**EXHIBIT 10 (17)**

**INDEMNIFICATION AGREEMENT**

 

This INDEMNIFICATION AGREEMENTis made as of the         of December 2001, by and between AxsysTechnologies, Inc., a Delaware corporation (the “Corporation”), and theindividual whose name appears on the signature page hereof (such individualbeing referred to herein as the “Indemnified Representative” and collectivelywith other individuals who may execute substantially similar agreements as the“Indemnified Representatives”).

 

WHEREAS:

 

A.            The Indemnified Representative currently is serving inone or more capacities as a director or officer of the Corporation or has beenspecifically designated as a person whom the Corporation shall indemnify ashereinafter provided (which may include any person serving at the request ofthe Corporation, as a director, officer, employee, agent fiduciary or trusteeof another corporation, partnership, joint venture, trust, employee benefitplan or other entity or enterprise) and as such is performing a valuableservice to or on behalf of the Corporation.

 

B.            Directors and officers of corporations in general may besubject to expensive and time consuming litigation, including matters thattraditionally would be brought only against the corporation.  Although the Corporation has obtained directorsand officers liability insurance to protect its directors and officers, suchinsurance policy  is subject tocancellation or termination in the future. Therefore the Corporation believes it is appropriate to provideadditional protection for its directors and officers.

 

C.            The Indemnified Representative has indicated that theIndemnified Representative may not be willing to remain in office or otherwisecontinue to serve the Corporation absent the protections afforded by thisAgreement.  To induce the IndemnifiedRepresentative to continue to serve the Corporation and in consideration forsuch continued service, and to assist in the recruitment of qualified personnelin the future, the Corporation agrees to indemnify the IndemnifiedRepresentative upon the terms set forth herein.

 

NOW, THEREFORE, inconsideration of the foregoing, the Corporation and the IndemnifiedRepresentative agree as follows:

 

AGREEMENT TO SERVE.                  THE INDEMNIFIED REPRESENTATIVE AGREES TO SERVE ORCONTINUE TO SERVE IN EACH INDEMNIFIED CAPACITY (AS HEREINAFTER DEFINED) HELDNOW OR IN THE FUTURE FOR SO LONG AS THE INDEMNIFIED REPRESENTATIVE IS DULYELECTED OR APPOINTED OR UNTIL SUCH TIME AS THE INDEMNIFIED REPRESENTATIVETENDERS A RESIGNATION IN WRITING.  THISAGREEMENT SHALL NOT BE DEEMED AN EMPLOYMENT CONTRACT BETWEEN THE CORPORATION ORANY OF ITS AFFILIATES AND ANY INDEMNIFIED REPRESENTATIVE WHO IS AN EMPLOYEE OFTHE CORPORATION OR ANY OF ITS AFFILIATES, AND THE INDEMNIFIED REPRESENTATIVESPECIFICALLY ACKNOWLEDGES THAT THE INDEMNIFIED REPRESENTATIVE’S EMPLOYMENT WITHTHE CORPORATION OR ANY OF ITS AFFILIATES IS AT WILL, AND THAT THE INDEMNIFIEDREPRESENTATIVE MAY BE DISCHARGED AT ANY TIME FOR ANY REASON, WITH OR WITHOUTCAUSE, AND WITH OR WITHOUT SEVERANCE COMPENSATION, EXCEPT AS MAY BE OTHERWISEPROVIDED IN A WRITTEN EMPLOYMENT CONTRACT BETWEEN THE INDEMNIFIEDREPRESENTATIVE AND THE CORPORATION OR ANY OF ITS AFFILIATES OR OTHER APPLICABLEFORMAL SEVERANCE POLICIES DULY ADOPTED BY THE BOARD OF DIRECTORS OF THEINDEMNIFIED REPRESENTATIVE’S EMPLOYER.

 

INDEMNIFICATION.

 

Except asprovided in Sections 2(b), 3 and 5, the Corporation shall indemnify the  Indemnified Representative against anyLiability (as hereinafter defined) incurred by the Indemnified Representativein connection with any Proceeding (as hereinafter defined) in which theIndemnified Representative may be involved as a party or otherwise, by reasonof the fact that the Indemnified Representative is or was serving in anIndemnified Capacity, including, without limitation, any 

 

 

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Liability resulting from actualor alleged breach or neglect of duty, error, misstatement or misleadingstatement, gross negligence, negligence or act giving rise to strict orproducts liability, whether occurring prior to or after the date of thisAgreement.  If the IndemnifiedRepresentative is entitled to indemnification in respect of a portion, but notall, of any Liability, the Corporation shall indemnify the IndemnifiedRepresentative to the maximum extent for such portion of any Liability.  The indemnification provided under thisagreement is effective from and after the time the individual representativefirst became an officer or director of the Corporation.

