Item 20. Indemnification of Directors and Officers
Subsection (a) of Section 145 of the General Corporation Law of the State of Delaware ("DGCL"), empowers a
corporation to indemnify any person who was or is a party or who is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation,
or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in
good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable
cause to believe the person's conduct was unlawful.
Subsection (b)
of Section 145 empowers a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the
person reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification shall be made in respect of any claim, issue or matter as to which such
person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery 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, such person is fairly and reasonably entitled to indemnity for such expenses which the Court
of Chancery or such other court shall deem proper.
Section 145
further provides that to the extent a director or officer of a corporation has been successful on the merits or otherwise in the defense of any action, suit or
proceeding referred to in subsections (a) and (b) of Section 145, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by such person in connection therewith; that indemnification provided for by Section 145 shall not be deemed exclusive of any other rights to
which the indemnified party may be entitled; and the indemnification provided for by Section 145 shall, unless otherwise provided when authorized or ratified, continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to the benefit of such person's heirs, executors and administrators. Section 145 also empowers the corporation to purchase
and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or
arising out of his status as such, whether or not the corporation would have the power to indemnify such person against such liabilities under Section 145.
Section 102(b)(7)
of the DGCL provides that a corporation's certificate of incorporation may contain a provision eliminating or limiting the personal liability of a director to
the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided that such provision shall not eliminate or limit the liability of a director
(i) for any breach of the director's duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which
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involve
intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL or (iv) for any transaction from which the director derived an improper personal
benefit.
OvaScience's
restated certificate of incorporation provides that OvaScience shall indemnify and advance expenses to each person who was or is a party or threatened to be made a party to
any threatened, pending or completed action, suit or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that he or she is or was, or has agreed to become, a
director or officer of OvaScience, or is or was serving, or has agreed to serve, at the request of OvaScience, as a director, officer, partner, employee or trustee of, or in a similar capacity with,
another corporation, partnership, joint venture, trust or other enterprise, or by reason of any action alleged to have been taken or omitted in such capacity, against all expenses (including
attorneys' fees), liabilities, losses, judgments, fines, and amounts paid in settlement actually and reasonably incurred in connection with such action, suit or proceeding and any appeal therefrom.
OvaScience
has indemnification agreements with its directors, in addition to the indemnification provided for in its restated certificate of incorporation, and intends to enter into
indemnification agreements with any new directors in the future.
OvaScience
has purchased and intends to maintain insurance on behalf of any person who is or was a director or officer of OvaScience against any loss arising from any claim asserted
against him or her and incurred by him or her in any such capacity, subject to certain exclusions.
Pursuant
to the terms of the Merger Agreement and subject to applicable law, from the Effective Time through the sixth anniversary of the date on which the Effective Time occurs,
OvaScience shall indemnify and hold harmless each person who is now, or has been at any time prior to the date thereof, or who becomes prior to the Effective Time, a director or officer of OvaScience
or Millendo, respectively, against all Costs incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of
or pertaining to the fact that such person is or was a director or officer of OvaScience or Millendo, whether asserted or claimed prior to, at or after the Effective Time, in each case, to the fullest
extent permitted under the DGCL for directors or officers of Delaware corporations, provided that such officer or director acted in good faith and in a manner such party reasonable believed to be in
or not opposed to the best interest of OvaScience or the Surviving Corporation, as applicable, and, with respect to any criminal proceeding, such officer or director had no reasonable cause to believe
such conducted was unlawful; provided, further, that, if applicable law so provides, no indemnification against such Costs shall be made in respect of any claim, issue or matter in such proceeding as
to which the director or officer shall have been adjudged to be liable to OvaScience or the Surviving Corporation unless and to the extent that the Court of Chancery of the State of Delaware shall
determine that such indemnification may be made. Subject to applicable law, each such director and officer will be entitled to advancement of expenses incurred in the defense of any such claim,
action, suit, proceeding or investigation from each of OvaScience and the Surviving Corporation, jointly and severally, upon receipt by OvaScience or the Surviving Corporation from such director or
officer of a request therefor; provided that any such person to whom expenses are advanced provides an undertaking to OvaScience or the Surviving Corporation, as applicable, to the extent then
required by the DGCL, to repay such advances if it is ultimately determined that such person is not entitled to indemnification. Such statement or statements shall reasonably evidence the expenses
incurred by the directors and officers.
Further,
pursuant to the Merger Agreement, the provisions of the OvaScience restated certificate of incorporation and the OvaScience by-laws with respect to indemnification, advancement
of expenses
and exculpation of present and former directors and officers of OvaScience shall not be amended, modified or repealed for a period of six years from the Effective Time in a manner that would adversely
affect the rights thereunder of individuals who, at or prior to the Effective Time, were officers or directors of OvaScience, unless such modification is required by applicable law.
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From
and after the Effective Time, (i) the Surviving Corporation shall fulfill and honor in all respects the obligations of Millendo to each person who is or has served as a
director or officer of Millendo as of immediately prior to the Closing pursuant to any indemnification provisions under the Millendo certificate of incorporation or Millendo bylaws and pursuant to any
indemnification agreements between Millendo and such directors and officers, with respect to claims arising out of matters occurring at or prior to the Effective Time and (ii) OvaScience shall
fulfill and honor in all respects the obligations of OvaScience to each person who is or has served as a director or officer of OvaScience as of immediately prior to the Closing pursuant to any
indemnification provisions under the OvaScience Charter or OvaScience Bylaws and pursuant to any indemnification agreements between OvaScience and such directors and officers that were in effect prior
to the date of the Merger Agreement, with respect to claims arising out of matters occurring at or prior to the Effective Time.
The
Merger Agreement also provides that OvaScience shall maintain directors' and officers' liability insurance policies commencing at the closing time of the Merger, on commercially
available terms and conditions with coverage limits customary for U.S. public companies similar situated to OvaScience. In addition, OvaScience shall purchase, prior to the Effective Time, a six-year
prepaid "D&O tail policy" for the non-cancellable extension of the directors' and officers' liability coverage of OvaScience's existing directors' and officers' insurance policies and OvaScience's
existing fiduciary liability insurance policies, in each case, for a claims reporting or discovery period of at least six years from and after the Effective Time.
From
and after the Effective Time, OvaScience shall pay all expenses, including reasonable attorneys' fees, that are incurred by indemnified persons in connection with their successful
enforcement of the rights provided to such persons in the Merger Agreement. The director and officer indemnification provisions of the Merger Agreement are intended to be in addition to the rights
otherwise available to the current and former officers and directors of OvaScience and Millendo by law, charter, statute, bylaw or agreement, and shall operate for the benefit of, and shall be
enforceable by, each of such indemnified persons, their heirs and their representatives.
In
the event OvaScience or the Surviving Corporation or any of their respective successors or assigns (i) consolidates with or merges into any other person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger, or (ii) transfers all or substantially all of its properties and assets to any person, then, and in each such
case, proper provision shall be made so that the successors and assigns of OvaScience or the Surviving Corporation, as the case may be, shall
succeed to the indemnification obligations set forth in the Merger Agreement. OvaScience shall cause the Surviving Corporation to perform all of the director and officer indemnification obligations of
the Surviving Corporation under the Merger Agreement.