INDEMNIFICATION AGREEMENT
This Indemnification Agreement (this "Agreement"), dated as of April 29,
1999 by and among NYMAGIC, Inc., a New York corporation with an address at 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Company"), and each of the
persons identified on Schedule 1 to this Agreement (each an "Indemnitee" and
collectively the "Indemnitees").
Recitals
A. The New York Business Corporation Law, as amended (as so amended from
time to time, the "BCL"), permits the Company to indemnify the directors and
officers of the Company.
B. The By-laws of the Company (the "By-laws") provide that the Company will
indemnify to the fullest extent then permissible under the BCL each person who
shall serve at any time as a director or officer of the Company.
C. The Indemnitees serve or have served as directors of the Company or as
directors and officers of the Company and in such capacity or capacities perform
or have performed a valuable service for the Company.
D. The Board of Directors of the Company has approved and adopted corporate
resolutions pursuant to Section 721 of the BCL (the "Corporate Resolutions")
providing that the Company will indemnify the Indemnitees as set forth in this
Agreement.
E. The Company has entered into this Agreement and has assumed the
obligations imposed on the Company hereby in order to more specifically provide
for the indemnification contemplated by the By-laws and the Corporate
Resolutions to each of the Indemnitees for his service as a director or
executive officer of the Company and/or to induce each of the Indemnitees to
serve or to continue to serve as a director of the Company or as a director and
officer of the Company.
Accordingly, the Company and each Indemnitee agrees as follows:
1. Authorization for Indemnification of Indemnitees.
(a) General. The Company shall indemnify each Indemnitee whenever he is
made, or threatened to be made, a party to an action, suit or proceeding,
including, without limitation, one by or in the right of the Company or by or in
the right of any other corporation of any type or kind, domestic or foreign, or
any partnership, joint venture, trust, employee benefit plan or other
enterprise, which such Indemnitee served in any capacity at the request of the
Company, to procure a judgment in its favor, whether civil, criminal,
administrative or investigative, by reason of the fact that he, his testator or
intestate, was a director or officer of the Company, or served such other
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise in any
capacity, against judgments, fines, amounts paid in settlement and reasonable
expenses, including attorneys' fees, actually and necessarily incurred as a
result of such action, suit or proceeding, or any appeal therein, provided the
Indemnitee acted, in good faith, for a purpose which he reasonably believed to
be in, or, in the case of service for any other corporation or any partnership,
joint venture, trust, employee benefit plan or other enterprise, not opposed to,
the best interests of the Company and, in criminal actions and proceedings, in
addition, had no reasonable cause to believe that his conduct was unlawful.
Nothing contained in this Agreement shall affect any rights to indemnification
which any Indemnitee may otherwise be entitled to by law or otherwise.
(b) No Presumption. The termination of any such civil, criminal,
administrative or investigative action, suit or proceeding by judgment,
settlement, conviction or upon a plea of nolo contendere, or its equivalent,
shall not in itself create a presumption that any Indemnitee did not act, in
good faith, for a purpose which he reasonably believed to be in, or, in the case
of service for any other corporation or any partnership, joint venture, trust,
employee benefit plan or other enterprise, not opposed to, the best interests of
the Company and, in criminal actions and proceedings, in addition, had no
reasonable cause to believe that his conduct was unlawful.
(c) Benefit Plan Matters. For purposes of this Agreement, the Company shall
be deemed to have requested an Indemnitee to serve an employee benefit plan
where the performance by such Indemnitee of his duties to the Company also
imposes duties on, or otherwise involves services by, the Indemnitee to the plan
or participants or beneficiaries of the plan. Excise taxes assessed on an
Indemnitee with respect to an employee benefit plan pursuant to applicable law
shall be considered fines for purposes of this Agreement. Action taken or
omitted by an Indemnitee with respect to an employee benefit plan in the
performance of such Indemnitee's duties for a purpose reasonably believed by the
Indemnitee to be in the interests of such participants and beneficiaries of the
plan shall be deemed to be for a purpose which is not opposed to the best
interests of the Company.
(d) Entitlement to Indemnification. An Indemnitee who has been successful,
on the merits or otherwise, in the defense of a civil, criminal, administrative
or investigative action, suit or proceeding for which indemnification is sought
under this Agreement shall be entitled to indemnification as herein provided. An
Indemnitee who has not been successful, on the merits or otherwise, in the
defense of such a civil, criminal, administrative or investigative action, suit
or proceeding shall nevertheless be entitled to indemnification hereunder, and
such indemnification is hereby authorized, unless a judgment or other final
adjudication adverse to such Indemnitee establishes that his acts were committed
in bad faith or were the result of active and deliberate dishonesty and were
material to the cause of action so adjudicated or that he personally gained in
fact a financial profit or other advantage to which he was not legally entitled.
