EXHIBIT 10.3
INDEMNIFICATION AGREEMENT
THIS AGREEMENT is made on the 29th day of September, 2005
BETWEEN:
XXXXXXXXXXX INTERNATIONAL LTD., a company incorporated under the laws of Bermuda
with its registered office located at Xxxxxxxxx Xxxxx, 0 Xxxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxx (xxx "Company"); and
Xxxxxx X. Xxxxxx (the "Indemnitee").
WHEREAS the Indemnitee is an officer of the Company;
WHEREAS highly skilled and competent persons are becoming more reluctant to
serve public companies as directors or officers unless they are provided with
adequate protection through insurance and indemnification against inordinate
risks of claims and actions against them arising out of their service to and
activities on behalf of such companies;
WHEREAS uncertainties relating to indemnification increase the difficulty of
attracting and retaining such persons;
WHEREAS the Board has determined that an inability to attract and retain such
persons is detrimental to the best interests of the Company and that the Company
should act to assure such persons that there will be increased certainty of such
protection in the future;
WHEREAS, it is reasonable, prudent and necessary for the Company contractually
to obligate itself to indemnify Indemnitee to the fullest extent permitted by
Bermuda law so that Indemnitee will serve or continue to serve the Company free
from undue concern that Indemnitee will not be so indemnified;
WHEREAS, Indemnitee is willing to serve, continue to serve and to take on
additional service for or on behalf of the Company on the condition that
Indemnitee be so indemnified;
NOW, THEREFORE, in consideration of the premises and the covenants contained
herein, the Company and Indemnitee do hereby covenant and agree as follows:
1. INTERPRETATION
1.1 In this Agreement unless the context otherwise requires, the following
words and expressions shall have the following meanings:
this "Agreement" means this Indemnification Agreement;
the "Board" means the board of directors of the Company;
"Business Day" means any day on which banks in Bermuda are
open for business;
the "Companies Act" means the Companies Xxx 0000;
"Corporate Status" means the status of a person who is or was
a director, officer, employee, agent, or
fiduciary of the Company or any other
Group Company, or is or was serving at the
request of the Company as a director,
officer, employee, agent or fiduciary of any
other company, corporation, partnership,
limited liability company, joint venture,
trust, employee benefit plan or other entity
or enterprise;
"the Court" means the Supreme Court of Bermuda;
"Disinterested Director" means a director of the Company who is not
or was not a party to a Proceeding in
respect of which indemnification is sought
by Indemnitee;
"Group Companies" means the Company and each subsidiary of the
Company (wherever incorporated or
organized);
"Independent Counsel" means a law firm or a member of a law firm
that neither is presently nor in the past
five years has been retained to represent:
(i) the Company or Indemnitee in any matter
material to either such party, 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;
the "Parties" means the parties to this Agreement
collectively, and "Party" means any one of
them; and
"Proceeding" means any action, suit, arbitration,
alternate dispute resolution mechanism,
investigation, administrative hearing or any
other proceeding whether civil,
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criminal, administrative or investigative
and whether formal or informal;
1.2 In this Agreement unless the context otherwise requires:
1.2.1 references to statutory provisions shall be construed as
references to those provisions as amended or re-enacted or as
their application is modified by other provisions from time to
time and shall include references to any provisions of which
they are re-enactments (whether with or without modification);
1.2.2 references to clauses and schedules are references to clauses
hereof and schedules hereto; references to sub-clauses or
paragraphs are, unless otherwise stated, references to
sub-clauses of the clause or paragraphs of the schedule in
which the reference appears;
1.2.3 references to the singular shall include the plural and vice
versa and references to the masculine shall include the
feminine and/or neuter and vice versa; and
1.2.4 references to persons shall include companies, partnerships,
associations and bodies of persons, whether incorporated or
unincorporated.
2. AGREEMENT TO SERVE
Indemnitee agrees to continue to serve as an officer of the Company.
