Document:

exv10w11

 

 

Exhibit 10.11

Summary of 2006 Compensation for Named Executive Officers

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Executive Officer	 	Salary (1)	 	Bonus (2)	 	Stock Options (3)	 	Performance
	 	 	 	 	 	 	 	 	Award (4)
	 	 	($)	 	($)	 	Value at grant ($)	 	Value at grant ($)
	Sidney Taurel
	 	$	1,650,333	 	 	$	2,062,917	 	 	$	3,600,000	 	 	$	3,600,000	 
	Chairman and Chief
Executive Officer
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	John C. Lechleiter, Ph.D.
	 	$	1,112,000	 	 	$	1,112,000	 	 	$	2,340,000	 	 	$	2,340,000	 
	President and Chief
Operating Officer
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Steven M. Paul, M.D.
	 	$	916,167	 	 	$	778,742	 	 	$	1,200,000	 	 	$	1,200,000	 
	Executive Vice
President, Science
and Technology
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Charles E. Golden
	 	$	857,700	 	 	$	729,045	 	 	$	1,100,000	 	 	$	1,100,000	 
	Executive Vice
President and Chief
Financial Officer
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Robert A. Armitage
	 	$	701,657	 	 	$	526,243	 	 	$	900,000	 	 	$	900,000	 
	Senior Vice President
and General Counsel
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

 

	(1)	 	Expected base salary for the full year 2006 assuming individual is employed for the full
year. However, it is noted that Charles E. Golden has announced his intent to retire as of
April 30, 2006, in which event his salary, bonus and performance award would be reduced
accordingly and his 2006 stock option would terminate without vesting.
	 
	(2)	 	Target bonus under the Eli Lilly and Company Bonus Plan for 2006 assuming individual is
employed for the full year. Actual bonuses earned may vary from zero to 200 percent of the
target amount, depending on the company’s 2006 results relative to predetermined corporate
performance measures that are based 25 percent on sales growth and 75 percent on
earnings-per-share growth (adjusted for unusual items in accordance with predetermined
criteria).
	 
	(3)	 	The options will vest three years from the grant date and expire ten years from the grant
date. The exercise price is the market value of Lilly stock on the grant date. The number of shares
granted will be determined as of the grant date based on the values listed
above, the share price on the grant date, and the company’s lattice valuation method for stock
options.
	 
	(4)	 	Target payout under the performance award program for 2006. Actual payouts earned for 2006
may vary from zero to 200 percent of the target amount, depending on the growth in the
company’s 2006 earnings per share (adjusted for unusual items in accordance with predetermined
criteria). The
present values listed above will be converted to shares based on 100 percent of the market value
of Lilly stock on the grant date. The shares will be paid in the form of restricted stock
vesting in 2008.exv10w1

 

Exhibit 10.1

Endocare, Inc.

Description of director compensation, as amended on February 23, 2006

Annual Retainers. Each of our non-employee directors receives an annual retainer of $25,000 for
his service as a director. The lead independent director receives an additional annual retainer of
$15,000, the chairman of the audit committee receives an additional annual retainer of $12,500, the
chairman of the compensation committee receives an additional annual retainer of $7,500, the
chairman of the nominating and corporate governance committee receives an additional annual
retainer of $7,500 and each member of the audit committee receives an additional annual retainer of
$2,500. The additional annual retainers are cumulative for any director who serves in multiple
capacities for which such director is entitled to more than one additional annual retainer (for
example, because the lead independent director also serves as chairman of the nominating and
corporate governance committee and currently is a member of the audit committee, he is entitled to
receive an aggregate annual retainer of $50,000, equal to the base annual retainer of $25,000 plus
an aggregate additional annual retainer of $25,000). All annual retainers are paid quarterly in
arrears.

