Exhibit
10.1
LTX-CREDENCE
CORPORATION
INDEMNIFICATION
AGREEMENT
This Agreement is made as of the
day of
, 2008, by and between LTX-Credence Corporation, a Massachusetts
corporation (the “Corporation”), and
(“Indemnitee”), a director or officer of the
Corporation.
WHEREAS, it is essential to the
Corporation to retain and attract as directors and officers the
most capable persons available, and
WHEREAS, the prevailing, significant
level of corporate litigation subjects directors and officers to
expensive litigation risks, and
WHEREAS, it is the policy of the
Corporation to indemnify its directors and officers so as to
provide them with the maximum protection permitted by law,
and
WHEREAS, Indemnitee does not regard
the protection available under the Corporation’s Articles of
Organization and Bylaws and insurance as adequate in the present
circumstances, and may not be willing to serve or continue to serve
as a director or officer of the Corporation without adequate
protection, and
WHEREAS, the Corporation desires
Indemnitee to serve, or continue to serve, as a director or officer
of the Corporation.
NOW THEREFORE, for valuable
consideration, the receipt of which is hereby acknowledged, the
Corporation and Indemnitee do hereby agree as follows:
1. Definitions . As used in
this Agreement:
(a) A “Change in
Control” shall mean:
(i) The acquisition by any
individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”)) (a
“Person”) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (x) the then outstanding shares of common stock of the
Company (the “Outstanding Company Common Stock”) or
(y) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting
Securities”); provided, however, that for purposes of this
subsection (i), the following acquisitions shall not constitute a
Change of Control: (1) any acquisition directly from the
Company, (2) any acquisition by the Company, (3) any
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation
controlled by the Company or (4) any acquisition by any
corporation pursuant to a transaction which complies with clauses
(x), (y) and (z) of subsection (iii) of this
definition; or
(ii) Individuals who, as of the date
hereof, constitute the Board (the “Incumbent Board”)
cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for
election by the Company’s shareholders, was approved by a
vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were
a member of the Incumbent Board, but excluding, for this purpose,
any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to
the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person
other than the Board; or
(iii) Consummation of a
reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the
Company (a “Business Combination”), in each case,
unless, following such Business Combination, (x) all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior
to such Business Combination beneficially own, directly or
indirectly, more than 50% of, respectively, the then outstanding
shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without
limitation a corporation which as a result of such transaction owns
the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately
prior to such Business Combination of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case
may be, (y) no Person (excluding any corporation resulting
from such Business Combination or any employee benefit plan (or
related trust) of the Company or such corporation resulting from
such Business Combination) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then
outstanding voting securities of such corporation except to the
extent that such ownership existed prior to the Business
Combination and (z) at least a majority of the members of the
board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board,
providing for such Business Combination; or
(iv) Approval by the shareholders of
the Company of a complete liquidation or dissolution of the
Company.
(b) The term “Corporate
Status” shall mean the status of a person who is or was, or
has agreed to become, a director or officer of the Corporation or
who, while a director or officer of the Corporation, is or was
serving at the Corporation’s request as a director, officer,
fiduciary, partner, trustee, employee or agent of, or in a similar
capacity with, another corporation, partnership, joint venture,
trust, employee benefit plan or other entity. A director or officer
is considered to be serving an employee benefit plan at the
Corporation’s request if his or her duties to the Corporation
also impose duties on, or otherwise involve services by, him or her
to the plan or to participants in or beneficiaries of the
plan.
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(c) The term “Disinterested
Director” shall mean a director of the Corporation who, at
the time of a vote referred to in Paragraph 8, is not
(i) a party to the Proceeding, or (ii) an individual
having a familial, financial, professional or employment
relationship with Indemnitee, which relationship would, in the
circumstances, reasonably be expected to exert an influence on the
director’s judgment when voting on the decision being
made.
(d) The term “Expenses”
shall include, without limitation, attorneys’ fees,
retainers, court costs, transcript costs, fees and expenses of
experts, travel expenses, duplicating costs, printing and binding
costs, telephone and telecopy charges, postage, delivery service
fees and other disbursements or expenses of the type customarily
incurred in connection with a Proceeding, but shall not include the
amount of judgments, fines or penalties against Indemnitee or
amounts paid in settlement in connection with such
matters.
(e) The term “Independent
Counsel” shall mean a law firm, or a member of a law firm,
that is experienced in matters of corporation law and neither
presently is, nor in the past five years has been, retained to
represent: (i) the Corporation or Indemnitee in any matter
material to either such party (other than with respect to matters
concerning Indemnitee under this Agreement, 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” 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 Corporation or Indemnitee in an action to determine
Indemnitee’s rights under this Agreement. The Corporation
agrees to pay the reasonable fees and expenses of the Independent
Counsel referred to above and to fully indemnify such counsel
against any and all Expenses, claims, liabilities and damages
arising out of or relating to this Agreement or its engagement
pursuant hereto.
(f) The term “Liability”
shall mean the obligation to pay a judgment, settlement, penalty,
fine (including an excise tax assessed with respect to an employee
benefit plan) and all reasonable Expenses incurred in connection
with a Proceeding.
(g) The term
“Proceeding” shall mean any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative, arbitrative or investigative and whether formal or
informal.
2. Indemnification
.
