Exhibit 10.13
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (this "Agreement") is made this __ day of
_______, 2006, between IPG Photonics Corporation, a Delaware corporation (the
"Company"), and _______________________ ("Indemnitee").
WHEREAS, it is essential to the Company that it be able to retain and
attract as directors and officers the most capable persons available;
WHEREAS, increased corporate litigation has subjected directors and
officers to litigation risks and expenses, and the limitations on the
availability of directors and officers liability insurance have made it
increasingly difficult for the Company to attract and retain such persons;
WHEREAS, the Amended and Restated By-laws of the Company (the "By-laws")
provide for the indemnification of its directors and officers and permit it to
make other indemnification arrangements and agreements;
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 change in
the ownership of the Company or the composition of its board of directors);
WHEREAS, this Agreement is a supplement to and in furtherance of the
Amended and Restated Certificate of Incorporation of the Company (the
"Certificate") and the By-laws and any resolutions adopted pursuant thereto, and
shall not be deemed a substitute therefor, nor to diminish or abrogate any
rights of Indemnitee thereunder;
WHEREAS, Indemnitee does not regard the protection available under the
Company's By-laws and insurance as adequate in the present circumstances, and
may not be willing to serve as director or officer without adequate protection,
and the Company desires Indemnitee to serve in such capacity. Indemnitee is
willing to serve, continue to serve and to take on additional service for or on
behalf of the Company on the condition that he be so indemnified; and
WHEREAS, Indemnitee is relying upon the rights afforded to the Indemnitee
under this Agreement in [accepting] [continuing in] Indemnitee's position as a
director or an officer of the Company.
NOW, THEREFORE, the Company and Indemnitee agree as follows.
1. Definitions.
(a) "Corporate Status" describes the status of a person who is serving
or has served (i) as a director and/or officer of the Company, (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 at
the request of the Company. For purposes of subsection (iii) of this Section
1(a), a director of the Company who is serving or has served as a director,
partner, trustee, officer, employee or agent of a Subsidiary
shall be deemed to be serving in each such capacity at the request of the
Company.
(b) "Change in Control" shall be deemed to occur upon the earliest to
occur after the date of this Agreement of any of the following events:
(i) Acquisition of Stock by Third Party. Any Person (as defined
below), other than Persons who are beneficial Owners of the Company's securities
on the date of this Agreement, is or becomes the Beneficial Owner (as defined
below), directly or indirectly, of securities of the Company representing
fifteen percent (15%) or more of the combined voting power of the Company's then
outstanding securities;
(ii) Change in Board of Directors. During any period of two (2)
consecutive years (not including any period prior to the execution of this
Agreement), individuals who at the beginning of such period constitute the board
of directors, and any new director (other than a director designated by a person
who has entered into an agreement with the Company to effect a transaction
described in Sections 1(b)(i), 1(b)(iii) or 1(b)(iv)) whose election by the
board of directors or nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds of the directors then still in office
who either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute at least a majority of the members of the board of directors;
(iii) Corporate Transactions. The effective date of a merger or
consolidation of the Company with any other entity, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior to such merger or consolidation continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 51% of the combined voting power
of the voting securities of the surviving entity outstanding immediately after
such merger or consolidation and with the power to elect at least a majority of
the board of directors or other governing body of such surviving entity;
(iv) Liquidation. The approval by the stockholders of the Company
of a complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's assets;
and
(v) Other Events. There occurs any other event of a nature that
would be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A (or a response to any similar item on any similar schedule or
form) promulgated under the Exchange Act (as defined below), whether or not the
Company is then subject to such reporting requirement.
For purposes of this Section 1(b), the following terms shall have the following
meanings:
(A) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
2
(B) "Person" shall have the meaning as set forth in Sections
13(d) and 14(d) of the Exchange Act; provided, however, that Person
shall exclude (i) the Company, (ii) any trustee or other fiduciary
holding securities under an employee benefit plan of the Company, and
(iii) any corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as
their ownership of stock of the Company.
(C) "Beneficial Owner" shall have the meaning given to such term
in Rule 13d-3 under the Exchange Act; provided, however, that
Beneficial Owner shall exclude any Person otherwise becoming a
Beneficial Owner by reason of the stockholders of the Company
approving a merger of the Company with another entity.
