Document:

EXHIBIT 10.2

 

CORNELL
COMPANIES, INC.

 

RESTRICTED STOCK AWARD AGREEMENT

 

(Performance Based)

 

This
Award Agreement is made effective as of April 1, 2010 (the “Date of Grant”)
by CORNELL COMPANIES, INC. (the “Company”) to                              (the “Participant”).

 

1.                                       Grant.

 

(a)           Shares.  Pursuant to the Company’s 2006 Incentive Plan,
as amended and restated (the “Plan”),                                    contingent, performance-based
restricted shares (the “Restricted Shares”) of the Company’s common stock, par
value $0.001 (the “Common Stock”), will be issued as hereinafter provided in
the Participant’s name.  Such Restricted
Shares shall be subject to certain restrictions as hereinafter described
pursuant to the Plan and this Award Agreement.  The Restricted Shares will accumulate (but
not vest) in accordance with the provisions of Section 2(d) and will
vest in accordance with the provisions of Section 2(e).  The exact number of Restricted Shares that
will actually accumulate and thereafter vest and be earned by you (if any) is
expressly subject to the accumulation and vesting requirements described below.

 

(b)           Issuance of Shares.  The Restricted Shares will be issued upon
acceptance of this Award Agreement by the Participant.  The Restricted Shares may, in the discretion
of the Company, be issued in either book entry or certificate form.  During the period the Restricted Shares are
subject to the prohibitions and restrictions set forth herein with respect to
the sale or other disposition of the Restricted Shares and the obligation to
forfeit and surrender such Restricted Shares to the Company (the “Forfeiture
Restrictions”) any certificates representing the Restricted Shares shall bear a
restrictive legend to the effect that ownership of such Restricted Shares (and
any such Retained Distributions (as that term is defined below)), and the
enjoyment of all rights appurtenant thereto, are subject to the restrictions,
terms, and conditions provided in the Plan and this Award Agreement.  The Participant shall have the right to vote
the Restricted Shares awarded to the Participant and to receive and retain all
cash dividends with respect to such Restricted Shares, and to exercise all
other rights, powers and privileges of a holder of the Common Stock, with respect
to such Restricted Shares, with the exception that (a) the Participant shall
not be entitled to delivery of the stock certificate or certificates
representing such Restricted Shares or electronic delivery of the such
Restricted Shares until the Forfeiture Restrictions applicable thereto shall
have expired, (b) the Company shall retain custody of all Retained
Distributions made or declared with respect to the Restricted Shares (and such
Retained Distributions shall be subject to the same 

 

 

restrictions,
terms and conditions as are applicable to the Restricted Shares) until such
time, if ever, as the Restricted Shares with respect to which such Retained
Distributions shall have been made, paid, or declared shall have become vested,
and such Retained Distributions shall not bear interest or be segregated in
separate accounts and (c) the Participant may not sell, assign, transfer,
pledge, exchange, encumber, or dispose of the Restricted Shares or any Retained
Distributions during the period in which the Restricted Shares may not be sold,
assigned, transferred, pledged, or otherwise encumbered (the “Restricted Period”).  Upon issuance of any certificates for the Restricted
Shares such certificate shall be delivered to the Secretary of the Company or
to such other depository as may be designated by the Company as a depository
for safekeeping until the forfeiture of such Restricted Shares occurs or the
Forfeiture Restrictions lapse, together with stock powers or other instruments
of assignment, each endorsed in blank, which will permit transfer to the
Company of all or any portion of the Restricted Shares and any securities
constituting Retained Distributions which shall be forfeited in accordance with
the Plan and this Award Agreement.  For purposes of
this Award Agreement, the term “Retained Distribution” means any securities or
other property (other than cash dividends) distributed by the Company in
respect of the Restricted Shares during any Restricted Period.  To the extent that all or a portion of the
Restricted Shares vest as provided in this Agreement, the Company will
distribute such vested Shares to the Participant in a reasonable time period
after vesting, which may consist of share certificates or electronic transfer
to brokerage accounts required to be established by the Participant and such
shares of the Common Stock shall be transferable by the Participant  (except to the extent that any proposed
transfer would, in the opinion of counsel satisfactory to the Company,
constitute a violation of applicable securities law).  The Participant agrees that the Participant
may be required to open a brokerage account as directed by the Company for
administration of the Participants equity awards from the Company.

 

(c)           Plan Incorporated.  The Participant acknowledges receipt of a
copy of the Plan, and agrees that this grant of the Restricted Shares shall be
subject to all of the terms and provisions of the Plan, including future
amendments thereto, if any.

 

2.                                       Restrictions. The Participant hereby accepts the Restricted
Shares when issued and agrees with respect thereto as follows:

 

(a)           In the event of termination of the Participant’s
employment with the Company and all Affiliates as a result of an involuntary
termination without Cause (as hereinafter defined) by the Company and such
Affiliates, death or disability (each, an “Involuntary Event”), the Participant
shall vest in any Restricted Shares accumulated through the date of such event,
and if such event occurs following the completion of a calendar year but prior
to the time the performance determination is made and finalized for such year,
then the Participant shall also vest in any Restricted Shares that would
otherwise have been accumulated for that previously completed calendar year as
a result of the achievement of the performance-based accumulation requirements
in Section 2(d).  The Participant
shall, for no consideration, forfeit to the Company any remaining Restricted
Shares which do not vest in accordance with the preceding sentence.

 

2

 

(b)           “Cause” shall mean any of the
following events:

 

(i)            the conviction
of the Participant or a plea of guilty or of nolo
contendere by the Participant, whether or not appeal be taken, of
any misdemeanor, or felony crime, involving personal dishonesty, moral
turpitude or willfully violent conduct;

(ii)           the commission
of any act of theft, fraud, embezzlement or wrongful diversion of funds of the
Company or any Affiliate by the Participant, regardless of whether a criminal conviction
is pursued or obtained;

(iii)          gross business
misconduct by the Participant, provided that this shall not include any
negligence, omissions, actions or judgments, if made in good faith by the
Participant;

(iv)          the willful
violation by the Participant of federal or state securities laws, as determined
in good faith by the Company’s Board of Directors;

(v)           the violation
of the Company’s policies and procedures, provided such conduct results in
substantial harm to the Company or any Affiliate;

(vi)          the material
breach by the Participant of his or her fiduciary and loyal duties to the
Company or any Affiliate;

(vii)         if the
Participant and the Company or any Affiliate have entered into an employment
agreement, the material breach by the Participant of any provision of such
agreement not fully remedied within twenty (20) days of written notice from
Company or such Affiliate.

