Indemnity Agreement - Informix Corp. and Peter Gyenes
INDEMNITY AGREEMENT
THIS INDEMNITY AGREEMENT (the "Agreement"), made and entered into this
14th day of September 2000 by and between INFORMIX CORPORATION, a Delaware
corporation (the "Company"), and the undersigned of the Company (the
"Indemnitee").
WITNESSETH:
WHEREAS, competent and experienced persons are increasingly reluctant
to serve as directors or officers of corporations because of increased exposure
to litigation costs and risks and because the exposure frequently bears no
reasonable relationship to their compensation;
WHEREAS, litigation against an officer or director often involves the
knowledge, motive and intent of the officer or director and the long period of
time between the events giving rise to the litigation and its final disposition
often extends beyond the time the officer or director can reasonably recall such
matters, the retirement of the officer or director, or the death of the officer
or director, with the result that he or, in the event of his death, his heirs,
executors or administrators, may be faced with limited ability and undue
hardship in maintaining an adequate defense, which may discourage such a
director or officer from serving in that position;
WHEREAS, the Board of Directors of the Company has concluded that, to
retain and attract talented and experienced individuals to serve as officers and
directors of the Company and its subsidiaries and to encourage such individuals
to take the business risks necessary for the success of the Company and its
subsidiaries, it is necessary for the Company to contractually indemnify the
officers and directors of the Company and of its subsidiaries, and to assume for
itself maximum liability for expenses and damages in connection with claims
against such officers and directors in connection with their service to the
Company and its subsidiaries;
WHEREAS, Section 145 of the General Corporation Law of Delaware
("Section 145") empowers the Company to indemnify its officers, directors,
employees and agents by agreement and to indemnify persons who serve, at the
request of the Company, as the directors, officers, employees or agents of other
corporations or enterprises;
WHEREAS, the shareholder of the Company have adopted or will adopt
by-laws (the "By-laws") providing for the indemnification of the officers,
directors, employees and agents of the Company;
WHEREAS, such By-laws and Section 145 specifically provide that they
are not exclusive and contemplate that contracts may be entered into between the
Company and the directors and officers with respect to indemnification of such
directors and officers;
WHEREAS, the Company desires and has requested the Indemnitee to serve
or continue to serve as a director and/or officer of the Company and/or one or
more subsidiaries of the Company; and
WHEREAS, the Indemnitee is willing to serve, or to continue to serve,
the Company and/or one or more subsidiaries of the Company as a director and/or
officer, provided that he is furnished the indemnity provided for herein.
NOW, THEREFORE, for and in consideration of the foregoing and the
mutual promises contained herein, the parties hereto hereby agree as follows:
1
<PAGE>
1. DEFINITIONS. When used herein.
(a) "Agent" shall mean any person who is or
was a director, officer, employee or other agent of the
Company or a Subsidiary, as hereinafter defined: or is or
was serving in a fiduciary capacity within the meaning of
the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), in connection with an employee benefit
plan, as that term is defined by ERISA, which is sponsored
by the Company or any of its Subsidiaries; or is or was
serving at the request of, for the convenience of, or to
represent the interests of the Company or a Subsidiary as a
director, officer, employee or agent of another foreign or
domestic corporation, partnership, joint venture, trust or
other enterprise; or was a director, officer, employee or
agent of a foreign or domestic corporation which was a
predecessor corporation of the Company or a Subsidiary, or
was a director, officer, employee or agent of another
enterprise at the request of, for the convenience of, or to
represent the interests of such predecessor corporation.
(b) "D&O Insurance" shall mean directors'
and officers' liability insurance.