Meeting Fees. Each non-employee director also receives $1,000 for each in person meeting of our
board of directors or any committee thereof that he attends and an additional payment of $500 for
each telephonic meeting of our board of directors or any committee thereof in which he
participates. The meeting fees apply to meetings of the board, the board’s three standing
committees (i.e., audit committee, compensation committee and nominating and corporate governance
committee) and any special committees established by the board.

Expense Reimbursement. Directors are reimbursed for reasonable expenses incurred in connection
with serving as directors.

2004 Non-Employee Director Option Program. Each non-employee director also participates in our
2004 Non-Employee Director Option Program (the “2004 Director Program”). The 2004 Director Program
was adopted by our Board of Directors in July 2004 as part of our 2004 Stock Incentive Plan, and
became effective upon approval by our stockholders at the Annual Meeting of the Stockholders held
September 10, 2004. The 2004 Director Program is subject to the terms and conditions of the 2004
Stock Incentive Plan. Under the 2004 Director Program, non-employee directors receive a stock
option grant of 20,000 shares on January 10 of each year beginning in 2005. In addition, each
non-employee director first elected or appointed to the Board after stockholder approval of the
2004 Stock Incentive Plan receives a stock option grant of 30,000 shares on the first trading day
after such non-employee director is first elected or appointed to the Board. All of the options
granted to non-employee directors under the 2004 Director Program are granted at an exercise price
equal to the fair market value of the common stock on the date the options are granted. The Board
has the discretion to amend the 2004 Director Program and increase or decrease the number of stock
options granted to non-employee directors on an annual or other basis. A copy of the 2004 Director
Program was filed as Exhibit 10.34 to the annual report on Form 10-K that we filed on March 16,
2005.Exhibit 10.1

 

EXHIBIT 10.1

FORM OF

INDEMNIFICATION AGREEMENT

     This Indemnification Agreement (this “Agreement”) is made as of this ___, 200___,
by and between I-Flow Corporation, a Delaware corporation (the “Company”) and ___
(“Indemnitee”).

     WHEREAS, the Board of Directors has determined that in order to attract and retain qualified
persons as directors and officers of the Company, it is in the best interests of the Company and
its stockholders to assure such persons that there will be adequate certainty of protection through
insurance and indemnification against risks of claims and actions against them arising out of their
service to and activities on behalf of the Company; and

     WHEREAS, the Company has adopted provisions in its bylaws providing for indemnification of its
officers and directors to the fullest extent permitted by applicable law, and the Company wishes to
clarify and detail the rights and obligations of the Company and Indemnitee with respect to
indemnification; and

     WHEREAS, in order to induce and encourage highly experienced and capable persons such as
Indemnitee to serve and continue to serve as directors and officers of the Company and in any other
capacity with respect to the Company, and to otherwise promote the desirable end that such persons
will resist what they consider unjustified lawsuits and claims made against them in connection with
the good faith performance of their duties to the Company, with the knowledge that certain costs,
judgments, penalties, fines, liabilities and expenses incurred by them in their defense of such
litigation are to be borne by the Company and they will receive the maximum protection against such
risks and liabilities as may be afforded by law, the Board of Directors of the Company has
determined that the following Agreement is reasonable and prudent to promote and ensure the best
interests of the Company and its stockholders; and

     WHEREAS, the Company desires to have Indemnitee continue to serve as a director and/or officer
of the Company and in such other capacity with respect to the Company as the Company may request,
as the case may be, free from undue concern for unpredictable, inappropriate or unreasonable legal
risks and personal liabilities by reason of Indemnitee acting in good faith in the performance of
Indemnitee’s duty to the Company; and Indemnitee desires to continue so to serve the Company,
provided, and on the express condition, that he is furnished with the indemnity set forth
hereinafter.

     NOW, THEREFORE, in consideration of Indemnitee’s continued service as a director and/or
officer of the Company, the parties hereto agree as follows:

     1. Service by Indemnitee. Indemnitee will serve and/or continue to serve as a
director or officer of the Company faithfully and to the best of Indemnitee’s ability so long as
Indemnitee is duly elected or appointed and until such time as Indemnitee is removed as permitted
by law or tenders a resignation in writing.

