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EXHIBIT 10.12
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INDEMNIFICATION AGREEMENT
This Agreement is made as of the _____ day of __________ 2000, by and
between Proton Energy Systems, Inc., a Delaware 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 substantial increase in corporate litigation subjects
directors and officers to expensive litigation risks at the same time that the
availability of directors' and officers' liability insurance has been severely
limited, and
WHEREAS, it is now and has always been the express policy of the
Corporation to indemnify its directors and officers so as to provide them with
the maximum possible protection permitted by law, and
WHEREAS, Indemnitee does not regard the protection available under the
Corporation's Certificate of Incorporation and insurance as adequate in the
present circumstances, and may not be willing to serve or continue to serve as a
director or officer 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, the Corporation and Indemnitee do hereby agree as
follows:
1. Agreement to Serve. Indemnitee agrees to serve or continue to
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serve as a director or officer of the Corporation for so long as Indemnitee is
duly elected or appointed or until such time as Indemnitee tenders Indemnitee's
resignation in writing.
2. Definitions. As used in this Agreement:
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(a) The term "Proceeding" shall include any threatened, pending
or completed action, suit, arbitration, alternative dispute resolution
proceeding, administrative hearing or other proceeding, whether brought by or in
the right of the Corporation or otherwise and whether of a civil, criminal,
administrative or investigative nature, and any appeal therefrom.
(b) The term "Corporate Status" shall mean the status of a
person who is or was a director or officer of the Corporation, or is or was
serving, or has agreed to serve, at the request of the Corporation, as a
director, officer, partner, trustee, member, employee or agent of another
corporation, partnership, joint venture, trust, limited liability company or
other enterprise.
(c) 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 charges, postage, delivery service fees and other disbursements or
expenses of the types customarily incurred in connection with investigations,
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judicial or administrative proceedings or appeals, but shall not include the
amount of judgments, fines or penalties against Indemnitee or amounts paid in
settlement in connection with such matters.
(d) References to "other enterprise" shall include employee
benefit plans; references to "fines" shall include any excise tax assessed with
respect to any employee benefit plan; references to "serving at the request of
the Corporation" shall include any service as a director, officer, employee or
agent of the Corporation which imposes duties on, or involves services by, such
director, officer, employee, or agent with respect to an employee benefit plan,
its participants, or beneficiaries; and a person who acted in good faith and in
a manner such person reasonably believed to be in the interests of the
participants and beneficiaries of an employee benefit plan shall be deemed to
have acted in a manner "not opposed to the best interests of the Corporation" as
referred to in this Agreement.
3. Indemnification in Third-Party Proceedings. The Corporation
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shall indemnify Indemnitee in accordance with the provisions of this Paragraph 3
if Indemnitee was or is a party to or threatened to be made a party to or
otherwise involved in any Proceeding (other than a Proceeding by or in the right
of the Corporation to procure a judgment in its favor) by reason of the
Indemnitee's Corporate Status or by reason of any action alleged to have been
taken or omitted in connection therewith, against all Expenses, judgments,
fines, penalties and amounts paid in settlement actually and reasonably incurred
by Indemnitee or on his behalf in connection with such Proceeding, if Indemnitee
acted in good faith and in a manner which Indemnitee reasonably believed to be
in, or not opposed to, the best interests of the Corporation and, with respect
to of any criminal Proceeding, had no reasonable cause to believe that his
conduct was unlawful. The termination of any Proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contendere or its equivalent,
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shall not, of itself, create a presumption that Indemnitee did not act in good
faith and in a manner which the Indemnitee reasonably believed to be in, or not
opposed to, the best interests of the Corporation, and, with respect to any
criminal Proceeding, had reasonable cause to believe that his conduct was
unlawful.
4. Indemnification in Proceedings by or in the Right of the
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Corporation. The Corporation shall indemnify Indemnitee in accordance with the
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provisions of this Paragraph 4 if Indemnitee is a party to or threatened to be
made a party to or otherwise involved in any Proceeding by or in the right of
the Corporation to procure a judgment in its favor by reason of the Indemnitee's
Corporate Status or by reason of any action alleged to have been taken or
omitted in connection therewith, against all Expenses and, to the extent
permitted by law, amounts paid in settlement actually and reasonably incurred by
Indemnitee or on his behalf in connection with such Proceeding, if he acted in
good faith and in a manner which he reasonably believed to be in, or not opposed
to, the best interests of the Corporation, except that no indemnification shall
be made under this Paragraph 4 in respect of any claim, issue, or matter as to
which Indemnitee shall have been adjudged to be liable to the Corporation,
unless and only to the extent that the Court of Chancery of Delaware or the
court in which such action or suit was brought shall determine upon application
that, despite the adjudication of such liability but in view of all the
circumstances of the case, Indemnitee is fairly and reasonably entitled to
indemnity for such Expenses as the Court of Chancery or such other court shall
deem proper.