(e) Advancement of Expenses. Expenses (including, without limitation,
attorneys' fees and expenses actually and necessarily incurred in defending an
actual or threatened action, suit or proceeding shall be paid by the Company in
advance of the final disposition of such action, suit or proceeding as herein
provided.
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2. Additional Indemnification. It is the intention of the Company that the
Indemnitees be indemnified hereunder to the greatest extent permitted or
authorized under applicable law. If and to the extent that (a) the BCL is
amended hereafter to require or permit indemnification, expense advancement or
exculpation that is or may be more favorable to the Indemnitees than the maximum
permissible indemnification, expense advancement and exculpation now permitted
thereunder and provided in this Agreement, or (b) the Company reincorporates in
or merges, consolidates or combines into or with any other corporation or entity
by virtue of which transaction the Company is not the surviving, resulting or
acquiring corporation and the surviving, resulting or acquiring corporation is
incorporated in a different jurisdiction which at such time requires or permits
indemnification, expense advancement or exculpation that is or may be more
favorable to the Indemnitees than the maximum permissible indemnification,
expense advancement and exculpation now permitted under the BCL and provided in
this Agreement, then pursuant to this Agreement the Indemnitees shall be
entitled to, and this Agreement shall be deemed to be amended to provide for the
Indemnitees' contractual entitlement to, indemnification, expense advancement
and exculpation to the maximum extent that may be permitted or required under
such applicable law at the time of any initial or subsequent request for
indemnity hereunder, whether or not the Company has adopted any Charter or
By-law provisions adopting, effecting or implementing any provisions thereof
which are permissive and not mandatory in nature. Nothing contained herein shall
be deemed to detract from, diminish, impair, limit or adversely affect any right
which the Indemnitees may have under this Agreement, and to the extent that any
terms, conditions or provisions of this Agreement (including, without
limitation, those in Section 1 hereof) are more favorable to the Indemnitees
than the maximum indemnification, expense advancement and exculpation then
permitted or required under such applicable law, then such terms, conditions and
provisions of this Agreement shall be preserved and integrated with such more
favorable terms from then-applicable law and shall continue to apply to the
Indemnitees' rights by virtue of this Agreement. The same expansion of the
Indemnitees' rights and deemed inclusion herein and integration herewith of any
terms, conditions or provisions more favorable to the Indemnitees shall occur
upon and with respect to any amendment of the provisions relating to
indemnification, expense advancement and exculpation in the Company's
Certificate of Incorporation (the "Charter") or By-laws and any provision by the
Company to any other officer or director of the Company of any other different
form of indemnification contract or agreement.
3. Establishment of Escrow; Procedures.
(a) Establishment of Segregated Escrow Account. In order to provide for the
prompt payment of expenses and indemnifiable amounts payable by the Company
under this Agreement, the Company shall establish and maintain for a period of
not less than three years from the date hereof, a segregated escrow account (the
"Escrow Account") in The Bank of New York (the "Escrow Agent") in the initial
amount of $750,000 (such amount, together with interest thereon, the "Escrow
Funds"). The fees and expenses of the Escrow Agent shall be borne by the
Company. The Escrow Funds shall be used for no purpose other than advancement of
expenses and payment of indemnifiable amounts hereunder and any amount required
to be repaid by the Indemnitees as herein
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provided shall be considered Escrow Funds to the extent originally paid out of
the Escrow Account and shall be promptly redeposited in the Escrow Account. The
obligation of the Company to establish the Escrow Account and to make payments
of Escrow Funds as herein provided shall be in addition to and not in limitation
of any other obligation of or on behalf of the Company or any third party with
respect to the payment of indemnifiable amounts, including without limitation,
payment of claims under any policy of insurance maintained by the Company for
the benefit of its directors and officers, and the indemnification obligation of
the Company shall not be limited to the amount of the Escrow Funds.
(b) Indemnification Procedures. For purposes of requesting indemnification
under Section 1(d) hereof, an Indemnitee shall submit to the Escrow Agent, with
a copy to the Company, a sworn statement of claim for indemnification
substantially in the form of Exhibit A hereto (the "Indemnification Statement")
to the effect that he is entitled to indemnification hereunder. The Escrow Agent
(or, in the event that all of the Escrow Funds have been previously paid out,
the Company) shall pay all amounts due to such Indemnitee promptly following the
submission of an Indemnification Statement unless, in the case of an Indemnitee
who has not been successful, on the merits or otherwise, in the defense of the
action, suit or proceeding underlying the Indemnification Statement, a judgment
or other final adjudication adverse to such Indemnitee establishes that he is
not entitled to be indemnified by the Company under this Agreement or otherwise.