(c) "Expenses" shall include all direct and
indirect costs of any type or nature whatsoever (including,
without limitation, all attorneys' fees and related
disbursements, other out-of-pocket costs and reasonable
compensation for time spent by the Indemnitee for which he
is not otherwise compensated by the Company or any third
party) actually and reasonably incurred by the Indemnitee in
connection with either the investigation, defense or appeal
of a Proceeding, as hereinafter defined, or establishing or
enforcing a right to indemnification under this Agreement,
Section 145 or otherwise; provided, however, that unless
otherwise expressly provided below. Expenses shall not
include any judgments, fines, ERISA excise taxes or
penalties, or amounts paid in settlement of a Preceding.
(d) "Proceeding" shall mean any threatened,
pending, or completed action, suit or other proceeding,
whether civil, criminal, administrative, investigative,
appellate, or any other type whatsoever.
(e) "Subsidiary" shall mean any corporation
of which more than fifty percent (50%) of the outstanding
voting securities is owned directly or indirectly by the
Company and one or more other Subsidiaries, or by one or
more other Subsidiaries.
2. AGREEMENT TO SERVE. The Indemnitee agrees to serve and/or continue to
serve as an Agent, at the will of the Company (or under separate agreement, if
such agreement exists), in the capacity Indemnitee currently serves as an Agent,
so long as he is duly appointed or elected and qualified in accordance with the
applicable provisions of the by-laws of the Company or any Subsidiary or until
such time as he tenders his resignation in writing; provided, however, that
nothing contained in this Agreement is intended to create any right to continued
employment and/or service as a director by Indemnitee.
3. MAINTENANCE OF LIABILITY INSURANCE.
(a) The Company hereby covenants and agrees
that, so long as the Indemnitee shall continue to serve as
an Agent and thereafter so long as the Indemnitee shall be
subject to any possible Proceeding by reason of the fact
that the Indemnitee was an Agent, the Company, subject to
Section 3(c), shall promptly obtain and maintain in full
force and effect D&O Insurance in reasonable amounts from
established and reputable insurers.
(b) In all policies of D&O Insurance, the
Indemnitee shall be named as an insured in such a manner as
to provide the Indemnitee the same rights and benefits as
are accorded to the most favorably insured of the Company's
directors, if the Indemnitee is a director, or of the
Company's officers, if the Indemnitee is not a director of
the Company but is an officer.
2
<PAGE>
(c) Notwithstanding the foregoing, the
Company shall have no obligation to obtain or maintain D&O
insurance if the Company determines in good faith that such
insurance is not reasonably available, the premium costs for
such insurance are disproportionate to the amount of
coverage provided, the coverage provided by such insurance
is so limited by exclusions that there is insufficient
benefit from such insurance, or the Indemnitee is covered by
similar insurance maintained by a Subsidiary.
4. MANDATORY INDEMNIFICATION
(a) To the fullest extent not prohibited by
Section 145 as in effect on the date of this Agreement and
as may hereafter be amended, or any other statutory
provision permitting or authorizing such indemnification
which is adopted subsequent to the execution of this
Agreement (but only to the extent that any such amendment or
other provision permits the Company to provide broader
indemnification rights than Section 145 permits prior to any
such amendment or the adoption of any such provision), the
Company shall indemnify and hold harmless the Indemnitee if
the Indemnitee is a person who was or is a party or is
threatened to be made a party to any Proceeding (including,
without limitation, an action by or in the right of the
Company) by reason of the fact that he is or was an Agent,
or by reason of anything done or not done by him in any such
capacity, against any and all Expenses and liabilities of
any type whatsoever (including, but not limited to,
judgments, fines, ERISA excise taxes or penalties, and
amounts paid in settlement) actually and reasonably incurred
by him in connection with the investigation, defense,
settlement or appeal of such Proceeding.
(b) In addition to the indemnity provided by
Section 4(a) hereof, the Company shall, subject to Section
6, 7, 8 and 10 hereof, indemnify and hold harmless the
Indemnitee if the Indemnitee is a person who was or is a
party or is threatened to be made a party to any Proceeding
(including, without limitation, an action by or in the right
of the Company) by reason of the fact that he is or was an
Agent, or by reason of anything done or not done by him in
any such capacity, against any and all Expenses and
liabilities of any type whatsoever (including, but not
limited to, judgments, fines, ERISA excise taxes or
penalties, and amounts paid in settlement) actually and
reasonably incurred by him in connection with the
investigation, defense, settlement or appeal of such
Proceeding.
