Exhibit
10.1
DIRECTOR AGREEMENT
This
DIRECTOR AGREEMENT is made as of November [●], 2016 (the
“
Agreement
”), by and
between Meridian Waste Solutions, Inc., a New York corporation (the
“
Company
”), and [●],
an individual with an address of [●]
(the “
Director
”).
WHEREAS, the
Company appointed the Director on [●], and desires to enter
into an agreement with the Director with respect to such
appointment; and
WHEREAS, the
Director is willing to accept such appointment and to serve the
Company on the terms set forth herein and in accordance with the
provisions of this Agreement.
NOW,
THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereto agree as follows:
1.
Position
. Subject to the terms
and provisions of this Agreement, the Company shall cause the
Director to be appointed, and the Director hereby agrees to serve
the Company in such position, upon the terms and conditions
hereinafter set forth,
provided
,
however
, that the
Director’s continued service on the Board of Directors of the
Company (the “
Board
”) after the next
annual stockholders’ meeting shall be subject to approval by
the Company’s stockholders.
2.
Duties
.
(a)
During the Directorship Term (as defined herein), the Director
shall make reasonable business efforts to attend all Board
meetings, serve on appropriate subcommittees as reasonably
requested by the Board, make himself available to the Company at
mutually convenient times and places, attend external meetings and
presentations, as appropriate and convenient, and perform such
duties, services and responsibilities, and have the authority
commensurate to such position.
(b) The
Director will use his best efforts to promote the interests of the
Company. The Company recognizes that the Director (i) is or may
become a full-time executive employee of another entity and that
his responsibilities to such entity must have priority and (ii)
sits or may sit on the board of directors of other entities.
Notwithstanding the same, the Director will use reasonable business
efforts to coordinate his respective commitments so as to fulfill
his obligations to the Company and, in any event, will fulfill his
legal obligations as a Director. Other than as set forth above, the
Director will not, without the prior notification to the Board,
engage in any other business activity which could materially
interfere with the performance of his duties, services and
responsibilities hereunder or which is in violation of the
reasonable policies established from time to time by the Company,
provided
that the
foregoing shall in no way limit his activities on behalf of (i) any
current employer and its affiliates or (ii) the board of directors
of any entities on which he currently sits. At such time as the
Board receives such notification, the Board may require the
resignation of the Director if it determines that such business
activity does in fact materially interfere with the performance of
the Director’s duties, services and responsibilities
hereunder.
3.
Compensation
.
(a)
Cash Stipend. The
Director shall receive a monthly cash stipend of One Thousand Five
Hundred Dollars ($1,500). For so long as the Director serves as the
chair of either the Audit Committee of the Board, the Compensation
Committee of the Board or the Nominating Committee of the Board the
amount of such monthly cash stipend shall be increased to Two
Thousand Dollars ($2,000). In addition, the Director shall receive
a cash stipend of (i) $500 for every telephonic meeting of the
Board that the Director attends which is longer than forty-five
minutes; (ii) $500 for every telephonic meeting of a Committee of
the Board that the Director attends that is longer than forty-five
minutes; and (iii) $1,000 for every in-person meeting that the
Director attends.
(b)
Common Stock. The
Director shall be issued, (i) upon execution of this Agreement,
Twenty Thousand (20,000) shares of the Company’s common stock
and (ii) upon the last day of each fiscal quarter, commencing in
the quarter in which the Director enters into this Agreement,
provided the Director is a member of the Board as of such date, the
number of shares of the Company’s common stock equivalent to
Seven Thousand Five Hundred Dollars ($7,500) as determined based on
the average closing price on the three trading days immediately
preceding the last day of such quarter.
(c)
Stock Options. The
Director shall receive, upon execution of this Agreement, a
non-qualified stock option to purchase up to Seventy-five Thousand
(75,000) shares of the Company’s common stock at an exercise
price per share equal to $1.00. Such option shall be exercisable
for a period of five years. The option shall vest in equal amounts
over a period of three years at the rate of Six Thousand Two
Hundred Fifty (6,250) shares per fiscal quarter at the end of such
quarter, commencing in the quarter in which the Director enters
into this Agreement, and pro-rated for the number of days the
Director serves on the Board during the fiscal quarter.
Notwithstanding the foregoing, if the Director ceases to be a
member of Board at any time during the three-year vesting period
for any reason (such as resignation, withdrawal, death, disability
or any other reason), then any un-vested options shall be
irrefutably forfeited. Upon the occurrence of a Change in Control,
any un-vested options shall vest immediately, provided the Director
serves on the Board as of the date of such Change in Control.
“
Change in
Control
” shall mean any sale, conveyance, assignment
or other transfer, directly or indirectly, of any ownership
interest of the Company, which results in any change in the
identity of the individuals or entities in Control of the Company,
other than as may result solely from the transfer of any shares of
the Company’s Series A Preferred Stock from Jeffrey Cosman to
another person. “
Control
” shall mean the
possession, directly or indirectly, of the power to direct, or
cause the direction of, the management and policies of a person by
contract, voting of securities, or otherwise.
(d)
Independent
Contractor. The Director’s status during the Directorship
Term shall be that of an independent contractor and not, for any
purpose, that of an employee or agent with authority to bind the
Company in any respect. All payments and other consideration made
or provided to the Director under this Section 3 shall be made or
provided without withholding or deduction of any kind, and the
Director shall assume sole responsibility for discharging all tax
or other obligations associated therewith.
(e)
Expense
Reimbursements. During the Directorship Term, the Company shall
reimburse the Director for (i) all reasonable out-of-pocket
expenses incurred by the Director in attending any in-person
meetings,
provided
that the Director complies with the generally applicable policies,
practices and procedures of the Company for submission of expense
reports, receipts or similar documentation of such expenses, and
(ii) any costs associated with filings required to be made by the
Director or any of the entities managed or controlled by Director
to report beneficial ownership or the acquisition or disposition of
securities of the Company. Any reimbursements for allocated
expenses (as compared to out-of-pocket expenses of the Director)
must be approved in advance by the Company.
4.
Directorship Term
. The
“
Directorship
Term
,” as used in this Agreement, shall mean the
period commencing on the date hereof and terminating on the earlier
of the date of the next annual stockholders meeting and the
earliest of the following to occur:
(a)
the death of the
Director;
(b)
the termination of
the Director from his membership on the Board by the mutual
agreement of the Company and the Director;
(c)
the removal of the
Director from the Board by the majority stockholders of the
Company; and
(d)
the resignation by
the Director from the Board.
5.
Director’s Representation and
Acknowledgment
. The Director represents to the Company that
his execution and performance of this Agreement shall not be in
violation of any agreement or obligation (whether or not written)
that he may have with or to any person or entity, including without
limitation, any prior or current employer. The Director hereby
acknowledges and agrees that this Agreement (and any other
agreement or obligation referred to herein) shall be an obligation
solely of the Company, and the Director shall have no recourse
whatsoever against any officer, director, employee, stockholder,
representative or agent of the Company or any of their respective
affiliates with regard to this Agreement.
6.
Director
Covenants
.
(a)
Unauthorized
Disclosure. The Director agrees and understands that in the
Director’s position with the Company, the Director has been
and will be exposed to and receive information relating to the
confidential affairs of the Company, including, but not limited to,
technical information, business and marketing plans, strategies,
customer information, other information concerning the
Company’s products, services, promotions, development,
financing, expansion plans, business policies and practices, and
other forms of information considered by the Company to be
confidential, and proprietary and in the nature of trade secrets.
The Director agrees that during the Directorship Term and
thereafter, the Director will keep such information confidential
and will not disclose such information, either directly or
indirectly, to any third person or entity without the prior written
consent of the Company;
provided
,
however
, that (i) the Director
shall have no such obligation to the extent such information is or
becomes publicly known or generally known in the Company’s
industry other than as a result of the Director’s breach of
his obligations hereunder and (ii) the Director may, after giving
prior notice to the Company to the extent practicable under the
circumstances, disclose such information to the extent required by
applicable laws or governmental regulations or judicial or
regulatory process. This confidentiality covenant has no temporal,
geographical or territorial restriction. Upon termination of the
Directorship Term, the Director will promptly return to the Company
and/or destroy at the Company’s direction all property, keys,
notes, memoranda, writings, lists, files, reports, customer lists,
correspondence, tapes, disks, cards, surveys, maps, logs, machines,
technical data, other product or document, and any summary or
compilation of the foregoing, in whatever form, including, without
limitation, in electronic form, which has been produced by,
received by or otherwise submitted to the Director in the course or
otherwise as a result of the Director’s position with the
Company during or prior to the Directorship Term,
provided
that the Company shall
retain such materials and make them available to the Director if
requested by him in connection with any litigation against the
Director under circumstances in which (i) the Director demonstrates
to the reasonable satisfaction of the Company that the materials
are necessary to his defense in the litigation and (ii) the
confidentiality of the materials is preserved to the reasonable
satisfaction of the Company.