     2. Indemnification. The Company shall indemnify Indemnitee to the fullest extent
permitted by the Delaware General Corporation Law in effect on the date hereof or as such law

 

 

may
be amended from time to time (but, in the case of any such amendment, only to the extent that such
amendment permits the Company to provide broader indemnification rights than said law permitted the
Company to provide prior to such amendment). Without diminishing the scope of the indemnification
provided by this Section 2, the rights of indemnification of Indemnitee provided hereunder shall
include but shall not be limited to those rights hereinafter set forth, except that no
indemnification shall be paid to Indemnitee:

          (a) for which payment is actually made to Indemnitee under a valid and collectible insurance
policy or under a valid and enforceable indemnity clause, bylaw or agreement of the Company or any
other company or organization on whose board Indemnitee serves at the request of the Company,
except in respect of any indemnity exceeding the payment under such insurance, clause, bylaw or
agreement;

          (b) in connection with an action, suit or proceeding, or part thereof (including claims and
counterclaims) initiated or brought voluntarily by Indemnitee and not by way of defense, except a
judicial proceeding or arbitration pursuant to Section 11 to enforce rights under this Agreement,
unless the action, suit or proceeding (or part thereof) was authorized by the Board of Directors of
the Company;

          (c) on account of Indemnitee’s conduct which is finally adjudged to have been knowingly
fraudulent or deliberately dishonest, or to constitute willful misconduct;

          (d) on account of any suit in which judgment is rendered against Indemnitee for an accounting
of profits made for the purchase or sale by Indemnitee of securities of the Company pursuant to
Section 16(b) of the Securities Exchange Act of 1934, as amended, or any similar successor statute;

          (e) with respect to any action, suit or proceeding brought by or on behalf of the Company
against Indemnitee that is authorized by the Board of Directors of the Company, except as provided
in Sections 4, 5 and 6 below; and

          (f) if a final decision by a court having competent jurisdiction in the matter shall determine
that such indemnification is not lawful.

     3. Action or Proceedings Other than an Action by or in the Right of the Company.
Except as limited by Section 2 above, Indemnitee shall be entitled to the indemnification rights
provided in this Section 3 if Indemnitee was or is a party or is threatened to be made a party to
any Proceeding (defined below) (other than an action by or in the right of the Company) (a) by
reason of the fact that Indemnitee is or was a director, officer, employee, agent or fiduciary of
the Company, or is or was serving at the request of the Company as a director, officer, employee,
agent or fiduciary of any other entity (including, but not limited to, another corporation,
partnership, joint venture, trust or employee benefit plan) or (b) by reason of anything done or
not done by Indemnitee in any such capacity. Pursuant to this Section 3, Indemnitee shall be
indemnified against all costs, judgments, penalties, fines, liabilities, amounts paid in settlement
by or on behalf of Indemnitee, and Expenses (defined below) actually and reasonably incurred by
Indemnitee in connection with such Proceeding, if Indemnitee acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the Company, and with respect
to any criminal Proceeding, had no reasonable cause to believe his conduct was unlawful.

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     4. Indemnity in Proceedings by or in the Right of the Company. Except as limited by
Section 2 above, Indemnitee shall be entitled to the indemnification rights provided in this
Section 4 if Indemnitee was or is a party or is threatened to be made a party to any Proceeding
brought by or in the right of the Company to procure a judgment in its favor (a) by reason of the
fact that Indemnitee is or was a director, officer, employee, agent or fiduciary of the Company, or
is or was serving at the request of the Company as a director, officer, employee, agent or
fiduciary of another entity (including, but not limited to, another corporation, partnership, joint
venture, trust or employee benefit plan), or (b) by reason of anything done or not done by
Indemnitee in any such capacity. Pursuant to this Section 4, Indemnitee shall be indemnified
against all costs, judgments, penalties, fines, liabilities, amounts paid in settlement by or on
behalf of Indemnitee, and 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 or not opposed to the best interests of the Company; provided,
however, that no such indemnification shall be made in respect of any claim, issue, or
matter as to which Delaware law expressly prohibits such indemnification by reason of any
adjudication of liability of Indemnitee to the Company, unless and only to the extent that the
Court of Chancery of the State of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but in view of all the
circumstances of the case, Indemnitee is entitled to indemnification for such costs, judgments,
penalties, fines, liabilities and Expenses as such court shall deem proper.

