Document:

Unassociated Document

       Exhibit 10.2 
      Execution
Copy

    

     

     

    

    MANAGEMENT
DIRECTOR INDEMNIFICATION AGREEMENT

     

    This Director
Indemnification Agreement, dated as of March 27, 2009 (this “Agreement”),
is made by and between FirstEnergy Corp., an Ohio corporation (the “Company”),
and ___________________(“Indemnitee”),
who is a director and officer of the Company.

     

    RECITALS:

     

    A.           Section 1701.59
of the Ohio Revised Code (the “ORC”)
provides that the business and affairs of a corporation shall be managed by or
under the direction of its directors.

     

    B.           By
virtue of the managerial prerogatives vested in the directors of an Ohio
corporation, directors act as fiduciaries of the corporation and its
shareholders.

     

    C.           Thus,
it is critically important to the Company and its shareholders that the Company
be able to attract and retain the most capable persons reasonably available to
serve as directors 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, ORC §1701.13(E)
authorizes (and in some instances requires) corporations to indemnify their
directors and officers, authorizes (and sometimes requires) corporations to
advance funds to pay for expenses of its directors and officers prior to the
final disposition of an action, suit or proceeding, and further authorizes
corporations to purchase and maintain insurance for the benefit of their
directors and officers.

     

    E.           Indemnification
by a corporation serves the policies of (1) allowing directors and officers to
resist unjustified lawsuits, secure in the knowledge that, if vindicated, the
corporation will bear the expense of litigation; (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; and (3) allowing directors, officers and corporations to dispose of
vexatious and distracting litigation through negotiation of
settlements.

     

    F.           The
number of lawsuits challenging the judgment and actions of corporate directors
and officer, the costs of defending those lawsuits, and the threat to directors’
and officers’ 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.           Federal
legislation and rules adopted by the Securities and Exchange Commission and the
national securities exchanges have imposed additional disclosure and corporate
governance obligations on directors and officers of public companies and have
exposed such directors and officers to additional and substantially broadened
civil liabilities.

     

    H.           These
legislative and regulatory initiatives have also exposed directors and officers
of public companies to a significantly greater risk of criminal proceedings,
with attendant defense costs and potential criminal fines and
penalties.

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    I.           Under
Ohio law, a director’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,
which are separate and distinct from any right to indemnification the director
may be able to establish, and indemnification of the director against criminal
fines and penalties is permitted if the director satisfies the applicable
standard of conduct as a director.

     

    J.           Indemnitee
is a director and officer of the Company and Indemnitee’s willingness to
continue to serve in such capacity is predicated, in substantial part, upon the
Company’s willingness to indemnify Indemnitee in accordance with the principles
reflected above, to the fullest extent permitted by the laws of the state of
Ohio, and upon the other undertakings set forth in this Agreement.

     

    K.           Regulation
31 of the Company’s Amended Code of Regulations (the “Regulations”) require the
Company to indemnify each director and officer and former director and officer
of the Company to the full extent then permitted by law.  However,
recent court decisions in Delaware, while not binding on the courts of Ohio
interpreting Ohio law, have raised questions as to the ability of directors and
officers generally to rely on such provisions following their retirement or
other departure from the board in the event that there is a subsequent amendment
to the Regulations that alters or eliminates the indemnification provisions of
those documents.

     

    L.           Regulation
33 of the Company’s Regulations provides that the Company, with the approval of
the Board of Directors may enter into agreements with any persons that the
Company may indemnify under the Regulations, and undertake thereby to indemnify
such persons and to pay the expenses incurred by them in defending any action,
suit or proceeding against them, whether or not the Company would have power
under the law or the Regulations to indemnify such person.

     

    M.           Therefore,
in recognition of the need to provide Indemnitee with contractual protection
against personal liability, in order to procure Indemnitee’s continued service
as a director and officer 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 Amended
Articles of Incorporation or the Regulations (collectively, the “Constituent
Documents”), any change in the composition of the Company’s Board of
Directors (the “Board”)
including, but not limited to, the retirement of a director, or any
change-in-control or business combination transaction relating to the Company),
or any change in the officer’s status through retirement or resignation, the
Company wishes to provide in this Agreement for the indemnification of and the
advancement of Expenses (as defined in Section 1(e)) to Indemnitee as set forth
in this Agreement and for the continued coverage of Indemnitee under the
Company’s directors’ and officers’ liability insurance policies.

     

    N.           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.

     

    

    
      
        
           

        

        
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AGREEMENT:

     

    NOW, THEREFORE, the
parties 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” 
means the occurrence after the date of this Agreement of any of the following
events:

     

    (i) the acquisition by
any individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange Act) (a “Person”)
of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of the combined voting power of the
then-outstanding Voting Stock of the Company; provided, however, that:

     

    (A) for purposes of this
Section 1(a)(i), the following acquisitions will not constitute a Change in
Control: (1) any acquisition of Voting Stock of the Company directly from
the Company that is approved by a majority of the Incumbent Directors,
(2) any acquisition of Voting Stock of the Company by the Company or any
Subsidiary, (3) any acquisition of Voting Stock of the Company by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any Subsidiary, and (4) any acquisition of Voting Stock of the Company by any
Person pursuant to a Business Combination that complies with clauses (A), (B)
and (C) of Section 1(a)(iii) below;

     

    (B) if any Person
acquires beneficial ownership of 20% or more of combined voting power of the
then-outstanding Voting Stock of the Company as a result of a transaction
described in clause (A)(1) of Section 1(a)(i) and such Person thereafter
becomes the beneficial owner of any additional shares of Voting Stock of the
Company representing 1% or more of the then-outstanding Voting Stock of the
Company, other than in an acquisition directly from the Company that is approved
by a majority of the Incumbent Directors or other than as a result of a stock
dividend, stock split or similar transaction effected by the Company in which
all holders of Voting Stock are treated equally, such subsequent acquisition
will be deemed to constitute a Change in Control;

     

    (C) a Change in Control
will not be deemed to have occurred if a Person acquires beneficial ownership of
20% or more of the Voting Stock of the Company as a result of a reduction in the
number of shares of Voting Stock of the Company outstanding unless and until
such Person thereafter becomes the beneficial owner of any additional shares of
Voting Stock of the Company representing 1% or more of the then-outstanding
Voting Stock of the Company, other than in an acquisition directly from the
Company that is approved by a majority of the Incumbent Directors or other than
as a result of a stock dividend, stock split or similar transaction effected by
the Company in which all holders of Voting Stock are treated equally;
and

     

    (D) if at least a
majority of the Incumbent Directors determine in good faith that a Person has
acquired beneficial ownership of 20% or more of the Voting Stock of the Company
inadvertently, and such Person divests as promptly as practicable a sufficient
number of shares so that such Person beneficially owns less than 20% of the
Voting

     

    

    
      
        
           

        

        
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    Stock of the
Company, then no Change in Control will have occurred as a result of such
Person’s acquisition; or