 

Notwithstanding the provisions of subsection (a), the Corporation shallnot indemnify the Indemnified Representative under this Agreement for anyLiability incurred in a Proceeding initiated (which shall not be deemed toinclude counter-claims or affirmative defenses) or participated in as anintervenor or amicus curiae by the Indemnified Representative unless suchinitiation of or participation in the proceeding is authorized, either beforeor after commencement of the Proceeding, by the affirmative vote of a majorityof the directors in office.  Thissubsection does not apply to reimbursement of expenses incurred in successfullyprosecuting or defending an arbitration under Section 5(d) or otherwisesuccessfully prosecuting or defending the rights granted to the IndemnifiedRepresentative by or pursuant to this Agreement.

 

As used in thisAgreement:

 

“Indemnified Capacity” means any and allpast, present or future service by an Indemnified Representative in one or morecapacities (A) as a director, officer, employee or agent of the Corporation,of any subsidiary of the Corporation or of any constituent corporation absorbedby the Corporation in a consolidation or merger, or (B) at the request of theCorporation as a director, officer, employee, agent, fiduciary or trustee ofanother corporation or of any partnership, joint venture, sole proprietorship,trust, employee benefit plan or other entity or enterprise.

 

“Liability” means any damage, judgment,amount paid in settlement, fine, penalty, punitive damages, excise tax assessedwith respect to an employee benefit plan, or cost or expense of any nature(including, without limitation, attorneys’ fees and disbursements and the costsand expenses of investigating any Proceeding); and

 

“Proceeding” means any threatened, pending orcompleted action, suit, appeal or other proceeding of any nature, whethercivil, criminal, administrative or investigative, whether formal or informal,and whether brought by or in the right of the Corporation, a class of itssecurity (whether equity or debt) holders, any creditors of the Corporation orotherwise.

 

EXCLUSIONS.

 

The Corporation shall not be liable underthis Agreement to make any payment in connection with any Liability incurred bythe  Indemnified Representative:

 

to the extent payment for such Liability ismade to the  Indemnified Representativeunder an insurance policy provided by the Corporation, and in the event the Corporation makes anyindemnification payments to the Indemnified Representative and the IndemnifiedRepresentative is subsequently reimbursed from the proceeds of insurance, theIndemnified Representative shall promptly refund such indemnification paymentsto the Corporation to the extent of such insurance reimbursements;

 

to the extentthe Indemnified Representative is indemnified for such Liability by theCorporation under its certificate of incorporation or by-laws or under theDelaware General Corporation Law or otherwise than pursuant to this Agreement;

 

for any claimfor an accounting of profits made either from the purchase or sale by suchIndemnified Representative of securities of the Corporation pursuant to Section16(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),or any corresponding or superseding provision, or from any use of material,non-public information, if such use is illegal under applicable provisions ofthe Exchange Act or the regulations thereunder;

 

 

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for which theconduct of the Indemnified Representative has been determined in a finaladjudication pursuant to Section 5(d) or otherwise to constitute bad faith orknowing violation of law, or receipt by such person of an improper personalbenefit, and which conduct was material to the cause of action or claim givingrise to the Liability; or

 

to the extentsuch indemnification has been determined in a final adjudication pursuant toSection 5(d) or otherwise to be unlawful.

 

Any fact, actor omission pertaining to the Indemnified Representative shall not be imputedto any other Indemnified Representative for the purposes of determining the applicabilityof any exclusion set forth herein.

 

Thetermination of a proceeding by judgment, order, settlement, conviction or upona plea of nolo contendere or its equivalent shall not, of itself, create apresumption that the Indemnified Representative is not entitled toindemnification under this Agreement.

 

ADVANCEMENTOF EXPENSES.   THECORPORATION SHALL PAY ANY LIABILITY INCURRED IN GOOD FAITH BY THE INDEMNIFIEDREPRESENTATIVE IN ADVANCE OF THE FINAL DISPOSITION OF A PROCEEDING UPON RECEIPTOF AN UNDERTAKING BY OR ON BEHALF OF THE INDEMNIFIED REPRESENTATIVE TO REPAYSUCH AMOUNT IF IT SHALL ULTIMATELY BE DETERMINED PURSUANT TO SECTION 5(D) OROTHERWISE THAT THE INDEMNIFIED REPRESENTATIVE IS NOT ENTITLED TO BE INDEMNIFIEDBY THE CORPORATION PURSUANT TO THIS AGREEMENT. THE FINANCIAL ABILITY OF THE INDEMNIFIED REPRESENTATIVE TO REPAY ANADVANCE SHALL NOT BE A PREREQUISITE TO THE MAKING OF SUCH ADVANCE.