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5. Exceptions to Right of Indemnification. Notwithstanding anything
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to the contrary in this Agreement, except as set forth in Paragraph 10, the
Corporation shall not indemnify the Indemnitee in connection with a Proceeding
(or part thereof) initiated by the Indemnitee unless the initiation thereof was
approved by the Board of Directors of the Corporation. Notwithstanding anything
to the contrary in this Agreement, the Corporation shall not indemnify the
Indemnitee to the extent the Indemnitee is reimbursed from the proceeds of
insurance, and in the event the Corporation makes any indemnification payments
to the Indemnitee and the Indemnitee is subsequently reimbursed from the
proceeds of insurance, the Indemnitee shall promptly refund such indemnification
payments to the Corporation to the extent of such insurance reimbursement.
6. Indemnification of Expenses of Successful Party. Notwithstanding
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any other provision of this Agreement, to the extent that Indemnitee has been
successful, on the merits or otherwise, in defense of any Proceeding or in
defense of any claim, issue or matter therein, Indemnitee shall be indemnified
against all Expenses incurred by him or on his behalf in connection therewith.
Without limiting the foregoing, if any Proceeding or any claim, issue or matter
therein is disposed of, on the merits or otherwise (including a disposition
without prejudice), without (i) the disposition being adverse to the Indemnitee,
(ii) an adjudication that the Indemnitee was liable to the Corporation, (iii) a
plea of guilty or nolo contendere by the Indemnitee, (iv) an adjudication that
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the Indemnitee did not act in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Corporation, and (v) with
respect to any criminal proceeding, an adjudication that the Indemnitee had
reasonable cause to believe his conduct was unlawful, the Indemnitee shall be
considered for the purposes hereof to have been wholly successful with respect
thereto.
7. Notification and Defense of Claim. As a condition precedent to
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his right to be indemnified, the Indemnitee must notify the Corporation in
writing as soon as practicable of any Proceeding for which indemnity will or
could be sought by him and provide the Corporation with a copy of any summons,
citation, subpoena, complaint, indictment, information or other document
relating to such Proceeding with which he is served. With respect to any
Proceeding of which the Corporation is so notified, the Corporation will be
entitled to participate therein at its own expense and/or to assume the defense
thereof at its own expense, with legal counsel reasonably acceptable to the
Indemnitee. After notice from the Corporation to the Indemnitee of its election
so to assume such defense, the Corporation shall not be liable to the Indemnitee
for any legal or other expenses subsequently incurred by the Indemnitee in
connection with such claim, other than as provided below in this Paragraph 7.
The Indemnitee shall have the right to employ his own counsel in connection with
such claim, but the fees and expenses of such counsel incurred after notice from
the Corporation of its assumption of the defense thereof shall be at the expense
of the Indemnitee unless (i) the employment of counsel by the Indemnitee has
been authorized by the Corporation, (ii) counsel to the Indemnitee shall have
reasonably concluded that there may be a conflict of interest or position on any
significant issue between the Corporation and the Indemnitee in the conduct of
the defense of such action or (iii) the Corporation shall not in fact have
employed counsel to assume the defense of such action, in each of which cases
the fees and expenses of counsel for the Indemnitee shall be at the expense of
the Corporation, except as otherwise expressly provided by this Agreement. The
Corporation shall not be entitled, without the consent of the Indemnitee, to
assume the defense of any claim brought by or in the right of the Corporation or
as to which counsel for the Indemnitee shall have
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reasonably made the conclusion provided for in clause (ii) above. The
Corporation shall not be required to indemnify the Indemnitee under this
Agreement for any amounts paid in settlement of any Proceeding effected without
its written consent. The Corporation shall not settle any Proceeding in any
manner which would impose any penalty or limitation on Indemnitee without
Indemnitee's written consent. Neither the Corporation nor the Indemnitee will
unreasonably withhold their consent to any proposed settlement.