     

    (ii) a majority of the
Directors are not Incumbent Directors; or

     

    (iii) the consummation of
a reorganization, merger or consolidation, or sale or other disposition of all
or substantially all of the assets of the Company or the acquisition of assets
of another corporation, or other transaction (each, a “Business
Combination”), unless, in each case, immediately following such Business
Combination (A) all or substantially all of the individuals and entities
who were the beneficial owners of Voting Stock of the Company immediately prior
to such Business Combination beneficially own, directly or indirectly, more than
60% of the combined voting power of the then outstanding shares of Voting Stock
of the entity resulting from such Business Combination (including, without
limitation, an entity which as a result of such transaction owns the Company or
all or substantially all of the Company’s assets either directly or through one
or more subsidiaries), (B) no Person (other than the Company, such entity
resulting from such Business Combination, or any employee benefit plan (or
related trust) sponsored or maintained by the Company, any Subsidiary or such
entity resulting from such Business Combination or a holding company as
described in ORC §1701.802(A)) beneficially owns, directly or indirectly, 20% or
more of the combined voting power of the then outstanding shares of Voting Stock
of the entity resulting from such Business Combination, and (C) at least a
majority of the members of the Board of Directors of the entity resulting from
such Business Combination were Incumbent Directors at the time of the execution
of the initial agreement or of the action of the Board providing for such
Business Combination; or

     

    (iv) approval by the
shareholders of the Company of a complete liquidation or dissolution of the
Company, except pursuant to a Business Combination that complies with clauses
(A), (B) and (C) of Section 1(a)(iii).

     

    For
purposes of this Section 1(a) and as used elsewhere in this Agreement, the
following terms have the following meanings:

     

    (A)  “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

     

    (B) “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
shareholders, or appointment, was approved by a vote of at least two-thirds 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
will 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 Exchange Act) 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.

     

    

    
      
        
           

        

        
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    (C) “Subsidiary”
means an entity in which the Company or any holding company as described in ORC
§1701.802(A) directly or indirectly beneficially owns 50% or more of the
outstanding Voting Stock.

     

    (D) “Voting
Stock” means securities entitled to vote generally in the election of
directors (or similar governing bodies).

     

    (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 threatened, pending or completed 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 determines might lead to the institution of any such claim, demand,
action, suit or proceeding.

     

    (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 20% 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 will 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 reasonable costs and expenses paid
or payable in connection with investigating, defending, being a witness in or
otherwise participating in (including on appeal), or preparing to investigate,
defend, be a witness in or otherwise participate in (including on appeal), any
Claim, and any amounts paid in settlement prior to a final, nonappealable
judgment or conviction.

     

    (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 or her 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 as a director, officer, employee, member, manager,
trustee or agent, (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

     

    

    
      
        
           

        

        
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    service at the
actual request of the Company, for purposes of this Agreement, Indemnitee will
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, trustee or agent 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 directly or indirectly 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.

     

    (h) “Independent
Counsel” means a law firm, or a member of a law firm, that is experienced
in matters of corporation 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” will 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 in settlement following a final,
nonappealable judgment or conviction, including without limitation all interest,
assessments and other charges paid or payable in connection with or in respect
of any of the foregoing.

     

    2. Indemnification
Obligation.  Subject to Section 7, the Company shall
indemnify, defend and hold harmless Indemnitee, to the fullest extent permitted
or required by the laws of the State of Ohio 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 Sections 4 and 20, Indemnitee will not be entitled to
indemnification pursuant to this Agreement in connection with any Claim
initiated by Indemnitee against the Company or any director or officer of the
Company unless the Company has joined in or consented to the initiation of such
Claim.

     

    3. Advancement of
Expenses.  Indemnitee will have the right to advancement by the
Company prior to the final disposition of any Indemnifiable Claim of any and all
Expenses relating to, arising out of or resulting from any Indemnifiable Claim
paid or incurred by Indemnitee or which Indemnitee determines are reasonably
likely to be paid or incurred by Indemnitee.  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

     

    

    
      
        
           

        

        
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    business days after
any request by Indemnitee, 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.  For purposes of obtaining payments of Expenses in advance of
final disposition, the Indemnitee shall submit to the Company a sworn request
for advancement of Expenses substantially in the form of Exhibit A attached
hereto and made a part hereof (subject to Indemnitee filling in the blanks
therein and selecting from among the bracketed alternatives therein, the “Undertaking”),
averring that the Indemnitee has reasonably incurred or will reasonably incur
actual Expenses in defending an Indemnifiable Claim.  The Undertaking
need not be secured and the Company must accept the Undertaking without
reference to Indemnitee’s ability to repay the Expenses.  Unless (x)
at the time of the Indemnitee’s act or omission at issue, the Constituent
Documents prohibit such advances by specific reference to ORC Section
l701.13(E)(5)(a), (y) the only liability asserted against the Indemnitee in the
subject action, suit or proceeding is pursuant to ORC Section 1701.95, or (z)
the Board of Directors determines, by a majority vote of a quorum consisting of
the Disinterested Directors, the only liability asserted against the Indemnitee
in the subject action, suit or proceeding is in the Indemnitee’s role as an
officer of the Company, the Indemnitee will be eligible to execute Part A of the
Undertaking by which the Indemnitee undertakes to:  (i) repay such
amount if it is proved by clear and convincing evidence in a court of competent
jurisdiction that the Indemnitee’s action or failure to act involved an act or
omission undertaken with deliberate intent to cause injury to the Company or
undertaken with reckless disregard for the best interests of the Company; and
(ii) reasonably cooperate with the Company concerning the action, suit,
proceeding or claim.  In all cases, the Indemnitee will be eligible to
execute Part B of the Undertaking by which the Indemnitee undertakes to repay
such amount if it ultimately is determined that the Indemnitee is not entitled
to be indemnified by the Company under this Agreement or
otherwise.  In the event that the Indemnitee is eligible to and does
execute both Part A and Part B of the Undertaking, the Expenses which are paid
by the Company pursuant thereto will be required to be repaid by the Indemnitee
only if the Indemnitee is required to do so under the terms of both Part A and
Part B of the Undertaking.  In no event will Indemnitee’s right to the
payment, advancement or reimbursement of Expenses pursuant to this Section 3 be
conditioned upon any undertaking that is less favorable to Indemnitee than, or
that is in addition to, the undertakings set forth in Exhibit
A.

