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Exhibit
10.1
MULTIMEDIA GAMES,
INC.
Indemnification
Agreement
THIS INDEMNIFICATION AGREEMENT (this
“ Agreement ”) is made between Multimedia Games,
Inc., a Texas corporation (the “ Company ”), and
the “ Indemnitee ” named on the signature page
hereto. Unless otherwise indicated, all references to Sections are
to Sections in this Agreement. This Agreement is effective the date
the Indemnitee first became (or becomes) an officer or director of
the Company (“ Effective Date ”).
| 1.1 |
The Indemnitee is (or is about to become) a director or officer
of the Company. The Company regards it as essential to continue to
attract and retain, as directors and officers, the most capable
persons available. |
| 1.2 |
The Company and the Indemnitee recognize the increased risk of
litigation and other claims being asserted against directors and
officers. Depending on the nature of the litigation or other claim
in question, the Company’s directors’ and
officers’ liability insurance coverage might not provide as
much protection as could be desirable in a given
situation. |
| 1.3 |
The Company regards it as crucial to secure the continued
service of competent and experienced people in senior corporate
positions and to assure that they will be able to exercise judgment
without fear of personal liability so long as they fulfill the
duties under Texas law, including honesty, care and good faith.
Accordingly, the Company wishes to provide in this Agreement
(a) for the indemnification of, and the advancing of
expenses to, the Indemnitee to the fullest extent, whether partial
or complete, permitted by law and as set forth in this Agreement,
and (b) to the extent insurance is maintained, for the
continued coverage of Indemnitee under the Company’s
directors’ and officers’ liability insurance
policies. |
| 2. |
DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings set forth below. |
| 2.1 |
Acquiring Person means a Person referred to in Section
2.8. |
| 2.2 |
Acquisition Report means a report filed by or on behalf
of a stockholder or group of stockholders on Schedule 13D or
Schedule 14D-1 or any successor schedule, form or report under the
Exchange Act. |
| 2.3 |
Approved Law Firm means any law firm that (a)
is located in the State of Texas, (b) is rated
“AV” by the Martindale-Hubbell Law Directory, and
(c) has not, for a five-year period prior to the
Indemnifiable Event in question, been engaged by the Company, by a
Person filing an Acquisition Report, or by the
Indemnitee. |
| 2.4 |
Article 2.02-1 means Article 2.02-1 of the TBCA and any
successor statute thereto or replacement statute
thereof. |
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| 2.5 |
Articles and Bylaws means the articles of incorporation
of the Company and/or the bylaws of the Company, in either case as
now in effect or as hereafter amended and/or restated (including
any substitute articles of incorporation and/or
bylaws). |
| 2.6 |
Beneficial Owner means a Person who is a beneficial
owner (as defined in Rule 13d-3 or any successor rule or regulation
promulgated under the Exchange Act), directly or indirectly, of
Voting Stock, of rights to acquire Voting Stock, or of securities
convertible into Voting Stock, as applicable. If a Person owns
rights to acquire Voting Stock, that Person’s beneficial
ownership shall be determined pursuant to paragraph (d) of
Rule 13d-3 or any successor rule or regulation promulgated
under the Exchange Act. |
| 2.7 |
Board means the Board of Directors of the
Company. |
| 2.8 |
Change in Control of the Company shall be deemed to have
occurred if any of the following events occurs after the Effective
Date: |
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(a) |
An Acquisition Report is filed with the Commission disclosing
that any Person is the Beneficial Owner of 20 percent or more of
the outstanding Voting Stock. The previous sentence shall not apply
if such Person is the Company, one of its subsidiaries or any
employee benefit plan sponsored by either. |
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(b) |
Any Person purchases securities pursuant to a tender offer or
exchange offer to acquire any Voting Stock (or any securities
convertible into Voting Stock) and, immediately after consummation
of that purchase, that Person is the Beneficial Owner of
20 percent or more of the outstanding Voting Stock. The
previous sentence shall not apply if such Person is the Company,
one of its subsidiaries, or any employee benefit plan sponsored by
either. |
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(c) |
The consummation of a Merger Transaction if (a) the
Company is not the surviving entity or (b) as a result of the
Merger Transaction, 50 percent or less of the combined voting power
