EXHIBIT 10.57
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the "Agreement") is effective as of
April 25, 2002, between EPICEDGE, INC., a Texas corporation (the "Company"), and
_______________ ("Indemnitee").
WHEREAS, it is essential to the Company to retain and attract as
directors and officers the most capable persons available;
WHEREAS, Indemnitee is a director and/or officer of the Company;
WHEREAS, both the Company and Indemnitee recognize the increased
risk of litigation and other claims being asserted against directors and
officers;
WHEREAS, it is crucial to secure the continued service of competent
and experienced people in senior corporate positions and to assure that they
will be able to exercise judgment without fear of personal liability so long as
they fulfill the basic duties of honesty, care and good faith; and
WHEREAS, in order to enhance Indemnitee's continued service to the
Company in an effective manner, and due to the potential inadequacy of the
Company's directors' and officers' liability insurance coverage, the Company
wishes to provide in this Agreement for the indemnification of, and the
advancing of expenses to, Indemnitee to the fullest extent (whether partial or
complete) permitted by law and as set forth in this Agreement, and to the extent
insurance is maintained, for the continued coverage of Indemnitee under the
Company's directors' and officers' liability insurance policies.
NOW, THEREFORE, in consideration of the premises and of Indemnitee
continuing to serve the Company directly or, at its request, with another
enterprise, and intending to be legally bound thereby, the parties hereto agree
as follows:
1. CERTAIN DEFINITIONS.
(a) "Approved Law Firm" shall mean any law firm rated "av" by
▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ Law Directory; provided, however, that such law firm shall
not, for a five (5) year period prior to the Indemnifiable Event (as hereinafter
defined), have been engaged by the Company, an Acquiring Person (as hereinafter
defined) or Indemnitee.
(b) "Board of Directors" shall mean the Board of Directors of the
Company.
(c) "Change in Control" shall be deemed to have occurred if after
the date hereof (i) any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")),
other than a trustee or other fiduciary holding securities under an employee
benefit plan of the Company in substantially the same proportions as their
ownership of stock of the Company, is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly of
securities of the Company representing fifty percent (50%) or more of the total
voting power represented by the Company's then outstanding Voting Securities (as
hereinafter defined) (such person being herein referred to as an "Acquiring
Person"), or (ii) during any twenty-four (24) consecutive month period,
individuals who at the beginning of such period constitute the Board of
Directors of the Company and any new director whose election by the Board of
Directors or nomination for election by the Company's shareholders was approved
by a vote of a majority 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 a
majority thereof, or (iii) the shareholders of the Company approve 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 thereto continuing to represent (either by
remaining outstanding or by being converted into Voting Securities of the
surviving entity) at least eighty percent (80%) of the total voting power
represented by the Voting Securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or (iv) the
shareholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all the Company's assets.
(d) "Claim" shall mean any threatened, pending, or completed
action, suit, or proceeding, whether civil, criminal, administrative,
arbitrative, or investigative, any appeal in such an action, suit, or
proceeding, and any inquiry or investigation that could lead to such an action,
suit, or proceeding.
(e) "Expenses" shall include attorneys' fees and all other costs,
expenses and obligations paid or incurred in connection with investigating,
defending, being a witness in or participating in (including on appeal), or
preparing to defend, be a witness in or participate in, any Claim relating to
any Indemnifiable Event, together with interest, computed at the Company's
average cost of funds for short-term borrowings, accrued from the date of
incurrence of such expense to that date Indemnitee receives reimbursement
therefor.
(f) "Indemnifiable Event" shall mean any event or occurrence
related to the fact that Indemnitee is or was a director, officer, employee,
agent or fiduciary of the Company, or is or was serving at the request of the
Company as a director, officer, employee, trustee, agent or fiduciary of another
corporation of any type or kind, domestic or foreign, partnership, joint
venture, trust, employee benefit plan or other enterprise, or by reason of
anything done or not done by Indemnitee in such capacity. Without limiting any
indemnification provided hereunder, an Indemnitee serving (i) another
corporation, partnership, joint venture or trust of which twenty percent (20%)
or more of the voting power or residual economic interest is held, directly or
indirectly, by the Company, or (ii) any employee benefit plan of the Company or
any entity referred to in clause (i), in any capacity shall be deemed to be
doing so at the request of the Company.
