Director Indemnification Agreement - Integrated Defense Technologies Inc.
DIRECTOR INDEMNIFICATION AGREEMENT
This Agreement made and entered into, as of January __, 2002 (the
"AGREEMENT"), by and between Integrated Defense Technologies, Inc., a Delaware
corporation (the "COMPANY", which term shall include, where appropriate, any
Entity (as hereinafter defined) controlled directly or indirectly by the
Company), and _____________ ("INDEMNITEE").
WHEREAS, it is essential to the Company that it be able to retain and
attract as directors the most capable persons available;
WHEREAS, the Company desires to provide Indemnitee with specific
contractual assurance of Indemnitee's rights to full indemnification against
litigation risks and expenses (regardless, among other things, of any amendment
to or revocation of any such bylaws or any change in the ownership of the
Company or the composition of its Board of Directors); and
WHEREAS, Indemnitee is relying upon the rights afforded under this
Agreement in continuing in Indemnitee's position as a director of the Company.
NOW, THEREFORE, in consideration of the promises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
(a) "CORPORATE STATUS" describes the status of a person who is serving
or has served (i) as a director of the Company, including as a member of any
committee thereof, (ii) in any capacity with respect to any employee benefit
plan of the Company, or (iii) as a director, partner, trustee, officer,
employee, or agent of any other Entity (as defined below) at the request of the
Company. For purposes of subsection (iii) of this Section 1(a), an officer or
director of the Company who is serving or has served as a director, partner,
trustee, officer, employee or agent of a Subsidiary (as defined below) shall be
deemed to be serving at the request of the Company.
(b) "ENTITY" shall mean any corporation, partnership, limited liability
company, joint venture, trust, foundation, association, organization or other
(c) "EXPENSES" shall mean all fees, costs and expenses incurred in
connection with any Proceeding (as defined below), including, without
limitation, reasonable attorneys' fees, disbursements and retainers (including,
without limitation, any such fees, disbursements and retainers incurred by
Indemnitee pursuant to Sections 8 and 10(c) of this Agreement), fees and
disbursements of expert witnesses, private investigators and professional
advisors (including, without limitation, accountants and investment bankers),
court costs, transcript costs, fees of experts, travel expenses, duplicating,
printing and binding costs, telephone and fax transmission charges, postage,
delivery services, secretarial services and other disbursements and expenses.
(d) "INDEMNIFIABLE EXPENSES," "INDEMNIFIABLE LIABILITIES" and
"INDEMNIFIABLE AMOUNTS" shall have the meanings ascribed to those terms in
Section 3(a) below.
(e) "LIABILITIES" shall mean judgments, damages, liabilities, losses,
penalties, excise taxes, fines and amounts paid in settlement of any nature.
(f) "PROCEEDING" shall mean any threatened, pending or completed claim,
action, suit, arbitration, alternate dispute resolution process, investigation,
administrative hearing, appeal, or any other proceeding, whether civil,
criminal, administrative, arbitrative or investigative, whether formal or
informal, including a proceeding initiated by Indemnitee pursuant to Section 10
of this Agreement to enforce Indemnitee's rights hereunder.
(g) "SUBSIDIARY" shall mean any corporation, partnership, limited
liability company, joint venture, trust or other Entity of which the Company
owns (either directly or through or together with another Subsidiary of the
Company) either (i) a general partner, managing member or other similar interest
or (ii) (A) 50% or more of the voting power of the voting capital or other
voting equity interests of such corporation, partnership, limited liability
company, joint venture or other Entity, or (B) 50% or more of the outstanding
voting capital stock or other voting equity interests of such corporation,
partnership, limited liability company, joint venture or other Entity.
Notwithstanding the foregoing, an Entity will be deemed a Subsidiary of the
Company for the purposes of this Agreement if the Company is, directly or
indirectly, the single largest equity holder of such Entity.