 

INDEMNIFICATION PROCEDURE.

 

The Indemnified Representative shall use suchIndemnified Representative’s best efforts to notify promptly the Secretary ofthe Corporation of the commencement of any Proceeding or the occurrence of any eventwhich might give rise to a Liability under this Agreement, but the failure soto notify the Corporation shall not relieve the Corporation of any liabilitywhich it may have to the Indemnified Representative under this Agreement orotherwise.

 

The Corporation shall be entitled, uponnotice to the Indemnified Representative, to assume the defense of anyProceeding with counsel reasonably satisfactory to the IndemnifiedRepresentative involved in such Proceeding or a majority of the IndemnifiedRepresentatives involved in such Proceeding if there be more than one.  If the Corporation notifies the IndemnifiedRepresentative of its election to defend the Proceeding, the Corporation shallhave no liability for the expenses (including attorneys’ fees anddisbursements) of the Indemnified Representative incurred in connection withthe defense of such Proceeding subsequent to such notice, unless (i) suchexpenses (including attorneys’ fees and disbursements) have been authorized bythe Corporation, (ii) the counsel employed by the Corporation for the purposeof assuming such defense is not reasonably satisfactory to such IndemnifiedRepresentative or Indemnified Representatives, or (iii) it shall have beendetermined pursuant to Section 5(d) that the Indemnified Representative wasentitled to indemnification for such expenses under this Agreement orotherwise.  Notwithstanding theforegoing, the Indemnified Representative may elect to retain counsel at theIndemnified Representative’s own cost and expense to participate in the defenseof such Proceeding.

 

The Corporation shall not be required toobtain the consent of the Indemnified Representative to the settlement of anyProceeding, which the Corporation has undertaken to defend if the Corporationassumes full and sole responsibility for such settlement and the settlementgrants the Indemnified Representative an unqualified release in respect of allLiabilities at issue in the Proceeding. The Corporation shall not be liable for any amount paid by anIndemnified Representative in settlement of any Proceeding that is not defendedby the Corporation, unless the Corporation has consented to such settlement(which consent shall not be unreasonably withheld).

 

Any dispute related to the right toindemnification, contribution or advancement of expenses hereunder, except withrespect to indemnification for liabilities arising under the Securities Act of1933 which the Corporation has undertaken to submit to a court foradjudication, shall be decided only by arbitration in the City of NewYork, New York, in 

 

 

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accordance with the commercial arbitrationrules then in effect of the American Arbitration Association, before a panel ofthree arbitrators, one of whom shall be selected by the Corporation, the secondof whom shall be selected by the Indemnified Representative and the third ofwhom shall be selected by the other two arbitrators.  In the absence of the American Arbitration Association, or if forany reason arbitration under the arbitration rules of the American ArbitrationAssociation cannot be initiated, or if one of the parties fails or refuses toselect an arbitrator, or if the arbitrators selected by the Corporation and theIndemnified Representative cannot agree on the selection of the thirdarbitrator within seven days after such time as the Corporation and theIndemnified Representative have each been notified of the selection of theother’s arbitrator, the necessary arbitrator or arbitrators shall be selectedby the presiding judge of the court of general jurisdiction of the State of NewYork.  Each arbitrator selected asprovided herein is required to be or have been a director or an executiveofficer of a corporation whose shares of common stock were listed during atleast one year of such service on the New York Stock Exchange or the AmericanStock Exchange or quoted on the Nasdaq Stock Market.  The party or parties challenging the right of an IndemnifiedRepresentative to the benefits of this Agreement shall have the burden ofproof.  The Corporation shall reimbursethe Indemnified Representative for the expenses (including attorneys’ fees anddisbursements) incurred in successfully prosecuting or defending sucharbitration.  Any award entered by thearbitrators shall be final, binding and nonappealable and judgment may beentered thereon by any party in accordance with applicable law in any court ofcompetent jurisdiction.  Thisarbitration provision shall be specifically enforceable.

 

Upon a paymentto the Indemnified Representative under this Agreement, the Corporation shallbe subrogated to the extent of such payment to all of the rights of theIndemnified Representative to recover against any person for such Liability,and the Indemnified Representative shall execute all documents and instrumentsrequired by the Corporation and shall take such other actions requested by theCorporation and at its expense as may be necessary to secure such rights,including the execution of such documents as may be necessary for theCorporation to bring suit to enforce such rights.