(g) "Reviewing Party" shall be (i) by a majority vote of a quorum
consisting of directors who at the time of the vote are not named defendants or
respondents in the proceeding. (ii) if such a quorum cannot be obtained, by a
majority vote of a committee of the Board of Directors, designated to act in the
matter by a majority vote of all directors, consisting solely of two or more
directors who at the time of the vote are not named defendants or respondents in
the proceeding; (iii) by special legal counsel selected by the board of
directors or a committee of the board by vote as set forth in subsection (i) or
(ii) of this section, or, if such a quorum cannot be obtained and such a
committee cannot be established, by a majority vote of all directors; or (iv) by
the shareholders in a vote that excludes the shares held by directors who are
named defendants or respondents in the proceeding.
(h) "Voting Securities" shall mean any securities of the Company
which vote generally in the election of directors.
2. BASIC INDEMNIFICATION AGREEMENT. If Indemnitee was, is or becomes
at any time a party to, or witness or other participant in, or is threatened to
be made a party to, or witness or other participant in, a Claim by reason of (or
arising in part out of) an Indemnifiable Event, the Company shall indemnify
Indemnitee to the fullest extent permitted by law as soon as practicable but in
any event no later than thirty (30) days after written demand is presented to
the Company, against any and all Expenses, judgments, fines (including excise
taxes assessed on an Indemnitee with respect to an employee benefit plan),
penalties and amounts paid in settlement (including all interest, assessments
and other charges paid or payable in connection with, or in respect of, such
Expenses, judgments, fines, penalties or amounts paid in settlement) of such
Claim. If so requested by Indemnitee, the Company shall advance (within thirty
(30) business days of such request) any and all Expenses to Indemnitee (an
"Expense Advance"). Notwithstanding anything in this Agreement to the contrary,
(i) Indemnitee shall not be entitled to indemnification pursuant to this
Agreement if a judgment or other final adjudication adverse to the Indemnitee
establishes that Indemnitee's acts were committed in bad faith or were the
result of active and deliberate dishonesty and, in either case, were material to
the cause of action so adjudicated, or that Indemnitee personally gained in fact
a financial profit or other advantage to which Indemnitee was not legally
entitled, and (ii) prior to a Change in Control, Indemnitee shall not be
entitled to indemnification pursuant to this Agreement in connection with any
Claim initiated by Indemnitee against the Company or any director or officer of
the Company unless the Company has joined in or consented to the initiation of
such Claim.
3. PAYMENT. Notwithstanding the provisions of Section 2, the
obligations of the Company under Section 2 (which shall in no event be deemed to
preclude any right to indemnification to which Indemnitee may be entitled under
Article 2.02-1 of the TBCA) shall be subject to the condition that the Reviewing
Party shall have
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authorized such indemnification in the specific case by having determined that
Indemnitee is permitted to be indemnified under the applicable standards of
conduct set forth in Section 2, Article 2.02-1 of the TBCA and other applicable
law. The Company shall promptly call a meeting of the Board of Directors with
respect to a Claim and agrees to use its best efforts to facilitate a prompt
determination by the Reviewing Party with respect to the Claim. Indemnitee shall
be afforded the opportunity to make submissions to the Reviewing Party with
respect to the Claim. The obligation of the Company to make an Expense Advance
pursuant to Section 2 shall be subject to the condition that, if, when and to
the extent that the Reviewing Party determines that Indemnitee would not be
permitted to be so indemnified under Section 2 and applicable law, the Company
shall be entitled to be reimbursed by Indemnitee (who hereby agrees and
undertakes to the full extent required by Section K of Article 2.02-1 of the
TBCA to reimburse the Company) for all such amounts therefore paid; provided,
however, that if Indemnitee has commenced legal proceedings in a court of
competent jurisdiction to secure a determination that Indemnitee should be
indemnified under applicable law, any determination made by the Reviewing Party
that Indemnitee would not be permitted to be indemnified under applicable law
shall not be binding and Indemnitee shall not be required to reimburse the
Company for any Expense Advance until a final judicial determination is made
with respect thereto (as to which all rights of appeal therefrom have been
exhausted or lapsed). If there has been no determination by the Reviewing Party
or if the Reviewing Party determines that Indemnitee substantively would not be
permitted to be indemnified in whole or in part under applicable law, Indemnitee
shall have the right to commence litigation in any court in the State of Texas
having subject matter jurisdiction thereof and in which venue is proper seeking
an initial determination by the court or challenging any such determination by
the Reviewing Party or any aspect thereof, and the Company hereby consents to
service of process and to appear in any such proceeding. Any determination by
the Reviewing Party otherwise shall be conclusive and binding on the Company and
Indemnitee.