2. SERVICES OF INDEMNITEE. In consideration of the Company's covenants and
commitments hereunder, Indemnitee agrees to serve or continue to serve as a
director of the Company, until the earlier of Indemnitee's resignation,
replacement or removal. However, this Agreement shall not impose any obligation
on Indemnitee or the Company to continue Indemnitee's service to the Company
beyond any period otherwise required by law or by other agreements or
commitments of the parties, if any.
3. AGREEMENT TO INDEMNIFY. The Company agrees to indemnify Indemnitee as
(a) Subject to the exceptions contained in Section 4(a) below, if
Indemnitee was or is a party or is threatened to be made a party to any
Proceeding (other than an action by or in the right of the Company) by reason of
Indemnitee's Corporate Status, Indemnitee shall be indemnified by the Company
against all Expenses and Liabilities incurred or paid by Indemnitee in
connection with such Proceeding (referred to herein as "INDEMNIFIABLE EXPENSES"
and "INDEMNIFIABLE LIABILITIES," respectively, and collectively as
(b) To the extent permitted by applicable law and subject to the
exceptions contained in Section 4(b) below, if Indemnitee was or is a party or
is threatened to be made a party to any Proceeding by or in the right of the
Company to procure a judgment in its favor by reason of Indemnitee's Corporate
Status, Indemnitee shall be indemnified by the Company against all Indemnifiable
4. EXCEPTIONS TO INDEMNIFICATION. Indemnitee shall be entitled to
indemnification under Sections 3(a) and 3(b) above in all circumstances other
than the following:
(a) If indemnification is requested under Section 3(a) and it has been
adjudicated finally by a court of competent jurisdiction that, in connection
with the subject of the Proceeding out of
which the claim for indemnification has arisen, Indemnitee failed to act (i) in
good faith and (ii) 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
action or proceeding, Indemnitee had reasonable cause to believe that
Indemnitee's conduct was unlawful, Indemnitee shall not be entitled to payment
of Indemnifiable Amounts hereunder.
(b) If indemnification is requested under Section 3(b) and it has been
adjudicated finally by a court of competent jurisdiction that Indemnitee is
liable to the Company with respect to any claim, issue or matter involved in the
Proceeding out of which the claim for indemnification has arisen, including,
without limitation, a claim that Indemnitee received an improper personal
benefit, then no Indemnifiable Expenses shall be paid with respect to such
claim, issue or matter unless the court of law or another 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 indemnity for such Indemnifiable
Expenses which such court shall deem proper.
5. PROCEDURE FOR PAYMENT OF INDEMNIFIABLE AMOUNTS. Indemnitee shall submit
to the Company a written request specifying the Indemnifiable Amounts for which
Indemnitee seeks payment under Section 3 of this Agreement and the basis for the
claim. The Company shall pay such Indemnifiable Amounts to Indemnitee within 10
calendar days of receipt of the request. At the request of the Company,
Indemnitee shall furnish such documentation and information as are reasonably
available to Indemnitee and necessary to establish that Indemnitee is entitled
to indemnification hereunder.
6. INDEMNIFICATION FOR EXPENSES OF A PARTY WHO IS WHOLLY OR PARTLY
SUCCESSFUL. Notwithstanding any other provision of this Agreement, and without
limiting any such provision, to the extent that Indemnitee is, by reason of
Indemnitee's Corporate Status, a party to and is successful, on the merits or
otherwise, in any Proceeding, Indemnitee shall be indemnified against all
Indemnifiable Amounts reasonably incurred by Indemnitee or on Indemnitee's
behalf 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
less than all claims, issues or matters in such Proceeding, the Company shall
indemnify Indemnitee against all Indemnifiable Amounts reasonably incurred by
Indemnitee or on Indemnitee's behalf in connection with each successfully
resolved claim, issue or matter. For purposes of this Agreement, the termination
of any claim, issue or matter in such a Proceeding by dismissal, with or without
prejudice, shall be deemed to be a successful result as to such claim, issue or
7. EFFECT OF CERTAIN RESOLUTIONS. Neither the settlement or termination of
any Proceeding nor the failure of the Company to award indemnification or to
determine that indemnification is payable shall create an adverse presumption
that Indemnitee is not entitled to indemnification hereunder. In addition, the
termination of any proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent shall not create a presumption
that Indemnitee did not act in good faith and in a manner which 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, had reasonable cause to
believe that Indemnitee's action was unlawful.
