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Exhibit 10(c)
INDEMNIFICATION AGREEMENT
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THIS INDEMNIFICATION AGREEMENT (this "Agreement") is made as of the ___ day
of January, 2000, by and between The Netplex Group, Inc., a New York corporation
(the "Corporation"), and ________________ ("Indemnitee"), a director and/or
officer of the Corporation or of a subsidiary of the Corporation.
RECITALS
A. It is essential to the Corporation to retain and attract as directors
and officers of the Corporation and of every subsidiary the most capable persons
available.
B. 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.
C. It is the express policy of the Corporation to indemnify directors and
certain executive officers of the Corporation, and its subsidiaries, so as to
provide them with the maximum possible protection permitted by law.
D. Indemnitee does not regard the protection available under the New York
Business Corporation Law, the Charter or the Bylaws of the Corporation, and its
subsidiaries as adequate in the present circumstances, and may not be willing to
serve as a director or officer without adequate protection, and the Corporation
desires Indemnitee to serve in such capacity.
AGREEMENTS
NOW, THEREFORE, the Corporation and Indemnitee do hereby agree as follows:
1. Agreement to Serve. Indemnitee agrees to serve or continue to serve as
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a director and/or an officer of the Corporation and/or its subsidiaries for so
long as he is duly elected or appointed or until such time as he tenders his
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, investigation or proceeding, and any appeal thereof,
whether brought by or in the right of the Corporation, or its subsidiaries or
otherwise and whether civil, criminal, administrative or investigative, and/or
any inquiry or investigation, in which Indemnitee may be or may have been
involved as a party or otherwise, or that Indemnitee in good faith believes
might lead to the institution of any such proceeding, by reason of the fact that
Indemnitee is or was a director or officer of the Corporation, by reason of any
action taken by him or of any inaction on his part while acting as such a
director or officer, or by reason of the fact that he is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise; in each case
whether or not he is
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acting or serving in any such capacity at the time any liability or expense is
incurred for which indemnification or reimbursement can be provided under this
Agreement.
(b) The term "Expenses" shall include, without limitation, expenses,
costs and obligations, paid or incurred, of investigations, judicial or
administrative proceedings or appeals, amounts paid in settlement by or on
behalf of Indemnitee, attorneys' fees and disbursements and any expenses
reasonably and actually incurred in establishing a right to indemnification
under Section 8 of this Agreement including, without limitation, those incurred
in investigating, defending, being a witness in or participating in (including
on appeal), or preparing to defend with respect to any claim, issue or matter
relating thereto or in connection therewith, but shall not include the amount of
judgments, fines or penalties against Indemnitee.
(c) A "Change in Control" shall be deemed to have occurred if, after
the date hereof, there is any transaction or series of transactions within any
twelve (12) month period, including, without limitation, a merger, consolidation
or exchange of securities, in which the holders of all of the Corporation's
outstanding voting securities immediately prior to the consummation of such
transaction or the first transaction of such series of transactions do not own,
directly or indirectly, a majority of the combined voting power of the
Corporation's outstanding securities upon consummation of such transaction or
series of such transactions.
(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 or its subsidiaries 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 he 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. Indemnity in Third-Party Proceedings. The Corporation shall indemnify
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Indemnitee in accordance with the provisions of this Section 3 if Indemnitee is
a party to or threatened to be made a party to any Proceeding (other than a
Proceeding by or in the right of the Corporation or any subsidiary of the
Corporation to procure a judgment in its favor) by reason of the fact that
Indemnitee is or was a director or officer of the Corporation, or is or was
serving at the request of the Corporation as a director, officer, employee, or
agent of another corporation, partnership, joint venture, trust or other
enterprise, against all Expenses, judgments, fines and penalties actually and
reasonably incurred by Indemnitee in connection with the defense or settlement
of such Proceeding, but only if he acted in good faith and in a manner which he
reasonably believed to be (in the case of conduct in his official capacity) in
the best interests of the Corporation or (in all other cases) not opposed to the
best interests of the Corporation, and, in the case of a criminal action or
proceeding, in addition, had no reasonable cause to believe that his conduct was
unlawful. The termination of any such Proceeding by judgment, order of court,
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 he reasonably believed to be in or not opposed to
the best interests of the Corporation (or that Indemnitee did not meet any other
particular standard of conduct or have any other particular
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belief or that a court has determined that indemnification is not permitted by
applicable law), and with respect to any criminal proceeding, that such person
had reasonable cause to believe that his conduct was unlawful.