     

    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, any and all Expenses paid
or incurred by Indemnitee or which Indemnitee determines are reasonably likely
to be paid or incurred by Indemnitee in connection with any Claim made,
instituted or conducted by Indemnitee for (a) indemnification or payment,
advancement or reimbursement 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, 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; provided, however, that

     

    

    
      
        
           

        

        
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    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 all of the total 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, 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
provide to Indemnitee a copy of such notice delivered to the applicable
insurers, and copies of all subsequent correspondence between the Company and
such insurers regarding the Indemnifiable Claim or Indemnifiable Loss, in each
case substantially concurrently with the delivery or receipt thereof by the
Company.  The failure by Indemnitee to timely notify the Company of
any Indemnifiable Claim or Indemnifiable Loss will 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 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 through a 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)) will be required.  In the event that a
matter as to which there has been a dismissal without prejudice is later revived
in the same or similar form, that matter will be treated as a new Claim for all
purposes of this Agreement.

     

    (b) To the extent that
the provisions of Section 7(a) are inapplicable to an Indemnifiable Claim
that will have been finally disposed of, any determination of whether Indemnitee
has satisfied any applicable standard of conduct under Ohio law that is a
legally required condition precedent to indemnification of Indemnitee hereunder
against Indemnifiable Losses relating to, arising out of or resulting from such
Indemnifiable Claim (a “Standard of
Conduct Determination”) will 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 a quorum consisting of the Disinterested Directors, (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 such quorum of Disinterested Directors is not
available or if a majority of such a quorum so direct, by Independent Counsel in
a written opinion addressed

     

    

    
      
        
           

        

        
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    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),
by Independent Counsel in a written opinion addressed to the Board, a copy of
which shall be delivered to Indemnitee.  Indemnitee will cooperate
with the person or persons making such Standard of Conduct Determination,
including providing to such person or persons, upon reasonable advance request,
any documentation or information which is not privileged or otherwise protected
from disclosure and which is reasonably available to Indemnitee and reasonably
necessary to such determination.  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, any and all costs and expenses (including attorneys’ and experts’ fees
and expenses) incurred by Indemnitee in so cooperating with the person or
persons making such Standard of Conduct Determination.

     

    (c) The Company shall
use its reasonable best efforts to cause any Standard of Conduct Determination
required under Section 7(b) to be made as promptly as
practicable.  If (i) the person or persons empowered or selected
under Section 7 to make the Standard of Conduct Determination shall not
have made a determination within 30 days after the later of
(A) receipt by the Company of written notice from Indemnitee advising the
Company of the final disposition of the applicable Indemnifiable Claim (the date
of such receipt being the “Notification
Date”) and (B) the selection of an Independent Counsel, if such
determination is to be made by Independent Counsel, that is permitted under the
provisions of Section 7(e) to make such determination and
(ii) Indemnitee shall have fulfilled his/her obligations set forth in the
second sentence of Section 7(b), then Indemnitee shall be deemed to have
satisfied the applicable standard of conduct; provided that such 30-day
period may be extended for a reasonable time, not to exceed an additional
30 days, if the person or persons making such determination in good faith
requires such additional time for the obtaining or evaluation or documentation
and/or information relating thereto.

     

    (d) 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
Ohio 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) or (c) to have
satisfied any applicable standard of conduct under Ohio law which is a legally
required condition precedent to indemnification of Indemnitee hereunder against
any Indemnifiable Losses, 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.

     

    (e) If a Standard of
Conduct Determination is to be made by Independent Counsel pursuant to
Section 7(b)(i), the Independent Counsel shall be selected by the Board of
Directors, 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 to be made by Independent Counsel pursuant
to Section 7(b)(ii), the Independent Counsel shall be selected
by

     

    

    
      
        
           

        

        
          9

          
            

          

        

        
           

        

      

    

    

    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 or firm so selected will 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(e) to
make the Standard of Conduct Determination shall have been selected within
30 days after the Company gives its initial notice pursuant to the first
sentence of this Section 7(e) or Indemnitee gives its initial notice
pursuant to the second sentence of this Section 7(e), as the case may be,
either the Company or Indemnitee may petition the Federal or state courts of
Ohio 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 the court or
by such other person as the 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 reasonable fees and expenses of the Independent Counsel
incurred in connection with the Independent Counsel’s determination pursuant to
Section 7(b).

     

    8. Presumption of
Entitlement.  In making any Standard of Conduct Determination,
the person or persons making such determination shall presume that Indemnitee
has satisfied the applicable standard of conduct, and the Company may overcome
such presumption only by its adducing clear and convincing evidence to the
contrary.  Any Standard of Conduct Determination that is adverse to
Indemnitee may be challenged by the Indemnitee in the state or Federal courts in
Ohio.  No determination by the Company (including by its directors or
any Independent Counsel) that Indemnitee has not satisfied any applicable
standard of conduct shall be a defense to any Claim by Indemnitee for
indemnification or reimbursement or advance payment of Expenses by the Company
hereunder or create a presumption that Indemnitee has not met any applicable
standard of conduct.

     

    9. 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.

     

    10. 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

     

    

    
      
        
           

        

        
          10

          
            

          

        

        
           

        

      

    

    

    Company’s
jurisdiction of incorporation, 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 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 will not
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 or any Other Indemnity Provision.

     

    11. Liability Insurance and
Funding.  For the duration of Indemnitee’s service as a
director or officer of the Company, and thereafter for so long as Indemnitee
shall be subject to any pending or possible Indemnifiable Claim, 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 that is at least
substantially comparable in scope and amount to that provided by the Company’s
current policies of directors’ and officers’ liability
insurance.  Upon request, the Company shall provide Indemnitee with a
copy of all directors’ and officers’ liability insurance applications, binders,
policies, declarations, endorsements and other related materials, and shall
provide Indemnitee with a reasonable opportunity to review and comment on the
same.  Without limiting the generality or effect of the two
immediately preceding sentences, the Company shall not discontinue or
significantly reduce the scope or amount of coverage from one policy period to
the next (i)  without the prior approval thereof by a majority vote of the
Incumbent Directors, even if less than a quorum, or (ii) if at the time
that any such discontinuation or significant reduction in the scope or amount of
coverage is proposed there are no Incumbent Directors, without the prior written
consent of Indemnitee (which consent shall not be unreasonably withheld or
delayed).  As long as commercially available, 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.  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.

     

    12. 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 or entities (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 attorneys’ fees and charges, related
thereto to be reimbursed by or, at the option of Indemnitee, advanced by the
Company).

     

    13. No Duplication of
Payments.  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 actually received payment (net of Expenses
incurred in connection therewith) under any insurance policy, the Constituent
Documents and Other

     

    

    
      
        
           

        

        
          11

          
            

          

        

        
           

        

      

    

    

    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.

     

    14. Defense of
Claims.  The Company shall be entitled to participate in the
defense of any Indemnifiable Claim or to assume the defense thereof, with
counsel reasonably satisfactory to the Indemnitee (which may include counsel for
the carrier); provided
that if Indemnitee believes, 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 Indemnitee
that are different from or in addition to those available to the Company, or
(c) any such representation by such counsel would be precluded under the
applicable standards of professional conduct then prevailing, 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) 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 to 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.