8. AGREEMENT TO ADVANCE EXPENSES; CONDITIONS. Except as provided in
Section 4, the Company shall pay to Indemnitee all Indemnifiable Expenses
incurred by Indemnitee in connection with any Proceeding, including a Proceeding
by or in the right of the Company, in advance of the final disposition of such
Proceeding, as the same are incurred. To the extent required by Delaware law,
Indemnitee hereby undertakes to repay the amount of Indemnifiable Expenses paid
to Indemnitee if it is finally determined by a court of competent jurisdiction
that Indemnitee is not entitled under this Agreement to indemnification with
respect to such Expenses. This undertaking is an unlimited general obligation of
9. PROCEDURE FOR ADVANCE PAYMENT OF EXPENSES. Indemnitee shall submit to
the Company a written request specifying the Indemnifiable Expenses for which
Indemnitee seeks an advancement under Section 8 of this Agreement, together with
documentation evidencing that Indemnitee has incurred such Indemnifiable
Expenses. Payment of Indemnifiable Expenses under Section 8 shall be made no
later than 10 calendar days after the Company's receipt of such request.
10. REMEDIES OF INDEMNITEE.
(a) RIGHT TO PETITION COURT. In the event that Indemnitee makes a
request for payment of Indemnifiable Amounts under Sections 3 and 5 above or a
request for an advancement of Indemnifiable Expenses under Sections 8 and 9
above and the Company fails to make such payment or advancement in a timely
manner pursuant to the terms of this Agreement, Indemnitee may petition a court
of law to enforce the Company's obligations under this Agreement.
(b) BURDEN OF PROOF. In any judicial proceeding brought under Section
10(a) above, the Company shall have the burden of proving that Indemnitee is not
entitled to payment of Indemnifiable Amounts hereunder.
(c) EXPENSES. The Company agrees to reimburse Indemnitee in full for
any Expenses incurred by Indemnitee in connection with investigating, preparing
for, litigating, defending or settling any action brought by Indemnitee under
Section 10(a) above, or in connection with any claim or counterclaim brought by
the Company in connection therewith.
(d) VALIDITY OF AGREEMENT. The Company shall be precluded from
asserting in any Proceeding, including, without limitation, an action under
Section 10(a) above, that the provisions of this Agreement are not valid,
binding and enforceable or that there is insufficient consideration for this
Agreement and shall stipulate in court that the Company is bound by all the
provisions of this Agreement.
(e) FAILURE TO ACT NOT A DEFENSE. The failure of the Company (including
its Board of Directors or any committee thereof, independent legal counsel or
stockholders) to make a determination concerning the permissibility of the
payment of Indemnifiable Amounts or the advancement of Indemnifiable Expenses
under this Agreement shall not be a defense in any action brought under Section
10(a) above, and shall not create a presumption that such payment or advancement
is not permissible.
11. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to Indemnitee as follows:
(a) AUTHORITY. The Company has all necessary power and authority to
enter into, and be bound by the terms of, this Agreement, and the execution,
delivery and performance of the undertakings contemplated by this Agreement have
been duly authorized by the Company.
(b) ENFORCEABILITY. This Agreement, when executed and delivered by the
Company in accordance with the provisions hereof, shall be a legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the
enforcement of creditors' rights generally.