(c) "Disinterested Director" means a director of the Company who is
not and was not a party to the Proceeding (as defined below) in respect of which
indemnification is sought by Indemnitee.
(d) "Entity" means any corporation, partnership, limited liability
company, joint venture, trust, foundation, association, organization or other
entity.
(e) "Enterprise" means the Company and any other corporation, limited
liability company, partnership, joint venture, trust, employee benefit plan or
other enterprise of which Indemnitee is or was serving at the request of the
Company as a director, officer, employee, agent or fiduciary.
(f) "Expenses" means all reasonable fees, costs and expenses incurred
in connection with any Proceeding (as defined below), including, without
limitation, reasonable attorneys' fees, disbursements and retainers, fines,
excise taxes assessed with respect to any employee benefit plan, 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.
(g) "Independent Counsel" means a law firm, or a member of a law firm,
that is experienced in matters of corporation law and neither presently is, nor
in the past five (5) years has been, retained to represent: (i) the Company or
Indemnitee in any matter material to either such party (other than with respect
to matters concerning the Indemnitee under this Agreement, or of other
indemnitees under similar indemnification agreements), or (ii) any other party
to the Proceeding (as defined below) giving rise to a claim for indemnification
hereunder. Notwithstanding the foregoing, the term "Independent Counsel" shall
not include any person who, under the applicable standards of professional
conduct then prevailing, would have a conflict of interest in representing
either the Company or Indemnitee in an action to determine Indemnitee's rights
under this Agreement. The Company agrees to pay the reasonable fees and expenses
of the Independent Counsel referred to above and to fully indemnify such counsel
against any and all Expenses,
3
claims, liabilities and damages arising out of or relating to this Agreement or
its engagement pursuant hereto.
(h) "Liabilities" means judgments, damages, liabilities, obligations,
losses, penalties, excise taxes, fines and amounts paid in settlement.
(i) "Proceeding" means 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 12 of this
Agreement to enforce Indemnitee's rights hereunder.
(j) "Subsidiary" means any 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) 50% or
more of the outstanding voting capital stock or other voting equity interests of
such Entity.
2. Services of Indemnitee. In consideration of the Company's undertakings
in this Agreement, Indemnitee agrees to serve or continue to serve as a director
and/or officer of the Company. However, this Agreement does 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
between the Company and Indemnitee, if any.
3. Agreement to Indemnify. The Company shall indemnify Indemnitee as
follows:
(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, the Company shall, to the extent permitted by
applicable law, indemnify Indemnitee 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 "Indemnifiable Amounts").
(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, the Company shall indemnify Indemnitee against all Indemnifiable
Expenses.
4. Exceptions to Indemnification. The Company shall indemnify Indemnitee
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
finally adjudicated by a court of competent jurisdiction (or arbitrator in an
arbitration proceeding commenced by Indemnitee in accordance with Section 12
hereof) that, (i) in connection with the subject of the
4
Proceeding out of which the claim for indemnification has arisen, Indemnitee
failed to act in good faith and in a manner Indemnitee reasonably believed to be
in, or not opposed to, the best interests of the Company, or (ii) with respect
to any criminal action or proceeding, Indemnitee had reasonable cause to believe
that Indemnitee's conduct was unlawful, then any such case, Indemnitee will not
be entitled to payment of Indemnifiable Amounts hereunder.
(b) If indemnification is requested under Section 3(b) and:
(i) it has been finally adjudicated by a court of competent
jurisdiction (or arbitrator in an arbitration proceeding commenced by
Indemnitee in accordance with Section 12 hereof) that, in connection with
the subject of the Proceeding out of which the claim for indemnification
has arisen, Indemnitee failed to act in good faith and in a manner
Indemnitee reasonably believed to be in, or not opposed to, the best
interests of the Company, then Indemnitee will not be entitled to payment
of Indemnifiable Expenses hereunder; or
(ii) it has been finally adjudicated by a court of competent
jurisdiction (or arbitrator in an arbitration proceeding commenced by
Indemnitee in accordance with Section 12 hereof) 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 will be paid with respect
to such claim, issue or matter unless the court in which such Proceeding
was brought determines upon application that, despite the adjudication of
liability, in view of all the circumstances of the case, Indemnitee is
fairly and reasonably entitled to such Indemnifiable Expenses as such court
deems proper.