     

    15. Successors and Binding
Agreement.  (a)  The Company shall require any
successor (whether direct or indirect, by purchase, merger, consolidation,
reorganization or otherwise, and including any holding company as described in
ORC 1701.802(A)) to all or substantially all of the business or assets of the
Company, by agreement in form and substance satisfactory to Indemnitee and his
or her counsel, expressly to assume and agree to perform this Agreement in the
same manner and to the same extent the Company would be required to perform if
no such succession had taken place.  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 including any holding
company as described in ORC 1701.802(A) (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 15(a) and
15(b).  Without limiting the

     

    

    
      
        
           

        

        
          12

          
            

          

        

        
           

        

      

    

    

    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 15(c), the Company will have no liability to pay any amount
so attempted to be assigned or transferred.

     

    16. Notices.  For all
purposes of this Agreement, all communications, including without limitation
notices, consents, requests or approvals, required or permitted to be given
hereunder shall be in writing and shall be deemed to have been duly given when
hand delivered or dispatched by electronic facsimile or electronic mail
transmission (with receipt thereof confirmed orally or electronically), or five
business days after having been mailed by United States registered or certified
mail, return receipt requested, postage prepaid 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 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.

     

    17. 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 Ohio, 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 state and Federal courts in Ohio for all
purposes in connection with any action or proceeding which arises out of or
relates to this Agreement and agree that any action instituted under this
Agreement shall be brought only in the state or Federal courts in
Ohio.

     

    18. 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 thereto 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.

     

    19. 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 that are not set forth expressly in this
Agreement.  References to Sections are to references to Sections of
this Agreement.

     

    

    
      
        
           

        

        
          13

          
            

          

        

        
           

        

      

    

    

    

     

    20. Legal Fees and
Expenses.  It is the intent of the Company that Indemnitee not
be required to incur legal fees and or other Expenses associated with the
interpretation, enforcement or defense of Indemnitee’s rights under this
Agreement by litigation or otherwise because the cost and expense thereof would
substantially detract from the benefits intended to be extended to Indemnitee
hereunder.  Accordingly, without limiting the generality or effect of
any other provision hereof, if it should appear to Indemnitee that the Company
has failed to comply with any of its obligations under this Agreement (including
its obligations under Section 3) or in the event that the Company or any other
person takes or threatens to take any action to declare this Agreement void or
unenforceable, or institutes any litigation or other action or proceeding
designed to deny, or to recover from, Indemnitee the benefits provided or
intended to be provided to Indemnitee hereunder, the Company irrevocably
authorizes the Indemnitee from time to time to retain counsel of Indemnitee’s
choice, at the expense of the Company as hereafter provided, to advise and
represent Indemnitee in connection with any such interpretation, enforcement or
defense, including without limitation the initiation or defense of any
litigation or other legal action, whether by or against the Company or any
director, officer, shareholder or other person affiliated with the Company, in
any jurisdiction.  Without respect to whether Indemnitee prevails, in
whole or in part, in connection with any of the foregoing, the Company will pay
and be solely financially responsible for any and all attorneys’ and related
fees and expenses incurred by Indemnitee in connection with any of the
foregoing.

     

    21. Certain Interpretive
Matters.  Unless the context of this Agreement otherwise
requires, (a) “it” or “its” or words of any gender include each other
gender, (b) words using the singular or plural number also include the
plural or singular number, respectively, (c) the terms “hereof,” “herein,”
“hereby” and derivative or similar words refer to this entire Agreement,
(d) the terms “Article,” “Section,” “Annex” or “Exhibit” refer to the
specified Article, Section, Annex or Exhibit of or to this Agreement,
(e) the terms “include,” “includes” and “including” will be deemed to be
followed by the words “without limitation” (whether or not so expressed), and
(f) 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.

     

    22. 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.

     

    

     

    [Signatures
Appear On Following Page]

     

    

    
      
        
           

        

        
          14

          
            

          

        

        
           

        

      

    

    

    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.

     

    

    FirstEnergy
Corp.

    76
South Main Street

    Akron, Ohio
44308

    

    

    

    By:___________________________                                                      

    Name:  ________________________

    Title:  _________________________

    

    

    

    

    

    

      
        

      

    

     “Indemnitee”

    

     

     

     

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    

    EXHIBIT
A

     

    UNDERTAKING

     

    STATE
OF                                             )

    )           SS

    COUNTY
OF                                         )

    

    I,
_________________________________, being first duly sworn, do depose and say as
follows:

     

    1. This Undertaking is
submitted pursuant to the Management Director Indemnification Agreement, dated
____________, 2___, between FirstEnergy Corp., an Ohio corporation (the “Company”)
and the undersigned.

     

    2. I am requesting
payment of Expenses that I have reasonably incurred or will reasonably incur in
defending an Indemnifiable Claim referred to in the aforesaid Management
Director Indemnification Agreement.

     

    3. The Expenses for
which payment is requested are, in general, all expenses related to

     

    ___________________________________________________________________________________________________________________________________________

    ___________________________________________________________________________________________________________________________________________

    _________________________________________________________________________________________________________________________________________.

    

    4. Part A1

     

    I
hereby undertake to (a) repay all amounts paid pursuant hereto if it is proved
by clear and convincing evidence in a court of competent jurisdiction that my
action or failure to act which is the subject of the matter described herein
involved an act or omission undertaken with deliberate intent to cause injury to
the Company or undertaken with reckless disregard for the best interests of the
Company and (b) reasonably cooperate with the Company concerning the action,
suit, proceeding or claim.

     

    

    __________________________________________

    [INDEMNITEE NAME]

    5. Part B

     

    I
hereby undertake to repay all amounts paid pursuant hereto if it ultimately is
determined that I am not entitled to be indemnified by the Company under the
aforesaid Director Indemnification Agreement or otherwise.

     

    

    

    ____________________________________

    [Signature of Indemnitee]

     

     

     

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    
 

    Subscribed and sworn
to before me, a Notary Public in and for said County and State, this _____ day
of _________, 2___.

     

    

    

    

    

    [Seal]

    

    My
commission expires the ____ day of ___________, 2___.

     

    

    

      

    

     

      1 The Indemnitee shall not be eligible to
execute Part A of this Undertaking if (x) at the time of the Indemnitee’s act or
omission at issue, the Articles or the Regulations of the Company prohibit such
advances by specific reference to the Ohio Revised Code (the “ORC”) Section 1701.13(E)(5)(a), (y) the
only liability asserted against the Indemnitee is in an action, suit, or
proceeding on the Company’s behalf pursuant to ORC Section 1701.95 or (z) the
Board of Directors determines, by a majority vote of a quorum consisting of the
Disinterested Directors, the only liability asserted against the Indemnitee in
the subject action, suit or proceeding is in the Indemnitee’s role as an officer
of the Company.  In the event that the Indemnitee is eligible to and
does execute both Part A and Part B hereof, the costs, charges, and expenses
which are paid by the Company pursuant hereto shall be required to be repaid by
the Indemnitee only if the Indemnitee is required to do so under the terms of
both Part A and Part B.