(b)
Non-Solicitation.
During the Directorship Term and for a period of three (3) years
thereafter, the Director shall not interfere with the
Company’s relationship with, or endeavor to entice away from
the Company, any person who, on the date of the termination of the
Directorship Term and/or at any time during the one year period
prior to the termination of the Directorship Term, was an employee
or customer (including those reasonably expected to be a customer)
of the Company or otherwise had a material business relationship
with the Company.
(c)
Remedies. The
Director agrees that any breach of the terms of this Section 6
would result in irreparable injury and damage to the Company for
which the Company would have no adequate remedy at law. The
Director therefore also agrees that in the event of said breach or
any threat of breach, the Company shall be entitled to an immediate
injunction and restraining order to prevent such breach and/or
threatened breach and/or continued breach by the Director and/or
any and all entities acting for and/or with the Director, without
having to prove damages or paying a bond, in addition to any other
remedies to which the Company may be entitled at law or in equity.
The terms of this paragraph shall not prevent the Company from
pursuing any other available remedies for any breach or threatened
breach hereof, including, but not limited to, the recovery of
damages from the Director. The Director acknowledges that the
Company would not have entered into this Agreement had the Director
not agreed to the provisions of this Section 6.
(d)
The provisions of
this Section 6 shall survive any termination of the Directorship
Term, and the existence of any claim or cause of action by the
Director against the Company, whether predicated on this Agreement
or otherwise, shall not constitute a defense to the enforcement by
the Company of the covenants and agreements of this Section
6.
7.
Indemnification
. The Company
agrees to indemnify the Director for his activities as a member of
the Board as set forth in the Director and Officer Indemnification
Agreement attached hereto as
Exhibit
A
.
8.
Non-Waiver of Rights
. The
failure to enforce at any time the provisions of this Agreement or
to require at any time performance by the other party hereto of any
of the provisions hereof shall in no way be construed to be a
waiver of such provisions or to affect either the validity of this
Agreement or any part hereof, or the right of either party hereto
to enforce each and every provision in accordance with its terms.
No waiver by either party hereto of any breach by the other party
hereto of any provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar
provisions at that time or at any prior or subsequent
time.
9.
Notices
. Every notice relating
to this Agreement shall be in writing and shall be given by
personal delivery, overnight delivery or by registered or certified
mail, postage prepaid, return receipt requested; to:
If to
the Company:
Meridian Waste
Solutions, Inc.
12540
Broadwell Road, Suite 2104
Milton,
GA 30004
Attn:
Jeffrey Cosman, Chief Executive Officer
Telephone: (678)
871-7457
Facsimile:
[●]
with a
copy (which shall not constitute notice) to:
Lucosky
Brookman LLP
101
Wood Avenue South
Woodbridge, New
Jersey 08830
Attn:
Scott E. Linsky, Esq.
Telephone: (732)
395-4400
Facsimile: (732)
395-4401
If to
the Director:
[●]
Telephone:
[●]
Facsimile:
[●]
Either
of the parties hereto may change their address for purposes of
notice hereunder by giving notice in writing to such other party
pursuant to this Section 9.
10.
Binding Effect/Assignment
. This
Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, personal
representatives, estates, successors (including, without
limitation, by way of merger) and assigns, as applicable.
Notwithstanding the provisions of the immediately preceding
sentence, neither the Director nor the Company shall assign all or
any portion of this Agreement without the prior written consent of
the other party.
11.
Entire Agreement
. This
Agreement (together with the other agreements referred to herein)
sets forth the entire understanding of the parties hereto with
respect to the subject matter hereof and supersedes all prior
agreements, written or oral, between them as to such subject
matter.
12.
Severability
. If any provision
of this Agreement, or any application thereof to any circumstances,
is invalid, in whole or in part, such provision or application
shall to that extent be severable and shall not affect other
provisions or applications of this Agreement.
13.
Governing Law
. This Agreement
and the legal relations among the parties shall be governed by, and
construed and enforced in accordance with, the laws of the State of
New Jersey, without regard to its conflict of laws rules. The
parties hereto hereby irrevocably and unconditionally (i) agree
that any action or proceeding arising out of or in connection with
this Agreement shall be brought in any court of the State of New
Jersey (the “
New
Jersey 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 New Jersey Court for purposes of any action or proceeding
arising out of or in connection with this Agreement, (iii) waive
any objection to the laying of venue of any such action or
proceeding in the New Jersey Court, and (v) waive, and agree not to
plead or to make, any claim that any such action or proceeding
brought in the New Jersey Court has been brought in an improper or
inconvenient forum.
14.
Legal Fees
. The parties hereto
agree that the non-prevailing party in any dispute, claim, action
or proceeding between the parties hereto arising out of or relating
to the terms and conditions of this Agreement or any provision
thereof (a “
Dispute
”), shall
reimburse the prevailing party for reasonable attorney’s fees
and expenses incurred by the prevailing party in connection with
such Dispute;
provided
,
however
, that the Director
shall only be required to reimburse the Company for its fees and
expenses incurred in connection with a Dispute if the
Director’s position in such Dispute was found by the court,
arbitrator or other person or entity presiding over such Dispute to
be frivolous or advanced not in good faith.
15.
Modifications
. Neither this
Agreement nor any provision hereof may be modified, altered,
amended or waived except by an instrument in writing duly signed by
the party to be charged.
16.
Tense and Headings
. Whenever
any words used herein are in the singular form, they shall be
construed as though they were also used in the plural form in all
cases where they would so apply. The headings contained herein are
solely for the purposes of reference, are not part of this
Agreement and shall not in any way affect the meaning or
interpretation of this Agreement.
17.
Counterparts
. This Agreement
may be executed in two or more counterparts, each of which shall be
deemed to be an original but all of which together shall constitute
one and the same instrument.
[-Signature Page Follows-]
IN
WITNESS WHEREOF, the Company has caused this Director Agreement to
be executed by authority of its Board of Directors, and the
Director has hereunto set his hand, on the day and year first above
written.
MERIDIAN WASTE SOLUTIONS, INC.
By:
_________________________
Jeffrey
Cosman
Chief
Executive Officer
DIRECTOR
______________________________
______________,
an individual
[Signature
page to Director Agreement]
7
EXHIBIT A
DIRECTOR AND OFFICER INDEMNIFICATION AGREEMENT
See
attached.
[Exhibit A to
Director Agreement]
8
Exhibit 10.2
MERIDIAN
WASTE SOLUTIONS, INC.
DIRECTOR
AND OFFICER INDEMNIFICATION AGREEMENT
This
Director and Officer Indemnification Agreement, dated as of
November _____, 2016 (the
“Agreement”
),
is made by and between Meridian Waste Solutions, Inc., a New York
corporation (the
“Company”
),
and ____________________ (the
“Indemnitee”
).
RECITALS:
A. The
New York Business Corporation Law provides that the business and
affairs of a corporation shall be managed by or under the direction
of its board of directors.
B. By
virtue of the managerial prerogatives vested in the directors and
officers of a New York corporation, directors and officers act as
fiduciaries of the corporation and its stockholders.
C. It
is critically important to the Company and its stockholders that
the Company be able to attract and retain the most capable persons
reasonably available to serve as directors and officers of the
Company.
D. In
recognition of the need for corporations to be able to induce
capable and responsible persons to accept positions in corporate
management, New York law authorizes (and in some instances
requires) corporations to indemnify their directors and officers,
and further authorizes corporations to purchase and maintain
insurance for the benefit of their directors and
officers.
E. Courts
have recognized that indemnification by a corporation serves the
dual policies of (1) allowing corporate officials to resist
unjustified lawsuits, secure in the knowledge that, if vindicated,
the corporation will bear the expense of litigation, and (2)
encouraging capable women and men to serve as corporate directors
and officers, secure in the knowledge that the corporation will
absorb the costs of defending their honesty and
integrity.
F. The
number of lawsuits challenging the judgment and actions of
directors and officers of corporations, the costs of defending
those lawsuits and the threat to personal assets have all
materially increased over the past several years, chilling the
willingness of capable women and men to undertake the
responsibilities imposed on corporate directors and
officers.
G. Recent
federal legislation and rules adopted by the Securities and
Exchange Commission and the national securities exchanges have
exposed such directors and officers to new and substantially
broadened civil liabilities.