 

To
the extent that the Participant and the Company or any Affiliate have entered
into an employment agreement that requires certain determinations or procedures
by the Company, such Affiliate, its Board or Directors or the Participant prior
to a finding of cause, then such determinations and/or procedures shall be
deemed incorporated into this definition of Cause for so long as such employment
agreement is in force.

 

(c)           Except as may be otherwise provided
in the Plan or this Award Agreement, in the event of termination of the
Participant’s employment with the Company and all Affiliates prior to April 1,
2013 for any reason other than an Involuntary Event, the Participant shall, for
no consideration, forfeit to the Company all Restricted Shares, including any
Restricted Shares that may have accumulated prior to the time of termination.

 

The Committee may, in its
discretion and pursuant to the Plan, accelerate the time at which vesting
conditions have been achieved with respect to any Restricted Shares that have
previously been accumulated under Section 2(d).

 

(d)           Subject in all respects to this Agreement, the Restricted Shares
shall accumulate (but not vest) only upon the Company achieving the performance
criteria set forth below and provided that the Participant remains employed
with the Company at the date of determination that the Company achieved the
performance criteria as described below, except as otherwise provided in Section 2(a).
 Except as otherwise provided in 

 

3

 

Section 2(a), accumulated
Restricted Shares are not earned or vested until three (3) years following
the Date of Grant as provided in Section 2(e).  The performance criteria shall be based upon
the Company’s annual basic earnings per share of Common Stock, (“EPS”) targets set forth
below, calculated as described and contemplated herein. The accumulation of Restricted Shares is
subject to achievement of three separate EPS targets, with such shares
accumulating in one-third increments upon the achievement of each of the EPS
targets with respect to any calendar year from 2010 up to and including 2012. The
first target has two alternate EPS targets — the first alternate EPS target may
only be met in the 2010 performance year. 
If the first alternate is met during 2010, then the second alternate
becomes inapplicable.  If the first
alternate is not met for the 2010 performance year, then the second alternate
target becomes the target and may be met with respect to the 2011 or 2012
fiscal years.   These
contingent Restricted Shares shall accumulate (if at all) as follows: one-third
(33.33%) of such shares (XX shares) accumulate upon the achievement of each of
the EPS targets set forth below with respect to a fiscal year of the Company up
to and including 2012 (except as noted above for the first target, the first
alternate of which may only be met in 2010):

 

Performance-based Accumulation Requirements

 

	
  EPS Targets*

  ($ per share)

  	
   

  	
  $

  /

  	
   

  	
  $

  	
   

  	
  $

  	
   

  
	
  # Shares Accumulated
  (reduced by any EPS awards accumulated in prior periods and at a lower EPS
  Target level; not in addition to that at a lower EPS Target level **)

  	
   

  	
  33

  	
  %

  	
  34

  	
  %

  	
  33

  	
  %

  

 

*                 Determination of Performance Results. 
EPS shall be calculated and determined by the Company.  The Compensation Committee of the Board of
Directors of the Company, in its sole and exclusive discretion, may, within
ninety (90) days of the beginning of the applicable performance period (in
accordance with Section 162(m) of the Internal Revenue Code of 1986,
as amended) adjust the calculation of EPS for items similar to (but not limited
to):

 

i.      Changes to accounting standards as required by GAAP or
Financial Accounting Standard Board (FASB) after the 

 

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performance goal has been set;

 

ii.     Unbudgeted capital transactions, including the
expenses related to the transaction;

 

iii.    Any profit or loss attributable to the business
operations of any entity acquired by the Company during the year with greater
than 5% impact to EPS that was unbudgeted.

 

Any
and all adjustments made by the Compensation Committee as set forth above shall
be made for each calculation of EPS during the performance period.

 

The Participant expressly agrees that (i) the Company shall, in its
sole and absolute discretion, so calculate and determine EPS and the associated
performance under the targets, and (ii) Company’s determination will be
conclusive, final and binding.

 

**          By way of illustration, if
prior to any EPS targets being met, the EPS for a particular covered year were
the amount set forth in Column 2, then two-thirds (66.67%) of the Restricted
Shares would accumulate (i.e., one-third for achieving the EPS target in Column
1 and an additional one-third for achieving the EPS target in Column 2).

 

(e)   Except as otherwise provided
in Section 2(a), the
Restricted Shares, to the extent accumulated, will vest on April 1, 2013,
provided that the Participant remains employed with the Company at April 1,
2013.  Any shares of Restricted
Stock that did not accumulate on or prior to April 1, 2013 shall be
forfeited and shall revert back to the Company without any payment to you, and
you shall not thereafter have any rights with respect to such shares of
Restricted Stock.

 

3.             Transfer Restrictions.  The Restricted Shares granted hereunder are
not transferable by the Participant and may not be sold, assigned, pledged,
exchanged, hypothecated or otherwise transferred, encumbered or disposed of
(other than by will or the applicable laws of descent and distribution) to the
extent then subject to the Forfeiture Restrictions.  Any such attempted sale, assignment, pledge,
exchange, hypothecation, transfer, encumbrance or disposition in violation of
this Agreement shall be void and the Company shall not be bound thereby.  Further, the Restricted Shares granted hereby
that are no longer subject to Forfeiture Restrictions may not be sold or
otherwise disposed of in any manner that would constitute a violation of any
applicable federal or state securities laws. 
The Participant also agrees (a) that the Company may refuse to
cause the transfer of the Restricted Shares to be registered on the applicable
stock transfer records if such proposed transfer would in the opinion of
counsel satisfactory to the Company constitute a violation of any applicable
securities law and (b) that the Company may give related instructions to
the transfer agent, if any, to stop registration of the transfer of the
Restricted Shares.

 

4.             Taxes.  All distributions under this Award are subject to
withholding of all applicable taxes. 
Subject to the rules as may be established by the Committee, such
withholding obligations may be satisfied through the surrender of Restricted Shares
that the Participant is otherwise entitled to under the Plan.

 

5

 

5.             Binding.  This Award shall be binding upon and inure to the
benefit of any successor to the Company and all persons lawfully claiming under
the Participant.

 

6.             Defined Terms.  Unless otherwise specifically defined herein, each capitalized
term used herein which is defined in the Plan shall have the meaning assigned
such term in the Plan.

 

7.             Amendment;
Modification.  This Award may be amended by agreement of
the Participant and the Company, without the consent of any other person.  The Company shall have the rights of
amendment and modification set forth in the Plan.