(c) Notwithstanding the foregoing, the
Company shall not be obligated to indemnify the Indemnitee
for Expenses or liabilities of any type whatsoever
(including, but not limited to, judgments, fines, ERISA
excise taxes or penalties, and amounts paid in settlement)
which have been paid directly to Indemnitee by D&O
Insurance.
5. PARTIAL INDEMNIFICATION. If the Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of any Expenses or liabilities of any type whatsoever (including, but
not limited to, judgments, fines, ERISA excise taxes or penalties, and amounts
paid in settlement) incurred by him in the investigation, defense, settlement or
appeal of a Proceeding but not entitled, however, to indemnification for all of
the total amount thereof, the Company shall indemnify the Indemnitee for such
portion thereof to which the Indemnitee is entitled.
6. MANDATORY ADVANCEMENT OF EXPENSES. Subject to Section 10(a) below, the
Company shall advance all Expenses incurred by the Indemnitee in connection with
the investigation, defense, settlement or appeal or any Proceeding to which the
Indemnitee is a party or is threatened to be made a party by reason of the fact
that the Indemnitee is or was an Agent. Indemnitee hereby undertakes to repay
such amounts advanced only if, and to the extent that, it shall ultimately be
determined pursuant to Section 8 hereof that the 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 the Indemnitee within twenty (20) days
following delivery of a written request therefor by the Indemnitee to the
Company.
3
<PAGE>
7. NOTICE AND OTHER INDEMNIFICATION PROCEDURES.
(a) Promptly after receipt by the Indemnitee
of notice of the commencement of or the threat of
commencement of any Proceeding, the Indemnitee shall, if the
Indemnitee believes that indemnification with respect
thereto may be sought from the Company under this Agreement,
notify the Company of the commencement or threat of
commencement thereof.
(b) If, at the time of the receipt of a
notice of the commencement of a Proceeding pursuant to
Section 7(a) hereof, the Company has D&O 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.
(c) In the event the Company shall be
obligated to pay the Expenses of any Proceeding against the
Indemnitee, the Company shall be entitled to assume the
defense of such Proceeding, with counsel selected by the
Company and subject to the reasonable approval of the
Indemnitee, upon the delivery to the Indemnitee of written
notice of its election so to do. After delivery of such
notice, approval of such counsel by the Indemnitee and the
retention of such counsel by the Company, the Company will
not be liable to the Indemnitee under this Agreement for any
fees of counsel subsequently incurred by the Indemnitee with
respect to the same Proceeding, provided that (i) the
Indemnitee shall have the right to employ his counsel in any
such Proceeding at the Indemnitee's expense; and (ii) if (A)
the employment of counsel by the Indemnitee has been
previously authorized by the Company, or (B) the Indemnitee
shall have reasonably concluded that there may be a conflict
of interest between the Company and the Indemnitee in the
conduct of any such defense, or (C) the Company shall not,
in fact, have employed counsel to assume the defense of such
Proceeding, the fees and expenses of Indemnitee's counsel
shall be at the expense of the Company. The Company shall
not be entitled to assume the defense of any action, suit,
or proceeding by or on behalf of the Company or as to which
the Indemnitee shall have made the conclusion provided for
in (ii)B above.
8. DETERMINATION OF RIGHT TO INDEMNIFICATION.
(a) To the extent the Indemnitee has been
successful on the merits or otherwise in defense of any
Proceeding referred to in Section 4(a) or 4(b) of this
Agreement or in the defense of any claim, issue or matter
described therein, the Company shall indemnify the
Indemnitee against Expenses actually and reasonably incurred
by him in connection with the investigation, defense, or
appeal of such Proceeding.
