Exhibit 10.1
INDEMNITY
AGREEMENT
This INDEMNITY AGREEMENT
(this “ Agreement ”), is made and executed as of
_______________, 2009, by and between INTERNAP NETWORK SERVICES
CORPORATION, a Delaware corporation (the “ Company
”), and ________________, an individual resident of the State
of __________________ (“ Indemnitee
”).
WHEREAS, it is essential to the
Company that it attract and retain as directors and officers the
most capable persons available;
WHEREAS, the Company is aware that,
to induce highly competent persons to serve the Company as
directors, officers or in other capacities, the Company must
provide such persons with adequate protection through directors and
officers liability insurance, advancement of expenses and
indemnification against risks of claims and actions against them,
and against damage to their professional and/or personal
reputations resulting from allegations, claims, actions and
investigations arising out of or relating to their service to and
activities on behalf of the Company;
WHEREAS, the Company’s Board
of Directors has determined that it is in the best interests of the
Company and its stockholders that the Company act to assure such
persons that there will be increased certainty of such protection
in the future;
WHEREAS, this Agreement is a
supplement to and in furtherance of the provisions of the
Company’s Certificate of Incorporation (the “
Certificate ”) and Bylaws (“ Bylaws
”), in each case as amended and in effect on the date hereof,
and resolutions adopted pursuant thereto, and this Agreement shall
not be deemed to substitute therefor, nor to diminish or abrogate
any rights of such persons thereunder;
WHEREAS, it is reasonable, prudent
and necessary for the Company to contractually obligate itself to
indemnify and advance the expenses of such persons to the fullest
extent permitted by applicable law and to guarantee such persons
would realize the benefit of any subsequent changes in applicable
law relating to indemnification or advancement of expenses so that
they will continue to provide services to the Company free from
undue concern that they will not be so indemnified, thereby
ensuring that the decisions of such persons for or on behalf of the
Company will be independent, objective and in the best interests of
the Company’s stockholders;
WHEREAS, it is reasonable, prudent
and necessary for the Company to provide such persons with the
specific contractual assurance that the exculpation from personal
liability for directors, the right to directors and officers
liability insurance and the rights to indemnification and
advancement of expenses provided to them remain available
regardless of, among other things, any amendment to or revocation
of the indemnification or advancement of expenses provisions in the
Certificate or the Bylaws or any change in composition or
philosophy of the Company’s Board of Directors such as might
occur following an acquisition or Change of Control (defined below)
of the Company; and
WHEREAS, 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 or she be so
indemnified.
NOW, THEREFORE, in consideration of
the premises and the mutual promises and covenants contained
herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Company and
Indemnitee do hereby agree as follows:
1.
Definitions
. For purposes of this
Agreement and if not otherwise defined herein, the following terms
shall have the meanings set forth below:
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“ Board ” shall
mean the Board of Directors of the Company.
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“ Change of Control
” shall mean any of the following occurrences:
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(i)
Any “person,” as such
term is used in Sections 13(a)(9) and 13(d) of the Securities
Exchange Act of 1934 (“ Exchange Act ”), becomes
a “beneficial owner,” as such term is used in Rule
13d-3 promulgated under the Exchange Act, of 30% or more of the
voting stock of the Company;
(ii)
The majority of the Board consists
of individuals other than “incumbent” directors, which
term means the members of the Board on the date hereof; provided
that any person becoming a director subsequent to such date whose
election or nomination for election was supported by two-thirds of
the directors who then comprised the incumbent directors will be
considered to be an incumbent director;
(iii)
The Company adopts any plan of
liquidation providing for the distribution of all or substantially
all of its assets;
(iv)
All or substantially all of the assets or
business of the Company is disposed of pursuant to a merger,
consolidation or other transaction (unless the stockholders of the
Company immediately prior to such merger, consolidation or other
transaction beneficially own, directly or indirectly, in
substantially the same proportion as they owned the voting stock of
the Company, all of the voting stock or other ownership interests
of the entity or entities, if any, that succeed to the business of
the Company); or
(v)
The Company combines with another company
and is the surviving corporation but, immediately after the
combination, the stockholders of the Company immediately prior to
the combination hold, directly or indirectly, 50% or less of the
voting stock of the combined company (there being excluded from the
number of shares held by such stockholders, but not from the voting
stock of the combined company, any shares received by affiliates of
such other company in exchange for stock of such other
company).