 

8.             Governing Law.  This Award shall be governed by, and
construed in accordance with the laws of the State of Texas.

 

9.             Restrictions on Resale.  Other than the restrictions expressly
described herein, there are no additional restrictions imposed by the Plan on
the resale of vested Restricted Shares acquired under the Plan.  However, under the provisions of the
Securities Act of 1933 (the “Securities Act”) and the rules and
regulations of the Securities and Exchange Commission (the “SEC”), resales of
shares acquired under the Plan by certain officers and directors of the Company
who may be deemed to be “affiliates” of the Company must be made pursuant to an
appropriate effective registration statement filed with the SEC, pursuant to
the provisions of Rule 144 issued under the Securities Act, or pursuant to
another exemption from registration provided in the Securities Act.  At the present time, the Company does not
have a currently effective registration statement pursuant to which such
resales may be made by affiliates.  These
restrictions do not apply to persons who are not affiliates of the Company;
provided, however, that all employees are subject to the Company’s policies
against insider trading, and restrictions on resale may be imposed by the
Company from time-to-time as may be necessary under applicable law.

 

10.           Capital Adjustments and
Reorganizations.  The existence of
the Restricted Shares shall not affect in any way the right or power of the
Company or any company the stock of which is awarded pursuant to this Award Agreement
to make or authorize any adjustment, recapitalization, reorganization or other
change in its capital structure or its business, engage in any merger or
consolidation, issue any debt or equity securities, dissolve or liquidate, or
sell, lease, exchange or otherwise dispose of all or any part of its assets or
business, or engage in any other corporate act or proceeding.

 

11.           Section 83(b) Election.  The Participant shall not exercise the
election permitted under section 83(b) of the Code with respect to the
Restricted Shares without the written approval of the Chief Financial Officer
of the Company.

 

12.           Legend.  The Participant consents to the placing on
the certificate for the Restricted Shares of an appropriate legend restricting
resale or other transfer of the Restricted Shares except in accordance with the
Securities Act of 1933 and all applicable rules thereunder.

 

6

 

13.           Effect on Other Benefits.  Income recognized by the Participant as a
result of the grant or vesting of the Restricted Shares or dividends on the
Restricted Shares will not be included in the formula for calculating benefits
under any of the Company’s retirement and disability plans or any other benefit
plans of the Company.

 

14.           Recoupment
of Awards. The Company’s Board of Directors adopted a
recoupment policy on April 30, 2009 (the “Policy”), that may require an officer of the Company to return
incentive compensation if there is a restatement of the financial results and
the Board determines that the restatement was due, in whole or in part, to the
fraudulent or intentional misconduct of such officer.  Participant acknowledges and agrees that, if
Participant is an officer, the Policy applies to this Award Agreement and that
any payments or issuances of Common Stock with respect to the Award Agreement may
be subject to recoupment pursuant to the terms of the Policy. This Award Agreement
shall be deemed to include the restrictions imposed by the Policy.

 

By signing this Award Agreement, the Participant acknowledges
acceptance of the terms and conditions set forth herein and in the Plan.

 

 

PARTICIPANT

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  CORNELL COMPANIES, INC.

  	
   

  

 

 

	
  By:

  	
   

  	
   

  
	
  Name:

  	
  Patrick N.
  Perrin

  	
   

  
	
   

  	
  Title:  Senior Vice President

  	
   

  
	
   

  	
  Chief
  Administrative Officer

  	
   

  
				

 

7Exhibit 10.1

 

SUREWEST COMMUNICATIONS

 

INDEMNIFICATION
AGREEMENT

 

This Indemnification Agreement (this “Agreement”)
is made as of March 24, 2010, by and between SureWest
Communications, a California corporation (the “Company”), and                                         
(“Indemnitee”).

 

RECITALS

 

The Company and Indemnitee recognize the increasing
difficulty in obtaining liability insurance for directors, officers and key
employees, the significant increases in the cost of such insurance and the
general reductions in the coverage of such insurance.  The Company and Indemnitee further recognize
the substantial increase in corporate litigation in general, subjecting
directors, officers and key employees to expensive litigation risks at the same
time as the availability and coverage of liability insurance has been severely
limited.  Indemnitee does not regard the
current protection available as adequate under the present circumstances, and
Indemnitee may not be willing to continue to serve in Indemnitee’s current
capacity with the Company without additional protection.  The Company desires to attract and retain the
services of highly qualified individuals, such as Indemnitee, and to indemnify
its directors, officers and key employees so as to provide them with the
maximum protection permitted by law.

 

AGREEMENT

 

In consideration of the mutual promises made in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company and Indemnitee hereby
agree as follows:

 

1.                                       Indemnification.

 

(a)                                  Third-Party Proceedings.  To the fullest extent permitted by applicable
law, the Company shall indemnify Indemnitee, if Indemnitee was, is or is
threatened to be made, a party to or a participant (as a witness or otherwise)
in any Proceeding (other than a Proceeding by or in the right of the Company to
procure a judgment in the Company’s favor), against all Expenses, judgments,
fines and amounts paid in settlement (if such settlement is approved in advance
by the Company, which approval shall not be unreasonably withheld) actually and
reasonably incurred by Indemnitee in connection with such Proceeding if
Indemnitee acted in good faith and in a manner Indemnitee reasonably believed
to be in the best interests of the Company and, in the case of a criminal
Proceeding, had no reasonable cause to believe Indemnitee’s conduct was
unlawful.

 

(b)                                 Proceedings By or in the Right of the Company.  To the fullest extent permitted
by applicable law, the Company shall indemnify Indemnitee, if Indemnitee was,
is or is threatened to be made a party to or a participant (as a witness or
otherwise) in any Proceeding by or in the right of the Company to procure a
judgment in the Company’s favor, against all Expenses actually and reasonably
incurred by Indemnitee in connection with such Proceeding if Indemnitee acted
in good faith and in a manner Indemnitee reasonably believed to be in the best 

 

 

interests of the Company and
its shareholders, except that no indemnification shall be made in respect of
any claim, issue or matter as to which Indemnitee shall have been finally
adjudicated by court order or judgment to be liable to the Company unless and
only to the extent that the court in which such Proceeding is or was pending
shall determine upon application that, in view of all the circumstances of the
case, Indemnitee is fairly and reasonably entitled to indemnity for such
expenses which such court shall deem proper, and except that no indemnification
shall be made in respect of (i) amounts paid in settling or otherwise
disposing of a pending action without court approval, or (ii) Expenses
incurred in defending a pending action which is settled or otherwise disposed
of without court approval.

