EXHIBIT 10.2
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is made as of this _____ day
of __________, 199 by and between Creo Products Inc. a Canadian corporation (the
"Company"), and_________ ("Indemnitee").
WHEREAS, the Company and Indemnitee recognize the increasing difficulty in
obtaining directors' and officers' liability insurance, the significant
increases in the cost of such insurance and the general reductions in the
coverage of such insurance;
WHEREAS, the Company and Indemnitee further recognize the substantial
increase in corporate litigation in general, subjecting officers and directors
to expensive litigation risks at the same time as the availability and coverage
of liability insurance has been severely limited;
WHEREAS, Indemnitee does not regard the current protection available as
adequate under the present circumstances, and Indemnitee and other officers and
directors of the Company may not be willing to continue to serve as officers and
directors without additional protection; and
WHEREAS, the Company desires to attract and retain the services of highly
qualified individuals, such as Indemnitee, to serve as officers and directors of
the Company and to indemnify its officers and directors so as to provide them
with the maximum protection permitted by law.
NOW, THEREFORE, the Company and Indemnitee hereby agree as follows:
1. Indemnification.
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(a) Third-Party Proceedings. The Company shall indemnify
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Indemnitee if Indemnitee is or was a party or is threatened to be made a party
to any threatened, pending or completed action or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Company) by reason of:
(i) the fact that Indemnitee is or was a director, officer,
employee or agent of the Company, or any subsidiary of the Company,
(ii) any action or inaction on the part of Indemnitee while an
officer or director of the Company or,
(iii) the fact that Indemnitee is or was serving at the request of
the Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise,
against expenses (including legal fees), judgments, fines and amounts
paid in settlement (if such settlement is approved in advance by the Company,
which approval shall not be unreasonably withheld) actually and reasonably
incurred by Indemnitee in connection with such action or proceeding if
Indemnitee acted honestly and in good faith and with a view to the best
interests of the Company, and, with respect to any criminal or administrative
action or proceeding that is enforced by monetary penalty, if Indemnitee had
reasonable grounds for believing Indemnitee's conduct was lawful. The
termination of any action or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
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itself, create a presumption that (A) Indemnitee did not act honestly, in good
faith and with a view to the best interests of the Company, or (B) with respect
to any criminal or administrative action or proceeding that is enforced by
monetary penalty, Indemnitee did not have reasonable grounds for believing that
Indemnitee's conduct was lawful.
(b) Proceedings By or in the Right of the Company. The Company shall
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indemnify Indemnitee if Indemnitee was or is a party or is threatened to be made
a party to any threatened, pending or completed action or proceeding by or in
the right of the Company or any subsidiary of the Company to procure a judgment
in its favor by reason of:
(i) the fact that Indemnitee is or was a director, officer, employee
or agent of the Company, or any subsidiary of the Company,
(ii) any action or inaction on the part of Indemnitee while an
officer or director of the Company or
(iii) the fact that Indemnitee is or was serving at the request of
the Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise,
against expenses (including legal fees) and, to the fullest extent
permitted by law, amounts paid in settlement, in each case to the extent
actually and reasonably incurred by Indemnitee in connection with the defence or
settlement of such action or proceeding if Indemnitee acted honestly and in good
faith and with a view to the best interests of the Company, and, with respect to
any criminal or administrative action or proceeding that is enforced by monetary
penalty, had reasonable grounds for believing Indemnitee's conduct was lawful,
and such indemnification is approved by a court of competent jurisdiction in
accordance with applicable law.
(c) Tax Gross-Up. If Indemnitee is required by law to pay any tax on
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account of receipt of any amount under this Agreement, the Company shall
increase the amount payable to Indemnitee such that the amount received by
Indemnitee, after deduction of all applicable taxes, is equal to the amount that
Indemnitee would have received under this Agreement had such tax not been
payable, provided that Indemnitee takes all reasonable steps to minimize the
amount of such tax
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and provides the Company with evidence satisfactory to the Company, acting
reasonably, that such steps have been taken.
2. Expenses; Indemnification Procedure.
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(a) Advancement of Expenses. The Company shall advance all expenses
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incurred by Indemnitee in connection with the investigation, defence, settlement
or appeal of any civil or criminal action or proceeding referenced in Section
1(a) or (b) hereof (but not amounts actually paid in settlement of any such
action or proceeding). Indemnitee hereby undertakes to repay such amounts
advanced only if, and to the extent that, it shall ultimately be determined that
Indemnitee is not entitled to be indemnified by the Company as authorized
hereby. The advances to be made hereunder shall be paid by the Company to
Indemnitee within 20 days following delivery of a written request therefor by
Indemnitee to the Company.