H. Under
New York law, a director’s or officer’s right to be
reimbursed for the costs of defense of criminal actions, whether
such claims are asserted under state or federal law, does not
depend upon the merits of the claims asserted against the director
or officer and is separate and distinct from any right to
indemnification the director may be able to establish.
I. Indemnitee
is, or will be, a director of the Company and his or her
willingness to serve in such capacity is predicated, in substantial
part, upon the Company’s willingness to indemnify him or her
in accordance with the principles reflected above, to the fullest
extent permitted by the laws of the State of New York, and upon the
other undertakings set forth in this Agreement.
J.
In recognition of the need to provide Indemnitee with substantial
protection against personal liability, in order to procure
Indemnitee’s service as a director of the Company and to
enhance Indemnitee’s ability to serve the Company in an
effective manner, and in order to provide such protection pursuant
to express contract rights (intended to be enforceable irrespective
of, among other things, any amendment to the Company’s
certificate of incorporation or bylaws (collectively, the
“Constituent
Documents”
), any change in the composition of the
Company’s Board of Directors (the
“Board”
)
or any change-in-control or business combination transaction
relating to the Company), the Company wishes to provide in this
Agreement for the indemnification and advancement of Expenses (as
defined herein) to Indemnitee on the terms, and subject to the
conditions, set forth in this Agreement.
K. In
light of the considerations referred to in the preceding recitals,
it is the Company’s intention and desire that the provisions
of this Agreement be construed liberally, subject to their express
terms, to maximize the protections to be provided to Indemnitee
hereunder.
AGREEMENT:
NOW,
THEREFORE, the parties hereto hereby agree as follows:
1.
Certain Definitions
. In
addition to terms defined elsewhere herein, the following terms
have the following meanings when used in this Agreement with
initial capital letters:
(a)
“Change in
Control”
shall have occurred at such time, if any, as
Incumbent Directors cease for any reason to constitute a majority
of the directors. For purposes of this Section 1(a),
“Incumbent
Directors”
means the individuals who, as of the date
hereof, are directors of the Company and any individual becoming a
director subsequent to the date hereof whose election, nomination
for election by the Company’s stockholders, or appointment,
was approved by a vote of at least a majority of the then Incumbent
Directors (either by a specific vote or by approval of the proxy
statement of the Company in which such person is named as a nominee
for director, without objection to such nomination);
provided, however,
that an individual
shall not be an Incumbent Director if such individual’s
election or appointment to the Board occurs as a result of an
actual or threatened election contest (as described in Rule
14a-12(c) of the Securities Exchange Act of 1934, as amended) with
respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board.
(b)
“Claim”
means (i) any threatened, asserted, pending or completed claim,
demand, action, suit or proceeding, whether civil, criminal,
administrative, arbitrative, investigative or other, and whether
made pursuant to federal, state or other law; and (ii) any inquiry
or investigation, whether made, instituted or conducted by the
Company or any other Person, including, without limitation, any
federal, state or other governmental entity, that Indemnitee
reasonably determines might lead to the institution of any such
claim, demand, action, suit or proceeding. For the avoidance of
doubt, the Company intends the indemnity to be provided hereunder
in respect of acts or failure to act prior to, on or after the date
hereof.
(c)
“Controlled
Affiliate”
means any corporation, limited liability
company, partnership, joint venture, trust or other entity or
enterprise, whether or not for profit, that is directly or
indirectly controlled by the Company. For purposes of this
definition,
“control”
means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of an
entity or enterprise, whether through the ownership of voting
securities, through other voting rights, by contract or otherwise;
provided
that direct or
indirect beneficial ownership of capital stock or other interests
in an entity or enterprise entitling the holder to cast 15% or more
of the total number of votes generally entitled to be cast in the
election of directors (or persons performing comparable functions)
of such entity or enterprise shall be deemed to constitute control
for purposes of this definition.
(d)
“Disinterested
Director”
means a director of the Company who is not
and was not a party to the Claim in respect of which
indemnification is sought by Indemnitee.
(e)
“Expenses”
means reasonable attorneys’ and experts’ fees and
expenses and all other costs and expenses paid or payable in
connection with investigating, defending, being a witness in or
participating in (including on appeal), or preparing to
investigate, defend, be a witness in or participate in (including
on appeal), any Claim.
(f)
“Indemnifiable
Claim”
means any Claim based upon, arising out of or
resulting from (i) any actual, alleged or suspected act or failure
to act by Indemnitee in his capacity as a director, officer,
employee or agent of the Company or as a director, officer,
employee, member, manager, trustee or agent of any other
corporation, limited liability company, partnership, joint venture,
trust or other entity or enterprise, whether or not for profit, as
to which Indemnitee is or was serving at the request of the
Company, (ii) any actual, alleged or suspected act or failure to
act by Indemnitee in respect of any business, transaction,
communication, filing, disclosure or other activity of the Company
or any other entity or enterprise referred to in clause (i) of this
sentence, or (iii) Indemnitee’s status as a current or former
director, officer, employee or agent of the Company or as a current
or former director, officer, employee, member, manager, trustee or
agent of the Company or any other entity or enterprise referred to
in clause (i) of this sentence or any actual, alleged or suspected
act or failure to act by Indemnitee in connection with any
obligation or restriction imposed upon Indemnitee by reason of such
status. In addition to any service at the actual request of the
Company, for purposes of this Agreement, Indemnitee shall be deemed
to be serving or to have served at the request of the Company as a
director, officer, employee, member, manager, trustee or agent of
another entity or enterprise if Indemnitee is or was serving as a
director, officer, employee, member, manager, agent, trustee or
other fiduciary of such entity or enterprise and (i) such entity or
enterprise is, or at the time of such service was, a Controlled
Affiliate, (ii) such entity or enterprise is or at the time of such
service was an employee benefit plan (or related trust) sponsored
or maintained by the Company or a Controlled Affiliate, or (iii)
the Company or a Controlled Affiliate (by action of the Board, any
committee thereof or the Company’s Chief Executive Officer
(“CEO”) (other than as the CEO himself)) caused or
authorized Indemnitee to be nominated, elected, appointed,
designated, employed, engaged or selected to serve in such
capacity.
(g)
“Indemnifiable
Losses”
means any and all Losses relating to, arising
out of or resulting from any Indemnifiable Claim;
provided, however,
that Indemnifiable
Losses shall not include Expenses incurred by Indemnitee in respect
of any Indemnifiable Claim (or any matter or issue therein) as to
which Indemnitee shall have been adjudged liable to the Company,
unless and only to the extent that the court in which such
Indemnifiable Claim was brought shall have determined upon
application that, despite the adjudication of liability but in view
of all the circumstances of the case, Indemnitee is fairly and
reasonably entitled to indemnification for such Expenses as the
court shall deem proper.
(h)
“Independent
Counsel”
means a nationally recognized law firm, or a
member of a nationally recognized law firm, that is experienced in
matters of New York corporate law and neither presently is, nor in
the past five years has been, retained to represent: (i) the
Company (or any subsidiary) 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 named (or, as
to a threatened matter, reasonably likely to be named) party to the
Indemnifiable Claim 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.
(i)
“Losses”
means any and all Expenses, damages, losses, liabilities,
judgments, fines, penalties (whether civil, criminal or other) and
amounts paid or payable in settlement, including, without
limitation, all interest, assessments and other charges paid or
payable in connection with or in respect of any of the
foregoing.
(j)
“Person”
means any individual, entity or group, within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended.
(k)
“Standard of
Conduct”
means the standard for conduct by Indemnitee
that is a condition precedent to indemnification of Indemnitee
hereunder against Indemnifiable Losses relating to, arising out of
or resulting from an Indemnifiable Claim. The Standard of Conduct
is (i) good faith and a reasonable belief by Indemnitee that his
action was in or not opposed to the best interests of the Company
and, with respect to any criminal action or proceeding, that
Indemnitee had no reasonable cause to believe that his conduct was
unlawful, or (ii) any other applicable standard of conduct that may
hereafter be substituted under the New York Business Corporation
Law.
2.
Indemnification Obligation
.
Subject only to Section 7 and to the proviso in this Section, the
Company shall indemnify, defend and hold harmless Indemnitee, to
the fullest extent permitted by the laws of the State of New York
in effect on the date hereof or as such laws may from time to time
hereafter be amended to increase the scope of such permitted
indemnification, against any and all Indemnifiable Claims and
Indemnifiable Losses;
provided,
however,
that, except as provided in Section 5, Indemnitee
shall not be entitled to indemnification pursuant to this Agreement
in connection with (i) 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
or the Claim relates to or arises from the enforcement or
prosecution of a right to indemnification under this Agreement, or
(ii) the purchase and sale by Indemnitee of securities in violation
of Section 16(b) of the Securities Exchange Act of 1934, as
amended. Nothing herein is intended to limit the scope of permitted
indemnification to Indemnitee under the laws of the State of New
York
3.