 

(c)                                  Success on the Merits.  To the fullest extent permitted by applicable
law and to the extent that Indemnitee has been successful on the merits or
otherwise in defense of any Proceeding referred to in Section 1(a) or
Section 1(b) or the defense of any claim, issue or matter therein, in
whole or in part, the Company shall indemnify Indemnitee against all Expenses
actually and reasonably incurred by Indemnitee in connection therewith.  Without limiting the generality of the
foregoing, if Indemnitee is successful on the merits or otherwise as to one or
more but less than all claims, issues or matters in a Proceeding, the Company
shall indemnify Indemnitee against all Expenses actually and reasonably
incurred by Indemnitee in connection with such successfully resolved claims,
issues or matters to the fullest extent permitted by applicable law.  If any Proceeding is disposed of on the
merits or otherwise (including a disposition without prejudice), without (1) the
disposition being adverse to Indemnitee, (ii) an adjudication that
Indemnitee was liable to the Company, (iii) a plea of guilty by
Indemnitee, (iv) an adjudication that Indemnitee did not act in good faith
and in a manner Indemnitee reasonably believed to be in the best interests of
the Company and its shareholders, and (v) with respect to any criminal
Proceeding, an adjudication that Indemnitee had reasonable cause to believe
Indemnitee’s conduct was unlawful, Indemnitee shall be considered for the
purposes hereof to have been wholly successful with respect thereto.

 

(d)                                 Witness Expenses.  To the fullest extent
permitted by applicable law and to the extent that Indemnitee is a witness or
otherwise asked to participate in any Proceeding to which Indemnitee is not a
party, the Company shall indemnify Indemnitee against all Expenses actually and
reasonably incurred by Indemnitee in connection with such Proceeding.

 

2.                                       Indemnification Procedure.

 

(a)                                  Advancement of Expenses.  To the fullest extent permitted by applicable
law, the Company shall advance all Expenses actually and reasonably incurred by
Indemnitee in connection with a Proceeding within thirty (30) days after
receipt by the Company of a statement requesting such advances from time to
time, whether prior to or after final disposition of any Proceeding.  Such advances shall be unsecured and interest
free and shall be made without regard to Indemnitee’s ability to repay the
Expenses and without regard to Indemnitee’s ultimate entitlement to
indemnification under the other provisions of this Agreement.  Indemnitee shall be entitled to continue to
receive advancement of Expenses pursuant to this Section 2(a) unless
and until the matter of Indemnitee’s entitlement to indemnification hereunder
has been finally adjudicated by court order or judgment from which no further
right of appeal exists.  Indemnitee
hereby undertakes to repay such amounts advanced only if, and to the extent
that, it ultimately is determined that Indemnitee is not entitled to be
indemnified by the Company under the other 

 

2

 

provisions of this
Agreement.  Indemnitee shall qualify for
advances upon the execution and delivery of this Agreement, which shall
constitute the requisite undertaking with respect to repayment of advances made
hereunder and no other form of undertaking shall be required to qualify for
advances made hereunder other than the execution of this Agreement.

 

(b)                                 Notice and Cooperation by Indemnitee.  Indemnitee shall promptly
notify the Company in writing upon being served with any summons, citation,
subpoena, complaint, indictment, information or other document relating to any
Proceeding or matter for which indemnification will or could be sought under
this Agreement.  Such notice to the
Company shall include a description of the nature of, and facts underlying, the
Proceeding, shall be directed to the Chief Executive Officer of the Company and
shall be given in accordance with the provisions of Section 13(d) below.  In addition, Indemnitee shall give the
Company such additional information and cooperation as the Company may
reasonably request.  Indemnitee’s failure
to so notify, provide information and otherwise cooperate with the Company
shall not relieve the Company of any obligation which it may have to Indemnitee
under this Agreement, except to the extent that the Company is adversely
affected by such failure.

 

(c)                                  Determination of Entitlement.  Notwithstanding any other provision in this
Agreement, no determination as to entitlement to indemnification under this
Agreement shall be required to be made prior to the final disposition of the
Proceeding.  Subject to the foregoing,
promptly after receipt of a statement requesting payment with respect to the
indemnification rights set forth in Section 1, to the extent required by
applicable law, the Company shall take the steps necessary to authorize such
payment in the manner set forth in Section 317 of the General Corporation
Law of California.  The Company shall pay
any claims made under this Agreement, under any statute, or under any provision
of the Company’s Articles of Incorporation or Bylaws providing for
indemnification or advancement of Expenses, within thirty(30) days after a
written request for payment thereof has first been received by the Company, and
if such claim is not paid in full within such thirty (30) day-period,
Indemnitee may, but need not, at any time thereafter bring an action against
the Company to recover the unpaid amount of the claim and, subject to Section 12,
Indemnitee shall also be entitled to be paid for all Expenses actually and
reasonably incurred by Indemnitee in connection with bringing such action.  It shall be a defense to any such action
(other than an action brought to enforce a claim for advancement of Expenses
under Section 2(a)) that Indemnitee has not met the standards of conduct
which make it permissible under applicable law for the Company to indemnify
Indemnitee for the amount claimed.  In
making a determination with respect to entitlement to indemnification
hereunder, the person or persons or entity making such determination shall
presume that Indemnitee is entitled to indemnification under this Agreement and
the Company shall have the burden of proof to overcome that presumption with
clear and convincing evidence to the contrary. 
The termination of any Proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a
presumption that Indemnitee did not act in good faith and in a manner which
Indemnitee reasonably believed to be in the best interests of the Company, or,
in the case of a criminal Proceeding, that Indemnitee had reasonable cause to
believe that Indemnitee’s conduct was unlawful. 
In addition, it is the parties’ intention that if the Company contests
Indemnitee’s right to indemnification, the question of Indemnitee’s right to
indemnification shall be for the court to decide, and neither the failure of
the Company (including its Board of Directors, any committee or subgroup of the
Board of Directors, independent legal counsel, or its shareholders) to have
made a determination that indemnification 

 

3

 

of Indemnitee is proper in
the circumstances because Indemnitee has met the applicable standard of conduct
required by applicable law, nor an actual determination by the Company
(including its Board of Directors, any committee or subgroup of the Board of
Directors, independent legal counsel, or its shareholders) that Indemnitee has
not met such applicable standard of conduct, shall create a presumption that
Indemnitee has or has not met the applicable standard of conduct.  If any requested determination with respect
to entitlement to indemnification hereunder has not been made within ninety
(90) days after the final disposition of the Proceeding, the requisite
determination that Indemnitee’s entitlement to indemnification shall be deemed
to have been made.