(c) Notwithstanding any provision in this Agreement, the Company shall
not be obligated under this Agreement to make any indemnity in connection with
any claim made against Indemnitee:
(i) for which payment has actually been made to or on behalf of
Indemnitee under any insurance policy or other indemnity provision, except
with respect to any excess beyond the amount paid under any insurance
policy or other indemnity provision; or
(ii) for (i) an accounting of profits made from the purchase and
sale (or sale and purchase) by Indemnitee of securities of the Company
within the meaning of Section 16(b) of the Exchange Act or similar
provisions of state statutory law or common law, or (ii) any reimbursement
of the Company by the Indemnitee of any bonus or other incentive-based or
equity-based compensation or of any profits realized by the Indemnitee from
the sale of securities of the Company, as required in each case under the
Exchange Act; or
(iii) except as provided in Sections 12(d) and 22 of this
Agreement, in connection with any Proceeding (or any part of any
Proceeding) initiated by Indemnitee, including any Proceeding (or any part
of any Proceeding) initiated by Indemnitee against the Company or its
directors, officers, employees or other indemnitees, unless (i) the
5
board of directors of the Company authorized the Proceeding (or any part of
any Proceeding) prior to its initiation or (ii) the Company provides the
indemnification, in its sole discretion, pursuant to the powers vested in
the Company under applicable law.
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
request. The Company shall pay such Indemnifiable Amounts to Indemnitee within
fifteen (15) days of receipt of the request. At the request of the Company,
Indemnitee shall furnish such documentation and information as is reasonably
available to Indemnitee and necessary to establish that Indemnitee is entitled
to indemnification hereunder.
6. Indemnification for Expenses of a Witness. Notwithstanding any other
provision of this Agreement, if Indemnitee is, by reason of Indemnitee's
Corporate Status, a witness in any Proceeding to which Indemnitee is not a
party, the Company shall indemnify Indemnitee against all Expenses actually and
reasonably incurred by Indemnitee or on Indemnitee's behalf in connection
therewith.
7. Indemnification for Expenses When Indemnitee is Partly Successful.
Notwithstanding any provision to the contrary contained herein, if, in any
Proceeding, Indemnitee is successful, on the merits or otherwise, as to one or
more but fewer than all claims, counts, issues or matters in such Proceeding,
the Company shall indemnify Indemnitee in accordance with Section 3 of this
Agreement in connection with each such successful claim, count, issue or matter.
For purposes of this Agreement, and, without limiting the generality of the
foregoing, the termination of any claim, count, issue or matter in such a
Proceeding by dismissal, with or without prejudice, is to be construed as a
successful result as to such claim, count, issue or matter from the perspective
of the Person requesting such dismissal.
8. 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 creates 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 does not create a presumption
that Indemnitee did not act in good faith and in a manner that 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.
9. Agreement to Advance Expenses; Conditions. The Company shall, to the
extent not prohibited by law, pay to Indemnitee all Expenses incurred by
Indemnitee in connection with a Proceeding, including those incurred by
Indemnitee in connection with any Proceeding by or in the right of the Company,
in advance of the final disposition of the Proceeding to which the Indemnifiable
Expenses relate, if Indemnitee furnishes the Company with a written undertaking
to repay the amount of such Expenses advanced to Indemnitee if it is finally
determined by a court of competent jurisdiction that Indemnitee is not entitled
under this Agreement to indemnification. This undertaking is an unlimited
general obligation of Indemnitee, which the
6
Company shall accept without regard to the financial ability of Indemnitee to
make repayment, and in no event is be required to be secured.
10. Procedure for Advance Payment of Expenses. Indemnitee shall submit to
the Company a written request specifying the Expenses for which Indemnitee seeks
an advancement under Section 9 of this Agreement, together with documentation
evidencing that Indemnitee has incurred such Expenses. The Company shall pay
Expenses under Section 9 no later than fifteen (15) days after the Company's
receipt of such request.
11. Procedure Upon Request for Payment of Indemnifiable Amounts and
Expenses.