(b) Notice/Cooperation by Indemnitee. Indemnitee shall, as a
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condition precedent to his right to be indemnified under this Agreement, give
the Company notice in writing as soon as practicable of any claim made against
Indemnitee for which indemnification will or could be sought under this
Agreement. Notice to the Company shall be directed to the Chief Executive
Officer of the Company at the address shown on the signature page of this
Agreement (or such other address as the Company shall designate in writing to
Indemnitee). Notice shall be deemed received 3 business days after the date
postmarked if sent by registered mail, properly addressed; otherwise notice
shall be deemed received when such notice shall actually be received by the
Company. In addition, Indemnitee shall give the Company such information and
cooperation as it may reasonably require and as shall be within Indemnitee's
power.
(c) Procedure. Any indemnification provided for in Section 1 shall be
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made no later than 45 days after receipt of the written request of Indemnitee.
If a claim under this Agreement, under any statute, or under any provision of
the Company's Articles of Incorporation or By-laws providing for
indemnification, is not paid in full by the Company within 45 days after a
written request for payment thereof has first been received by the Company,
Indemnitee may, but need not, at any time thereafter bring an action against the
Company to recover the unpaid amount of the claim and, subject to Section 13 of
this Agreement, Indemnitee shall also be entitled to be paid for the expenses
(including legal fees) of bringing such action. It shall be a defence to any
such action (other than an action brought to enforce a claim for expenses
incurred in connection with any action or proceeding in advance of its final
disposition) that Indemnitee has not met the standards of conduct which make it
permissible under applicable law for the Company to indemnify Indemnitee for the
amount claimed but the burden of proving such defence shall be on the Company,
and Indemnitee shall be entitled to receive interim payments of expenses
pursuant to Subsection 2(a) unless and until such defence may be finally
adjudicated by court order or judgment from which no further right of appeal
exists. It is the parties' intention that if the Company contests Indemnitee's
right to indemnification, the question of Indemnitee's right to indemnification
shall be for the court to decide, and neither the failure of the Company
(including
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its Board of Directors, any committee or subgroup of the Board of Directors,
independent legal counsel, or its shareholders) to have made a determination
that indemnification of Indemnitee is proper in the circumstances because
Indemnitee has met the applicable standard of conduct required by applicable
law, nor an actual determination by the Company (including its Board of
Directors, any committee or subgroup of the Board of Directors, independent
legal counsel, or its shareholders) that Indemnitee has not met such applicable
standard of conduct, shall create a presumption that Indemnitee has or has not
met the applicable standard of conduct.
(d) Notice to Insurers. If, at the time of the receipt of a notice of
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a claim pursuant to Section 2(b) hereof, the Company has director and officer
liability insurance in effect, the Company shall give prompt notice of the
commencement of such proceeding to the insurers in accordance with the
procedures set forth in the respective policies. The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay, on behalf
of the Indemnitee, all amounts payable as a result of such proceeding in
accordance with the terms of such policies.
(e) Selection of Counsel. In the event the Company shall be obligated
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under Section 2(a) hereof to pay the expenses of any proceeding against
Indemnitee, the Company, if appropriate, shall be entitled to assume the defence
of such proceeding, with counsel approved by Indemnitee, which approval shall
not be unreasonably withheld, upon the delivery to Indemnitee of written notice
of its election so to do. After delivery of such notice, approval of such
counsel by Indemnitee and the retention of such counsel by the Company, the
Company will not be liable to Indemnitee under this Agreement for any fees of
counsel subsequently incurred by Indemnitee with respect to the same proceeding,
provided that (i) Indemnitee shall have the right to employ his counsel in any
such proceeding at Indemnitee's expense; and (ii) if (A) the employment of
counsel by Indemnitee has been previously authorized by the Company, (B)
Indemnitee shall have reasonably concluded that there may be a conflict of
interest between the Company and Indemnitee in the conduct of any such defence
or (C) the Company shall not, in fact, have employed counsel to assume the
defence of such proceeding, then the fees and expenses of Indemnitee's counsel
shall be at the expense of the Company.