     5. Indemnification for Costs, Charges and Expenses of Successful Party.
Notwithstanding the limitations of Sections 2(e), 3 and 4 above, to the extent that Indemnitee has
been successful, on the merits or otherwise, in whole or in part, in defense of any action, suit or
proceeding (including an action, suit or proceeding brought by or on behalf of the Company) or in
defense of any claim, issue or matter therein, including, without limitation, the dismissal of any
action without prejudice, or if it is ultimately determined that Indemnitee is otherwise entitled
to be indemnified against Expenses, Indemnitee shall be indemnified against all Expenses actually
and reasonably incurred in connection therewith.

     6. Partial Indemnification. If Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion of the costs, judgments,
penalties, fines, liabilities or Expenses actually and reasonably incurred in connection with any
action, suit or proceeding (including an action, suit or proceeding brought by or on behalf of the
Company), but not, however, for all of the total amount thereof, the Company shall nevertheless
indemnify Indemnitee for the portion of such costs, judgments, penalties, fines, liabilities and
Expenses actually and reasonably incurred to which Indemnitee is entitled.

     7. Contribution. If the indemnification provided in Sections 3, 4, 5 and 6 above is
unavailable and may not be paid to Indemnitee for any reason (other than those set forth in Section
2(a)-(f)), then, with respect to any Proceeding in which the Company is jointly liable with
Indemnitee (or would be if joined in such Proceeding), the Company shall contribute to the amount
of Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred and
paid or payable by Indemnitee to the fullest extent allowed by applicable law, in

3

 

such proportion
as is appropriate to reflect (a) the relative benefits received by the Company on the one hand and
by the Indemnitee on the other hand from the transaction from which such Proceeding arose and (b)
the relative fault of the Company on the one hand and the Indemnitee other hand in connection with
the events which resulted in such Expenses, judgments, fines or settlement amounts, as well as any
other relevant equitable considerations. The relative fault of the Company on the one hand and of
the Indemnitee on the other hand shall be determined by reference to, among other matters, the
parties’ relative intent, knowledge, access to information and opportunity to correct or prevent
the circumstances resulting in such Expenses, judgments, fines or settlement amounts. The Company
agrees that it would not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation or any other method of allocation which does not take into
account the foregoing equitable considerations.

     8. Indemnification for Expenses of a Witness. Notwithstanding any other provision of
this Agreement, to the maximum extent permitted by applicable law, Indemnitee shall be entitled to
indemnification against all Expenses actually and reasonably incurred or suffered by Indemnitee or
on Indemnitee’s behalf if Indemnitee appears as a witness or otherwise incurs legal expenses as a
result of or related to Indemnitee’s service as a director, officer, employee, agent or fiduciary
of the Company or, at the request of the Company, of any other entity, in any threatened, pending
or completed legal, administrative, investigative or other proceeding or matter to which Indemnitee
neither is, nor is threatened to be made, a party.

