the surviving entity outstanding immediately
after such merger or consolidation and with the power to elect at
least a majority of the board of directors or other governing body
of such surviving entity;
(iv) Liquidation . The
approval by the stockholders of the Company of a complete
liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the
Company’s assets; and
(v) Other Events . Any
other event of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of
Regulation 14A (or in response to any similar item on any
similar schedule or form) promulgated under the Securities Exchange
Act of 1934, as amended, whether or not the Company is then subject
to such reporting requirement.
For purposes of this definition of
“Change in Control,” the following terms shall have the
following meanings:
“ Person ”
shall have the meaning as set forth in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended; provided, however,
that “Person” shall exclude (i) the Company,
(ii) any trustee or other fiduciary holding securities under
an employee benefit plan of the Company, and (iii) any
corporation owned, directly or indirectly, by the stockholders of
the Company in substantially the same proportions as their
ownership of stock of the Company.
“ Beneficial
Owner ” shall have the meaning given to such term in
Rule 13d-3 under the Securities Exchange Act of 1934, as
amended; provided, however, that “Beneficial Owner”
shall exclude any Person otherwise becoming a Beneficial Owner by
reason of (i) the stockholders of the Company approving a
merger of the Company with another entity or (ii) the
Company’s board of directors approving a sale of securities
by the Company to such Person.
“ Corporate
Status ” means the status of a person who is or was a
director, officer, employee, partner, member, manager, trustee,
fiduciary or agent of the Company or of any other Enterprise which
such person is or was serving at the request of the Company. In
addition to any service at the actual request of the Company,
Indemnitee will be deemed, for purposes of this Agreement, to be
serving or to have served at the request of the Company as a
director, officer, employee, partner, member, manager, trustee,
fiduciary or agent of another Enterprise if Indemnitee is or was
serving as a director, officer, employee, partner, member, manager,
fiduciary, trustee or agent of such Enterprise and (i) such
Enterprise is or at the time of such service was a Controlled
Affiliate, (ii) such Enterprise is or at the time of such
service was an employee benefit plan (or related trust) sponsored
on maintained by the Company or a Controlled Affiliate or
(iii) the Company or a Controlled Affiliate directly or
indirectly caused Indemnitee to be nominated, elected, appointed,
designated, employed, engaged or selected to serve in such
capacity.
“ Controlled
Affiliate ” means any corporation, limited liability
company, partnership, joint venture, trust or other Enterprise,
whether or not for profit, that is directly or indirectly
controlled by the Company. For purposes of this definition, the
term “control” means the possession, directly or
indirectly, of the power to direct, or cause the direction of, the
management or policies of an Enterprise, whether through the
ownership of voting securities, through other voting rights, by
contract or otherwise; provided , however , that
direct or indirect beneficial ownership of capital stock or other
interests in an Enterprise entitling the holder to cast 30% or more
of the total number of votes generally entitled to be cast in the
election of directors (or persons performing comparable functions)
of such Enterprise will be deemed to constitute
“control” for purposes of this definition.
“ Disinterested
Director ” means a director of the Company who is not
and was not a party to the Proceeding in respect of which
indemnification is sought by Indemnitee.
“ Enterprise
” means the Company and any other corporation, partnership,
limited liability company, joint venture, employee benefit plan,
trust or other entity or other enterprise of which Indemnitee is or
was serving at the request of the Company in a Corporate Status.
“ Expenses
” means all attorney’s fees, disbursements and
retainers, court costs, transcript costs, fees of experts, witness
fees, travel expenses, duplicating costs, printing and binding
costs, telephone charges, postage, fax transmission charges,
secretarial services, delivery service fees and all other
disbursements or expenses paid or incurred in connection with
prosecuting, defending, preparing to prosecute or defend,
investigating, being or preparing to be a witness in, or otherwise
participating in, a Proceeding, or in connection with seeking
indemnification under this Agreement. Expenses will also include
Expenses paid or incurred in connection with any appeal resulting
from any Proceeding, including the premium, security for and other
costs relating to any appeal bond or its equivalent. Expenses,
however, will not include amounts paid in settlement by Indemnitee
or the amount of judgments or fines against Indemnitee.
“ Independent
Counsel ” means an attorney or firm of attorneys that
is experienced in matters of corporation law and neither currently
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 (other than with respect to matters
concerning the Indemnitee under this Agreement and/or the
indemnification provisions of the Certificate or Bylaws, or of
other indemnitees under similar indemnification agreements), or
(ii) any other party to the Proceeding giving rise to a claim
for indemnification hereunder. Notwithstanding the foregoing, the
term “Independent Counsel” does 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.