3. Additional Indemnification Rights; Nonexclusivity.
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(a) Scope. Notwithstanding any other provision of this Agreement, the
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Company hereby agrees to indemnify the Indemnitee to the fullest extent
permitted by law, notwithstanding that such indemnification is not specifically
authorized by the other provisions of this Agreement, the Company's Articles of
Incorporation, the Company's By-laws or by statute. In the event of any change,
after the date of this Agreement, in any applicable law, statute or rule which
expands the right of a Canadian corporation to indemnify a member of its board
of directors, an officer or other corporate agent, such changes shall be, ipso
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facto, within the purview of Indemnitee's rights and Company's obligations under
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this Agreement. In the event of any change in any applicable law, statute, or
rule which narrows the right of a Canadian corporation to indemnify a member of
its Board of Directors, an officer, or other corporate agent, such changes,
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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) Nonexclusivity. The indemnification provided by this Agreement
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shall not be deemed exclusive of any rights to which Indemnitee may be entitled
under the Company's Articles of Incorporation, its By-laws, any agreement, any
vote of shareholders or disinterested directors, the Canada Business
Corporations Act, as amended, or otherwise, both as to action in Indemnitee's
official capacity and as to action in another capacity while holding such
office. The indemnification provided under this Agreement shall continue as to
Indemnitee for any action taken or not taken while serving in an indemnified
capacity even though he may have ceased to serve in such capacity at the time of
any action or other covered proceeding.
4. Partial Indemnification. If Indemnitee is entitled under any provision
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of this Agreement to indemnification by the Company for some or a portion of the
expenses, judgments, fines or penalties actually or reasonably incurred by him
in the investigation, defence, appeal or settlement of any civil or criminal
action or proceeding, but not, however, for the total amount thereof, the
Company shall nevertheless indemnify Indemnitee for the portion of such
expenses, judgments, fines or penalties to which Indemnitee is entitled.
5. Mutual Acknowledgement. Both the Company and Indemnitee acknowledge
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that in certain instances, applicable law or public policy may prohibit the
Company from indemnifying its directors and officers under this Agreement or
otherwise. Indemnitee understands and acknowledges that the Company has
undertaken or may be required in the future to undertake with the United States
Securities and Exchange 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.
6. Directors' and Officers' Liability Insurance. The Company shall, from time
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to time, make the good faith determination whether or not it is practicable for
the Company to obtain and maintain a policy or policies of insurance with
reputable insurance companies providing the officers and directors of the
Company with coverage for losses from wrongful acts, or to ensure the Company's
performance of its indemnification obligations under this Agreement. Among
other considerations, the Company will weigh the costs of obtaining such
insurance coverage against the protection afforded by such coverage. In all
policies of directors' and officers' liability insurance, Indemnitee shall be
named as an insured in such a manner as to provide Indemnitee the same rights
and benefits as are accorded to the most favorably insured of the Company's
directors, if Indemnitee is a director; or of the Company's officers, if
Indemnitee is not a director of the Company but is an officer; or of the
Company's key employees, if Indemnitee is not an officer or director but is a
key employee. Notwithstanding the foregoing, the Company shall have no
obligation to obtain or maintain such insurance if the Company determines in
good faith that such insurance is not reasonably available, if the premium costs
for such insurance are disproportionate to the amount of coverage provided, if
the coverage provided by such insurance is limited by
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exclusions so as to provide an insufficient benefit, or if Indemnitee is covered
by similar insurance maintained by a subsidiary or parent of the Company.
7. Severability. Nothing in this Agreement is intended to require or
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shall be construed as requiring the Company to do or fail to do any act in
violation of applicable law. The Company's inability, pursuant to court order,
to perform its obligations under this Agreement shall not constitute a breach of
this Agreement. The provisions of this Agreement shall be severable as provided
in this Section 7. If this Agreement or any portion hereof shall be invalidated
on any ground by any court of competent jurisdiction, then the Company shall
nevertheless indemnify Indemnitee to the full extent permitted by any applicable
portion of this Agreement that shall not have been invalidated, and the balance
of this Agreement not so invalidated shall be enforceable in accordance with its
terms.
8. Exceptions. Any other provision herein to the contrary
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notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:
(a) Excluded Acts. To indemnify Indemnitee for any acts or omissions
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or transactions from which a director may not be relieved of liability under the
Canada Business Corporations Act, as amended.