Advancement of
Expenses
.
Indemnitee shall have the right to advancement by the Company prior
to the final disposition of any Indemnifiable Claim of any and all
actual and reasonable Expenses relating to, arising out of or
resulting from any Indemnifiable Claim paid or incurred by
Indemnitee. Without limiting the generality or effect of any other
provision hereof, Indemnitee’s right to such advancement is
not subject to the satisfaction of any Standard of Conduct. Without
limiting the generality or effect of the foregoing, within five
business days after any request by Indemnitee that is accompanied
by supporting documentation for specific reasonable Expenses to be
reimbursed or advanced, the Company shall, in accordance with such
request (but without duplication), (a) pay such Expenses on behalf
of Indemnitee, (b) advance to Indemnitee funds in an amount
sufficient to pay such Expenses, or (c) reimburse Indemnitee for
such Expenses;
provided
that Indemnitee shall repay, without interest, any amounts actually
advanced to Indemnitee that, at the final disposition of the
Indemnifiable Claim to which the advance related, were in excess of
amounts paid or payable by Indemnitee in respect of Expenses
relating to, arising out of or resulting from such Indemnifiable
Claim. In connection with any such payment, advancement or
reimbursement, at the request of the Company, Indemnitee shall
execute and deliver to the Company an undertaking, which need not
be secured and shall be accepted without reference to
Indemnitee’s ability to repay the Expenses, by or on behalf
of the Indemnitee, to repay any amounts paid, advanced or
reimbursed by the Company in respect of Expenses relating to,
arising out of or resulting from any Indemnifiable Claim in respect
of which it shall have been determined, following the final
disposition of such Indemnifiable Claim and in accordance with
Section 7, that Indemnitee is not entitled to indemnification
hereunder.
4.
Indemnification for Additional
Expenses
.
Without limiting the generality or effect of the foregoing, the
Company shall indemnify and hold harmless Indemnitee against and,
if requested by Indemnitee, shall reimburse Indemnitee for, or
advance to Indemnitee, within five business days of such request
accompanied by supporting documentation for specific Expenses to be
reimbursed or advanced, any and all actual and reasonable Expenses
paid or incurred by Indemnitee in connection with any Claim made,
instituted or conducted by Indemnitee for (a) indemnification or
reimbursement or advance payment of Expenses by the Company under
any provision of this Agreement, or under any other agreement or
provision of the Constituent Documents now or hereafter in effect
relating to Indemnifiable Claims, and/or (b) recovery under any
directors’ and officers’ liability insurance policies
maintained by the Company;
provided, however,
if it is ultimately
determined that the Indemnitee is not entitled to such
indemnification, reimbursement, advance or insurance recovery, as
the case may be, then the Indemnitee shall be obligated to repay
any such Expenses to the Company;
provided further,
that, regardless in
each case of whether Indemnitee ultimately is determined to be
entitled to such indemnification, reimbursement, advance or
insurance recovery, as the case may be, Indemnitee shall return,
without interest, any such advance of Expenses (or portion thereof)
which remains unspent at the final disposition of the Claim to
which the advance related.
5.
Partial Indemnity
. If
Indemnitee is entitled under any provision of this Agreement to
indemnification by the Company for some or a portion of any
Indemnifiable Loss but not for the entire amount thereof, the
Company shall nevertheless indemnify Indemnitee for the portion
thereof to which Indemnitee is entitled.
6.
Procedure for Notification
. To
obtain indemnification under this Agreement in respect of an
Indemnifiable Claim or Indemnifiable Loss, Indemnitee shall submit
to the Company a written request therefore, including a brief
description (based upon information then available to Indemnitee)
of such Indemnifiable Claim or Indemnifiable Loss. If, at the time
of the receipt of such request, the Company has directors’
and officers’ liability insurance in effect under which
coverage for such Indemnifiable Claim or Indemnifiable Loss is
potentially available, the Company shall give prompt written notice
of such Indemnifiable Claim or Indemnifiable Loss to the applicable
insurers in accordance with the procedures set forth in the
applicable policies. The Company shall thereafter take all
necessary or desirable action to cause such insurers to pay, on
behalf of the Indemnitee, all Indemnifiable Claims and
Indemnifiable Losses in accordance with the terms of such policies.
The Company shall provide to Indemnitee a copy of such notice
delivered to the applicable insurers, substantially concurrently
with the delivery thereof by the Company. The failure by Indemnitee
to timely notify the Company of any Indemnifiable Claim or
Indemnifiable Loss shall not relieve the Company from any liability
hereunder unless, and only to the extent that, the Company did not
otherwise learn of such Indemnifiable Claim or Indemnifiable Loss
and to the extent that such failure results in forfeiture by the
Company of substantial defenses, rights or insurance
coverage.
7.
Determination of Right to
Indemnification
.
(a)
To the extent that
Indemnitee shall have been successful on the merits or otherwise in
defense of any Indemnifiable Claim or any portion thereof or in
defense of any issue or matter therein, including, without
limitation, dismissal without prejudice, Indemnitee shall be
indemnified against all Indemnifiable Losses relating to, arising
out of or resulting from such Indemnifiable Claim in accordance
with Section 2 and no Standard of Conduct Determination (as defined
in Section 7(b)) shall be required.
(b)
To the extent that
the provisions of Section 7(a) are inapplicable to an Indemnifiable
Claim that shall have been finally disposed of, any determination
required to be made under the laws of the State of New York as to
whether Indemnitee has satisfied the applicable Standard of Conduct
(a
“Standard of Conduct
Determination”
) shall be made as follows: (i) if a
Change in Control shall not have occurred, or if a Change in
Control shall have occurred but Indemnitee shall have requested
that the Standard of Conduct Determination be made pursuant to this
clause (i), (A) by a majority vote of the Disinterested Directors,
even if less than a quorum of the Board, (B) if such Disinterested
Directors so direct, by a majority vote of a committee of
Disinterested Directors designated by a majority vote of all
Disinterested Directors, or (C) if there are no such Disinterested
Directors, or if a majority of the Disinterested Directors so
direct, by Independent Counsel in a written opinion addressed to
the Board, a copy of which shall be delivered to Indemnitee; and
(ii) if a Change in Control shall have occurred and Indemnitee
shall not have requested that the Standard of Conduct Determination
be made pursuant to clause (i) above, by Independent Counsel in a
written opinion addressed to the Board, a copy of which shall be
delivered to Indemnitee.
(c)
If (i) Indemnitee
shall be entitled to indemnification hereunder against any
Indemnifiable Losses pursuant to Section 7(a), (ii) no
determination of whether Indemnitee has satisfied any applicable
standard of conduct under New York law is a legally required
condition precedent to indemnification of Indemnitee hereunder
against any Indemnifiable Losses, or (iii) Indemnitee has been
determined or deemed pursuant to Section 7(b) to have satisfied the
applicable Standard of Conduct, then the Company shall pay to
Indemnitee, within five business days after the later of (x) the
notification date in respect of the Indemnifiable Claim or portion
thereof to which such Indemnifiable Losses are related, out of
which such Indemnifiable Losses arose or from which such
Indemnifiable Losses resulted, and (y) the earliest date on which
the applicable criterion specified in clause (i), (ii) or (iii)
above shall have been satisfied, an amount equal to the amount of
such Indemnifiable Losses. Nothing herein is intended to mean or
imply that the Company is intending to use the New York Business
Corporations Law to dispense with a requirement that Indemnitee
meet the applicable Standard of Conduct where it is otherwise
required by such statute.
(d)
If a Standard of
Conduct Determination is required to be, but has not been, made by
Independent Counsel pursuant to Section 7(b)(i), the Independent
Counsel shall be selected by the Board or a committee of the Board,
and the Company shall give written notice to Indemnitee advising
him or her of the identity of the Independent Counsel so selected.
