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Exhibit
10.1
SILICON GRAPHICS,
INC.
INDEMNIFICATION
AGREEMENT
This Indemnification
Agreement (“Agreement”) is entered into effective as of
, 2006 by and between Silicon Graphics, Inc., a Delaware
corporation (the “Company”), and
(together with his/her estate, spouse, heirs, executors or personal
or legal representatives, the “Indemnitee”).
WHEREAS, the Company and
Indemnitee recognize that it continues to be difficult for the
Company to obtain liability insurance for its directors, officers,
employees, agents and fiduciaries, and that the cost of such
insurance has significantly increased while the coverage of such
insurance has generally been reduced;
WHEREAS, the Company and
Indemnitee further recognize that there has been a substantial
increase in corporate litigation in general, subjecting directors,
officers, employees, agents and fiduciaries to expensive litigation
risks at the same time as the availability and coverage of
liability insurance has been severely limited;
WHEREAS, Indemnitee does not
regard the current protection available as adequate under the
present circumstances, and the Indemnitee and other directors,
officers, employees, agents and fiduciaries of the Company may not
be willing to continue to serve in such capacities without
additional protection;
WHEREAS, the Company desires
to attract and retain the services of highly qualified individuals,
such as Indemnitee, to serve the Company and, in part, in order to
induce Indemnitee to continue to provide services to the Company,
wishes to provide for the indemnification and advancing of expenses
to Indemnitee to the maximum extent permitted by law;
and
WHEREAS, in view of the
considerations set forth above, the Company desires that effective
upon the date referred to above, Indemnitee shall be indemnified by
the Company as set forth herein.
NOW, THEREFORE, the Company
and Indemnitee hereby agree as follows:
1.
Indemnification.
(a) Indemnification of
Expenses. The Company shall indemnify Indemnitee to the fullest
extent permitted by law if Indemnitee was or 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 Claim by reason of
(or arising in part out of) an Indemnifiable Event against any and
all Expenses, including all interest, assessments and other charges
paid or payable in connection with or in respect of such Expenses.
Such payment of
Expenses shall be made by the Company as
soon as practicable but in any event no later than five
(5) days after written demand by Indemnitee therefor is
presented to the Company.
(b) Reviewing Party
.
(i) The obligations of the
Company under Section l(a) shall be subject to the condition that
the Reviewing Party shall not have determined (in a written
opinion, in any case in which the Independent Legal Counsel
referred to in Section l(c) hereof is involved) that Indemnitee
would not be permitted to be indemnified under applicable law. The
obligation of the Company to make an advance payment of Expenses to
Indemnitee pursuant to Section 2(a) (an “Expense
Advance”) shall be subject to the condition that, if, when
and to the extent that the Reviewing Party determines that
Indemnitee would not be permitted to be so indemnified under
applicable law, the Company shall be entitled to be reimbursed by
Indemnitee (who hereby agrees to reimburse the Company) for all
such amounts theretofore paid.
(ii) Notwithstanding the
foregoing paragraph (b)(i), if Indemnitee has commenced or
thereafter commences legal proceedings in a court of competent
jurisdiction to secure a determination that Indemnitee should be
indemnified under applicable law, any determination made by the
Reviewing Party that Indemnitee would not be permitted to be
indemnified under applicable law shall not be binding, and
Indemnitee shall not be required to reimburse the Company for any
Expense Advance, until final judicial determination is made with
respect thereto (as to which all rights of appeal therefrom have
been exhausted or lapsed).
(iii) Indemnitee’s
obligation to reimburse the Company for any Expense Advance shall
be unsecured and no interest shall be charged thereon.
(iv) If there has not been a
Change in Control, the Reviewing Party shall be selected by the
Board of Directors, and if there has been such a Change in Control
(other than a Change in Control which has been approved by a
majority of the Company’s Board of Directors who were
directors immediately prior to such Change in Control), the
Reviewing Party shall be the Independent Legal Counsel referred to
in Section l(c) hereof.