       

    

    

    
      
        
           

        

        
          17ex1069.htm

    Exhibit
10.69

     

    Chordiant
Software, Inc.

     

    Restricted Stock Unit Grant
Notice

     

    2005
Equity Incentive Plan

     

    Chordiant
Software, Inc. (the “Company”),
pursuant to its 2005 Equity Incentive Plan (the “Plan”),
hereby awards to Participant a Restricted Stock Unit Award for the number of shares of
the Company’s Common Stock set forth below (the “Award”).  The
Award is subject to all of the terms and conditions as set forth herein, in the
Plan and in the Restricted Stock Unit Agreement, both of which are attached
hereto and incorporated herein in their entirety.  Capitalized terms
not otherwise defined herein shall have the meanings set forth in the Plan or
the Restricted Stock Unit Agreement.  In the event of any conflict
between the terms set forth herein and the Plan, the terms of the Plan shall
control.

     

    
      
        	
                Participant:

              	 
      	 
      	 
      
	
                Date
      of Grant:

              	 
      	 
      	 
      
	
                Vesting
      Commencement Date:

              	 
      	 
      	 
      
	
                Number
      of Shares Subject to Award:

              	 
      	 
      	 
      
	
                Consideration

              	 
      	 
      	 
      
	 
      	
                Participant’s
      past services

              	 
      	 
      
	 	 	 	 
	
                Vesting
      Schedule:

              	
                [

              	 
      	
                ]

              	
                .

              

      

    

    Notwithstanding
the foregoing, vesting shall terminate upon the Participant’s termination of
Continuous Service.  In addition, subject to the Participant’s
Continuous Service through the time that is immediately prior to a Change in
Control, 100% of the shares subject to this Award will become fully vested as of
immediately prior to the Change in Control.

    

    
      	
              Issuance
      Schedule:

            	
              The
      shares will be issued in accordance with the issuance schedule set forth
      in Section 8 of the Restricted Stock Unit
  Agreement.

            

    

     

    Additional
Terms/Acknowledgements:  The undersigned Participant
acknowledges receipt of, and understands and agrees to, this Restricted Stock
Unit Grant Notice, the Restricted Stock Unit Agreement, the Plan and the Plan
prospectus.  Participant further acknowledges that as of the Date of
Grant, this Restricted Stock Unit Grant Notice, the Restricted Stock Unit
Agreement and the Plan set forth the entire understanding between Participant
and the Company with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company
and Participant with respect to the subject matter hereof.

     

    
      
        	
                Chordiant
      Software, Inc.

              	 
      	
                Participant:

              
	 
      	 
      	 
      	 
      
	
                By:

              	 
      	 
      	 
      
	 
      	
                Signature

              	 
      	
                Signature

              
	 	 	 	 
	
                Title:

              	 
      	 
      	
                Date:

              	 
      
	 
      	 
      	 
      	 
      	 
      
	
                Date:

              	 
      	 
      	 
      	 
      

      

    

    

    

    
      

    

    
      	
              Attachments:

            	
              Restricted
      Stock Unit Agreement, 2005 Equity Incentive
Plan

            

    

    
      
        
          
 

        

         

      

      
         

        
          

        

      

      
         

      

    

    Attachment
I

    

    Chordiant
Software, Inc.

    2005
Equity Incentive Plan

     

    Restricted
Stock Unit Agreement

     

    Pursuant
to the Restricted Stock Unit Grant Notice (the “Grant
Notice”) and this Restricted Stock Unit Agreement (the “Agreement”)
and in consideration of your services, Chordiant Software, Inc. (the “Company”)
has awarded you a Restricted Stock Unit Award (the “Award”)
under its 2005 Equity Incentive Plan (the “Plan”).
Your Award is granted to you effective as of the Date of Grant set forth in the
Grant Notice for this Award.  This Agreement shall be deemed to be
agreed to by the Company and you upon the signing by you of the Grant Notice to
which it is attached.  Defined terms not explicitly defined in this
Agreement shall have the same meanings given to them in the Plan.  In
the event of any conflict between the terms in this Agreement and the Plan, the
terms of the Plan shall control.  The details of your Award, in
addition to those set forth in the Grant Notice and the Plan, are as
follows.

     

    1. Grant of
the Award.    This Award represents the right to be
issued on a future date the number of shares of the Company’s Common Stock as
indicated in the Grant Notice.  As of the Date of Grant, the Company
will credit to a bookkeeping account maintained by the Company for your benefit
(the “Account”)
the number of shares of Common Stock subject to the Award.  This Award
was granted in consideration of your services to the Company.  Except
as otherwise provided herein, you will not be required to make any payment to
the Company (other than past and future services to the Company) with respect to
your receipt of the Award, the vesting of the shares or the delivery of the
underlying Common Stock.

     

    2. Vesting.  Subject to the
limitations contained herein, your Award will vest, if at all, in accordance
with the vesting schedule provided in the Grant Notice, provided that vesting
will cease upon the termination of your Continuous
Service.   Upon such termination of your Continuous Service, the
shares credited to the Account that were not vested on the date of such
termination will be forfeited at no cost to the Company and you will have no
further right, title or interest in or to such underlying shares of Common
Stock.

     

    3. Holding
Period.  You agree that you will not sell or otherwise transfer
(excluding transfers to certain family trusts as provided in Section 6
below) any of the shares of Common Stock issued under the Award until the
earlier of (1) the second anniversary of the vesting date of such shares, (2) a
Change in Control, or (3) the termination of your Continuous Service as a result
of death or Disability (such period, the “Holding
Period”).  Shares sold or withheld by the Company to cover
applicable tax withholdings will not be deemed a violation of the Holding
Period.  The shares of Common Stock issued pursuant to this Award
shall be endorsed with appropriate legends as determined by the Company and
subject to escrow (as provided in Section 7 below) in order to enforce the
provisions of this Section 3, and you will enter into such other arrangements as
determined reasonably necessary by the Company in order to enforce the
provisions of this Section 3.

     

    4. Number of
Shares.

     

    (a) The
number of shares subject to your Award may be adjusted from time to time for
Capitalization Adjustments, as provided in the Plan.

     

    (b) Any
shares, cash or other property that becomes subject to the Award pursuant to
this Section 4, if any, shall be subject, in a manner determined by the Board,
to the same forfeiture restrictions, restrictions on transferability, and time
and manner of delivery as applicable to the other shares covered by your
Award.

     

    (c) Notwithstanding
the provisions of this Section 4, no fractional shares or rights for fractional
shares of Common Stock shall be created pursuant to this Section
4.  The Board shall, in its discretion, determine an equivalent
benefit for any fractional shares or fractional shares that might be created by
the adjustments referred to in this Section 4.