 

NON-EXCLUSIVITY.          THE INDEMNIFICATION RIGHTS GRANTED TOTHE INDEMNIFIED REPRESENTATIVE PURSUANT TO THIS AGREEMENT (I) SHALL NOT BEDEEMED EXCLUSIVE OF ANY OTHER RIGHTS TO WHICH THE INDEMNIFIED REPRESENTATIVEMAY BE ENTITLED UNDER ANY STATUTE, BY-LAW, CERTIFICATE OR ARTICLES OFINCORPORATION, AGREEMENT, VOTE OF SHAREHOLDERS OR DISINTERESTED DIRECTORS OROTHERWISE, BOTH AS TO ACTION IN AN INDEMNIFIED CAPACITY AND IN ANY OTHERCAPACITY, AND (II) SHALL CONTINUE AS TO A PERSON WHO HAS CEASED TO BE ELECTED,APPOINTED OR EMPLOYED BY THE CORPORATION IN AN INDEMNIFIED CAPACITY IN RESPECT OFMATTERS ARISING WHEN SUCH PERSONS PERFORMED IN AN INDEMNIFIED CAPACITY.  WITHOUT LIMITING THE GENERALITY OF THEFOREGOING, THE CORPORATION AND THE INDEMNIFIED REPRESENTATIVE ACKNOWLEDGE THEPROVISIONS OF THE CORPORATION’S CERTIFICATE OF INCORPORATION AND BY-LAWSREGARDING INDEMNIFICATION AND CONFIRM THAT THE INDEMNIFIED REPRESENTATIVE ISACTING IN RELIANCE THEREON.

 

DURATION OFAGREEMENT.        THISAGREEMENT SHALL APPLY TO ANY CLAIM ASSERTED AND ANY LIABILITY INCURRED INCONNECTION WITH ANY CLAIM ASSERTED ON OR AFTER THE DATE ON WHICH THEINDEMNIFIED REPRESENTATIVE BEGAN SERVING IN EACH INDEMNIFIED CAPACITY AND SHALLCONTINUE UNTIL AND TERMINATE UPON THE LATER OF:  (A) SIX YEARS AFTER THE INDEMNIFIED REPRESENTATIVE HAS CEASED TOSERVE IN ANY INDEMNIFIED CAPACITY; OR (B) ONE YEAR AFTER THE FINAL TERMINATIONOF ALL PENDING OR THREATENED PROCEEDINGS OF THE KIND DESCRIBED HEREIN WITHRESPECT TO THE INDEMNIFIED REPRESENTATIVE.

 

DISCHARGEOF DUTY.     THE INDEMNIFIEDREPRESENTATIVE SHALL BE DEEMED TO HAVE DISCHARGED SUCH PERSON’S DUTY TO THECORPORATION IF HE OR SHE HAS RELIED IN GOOD FAITH ON INFORMATION, OPINIONS,REPORTS OR STATEMENTS, INCLUDING FINANCIAL STATEMENTS AND OTHER FINANCIAL DATA,IN EACH CASE PREPARED OR PRESENTED BY ANY OF THE FOLLOWING:

 

one or more officersor employees of the Corporation whom the Indemnified Representative reasonablybelieves to be reliable and competent with respect to the matter presented;

 

 

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legal counsel, public accountants or other personsas to matters that the Indemnified Representative reasonably believes arewithin the person’s professional or expert competence; or

 

a committee of the Board of Directors of theCorporation on which he or she does not serve as to matters within its area ofdesignated authority, which committee he or she reasonablybelieves to merit confidence.

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RELIANCE ONPROVISIONS.           THEINDEMNIFIED REPRESENTATIVE SHALL BE DEEMED TO BE ACTING IN SUCH PERSON’SINDEMNIFIED CAPACITY IN RELIANCE UPON THE RIGHTS OF INDEMNIFICATION PROVIDED BYTHIS AGREEMENT.

 

SEVERABILITY AND REFORMATION.         ANY PROVISION OF THIS AGREEMENT WHICHIS ADJUDICATED TO BE INVALID OR UNENFORCEABLE IN ANY JURISDICTION OR UNDER ANYCIRCUMSTANCE SHALL BE INEFFECTIVE TO THE EXTENT OF SUCH INVALIDITY ORUNENFORCEABILITY ONLY AND SHALL BE DEEMED REFORMED SO AS TO CONTINUE TO APPLYTO THE MAXIMUM EXTENT AND TO PROVIDE THE MAXIMUM INDEMNIFICATION PERMISSIBLEUNDER THE APPLICABLE LAW OF SUCH JURISDICTION. ANY SUCH ADJUDICATION SHALL NOT INVALIDATE OR RENDER UNENFORCEABLE THEREMAINING PROVISIONS HEREOF AND SHALL NOT INVALIDATE OR RENDER UNENFORCEABLESUCH PROVISION IN ANY OTHER JURISDICTION OR UNDER ANY OTHER CIRCUMSTANCES.