(c) Expense Advancement Procedures. For purposes of requesting the
advancement of expenses pursuant to Section 1(e) hereof, an Indemnitee shall be
required to submit to the Escrow Agent, with a copy to the Company, a sworn
statement of request for advancement of expenses substantially in the form of
Exhibit B hereto (the "Undertaking"), to the effect that (i) he has actually and
necessarily incurred expenses (including, without limitation, attorneys' fees)
in defending an action or threatened action, suit or proceeding to which he is a
party or is threatened to be made a party by reason of the fact that he was or
is a director or officer of the Company and (ii) he undertakes to repay such
amount if it shall be determined ultimately that he is not entitled to be
indemnified. The Escrow Agent (or, in the event that all of the Escrow Funds
have been previously paid out, the Company) shall promptly pay the expenses
described in the Undertaking. No security shall be required in connection with
any Undertaking, and any Undertaking shall be accepted without reference to such
Indemnitee's ability to make repayment.
(d) Selection of Counsel. In the event the Company shall be obligated under
this Section 4 to pay any amount in respect of any action, suit or proceeding
against any Indemnitee, the Company shall be entitled to assume the defense of
such proceeding, with counsel reasonably acceptable to and approved by such
Indemnitee, upon the delivery to the Indemnitee of written notice of the
Company's election to do so. It is understood and agreed that counsel selected
by the Company's insurer shall be acceptable to the Indemnitees. After delivery
of such notice, approval of such counsel by the Indemnitees and the retention of
such counsel by the Company, the Company will not be liable to the Indemnitees
under this Agreement for any fees of separate counsel subsequently incurred by
the Indemnitees with respect to the same action, suit or proceeding;
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provided, however, that if (i) the employment of counsel by any Indemnitee has
been previously authorized by the Company, (ii) counsel for any Indemnitee or
Indemnitees with the same interests shall have reasonably concluded, and advised
the Company in writing of such counsel's conclusion, that there may be a
conflict of interest between the Company and such Indemnitee or Indemnitees in
the conduct of any such defense, or (iii) the Company shall not, in fact, have
employed counsel to assume the defense of such proceeding, then such Indemnitee
or Indemnitees may select and employ their own counsel to direct the defense
thereof and the fees and expenses of such counsel shall be paid by the Company;
provided, however, that Company shall be liable to the Indemnitees under this
Agreement for the fees of only one separate counsel incurred by Indemnitees with
the same interests with respect to such action, suit or proceeding.
Notwithstanding any assumption of the defense of any such action, suit or
proceeding and employment of counsel with respect thereto by the Company in
accordance with the foregoing, the Indemnitees shall have the right to employ
their own separate counsel to participate in any such action, suit or proceeding
at the Indemnitees' expense. The Company shall not settle any action, suit or
proceeding without the prior written consent of any Indemnitee unless, as part
of such settlement, such Indemnitee receives a full and unconditional release
reasonably satisfactory to the Indemnitee. No Indemnitee shall settle any
action, suit or proceeding without the prior written consent of the Company
unless, as part of such settlement, the Company receives a full and
unconditional release reasonably satisfactory to the Company.
4. Corporate Approval. The Company represents and warrants to the
Indemnitees that: (i) the Company has all requisite power and authority to enter
into this Agreement and to perform its obligations hereunder; (ii) this
Agreement and the performance of all of the Company's obligations hereunder have
been approved by all corporate action required on the part of the Company under
the Charter, the By-laws or applicable law or contract; and (iii) this
Agreement, when executed, will constitute the valid and legally binding
obligation of the Company, enforceable against the Company in accordance with
its terms, subject to any applicable bankruptcy law and equitable limitations.
5. Fees and Expenses of Enforcement. It is the intent of the Company that
the Indemnitees not be required to incur the expenses associated with the
enforcement of their rights under this Agreement by litigation or other legal
action because the cost and expense thereof would substantially detract from the
benefits intended to be extended to the Indemnitees hereunder. Accordingly, if
it should reasonably appear to the Indemnitees that the Company has failed to
comply with any of its obligations under this Agreement or in the event that the
Company or any other person takes any action to declare this Agreement void or
unenforceable, or institutes any action, suit or proceeding designed (or having
the effect of being designed) to deny, or to recover from, the Indemnitees the
benefits intended to be provided to the Indemnitees hereunder, the Company
irrevocably authorizes the Indemnitees from time to time to retain counsel of
his choice, at the expense of the Company, to represent the Indemnitees in
connection with the initiation or defense of any litigation or other legal
action, whether by or against the Company or any director, officer, stockholder
or other person affiliated with the Company, in any jurisdiction. Regardless of
the outcome thereof, the Company shall pay and be solely responsible for any and
all expenses,
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including, without limitation, attorney's fees and expenses, actually and
reasonably incurred by the Indemnitees (i) as a result of the Company's failure
to perform this Agreement or any provision hereof or (ii) as a result of the
Company or any person contesting the validity or enforceability of this
Agreement or any provision hereof as aforesaid.