(a) Upon written request by Indemnitee for payment pursuant to
Sections 5 and 10 of this Agreement, a determination, if required by applicable
law, with respect to Indemnitee's entitlement thereto shall be made in the
specific case: (i) if a Change in Control shall have occurred, by Independent
Counsel in a written opinion to the board of directors, a copy of which shall be
delivered to Indemnitee; or (ii) if a Change in Control shall not have occurred,
(A) by a majority vote of the Disinterested Directors, even though less than a
quorum of the board of directors, (B) by a committee of Disinterested Directors
designated by a majority vote of the Disinterested Directors, even though less
than a quorum of the board of directors, (C) if there are no such Disinterested
Directors or, if such Disinterested Directors so direct, by Independent Counsel
in a written opinion to the board of directors, a copy of which shall be
delivered to Indemnitee or (D) if so directed by the board of directors, by the
stockholders of the Company; and, if it is so determined that Indemnitee is
entitled to indemnification, payment to Indemnitee shall be made within ten (10)
days after such determination. Indemnitee shall cooperate with the person,
persons or entity making such determination with respect to Indemnitee's
entitlement to indemnification, including providing to such person, persons or
entity upon reasonable advance request any documentation or information which is
not privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination. Any
costs or Indemnifiable Expenses (including attorneys' fees and disbursements)
incurred by Indemnitee in so cooperating with the person, persons or entity
making such determination shall be borne by the Company (irrespective of the
determination as to Indemnitee's entitlement to indemnification) and the Company
hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
(b) In the event the determination of entitlement to indemnification
is to be made by Independent Counsel pursuant to Section 11(a) hereof, the
Independent Counsel shall be selected as provided in this Section 11(b). If a
Change in Control shall not have occurred, the Independent Counsel shall be
selected by the board of directors, and the Company shall give written notice to
Indemnitee advising him of the identity of the Independent Counsel so selected.
If a Change in Control shall have occurred, the Independent Counsel shall be
selected by Indemnitee (unless Indemnitee shall request that such selection be
made by the board of directors, in which event the preceding sentence shall
apply), and Indemnitee shall give written notice to the Company advising it of
the identity of the Independent Counsel so selected. In either event, Indemnitee
or the Company, as the case may be, may, within ten (10) days after such written
notice of selection shall have been given, deliver to the Company or to
Indemnitee, as
7
the case may be, a written objection to such selection; provided, however, that
such objection may be asserted only on the ground that the Independent Counsel
so selected does not meet the requirements of "Independent Counsel" as defined
in Section 1 of this Agreement, and the objection shall set forth with
particularity the factual basis of such assertion. Absent a proper and timely
objection, the person so selected shall act as Independent Counsel. If such
written objection is so made and substantiated, the Independent Counsel so
selected may not serve as Independent Counsel unless and until such objection is
withdrawn or a court has determined that such objection is without merit. If,
within twenty (20) days after the later of submission by Indemnitee of a written
request for payment pursuant to Sections 5 and 10 hereof and the final
disposition of the Proceeding, no Independent Counsel shall have been selected
and not objected to, either the Company or Indemnitee may petition a court of
competent jurisdiction for resolution of any objection which shall have been
made by the Company or Indemnitee to the other's selection of Independent
Counsel and/or for the appointment as Independent Counsel of a person selected
by the Court or by such other person as the Court shall designate, and the
person with respect to whom all objections are so resolved or the person so
appointed shall act as Independent Counsel under Section 11(a) hereof. Upon the
due commencement of any judicial proceeding or arbitration pursuant to Section
12(a) of this Agreement, Independent Counsel shall be discharged and relieved of
any further responsibility in such capacity (subject to the applicable standards
of professional conduct then prevailing).
12. Remedies of Indemnitee.
(a) Right to Petition. If Indemnitee makes a request for payment of
Indemnifiable Amounts under Section 5 above or a request for an advancement of
Expenses under Section 10 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 the Chancery Court of the State of Delaware (the
"Delaware Court") in accordance with Section 20 hereof to enforce the Company's
obligations under this Agreement. Alternatively, Indemnitee, at his option, may
seek an award in arbitration to be conducted by a single arbitrator pursuant to
the Commercial Arbitration Rules of the American Arbitration Association.
Indemnitee shall commence such proceeding seeking an adjudication or an award in
arbitration within ninety (90) days following the date on which Indemnitee first
has the right to commence such proceeding pursuant to this Section 12(a). The
Company shall not oppose Indemnitee's right to seek any such adjudication or
award in arbitration.
(b) Burden of Proof. In any action brought under Section 12(a) above,
the Company has the burden of proving by a preponderance of the evidence that
Indemnitee is not entitled to payment of Indemnifiable Amounts hereunder;
provided, however, that if prior to the commencement of such action, this form
of agreement has been approved by the holders of a majority of the voting power
of the capital stock of the Company, the Company has the burden of proving by
clear and convincing evidence that Indemnitee is not entitled to such
indemnification.