If a Standard of Conduct Determination is required to be, or to
have been, made by Independent Counsel pursuant to Section
7(b)(ii), the Independent Counsel shall be selected by Indemnitee,
and Indemnitee shall give written notice to the Company advising it
of the identity of the Independent Counsel so selected. In either
case, Indemnitee or the Company, as applicable, may, within five
business days after receiving written notice of selection from the
other, deliver to the other 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 satisfy the criteria set
forth in the definition of “Independent Counsel” in
Section 1(h), 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 properly and timely made and
substantiated, (i) 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 and (ii) the non-objecting party may, at its option, select
an alternative Independent Counsel and give written notice to the
other party advising such other party of the identity of the
alternative Independent Counsel so selected, in which case the
provisions of the two immediately preceding sentences and clause
(i) of this sentence shall apply to such subsequent selection and
notice. If applicable, the provisions of clause (ii) of the
immediately preceding sentence shall apply to successive
alternative selections. If no Independent Counsel that is permitted
under the foregoing provisions of this Section 7(d) to make the
Standard of Conduct Determination shall have been selected within
30 calendar days after the Company gives its initial notice
pursuant to the first sentence of this Section 7(d) or Indemnitee
gives its initial notice pursuant to the second sentence of this
Section 7(d), as the case may be, either the Company or Indemnitee
may petition the courts of the State of New York 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 or
firm selected by such court or by such other person as such Court
shall designate, and the person or firm with respect to whom all
objections are so resolved or the person or firm so appointed will
act as Independent Counsel. In all events, the Company shall pay
all of the actual and reasonable fees and expenses of the
Independent Counsel incurred in connection with the Independent
Counsel’s determination pursuant to Section
7(b).
8.
Cooperation
. Indemnitee shall
cooperate with reasonable requests of the Company in connection
with any Indemnifiable Claim and any individual or firm making such
Standard of Conduct Determination, including providing to such
Person documentation or information which is not privileged or
otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to defend the
Indemnifiable Claim or make any Standard of Conduct Determination
without incurring any unreimbursed cost in connection therewith.
The Company shall indemnify and hold harmless Indemnitee against
and, if requested by Indemnitee, shall reimburse Indemnitee for, or
advance to Indemnitee, within five business days of such request
accompanied by supporting documentation for specific costs and
expenses to be reimbursed or advanced, any and all costs and
expenses (including reasonable attorneys’ and experts’
fees and expenses) actually and reasonably incurred by Indemnitee
in so cooperating with the Person defending the Indemnifiable Claim
or making such Standard of Conduct Determination.
9.
Presumption of Entitlement
.
Notwithstanding any other provision hereof, in making any Standard
of Conduct Determination, the Person making such determination
shall presume that Indemnitee has satisfied the applicable Standard
of Conduct.
10.
No Other Presumption
. For
purposes of this Agreement, the termination of any Claim by
judgment, order, settlement (whether with or without court
approval) or conviction, or upon a plea of nolo contendere or its
equivalent, will not create a presumption that Indemnitee did not
meet any applicable Standard of Conduct or that indemnification
hereunder is otherwise not permitted.
11.
Non-Exclusivity
. The rights of
Indemnitee hereunder will be in addition to any other rights
Indemnitee may have under the Constituent Documents, or the
substantive laws of the State of New York, any other contract or
otherwise (collectively,
“Other Indemnity
Provisions”
);
provided, however,
that (a) to the
extent that Indemnitee otherwise would have any greater right to
indemnification under any Other Indemnity Provision, Indemnitee
will without further action be deemed to have such greater right
hereunder, and (b) to the extent that any change is made to any
Other Indemnity Provision which permits any greater right to
indemnification than that provided under this Agreement as of the
date hereof, Indemnitee will be deemed to have such greater right
hereunder. The Company may not, without the consent of Indemnitee,
adopt any amendment to any of the Constituent Documents the effect
of which would be to deny, diminish or encumber Indemnitee’s
right to indemnification under this Agreement.
12.
Liability Insurance and
Funding
. For the duration of Indemnitee’s service as a
director of the Company and for a reasonable period of time
thereafter, which such period shall be determined by the Company in
its sole discretion, the Company shall use commercially reasonable
efforts (taking into account the scope and amount of coverage
available relative to the cost thereof) to cause to be maintained
in effect policies of directors’ and officers’
liability insurance providing coverage for directors and/or
officers of the Company, and, if applicable, that is substantially
comparable in scope and amount to that provided by the
Company’s current policies of directors’ and
officers’ liability insurance. Upon reasonable request, the
Company shall provide Indemnitee or his or her counsel with a copy
of all directors’ and officers’ liability insurance
applications, binders, policies, declarations, endorsements and
other related materials. In all policies of directors’ and
officers’ liability insurance obtained by the Company,
Indemnitee shall be named as an insured in such a manner as to
provide Indemnitee the same rights and benefits, subject to the
same limitations, as are accorded to the Company’s directors
and officers most favorably insured by such policy. Notwithstanding
the foregoing, (i) the Company may, but shall not be required to,
create a trust fund, grant a security interest or use other means,
including, without limitation, a letter of credit, to ensure the
payment of such amounts as may be necessary to satisfy its
obligations to indemnify and advance expenses pursuant to this
Agreement and (ii) in renewing or seeking to renew any insurance
hereunder, the Company will not be required to expend more than 2.0
times the premium amount of the immediately preceding policy period
(equitably adjusted if necessary to reflect differences in policy
periods).
13.
Subrogation
. In the event of
payment under this Agreement, the Company shall be subrogated to
the extent of such payment to all of the related rights of recovery
of Indemnitee against other Persons (other than Indemnitee’s
successors), including any entity or enterprise referred to in
clause (i) of the definition of “Indemnifiable Claim”
in Section 1(f). Indemnitee shall execute all papers reasonably
required to evidence such rights (all of Indemnitee’s
reasonable Expenses, including reasonable attorneys’ fees and
charges, related thereto to be reimbursed by or, at the option of
Indemnitee, advanced by the Company).
14.
No Duplication of
Payments
.
(a)
The Company shall
not be liable under this Agreement to make any payment to
Indemnitee in respect of any Indemnifiable Losses to the extent
Indemnitee has otherwise already actually received payment (net of
Expenses incurred in connection therewith) under any insurance
policy, the Constituent Documents and Other Indemnity Provisions or
otherwise (including from any entity or enterprise referred to in
clause (i) of the definition of “Indemnifiable Claim”
in Section 1(f)) in respect of such Indemnifiable Losses otherwise
indemnifiable hereunder.
(b)
Notwithstanding
anything to the contrary contained in Section 14(a) above, the
Company hereby acknowledges that Indemnitee may have certain rights
to indemnification, advancement of expenses and/or insurance
provided by one or more venture capital funds, the general
partners, managing members or other control persons and/or any
affiliated management companies of such venture capital funds, and
certain of its or their affiliates (collectively, the
“
Fund
Indemnitors
”). The Company hereby agrees that in
connection with any Indemnifiable Claim, (i) it is the indemnitor
of first resort (i.e., its obligations to Indemnitee are primary
and any obligation of the Fund Indemnitors to advance expenses or
to provide indemnification for the same expenses or liabilities
incurred by Indemnitee are secondary), (ii) it shall be required to
advance the full amount of expenses incurred by Indemnitee and
shall be liable for the full amount of all Expenses, judgments,
penalties, fines and amounts paid in settlement to the extent
legally permitted and as required by the terms of this Agreement
and the Company’s Constituent Documents (or any other
agreement between the Company and Indemnitee), without regard to
any rights Indemnitee may have against the Fund Indemnitors, and,
(iii) it irrevocably waives, relinquishes and releases the Fund
Indemnitors from any and all claims against the Fund Indemnitors
for contribution, subrogation or any other recovery of any kind in
respect thereof. The Company further agrees that no advancement or
payment by the Fund Indemnitors on behalf of Indemnitee with
respect to any claim for which Indemnitee has sought
indemnification from the Company shall affect the foregoing and the
Fund Indemnitors shall have a right of contribution and/or be
subrogated to the extent of such advancement or payment to all of
the rights of recovery of Indemnitee against the Company. The
Company and Indemnitee agree that the Fund Indemnitors are express
third party beneficiaries of the terms of this Section
14(b).
15.
Defense of Claims
. Subject to
the provisions of applicable policies of directors’ and
officers’ liability insurance, if any, the Company shall be
entitled to participate in the defense of any Indemnifiable Claim
or to assume or lead the defense thereof with counsel reasonably
satisfactory to the Indemnitee;
provided
that if Indemnitee determines,
after consultation with counsel selected by Indemnitee, that (a)
the use of counsel chosen by the Company to represent Indemnitee
would present such counsel with an actual or potential conflict,
(b) the named parties in any such Indemnifiable Claim (including
any impleaded parties) include both the Company and Indemnitee and
Indemnitee shall conclude that there may be one or more legal
defenses available to him or her that are different from or in
addition to those available to the Company, (c) any such
representation by such counsel would be precluded under the
applicable standards of professional conduct then prevailing, or
(d) Indemnitee has interests in the claim or underlying subject
matter that are different from or in addition to those of other
Persons against whom the Claim has been made or might reasonably be
expected to be made, then Indemnitee shall be entitled to retain
separate counsel (but not more than one law firm plus, if
applicable, local counsel in respect of any particular
Indemnifiable Claim for all indemnitees in Indemnitee’s
circumstances) at the Company’s expense. The Company shall
not be liable to Indemnitee under this Agreement for any amounts
paid in settlement of any threatened or pending Indemnifiable Claim
effected without the Company’s prior written consent. The
Company shall not, without the prior written consent of the
Indemnitee, effect any settlement of any threatened or pending
Indemnifiable Claim which the Indemnitee is or could have been a
party unless such settlement solely involves the payment of money
and includes a complete and unconditional release of the Indemnitee
from all liability on any claims that are the subject matter of
such Indemnifiable Claim. Neither the Company nor Indemnitee shall
unreasonably withhold its consent to any proposed settlement;
provided
that Indemnitee
may withhold consent to any settlement that does not provide a
complete and unconditional release of Indemnitee.