     

    5. Securities
Law Compliance.  You may not be
issued any shares under your Award unless either (a) the shares are registered
under the Securities Act; or (b) the Company has determined that such issuance
would be exempt from the registration requirements of the Securities Act. Your
Award also must comply with other applicable laws and regulations governing the
Award, and you will not receive such shares if the Company determines that such
receipt would not be in material compliance with such laws and
regulations.

     

    6. Limitations
on Transfer.  Your Award and
any shares of Common Stock subject to the Holding Period are not transferable,
except by will or by the laws of descent and distribution.  In
addition to any other limitation on transfer created by applicable securities
laws, you agree not to assign, hypothecate, donate, encumber or otherwise
dispose of any interest in any of the shares of Common Stock subject to the
Award until the shares are released from escrow in accordance with
Section 7 of this Agreement.  After the shares have been released
to you, you are free to assign, hypothecate, donate, encumber or otherwise
dispose of any interest in such shares provided that any such actions are in
compliance with the provisions herein and applicable securities
laws.  Notwithstanding the foregoing, by delivering written notice to
the Company, in a form satisfactory to the Company, you may (a) designate a
third party who, in the event of your death, shall thereafter be entitled to
receive any distribution of Common Stock to which you were entitled at the time
of your death pursuant to this Agreement and/or (b) instruct the Company to
distribute shares of Common Stock to a spouse or former spouse pursuant to a
domestic relations order.  In addition, notwithstanding the foregoing,
you may transfer shares of Common Stock subject to the Holding Period to a trust
for the benefit of you or your “immediate family”, provided that each such
transferee agrees in a writing satisfactory to the Company that the provisions
of this Agreement (including but not limited to Section 3 and Section 7)
will continue to apply to the transferred shares in the hands of such
transferee, and provided further that following such transfer, you continue to
be deemed to be the “beneficial owner” of the shares for purposes of the
Exchange Act.  As used herein, the term “immediate family”
will mean your spouse, brother, sister, child, grandchild, adopted child,
adopted grandchild, or the spouse of your child, grandchild, adopted child, or
adopted grandchild.

     

    7. Escrow of
Shares Subject to Holding Period.  As security for your
faithful performance of the terms of this Agreement (including Section 3), you
agree to the following “Joint Escrow” and “Joint Escrow Instructions,” and you
and the Company hereby authorize and direct the Corporate Secretary of the
Company or the Corporate Secretary’s designee (“Escrow
Agent”) to hold the documents delivered to Escrow Agent pursuant to the
terms of this Agreement and of your Grant Notice, in accordance with the
following Joint Escrow Instructions:

     

    (a) At
any closing involving the transfer or delivery of some or all of the property
subject to the Grant Notice and this Agreement, Escrow Agent is directed
(i) to date any stock assignments necessary for the transfer in question,
(ii) to fill in the number of shares being transferred, and (iii) to
deliver the same, together with the certificate, if any, evidencing the shares
of Common Stock to be transferred, to you or the Company, as
applicable.

     

    (b) You
irrevocably authorize the Company to deposit with Escrow Agent the certificates,
if any, evidencing shares of Common Stock to be held by Escrow Agent hereunder
and any additions and substitutions to such shares as specified in this
Agreement.  You hereby irrevocably constitute and appoint Escrow Agent
as your attorney-in-fact and agent for the term of this escrow to execute with
respect to such securities and other property all documents of assignment and/or
transfer and all stock certificates necessary or appropriate to make all
securities negotiable and complete any transaction contemplated
herein.

     

    (c) This
escrow shall terminate upon the later of the expiration of the Holding Period,
and the completion of the tasks contemplated by these Joint Escrow
Instructions.

     

    (d) If
at the time of termination of this escrow, Escrow Agent should have in its
possession any documents, securities, or other property belonging to you, Escrow
Agent shall deliver all of same to you and shall be discharged of all further
obligations hereunder.

     

    (e) Except
as otherwise provided in these Joint Escrow Instructions, Escrow Agent’s duties
hereunder may be altered, amended, modified, or revoked only by a writing signed
by all of the parties hereto.

     

    (f) Escrow
Agent shall be obligated only for the performance of such duties as are
specifically set forth herein and may rely and shall be protected in relying or
refraining from acting on any instrument reasonably believed by Escrow Agent to
be genuine and to have been signed or presented by the proper party or parties
or their assignees.  Escrow Agent shall not be personally liable for
any act Escrow Agent may do or omit to do hereunder as Escrow Agent or as
attorney-in-fact for you while acting in good faith and any act done or omitted
by Escrow Agent pursuant to the advice of Escrow Agent’s own attorneys shall be
conclusive evidence of such good faith.

     

    (g) Escrow
Agent is hereby expressly authorized to disregard any and all warnings given by
any of the parties hereto or by any other person or corporation, excepting only
orders, judgments, decrees or process of courts of law, and is hereby expressly
authorized to comply with and obey orders, judgments, or decrees of any
court.  In case Escrow Agent obeys or complies with any such order,
judgment, or decree of any court, Escrow Agent shall not be liable to any of the
parties hereto or to any other person, firm, or corporation by reason of such
compliance, notwithstanding any such order, judgment, or decree being
subsequently reversed, modified, annulled, set aside, vacated, or found to have
been entered without jurisdiction.

     

    (h) Escrow
Agent shall not be liable in any respect on account of the identity, authority,
or rights of the parties executing or delivering or purporting to execute or
deliver this Agreement or any documents or papers deposited or called for
hereunder.

     

    (i) Escrow
Agent shall not be liable for the outlawing of any rights under any statute of
limitations with respect to these Joint Escrow Instructions or any documents
deposited with Escrow Agent.

     

    (j) Escrow
Agent’s responsibilities as Escrow Agent hereunder shall terminate if Escrow
Agent shall cease to be the Secretary of the Company, if applicable, or if
Escrow Agent shall resign by written notice to each party.  In the
event of any such termination, the Company may appoint any officer or assistant
officer of the Company or any other person as successor Escrow Agent and you
hereby confirm the appointment of such successor or successors as your
attorney-in-fact and agent to the full extent of such successor Escrow Agent’s
appointment.

     

    (k) If
Escrow Agent reasonably requires other or further instruments in connection with
these Joint Escrow Instructions or obligations in respect hereto, the necessary
parties hereto shall join in furnishing such instruments.

     

    (l) It
is understood and agreed that should any dispute arise with respect to the
delivery and/or ownership or right of possession of the securities, Escrow Agent
is authorized and directed to retain in its possession without liability to
anyone all or any part of such securities until such dispute shall have been
settled either by mutual written agreement of the parties concerned or by a
final order, decree, or judgment of a court of competent jurisdiction after the
time for appeal has expired and no appeal has been perfected, but Escrow Agent
shall be under no duty whatsoever to institute or defend any such
proceedings.

     

    (m) By
signing this Agreement below Escrow Agent becomes a party hereto only for the
purpose of the Joint Escrow Instructions in this Section 7; Escrow Agent does
not become a party to any other rights and obligations of this Agreement apart
from those in this Section 7.