“ Losses ”
means any loss, liability, judgments, damages, amounts paid in
settlement, fines (including excise taxes and penalties assessed
with respect to employee benefit plans), penalties (whether civil,
criminal or otherwise) and all interest, assessments and other
charges paid or payable in connection with or in respect of any of
the foregoing.
“ Proceeding
” means any threatened, pending or completed action, suit,
claim, demand, arbitration, alternate dispute resolution mechanism,
investigation, inquiry, administrative hearing or any other actual,
threatened or completed proceeding, whether formal or informal,
including any and all appeals, whether brought by or in the right
of the Company or otherwise, whether civil, criminal,
administrative or investigative, whether formal or informal, and in
each case whether or not commenced prior to the date of this
Agreement, in which Indemnitee was, is or will be involved as a
party or otherwise, by reason of or relating to Indemnitee’s
Corporate Status and by reason of or relating to either
(i) any action or alleged action taken by Indemnitee (or
failure or alleged failure to act) or of any action or alleged
action (or failure or alleged failure to act) on Indemnitee’s
part, while acting in his or her Corporate Status or (ii) the
fact that Indemnitee is or was serving at the request of the
Company as director, officer, employee, partner, member, manager,
trustee, fiduciary or agent of another Enterprise, in each case
whether or not serving in such capacity at the time any Loss or
Expense is paid or incurred for which indemnification or
advancement of Expenses can be provided under this Agreement,
except one initiated by Indemnitee to enforce his or her rights
under this Agreement. For purposes of this definition, the term
“threatened” will be deemed to include
Indemnitee’s good faith belief that a claim or other
assertion may lead to institution of a Proceeding.
References to “ serving
at the request of the Company ” include any service
as a director, officer, employee or agent of the Company which
imposes duties on, or involves services by, such director, officer,
employee or agent with respect to any employee benefit plan, its
participants or beneficiaries; and a person who acted in good faith
and in a manner he or she reasonably believed to be in the best
interests of the participants and beneficiaries of an employee
benefit plan will be deemed to have acted in a manner “
not opposed to the best interests of the Company
” as referred to under applicable law or in this
Agreement.
ARTICLE 2
SERVICES TO THE COMPANY
2.1 Services to the Company .
Indemnitee agrees to serve as [a director][an officer] of the
Company. Indemnitee may at any time and for any reason resign from
such position (subject to any other contractual obligation or any
obligation imposed by operation of law), in which event the Company
will have no obligation to continue to allow Indemnitee to serve in
such position either pursuant to this Agreement or otherwise. This
Agreement will not be construed as giving Indemnitee any right to
be retained in the employ of the Company (or any other
Enterprise).
ARTICLE 3
INDEMNIFICATION
3.1 Company Indemnification .
Except as otherwise provided in this Article 3 , if
Indemnitee was, is or becomes a party to, or was or is threatened
to be made a party to, or was or is otherwise involved in, any
Proceeding, the Company will indemnify and hold harmless Indemnitee
to the fullest extent permitted by the Certificate, Bylaws and
applicable law, as the same exists or may hereafter be amended,
interpreted or replaced (but in the case of any such amendment,
interpretation or replacement, only to the extent that such
amendment, interpretation or replacement permits the Company to
provide broader indemnification rights than were permitted prior
thereto), against any and all Expenses and Losses, and any federal,
state, local or foreign taxes imposed as a result of the actual or
deemed receipt of any payments under this Agreement, that are paid
or incurred by Indemnitee in connection with such Proceeding. For
purposes of this Agreement, the meaning of the phrase “
to the fullest extent permitted by law ” will
include to the fullest extent permitted by Section 145 of the
Delaware General Corporation Law (“ DGCL
”) or any section that replaces or succeeds Section 145
of the DGCL with respect to such matters.
3.2 Mandatory Indemnification if
Indemnitee is Wholly or Partly Successful . Notwithstanding any
other provision of this Agreement (other than
Section 6.9 ), to the extent that Indemnitee has been
successful, on the merits or otherwise, in defense of any
Proceeding or any part thereof, the Company will indemnify
Indemnitee against all Expenses that are paid or incurred by
Indemnitee in connection therewith. If Indemnitee is not wholly
successful in such Proceeding, but is successful, on the merits or
otherwise, as to one or more but fewer than all claims, issues or
matters in such Proceeding, the Company will indemnify and hold
harmless Indemnitee against all Expenses paid or incurred by
Indemnitee in connection with each successfully resolved claim,
issue or matter on which Indemnitee was successful. For purposes of
this Section 3.2 , the termination of any Proceeding,
or any claim, issue or matter in such Proceeding, by dismissal,
settlement or a plea of nolo contendere with or without
prejudice will be deemed to be a successful result as to such
Proceeding, claim, issue or matter.