(c) Reliance as Safe Harbor. For purposes of any determination of good
faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee's
action is based on the records or books of account of the Enterprise, including
financial statements, or on information supplied to Indemnitee by the officers
of the Enterprise in the course of their duties,
8
or on the advice of legal counsel for the Enterprise or on information or
records given or reports made to the Enterprise by an independent certified
public accountant or by an appraiser or other expert selected with the
reasonable care by the Enterprise. The provisions of this Section 12(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.
(d) Expenses. The Company shall reimburse Indemnitee in full for any
Indemnifiable Expenses incurred by Indemnitee in connection with investigating,
preparing for, litigating, defending or settling any action brought by
Indemnitee under Section 12(a) above, except where such action is resolved
wholly in favor of the Company.
(e) Validity of Agreement. The Company is precluded from asserting in
any Proceeding, including, without limitation, an action under Section 12(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 that the Company is bound by all the provisions of this
Agreement.
(f) 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 Expenses under
this Agreement is not a defense in any action brought under Section 12(a) above,
and does not create a presumption that such payment or advancement is not
permissible.
(g) Indemnitee's Right to Counsel. If the Company fails to comply with
any of its obligations under this Agreement or if the Company or any other
Person takes any action to declare this Agreement void or unenforceable, or
institutes any action, suit or proceeding to deny or to recover from Indemnitee
the benefits provided to Indemnitee hereunder, Indemnitee may retain counsel of
Indemnitee's choice, at the expense of the Company, to represent Indemnitee in
connection with any such matter.
13. Notice by Indemnitee. Indemnitee shall notify the Company promptly upon
being served with any summons, citation, subpoena, complaint, indictment,
information or other document relating to any Proceeding that may result in the
payment of Indemnifiable Amounts or the advancement of Expenses hereunder;
provided, however, that the failure to give any such notice does not disqualify
Indemnitee from the right, or otherwise affect in any manner any right of
Indemnitee, to receive payments of Indemnifiable Amounts or advancements of
Expenses except to the extent the Company's ability to defend in such Proceeding
is prejudiced thereby.
14. Representations and Warranties of the Company. The Company 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 this Agreement and the obligations of the Company
contemplated hereby have been duly authorized by the Company.
9
(b) Enforceability. This Agreement is valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms.
15. Expenses. During Indemnitee's service as a director and/or officer, the
Company shall promptly reimburse Indemnitee for all reasonable out-of-pocket
expenses incurred by Indemnitee in connection with Indemnitee's service as a
director and or officer or member of any board committee.
16. Contract Rights Not Exclusive. The rights to payment of Indemnifiable
Amounts and advancement of Expenses in this Agreement are in addition to any
other rights that Indemnitee has under applicable law, the Company's By-laws or
its Certificate, as each may be amended, modified or supplemented from time to
time (collectively, the "Organization Documents"), 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 and/or officer of the
Company.
17. Contribution. To the fullest extent permissible under applicable law,
if the indemnification provided for in this Agreement is unavailable to
Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying
Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for
judgments, fines, penalties, excise taxes, amounts paid or to be paid in
settlement and/or for Indemnifiable Expenses, in connection with any claim
relating to an indemnifiable event under this Agreement, in such proportion as
is deemed fair and reasonable in light of all of the circumstances of such
Proceeding in order to reflect (i) the relative benefits received by the Company
and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to
such Proceeding; and/or (ii) the relative fault of the Company (and its
directors, officers, employees and agents) and Indemnitee in connection with
such event(s) and/or transaction(s).
18. Successors. This Agreement is to (a) be binding upon all successors and
assigns of the Company (including any transferee of all or a substantial portion
of the business, stock or assets of the Company and any direct or indirect
successor by merger or consolidation or otherwise by operation of law), and (b)
be binding on and inure to the benefit of the heirs, personal representatives,
executors and administrators of Indemnitee. This Agreement will continue to
benefit Indemnitee and such heirs, personal representatives, executors and
administrators after Indemnitee has ceased to have Corporate Status.
19. Subrogation. If any payment of Indemnifiable Amounts is made under this
Agreement, the Company is to 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 such rights.