 

(d)                                 Payment Directions.  To the extent payments are required to be
made hereunder, the Company shall, in accordance with Indemnitee’s request (but
without duplication), (i) 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.

 

(e)                                  Notice to Insurers.  If, at the time of the receipt of a notice of
a claim pursuant to Section 2(b) hereof, the Company has director and
officer liability insurance in effect, the Company shall give prompt notice of
the commencement of such Proceeding to the insurers in accordance with the
procedures set forth in the respective policies.  The Company shall thereafter take all
necessary or desirable action to cause such insurers to pay, on behalf of
Indemnitee, all amounts payable as a result of such Proceeding in accordance
with the terms of such policies.

 

(f)                                    Defense of Claim and Selection of Counsel.  In the event the Company shall
be obligated under Section 2(a) hereof to advance Expenses with
respect to any Proceeding, the Company, if appropriate, shall be entitled to
assume the defense of such Proceeding, with counsel reasonably acceptable to
Indemnitee, upon the delivery to Indemnitee of written notice of its election
so to do.  After delivery of such notice,
approval of such counsel by Indemnitee and the retention of such counsel by the
Company, the Company will not be liable to Indemnitee under this Agreement for
any fees of counsel subsequently incurred by Indemnitee with respect to the
same Proceeding, provided that (i) Indemnitee shall have the right to
employ counsel in any such Proceeding at Indemnitee’s expense; and (ii) if
(A) the employment of counsel by Indemnitee has been previously authorized
by the Company, (B) Indemnitee shall have reasonably concluded that there
may be a conflict of interest between the Company and Indemnitee in the conduct
of any such defense or (C) the Company shall not, in fact, have employed
counsel to assume the defense of such Proceeding, then the fees and expenses of
Indemnitee’s counsel shall be at the expense of the Company.  In addition, if there exists a potential, but
not an actual conflict of interest between the Company and Indemnitee, the
actual and reasonable legal fees and expenses incurred by Indemnitee for
separate counsel retained by Indemnitee to monitor the Proceeding (so that such
counsel may assume Indemnitee’s defense if the conflict of interest between the
Company and Indemnitee becomes an actual conflict of interest) shall be deemed
to be Expenses that are subject to indemnification hereunder.  The existence of an actual or potential
conflict of interest, and whether such conflict may be waived, shall be
determined pursuant to the rules of attorney professional conduct and
applicable law.  The Company shall not be
required to obtain the consent of Indemnitee for the settlement of any
Proceeding the Company has undertaken to defend if the Company assumes full and
sole responsibility for each such settlement; provided, however, that the
Company shall be required to 

 

4

 

obtain Indemnitee’s prior
written approval, which shall not be unreasonably withheld, before entering
into any settlement which (1) does not grant Indemnitee a complete release of
liability, (2) would impose any penalty or limitation on Indemnitee, or (3) would
admit any liability or misconduct by Indemnitee.

 

3.                                       Additional Indemnification Rights.

 

(a)                                  Scope.  Notwithstanding any other provision of this
Agreement, the Company hereby agrees to indemnify Indemnitee to the fullest
extent permitted by law, notwithstanding that such indemnification is not
specifically authorized by the other provisions of this Agreement, the Company’s
Articles of Incorporation, the Company’s Bylaws or by statute.  In the event of any change, after the date of
this Agreement, in any applicable law, statute, or rule which expands the
right of a California corporation to indemnify a member of its board of
directors or an officer, such changes shall be deemed to be within the purview
of Indemnitee’s rights and the Company’s obligations under this Agreement.  In the event of any change in any applicable
law, statute or rule which narrows the right of a California corporation
to indemnify a member of its board of directors or an officer, such changes, to
the extent not otherwise required by such law, statute or rule to be applied
to this Agreement shall have no effect on this Agreement or the parties’ rights
and obligations hereunder.

 

(b)                                 Nonexclusivity.  The indemnification provided by this
Agreement shall not be deemed exclusive of any rights to which Indemnitee may
be entitled under the Company’s Articles of Incorporation, its Bylaws, any
agreement, any vote of shareholders or disinterested members of the Company’s
Board of Directors, the General Corporation Law of California, or otherwise,
both as to action in Indemnitee’s official capacity and as to action in another
capacity while holding such office.

 

(c)                                  Interest on Unpaid Amounts.  If any payment to be made by the Company to
Indemnitee hereunder is delayed by more than ninety (90) days from the date the
duly prepared request for such payment is received by the Company, interest
shall be paid by the Company to Indemnitee at the legal rate under Delaware law
for amounts which the Company indemnifies or is obligated to indemnify for the
period commencing with the date on which Indemnitee actually incurs such
Expense or pays such judgment, fine or amount in settlement and ending with the
date on which such payment is made to Indemnitee by the Company.

 

(d)                                 Third-Party Indemnification.  The Company hereby acknowledges that Indemnitee
has or may from time to time obtain certain rights to indemnification,
advancement of expenses and/or insurance provided by one or more third parties
(collectively, the “Third-Party Indemnitors”).  The Company hereby agrees that it is the
indemnitor of first resort (i.e.,
its obligations to Indemnitee are primary and any obligation of the Third-Party
Indemnitors to advance expenses or to provide indemnification for the same
expenses or liabilities incurred by Indemnitee are secondary), and that the
Company will not assert that the Indemnitee must seek expense advancement or
reimbursement, or indemnification, from any Third-Party Indemnitor before the
Company must perform its expense advancement and reimbursement, and
indemnification obligations, under this Agreement.  No advancement or payment by the Third-Party
Indemnitors on behalf of Indemnitee with respect to any claim for which
Indemnitee has sought indemnification from the Company shall affect the foregoing.  The Third-Party 

 

5

 

Indemnitors shall be
subrogated to the extent of such advancement or payment to all of the rights of
recovery which Indemnitee would have had against the Company if the Third-Party
Indemnitors had not advanced or paid any amount to or on behalf of
Indemnitee.  If for any reason a court of
competent jurisdiction determines that the Third-Party Indemnitors are not
entitled to the subrogation rights described in the preceding sentence, the
Third-Party Indemnitors shall have a right of contribution by the Company to
the Third-Party Indemnitors with respect to any advance or payment by the
Third-Party Indemnitors to or on behalf of the Indemnitee.