     

    (n) Escrow
Agent shall be entitled to employ such legal counsel and other experts as Escrow
Agent may deem necessary to properly advise Escrow Agent in connection with
Escrow Agent’s obligations hereunder.  Escrow Agent may rely upon the
advice of such counsel, and may pay such counsel reasonable compensation
therefor.  The Company shall be responsible for all fees generated by
such legal counsel in connection with Escrow Agent’s obligations
hereunder.

     

    (o) These
Joint Escrow Instructions set forth in this Section 7 shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns.  It is understood and agreed that references to
“Escrow Agent” herein refer to the original Escrow Agent and to any and all
successor Escrow Agents.  It is understood and agreed that the Company
may at any time or from time to time assign its rights under the Agreement and
these Joint Escrow Instructions in whole or in part.

     

    8. Date
of Issuance.

     

    (a) The
Company will deliver to the Escrow Agent a number of shares of the Company’s
Common Stock equal to the number of vested shares subject to your Award,
including any additional shares received pursuant to Section 4 above that
relate to those vested shares on the applicable vesting
date(s).  However, if a scheduled delivery date falls on a date that
is not a business day, such delivery date shall instead fall on the next
following business day.

     

    (b) Notwithstanding
the foregoing, in the event that (i) you are subject to the Company’s policy (as
in effect from time to time) permitting officers and directors to sell shares
only during certain “window” periods or you are otherwise prohibited from
selling shares of the Company’s Common Stock in the public market under
applicable law and any shares covered by your Award are scheduled to be
delivered on a day (the “Original
Distribution Date”) that does not occur during an open “window period”
applicable to you, as determined by the Company in accordance with such policy,
or does not occur on a date when you are otherwise permitted under applicable
law to sell shares of the Company’s Common Stock on the open market, and (ii)
the Company elects not to satisfy its tax withholding obligations by withholding
shares of Common Stock from your distribution under this Award and you do not
otherwise make arrangements for the payment in cash of your tax obligations,
then such shares shall not be delivered on such Original Distribution Date and
shall instead be delivered on the first business day of the next occurring open
“window period” applicable to you pursuant to such policy (regardless of whether
you are still providing Continuous Service at such time) or the next business
day when you are not prohibited from selling shares of the Company’s Common
Stock in the open market, but in no event later than the fifteenth (15th) day of
the third calendar month of the calendar year following the calendar year in
which the Original Distribution Date occurs.  The form of such
delivery (e.g., a stock
certificate or electronic entry evidencing such shares) shall be determined by
the Company.  In all cases, the delivery of shares under this Award is
intended to comply with Treasury Regulation 1.409A-1(b)(4) and shall be
construed and administered in such a manner.

     

    9. Dividends.  You shall receive no
benefit or adjustment to your Award with respect to any cash dividend, stock
dividend or other distribution that does not result from a Capitalization
Adjustment; provided,
however, that this sentence shall not apply with respect to any shares of
Common Stock that are delivered to you in connection with your Award after such
shares have been delivered to you.

     

    10. Award not a
Service Contract.

     

    (a) Your
Continuous Service with the Company or an Affiliate is not for any specified
term and may be terminated by you or by the Company or an Affiliate at any time,
for any reason, with or without cause and with or without notice.  Nothing
in this Agreement (including, but not limited to, the vesting of your Award
pursuant to the schedule set forth in Section 2 herein or the issuance of
the shares subject to your Award), the Plan or any covenant of good faith and
fair dealing that may be found implicit in this Agreement or the Plan
shall:  (i) confer upon you any right to continue in the employ of, or
affiliation with, the Company or an Affiliate; (ii) constitute any promise or
commitment by the Company or an Affiliate regarding the fact or nature of future
positions, future work assignments, future compensation or any other term or
condition of employment or affiliation; (iii) confer any right or benefit under
this Agreement or the Plan unless such right or benefit has specifically accrued
under the terms of this Agreement or Plan; or (iv) deprive the Company of the
right to terminate you at will and without regard to any future vesting
opportunity that you may have.

     

    (b) By
accepting this Award, you acknowledge and agree that the right to continue
vesting in the Award pursuant to the schedule set forth in Section 2 is
earned only by continuing as an employee, director or consultant at the will of
the Company (not through the act of being hired, being granted this Award or any
other award or benefit) and that the Company has the right to reorganize, sell,
spin-out or otherwise restructure one or more of its businesses or Affiliates at
any time or from time to time, as it deems appropriate (a “reorganization”). 
You further acknowledge and agree that such a reorganization could result in the
termination of your Continuous Service, or the termination of Affiliate status
of your employer and the loss of benefits available to you under this Agreement,
including but not limited to, the termination of the right to continue vesting
in the Award.  You further acknowledge and agree that this Agreement,
the Plan, the transactions contemplated hereunder and the vesting schedule set
forth herein or any covenant of good faith and fair dealing that may be found
implicit in any of them do not constitute an express or implied promise of
continued engagement as an employee or consultant for the term of this
Agreement, for any period, or at all, and shall not interfere in any way with
your right or the Company’s right to terminate your Continuous Service at any
time, with or without cause and with or without notice.

     

    11. Withholding
Obligations.

     

    (a) On
or before the time you receive a distribution of the shares subject to your
Award, or at any time thereafter as requested by the Company, you hereby
authorize any required withholding from the Common Stock issuable to you or the
Escrow Agent and/or otherwise agree to make adequate provision in cash for any
sums required to satisfy the federal, state, local and foreign tax withholding
obligations of the Company or any Affiliate which arise in connection with your
Award (the “Withholding
Taxes”).  Additionally, the Company may, in its sole
discretion, satisfy all or any portion of the Withholding Taxes obligation
relating to your Award by any of the following means or by a combination of such
means: (i) withholding from any compensation otherwise payable to you by the
Company; (ii) causing you to tender a cash payment; (iii) permitting you to
enter into a “same day sale” commitment with a broker-dealer that is a member of
the Financial Industry Regulatory Authority (a “FINRA
Dealer”) whereby you irrevocably elect to sell a portion of the shares to
be delivered under the Award to satisfy the Withholding Taxes and whereby the
FINRA Dealer irrevocably commits to forward the proceeds necessary to satisfy
the Withholding Taxes directly to the Company and/or its Affiliates or (iv)
withholding shares of Common Stock from the shares of Common Stock issued or
otherwise issuable to you or the Escrow Agent in connection with the Award with
a Fair Market Value (measured as of the date shares of Common Stock are issued
pursuant to Section 8 equal to the amount of such Withholding Taxes;
provided, however, that the number of such shares of Common Stock so withheld
shall not exceed the amount necessary to satisfy the Company’s required tax
withholding obligations using the minimum statutory withholding rates for
federal, state, local and foreign tax purposes, including payroll taxes, that
are applicable to supplemental taxable income.