20. Governing Law; Change in Law; Consent to Jurisdiction. This Agreement
is to 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 (the "Governing Law"). If a change in the Governing Law (whether by
statute or judicial decision) permits broader
10
indemnification or advancement of Expenses than is provided under the terms of
the Organization Documents or this Agreement, Indemnitee will be entitled to
such broader indemnification and advancements, and this Agreement will be deemed
to be amended to such extent. The Company and Indemnitee hereby irrevocably and
unconditionally (i) agree that any action or proceeding arising out of or in
connection with this Agreement shall be brought (except for an arbitration
proceeding commenced by Indemnitee in accordance with Section 12 hereof) only in
the Delaware Court, and not in any other state or federal court in the United
States of America or any court in any other country, (ii) consent to submit to
the exclusive jurisdiction of the Delaware Court for purposes of any action or
proceeding arising out of or in connection with this Agreement, (iii) appoint,
to the extent such party is not otherwise subject to service of process in the
State of Delaware, irrevocably RL&F Service Corp., One Xxxxxx Square, 10th
Floor, 10th and King Streets, Wilmington, Delaware 19801 as its agent in the
State of Delaware as such party's agent for acceptance of legal process in
connection with any such action or proceeding against such party with the same
legal force and validity as if served upon such party personally within the
State of Delaware, (iv) waive any objection to the laying of venue of any such
action or proceeding in the Delaware Court, and (v) waive, and agree not to
plead or to make, any claim that any such action or proceeding brought in the
Delaware Court has been brought in an improper or inconvenient forum.
21. Severability. Whenever possible, each provision of this Agreement is to
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, is
determined by a court of competent jurisdiction (or arbitrator in an arbitration
proceeding commenced by Indemnitee in accordance with Section 12 hereof) to be
illegal, invalid or unenforceable, in whole or in part, such provision or clause
will be limited or deemed to be 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 will remain fully
enforceable and binding on the parties.
22. Indemnitee as Plaintiff. Except as provided in Section 12 of this
Agreement, Indemnitee is not entitled to payment of Indemnifiable Amounts or
advancement of Expenses with respect to any Proceeding brought by Indemnitee
against the Company, any Entity that it controls, or any director or officer
thereof or any third party, unless the Company consents to the initiation of
such Proceeding; provided, however, that this Section 22 does not apply to
affirmative defenses asserted by Indemnitee or any counterclaims by Indemnitee
that are resolved successfully (from Indemnitee's perspective) in an action
brought against Indemnitee.
23. Modifications and Waiver. Except as provided in Section 20 above with
respect to changes in the Governing Law that broaden the right of Indemnitee to
be indemnified by the Company, no supplement, modification or amendment of this
Agreement will be effective unless executed in writing by each of the parties
hereto. No waiver of any of the provisions of this Agreement constitutes a
waiver of any other provisions of this Agreement, nor does such waiver
constitute a continuing waiver of the provisions subject to such waiver.
24. 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
11
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
mailed to such address as may have been furnished by any party to the others.
25. Enforcement.
(a) The Company expressly confirms and agrees that it has entered into
this Agreement and assumed the obligations imposed on it hereby in order to
induce Indemnitee to serve as a director or officer of the Company, and the
Company acknowledges that Indemnitee is relying upon this Agreement in serving
as a director or officer of the Company.
(b) This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral, written and implied, between the
Company and Indemnitee with respect to the subject matter hereof; provided,
however, that this Agreement is a supplement to and in furtherance of the
Certificate, the By-laws, applicable insurance and applicable law, and shall not
be deemed a substitute therefor, nor to diminish or abrogate any rights of
Indemnitee thereunder.
26. Duration of Agreement. This Agreement shall continue until and
terminate upon the later of: (a) ten (10) years after the date that Indemnitee
shall have ceased to serve as a director or officer of the Company or (b) one
(1) year after the final termination of any Proceeding then pending in respect
of which Indemnitee is granted rights of indemnification or advancement of
Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to
this Agreement relating thereto. This Agreement shall be binding upon the
Company and its successors and assigns and shall inure to the benefit of
Indemnitee and his heirs, executors and administrators.
[Signature page follows]
12
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
IPG PHOTONICS CORPORATION
By:
------------------------------------
Chairman of the Board and
Chief Executive Officer
INDEMNITEE:
----------------------------
Name:
----------------------------------