This Agreement does not create or otherwise establish any right on the
part of Indemnitee to be and continue to be elected or appointed an
officer of the Company or any other Group Company and does not create
an employment contract between the Company and Indemnitee.
3. INDEMNITY OF DIRECTOR/OFFICER
3.1 Subject to clause 10, the Company shall indemnify Indemnitee if
Indemnitee is a party or is threatened to be made a party to any
threatened, pending or completed Proceeding, including a Proceeding
brought by or in the right of the Company, 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 company,
corporation, partnership, limited liability company, joint venture,
trust, employee benefit plan or other entity or enterprise or by reason
of anything done or not done by Indemnitee in any such capacity.
Subject to clause 10, pursuant to this sub-clause 3.1 Indemnitee shall
be indemnified against expenses (including attorneys' fees and
disbursements), judgments, penalties, fines and amounts paid in
settlement actually and reasonably incurred by Indemnitee in connection
with such Proceeding (including, but not limited to, the investigation,
defense, settlement or appeal thereof).
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3.2 Notwithstanding any other provision of this Agreement other than clause
10, Indemnitee shall be indemnified against all expenses (including
attorneys' fees and disbursements) actually and reasonably incurred by
Indemnitee or on Indemnitee's behalf in defending any Proceedings
referred to in clause 3.1 in which judgement is given in his favour, in
which he is acquitted, or in respect of which relief is granted to him
by the Court under section 281 of the Companies Act.
3.3 Subject to clause 10, the Company shall indemnify Indemnitee for such
portion of the expenses (including attorneys' fees), witness fees,
damages, judgments, fines and amounts paid in settlement and any other
amounts that Indemnitee becomes legally obligated to pay in connection
with any Proceeding referred to in clause 3.1 in respect of which
Indemnitee is entitled to indemnification hereunder, even if Indemnitee
is not entitled to indemnification hereunder for the total amount
thereof.
3.4 Without limiting the scope of the indemnity provided under any other
provision of this Agreement, if the Indemnitee has reason to apprehend
that any claim will or might be made against him in respect of any
negligence, default, breach of duty or breach of trust, he may apply to
the Court for relief pursuant to section 281 of the Companies Act and,
to the extent that the Court relieves him, either wholly or partly,
from his liability in accordance with section 281 of the Companies Act,
the Indemnitee shall be indemnified against any liability incurred by
him in defending any Proceedings in accordance with paragraph 98(2)(b)
of the Companies Act.
4. INDEMNIFICATION FOR EXPENSES OF A WITNESS
Subject to clause 10, to the extent that Indemnitee is, by reason of
Indemnitee's Corporate Status, a witness in any proceeding, Indemnitee
shall be indemnified by the Company against all expenses actually and
reasonably incurred by Indemnitee or on Indemnitee's behalf in
connection therewith.
5. DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION
5.1 The Indemnitee shall request indemnification pursuant to this Agreement
by notice in writing to the secretary of the Company. The secretary
shall, promptly upon receipt of Indemnitee's request for
indemnification, advise in writing the Board or such other person or
persons empowered to make the determination as provided in sub-clause
5.2 that Indemnitee has made such request for indemnification. Subject
to clause 10, 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 the making of any
determination contrary to such presumption.
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5.2 Upon written request by Indemnitee for indemnification pursuant to
sub-clause 3.1, the entitlement of the Indemnitee to indemnification
pursuant to the terms of this Agreement shall be determined by the
following person or persons who shall be empowered to make such
determination:
5.2.1 the Board, by a majority vote of the Disinterested Directors;
or
5.2.2 if such vote is not obtainable or, even if obtainable, if such
Disinterested Directors so direct by majority vote, by
Independent Counsel in a written opinion to the Board, a copy
of which shall be delivered to Indemnitee; or
5.2.3 by a majority vote of the shareholders.