8. Advancement of Expenses. Subject to the provisions of
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Paragraph 9 below, in the event that the Corporation does not assume the defense
pursuant to Paragraph 7 of this Agreement of any Proceeding to which the
Indemnitee was or is a party or is threatened to be made a party by reason of
his Corporate Status or by reason of any action alleged to have been taken or
omitted in connection therewith and of which the Corporation receives notice
under this Agreement, any Expenses incurred by the Indemnitee or on his behalf
in defending such Proceeding shall be paid by the Corporation in advance of the
final disposition of such Proceeding; provided, however, that the payment of
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such Expenses incurred by the Indemnitee or on his behalf in advance of the
final disposition of such Proceeding shall be made only upon receipt of an
undertaking by or on behalf of the Indemnitee to repay all amounts so advanced
in the event that it shall ultimately be determined that the Indemnitee is not
entitled to be indemnified by the Corporation as authorized in this Agreement.
Such undertaking shall be accepted without reference to the financial ability of
the Indemnitee to make repayment.
9. Procedure for Indemnification. In order to obtain
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indemnification or advancement of Expenses pursuant to Paragraphs 3, 4, 6 or 8
of this Agreement, Indemnitee shall submit to the Corporation a written request,
including in such request such documentation and information as is reasonably
available to Indemnitee and is reasonably necessary to determine whether and to
what extent Indemnitee is entitled to indemnification or advancement of
Expenses. Any such indemnification or advancement of Expenses shall be made
promptly, and in any event within 60 days after receipt by the Corporation of
the written request of the Indemnitee, unless with respect to requests under
Paragraphs 3, 4 or 8 the Corporation determines within such 60-day period that
such Indemnitee did not meet the applicable standard of conduct set forth in
Paragraph 3 or 4, as the case may be. Such determination, and any determination
that advanced Expenses must be repaid to the Corporation, shall be made in each
instance (a) by a majority vote of the directors of the Corporation consisting
of persons who are not at that time parties to the Proceeding ("disinterested
directors"), whether or not a quorum, (b) by a committee of disinterested
directors designated by a majority vote of disinterested directors, whether or
not a quorum, (c) if there are no disinterested directors, or if the
disinterested directors so direct, by independent legal counsel (who may, to the
extent permitted by applicable law, be regular legal counsel to the Corporation)
in a written opinion to the Board, or (d) by the stockholders.
10. Remedies. The right to indemnification or advancement of
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Expenses as provided by this Agreement shall be enforceable by the Indemnitee in
any court of competent jurisdiction if the Corporation denies such request, in
whole or in part, or if no disposition thereof is made within the 60-day period
referred to above in Paragraph 9. Unless otherwise required by law, the burden
of proving that indemnification is not appropriate shall be on the Corporation.
Neither the failure of the Corporation to have made a determination prior to the
commencement of such action that indemnification is proper in the circumstances
because Indemnitee has met the
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applicable standard of conduct, nor an actual determination by the Corporation
pursuant to Paragraph 9 that Indemnitee has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that
Indemnitee has not met the applicable standard of conduct. Indemnitee's expenses
(of the type described in the definition of "Expenses" in Paragraph 2(c))
reasonably incurred in connection with successfully establishing his right to
indemnification, in whole or in part, in any such Proceeding shall also be
indemnified by the Corporation.
11. Partial Indemnification. If Indemnitee is entitled under any
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provision of this Agreement to indemnification by the Corporation for some or a
portion of the Expenses, judgments, fines, penalties or amounts paid in
settlement actually and reasonably incurred by him or on his behalf in
connection with any Proceeding but not, however, for the total amount thereof,
the Corporation shall nevertheless indemnify Indemnitee for the portion of such
Expenses, judgments, fines, penalties or amounts paid in settlement to which
Indemnitee is entitled.
12. Subrogation. In the event of any payment under this Agreement,
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the Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of Indemnitee, who shall execute all papers required and take
all action necessary to secure such rights, including execution of such
documents as are necessary to enable the Corporation to bring suit to enforce
such rights.