(b) Claims Initiated by Indemnitee. To indemnify or advance expenses
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to Indemnitee with respect to proceedings or claims initiated or brought
voluntarily by Indemnitee and not by way of defence, except with respect to
proceedings brought to establish or enforce a right to indemnification under
this Agreement or any law or, but such indemnification or advancement of
expenses may be provided by the Company in specific cases if the Board of
Directors has approved the initiation or bringing of such suit; or
(c) Lack of Good Faith. To indemnify Indemnitee for any expenses
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incurred by the Indemnitee with respect to any proceeding instituted by
Indemnitee to enforce or interpret this Agreement, if a court of competent
jurisdiction determines that each of the material assertions made by the
Indemnitee in such proceeding was not made in good faith or was frivolous; or
(d) Insured Claims. To indemnify Indemnitee for expenses or
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liabilities of any type whatsoever (including, but not limited to, judgments,
fines, taxes or penalties, and amounts paid in settlement) which have been paid
directly to Indemnitee by an insurance carrier under a policy of directors' and
officers' liability insurance maintained by the Company; or
(e) Claims Under Section 16(b). To indemnify Indemnitee for expenses
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and the payment of profits arising from the purchase and sale by Indemnitee of
securities in violation of Section 16(b) of the United States Securities
Exchange Act of 1934, as amended, or any similar successor statute.
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9. Effectiveness of Agreement. This Agreement shall be effective as of the
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date set forth on the first page and may apply to acts or omissions of
Indemnitee which occurred prior to such date if Indemnitee was an officer,
director, employee or other agent of the Company, or was serving at the request
of the Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, at the time such act or
omission occurred.
10. Construction of Certain Phrases.
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(a) For purposes of this Agreement, references to the "Company" shall
also include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, employees or
agents, so that if Indemnitee is or was a director, officer, employee or agent
of such constituent corporation, or is or was serving at the request of such
constituent corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, Indemnitee
shall stand in the same position under the provisions of this Agreement with
respect to the resulting or surviving corporation as Indemnitee would have with
respect to such constituent corporation if its separate existence had continued.
(b) For purposes of this Agreement, references to "serving at the
request of the Company" shall include any service as a director, officer,
employee or agent of the Company 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.
11. Counterparts. This Agreement may be executed in one or more
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counterparts, which together shall constitute one agreement.
12. Successors and Assigns. This Agreement shall be binding upon the
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Company and its successors and assigns, and shall enure to the benefit of
Indemnitee and Indemnitee's estate, heirs, legal representatives and assigns.
13. Legal Fees. In the event that any action is instituted by Indemnitee
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under this Agreement to enforce or interpret any of the terms hereof, Indemnitee
shall be entitled to be paid all costs and expenses, including reasonable legal
fees, incurred by Indemnitee with respect to such action, unless as a part of
such action, a 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 Company under this Agreement or to enforce or interpret any of
the terms of this Agreement, Indemnitee shall be entitled to be paid all costs
and expenses, including reasonable legal fees, incurred by Indemnitee in defence
of such action (including with respect to Indemnitee's counterclaims and
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cross-claims made in such action), unless as a part of such action the court
determines that each of Indemnitee's material defences to such action were made
in bad faith or were frivolous.
14. Notice. All notices, requests, demands and other communications under
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this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and receipted for by the party addressee, on the date of such
receipt, or (ii) if mailed by registered mail with postage prepaid, on the third
business day after the date postmarked. Addresses for notice to either party
are as shown on the signature page of this Agreement, or as subsequently
modified by written notice.
15. Consent to Jurisdiction. The Company and Indemnitee each hereby
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irrevocably consent to the jurisdiction of the courts of the Province of British
Columbia for all purposes in connection with any action or proceeding which
arises out of or relates to this Agreement and agree that any action instituted
under this Agreement shall be brought only in the courts of the Province of
British Columbia.
16. Choice of Law. This Agreement shall be governed by and its provisions
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construed in accordance with the laws of the Province of British Columbia.
THE PARTIES, intending to be contractually bound, have executed this
Indemnification Agreement as of the date set out on the first page.
CREO PRODUCTS INC.
By:
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Name:
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Title:
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Address: Creo Products Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇
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AGREED TO AND ACCEPTED:
INDEMNITEE:
Address:
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