4. CHANGE IN CONTROL. If there is a Change in Control of the Company
(other than a Change in Control which has been approved by a majority of the
Board of Directors who were directors immediately prior to such Change in
Control) then (i) all determinations by the Company pursuant to the first
sentence of Section 3 hereof and Article 2.02-1 of the TBCA shall be made
pursuant to subparagraph (F)(1) or (F)(2) of such Article 2.02-1 of the TBCA and
(ii) with respect to all matters thereafter arising concerning the rights of
Indemnitee to indemnity payments and Expense Advances under this Agreement or
any other agreement, provision of the Articles of Incorporation ("Articles") or
ByLaws ("Bylaws") of the Company now or hereinafter in effect relating to Claims
for Indemnifiable Events (including, but not limited to, any opinion to be
rendered pursuant to Article 2.02-1 of the TBCA) the Company (including the
Board of Directors) shall seek legal advice from (and only from) special,
independent counsel selected by Indemnitee and approved by the Company (which
approval shall not be unreasonably withheld), and who has not otherwise
performed services for the Company (or any subsidiary of the Company) or the
Acquiring Person (or any affiliate or associate of such Acquiring Person) within
the last five (5) years (other than in connection with such matters) or
Indemnitee. Unless Indemnitee has theretofore selected counsel pursuant to
Section 4 and such counsel has been approved by the Company, any Approved Law
Firm shall be deemed to satisfy the requirements set forth above. Such counsel,
among other things, shall, if required by the Company, render its written
opinion to the Company, the Board of Directors and Indemnitee as to whether and
to what extent the Indemnitee would be permitted to be indemnified under
applicable law. The Company agrees to pay the reasonable fees of the special,
independent counsel referred to above and to fully indemnify such counsel
against any and all expenses (including attorneys' fees), claims, liabilities
and damages arising out of or relating to this Agreement or its engagement
pursuant hereto. As used in this Section 4, the terms "affiliate" and
"associate" shall have the respective meanings ascribed to such terms in Rule
12b-2 of the General Rules and Regulations under the Exchange Act and in effect
on the date of this Agreement.
5. INDEMNIFICATION FOR ADDITIONAL EXPENSES. The Company shall
indemnify Indemnitee against any and all expenses (including attorneys' fees)
that are incurred by Indemnitee in connection with any claim asserted or action
brought by Indemnitee for (i) indemnification or advance payment of Expenses by
the Company under this Agreement or any other agreement, provision of the
Articles or Bylaws of the Company now or hereafter in effect relating to Claims
for Indemnifiable Events or (ii) recovery under any directors' and officers'
liability insurance policies maintained by the Company, but only if Indemnitee
ultimately is determined to be entitled to such indemnification, advance
expenses payment or insurance recovery, as the case may be.
6. PARTIAL INDEMNITY, ETC. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of the Expenses, judgments, fines, penalties and amounts paid in
settlement of a Claim but not, however, for all of the total amount thereof, the
Company shall nevertheless
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indemnify Indemnitee for the portion thereof 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 relating in whole or in part to an Indemnifiable Event or in
defense of any issue or matter therein, including dismissal without prejudice,
Indemnitee shall be indemnified, to the extent permitted by law, against all
Expenses incurred in connection with such Indemnifiable Event.
7. NO PRESUMPTION. For purposes of this Agreement, the termination
of any claim, action, suit or proceeding, whether civil or criminal, by
judgment, order, settlement (whether with or without court approval) or
conviction, or upon a plea of nolo contendere or its equivalent, shall not
create a presumption that Indemnitee did not meet any particular standard of
conduct or have any particular belief or that a court has determined that
indemnification is not permitted by applicable law.