13. Term of Agreement. This Agreement shall continue until and
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terminate upon the later of (a) six years after the date that Indemnitee shall
have ceased to serve as a director or officer of the Corporation or, at the
request of the Corporation, as a director, officer, partner, trustee, member,
employee or agent of another corporation, partnership, joint venture, trust,
limited liability company or other enterprise or (b) the final termination of
all Proceedings pending on the date set forth in clause (a) in respect of which
Indemnitee is granted rights of indemnification or advancement of Expenses
hereunder and of any proceeding commenced by Indemnitee pursuant to Paragraph 10
of this Agreement relating thereto.
14. Indemnification Hereunder Not Exclusive. The indemnification and
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advancement of Expenses provided by this Agreement shall not be deemed exclusive
of any other rights to which Indemnitee may be entitled under the Certification
of Incorporation, the By-Laws, any agreement, any vote of stockholders or
disinterested directors, the General Corporation Law of Delaware, any other law
(common or statutory), or otherwise, both as to action in his official capacity
and as to action in another capacity while holding office for the Corporation.
Nothing contained in this Agreement shall be deemed to prohibit the Corporation
from purchasing and maintaining insurance, at its expense, to protect itself or
the Indemnitee against any expense, liability or loss incurred by it or him in
any such capacity, or arising out of his status as such, whether or not the
Indemnitee would be indemnified against such expense, liability or loss under
this Agreement; provided that the Corporation shall not be liable under this
Agreement to make any payment of amounts otherwise indemnifiable hereunder if
and to the extent that Indemnitee has otherwise actually received such payment
under any insurance policy, contract, agreement or otherwise.
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15. No Special Rights. Nothing herein shall confer upon Indemnitee
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any right to continue to serve as an officer or director of the Corporation for
any period of time or at any particular rate of compensation.
16. Savings Clause. If this Agreement or any portion thereof shall
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be invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify Indemnitee as to Expenses, judgments,
fines, penalties and amounts paid in settlement with respect to any Proceeding
to the full extent permitted by any applicable portion of this Agreement that
shall not have been invalidated and to the fullest extent permitted by
applicable law.
17. Counterparts. This Agreement may be executed in any number of
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counterparts, each of which shall constitute the original.
18. Successors and Assigns. This Agreement shall be binding upon the
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Corporation and its successors and assigns and shall inure to the benefit of the
estate, heirs, executors, administrators and personal representatives of
Indemnitee.
19. Headings. The headings of the paragraphs of this Agreement are
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inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.
20. Modification and Waiver. This Agreement may be amended from time
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to time to reflect changes in Delaware law or for other reasons. No supplement,
modification or amendment of this Agreement shall be binding unless executed in
writing by both 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
provision hereof nor shall any such waiver constitute a continuing waiver.
21. Notices. All notices, requests, demands and other communications
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hereunder shall be in writing and shall be deemed to have been given (i) when
delivered by hand or (ii) if sent by reputable nationwide overnight courier
service, one day after the date on which it is so sent:
(a) if to the Indemnitee, to:
(b) if to the Corporation, to: Proton Energy Systems, Inc.
Attn: President
50 Inwood Road
Rocky Hill, CT 06067
with a copy to: Hale and Dorr LLP
Attn: William F. Winslow, Esq.
Reston Town Center
11951 Freedom Drive
Reston, VA 20190
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or to such other address as may have been furnished to Indemnitee by the
Corporation or to the Corporation by Indemnitee, as the case may be.
22. Applicable Law. This Agreement shall be governed by, and
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construed and enforced in accordance with, the laws of the State of Delaware.
23. Enforcement. The Corporation expressly confirms and agrees that
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it has entered into this Agreement in order to induce Indemnitee to continue to
serve as a director of the Corporation, and acknowledges that Indemnitee is
relying upon this Agreement in continuing in such capacity.
24. Entire Agreement. This Agreement sets forth the entire
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agreement of the parties hereto in respect of the subject matter contained
herein and supercedes all prior agreements, whether oral or written, by any
officer, employee or representative of any party hereto in respect of the
subject matter contained herein; and any prior agreement of the parties hereto
in respect of the subject matter contained herein is hereby terminated and
cancelled. For avoidance of doubt, the parties confirm that the foregoing does
not apply to or limit the Indemnitee's rights under Delaware law or the
Corporation's Certificate of Incorporation or bylaws.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
PROTON ENERGY SYSTEMS, INC.
By: ______________________________
Name:
Title:
INDEMNITEE
______________________________
Name:
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