of the then-outstanding securities of the other party to the Merger
Transaction, immediately after the Change of Control Date, are held
in the aggregate by the holders of Voting Stock immediately prior
to the Change of Control Date. |
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(d) |
The consummation of a Sale Transaction if as a result of the
Sale Transaction, 50 percent or less of the combined voting power
of the then-outstanding securities of the other party to the Sale
Transaction, immediately after the Change of Control Date, are held
in the aggregate by the holders of Voting Stock immediately prior
to the Change of Control Date. |
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(e) |
The consummation of a transaction, immediately after which any
Person would be the Beneficial Owner, directly or indirectly, of
more than 50 percent of the outstanding Voting Stock. |
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(f) |
The stockholders of the Company approve the dissolution of the
Company. |
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(g) |
During any
period of 12 consecutive months, the individuals who at the
beginning of that period constituted the Board of Directors shall
cease to constitute a majority of the Board of Directors. The
previous sentence will not apply if the election, or the nomination
for
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election by the
Company’s stockholders, of each director of the Company first
elected during such period was approved by a vote of at least
two-thirds of the directors of the Company then still in office who
were directors of the Company at the beginning of any such
period.
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| 2.9 |
Change of Control Date means the date of an event
constituting a Change of Control. In the case of a Merger
Transaction or a Sale Transaction constituting a Change of Control,
the Change of Control Date shall be the effective date of such
transaction. |
| 2.10 |
Claim means (a) any threatened, pending or
completed action, arbitration, mediation, suit or proceeding,
whether civil, criminal, administrative, arbitrative, investigative
or otherwise; (b) any appeal in such an action, suit,
or proceeding; and (c) any formal or informal inquiry
or investigation, whether conducted by the Company or some other
party (either private, regulatory or governmental). |
| 2.11 |
Commission means the Securities and Exchange Commission
or any successor agency. |
| 2.12 |
Exchange Act means the Securities Exchange Act of 1934,
as amended from time to time, or any successor statute. |
| 2.13 |
Expense Advance – see Section 5. |
| 2.14 |
Expenses shall include (a) attorneys’
fees and all other costs, expenses and obligations paid or incurred
in connection with (1) investigating, defending,
prosecuting, being a witness in or participating in any
Indemnifiable Claim, or (2) preparing to conduct any
of the activities listed in clause (1), together with (b)
interest, computed at the Company’s average cost of
funds for short-term borrowings, accrued from the date of
incurrence of the items listed in subparagraph (a) to that
date the Indemnitee receives reimbursement therefor. |
| 2.15 |
Final Judgment means a final judgment or other final
adjudication, by a court of competent jurisdiction, from which no
further appeal is taken or possible. |
| 2.16 |
Including (in lower case), unless otherwise specified,
means including but not limited to. |
| 2.17 |
Indemnifiable Claim means (a) a Claim, made
by a person or entity other than the Indemnitee, arising out of (in
whole or in part) or relating to an Indemnifiable Event, or
(b) a Claim made by the Indemnitee pursuant to Section
4.3. |
| 2.18 |
Indemnifiable Event means any event or occurrence
related to: |
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(a) |
the fact that the Indemnitee is or was a director, officer,
employee, agent or fiduciary of the Company; or |
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(b) |
the fact that
the Indemnitee is or was serving at the request of the Company as a
director, officer, employee, trustee, agent or fiduciary of another
corporation of any type or kind, foreign or domestic, partnership,
joint venture, limited liability company, trust, employee benefit
plan or other enterprise. Without limiting any indemnification
provided hereunder, if the Indemnitee serves, in any capacity,
either (i) another corporation, partnership,
joint
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venture, limited liability
company, trust, or other enterprise of which 50% or more of the
voting power or residual economic interest is held, directly or
indirectly, by the Company or (ii) any employee
benefit plan of the Company or any entity referred to in clause
(i) above, such service shall be deemed to be at the request