8. NONEXCLUSIVITY, ETC. The rights of the Indemnitee hereunder shall
be in addition to any other rights Indemnitee may have under the Articles,
Bylaws, the TBCA or otherwise. To the extent that a change in the TBCA (whether
by statute or judicial decision) permits greater indemnification by agreement
than would be afforded currently under the Articles or Bylaws of the Company and
this Agreement, it is the intent of the parties hereto that Indemnitee shall
enjoy by this Agreement the greater benefits so afforded by such change.
9. INSURANCE. To the extent the Company maintains an insurance
policy or policies providing directors' and officers' liability insurance,
Indemnitee shall be covered by such policy or policies, in accordance with its
or their terms, to the maximum extent of the coverage available for any director
or officer of the Company.
10. PERIOD OF LIMITATIONS. No legal action shall be brought and no
cause of action shall be asserted by or on behalf of the Company or any
affiliate of the Company against Indemnitee, Indemnitee's spouse, heirs,
executors or personal or legal representatives after the expiration of two (2)
years from the date of accrual of such cause of action, and any claim or cause
of action of the Company or its affiliate shall be extinguished and deemed
released unless asserted by the timely filing of a legal action within such two
(2) 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.
11. AMENDMENTS, ETC. 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 provisions hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.
12. SUBROGATION. In the event of payment under this Agreement,
Company 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 shall do
everything that may be necessary to secure such rights, including the execution
of such documents necessary to enable the Company effectively to bring suit to
enforce such rights.
13. NO DUPLICATION OF PAYMENTS. The Company 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 hereunder.
14. SPECIFIC PERFORMANCE. The parties recognize that if any
provision of this Agreement is violated by the Company, Indemnitee may be
without an adequate remedy at law. Accordingly, in the event of any such
violation, the Indemnitee shall be entitled, if Indemnitee so elects, to
institute proceedings, either in law or at equity, to obtain damages, to enforce
specific performance, to enjoin such violation, or to obtain any relief or any
combination of the foregoing as Indemnitee may elect to pursue.
15. BINDING EFFECT, ETC. This Agreement shall be binding upon, inure
to the benefit of, and be enforceable by, the parties hereto and their
respective successors (including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
and/or assets of the Company), assigns spouses, heirs, and personal and legal
representatives. This Agreement shall continue in effect regardless of
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whether Indemnitee continues to serve as an officer or director of the Company
or of any other enterprise at the Company's request.
16. SEVERABILITY. The provisions of this Agreement shall be
severable if any of the provisions hereof (including any provision within a
single section, paragraph or sentence) are held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, and the remaining
provisions shall remain enforceable to the fullest extent permitted by law.
17. GOVERNING LAW. This Agreement shall be governed by, and be
construed and enforced in accordance with, the laws of the State of Texas
applicable to contracts made and to be performed in such state without giving
effect to the principles of conflicts of laws.
18. MUTUAL ACKNOWLEDGMENT. Both the Company and Indemnitee
acknowledge that in certain instances Federal law or applicable public policy
may prohibit the Company from indemnifying its directors or any other
indemnities under this Agreement or otherwise, in which event, notwithstanding
any other provisions of this Agreement to the contrary, the indemnification
provided by this Agreement shall be limited to such extent as is necessary to
comply with applicable Federal law or public policy. For example, the Company
and the Indemnitee acknowledge that the Securities and Exchange Commission (the
"Commission") has taken the position that indemnification is not permissible for
liabilities arising under certain federal securities laws, and federal
legislation prohibits indemnification for certain violations of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"). Indemnitee
understands and acknowledges that in the event the Company undertakes a public
offering of its securities pursuant to a registration with the Commission, the
Company may be required to undertake with the Commission to submit the question
of indemnification to a court in certain circumstances for a determination of
the Company's right under public policy to indemnify Indemnitee.
EXECUTED as of the day first written above.
EPICEDGE, INC.
By:
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇
President and Chief Executive Officer
INDEMNITEE
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