4. Indemnitee in Proceedings by or in the Right of the Corporation. The
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Corporation shall indemnify Indemnitee in accordance with the provisions of this
Section 4 if Indemnitee is a party to or threatened to be made a party to any
Proceeding by or in the right of the Corporation or any subsidiary of the
Corporation to procure a judgment in its favor by reason of the fact that
Indemnitee is or was a director or officer of the Corporation or any subsidiary
of the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust or other enterprise, against all Expenses actually and reasonably
incurred by Indemnitee in connection with the defense or settlement of such
Proceeding, but only if he acted in good faith and in a manner which he
reasonably believed to be (in the case of conduct in his official capacity) in
the best interests of the Corporation or (in all other cases) not opposed to the
best interests of the Corporation, except that no indemnification for Expenses
shall be made under this Section 4, in respect of any Proceeding as to which
Indemnitee shall have been adjudged to be liable to the Corporation, unless and
only to the extent that any 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 expenses as such court shall deem proper.
Notwithstanding the foregoing, Indemnitee shall have no right to indemnification
for Expenses and the payment of profits arising from the purchase and sale by
Indemnitee of securities in violation of Section 16(b) of the Securities
Exchange Act of 1934, as amended.
5. Indemnification Prohibited. Notwithstanding the provisions of Sections
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3 and 4, no indemnification shall be made in connection with any Proceeding
charging improper personal benefit to the Indemnitee, whether or not involving
action in his official capacity, in which he was adjudged liable on the basis
that personal benefit was improperly received by him.
6. Indemnification of Expenses of Successful Party. Notwithstanding any
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other provision of this Agreement whatsoever, to the extent that Indemnitee has
been successful on the merits or otherwise (including a settlement) in defense
of any Proceeding or in defense of any claim, issue or matter therein, including
dismissal without prejudice, Indemnitee shall be indemnified against all
Expenses reasonably and actually incurred in connection therewith.
7. Advances of Expenses. Expenses incurred by the Indemnitee pursuant to
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Sections 3 and 4 in any Proceeding shall be paid by the Corporation in advance
as soon as practicable but not later than seven business days after receipt of
the written request of the Indemnitee provided that Indemnitee shall (i) affirm
in such written request that he acted in good faith and in a manner which he
reasonably believed to be (in the case of conduct in his official capacity) in
the best interests of the Corporation or (in all other cases) not opposed to the
best interests of the Corporation and (ii) undertake to repay such amount to the
extent that it is ultimately determined that Indemnitee is not entitled to
indemnification, and further provided that a determination has been made that
the facts then known would not preclude indemnification pursuant to the terms of
this Agreement.
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8. Right of Indemnitee to Indemnification Upon Application; Procedure
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Upon Application.
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(a) Any indemnification under Sections 3 and 4 shall be made as soon
as practicable but in any event no later than 30 days after receipt by the
Corporation of the written request of Indemnitee.
(b) The right to indemnification or advances as provided by this
Agreement shall be enforceable by Indemnitee in any court of competent
jurisdiction. The burden of proving that indemnification or advances are not
appropriate shall be on the Corporation. Neither the failure of the Corporation
(including its Board of Directors, independent legal counsel, or stockholders)
to have made a determination prior to the commencement of such action that
indemnification or advances are proper in the circumstances because Indemnitee
has met the applicable standard of conduct, nor an actual determination by the
Corporation (including its Board of Directors, independent legal counsel, or
stockholders) that Indemnitee has not met such applicable standard 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 reasonably
incurred in connection with successfully establishing Indemnitee's right to
indemnification or advances, in whole or in part, in any such Proceeding shall
also be indemnified by the Corporation.
(c) The Corporation shall not be liable under this Agreement to make
any payment in connection with any claim made against Indemnitee to the extent
Indemnitee has otherwise actually received payment (under any insurance policy,
Bylaw or otherwise) of the amounts otherwise indemnifiable.