 

4.                                       Partial Indemnification.  If Indemnitee is entitled under any provision
of this Agreement to indemnification by the Company for some or a portion of
the Expenses, judgments, fines or amounts paid in settlement, actually and
reasonably incurred in connection with a Proceeding, but not, however, for the
total amount thereof, the Company shall nevertheless indemnify Indemnitee for
the portion of such Expenses, judgments, fines and amounts paid in settlement
to which Indemnitee is entitled.

 

5.                                       Director and Officer Liability Insurance.

 

(a)                                  D&O Policy.  The Company shall, from time to time, make
the good faith determination whether or not it is practicable for the Company
to obtain and maintain a policy or policies of insurance with reputable
insurance companies providing the directors and officers of the Company with
coverage for losses from wrongful acts, or to ensure the Company’s performance
of its indemnification obligations under this Agreement.  Among other considerations, the Company will
weigh the costs of obtaining such insurance coverage against the protection
afforded by such coverage.  In all
policies of director and officer liability insurance, Indemnitee shall be
covered in such a manner as to provide Indemnitee the same rights and benefits
as are accorded to the  Company’s
directors, if Indemnitee is a director; or of the Company’s officers, if
Indemnitee is not a director of the Company but is an officer; or of the
Company’s  employees, if Indemnitee is
not an officer or director but is  an
employee.  Notwithstanding the foregoing,
the Company shall have no obligation to obtain or maintain such insurance if
the Company determines in good faith that such insurance is not reasonably
available, or if Indemnitee is covered by similar insurance maintained by a
parent or subsidiary of the Company.

 

(b)                                 Tail Coverage.  In the event of a Change of Control of the
Company , the Company shall purchase directors’ and officers’ liability runoff
coverage in respect of Indemnitee, for a period of six years, and employment
practices liability and fiduciary liability runoff coverage in respect of
Indemnitee for a period of at least three years after the closing of the Change
of Control transaction.

 

6.                                       Severability.  Nothing in this Agreement is intended to
require or shall be construed as requiring the Company to do or fail to do any
act in violation of applicable law.  The
Company’s inability, pursuant to court order, to perform its obligations under
this Agreement shall not constitute a breach of this Agreement.  If this Agreement or any portion hereof shall
be invalidated on any ground by any court of competent jurisdiction, then the
Company shall nevertheless indemnify Indemnitee to the full extent permitted by
any applicable 

 

6

 

portion of this Agreement
that shall not have been invalidated, and the balance of this Agreement not so
invalidated shall be enforceable in accordance with its terms.

 

7.                                       Exclusions.  Any other provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:

 

(a)                                  Claims Initiated by Indemnitee.  To indemnify or advance Expenses to
Indemnitee with respect to Proceedings initiated or brought voluntarily by
Indemnitee and not by way of defense, except with respect to Proceedings
brought to establish, enforce or interpret a right to indemnification under
this Agreement or any other statute or law or otherwise as required under Section 317
of the General Corporation Law of California, but such indemnification or
advancement of Expenses may be provided by the Company in specific cases if the
Board of Directors finds it to be appropriate; provided, however, that the
exclusion set forth in the first clause of this subsection shall not be deemed
to apply to any investigation initiated or brought by Indemnitee to the extent
reasonably necessary or advisable in support of Indemnitee’s defense of a
Proceeding to which Indemnitee was, is or is threatened to be made, a party;

 

(b)                                 Lack of Good Faith.  To indemnify Indemnitee for any Expenses
incurred by Indemnitee with respect to any Proceeding instituted by Indemnitee
to establish, enforce or interpret a right to indemnification under this
Agreement or any other statute or law or otherwise as required under Section 317
of the General Corporation Law of California, if a court of competent
jurisdiction determines that each of the material assertions made by Indemnitee
in such proceeding was not made in good faith or was frivolous;

 

(c)                                  Insured Claims.  To indemnify Indemnitee for Expenses to the
extent such Expenses have been paid directly to Indemnitee by an insurance
carrier under an insurance policy maintained by the Company; or

 

(d)                                 Certain Exchange Act Claims.  To indemnify Indemnitee in connection with
any claim made against Indemnitee for (i) an accounting of profits made from
the purchase and sale (or sale and purchase) by Indemnitee of securities of the
Company within the meaning of Section 16(b) of the Exchange Act or
any similar successor statute or any similar provisions of state statutory law
or common law, or (ii) any reimbursement of the Company by Indemnitee of
any bonus or other incentive-based or equity-based compensation or of any
profits realized by Indemnitee from the sale of securities of the Company, as
required in each case under the Exchange Act (including any such reimbursements
that arise from an accounting restatement of the Company pursuant to Section 304
of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), or the
payment to the Company of profits arising from the purchase and sale by
Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley
Act); provided, however, that to the fullest extent permitted by applicable law
and to the extent Indemnitee is successful on the merits or otherwise with
respect to any such Proceeding, the Expenses actually and reasonably incurred
by Indemnitee in connection with any such Proceeding shall be deemed to be
Expenses that are subject to indemnification hereunder.

 

7

 

8.                                       Contribution Claims.

 

(a)                                  If the
indemnification provided in Section 1 is unavailable in whole or in part
and may not be paid to Indemnitee for any reason other than those set forth in Section 7,
then in respect to any Proceeding in which the Company is jointly liable with
Indemnitee (or would be if joined in such Proceeding), to the fullest extent
permitted by applicable law, the Company, in lieu of indemnifying Indemnitee,
shall pay, in the first instance, the entire amount incurred by Indemnitee,
whether for Expenses, judgments, fines or amounts paid in settlement, in
connection with any Proceeding without requiring Indemnitee to contribute to
such payment, and the Company hereby waives and relinquishes any right of
contribution it may have at any time against Indemnitee.

 

(b)                                 With respect to
a Proceeding brought against directors, officers, employees or agents of the
Company (other than Indemnitee), to the fullest extent permitted by applicable
law, the Company shall indemnify Indemnitee from any claims for contribution
that may be brought by any such directors, officers, employees or agents of the
Company (other than Indemnitee) who may be jointly liable with Indemnitee, to
the same extent Indemnitee would have been entitled to such indemnification
under this Agreement if such Proceeding had been brought against Indemnitee.

 

9.                                       No Imputation.  The knowledge and/or actions, or failure to
act, of any director, officer, agent or employee of the Company or the Company
itself shall not be imputed to Indemnitee for purposes of determining any
rights under this Agreement.