     9. Determination of Entitlement to Indemnification. Upon written request by
Indemnitee for indemnification pursuant to Sections 3, 4, 5, 6 or 8, the entitlement of Indemnitee
to indemnification, to the extent not provided pursuant to the terms of this Agreement, shall be
determined by the following person or persons who shall be empowered to make such determination:
(a) the Board of Directors of the Company by a majority vote of Disinterested Directors (defined
below), whether or not such majority constitutes a quorum; (b) a committee of Disinterested
Directors designated by a majority vote of such directors, whether or not such majority constitutes
a quorum; (c) if there are no Disinterested Directors, or if the Disinterested Directors so direct,
by Independent Counsel (defined below) in a written opinion to the Board of Directors, a copy of
which shall be delivered to Indemnitee; or (d) the stockholders of the Company. Such Independent
Counsel shall be selected by the Board of Directors and approved by Indemnitee. Upon failure of
the Board so to select such Independent Counsel or upon failure of Indemnitee so to approve, such
Independent Counsel shall be selected upon application to a court of competent jurisdiction. Such
determination of entitlement to indemnification shall be made not later than forty-five (45)
calendar days after receipt by the Company of a written request for indemnification. Such request
shall include documentation or information which is reasonably necessary for such determination and
which is reasonably available to Indemnitee. Any Expenses incurred by Indemnitee in connection
with a request for indemnification or payment of Expenses hereunder, under any other agreement, any
provision of the Company’s bylaws or any directors’ and officers’ liability insurance, shall be
borne by the Company. The Company hereby indemnifies Indemnitee for any such Expense and agrees to
hold Indemnitee harmless therefrom irrespective of the outcome of the determination of Indemnitee’s
entitlement to indemnification. If the person making such determination shall determine that
Indemnitee is entitled to indemnification as to part (but not all) of the application for
indemnification, such person shall reasonably prorate such partial indemnification among the
claims, issues or matters at issue at the time of the determination.

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     10. Presumptions and Effect of Certain Proceedings. The General Counsel of the
Company (or if there is no General Counsel, the President of the Company) shall, promptly upon
receipt of Indemnitee’s request for indemnification, advise in writing the Board of Directors or
such other person or persons empowered to make the determination as provided in Section 9 that
Indemnitee has made such request for indemnification. Upon making such request for
indemnification, Indemnitee shall be presumed to be entitled to indemnification hereunder and the
Company shall have the burden of proof in making any determination contrary to such presumption.
If the person or persons so empowered to make such determination shall have failed to make the
requested determination with respect to indemnification within forty-five (45) calendar days after
receipt by the Company of such request, a requisite determination of entitlement to indemnification
shall be deemed to have been made and Indemnitee shall be entitled to such indemnification (a)
absent actual and material fraud in the request for indemnification or (b) a prohibition of such
indemnification under applicable law; provided, however, that such 45-day period
may be extended for a reasonable period of time, not to exceed an additional thirty (30) calendar
days, if the person or persons or entity making the determination with respect to entitlement to
indemnification in good faith requires such additional time for the obtaining or evaluating
documentation and/or information relating thereto. The termination of any Proceeding described in
Sections 3 or 4 by judgment, order, settlement or conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself: (x) create a presumption that Indemnitee did not act in good
faith and in a manner which Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company, or, with respect to any criminal Proceeding, that Indemnitee had
reasonable cause to believe that Indemnitee’s conduct was unlawful; or (y) otherwise adversely
affect the rights of Indemnitee to indemnification except as may be provided herein.