 

COUNTERPARTS.              THIS AGREEMENT MAY BE EXECUTED INSEVERAL COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED AN ORIGINAL, BUT ALL OFWHICH TOGETHER SHALL CONSTITUTE ONE AND THE SAME DOCUMENT.

 

HEADINGS.          SECTIONHEADINGS ARE FOR CONVENIENCE ONLY AND DO NOT CONTROL OR AFFECT MEANING OR INTERPRETATION OF ANY TERMS ORPROVISIONS HEREOF.

 

NOTICES.              ANYNOTICE, CLAIM, REQUEST OR DEMAND REQUIRED OR PERMITTED HEREUNDER SHALL BE INWRITING AND SHALL BE DEEMED GIVEN IF DELIVERED PERSONALLY OR SENT BY TELEGRAMOR BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID:  (I) IF TO THE CORPORATION, TO 175 CAPITAL BOULEVARD, SUITE 103,ROCKY HILL, CT 06067, ATTENTION: SECRETARY, OR (II) IF TO THE INDEMNIFIEDREPRESENTATIVE, TO THE ADDRESS LISTED ON THE SIGNATURE PAGE HEREOF, OR TO SUCHOTHER ADDRESS AS ANY PARTY HERETO SHALL HAVE SPECIFIED IN A NOTICE GIVEN INACCORDANCE WITH THIS SECTION.

 

### *AMENDMENTS;BINDING EFFECT*.      NOAMENDMENT, MODIFICATION, TERMINATION OR CANCELLATION OF THIS AGREEMENT SHALL BEEFFECTIVE AS TO THE INDEMNIFIED REPRESENTATIVE UNLESS SIGNED IN WRITING BY THECORPORATION AND THE INDEMNIFIED REPRESENTATIVE.  THIS AGREEMENT SHALL BE BINDING UPON THE CORPORATION AND ITSSUCCESSORS AND ASSIGNS AND SHALL INURE TO THE BENEFIT OF THE HEIRS, EXECUTORS,ADMINISTRATORS AND PERSONAL REPRESENTATIVES OF THE INDEMNIFIED REPRESENTATIVE.

 

GOVERNING LAW.             THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED ANDENFORCED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO THE PRINCIPLESGOVERNING THE CONFLICT OF LAWS APPLICABLE IN THAT OR ANY OTHER JURISDICTION.

 

 

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GENDER ANDNUMBER.  WORDS USEDHEREIN, REGARDLESS OF THE GENDER OR NUMBER SPECIFICALLY USED, SHALL BE DEEMEDTO INCLUDE ANY OTHER GENDER, MASCULINE, FEMININE OR NEUTER, AND ANY OTHERNUMBER, SINGULAR OR PLURAL,AS THE CONTEXT MAY REQUIRE.

 

ENTIREAGREEMENT.      SUBJECTTO THE PROVISIONS OF SECTION 6 HEREOF, THIS AGREEMENT CONSTITUTES THE ENTIRE UNDERSTANDING BETWEEN THE PARTIES ANDSUPERSEDES ALL PROPOSALS, COMMITMENTS, WRITINGS, NEGOTIATIONS ANDUNDERSTANDINGS, ORAL AND WRITTEN, AND ALL OTHER COMMUNICATIONS BETWEEN THEPARTIES RELATING TO THE SUBJECT MATTER HEREOF. A WAIVER BY ANY PARTY OF ANY BREACH OR VIOLATION OF THIS AGREEMENT SHALLNOT BE DEEMED OR CONSTRUED AS A WAIVER OF ANY SUBSEQUENT BREACH OR VIOLATIONTHEREOF.

 

[SignaturePage Follows]

 

 

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IN WITNESS WHEREOF, the undersigned have executed thisAgreement as of the day and year first set forth above.

 
|   | AXSYS TECHNOLOGIES, INC.                |
|--------|-----------------------------------------|
|   |                                    |
|   | Mark J. Bonney                          |
|   | President & Chief Operating Officer |
|   |                                    |   |   |   |
|   | INDEMNIFIED REPRESENTATIVE              |
|   |                                    |   |   |   |
|   |                                    |
|   |                                    | Address: |

 

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