 

10.                                 Determination of Good Faith.  For purposes of any determination of good
faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s
action is based on the records or books of account of the Enterprise, including
financial statements, or on information supplied to Indemnitee by the officers
of the Enterprise in the course of their duties, or on the advice of legal
counsel for the Enterprise or the Board of Directors of the Enterprise or any
counsel selected by any committee of the Board of Directors of the Enterprise
or on information or records given or reports made to the Enterprise by an
independent certified public accountant or by an appraiser, investment banker,
compensation consultant, or other expert selected with reasonable care by the
Enterprise or the Board of Directors of the Enterprise or any committee
thereof.  The provisions of this Section 10
shall not be deemed to be exclusive or to limit in any way the other
circumstances in which the Indemnitee may be deemed to have met the applicable
standard of conduct.  Whether or not the
foregoing provisions of this Section are satisfied, it shall in any event
be presumed that Indemnitee has at all times acted in good faith and in a
manner Indemnitee reasonably believed to be in the best interests of the
Company and its shareholders.

 

11.                                 Defined Terms and Phrases.  For purposes of this Agreement, the following
terms shall have the following meanings:

 

(a)                                  “Beneficial
Owner” and “Beneficial Ownership” shall have the meanings set forth
in Rule 13d-3 promulgated under the Exchange Act as in effect on the date
hereof.

 

(b)                                 “Change of
Control” shall be deemed to occur upon the earliest of any of the following
events:

 

8

 

(i)                                     Acquisition of
Stock by Third Party.  Any Person
is or becomes the Beneficial Owner, directly or indirectly, of securities of
the Company representing fifteen percent (15%) or more of the combined voting
power of the Company’s then outstanding securities entitled to vote generally
in the election of directors, unless (1) the change in the relative
Beneficial Ownership of the Company’s securities by any Person results solely
from a reduction in the aggregate number of outstanding shares of securities entitled
to vote generally in the election of directors, or (2) such acquisition
was approved in advance by the Continuing Directors and such acquisition would
not constitute a Change of Control under part (iii) of this definition.

 

(ii)                                  Change in Board
of Directors.  Individuals
who, as of the date of this Agreement, constitute the Company’s Board of
Directors (the “Board”), and any new director whose election by the
Board or nomination for election by the Company’s stockholders was approved by
a vote of at least two thirds of the directors then still in office who were
directors on the date of this Agreement (collectively, the “Continuing
Directors”), cease for any reason to constitute at least a majority of the
members of the Board.

 

(iii)                               Corporate
Transaction.  The
effective date of a reorganization, merger, or consolidation of the Company (a “Business
Combination”), in each case, unless, following such Business
Combination:  (1) all or
substantially all of the individuals and entities who were the Beneficial
Owners of securities entitled to vote generally in the election of directors
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 51% of the combined voting power of the then outstanding
securities of the Company entitled to vote generally in the election of
directors resulting from such Business Combination (including a corporation
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) in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the securities entitled to
vote generally in the election of directors and with the power to elect at
least a majority of the Board or other governing body of the surviving entity; (2) no
Person (excluding any corporation resulting from such Business Combination) is
the Beneficial Owner, directly or indirectly, of 15% or more of the combined
voting power of the then outstanding securities entitled to vote generally in
the election of directors of such corporation except to the extent that such
ownership existed prior to the Business Combination; and (3) at least a
majority of the Board of Directors of the corporation resulting from such
Business Combination were Continuing Directors at the time of the execution of
the initial agreement, or of the action of the Board of Directors, providing
for such Business Combination.

 

(iv)                              Liquidation.  The approval by the Company’s stockholders of
a complete liquidation of the Company or an agreement or series of agreements
for the sale or disposition by the Company of all or substantially all of the
Company’s assets, other than factoring the Company’s current receivables or
escrows due (or, if such approval is not required, the decision by the Board to
proceed with such a liquidation, sale or disposition in one transaction or a
series of related transactions).

 

(v)                                 Other Events.  There occurs any other event of a nature that
would be required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A (or a 

 

9

 

response to any similar item
or any similar schedule or form) promulgated under the Exchange Act whether or
not the Company is then subject to such reporting requirement.

 

(c)                                  “Company”
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, and
employees or agents, so that if Indemnitee is or was a director, officer,
employee or agent of such constituent corporation, or is or was serving at the
request of such constituent corporation as a director, officer, trustee,
general partner, managing member, fiduciary, employee or agent of any other
enterprise, Indemnitee shall stand in the same position under the provisions of
this Agreement with respect to the resulting or surviving corporation as
Indemnitee would have with respect to such constituent corporation if its
separate existence had continued.

 

(d)                                 “Enterprise”
means the Company and any other enterprise that Indemnitee was or is serving at
the request of the Company as a director, officer, partner (general, limited or
otherwise), member (managing or otherwise), trustee, fiduciary, employee or
agent.

 

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

 

(f)                                    “Expenses”
shall include all direct and indirect costs, fees and expenses of any type or
nature whatsoever, including all attorneys’ fees and costs, retainers, court
costs, transcript costs, fees of experts, witness fees, travel expenses, fees
of private investigators and professional advisors, duplicating costs, printing
and binding costs, telephone charges, postage, delivery service fees, any
federal, state, local or foreign taxes imposed on Indemnitee as a result of the
actual or deemed receipt of any payment under this Agreement (including taxes
that may be imposed upon the actual or deemed receipt of payments under this
Agreement with respect to the imposition of federal, state, local or foreign
taxes), fax transmission charges, secretarial services and all other
disbursements, obligations or expenses in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, being or preparing
to be a witness in, settlement or appeal of, or otherwise participating in a
Proceeding.  Expenses also shall include
any of the forgoing expenses incurred in connection with any appeal resulting
from any Proceeding, including the principal, premium, security for, and other
costs relating to any costs bond, supersedes bond, or other appeal bond or its
equivalent.  Expenses also shall include
any interest, assessment or other charges imposed thereon and costs incurred in
preparing statements in support of payment requests hereunder.  Expenses, however, shall not include amounts
paid in settlement by Indemnitee or the amount of judgments or fines against
Indemnitee.