3.3 Indemnification for Expenses
of a Witness . Notwithstanding any other provision of this
Agreement, to the extent that Indemnitee is, by reason of his or
her Corporate Status, a witness in any Proceeding to which
Indemnitee is not a party, the Company will indemnify Indemnitee
against all Expenses paid or incurred by Indemnitee on his or her
behalf in connection therewith.
3.4 Exclusions .
Notwithstanding any other provision of this Agreement, the Company
will not be obligated under this Agreement to provide
indemnification in connection with the following:
(a) Any
Proceeding (or part of any Proceeding) initiated or brought
voluntarily by Indemnitee against the Company or its directors,
officers, employees or other indemnities, unless the Board of
Directors has authorized or consented to the initiation of the
Proceeding (or such part of any Proceeding); provided ,
however , that nothing in this Section 3.4(a)
shall limit the right of Indemnitee to be indemnified under
Section 8.4 .
(b) For an
accounting of profits made from the purchase and sale (or sale and
purchase) by Indemnitee of securities of the Company within the
meaning of Section 16(b) of the Exchange Act or any similar
successor statute, provided that the foregoing shall not relieve
the Company of its obligations to provide for an Expense Advance in
accordance with Section 4.1 unless the party making the
determination of entitlement to indemnification pursuant to
Article 6 of this Agreement reasonably determines that
Indemnitee clearly violated Section 16(b) and must disgorge
the profits to the corporation. Notwithstanding anything to the
contrary stated or implied in this Section 3.4(b) ,
indemnification pursuant to this Agreement relating to any
Proceeding against Indemnitee for an accounting of profits made
from the purchase or sale by Indemnitee of securities of the
Company pursuant to the provisions of Section 16(b) of the
Exchange Act or similar provisions of any federal, state or local
laws shall not be prohibited if Indemnitee ultimately establishes
in any Proceeding that no recovery of such profits from Indemnitee
is permitted under Section 16(b) of the Exchange Act or
similar provisions of any federal, state or local laws.
ARTICLE 4
ADVANCEMENT OF EXPENSES
4.1 Expense Advances . Except
as set forth in Section 4.2 , the Company will, if
requested by Indemnitee, advance, to the fullest extent permitted
by law, to Indemnitee (hereinafter an “ Expense
Advance ”) any and all Expenses paid or incurred by
Indemnitee in connection with any Proceeding (whether prior to or
after its final disposition). Indemnitee’s right to each
Expense Advance will not be subject to the satisfaction of any
standard of conduct and will be made without regard to
Indemnitee’s ultimate entitlement to indemnification under
the other provisions of this Agreement, or under provisions of the
Certificate or Bylaws or otherwise. Each Expense Advance will be
unsecured and interest free and will be made by the Company without
regard to Indemnitee’s ability to repay the Expense Advance.
The Indemnitee shall qualify for Expense Advances upon the
execution and delivery to the Company of this Agreement, which
shall constitute an undertaking providing that the Indemnitee
undertakes to the fullest extent permitted by law, by or on behalf
of Indemnitee, to repay such Expense Advance if it is ultimately
determined, by final decision by a court or arbitrator, as
applicable, from which there is no further right to appeal, that
Indemnitee is not entitled to be indemnified for such Expenses
under the Certificate, Bylaws, the DGCL, this Agreement or
otherwise. No other form of undertaking shall be required other
than the execution of this Agreement. An Expense eligible for an
Expense Advance will include any and all reasonable Expenses
incurred pursuing an action to enforce the right of advancement
provided for in this Article 4, including Expenses incurred
preparing and forwarding statements to the Company to support the
Expense Advances claimed.
4.2 Exclusions . Indemnitee
will not be entitled to any Expense Advance in connection with any
of the matters for which indemnity is excluded pursuant to
Section 3.4 .
4.3 Timing . An Expense
Advance pursuant to Section 4.1 will be made within
five business days after the receipt by the Company of a written
statement or statements from Indemnitee requesting such Expense
Advance (which statement or statements will include, if requested
by the Company, reasonable detail underlying the Expenses for which
the Expense Advance is requested), whether such request is made
prior to or after final disposition of such Proceeding.