5.3 For purposes of sub-clause 5.2, Independent Counsel shall be selected
by the Board and approved by Indemnitee. Upon failure of the Board to
so select such Independent Counsel or upon failure of Indemnitee to so
approve, such Independent Counsel shall be selected by a single
arbitrator pursuant to the rules of the American Arbitration
Association. Such determination of entitlement to indemnification shall
be made not later than 60 days after receipt by the Company of a
written request for indemnification. Such request shall include
documentation or information which is necessary for such determination
and which is reasonably available to Indemnitee. Subject to clause 10,
any expenses (including attorneys' fees) incurred by Indemnitee in
connection with Indemnitee's request for indemnification hereunder
shall be borne by the Company irrespective of the outcome of the
determination of Indemnitee's entitlement to indemnification. If the
person or persons making such determination shall determine that
Indemnitee is entitled to indemnification as to part (but not all) of
the application for indemnification, such persons may reasonably
prorate such partial indemnification among such claims, issues or
matters in respect of which indemnification is requested.
6. ADVANCEMENT OF EXPENSES
All reasonable expenses incurred by Indemnitee (including attorneys'
fees, retainers and advances of disbursements required of Indemnitee)
shall be paid by the Company in advance of the final disposition of any
Proceeding at the request of Indemnitee as promptly as possible, and in
any event within twenty days after the receipt by the Company of a
statement or statements from Indemnitee requesting such advance or
advances from time to time. Indemnitee's entitlement to such expenses
shall include those incurred in connection with any Proceeding by
Indemnitee seeking an adjudication or award in arbitration pursuant to
this Agreement. Such statement or statements shall reasonably evidence
the expenses incurred by Indemnitee in connection therewith and shall
include or be accompanied by an undertaking by or on behalf of
Indemnitee to repay such amount if it is ultimately determined that
Indemnitee is not entitled to be indemnified against such expenses by
the Company as provided by this Agreement or
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otherwise. Subject to clause 10, the Company shall have the burden of
proof in any determination under this clause 6. No amounts advanced
hereunder shall be deemed an extension of credit by the Company to
Indemnitee.
7. REMEDIES OF INDEMNITEE IN CASES OF DETERMINATION NOT TO INDEMNIFY OR TO
ADVANCE EXPENSES
7.1 In the event that: (a) a determination is made that Indemnitee is not
entitled to indemnification hereunder; (b) payment has not been timely
made following a determination of entitlement to indemnification
pursuant to clause 5; or (c) expenses are not advanced pursuant to
clause 6, Indemnitee shall be entitled to apply to the Court or any
other court of competent jurisdiction for a determination of
Indemnitee's entitlement to such indemnification or advance.
7.2 Alternatively to sub-clause 7.1, Indemnitee, at Indemnitee's option,
may seek an award in arbitration to be conducted by a single arbitrator
pursuant to the rules of the American Arbitration Association, such
award to be made within sixty 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.
7.3 A judicial proceeding or arbitration pursuant to this clause 7 shall be
made de novo and Indemnitee shall not be prejudiced by reason of a
determination otherwise made hereunder (if so made) that Indemnitee is
not entitled to indemnification. Subject to clause 10, if a
determination is made pursuant to the terms of clause 5 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. If the court or arbitrator
shall determine that Indemnitee is entitled to any indemnification
hereunder, the Company shall pay all reasonable expenses (including
attorneys' fees and disbursements) actually incurred by Indemnitee in
connection with such adjudication or award in arbitration (including,
but not limited to, any appellate proceedings).
8. OTHER RIGHTS TO INDEMNIFICATION
The indemnification and advancement of expenses (including attorneys'
fees) provided by this Agreement shall not be deemed exclusive of any
other right to which Indemnitee may now or in the future be entitled
under any provision of the Company's bye-laws, any agreement, vote of
shareholders, the Board or Disinterested Directors, provision of law,
or otherwise; provided, however, that: (a) this Agreement supersedes
any other agreement that has been entered into by the Company with the
Indemnitee which has as its principal purpose the indemnification of
Indemnitee (except that this Agreement shall not supersede that certain
Indemnification Agreement entered into on or about the date hereof
between Indemnitee and Xxxxxxxxxxx International, Inc., a subsidiary of
the Company, it being the intention of the Parties that Indemnitee
shall be entitled to the
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indemnification provided under either or both agreements to the fullest
extent permitted by law); and (b) where the Company may indemnify the
Indemnitee pursuant to either this Agreement or the bye-laws of the
Company, the Company may indemnify the Indemnitee under either this
Agreement or the bye-laws but the Indemnitee shall, in no case, be
indemnified by the Company in respect of any expense, liability or cost
of any type for which payment is or has been actually made to
Indemnitee under any insurance policy, indemnity clause, bye-law or
agreement, except in respect of any excess beyond such payment.