(a) Subject to Paragraph 3, the
Corporation shall, to the fullest extent permitted by law (as such
may be amended from time to time), indemnify Indemnitee in
connection with any Proceeding as to which Indemnitee is, was or is
threatened to be made a party (or is otherwise involved) by reason
of Indemnitee’s Corporate Status. In furtherance of the
foregoing and without limiting the generality thereof:
(i) the Corporation shall indemnify
Indemnitee if Indemnitee was, is or is threatened to be made a
defendant or respondent in a Proceeding because of
Indemnitee’s Corporate Status as a director against Liability
incurred in the Proceeding if
(A) (1) Indemnitee
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conducted himself or herself in good faith, and
(2) Indemnitee reasonably believed that his or her conduct was
in the best interests of the Corporation or that his or her conduct
was at least not opposed to the best interests of the Corporation,
and (3) in the case of any criminal proceeding, Indemnitee had
no reasonable cause to believe his or her conduct was unlawful, or
(B) Indemnitee engaged in conduct for which Indemnitee shall
not be liable under a provision of the Corporation’s Articles
of Organization authorized by Section 2.02(b)(4) of Chapter
156D of the General Laws of the Commonwealth of Massachusetts
(“Chapter 156D”) or any successor provision to such
Section; and
(ii) the Corporation shall indemnify
Indemnitee if Indemnitee was, is or is threatened to be made a
defendant or respondent in a Proceeding because of
Indemnitee’s Corporate Status as an officer against Liability
incurred in the Proceeding, except for Liability arising out of
acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law.
(b) Indemnitee’s conduct with
respect to an employee benefit plan for a purpose Indemnitee
reasonably believed to be in the interests of the participants in,
and the beneficiaries of, the plan is conduct that satisfies the
requirement that Indemnitee’s conduct was at least not
opposed to the best interests of the Corporation.
(c) The termination of a Proceeding
by judgment, order, settlement or conviction, or upon a plea of
nolo contendere or its equivalent, is not, of itself,
determinative that Indemnitee did not meet the relevant standard of
conduct described in this Paragraph 2.
3. Exceptions to Right of
Indemnification . Notwithstanding anything to the contrary in
this Agreement, except as set forth in Paragraphs 9 and
10:
(a) the Corporation shall not
indemnify, or advance Expenses to, Indemnitee in connection with a
Proceeding (or part thereof) initiated by Indemnitee unless
(i) the initiation thereof was approved by the Board of
Directors of the Corporation (the “Board of Directors”)
or (ii) the Proceeding is instituted after a Change in
Control; and
(b) the Corporation shall not be
required to make an indemnification payment to Indemnitee to the
extent Indemnitee has otherwise actually received such payment
under any insurance policy, agreement or otherwise, and in the
event the Corporation makes any indemnification payments to
Indemnitee and Indemnitee is subsequently reimbursed from the
proceeds of insurance, Indemnitee shall promptly refund such
indemnification payments to the Corporation to the extent of such
insurance reimbursement.
4. Indemnification of Expenses of
Successful Party . Notwithstanding any other provision of this
Agreement, in addition to and not in limitation of the rights set
forth in Paragraph 2, to the extent that Indemnitee has been
wholly successful, on the merits or otherwise, in the defense of
any Proceeding to which Indemnitee was a party because of
Indemnitee’s Corporate Status, Indemnitee shall be
indemnified, to the fullest extent permitted by law (as such may be
amended from time to time), against all reasonable Expenses
incurred by Indemnitee or on Indemnitee’s behalf in
connection therewith.
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5. Indemnification for Expenses
of a Witness . Notwithstanding any other provision of this
Agreement, to the extent that Indemnitee is, by reason of
Indemnitee’s Corporate Status, a witness in any Proceeding to
which Indemnitee is not a party, Indemnitee shall be indemnified
against all reasonable Expenses incurred by or on behalf of
Indemnitee in connection therewith.
6. Notification and Defense of
Claim .
(a) Indemnitee must notify the
Corporation in writing as soon as practicable of any Proceeding for
which indemnity will or could be sought by Indemnitee and provide
the Corporation with a copy of any summons, citation, subpoena,
complaint, indictment, information or other document relating to
such Proceeding with which Indemnitee is served. The Corporation
will be entitled to participate in any such Proceeding at its own
expense. Indemnitee shall have the right to engage
Indemnitee’s own counsel in connection with such Proceeding.
Indemnitee’s counsel shall cooperate reasonably with the
Corporation’s counsel to minimize the cost of defending
claims against the Corporation and Indemnitee.
(b) The Corporation shall not be
required to indemnify Indemnitee under this Agreement for any
amounts paid in settlement of any Proceeding effected without the
Corporation’s written consent. The Corporation shall not
settle any Proceeding in any manner that would impose any penalty
or limitation on Indemnitee without Indemnitee’s written
consent. Neither the Corporation nor Indemnitee will unreasonably
withhold consent to any proposed settlement.
7. Advancement of Expenses .
The Corporation shall advance any and all Expenses incurred by or
on behalf of the Indemnitee in connection with a Proceeding within
30 days after receipt by the Corporation of a written request
for advancement of Expenses (including in such request such
documentation and information as is reasonably available to
Indemnitee with respect to such Proceeding); provided ,
however , that the payment of such Expenses incurred by
Indemnitee or on his or her behalf in ad