     11. Remedies of Indemnitee in Cases of Determination not to Indemnify or to Pay
Expenses. In the event that a determination is made that Indemnitee is not entitled to
indemnification hereunder or if payment has not been timely made following a determination of
entitlement to indemnification pursuant to Sections 9 and 10, or if Expenses are not paid pursuant
to Section 16 hereof, Indemnitee shall be entitled to final adjudication in a court of competent
jurisdiction of entitlement to such indemnification or payment. Alternatively, Indemnitee at
Indemnitee’s option may seek an award in an arbitration to be conducted by a single arbitrator
pursuant to the rules of the American Arbitration Association, such award to be made within sixty
(60) days following the filing of the demand for arbitration. The Company shall not oppose
Indemnitee’s right to seek any such adjudication or award in arbitration or any other claim. The
determination in any such judicial proceeding or arbitration shall be made de novo and Indemnitee
shall not be prejudiced by reason of a determination (if so made) pursuant to Section 9 or Section
10 that Indemnitee is not entitled to indemnification. If a determination is made or deemed to
have been made pursuant to the terms of Section 9 or Section 10 that Indemnitee is entitled to
indemnification, the Company shall be bound by such determination and is precluded from asserting
that such determination has not been made or that the procedure by which such determination was
made is not valid, binding and enforceable. The Company further agrees to stipulate in any such
court or before any such arbitrator that the Company is bound by all the provisions of this
Agreement and is precluded from making any assertions to the contrary. If the court or arbitrator
shall determine that Indemnitee is entitled to any indemnification or payment of Expenses
hereunder, the Company shall pay all Expenses actually and reasonably incurred by Indemnitee in
connection with such adjudication or award in arbitration (including, but not limited to, any
appellate Proceedings).

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     12. Other Rights to Indemnification. Indemnification and payment of Expenses provided
by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may now or
in the future be entitled under any provision of the bylaws or other organizational documents of
the Company, vote of stockholders or Disinterested Directors, provision of law, agreement or
otherwise.

     13. Expenses to Enforce Agreement. In the event that Indemnitee is subject to or
intervenes in any Proceeding in which the validity or enforceability of this Agreement is at issue
or seeks an adjudication or award in arbitration to enforce Indemnitee’s rights under, or to
recover damages for breach of, this Agreement, Indemnitee, if Indemnitee prevails in whole or in
part in such action, shall be entitled to recover from the Company and shall be indemnified by the
Company against any actual Expenses incurred by Indemnitee in connection with such action.

     14. Continuation of Indemnity. All agreements and obligations of the Company
contained herein shall continue during the period Indemnitee is a director, officer, employee or
agent of the Company or is serving at the request of the Company as a director, officer, employee,
agent or fiduciary of any other entity (including, but not limited to, another corporation,
partnership, joint venture, trust or employee benefit plan) and shall continue thereafter with
respect to any possible claims based on the fact that Indemnitee was a director, officer, employee
or agent of the Company or was serving at the request of the Company as a director, officer,
employee, agent or fiduciary of any other entity (including, but not limited to, another
corporation, partnership, joint venture, trust or employee benefit plan). This Agreement shall be
binding upon all successors and assigns of the Company (including any transferee of all or
substantially all of its assets and any successor by merger or operation of law) and shall inure to
the benefit of the heirs, personal representatives and estate of Indemnitee.

     15. Notification and Defense of Claim. Promptly after receipt by Indemnitee of notice
of any Proceeding, Indemnitee will, if a claim in respect thereof is to be made against the Company
under this Agreement, notify the Company in writing of the commencement thereof; but the omission
so to notify the Company will not relieve the Company from any liability that the Company may have
to Indemnitee. Notwithstanding any other provision of this Agreement, with respect to any such
Proceeding of which Indemnitee notifies the Company:

          (a) The Company shall be entitled to participate therein at its own expense; and

          (b) Except as otherwise provided in this Section 15(b), to the extent that it may wish, the
Company, jointly with any other indemnifying party similarly notified, shall be entitled to assume
the defense thereof, with counsel satisfactory to Indemnitee. After notice from the Company to
Indemnitee of its election so to assume the defense thereof, the Company shall not be liable to
Indemnitee under this Agreement for any expenses of counsel subsequently incurred by Indemnitee in
connection with the defense thereof except as otherwise provided below. Indemnitee shall have the
right to employ Indemnitee’s own counsel in such Proceeding,