of the Company; or
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(c) |
anything done or not done by the Indemnitee in any capacity
described in subparagraphs (a) and (b). |
| 2.19 |
Indemnity Obligations means the Company’s
obligations to indemnify the Indemnitee under this Agreement or any
other agreement or any provision of the Articles and Bylaws
relating to Indemnifiable Claims. |
| 2.20 |
Merger Transaction means a merger, consolidation or
reorganization of the Company with or into any other person or
entity. |
| 2.21 |
Person means a person within the meaning of
Section 13(d) or Section 14(d)(2) or any successor rule
or regulation promulgated under the Exchange Act. |
| 2.22 |
Reviewing Party means: |
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(a) |
the Board acting by a majority consisting of directors who are
not parties to the particular Claim with respect to which the
Indemnitee is seeking indemnification (“ Disinterested
Directors ”) or |
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(b) |
if there are no Disinterested Directors or if a majority of
Disinterested Directors so directs: |
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(1) |
the Board upon the opinion in writing of independent legal
counsel that indemnification is proper in the circumstances because
the applicable standard of conduct set forth in Section 3 of
this Agreement and/or in Article 2.02-1 of the TBCA has been met by
the Indemnitee, or |
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(2) |
the shareholders upon a finding that the Indemnitee has met the
applicable standard of conduct referred to in clause (b)(1) of this
definition. |
| 2.23 |
Sale Transaction means a sale, lease, exchange or other
transfer of all or substantially all the assets of the Company and
its consolidated subsidiaries to any other person. |
| 2.24 |
TBCA means the Texas Business Corporation Act or any
successor statute. A reference to a specific article of the TBCA
shall encompass any corresponding renumbered or amended article or
any corresponding article of any successor statute. |
| 2.25 |
Voting Stock means shares of capital stock of the
Company the holders of which are entitled to vote for the election
of directors, but excluding shares entitled to so vote only upon
the occurrence of a contingency unless that contingency shall have
occurred. |
| 3. |
RIGHT TO INDEMNIFICATION. |
| 3.1 |
If
(a) the Indemnitee was, is, becomes at any time, or is
threatened to be made, (i) a party to, or
(ii) a witness in, or (iii) otherwise a
participant in, an Indemnifiable Claim, then (b)
subject to the
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terms hereof, the Company
shall indemnify the Indemnitee, to the maximum extent permitted by
law, against any and all Expenses, judgments, fines (including
excise taxes assessed on an Indemnitee with respect to an employee
benefit plan), penalties, and amounts paid in settlement (including
all interest, assessments and other charges paid or payable in
connection with, or in respect of, such Expenses, judgments, fines,
penalties or amounts paid in settlement) in respect of such
Claim.
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| 3.2 |
The Indemnitee shall not be entitled to indemnification, except
for Expenses, pursuant to Section 3.1 if a Final Judgment,
adverse to the Indemnitee, establishes that (a) the
Indemnitee’s acts were committed in bad faith or were the
result of active and deliberate dishonesty and in either case, were
material to the cause of action adjudicated in the Final Judgment,
or (b) the Indemnitee personally and improperly gained
a material financial profit or other material benefit to which the
Indemnitee was not entitled, or (c) the Indemnitee did
not reasonably believe that his conduct as an officer or director
was in the best interests of the Company and such conduct was
material to the cause of action adjudicated in the Final
Judgment. |
| 3.3 |
Prior to a Change of Control, the Indemnitee shall not be
entitled to indemnification pursuant to Section 3.1 in
connection with any Claim initiated by the Indemnitee against the
Company or any director or officer of the Company unless (a)
the Company has joined in or consented to the initiation of
such Claim, or (b) such Claim is initiated pursuant to
Section 3.4. |
| 3.4 |
If (a) the Indemnitee asserts a claim or brings an
action for (i) indemnification or advance payment of
Expenses by the Company under its Indemnity Obligations, or
(ii) a determination or challenge pursuant to
Section 4.3, or (iii) recovery under any
directors’ and officers’ liability insurance policies
maintained by the Company, then (b) the Company shall
indemnify the Indemnitee against an |
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