For
purposes of the Change of Control definition, the
“Company” will include any entity that succeeds to all
or substantially all, of the business of the Company and
“voting stock” will mean securities of any class or
classes having general voting power under ordinary circumstances,
in the absence of contingencies, to elect the directors of a
corporation.
(c)
“ DGCL ” shall mean
the Delaware General Corporation Laws, as amended from time to
time, and any successor law or laws.
(d)
“ Disinterested Director
” shall mean a director of the Company who neither is or was
a party to the Proceeding in respect of which indemnification is
being sought by Indemnitee.
(e)
“ Expenses ” shall
include all attorneys’ fees, retainers, court costs,
transcript costs, accounting and expert fees, witness fees, travel
expenses, duplicating costs, printing and binding costs, telephone
charges, postage, delivery service fees, and all other
disbursements or expenses incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating or
being or preparing to be a witness in, or otherwise participating
in, any Proceeding, and shall include all such items incurred in
enforcing or pursuing any rights under this
Agreement.
(f)
“ Independent Counsel
” shall mean a law firm or member of a law firm that, as of a
particular date, neither is presently representing, nor in the five
years preceding such date 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 right to indemnification under this
Agreement.
(g)
“ Proceeding ” shall
mean any threatened, pending or completed action, suit,
arbitration, alternate dispute resolution mechanism, investigation,
inquiry, administrative hearing or any other actual, threatened or
completed proceeding, whether brought in the right of the Company
or otherwise and whether of a civil, criminal, administrative,
legislative or investigative (formal or informal) nature, including
any appeal therefrom, whether by, in or involving a public
official, law enforcement organization, public or
government-sponsored board or commission, self-regulatory body,
court or an administrative, other governmental or private entity or
body, and as to which Indemnitee was, is or will be involved as a
party, potential party, non-party witness or otherwise by reason of
the fact that Indemnitee is or was a director or officer of the
Company, by reason of any action taken by him or her or any action
on his or her or her part, or any inaction on Indemnitee’s
part, while acting as director or officer of the Company, or by
reason of the fact that he or she is or was serving at the request
of the Company as a director, officer, employee or agent of another
corporation, limited liability company, partnership, joint venture,
trust or other enterprise, in each case whether or not serving in
such capacity at the time any liability or Expense is incurred for
which indemnification, reimbursement, or advancement of Expenses
can be provided under this Agreement.
2.
Service by
Indemnitee . Indemnitee agrees to serve and/or
continue to serve as a director, officer or employee of the
Company, as applicable, and/or, at the request of the Company, as a
director, officer, agent or fiduciary of another corporation,
partnership, joint venture, trust, employee benefit plan or other
enterprise. 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 shall have no obligation under this Agreement to
continue the employment, directorship or other service of
Indemnitee in such position. Nothing in this Agreement
shall confer upon Indemnitee the right to continue in the employ
of, or as an officer or director of, the Company or affect the
right of the Company to terminate Indemnitee’s employment at
any time in the sole discretion of the Company, with or without
cause, subject to any contractual rights of Indemnitee created or
existing under any written employment contract between the Company
and Indemnitee. The foregoing notwithstanding, this
Agreement shall continue in force after Indemnitee has ceased to
serve as director, officer or employee of the Company, as
applicable.
3.