(v) If there has been no
determination by the Reviewing Party or if the Reviewing Party
determines that Indemnitee substantively would not be permitted to
be indemnified in whole or in part under applicable law, Indemnitee
shall have the right to commence litigation seeking an initial
determination by the court or challenging any such determination by
the Reviewing Party or any aspect thereof, including the legal or
factual bases therefor, and the Company hereby consents to service
of process and to appear in any such proceeding. Any determination
by the Reviewing Party otherwise shall be conclusive and binding on
the Company and Indemnitee.
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(c) Change in Control
. The Company agrees that if there is a Change in Control of the
Company (other than a Change in Control which has been approved by
a majority of the Company’s Board of Directors who were
directors immediately prior to such Change in Control) then with
respect to all matters thereafter arising concerning the rights of
Indemnitee to payments of Expenses and Expense Advances under this
Agreement or any other agreement or under the Company’s
Certificate of Incorporation or Bylaws as now or hereafter in
effect, the Company shall seek legal advice only from legal counsel
selected by Indemnitee and approved by the Company (which approval
shall not be unreasonably withheld) (“Independent Legal
Counsel”). Such counsel, among other things, shall render its
written opinion to the Company and Indemnitee as to whether and to
what extent Indemnitee would be permitted to be indemnified under
applicable law. The Company agrees to pay the reasonable fees of
the Independent Legal Counsel referred to above and to fully
indemnify such counsel against any and all expenses (including
attorneys’ fees), claims, liabilities and damages arising out
of or relating to this Agreement or its engagement pursuant
hereto.
(d) Mandatory Payment of
Expenses. Notwithstanding any other provision of this Agreement
other than Section 9 hereof, to the extent that Indemnitee has
been successful on the merits of any cause of action or otherwise,
including, without limitation, by dismissal of an action with or
without prejudice, or by settlement, judgment, order or otherwise,
in defense of any Claim referred to in Section l(a) hereof or in
the defense of any claim, issue or matter therein, Indemnitee shall
be indemnified against all Expenses incurred by Indemnitee in
connection therewith.
2. Expenses;
Indemnification Procedure.
(a) Advancement of
Expenses . The Company shall advance all Expenses incurred by
Indemnitee. The advances to be made hereunder shall be paid by the
Company to Indemnitee as soon as practicable but in any event no
later than five (5) days after written demand by Indemnitee
therefor to the Company.
(b) Notice/Cooperation by
Indemnitee . Indemnitee shall, as a condition precedent to
Indemnitee’s right to be indemnified under this Agreement,
give the Company notice in writing as soon as reasonably
practicable of any Claim made against Indemnitee for which
indemnification will or could be sought under this Agreement;
provided , however , that the failure to give any
such notice shall not disqualify Indemnitee from the right, or
otherwise affect in any manner any right of Indemnitee, to receive
payments or advancements of Expenses unless the Company’s
ability to defend in such Claim is materially and adversely
prejudiced thereby, and then only to the extent thereof. Notice to
the Company shall be directed to the Chief Executive Officer of the
Company, with a copy to the Company’s Secretary, at the
address shown on the signature page of this Agreement (or such
other address as the Company shall designate in writing to
Indemnitee). In addition, Indemnitee shall give the Company such
information and
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cooperation as it may reasonably require
and as shall be within Indemnitee’s power. Promptly after
receipt by Indemnitee, or the Company, of any notice or document
respecting the commencement of a Claim naming or involving
Indemnitee and relating to an Indemnifiable Event with respect to
which Indemnitee may be entitled to indemnification or an Expense
Advance pursuant to this Agreement, the party receiving the same
shall notify the other party promptly in writing pursuant to
Section 16 hereof of such receipt, together with copies of
such notice or document.
(c) No Presumptions;
Burden of Proof; Determination of Good Faith and Knowledge
.