9. Indemnification Hereunder Not Exclusive.
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(a) Notwithstanding any other provision of this Agreement, the
Corporation hereby agrees to indemnify the Indemnitee to the full extent
permitted by law, whether or not such indemnification is specifically authorized
by the other provisions of this Agreement, the Corporation's Certificate of
Incorporation, the Bylaws, or by statute. In the event of any changes, after the
date of this Agreement, in any applicable law, statute, or rule which expand the
right of a New York corporation to indemnify a member of its board of directors
or any officer, such changes shall be, ipso facto, within the purview of
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Indemnitee's rights, and Corporation's obligations, under this Agreement. In the
event of any changes in any applicable law, statute, or rule which narrow the
right of a New York corporation to indemnify a member of its board of directors
or any officer, such changes, to the extent not otherwise required by such law,
statute or rule to be applied to this Agreement, shall have no effect on this
Agreement or the parties' rights and obligations hereunder.
(b) The indemnification provided by this Agreement shall not be
deemed exclusive of any other rights to which Indemnitee may be entitled under
the Certificate of Incorporation, the Bylaws, any agreement, any vote of
shareholders or disinterested directors, the laws of the State of New York, or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office.
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10. Partial Indemnification. If Indemnitee is entitled under any provision
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of this Agreement to indemnification by the Corporation for some or a portion of
the Expenses, judgments, fines or penalties actually and reasonably incurred by
him in the investigation, defense, appeal or settlement of any Proceeding but
not, however, for the total amount thereof, the Corporation shall nevertheless
indemnify Indemnitee for the portion of such Expenses, judgments, fines or
penalties to which Indemnitee is entitled. Moreover, notwithstanding any other
provision of this Agreement, to the extent that Indemnitee has been successful
on the merits or otherwise in defense of any or all claims, issues or matters
relating in whole or in part to an indemnifiable event, occurrence or matter
hereunder, including dismissal without prejudice, Indemnitee shall be
indemnified against all Expenses incurred in connection with such defenses.
11. Effect of Federal Law. Both the Company and the Indemnitee acknowledge
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that in certain instances, federal law will override New York law and prohibit
the Corporation from indemnifying its offices and directors. For example, the
Corporation and Indemnitee acknowledge that the Securities and Exchange
Commission has taken the position that indemnification is not permissible for
liabilities arising under certain federal securities law, and federal law
prohibits indemnification for certain violations of the Employee Retirement
Income Security Act.
12. Liability Insurance.
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(a) The Corporation shall from time to time make the good faith
determination whether or not it is practicable for the Corporation to obtain and
maintain a policy or policies of insurance with reputable insurance companies
providing the officers and directors with coverage for losses from wrongful
acts, or to ensure the Corporation's performance of its indemnification
obligations under this Agreement. Among other considerations, the Corporation
will weigh the costs of obtaining such insurance against the protection afforded
by such coverage.
(b) Indemnitee hereby releases the Corporation and its respective
authorized representatives from any claims for indemnification hereunder if and
to the extent that Indemnitee receives proceeds from any liability insurance
policy or other third-party source in payment or reimbursement for such claims.
Indemnitee hereby agrees to assign all proceeds Indemnitee receives under any
such insurance policy or third-party agreement to the extent of the amount of
indemnification made to Indemnitee under the terms of this Agreement. Finally,
Indemnitee shall cause each insurance policy or other third-party agreement by
which the Indemnitee may be entitled to payment or reimbursement to provide that
the insurance company or the third-party agreement by which the Indemnitee may
be entitled to payment or reimbursement to provide that the insurance company or
the third party waives all right of recovery by way of subrogation against the
Corporation in connection with any claim for indemnification under this
Agreement. If such waiver of subrogation cannot be obtained except with the
payment of additional sums in premiums or otherwise, the Indemnitee shall notify
the Corporation of this fact. The Corporation shall then have ten (10) days
after receiving such notice to agree to pay such additional sums. If a waiver of
subrogation rights is not obtainable at any price or if the Corporation shall
fail to agree to pay such additional sums, Indemnitee shall be relieved of the
obligation to obtain the waiver of subrogation rights with respect to any
particular insurance policy or third-party agreement.
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13. Saving Clause. Nothing in this Agreement is intended to require or
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shall be construed as requiring the Corporation to do or fail to do any act in
violation of applicable law. The provisions of this Agreement (including any
provision within a single section, paragraph or sentence) shall be severable in
accordance with this Section 14. If this Agreement or any portion thereof shall
be invalidated on any ground by any court of competent jurisdiction, the
Corporation shall nevertheless indemnify Indemnitee as to Expenses, judgments,
fines and penalties with respect to any Proceeding to the full extent permitted
by any applicable portion of this agreement that shall not have been invalidated
or by any other applicable law, and this Agreement shall remain enforceable to
the fullest extent permitted by law.