Indemnification
. Subject to Section 9, the
Company shall hold harmless and indemnify, and advance Expenses to,
Indemnitee as provided in this Agreement and to the fullest extent
not prohibited by the DGCL or other applicable as the same now
exists or may hereafter be amended (but only to the extent any such
amendment permits the Company to provide broader indemnification
rights than the DGCL permitted the Company to provide prior to such
amendment). Without diminishing the scope of the
indemnification provided by this Section 3, the rights of
indemnification of Indemnitee provided hereunder shall include, but
shall not be limited to, those rights hereinafter set forth, except
that no indemnification shall be paid to
Indemnitee:
(a)
on account of any Proceeding in which
judgment is rendered against Indemnitee for disgorgement 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
statutory law; provided, however , that the Company may
advance Expenses in accordance with Section 11 of this Agreement in
connection with Indemnitee’s defense of a claim under Section
16(b) of the Exchange Act, which advances shall be repaid to the
Company if it is ultimately determined that Indemnitee is not
entitled to indemnification of such Expenses.
(b)
on account of conduct of Indemnitee which
is finally adjudged by a court of competent jurisdiction to have
been knowingly fraudulent or to constitute willful
misconduct;
(c)
in any circumstance where such
indemnification is expressly prohibited by applicable law,
including if Indemnitee’s conduct is determined to have been
in bad faith, in opposition to the best interests of the Company
or, with respect to a criminal proceeding, if Indemnitee knew or
reasonably should have known that Indemnitee’s conduct was
unlawful;
(d)
with respect to liability for which
payment is actually made to Indemnitee under a valid and
collectible insurance policy or under a valid and enforceable
indemnity clause or other agreement (other than this Agreement),
except in respect of any liability in excess of payment under such
insurance, indemnity clause or other agreement;
(e)
if a final decision by a court having
jurisdiction in the matter shall determine that such
indemnification is not lawful; or
(f)
in connection with any Proceeding
initiated by Indemnitee against the Company or any of its direct or
indirect subsidiaries or the directors, officers, employees or
other indemnitees of the Company or any of its direct or indirect
subsidiaries, (i) unless such indemnification is expressly
required to be made by law, (ii) unless the Proceeding was
authorized by the Board or such other person or persons empowered
pursuant to Section 9 to make such determination,
(iii) unless such indemnification is provided by the Company,
in its sole discretion, pursuant to the powers vested in the
Company by applicable law, or (iv) except as provided in
Section 12.
4.
Actions or Proceedings Other Than
an Action by or in the Right of the Company
. Indemnitee shall be entitled
to the indemnification rights provided in this Section 4 if
Indemnitee was or is a party or witness or is threatened to be a
party or witness to any Proceeding, other than a Proceeding by or
in the right of the Company, by reason of the fact that Indemnitee
is or was a director, officer, employee, agent or fiduciary of the
Company, or any of its direct or indirect subsidiaries, or is or
was serving at the request of the Company, or any of its direct or
indirect subsidiaries, as a director, officer, employee, agent or
fiduciary of any other entity, including, but not limited to,
another corporation, partnership, limited liability company,
employee benefit plan, joint venture, trust or other enterprise, or
by reason of any act or omission by him or her in such capacity.
Pursuant to this Section 4, Indemnitee shall be
indemnified against all Expenses, judgments, penalties (including
excise and similar taxes), fines and amounts paid in settlement
which were actually and reasonably incurred by Indemnitee in
connection with such Proceeding (including, but not limited to, the
investigation, defense or appeal thereof), if Indemnitee acted in
good faith and in a manner Indemnitee reasonably believed to be in
or not opposed to the best interests of the Company, and, with
respect to any criminal Proceeding, had no reasonable cause to
believe his or her conduct was unlawful.
5.