(b) In the event that Section 8(a) is
inapplicable, the Company shall also indemnify the
Indemnitee unless, and only to the extent that, the Company
shall prove by clear and convincing evidence to a forum
listed in Section 8(c) below that indemnification is not
required pursuant to Sections 4 and 10 hereof.
(c) The Indemnitee shall be entitled to
select the forum in which the validity of the Company's
claim under Section 8(b) hereof that the Indemnitee is not
entitled to indemnification will be heard from among the
following:
(1) A quorum of the Board
consisting of directors who are not parties to the
proceeding for which indemnification is being
sought;
(2) The stockholders of the
Company;
4
<PAGE>
(3) Legal counsel selected by the
Indemnitee, and reasonably approved by the Board,
which counsel shall make such determination in a
written opinion; or
(4) A panel of three (3)
arbitrators, one (1) of whom is selected by the
Company, another of whom is selected by the
Indemnitee and the last of whom is selected by the
first two (2) arbitrators so selected.
(d) As soon as practicable, and in no event
later than thirty (30) days after written notice of the
Indemnitee's choice of forum pursuant to Section 8(c) above,
there shall be submitted to such forum as the Indemnitee or
the Indemnitee's counsel may reasonably request, its claim
that the Indemnitee is not entitled to indemnification, and
the Company shall act in the utmost good faith to assure the
Indemnitee a complete opportunity to defend against such
claim.
(e) Notwithstanding a determination by any
forum listed in Section 8(c) hereof that Indemnitee is not
entitled to indemnification with respect to a specific
Proceeding, the Indemnitee shall have the right, subject to
the provisions of Section 18 hereof, to apply to the Court
of Chancery of Delaware, the court in which that Proceeding
is or was pending, or any other court of competent
jurisdiction, for the purpose of enforcing the Indemnitee's
right to indemnification pursuant to this Agreement.
(f) Notwithstanding any other provision in
this Agreement to the contrary, the Company shall indemnify
the Indemnitee against all Expenses incurred by the
Indemnitee in connection with any hearing or Proceeding
under this Section 8 involving the Indemnitee and against
all Expenses incurred by the Indemnitee in connection with
any other Proceeding between the Company and the Indemnitee
involving the interpretation or enforcement of the rights of
the Indemnitee under this Agreement unless a court of
competent jurisdiction finds that each of the claims and/or
defenses of the Indemnitee in any such Proceeding was
frivolous or made in bad faith.
9. SHARE RATIFICATION. Unless this Agreement in substantially the form
set forth herein has been approved by the shareholders of the Company, this
Agreement shall be expressly subject to ratification by such stockholders. If
this Agreement in substantially the form set forth herein is not so ratified
and/or approved by such stockholders within one (1) year after the effective
date hereof, this Agreement shall be void.
10. EXCEPTIONS. Any other provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:
(a) To indemnify or advance Expenses to the
Indemnitee with respect to Proceedings or claims initiated
or brought voluntarily by the Indemnitee and not by way of
defense, except with respect to Proceedings brought to
establish or enforce a right to indemnification under this
Agreement or any other statute or law or otherwise as
required under Section 145, but such indemnification or
advancement of Expenses may be provided by the Company in
specific cases if the Board of Directors finds it to be
appropriate; or
(b) To indemnify the Indemnitee for any
Expenses incurred by the Indemnitee with respect to any
Proceeding instituted by the 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
(c) To indemnify the Indemnitee under this
Agreement for any amounts paid in settlement of a Proceeding
unless the Company consents to such settlement, which
consent shall not be unreasonably withheld; or
5
<PAGE>
(d) on account of any Proceeding in which
judgment is rendered against Indemnitee for an accounting of
profits made from the purchase or sale by Indemnitee of
securities of the Company pursuant to the provisions of
Section 16(b) of the Securities Exchange Act of 1934, as
amended; or
(e) on account of Indemnitee's conduct which
is finally adjudged by a court to have been knowingly
fraudulent, deliberately dishonest or willful misconduct; or
(f) if a final adjudication by a court
having jurisdiction in the matter shall determine that such
indemnification is not lawful.
