Exhibit 10.14
FORM OF
INDEMNIFICATION AGREEMENT
THIS AGREEMENT is made on the ___ day of _____________, 2006.
BETWEEN:
RAM Holdings Ltd., a limited liability company incorporated under the laws of
Bermuda with its registered office located at Xxxxxxxxx Xxxxx, 0 Xxxxxx Xxxxxx,
Xxxxxxxx 00, Xxxxxxx (the "Company"); and
__________ of __________ ("Indemnitee").
WHEREAS Indemnitee is a director and/or officer of the Company;
WHEREAS highly skilled and competent persons are becoming 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; and
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:
"Agreement" means this Indemnification Agreement;
"Board" means the board of directors of the Company;
"Business Day" means any day on which banks in Bermuda and New York
City are open for business;
"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;
"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, Holdings II and each subsidiary of
the Company (wherever incorporated or organized);
"Holdings II" means RAM Holdings II Ltd., a limited liability
company incorporated under the laws of Bermuda and
its successors and assigns;
"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;
provided that 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;
"Parties" means the parties to this Agreement collectively, and
"Party" means any one of them; and
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"Proceeding" means any action, suit, arbitration, alternate
dispute resolution mechanism, investigation,
administrative hearing or any other proceeding
whether civil, 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. SERVICE
Indemnitee agrees to continue to serve as a director/officer of the Company
at the will of the Company so long as Indemnitee is duly elected and
qualified to so serve in accordance with applicable provisions of the
Company's Memorandum of Association and Bye-laws or until such earlier time
as Indemnitiee tenders his or her resignation in writing. This Agreement
does not create or otherwise establish any right on the part of Indemnitee
to be and continue to be elected or appointed a director/officer of the
Company or any other Group Company and does not create an employment
contract between the Company and Indemnitee.
3. INDEMNITY OF DIRECTORS AND OFFICERS
3.1 Subject to clause 10, the Company shall indemnify Indemnitee to the fullest
extent permitted by applicable law 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 against expenses (including reasonable attorneys' fees and
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disbursements), judgments, penalties, fines and amounts paid in settlement
(collectively "Liabilities and Expenses") actually and reasonably incurred
by Indemnitee in connection with any such Proceeding (including, but not
limited to, the investigation, defense, settlement or appeal thereof).
3.2 Notwithstanding any other provision of this Agreement other than clause 10,
Indemnitee shall be indemnified against all Liabilities and Expenses
actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in
defending any Proceedings referred to in sub-clause 3.1 in which judgment
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, for the avoidance of doubt, the Company shall
indemnify Indemnitee for such portion of the Liabilities and Expenses that
Indemnitee becomes legally obligated to pay in connection with any
Proceeding referred to in sub-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 Indemnitee has reason to believe 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, 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, or otherwise a participant, 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 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.
5.2 Upon written request by Indemnitee for indemnification pursuant to
sub-clause 5.1, a determination shall be made by the following person or
persons:
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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; provided that such Independent Counsel shall
be selected by the Indemnitee and approved by the Board; or
5.2.3 upon failure of the Board to so select such Independent Counsel or
failure of Indemnitee to so approve such Independent Counsel as set
forth in sub-clause 5.2.2 above, then by a majority vote of the
shareholders.
5.3 In any event where the determination of whether Indemnitee is entitled to
indemnification is not made pursuant to sub-clause 5.2, then such
determination shall be made by a single arbitrator pursuant to the rules of
Judicial Arbitration and Mediation, Inc. ("JAMS"). 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, and such
period shall not be extended without Indemnitee's consent, which may be
withheld by Indemnitee at Indemnitee's sole discretion by reason of the
initiation or pendency of any procedure provided for in sub-clause 5.2.
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 expenses incurred by Indemnitee (including reasonable 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
otherwise. Subject to clause 10, the Company shall have the burden of proof
in any
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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) if applicable, 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 JAMS, such award to be made within sixty days
following the filing of the demand for arbitration and the Company shall
not oppose Indemnitee's right to seek any such adjudication or award in
arbitration or any other claim; provided, however, if JAMS shall have made
a final determination with respect to Indemnitee's entitlement to
indemnification pursuant to sub-clause 5.3, Indemnitee shall not be
entitled to any right to appeal such determination through JAMS or any
other arbitration or mediation service.
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 any
determination, if applicable, otherwise made hereunder (if so made) that
Indemnitee is not entitled to indemnification. Subject to clause 10, if a
determination is required under applicable law and 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 expenses
(including reasonable 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 and shall be in
addition to 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 (other than the Bye-laws of the Company) that has been entered
into by the Company with Indemnitee which has as its principal purpose the
indemnification of Indemnitee (for the avoidance of doubt it is intended by
the parties
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that the Indemnitee shall enjoy by this Agreement the greater benefit
afforded by either of this agreement or the bye-laws) and (b) where the
Company may indemnify Indemnitee pursuant to either this Agreement or the
bye-laws of the Company, the Company may indemnify Indemnitee under either
this Agreement or the bye-laws but 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
require the Company to indemnify Indemnitee against, or exempt Indemnitee
from, any liability to the extent such liability results from Indemnitee's
fraud or dishonesty in relation to the Company.
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 (including coverage after Indemnitee is no longer serving in a
Corporate Status for acts and omissions occurring while Indemnitee was
serving in a Corporate Status).
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 Indemnitee may have ceased to
occupy such positions(s).
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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, 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
(unless the Company fails to provide Indemnitee reasonable assurance
of the Company's financial capacity to defend such proceeding and
provide indemnification with respect to such proceeding), the Company
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 and after
such approval of counsel by Indemnitee, 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 and Indemnitee's
reasonable costs as a participant in the Company's defense of such
claim 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 and after approval of counsel by
Indemnitee as set forth above 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 Indemnitee based on advice of counsel to
Indemnitee there is an actual or potential 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 Indemnitee shall settle any claim which may be
subject to indemnification hereunder 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 registered
mail, facsimile or by delivering the
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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
registered mail as provided in this clause shall be deemed to have been
served three Business Days after dispatch and any notice sent by facsimile
as provided in this clause shall be deemed to have been served at the time
of dispatch 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 mail for collection; and in the case of a
facsimile that such facsimile was duly dispatched to a current facsimile
number of the addressee.
To the Company:
RAM Holdings Ltd.
RAM Re House
46 Xxxx Street
Xxxxxxxx XX 12
Bermuda
Attn: General Counsel and Secretary
Fax: 000-000-0000
Indemnitee:
Name: __________________________
Address: _______________________
Fax: ___________________________
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 by a
court of competent jurisdiction or by a duly appointed arbitrator 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.
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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 arrangement (other than the Bye-laws of the Company)
that has been entered into by the Company in favor of the Indemnitee that
has as its principal purpose the indemnification of the Indemnitee by the
Company.
15.5 No provision in this Agreement may be amended unless such amendment is
agreed to in writing, signed by Indemnitee and by a duly authorized officer
of the Company. No waiver by either Party of any breach by the other Party
of any condition or provision of 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 Indemnitee or a duly authorized 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.
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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.
In witness whereof the common )
seal of the COMPANY was ) ----------------------------------------
affixed hereto in the presence of ) Name:
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Title:
---------------------------------
SIGNED by )
INDEMNITEE ) ----------------------------------------
in the presence of: ) Name:
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Witness:
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Name:
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