 

(g)                                 “Person”
shall have the meaning as set forth in Section 13(d) and 14(d) of
the Exchange Act as in effect on the date hereof; provided, however, that “Person”
shall exclude: (i) the Company; (ii) any direct or indirect majority
owned subsidiaries of the Company; (iii) any employee benefit plan of the
Company or any direct or indirect majority owned subsidiaries of the Company or
of any corporation owned, directly or indirectly, by the Company’s shareholders
in substantially the same proportions as their ownership of stock of the
Company (an “Employee Benefit Plan”); and (iv) any trustee or other
fiduciary holding securities under an Employee Benefit Plan.

 

10

 

(h)                                 “Proceeding”
shall include any actual, threatened, pending or completed action, suit,
arbitration, mediation, alternate dispute resolution mechanism, investigation,
inquiry, administrative hearing or any other actual, threatened or completed
proceeding, whether brought by a third party, a government agency, the Company
or its Board of Directors or a committee thereof, whether in the right of the
Company or otherwise and whether of a civil (including intentional or
unintentional tort claims), criminal, administrative, legislative or
investigative (formal or informal) nature, including any appeal therefrom, in
which Indemnitee was, is, will or might be involved as a party, potential
party, non-party witness or otherwise by reason of the fact that Indemnitee is
or was a director, officer, employee or agent of the Company, by reason of any
action (or failure to act) taken by Indemnitee or of any action (or failure to
act) on Indemnitee’s part while acting as a director, officer, employee or
agent of the Company, or by reason of the fact that Indemnitee is or was
serving at the request of the Company as a director, officer, partner (general,
limited or otherwise), member (managing or otherwise), trustee, fiduciary,
employee or agent of any other enterprise, in each case whether or not serving
in such capacity at the time any liability or expense is incurred for which
indemnification, reimbursement or advancement of expenses can be provided under
this Agreement.

 

(i)                                     In addition,
references to “other enterprise” shall include another corporation,
partnership, limited liability company, joint venture, trust, employee benefit
plan or any other enterprise; references to “fines” shall include any
excise taxes assessed on Indemnitee with respect to an employee benefit plan;
references to “serving at the request of the Company” shall include any
service as a director, officer, employee or agent of the Company which imposes
duties on, or involves services by Indemnitee with respect to an employee
benefit plan, its participants, or beneficiaries; references to “include”
or “including” shall mean include or including, without limitation; and
references to Sections, paragraphs or clauses are to Sections, paragraphs or
clauses in this Agreement unless otherwise specified.

 

12.                                 Attorneys’ Fees.  In the event that any Proceeding is
instituted by Indemnitee under this Agreement to enforce or interpret any of
the terms hereof, the Company shall indemnify Indemnitee against all Expenses
actually and reasonably incurred by Indemnitee in connection with such
Proceeding, unless a court of competent jurisdiction determines that each of
the material assertions made by Indemnitee as a basis for such Proceeding were
not made in good faith or were frivolous. 
In the event of a Proceeding instituted by or in the name of the Company
under this Agreement or to enforce or interpret any of the terms of this
Agreement, the Company shall indemnify Indemnitee against all Expenses actually
and reasonably incurred by Indemnitee in connection with such Proceeding
(including with respect to Indemnitee’s counterclaims and cross-claims made in
such action), unless a court of competent jurisdiction determines that each of
Indemnitee’s material defenses to such action were made in bad faith or were
frivolous.

 

13.                                 Miscellaneous.

 

(a)                                  Governing Law.  This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
California, without giving effect to principles of conflicts of law.

 

11

 

(b)                                 Entire Agreement; Binding Effect.  Without limiting any of the rights of
Indemnitee described in Section 3(b), this Agreement sets forth the entire
agreement and understanding of the parties relating to the subject matter
herein and merges all prior discussions and supersedes any and all previous
agreements between them covering the subject matter herein.  The indemnification provided under this
Agreement applies with respect to events occurring before or after the
effective date of this Agreement, and shall continue to apply even after
Indemnitee has ceased to serve the Company in any and all indemnified
capacities.

 

(c)                                  Amendments and Waivers.  No modification of or amendment to this
Agreement, nor any waiver of any rights under this Agreement, shall be
effective unless in writing signed by the parties to this Agreement.  The failure by either party to enforce any
rights under this Agreement shall not be construed as a waiver of any rights of
such party.

 

(d)                                 Notices.  Any notice, demand or request required or
permitted to be given under this Agreement shall be in writing and shall be
deemed sufficient when delivered personally or sent by fax or 48 hours after
being sent by nationally-recognized courier or deposited in the U.S. mail, as
certified or registered mail, with postage prepaid, and addressed to the party
to be notified at such party’s address or fax number as set forth below or as
subsequently modified by written notice.

 

(e)                                  Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.

 

(f)                                    Successors and Assigns.  This Agreement shall be binding upon the
Company and its successors (including any direct or indirect successor by
purchase, merger, consolidation or otherwise to all or substantially all of the
business and/or assets of the Company) and assigns, and inure to the benefit of
Indemnitee and Indemnitee’s heirs, executors, administrators, legal
representatives and assigns.  The Company
shall require and cause any successor (whether direct or indirect by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company, by written agreement in form and substance
satisfactory to Indemnitee, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform if no such succession had taken place.

 

(g)                                 No Employment Rights.  Nothing contained in this Agreement is
intended to create in Indemnitee any right to continued employment.

 

(h)                                 Company Position.  The Company shall be precluded from
asserting, in any Proceeding brought for purposes of establishing, enforcing or
interpreting any right to indemnification under this Agreement, that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court that the Company is bound by
all the provisions of this Agreement and is precluded from making any assertion
to the contrary.

 

(i)                                     Subrogation.  In the event of payment under this Agreement,
the Company shall be subrogated to the extent of such payment to all of the
rights of recovery of 

 

12

 

Indemnitee, who shall
execute all documents required and shall do all acts that may be necessary to
secure such rights and to enable the Company to effectively bring suit to
enforce such rights.

 

[Signature Page Follows]

 

13

 

The parties have executed this Agreement as of the
date first set forth above.

 

	
   

  	
  THE COMPANY:

  
	
   

  	
   

  
	
   

  	
  SUREWEST
  COMMUNICATIONS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  (Signature)

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
  8150 Industrial Avenue

  
	
   

  	
  Roseville, CA 95678

  
	
   

  	
  Fax: [·]

  
				

 

	
  AGREED
  TO AND ACCEPTED:

  	
   

  
	
   

  	
   

  
	
  INDEMNITEE:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (PRINT NAME)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Signature)

  	
   

  
	
   

  	
   

  
	
  Address:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Fax:

  	
   

  	
   

  	
   

  
				

 

14

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