     

    (b) Unless
the tax withholding obligations of the Company and/or any Affiliate are
satisfied, the Company shall have no obligation to deliver to you any Common
Stock.

     

    (c) In
the event the Company’s obligation to withhold arises prior to the delivery to
you of Common Stock or it is determined after the delivery of Common Stock to
you that the amount of the Company’s withholding obligation was greater than the
amount withheld by the Company, you agree to indemnify and hold the Company
harmless from any failure by the Company to withhold the proper
amount.

     

    12. Unsecured
Obligation.  Your Award is unfunded, and as a holder of a
vested Award, you shall be considered an unsecured creditor of the Company with
respect to the Company’s obligation, if any, to issue shares pursuant to this
Agreement.  You shall not have voting or any other rights as a
stockholder of the Company with respect to the shares to be issued pursuant to
this Agreement until such shares are issued pursuant to Section 8 of this
Agreement.   Upon such issuance, you will obtain full voting and
other rights as a stockholder of the Company.  Nothing contained in
this Agreement, and no action taken pursuant to its provisions, shall create or
be construed to create a trust of any kind or a fiduciary relationship between
you and the Company or any other person.

     

    13. Other
Documents.  You hereby acknowledge receipt or the right to
receive a document providing the information required by Rule 428(b)(1)
promulgated under the Securities Act, which includes the Plan
prospectus.  In addition, you acknowledge receipt of the Company’s
policy permitting certain individuals to sell shares only during certain
“window” periods and the Company’s insider trading policy, in effect from time
to time.

     

    14. Notices.  Any notices
provided for in your Award or the Plan shall be given in writing and shall be
deemed effectively given upon receipt or, in the case of notices delivered by
the Company to you, five (5) days after deposit in the United States mail,
postage prepaid, addressed to you at the last address you provided to the
Company.  Notwithstanding the foregoing, the Company may, in its sole
discretion, decide to deliver any documents related to participation in the Plan
and this Award by electronic means or to request your consent to participate in
the Plan by electronic means.  You hereby consent to receive such
documents by electronic delivery and, if requested, to agree to participate in
the Plan through an on-line or electronic system established and maintained by
the Company or another third party designated by the Company.

     

    15. Miscellaneous.

     

    (a) The
rights and obligations of the Company under your Award shall be transferable to
any one or more persons or entities, and all covenants and agreements hereunder
shall inure to the benefit of, and be enforceable by the Company’s successors
and assigns. Your rights and obligations under your Award may only be assigned
with the prior written consent of the Company.

     

    (b) You
agree upon request to execute any further documents or instruments necessary or
desirable in the sole determination of the Company to carry out the purposes or
intent of your Award.

     

    (c) You
acknowledge and agree that you have reviewed your Award in its entirety, have
had an opportunity to obtain the advice of counsel prior to executing and
accepting your Award, and fully understand all provisions of your
Award.

     

    (d) This
Agreement shall be subject to all applicable laws, rules, and regulations, and
to such approvals by any governmental agencies or national securities exchanges
as may be required.

     

    (e) All
obligations of the Company under the Plan and this Agreement shall be binding on
any successor to the Company, whether the existence of such successor is the
result of a direct or indirect purchase, merger, consolidation, or otherwise, of
all or substantially all of the business and/or assets of the
Company.

     

    16. Governing
Plan Document.  Your Award is
subject to all the provisions of the Plan, the provisions of which are hereby
made a part of your Award, and is further subject to all interpretations,
amendments, rules and regulations which may from time to time be promulgated and
adopted pursuant to the Plan.  Except as expressly provided herein, in
the event of any conflict between the provisions of your Award and those of the
Plan, the provisions of the Plan shall control.

     

    17. Severability.  If
all or any part of this Agreement or the Plan is declared by any court or
governmental authority to be unlawful or invalid, such unlawfulness or
invalidity shall not invalidate any portion of this Agreement or the Plan not
declared to be unlawful or invalid. Any Section of this Agreement (or part of
such a Section) so declared to be unlawful or invalid shall, if possible, be
construed in a manner which will give effect to the terms of such Section or
part of a Section to the fullest extent possible while remaining lawful and
valid.

     

    18. Effect on
Other Employee Benefit Plans.  The value of the Award subject
to this Agreement shall not be included as compensation, earnings, salaries, or
other similar terms used when calculating your benefits under any employee
benefit plan sponsored by the Company or any Affiliate, except as such plan
otherwise expressly provides. The Company expressly reserves its rights to
amend, modify, or terminate any of the Company’s or any Affiliate’s employee
benefit plans.

     

    19. Choice
of Law.  The
interpretation, performance and enforcement of this Agreement will be governed
by the law of the state of Delaware without regard to such state’s conflicts of
laws rules.

     

    20. Amendment.  This
Agreement may not be modified, amended or terminated except by an instrument in
writing, signed by you and by a duly authorized representative of the Company.
Notwithstanding the foregoing, this Agreement may be amended solely by the Board
by a writing which specifically states that it is amending this Agreement, so
long as a copy of such amendment is delivered to you, and provided that no such
amendment adversely affecting your rights hereunder may be made without your
written consent. Without limiting the foregoing, the Board reserves the right to
change, by written notice to you, the provisions of this Agreement in any way it
may deem necessary or advisable to carry out the purpose of the grant as a
result of any change in applicable laws or regulations or any future law,
regulation, ruling, or judicial decision, provided that any such change shall be
applicable only to rights relating to that portion of the Award which is then
subject to restrictions as provided herein.

     

    21. Compliance
with Section 409A of the Code.  This Award is
intended to comply with the “short-term deferral” rule set forth in Treasury
Regulation Section 1.409A-1(b)(4).  Notwithstanding the foregoing, if
it is determined that the Award fails to satisfy the requirements of the
short-term deferral rule and is otherwise deferred compensation subject to
Section 409A, and if you are a “Specified Employee” (within the meaning set
forth Section 409A(a)(2)(B)(i) of the Code) as of the date of your separation
from service (within the meaning of Treasury Regulation Section 1.409A-1(h)),
then the issuance of any shares that would otherwise be made upon the date of
the separation from service or within the first six (6) months thereafter will
not be made on the originally scheduled date(s) and will instead be issued in a
lump sum on the date that is six (6) months and one day after the date of the
separation from service, with the balance of the shares issued thereafter in
accordance with the original vesting and issuance schedule set forth above, but
if and only if such delay in the issuance of the shares is necessary to avoid
the imposition of taxation on you in respect of the shares under Section 409A of
the Code.  Each installment of shares that vests is intended to
constitute a “separate payment” for purposes of Treasury Regulation Section
1.409A-2(b)(2).

     

    

     

    Escrow
Agent hereby acknowledges and accepts its rights and responsibilities pursuant
to Section 7, above.

    

    

    ___________________________

     

    Escrow
Agent

     

    

     

    
      
        
                                                                   
..

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