ARTICLE 5
CONTRIBUTION IN THE EVENT OF JOINT LIABILITY
5.1 Contribution by Company .
To the fullest extent permitted by law, if the indemnification
provided for in this Agreement is unavailable to Indemnitee for any
reason whatsoever, the Company, in lieu of indemnifying Indemnitee,
will contribute to the amount of Expenses and Losses incurred or
paid by Indemnitee in connection with any Proceeding in proportion
to the relative benefits received by the Company and all officers,
directors and employees of the Company other than Indemnitee who
are jointly liable with Indemnitee (or would be if joined in such
Proceeding), on the one hand, and Indemnitee, on the other hand,
from the transaction from which such Proceeding arose;
provided , however , that the proportion determined
on the basis of relative benefit may, to the extent necessary to
conform to law, be further adjusted by reference to the relative
fault of the Company and all officers, directors and employees of
the Company other than Indemnitee who are jointly liable with
Indemnitee (or would be if joined in such Proceeding), on the one
hand, and Indemnitee, on the other hand, in connection with the
events that resulted in such Expenses and Losses, as well as any
other equitable considerations which applicable law may require to
be considered. The relative fault of the Company and all officers,
directors and employees of the Company other than Indemnitee who
are jointly liable with Indemnitee (or would be if joined in such
Proceeding), on the one hand, and Indemnitee, on the other hand,
will be determined by reference to, among other things, the degree
to which their actions were motivated by intent to gain personal
profit or advantage, the degree to which their liability is primary
or secondary, and the degree to which their conduct was active or
passive.
5.2 Indemnification for
Contribution Claims by Others . To the fullest extent permitted
by law, the Company will fully indemnify and hold Indemnitee
harmless from any claims of contribution which may be brought by
other officers, directors or employees of the Company who may be
jointly liable with Indemnitee for any Loss or Expense arising from
a Proceeding.
ARTICLE 6
PROCEDURES AND PRESUMPTIONS FOR THE
DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION
6.1 Notification of Claims;
Request for Indemnification . Indemnitee agrees to notify
promptly the Company in writing of any claim made against
Indemnitee for which indemnification will or could be sought under
this Agreement; provided , however , that a delay in
giving such notice will not deprive Indemnitee of any right to be
indemnified under this Agreement unless, and then only to the
extent that, the Company did not otherwise learn of the Proceeding
and such delay is materially prejudicial to the Company’s
ability to defend such Proceeding; and, provided ,
further , that notice will be deemed to have been given
without any action on the part of Indemnitee in the event the
Company is a party to the same Proceeding. The omission to notify
the Company will not relieve the Company from any liability for
indemnification which it may have to Indemnitee otherwise than
under this Agreement. Indemnitee may deliver to the Company a
written request to have the Company indemnify and hold harmless
Indemnitee in accordance with this Agreement. Subject to
Section 6.9 , such request may be delivered from time
to time and at such time(s) as Indemnitee deems appropriate in his
or her sole discretion. Following such a written request for
indemnification, Indemnitee’s entitlement to indemnification
shall be determined according to Section 6.2 . The
Secretary of the Company will, promptly upon receipt of such a
request for indemnification, advise the Board of Directors in
writing that Indemnitee has requested indemnification. The Company
will be entitled to participate in any Proceeding at its own
expense.
6.2 Determination of Right to
Indemnification . Upon written request by Indemnitee for
indemnification pursuant to Section 6.1 hereof with
respect to any Proceeding, a determination, if, but only if,
required by applicable law, with respect to Indemnitee’s
entitlement thereto will be made by one of the following, at the
election of Indemnitee: (1) so long as there are Disinterested
Directors with respect to such Proceeding, a majority vote of the
Disinterested Directors, even though less than a quorum of the
Board of Directors, (2) so long as there are Disinterested
Directors with respect to such Proceeding, a committee of such
Disinterested Directors designated by a majority vote of such
Disinterested Directors, even though less than a quorum of the
Board of Directors or (3) Independent Counsel in a written
opinion delivered to the Board of Directors, a copy of which will
also be delivered to Indemnitee. The election by Indemnitee to use
a particular person, persons or entity to make such determination
is to be included in the written request for indemnification
submitted by Indemnitee (and if no election is made in the request
it will be assumed that Indemnitee has elected the Independent
Counsel to make such determination). The perso