16.
Mutual
Acknowledgment
.
Both the Company and the
Indemnitee acknowledge that in certain instances, Federal law or
applicable public policy may prohibit the Company from indemnifying
its directors and officers under this Agreement or otherwise.
Indemnitee understands and acknowledges that the Company may be
required in the future to undertake to the 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 and, in that
event, the Indemnitee’s rights and the Company’s
obligations hereunder shall be subject to that
determination.
17.
Successors and Binding
Agreement
.
(a)
This Agreement
shall be binding upon and inure to the benefit of the Company and
any successor to the Company, including, without limitation, any
Person acquiring directly or indirectly all or substantially all of
the business or assets of the Company whether by purchase, merger,
consolidation, reorganization or otherwise (and such successor will
thereafter be deemed the “Company” for purposes of this
Agreement), but shall not otherwise be assignable or delegatable by
the Company.
(b)
This Agreement
shall inure to the benefit of and be enforceable by the
Indemnitee’s personal or legal representatives, executors,
administrators, heirs, distributees, legatees and other
successors.
(c)
This Agreement is
personal in nature and neither of the parties hereto shall, without
the consent of the other, assign or delegate this Agreement or any
rights or obligations hereunder except as expressly provided in
Sections 17(a) and 17(b). Without limiting the generality or effect
of the foregoing, Indemnitee’s right to receive payments
hereunder shall not be assignable, whether by pledge, creation of a
security interest or otherwise, other than by a transfer by the
Indemnitee’s will or by the laws of descent and distribution,
and, in the event of any attempted assignment or transfer contrary
to this Section 17(c), the Company shall have no liability to pay
any amount so attempted to be assigned or transferred.
18.
Notices
. For all purposes of
this Agreement, all communications, including without limitation
notices, consents, requests or approvals, required or permitted to
be given hereunder must be in writing and shall be deemed to have
been duly given when hand delivered or dispatched by electronic
facsimile transmission (with receipt thereof orally confirmed), or
one business day after having been sent for next-day delivery by a
nationally recognized overnight courier service, addressed to the
Company (to the attention of the Secretary of the Company) and to
Indemnitee at the applicable address shown on the signature page
hereto, or to such other address as any party hereto may have
furnished to the other in writing and in accordance herewith,
except that notices of changes of address will be effective only
upon receipt.
19.
Governing Law
.
The validity, interpretation,
construction and performance of this Agreement shall be governed by
and construed in accordance with the substantive laws of the State
of New York, without giving effect to the principles of conflict of
laws of such State. The Company and Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of the State
of New York for all purposes in connection with any action or
proceeding which arises out of or relates to this Agreement, waive
all procedural objections to suit in that jurisdiction, including,
without limitation, objections as to venue or inconvenience, agree
that service in any such action may be made by notice given in
accordance with Section 18 and also agree that any action
instituted under this Agreement shall be brought only in the courts
of the State of New York.
20.
Validity
. If any provision of
this Agreement or the application of any provision hereof to any
Person or circumstance is held invalid, unenforceable or otherwise
illegal, the remainder of this Agreement and the application of
such provision to any other Person or circumstance shall not be
affected, and the provision so held to be invalid, unenforceable or
otherwise illegal shall be reformed to the extent, and only to the
extent, necessary to make it enforceable, valid or legal. In the
event that any court or other adjudicative body shall decline to
reform any provision of this Agreement held to be invalid,
unenforceable or otherwise illegal as contemplated by the
immediately preceding sentence, the parties hereto shall take all
such action as may be necessary or appropriate to replace the
provision so held to be invalid, unenforceable or otherwise illegal
with one or more alternative provisions that effectuate the purpose
and intent of the original provisions of this Agreement as fully as
possible without being invalid, unenforceable or otherwise
illegal.
21.
Miscellaneous
. No provision of
this Agreement may be waived, modified or discharged unless such
waiver, modification or discharge is agreed to in writing signed by
Indemnitee and the Company. No waiver by either party hereto at any
time of any breach by the other party hereto or compliance with any
condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent
time. No agreements or representations, oral or otherwise,
expressed or implied with respect to the subject matter hereof have
been made by either party hereto that is not set forth expressly in
this Agreement.
22.
Certain Interpretive Matters
.
Unless the context of this Agreement otherwise requires, (1)
“it” or “its” or words of any gender
include each other gender, (2) words using the singular or plural
number also include the plural or singular number, respectively,
(3) the terms “hereof,” “herein,”
“hereby” and derivative or similar words refer to this
entire Agreement, (4) the terms “Article,”
“Section,” “Annex” or “Exhibit”
refer to the specified Article, Section, Annex or Exhibit of or to
this Agreement, (5) the terms “include,”
“includes” and “including” will be deemed
to be followed by the words “without limitation”
(whether or not so expressed), and (6) the word “or” is
disjunctive but not exclusive. Whenever this Agreement refers to a
number of days, such number will refer to calendar days unless
business days are specified and whenever action must be taken
(including the giving of notice or the delivery of documents) under
this Agreement during a certain period of time or by a particular
date that ends or occurs on a non-business day, then such period or
date will be extended until the immediately following business day.
As used herein,
“business
day”
means any day other than Saturday, Sunday or a
United States federal holiday.
23.
Entire Agreement
. This
Agreement constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, between the
parties hereto with respect to the subject matter of this
Agreement. Any prior agreements or understandings between the
parties hereto with respect to indemnification are hereby
terminated and of no further force or effect. This Agreement is not
the exclusive means of securing indemnification rights of
Indemnitee and is in addition to any rights Indemnitee may have
under any Constituent Documents.
24.
Counterparts
. This Agreement
may be executed in one or more counterparts, each of which will be
deemed to be an original but all of which together shall constitute
one and the same agreement.
25.
Duration of Agreement
. This
Agreement shall continue until and terminate upon the later of: (a)
six years after the date that the Indemnitee shall have ceased to
serve as a director, officer, employee, agent or fiduciary of the
Company or of any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise which the
Indemnitee served at the request of the Company; (b) the expiration
of the applicable statutes of limitations pertaining to any and all
potential proceedings covered by the indemnification provided for
herein; or (c) the final termination of all pending proceedings in
respect of which the Indemnitee is granted rights of
indemnification or advancement of Expenses hereunder and of any
proceeding commenced by the Indemnitee pursuant to this Agreement
relating thereto.
[REMAINDER OF PAGE
INTENTIONALLY BLANK]
IN
WITNESS WHEREOF, Indemnitee has executed and the Company has caused
its duly authorized representative to execute this Agreement as of
the date first above written.
MERIDIAN
WASTE SOLUTIONS, INC.
By:
____________________________
Jeffrey
Cosman
Chief
Executive Officer
INDEMNITEE
:
_________________________________
____________________,
an individual
[Signature
page to Indemnification Agreement]
13
Exhibit 10.4
MERIDIAN WASTE SOLUTIONS, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
NON-EMPLOYEE
THIS
STOCK OPTION AGREEMENT (the “
Agreement
”) entered into as of the
1
st
day of
November, 2016 by and between Meridian Waste Solutions,
Inc.
(the
“
Company
”) and
[●] (the “
Optionee
”).
WHEREAS, pursuant
to the authority of the Board of Directors (the “
Board
”), the Company has granted
the Optionee the right to purchase common stock, $.025 par value
per share (“
Common
Stock
”), of the Company pursuant to stock options
granted under the Meridian Waste Solutions, Inc. 2016 Equity and
Incentive Plan.
NOW
THEREFORE, in consideration of the mutual covenants and promises
hereafter set forth and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1.
Grant of Non-Qualified Options
.