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but the fees and expenses of such
counsel incurred after notice from the Company of its assumption of the defense thereof shall be at
the expense of Indemnitee unless (i) the employment of counsel by Indemnitee has been authorized by
the Company, (ii) Indemnitee shall have reasonably concluded that there may be a conflict of
interest between the Company and Indemnitee in the conduct of the defense of such action or (iii)
the Company has not, within sixty (60) calendar days of receipt of notice from Indemnitee, employed
counsel to assume the defense of the action, in each of which cases the fees and expenses of
Indemnitee’s counsel shall be at the expense of the Company. The Company shall not be entitled to
assume the defense of any Proceeding brought by or on behalf of the Company or as to which
Indemnitee shall have made the conclusion provided for in (ii) above; and

          (c) If the Company has assumed the defense of a Proceeding, the Company shall not be liable to
indemnify Indemnitee under this Agreement for any amounts paid in settlement of any Proceeding
effected without the Company’s written consent. The Company shall not settle any Proceeding in any
manner that would impose any penalty or limitation on or disclosure obligation with respect to
Indemnitee without Indemnitee’s written consent. Neither the Company nor Indemnitee will
unreasonably withhold consent to any proposed settlement.

     16. Advancement of Expenses. All Expenses incurred by Indemnitee in advance of the
final disposition of any Proceeding shall be paid by the Company at the request of Indemnitee, each
such payment to be made within thirty (30) calendar days after the receipt by the Company of a
statement or statements from Indemnitee requesting such payment or payments from time to time.
Indemnitee’s entitlement to such Expenses shall include those incurred in connection with any
Proceeding by Indemnitee seeking a judgment in court or an adjudication or award in arbitration
pursuant to this Agreement (including the enforcement of this provision). Such statement or
statements shall (a) reasonably evidence the Expenses incurred by Indemnitee in connection
therewith, (b) include or be accompanied by such documentation and information as is reasonably
requested by the Company to determine the nature of the Proceeding and whether Indemnitee is
entitled to the advancement of Expenses, and (c) if requested by the Company because the
undertaking in the next sentence is not deemed sufficient for any reason, include or be accompanied
by a written undertaking, by or on behalf of Indemnitee to reimburse such amounts advanced if it is
finally determined, after all appeals by a court of competent jurisdiction, that Indemnitee is not
entitled to be indemnified against such Expenses by the Company as provided by this Agreement or
otherwise. In this regard, Indemnitee hereby expressly undertakes to repay any Expenses advanced
to Indemnitee if it shall ultimately be determined that Indemnitee is not entitled to be
indemnified against such Expenses. Any advances or undertakings to repay pursuant to this Section
16 shall be unsecured.

     17. Separability; Prior Indemnification Agreements. If any provision or provisions of
this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever (a)
the validity, legality and enforceability of the remaining provisions of this Agreement (including
without limitation, all portions of any paragraphs of this Agreement containing any such provision
held to be invalid, illegal or unenforceable, that are not by themselves invalid, illegal or
unenforceable) shall not in any way be affected or impaired thereby and (b) to the fullest extent
possible, the provisions of this Agreement (including, without limitation, all portions of any
paragraph of this Agreement containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or unenforceable) shall be

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construed so as
to give effect to the intent of the parties that the Company provide protection to Indemnitee to
the fullest enforceable extent. This Agreement shall supersede and replace any prior
indemnification agreements entered into by and between the Company and Indemnitee and any such
prior agreements shall be terminated upon execution of this Agreement.

     18. Headings; References; Pronouns. The headings of the sections of this Agreement
are inserted for convenience only and shall not be deemed to constitute part of this Agreement or
to affect the construction thereof. References herein to section numbers are to sections of this
Agreement. All pronouns and any variations thereof shall be deemed to refer to the masculine,
feminine, neuter, singular or plural as appropriate.

     19. Definitions. For purposes of this Agreement:

          (a) “Disinterested Director” means a director of the Company who is not or was not a
party to the Proceeding in respect of which indemnification is being sought by Indemnitee.