(i) For purposes of this
Agreement, the termination of any Claim by judgment, order,
settlement (whether with or without court approval) or conviction,
or upon a plea of nolo contendere , or its
equivalent, shall not create a presumption that Indemnitee did not
meet any particular standard of conduct or have any particular
belief or that a court has determined that indemnification is not
permitted by applicable law. In addition, neither the failure of
the Reviewing Party to have made a determination as to whether
Indemnitee has met any particular standard of conduct or had any
particular belief, nor an actual determination by the Reviewing
Party that Indemnitee has not met such standard of conduct or did
not have such belief, prior to the commencement of legal
proceedings by Indemnitee to secure a judicial determination that
Indemnitee should be indemnified under applicable law, shall be a
defense to Indemnitee’s claim or create a presumption that
Indemnitee has not met any particular standard of conduct or did
not have any particular belief. In connection with any
determination by the Reviewing Party or otherwise as to whether the
Indemnitee is entitled to be indemnified hereunder, the burden of
proof shall be on the Company to establish that Indemnitee is not
so entitled.
(ii) For purposes of any
determination of good faith, 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 action or proceeding, to have had no
reasonable cause to believe Indemnitee’s conduct was
unlawful, if Indemnitee’s action was based on the records or
books of account of the Company (or other applicable enterprise),
including financial statements, or on information supplied to
Indemnitee by the officers of the Company (or other applicable
enterprise) in the course of their duties, or on the advice of
legal counsel for the Company (or other applicable enterprise) or
the Board of Directors or counsel selected by any committee of the
Board of Directors or on information or records given or reports
made to the Company (or other applicable enterprise) by an
independent certified public accountant or by an appraiser,
investment banker or other expert selected with reasonable care by
the Company (or other applicable enterprise) or the Board of
Directors or any committee of the Board of Directors. The
provisions of this
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Section 2(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.
(iii) The knowledge and/or
actions, or failure to act, of any director, officer, agent or
employee of the Company shall not be imputed to Indemnitee for
purposes of determining the right to indemnification under this
Agreement.
(d) Notice to Insurers
. If, at the time of the receipt by the Company of a notice of a
Claim pursuant to Section 2(b) hereof, the Company has
liability insurance in effect which may cover such Claim, the
Company shall give prompt notice of the commencement of such Claim
to the insurers in accordance with the procedures set forth in the
respective policies. The Company shall thereafter take all
necessary or desirable action to cause such insurers to pay, on
behalf of the Indemnitee, all amounts payable as a result of such
Claim in accordance with the terms of such policies.
(e) Selection of
Counsel . In the event the Company shall be obligated hereunder
to pay the Expenses of any Claim, the Company, if appropriate,
shall be entitled to assume the defense of such Claim, with counsel
approved by Indemnitee (“Retained Counsel”), upon the
delivery to Indemnitee of written notice of its election so to do.
After delivery of such notice, approval of Retained Counsel by
Indemnitee and the retention of Retained Counsel by the Company,
the Company will not be liable to Indemnitee under this Agreement
for any fees of separate counsel (“Separate Counsel”)
subsequently incurred by Indemnitee with respect to the same Claim;
provided that, Indemnitee shall have the right to employ Separate
Counsel in any such Claim (i) at Indemnitee’s expense or
(ii) if (A) the employment of Separate Counsel by
Indemnitee has been previously authorized by the Company,
(B) Indemnitee shall have reasonably concluded that there may
be a conflict of interest between the Company and Indemnitee in the
conduct of any such defense, or (C) the Company fails to
assume the defense of such Claim in a timely manner or the Company
shall not continue to retain Retained Counsel to defend such Claim,
then the fees and expenses of Indemnitee’s Separate Counsel
shall be at the expense of the Company.
(f) Defense by Company
. In the event the Company has assumed the defense of a Claim
pursuant to Section 2(e), the Company shall not, without the
prior written consent of Indemnitee, consent to the entry of any
judgment against Indemnitee or enter into any settlement or
compromise which (i) includes an admission of fault of
Indemnitee, (ii) involves damages other than solely the
payment of monetary damages or (iii) does not include, as an
unconditional term thereof, the full release of Indemnitee from all
liability in respect of such Claim, which release shall be in form
and substance reasonably satisfactory to Indemnitee.
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3. Additional
Indemnification Rights; Nonexclusivity .
(a) Scope . The
Company hereby agrees to indemnify the Indemnitee to the fullest
extent permitted by law, notwithstanding that such indemnification
is not specifically authorized by the other provisions of this
Agreement, the Company�
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