9. ATTORNEYS' FEES AND OTHER 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 for attorneys'
fees and disbursements reasonably incurred by Indemnitee, provided that
in bringing such action, Indemnitee acted in good faith.
10. LIMITATION OF INDEMNIFICATION
Notwithstanding any other terms of this Agreement, nothing herein shall
indemnify the Indemnitee against, or exempt the Indemnitee from, any
liability in respect of the Indemnitee's fraud or dishonesty.
11. LIABILITY INSURANCE
To the extent the Company maintains an insurance policy or policies
providing directors' and officers' liability insurance, Indemnitee
shall be covered by such policy or policies, in accordance with its or
their terms, to the maximum extent of the coverage available for any
Company director or officer.
12. DURATION OF AGREEMENT
This Agreement shall apply with respect to Indemnitee's occupation of
any of the position(s) described in sub-clause 3.1 of this Agreement
prior to the date of this Agreement and with respect to all periods of
such service after the date of this Agreement, even though the
Indemnitee may have ceased to occupy such positions(s).
13. NOTICE OF PROCEEDINGS BY INDEMNITEE
13.1 Indemnitee agrees promptly to notify the Company in writing upon being
served with any summons, citation, subpoena, complaint, indictment,
information or other document relating to any Proceeding which may be
subject to indemnification hereunder, provided,
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however, that the failure to so notify the Company will not relieve the
Company from any liability it may have to Indemnitee except to the
extent that such failure materially prejudices the Company's ability to
defend such claim. With respect to any such Proceeding as to which
Indemnitee notifies the Company of the commencement thereof:
13.1.1 the Company will be entitled to participate therein at its own
expense; and
13.1.2 except as otherwise provided below, to the extent that it may
wish, the Company jointly with any other indemnifying party
similarly notified will be entitled to assume the defense
thereof, with counsel reasonably satisfactory to Indemnitee.
After notice from the Company to Indemnitee of its election so
to assume the defense thereof, the Company will not be liable
to Indemnitee under this Agreement for any legal or other
expenses subsequently incurred by Indemnitee in connection
with the defense thereof other than reasonable costs of
investigation or as otherwise provided below. Indemnitee shall
have the right to employ Indemnitee's own counsel in such
Proceeding, 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 and not subject
to indemnification hereunder unless (a) the employment of
counsel by Indemnitee has been authorized by the Company; (b)
in the reasonable opinion of counsel to Indemnitee there is or
may be a conflict of interest between the Company and
Indemnitee in the conduct of the defense of such Proceeding;
or (c) the Company shall not in fact have employed counsel to
assume the defense of such action, in each of which cases,
subject to clause 10, the fees and expenses of counsel shall
be at the expense of the Company.
13.2 Neither the Company nor the Indemnitee shall settle any claim without
the prior written consent of the other (which shall not be unreasonably
withheld).
14. NOTICES
Any notice required to be given hereunder shall be in writing in the
English language and shall be served by sending the same by prepaid
recorded post, facsimile or by delivering the same by hand to the
address of the Party or Parties in question as set out below (or such
other address as such Party or Parties shall notify the other Parties
of in accordance with this clause). Any notice sent by post as provided
in this clause shall be deemed to have been served five Business Days
after despatch and any notice sent by facsimile as provided in this
clause shall be deemed to have been served at the time of despatch and
in proving the service of the same it will be sufficient to prove in
the case of a letter that such letter was properly stamped, addressed
and placed in the post; and in the case of a facsimile that such
facsimile was duly despatched to a current facsimile number of the
addressee.