          (b) “Expenses” shall include, without limitation, all attorneys’ fees, witness fees,
fees of advisors and experts, retainers, court costs, transcript costs, travel expenses,
duplicating, printing and binding costs, postage, delivery service fees and all other disbursements
or expenses of the types customarily and reasonably incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in,
or otherwise participating in, a Proceeding and any expenses of establishing a right to
indemnification under Sections 9, 10, 11 and 13 above, but shall not include the amount of
judgments, fines or penalties actually levied against Indemnitee.

          (c) “Independent Counsel” means a law firm or a member of a law firm that neither is
currently nor in the past five years has been retained to represent: (i) the Company or Indemnitee
in any matter material to either such party (other than with respect to matters concerning
Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements);
or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who,
under the applicable standards of professional conduct then prevailing, would have a conflict of
interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s
right to indemnification under this Agreement.

          (d) “Proceeding” includes any threatened, pending or completed investigation, action,
suit, arbitration, alternate dispute resolution mechanism, inquiry, administrative hearing or any
other actual, threatened or completed proceeding, whether brought by or in the right of the Company
or otherwise, against Indemnitee, for which indemnification is not prohibited under Sections
2(a)-(f) above and whether of a civil, criminal, administrative or investigative nature, including,
but not limited to, actions, suits or proceedings in which Indemnitee may be or may have been
involved as a party or otherwise, by reason of the fact that Indemnitee is or was a director,
officer, employee or agent of the Company, or is or was serving, at the request of the Company, as
a director, officer, employee or agent or fiduciary of any other entity, including, but not limited
to, another corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, or by reason of anything done or not done by Indemnitee in any such capacity, whether
or not Indemnitee is serving in such capacity at the time any liability or expense is incurred for
which indemnification or reimbursement can be provided under this Agreement.

8

 

     20. Other Provisions.

          (a) This Agreement shall be interpreted and enforced in accordance with the internal laws of
Delaware.

          (b) This Agreement may be executed in one or more counterparts, each of which shall for all
purposes be deemed to be an original but all of which together shall constitute one and the same
Agreement. Signatures transmitted electronically or via facsimile shall be deemed to be originals
for all purposes. All notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given (i) if delivered by hand and receipted for by
the party to whom said notice or other communication shall have been directed or (ii) mailed by
certified or registered mail to the address below with postage prepaid, on the third business day
after the date postmarked. Addresses to either party are as provided below, or as subsequently
modified by written notice to the other party.

	 	 	 	 	 	 	 
	 

	 	If to Indemnitee, to:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	If to the Company, to:	 	 	 	 
	 

	 	 	 	I-Flow Corporation	 	 
	 

	 	 	 	20202 Windrow Drive	 	 
	 

	 	 	 	Lake Forest, CA 92630	 	 
	 

	 	 	 	Attn: Chief Executive Officer	 	 

          (c) This Agreement shall not be deemed an employment contract between the Company and any
indemnitee who is an officer of the Company, and, if Indemnitee is an officer of the Company,
Indemnitee specifically acknowledges that Indemnitee may be discharged at any time for any reason,
with or without cause, and with or without severance compensation, except as may be otherwise
provided in a separate written contract between Indemnitee and the Company.

          (d) Upon a payment to Indemnitee under this Agreement, the Company shall be subrogated to the
extent of such payment to all of the rights of Indemnitee to recover against any person for such
liability, and Indemnitee shall execute all documents and instruments required and shall take such
other actions as may be necessary to secure such rights, including the execution of such documents
as may be necessary for the Company to bring suit to enforce such rights.

          (e) No supplement, modification or amendment of this Agreement shall be binding unless
executed in writing by both parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not
similar) nor shall such waiver constitute a continuing waiver.

9

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the day and
year first above written.

	 	 	 	 	 	 	 
	 	 	I-FLOW CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	INDEMNITEE	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 
	 	 	Name:	 	 

10

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