The Company hereby irrevocably grants to the Optionee, as a matter
of separate agreement and not in lieu of salary or other
compensation for services, the right and option to purchase all or
any part of an aggregate of 75,000 shares of authorized but
unissued or treasury common stock of the Company (the
“
Options
”) on
the terms and conditions herein set forth. The Common Stock shall
be unregistered under the Securities Act of 1933, as amended (the
“
Securities
Act
”), unless the Company voluntarily files a
registration statement covering such shares of Common Stock with
the Securities and Exchange Commission. The Options are not
intended to be Incentive Stock Options as defined by Section 422 of
the Internal Revenue Code of 1986, as amended (the
“
Code
”). This
Agreement replaces any stock option agreement or offer letter
previously provided to the Optionee, if any, with respect to the
Options.
2.
Price
. The exercise price of
the shares of Common Stock subject to the Options granted hereunder
shall be $1.00 per share.
(a)
The Options shall
vest in equal amounts over a period of three (3) years at the rate
of Six Thousand Two Hundred Fifty (6,250) shares per fiscal quarter
at the end of such quarter, commencing in the quarter in which the
Optionee enters into this Agreement, and pro-rated for the number
of days the Optioneee serves on the Board during the fiscal
quarter. In lieu of fractional vesting, the number of Options shall
be rounded up each time until fractional Options are
eliminated.
(b)
Subject to Sections
3(c) and 4 of this Agreement, Options may be exercised by providing
to the Company the Notice of Option Exercise in the form attached
hereto as
Exhibit A
after vesting, and remain exercisable until 5:30 p.m. New York time
on the date that is the fifth (5
th
) year anniversary
of the date of this Agreement.
(c)
However,
notwithstanding any other provision of this Agreement, at the
option of the Board in its sole and absolute discretion, all
Options shall be immediately forfeited in the event any of the
following events occur:
(i)
The Optionee
purchases or sells securities of the Company without written
authorization in accordance with the Company’s insider
trading policy then in effect, if any;
(ii)
The Optionee (A)
discloses, publishes or authorizes anyone else to use, disclose or
publish, without the prior written consent of the Company, any
proprietary or confidential information of the Company, including,
without limitation, any information relating to existing or
potential customers, business methods, financial information, trade
or industry practices, sales and marketing strategies, employee
information, vendor lists, business strategies, intellectual
property, trade secrets or any other proprietary or confidential
information or (B) directly or indirectly uses any such proprietary
or confidential information for the individual benefit of the
Optionee or the benefit of a third party;
(iii)
Except as prior
approved by the Board in writing or listed on
Schedule I
to this Agreement,
the Optionee directly or indirectly owns, manages, controls or
participates in the ownership, management or control of, or is
employed or engaged by or otherwise affiliated or associated as an
officer, director, partner, consultant, independent contractor,
agent, representative or otherwise, with any other person or entity
that competes with the business of the Company or any of its
Affiliates (as defined hereinafter) in any geographical area in
which the Company or any of its Affiliates conducts its business or
promotes its products or services;
provided, however
, that the ownership
of not more than one percent (1%) of the stock of a company whose
equity interests are publicly traded on a nationally recognized
stock exchange or over-the-counter shall not be deemed a violation
of this provision;
(iv)
The Optionee
disrupts or damages, impairs or interferes with the business of the
Company or its Affiliates by recruiting, soliciting or otherwise
inducing any of their respective employees to enter into employment
or other relationship with any other business entity, or terminate
or materially diminish their relationship with the Company or its
Affiliates, as applicable; or
(v)
The Optionee
solicits or directs business of any person or entity who is (A) a
customer of the Company or its Affiliates at any time or (B)
solicited to be a “prospective customer” of the Company
or its Affiliates, in any case either for such Optionee or for any
other person or entity;
provided
that the Optionee has actual
knowledge of such prospective customer. For purposes of this clause
(v), “
prospective
customer
” means a person or entity that contacted, or
is contacted by, the Company or its Affiliates regarding the
provision of services to or on behalf of such person or
entity.
(d) For
purposes of this Agreement, “
Affiliate
” means with respect to a
person or entity, any other person or entity controlled by, in
control of or under common control with such person or entity, and
“controlled,” “controlled by,” and
“under common control with” shall mean direct or
indirect possession of the power to direct or cause the direction
of management or policies (whether through ownership of voting
securities, by contract or otherwise) of a person or
entity.
4.
Termination of
Relationship
.
(a)
If for any reason,
except death or disability as provided below, the Optionee ceases
to perform the services for which the Options were granted, all
unvested options shall be automatically and irrefutably forfeited
effective three months from the date the Board has deemed that the
Optionee has ceased to perform such services, except as otherwise
provided herein.
(b)
If the Optionee
shall die while performing services for the Company, such
Optionee’s estate or any Transferee (as defined hereinafter)
shall have the right within twelve (12) months from the date of
death to exercise the Optionee’s vested Options, subject to
Section 3(c) hereof. For the purpose of this Agreement,
“
Transferee
”
shall mean an individual to whom such Optionee’s vested
Options are transferred by will or by the laws of descent and
distribution.
(c)
If the Optionee
shall become disabled while performing services for the Company
within the meaning of Section 22(e)(3) of the Code, the three-month
period referred to in Section 4(a) of this Agreement shall be
extended to one year.
5.
Profits on the Sale of Certain Shares;
Redemption
. If any of the events specified in Section 3(c)
of this Agreement occur within one (1) year from the last date the
Optionee performed services for which the Options were granted (the
“
Termination
Date
”), all profits earned from the sale of the
Company’s securities, including the sale of shares of Common
Stock underlying the Options, during the two (2) year period
commencing one (1) year prior to the Termination Date shall be
forfeited and forthwith paid by the Optionee to the Company (and a
copy of the documentation of the sale, including, without
limitation, the purchase price therefor shall be provided to the
Company) within ten (10) days after the Optionee receives written
demand from the Company for such payment. Further, in such event,
the Company may at its option redeem shares of Common Stock
acquired upon exercise of the Options by payment of the exercise
price to the Optionee. The Company’s rights under this
Section 5 do not lapse one year from the Termination Date, but are
a contract right subject to any appropriate statutory limitation
period.
6.
Transfer
.
No transfer of the
Options by the Optionee by will or by the laws of descent and
distribution shall be effective to bind the Company unless the
Company shall have been furnished with written notice thereof and a
copy of the letters testamentary or such other evidence as the
Board may deem necessary to establish the authority of the estate
and the acceptance by the Transferee or Transferees of the terms
and conditions of the Options.
7.
Method of Exercise
. The Options
shall be exercisable by a written notice which shall:
(a) state
the election to exercise the Options, the number of shares to be
exercised, the natural person in whose name the stock certificate
or certificates for such shares of Common Stock is to be registered
and such person’s address and social security number (or if
more than one, the names, addresses and social security numbers of
such persons);
(b) contain
such representations and agreements as to the holder’s
investment intent with respect to such shares of Common Stock as
set forth in Section 11 hereof;
(c) be
signed by the person or persons entitled to exercise the Options
and, if the Options are being exercised by any person or persons
other than the Optionee, be accompanied by proof, satisfactory to
counsel for the Company, of the right of such person or persons to
exercise the Options; and
(d) be
accompanied by full payment of the purchase or exercise price in
United States dollars in cash or by bank or cashier's check,
certified check or money order.
The
certificate or certificates for shares of Common Stock as to which
the Options shall be exercised shall be registered in the name of
the person or persons exercising the Options.
8.
Sale of Shares Acquired Upon Exercise
of Options
.
Intentionally
Omitted.
9.