12. INSURANCE. The Company shall, as promptly as practicable following the
date hereof, obtain and maintain directors and officers' liability insurance
coverage on terms satisfactory to the Board of Directors, covering, among other
things, violations of federal or state securities laws, and shall use its
reasonable best efforts to maintain such coverage in effect thereafter. In all
policies of director and officer liability insurance, Indemnitee shall be named
as an insured in such a manner as to provide Indemnitee the same rights and
benefits as are accorded to the most favorably insured of the Company's officers
13. CONTRACT RIGHTS NOT EXCLUSIVE. The rights to payment of Indemnifiable
Amounts and advancement of Indemnifiable Expenses provided by this Agreement
shall be in addition to, but not exclusive of, any other rights which Indemnitee
may have at any time under applicable law, the Company's bylaws or certificate
of incorporation, or any other agreement, vote of stockholders or directors (or
a committee of directors), or otherwise, both as to action in Indemnitee's
official capacity and as to action in any other capacity as a result of
Indemnitee's serving as a director of the Company.
14. SUCCESSORS. This Agreement shall be (a) binding upon all successors and
assigns of the Company (including any transferee of all or a substantial portion
of the business, stock and/or assets of the Company and any direct or indirect
successor by merger or consolidation or otherwise by operation of law) and (b)
binding on and shall inure to the benefit of the heirs, personal
representatives, executors and administrators of Indemnitee. This Agreement
shall continue for the benefit of Indemnitee and such heirs, personal
representatives, executors and administrators after Indemnitee has ceased to
have Corporate Status.
15. SUBROGATION. In the event of any payment of Indemnifiable Amounts under
this Agreement, the Company shall be subrogated to the extent of such payment to
all of the rights of contribution or recovery of Indemnitee against other
persons, and Indemnitee shall take, at the request of the Company, all
reasonable action necessary to secure such rights, including the execution of
such documents as are necessary to enable the Company to bring suit to enforce
16. CHANGE IN LAW. To the extent that a change in Delaware law (whether by
statute or judicial decision) shall permit broader indemnification or
advancement of expenses than is provided under the terms of the bylaws of the
Company and this Agreement, Indemnitee shall be
entitled to such broader indemnification and advancements, and this Agreement
shall be deemed to be amended to such extent.
17. SEVERABILITY. Whenever possible, each provision of this Agreement shall
be interpreted in such a manner as to be effective and valid under applicable
law, but if any provision of this Agreement, or any clause thereof, shall be
determined by a court of competent jurisdiction to be illegal, invalid or
unenforceable, in whole or in part, such provision or clause shall be limited or
modified in its application to the minimum extent necessary to make such
provision or clause valid, legal and enforceable, and the remaining provisions
and clauses of this Agreement shall remain fully enforceable and binding on the
18. INDEMNITEE AS PLAINTIFF. Except as provided in Section 10(c) of this
Agreement and in the next sentence, Indemnitee shall not be entitled to payment
of Indemnifiable Amounts or advancement of Indemnifiable Expenses with respect
to any Proceeding brought by Indemnitee against the Company, any Entity which it
controls, any director or officer thereof, or any third party, unless such
Entity, director, officer or third party has consented to the initiation of such
Proceeding. This Section shall not apply to counterclaims or affirmative
defenses asserted by Indemnitee in an action brought against Indemnitee.
19. MODIFICATIONS AND WAIVER. Except as provided in Section 16 above with
respect to changes in Delaware law which broaden the right of Indemnitee to be
indemnified by the Company, no supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by each of the parties
hereto. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provisions of this Agreement (whether or
not similar), nor shall such waiver constitute a continuing waiver.
20. GENERAL NOTICES. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given (a) when delivered by hand, (b) when transmitted by facsimile and
receipt is acknowledged, or (c) if mailed by certified or registered mail with
postage prepaid, on the third business day after the date on which it is so
If to Indemnitee, to:
If to the Company, to:
Integrated Defense Technologies, Inc.
110 Wynn Drive
Huntsville, Alabama 35807
Attn: Chief Executive Officer
or to such other address as may have been furnished in the same manner by any
party to the others.
21. GOVERNING LAW. This Agreement shall be governed by and construed and
enforced under the laws of the State of Delaware without giving effect to the
provisions thereof relating to conflicts of law.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
INTEGRATED DEFENSE TECHNOLOGIES, INC.