14. Notice. Indemnitee shall, as a condition precedent to his right to be
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indemnified under this Agreement, give to the Corporation notice in writing as
soon as practicable of any claim made against him for which indemnity will or
could be sought under this Agreement. Notice to the Corporation shall be
directed to ________________, ______________________________, _________,
________, _____, Attention: President (or such other address as the Corporation
shall designate in writing to Indemnitee), together with a copy thereof to
Venable, Baetjer & Howard, LLP, Attn: Elizabeth Hughes, 2010 Corporate Ridge,
Suite 400, McLean VA 22102.. All notices, requests, demands and other
communications shall be deemed received three days after the date postmarked if
(i) delivered by hand and receipted for by the party to whom such notice or
other communication shall have been directed, or (ii) sent by prepaid mail,
properly addressed. In addition, Indemnitee shall give the Corporation such
information and cooperation as it may reasonably require and shall be within
Indemnitee's power.
15. Counterparts. This Agreement may be executed in any number of
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counterparts, each of which shall constitute the original.
16. Applicable Law. This Agreement shall be governed by and construed in
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accordance with the substantive laws of the State of New York without giving
effect to its rules of conflicts of laws.
17. Successors and Assigns. This Agreement shall be binding upon and
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inure to the benefit of and be enforceable by the parties and their respective
successors and assigns (including any direct or indirect successors by purchase,
merger, consolidation or otherwise to all or substantially all of the business
and/or assets of the Corporation), spouses, heirs, and personal and legal
representatives. The Corporation shall require and cause any successor (whether
direct or indirect by purchase, merger, consolidation or otherwise) to all,
substantially all or a substantial part, of the business and/or assets of the
Corporation, by written agreement in form and substance satisfactory to the
Indemnitee, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent that the Corporation would be required to perform
if no such succession had taken place. This Agreement shall continue in effect
regardless of whether Indemnitee continues to serve as a director and/or officer
of the Corporation or of any other enterprise.
18. Attorneys' Fees. In the event that any action is instituted by
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Indemnitee under this Agreement to enforce or interpret any of the terms hereof,
Indemnitee shall be entitled to be paid all court costs and expenses, including
reasonable attorneys' fees and disbursements, incurred by
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Indemnitee with respect to such action, unless as a part of such action, the
court of competent jurisdiction determines that each of the material assertions
made by Indemnitee as a basis for such action were not made in good faith or
were frivolous. In the event of an action instituted by or in the name of the
Corporation under this Agreement or to enforce or interpret any of the terms of
this Agreement, Indemnitee shall be entitled to be paid all court costs and
expenses, including attorneys' fees and disbursements, incurred by Indemnitee in
defense of such action (including with respect to Indemnitee's counterclaims and
crossclaims made in such action), unless as a part of such action the court
determines that each of Indemnitee's material defenses to such action were made
in bad faith or were frivolous.
19. Subsequent Instruments and Acts. The parties hereto agree that they
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will execute any further instrument and perform any acts that may become
necessary from time to time to carry out the terms of this Agreement.
20. Limitations Period. No legal action shall be brought and no cause of
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action shall be asserted by or in the right of the Corporation or any affiliate
of the Corporation against Indemnitee, Indemnitee's spouse, heirs, executors or
personal or legal representatives after the expiration of two years from the
date of accrual of such cause of action, and any claim or cause of action of the
Corporation or its affiliates shall be extinguished and deemed released unless
asserted by the timely filing of a legal action within such two-year period;
provided, however, that if any shorter period of limitations is otherwise
applicable to any such cause of action such shorter period shall govern.
IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be
duly executed and signed as of the day and year first above written.
The Netplex Group
a New York corporation
By:
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________________, Authorized Officer
INDEMNITEE:
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____________________________________
Printed Name
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Schedule of Indemnitees pursuant to Exhibit 10(c)--Form of Indemnification
Agreement between the Officers and Directors of Netplex and Netplex.
Seven agreements were executed pursuant to the "form of" agreement referenced
above. Information describing the material differences between the executed
agreements is provided below:
Indemnitees
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Gene Zaino
Pamela Fredette
Walton E. Bell III
Peter J. Russo
J. Alan Lindauer
Richard Goldstein
Robert M. Skelton