Adjustments
. Upon the
occurrence of any of the following events, the Optionee’s
rights with respect to Options granted to such Optionee hereunder
shall be adjusted as hereinafter provided unless otherwise
specifically provided in a written agreement between the Optionee
and the Company relating to such Options:
(a)
If the shares of
Common Stock shall be subdivided or combined into a greater or
smaller number of shares, respectively, or if the Company shall
issue any shares of its Common Stock as a stock dividend on its
outstanding shares of Common Stock, the number of shares of Common
Stock deliverable upon the exercise of the Options shall be
appropriately increased or decreased proportionately, and
appropriate adjustments shall be made in the exercise price per
share to reflect such subdivision, combination or stock dividend,
as applicable;
(b)
If the Company is
to be consolidated with or acquired by another entity pursuant to
an acquisition, the board of directors of any entity assuming the
obligations of the Company hereunder (the “
Successor Board
”) shall either (i)
make appropriate provision for the continuation of such Options by
substituting on an equitable basis for the shares then subject to
such Options the consideration payable with respect to the
outstanding shares of Common Stock of the Company in connection
with such acquisition or (ii) terminate all Options in exchange for
a cash payment equal to the excess of the fair market value of the
shares of Common Stock subject to such Options over the exercise
price thereof;
(c)
In the event of a
recapitalization or reorganization of the Company (other than a
transaction described in Section 9(b) above) pursuant to which
securities of the Company or of another corporation are issued with
respect to the outstanding shares of Common Stock, the Optionee
upon exercising the Options shall be entitled to receive for the
purchase price paid upon such exercise, the securities such
Optionee would have received if such Optionee had exercised such
Optionee’s Options prior to such recapitalization or
reorganization;
(d)
Except as expressly
provided herein, no issuance by the Company of shares of Common
Stock of any class or securities convertible into shares of Common
Stock of any class shall affect, and no adjustment by reason
thereof shall be made with respect to, the number or exercise price
of shares subject to Options. No adjustments shall be made for
dividends or other distributions paid in cash or in property other
than securities of the Company;
(e)
No fractional
shares shall be issued and the Optionee shall receive from the
Company cash based on the fair market value of the shares of Common
Stock in lieu of such fractional shares; or
(f)
The Board or the
Successor Board shall determine the specific adjustments to be made
under this Section 9, and its determination shall be conclusive. If
the Optionee receives securities or cash in connection with a
corporate transaction described in Section 9(a), (b) or (c) above
as a result of owning such restricted Common Stock, such securities
or cash shall be subject to all of the conditions and restrictions
applicable to the restricted Common Stock with respect to which
such securities or cash were issued, unless otherwise determined by
the Board or the Successor Board.
10.
Necessity to Become Holder of
Record
. Neither the Optionee, the Optionee’s estate,
nor the Transferee have any rights as a shareholder with respect to
any shares of Common Stock covered by the Options until such
Optionee, estate or Transferee, as applicable, shall have become
the holder of record of such shares of Common Stock. No adjustment
shall be made for cash dividends or cash distributions, ordinary or
extraordinary, in respect of such shares of Common Stock for which
the record date is prior to the date on which such Optionee, estate
or Transferee, as applicable, shall become the holder of record
thereof.
11.
Conditions to Exercise of
Options
.
(a)
In order to enable
the Company to comply with the Securities Act and relevant state
law, the Company may require the Optionee, the Optionee’s
estate or any Transferee, as a condition of the exercising of the
Options granted hereunder, to give written assurance satisfactory
to the Company that the shares of Common Stock subject to the
Options are being acquired for such Optionee’s,
estate’s or Transferee’s, as applicable, own account,
for investment only, with no view to the distribution of same, and
that any subsequent resale of any such shares of Common Stock
either shall be made pursuant to a registration statement under the
Securities Act and applicable state law which has become effective
and is current with regard to the shares of Common Stock being
sold, or shall be pursuant to an exemption from registration under
the Securities Act and applicable state law.
(b)
The Options are
subject to the requirement that, if at any time the Board shall
determine, in its sole and absolute discretion, that the listing,
registration or qualification of the shares of Common Stock subject
to the Options upon any securities exchange, quotation system or
under any state or federal law, or the consent or approval of any
governmental regulatory body, is necessary as a condition of, or in
connection with the issue or purchase of such shares of Common
Stock under the Options, the Options may not be exercised in whole
or in part unless such listing, registration, qualification,
consent or approval shall have been effected.
12.
Duties of Company
. The Company
will at all times during the term of the Options:
(a) Reserve
and keep available for issue such number of shares of its
authorized and unissued shares of Common Stock as will be
sufficient to satisfy the requirements of this
Agreement;
(b) Pay
all original issue taxes with respect to the issue of shares of
Common Stock pursuant hereto and all other fees and expenses
necessarily incurred by the Company in connection therewith;
and
(c) Use
its best efforts to comply with all laws and regulations which, in
the opinion of counsel for the Company, shall be applicable
thereto.
13.
Severability
. In the event any
parts of this Agreement are found to be void, the remaining
provisions of this Agreement shall nevertheless be binding with the
same effect as though the void parts were deleted.
14.
Arbitration
. Any controversy,
dispute or claim arising out of or relating to this Agreement, or
its interpretation, application, implementation, breach or
enforcement which the parties hereto are unable to resolve by
mutual agreement, shall be settled by submission by either party of
the controversy, claim or dispute to binding arbitration in New
York County, New York (unless the parties agree in writing to a
different location), before a single arbitrator in accordance with
the rules of the American Arbitration Association then in effect.
The decision and award made by the arbitrator shall be final,
binding and conclusive on all parties hereto for all purposes, and
judgment may be entered thereon in any court having jurisdiction
thereof.
15.
Benefit
. This Agreement shall
be binding upon and inure to the benefit of the parties hereto and
their legal representatives, successors and assigns.
16.
Notices and Addresses
. All
notices, offers, acceptance and any other acts under this Agreement
(except payment) shall be in writing, and shall be sufficiently
given if delivered to the addressees in person, by FedEx or similar
receipted delivery, or by facsimile delivery as
follows:
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The
Optionee:
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[●]
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The
Company:
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Meridian Waste
Solutions, Inc.
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12540 Broadwell
Road, Suite 2104
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Milton, GA
30004
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Telephone: (678)
871-7457
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with a copy (which
shall not Lucosky Brookman LLP
constitute notice)
to:
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101 Wood Avenue
South, 5
th
Floor
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Woodbridge, NJ
08830
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Attn: Scott E.
Linsky, Esq.
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Facsimile: (732)
395-4400
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or to
such other address as either of them, by notice to the other, may
designate from time to time. The transmission confirmation receipt
from the sender’s facsimile machine shall be evidence of
successful facsimile delivery. Time shall be counted to, or from,
as the case may be, the delivery in person or by
mailing.
17.
Attorney’s Fees
. In the
event that there is any controversy or claim arising out of or
relating to this Agreement, or to the interpretation, breach or
enforcement thereof, and any action or proceeding is commenced to
enforce the provisions of this Agreement, the prevailing party
shall be entitled from the non-prevailing party to its reasonable
attorneys’ fee, costs and expenses.
18.
Governing Law
. This Agreement
and any dispute, disagreement, or issue of construction or
interpretation arising hereunder whether relating to its execution,
its validity, the obligations provided herein or performance, shall
be governed or interpreted according to the laws of the State of
New York without regard to choice of law
considerations.
19.
Oral Evidence
. This Agreement
constitutes the entire agreement between the parties hereto and
supersedes all prior oral and written agreements between the
parties hereto with respect to the subject matter hereof. Neither
this Agreement nor any provision hereof may be changed, waived,
discharged or terminated except by a statement in writing signed by
the party or parties against which enforcement or the change,
waiver discharge or termination is sought.
20.
Counterparts
. This Agreement
may be executed in one or more counterparts, each of which shall be
deemed an original but all of which together shall constitute one
and the same instrument. The execution of this Agreement may be
made by facsimile signature, which shall be deemed to be an
original.
21.
Section Headings
. Section
headings herein have been inserted for reference only and shall not
be deemed to limit or otherwise affect, in any matter, or be deemed
to interpret in whole or in part, any of the terms or provisions of
this Agreement.
IN
WITNESS WHEREOF the parties hereto have set their hand the day and
year first above written.
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MERIDIAN
WASTE SOLUTIONS, INC.
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Date
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By:
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/s/
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Name:
Jeffrey
Cosman
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Title:
Chief
Executive Officer
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OPTIONEE:
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By:
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Name:
[●]
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Title:
Director
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Address:
[●]
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[Signature page to
Option Agreement]
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7
SCHEDULE I
COMPETING
ACTIVITIES
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[Schedule I to
Option Agreement]
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8
EXHIBIT A
FORM OF NOTICE OF OPTION EXERCISE
To:
Meridian Waste
Solutions, Inc. (the “Company”)
(1)
The undersigned
hereby elects to purchase __________ shares of Common Stock of the
Company (the “Shares”) pursuant to the terms of the
Option Agreement by and between the Company and the undersigned
dated as of ________ ___, 20__, and tenders herewith payment of the
exercise price in full as set forth below.
(2)
Payment shall take
the form of (check applicable box):
[ ] in
lawful money of the United States in the form of a check made
payable by the undersigned to the Company;
[ ] in
lawful money of the United States in the form of a wire transfer to
the account specified by the Company; or
[ ] in
the form of shares of Common Stock pursuant to Section 5(d) of the
Plan.
(3)
Please issue a
certificate or certificates representing the Shares in the name of
the undersigned or in such other name as is specified
below:
____________________________________
The
Shares shall be delivered via overnight courier (with tracking
information to be provided to the undersigned) to the following
address:
_____________________________
_____________________________
_____________________________
Attn:
________________________
Tel:
_________________________
OPTIONEE
__________________________________
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[Exhibit A to
Option Agreement]
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9