11. NON-EXCLUSIVITY. The provisions for indemnification and advancement of
Expenses set forth in this Agreement shall not be deemed exclusive of any other
rights which the Indemnitee may have under any provision of law, the Company's
certificate of incorporation or By-laws, the vote of the Company's stockholders
or disinterested directors, other agreements, or otherwise, both as to action in
his official capacity and to action in another capacity while occupying his
position as an Agent, and the Indemnitee's rights hereunder shall continue after
the Indemnitee has ceased acting as an Agent and shall inure to the benefit of
the heirs, executors and administrators of the Indemnitee or his estate.
12. INTERPRETATION OF AGREEMENT. It is understood that the parties hereto
intend this Agreement to be interpreted and enforced so as to provide
indemnification to the Indemnitee to the fullest extent now or hereafter
permitted by law.
13. SEVERABILITY. If any provision or provisions of this Agreement shall
be held to be invalid, illegal or unenforceable for any reason whatsoever, (i)
the validity, legality and enforceability of the remaining provisions of the
Agreement (including without limitation, all portions of any paragraphs of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or unenforceable) shall
not in any way be affected or impaired thereby, and (ii) to the fullest extent
possible, the provisions of this Agreement (including, without limitation, all
portions of any paragraph of this Agreement containing any such provision held
to be invalid, illegal or unenforceable, that are not themselves invalid,
illegal or unenforceable) shall be construed so as to give effect to the intent
manifested by the provision held invalid, illegal or unenforceable and to give
effect to Section 12 hereof.
14. MODIFICATION AND WAIVER. No waiver, supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by both
of the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed, or shall constitute, a waiver of any other provision hereof
(whether or not similar), nor shall such waiver constitute a continuing waiver.
15. SUCCESSORS AND ASSIGNS. The terms of this agreement shall bind, and
shall inure to the benefit of, the successors and assigns of the Company and the
successors, assigns, heirs, executors and administrators of the Indemnitee or
his estate.
16. NOTICE. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and receipted for by the party addressee or (ii) if mailed by
certified or registered mail with postage prepaid, on the third business day
after the mailing date. Addresses for notice to either party are as follows:
to the Company: Informix Corporation
4100 Bohannon Drive
Menlo Park, California 94025
Attn: Gary Lloyd
Vice President, Legal,
General Counsel and Secretary
6
<PAGE>
to the Indemnitee: Peter Gyenes
--------------------------
--------------------------
or subsequently modified by written notice given in accordance with this
section.
17. GOVERNING LAW. This Agreement shall be governed exclusively by and
construed according to the laws of the State of Delaware, as applied to
contracts between Delaware residents entered into and to be performed entirely
within Delaware.
18. CONSENT TO JURISDICTION. Subject to Indemnitee's right to select a
nonjudicial forum under Section 8(c) hereof, the Company and the Indemnitee each
hereby irrevocably consent to the jurisdiction of the courts of the State of
Delaware 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 state courts of the State of
Delaware.
IN WITNESS WHEREOF, the parties hereto have entered into this
Agreement as of the date first above written,
INFORMIX CORPORATION
a Delaware Corporation
"COMPANY"
By: /s/ Gary Lloyd
------------------------------
Gary Lloyd
Vice President, Legal,
General Counsel and Secretary
"INDEMNITEE"
/s/ Peter Gyenes
---------------------------------------
Signature
PETER GYENES
---------------------------------------
Printed Name
PRESIDENT AND CHIEF EXECUTIVE OFFICER
---------------------------------------
Approved by stockholders on February 8, 1988.
7