Actions by or in the Right of the
Company . Indemnitee shall be entitled to the
indemnification rights provided in this Section 5 if
Indemnitee was or is a party or witness or is threatened to be made
a party or witness to any Proceeding brought by or in the right of
the Company to procure a judgment in its favor by reason of the
fact that Indemnitee is or was a director, officer, employee, agent
or fiduciary of the Company, or any of its direct or indirect
subsidiaries, or is or was serving at the request of the Company,
or any of its direct or indirect subsidiaries, as a director,
officer, employee, agent or fiduciary of another entity, including,
but not limited to, another corporation, partnership, limited
liability company, employee benefit plan, joint venture, trust
or other enterprise, or by reason of any act or omission by him or
her in any such capacity. Pursuant to this Section 5,
Indemnitee shall be indemnified against all Expenses actually and
reasonably incurred by him or her in connection with the defense or
settlement of such Proceeding (including, but not limited to the
investigation, defense or appeal thereof), if Indemnitee acted in
good faith and in a manner Indemnitee reasonably believed to be in
or not opposed to the best interests of the Company; provided,
however , that no such indemnification shall be made in respect
of any claim, issue or matter as to which Indemnitee shall have
been adjudged to be liable to the Company, unless and only to the
extent that the Court of Chancery of the State of Delaware or 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, Indemnitee is fairly and
reasonably entitled to be indemnified for such Expenses actually
and reasonably incurred by him or her which such court shall deem
proper.
6.
Good Faith
Definition . For purposes of this Agreement,
Indemnitee shall be deemed to have acted in good faith and in a
manner Indemnitee reasonably believed to be in or not opposed to
the best interests of the Company, or, with respect to any criminal
Proceeding, to have had no reasonable cause to believe
Indemnitee’s conduct was unlawful, if such action was based
on any of the following: (a) the records or books of the account of
the Company or other enterprise, including financial statements;
(b) information, opinions, reports or statements supplied to
Indemnitee by the officers or employees of the Company or other
enterprise in the course of his or her duties; (c) the advice of
legal counsel for the Company or other enterprise; or (d)
information or records given in reports made to the Company or
other enterprise by an independent certified public accountant or
by an appraiser or other expert selected with reasonable care by
the Company or other enterprise. The provisions of this
Section 6 shall not be deemed to be exclusive or to limit in
any way the other circumstances in which Indemnitee may be deemed
to have met the applicable standard of conduct set forth in this
Agreement.
7.
Indemnification for Expenses of a
Witness or a Successful Party . Notwithstanding the other provisions of this
Agreement, to the extent that Indemnitee has (i) served on
behalf of or at the request of the Company, or any of its direct or
indirect subsidiaries, as a witness or other participant in any
class action or Proceeding, or (ii) has been successful, on
the merits or otherwise, in defense of any Proceeding referred to
in Sections 4 and 5, or in defense of any claim, issue or
matter therein, including, but not limited to, the dismissal of any
action without prejudice or the settlement of a Proceeding without
an admission of liability, Indemnitee shall be indemnified against
all Expenses actually and reasonably incurred by Indemnitee in
connection therewith without any determination pursuant to Section
9.
8.
Partial
Indemnification . If
Indemnitee is entitled under any provision of this Agreement to
indemnification by the Company for some or a portion of the
Expenses, judgments, fines and amounts paid in settlement actually
and reasonably incurred by Indemnitee in connection with the
investigation, defense, appeal or settlement of such Proceeding
described in Section 4 and 5 hereof, but is not entitled to
indemnification for the total amount thereof, the Company shall
nevertheless indemnify Indemnitee for the portion of such Expenses,
judgments, penalties, fines and amounts paid in settlement actually
and reasonably incurred by Indemnitee to which Indemnitee is
entitled.
9.
Procedure for Determination of
Entitlement to Indemnification .
(a)
To obtain indemnification under this
Agreement, Indemnitee shall submit to the Secretary of the Company
a written request, including documentation and information which is
reasonably available to Indemnitee and is reasonably necessary to
determine whether and to what extent Indemnitee is entitled to
indemnification. The Secretary of the Company shall, promptly upon
receipt of a request for indemnification, advise the Board in
writing that Indemnitee has requested
indemnification.
(b)
Upon written request by Indemnitee for
indemnification pursuant to Section 4, 5, 7 and 8 hereof, the
entitlement of Indemnitee to indemnification pursuant to the terms
of this Agreement shall be determined by the following person or
persons, who shall be empow
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