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Company -
Xxxxxxxxxxx International Ltd.
000 Xxxx Xxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Attn: Secretary
Fax: 000-000-0000
Indemnitee -
Name: Xxxxxx X. Xxxxxx
Address: 000 Xxxx Xxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Fax: (000) 000-0000
15. MISCELLANEOUS
15.1 Notwithstanding the expiration or termination of this Agreement
howsoever arising, such expiration or termination shall not operate to
affect such of the provisions hereof as are expressed or intended to
remain in full force and effect.
15.2 If any of the clauses, conditions, covenants or restrictions of this
Agreement or any deed or document emanating from it shall be found to
be void but would be valid if some part thereof were deleted or
modified, then such clause, condition, covenant or restriction shall
apply with such deletion or modification as may be necessary to make it
valid and effective so as to give effect as nearly as possible to the
intent manifested by such clause, condition, covenant or restriction.
15.3 This Agreement shall be binding upon the Company and its successors and
assigns (including any transferee of all or substantially all of its
assets and any successor or resulting company by merger, amalgamation
or operation of law) and shall inure to the benefit of Indemnitee and
Indemnitee's spouse, assigns, heirs, estate, devises, executors,
administrators or other legal representatives.
15.4. This Agreement (together with any documents referred to herein)
constitutes the whole agreement between the Parties relating to its
subject matter and supersedes any prior indemnification arrangement
between the Company (or its predecessor) and Indemnitee (except as
specifically set forth in clause 8).
15.5 No provision in this Agreement may be amended unless such amendment is
agreed to in writing, signed by the Indemnitee and by a duly authorised
officer of the Company. No waiver by either Party of any breach by the
other Party of any condition or provision of
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this Agreement to be performed by such other Party shall be deemed a
waiver of a similar or dissimilar condition or provision at the same or
any prior or subsequent time. Any waiver must be in writing and signed
by the Indemnitee or a duly authorised officer of the Company, as the
case may be.
15.6 The headings in this Agreement are inserted for convenience only and
shall not affect the construction of this Agreement.
15.7 This Agreement may be executed in counterparts each of which when
executed and delivered shall constitute an original but all such
counterparts together shall constitute one and the same instrument.
15.8 The terms and conditions of this Agreement and the rights of the
parties hereunder shall be governed by and construed in all respects in
accordance with the laws of the Islands of Bermuda. The parties to this
Agreement hereby irrevocably agree that the courts of Bermuda shall
have non-exclusive jurisdiction in respect of any dispute, suit,
action, arbitration or proceedings ("Agreement Proceedings") which may
arise out of or in connection with this Agreement and waive any
objection to Agreement Proceedings in the courts of Bermuda on the
grounds of venue or on the basis that the Agreement Proceedings have
been brought in an inconvenient forum.
15.9 All payments made by the Company to Indemnitee hereunder shall be
deemed to have been made in the ordinary course of business of the
Company, and shall not be deemed to be extraordinary payments.
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IN WITNESS WHEREOF, the undersigned, intending to be bound hereby, have duly
executed this Agreement as of the date first written above.
SIGNED by and on behalf of ) /s/ Xxxx X. Xxxxxx
THE COMPANY ) ----------------------------
in the presence of: ) Name: Xxxx X. Xxxxxx
Title: Sr. VP and General Counsel
Witness: /s/ Xxxxxxxx Xxxxxx
----------------------
Name: Xxxxxxxx Xxxxxx
----------------------
SIGNED by ) /s/ Xxxxxx X. Xxxxxx
THE INDEMNITEE ) -----------------------------
in the presence of: ) Name: Xxxxxx X. Xxxxxx
Witness: /s/ Xxxxxx X. Xxxxx
----------------------
Name: Xxxxxx X. Xxxxx
----------------------
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