6. Reorganizations. In the event that the Company shall be a constituent
corporation (including any constituent of a constituent) in a merger,
reorganization, consolidation, combination or similar transaction, the Company,
if it shall not be the surviving, resulting or acquiring corporation therein,
shall require as a condition thereto the surviving, resulting or acquiring
corporation to expressly assume and adopt this Agreement and to agree to
indemnify the Indemnitees to the full extent provided in this Agreement.
7. Nonexclusivity, Survival and Subrogation.
(a) Nonexclusivity. The right to indemnification provided by this Agreement
shall not be exclusive of any other rights to which the Indemnitees may be
entitled under the Charter, the By-laws, the BCL, any other statute, insurance
policy, agreement, vote of shareholders or of directors or otherwise.
(b) Survival. The provisions of this Agreement shall survive the death,
disability, or incapacity of any of the Indemnitees or the termination of any
Indemnitee's service as an director or officer of the Company and shall inure to
the benefit of, and be enforceable by, heirs, executors, guardians,
administrators or assigns of each Indemnitee.
(c) Subrogation. In the event of any payment by the Company under this
Agreement, the Company shall be subrogated to the extent thereof to all rights
of recovery previously vested in the Indemnitees, who shall cooperate with the
Company, at the Company's expense, in executing all such instruments and taking
all such other actions as shall be reasonably necessary for the Company to
enforce such right or as the Company may reasonably request.
8. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to the
principles of conflict of laws thereof.
9. Miscellaneous.
(a) This Agreement contains the entire agreement of the parties relating to
the subject matter hereof.
(b) Any provision of this Agreement may be amended or waived only if such
amendment or waiver is in writing and signed, in the case of an amendment, by
the parties hereto or, in the case of a waiver, by the party against whom the
waiver is to be effective. No failure or delay by any party in exercising any
right, power or privilege hereunder shall operate as a waiver
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hereof nor shall any single or partial exercise thereof preclude any other or
future exercise thereof or the exercise of any other right, power or privilege.
(c) If any provision of this Agreement or the application of any provision
hereof to any person or circumstance is held invalid, unenforceable or otherwise
illegal, the remainder of this Agreement and the application of such provision
to other persons or circumstances shall not be affected, and the provision so
held to be invalid, unenforceable or otherwise illegal shall be reformed to the
extent (and only to the extent) necessary to make it enforceable, valid and
legal.
(d) Nothing contained in this Agreement is intended to create in the
Indemnitees any separate or independent right to continued employment by, or
service with, the Company.
(e) This Agreement may be executed in counterparts, but all such
counterparts taken together shall constitute one and the same Agreement.
(f) The descriptive headings of this Agreement are inserted for convenience
only and do not constitute a part of this Agreement. The use of the word
"including" in this Agreement shall be by way of example rather than limitation.
The use of the word "or" in this Agreement is intended to be conjunctive rather
than disjunctive.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date first above written.
NYMAGIC, INC.
By:___________________
Name:
Title:
[SIGNATURE PAGE TO INDEMNIFICATION AGREEMENT]
The undersigned, desiring to become a party to that certain Indemnification
Agreement dated as of April 29, 1999, among NYMAGIC, INC. (the "Company") and
the persons identified therein as Indemnitees (the "Agreement"), by execution of
this Counterpart Signature Page hereby agrees to and accepts the terms of such
Agreement and hereby authorizes the Company to attach this Counterpart Signature
Page to the Agreement.
INDEMNITEE:
-----------------------
Print Name:
[COUNTERPART SIGNATURE PAGE TO INDEMNIFICATION AGREEMENT]
EXHIBIT A
Indemnification Statement
STATE OF )
) ss.
COUNTY OF )
I,___________________ , being first duly sworn, do depose and state as
follows:
1. This Indemnification Statement is submitted pursuant to the
Indemnification Agreement, dated as of April 29, 1999, among NYMAGIC, Inc., a
New York corporation (the "Company"), certain other persons and the undersigned
and the related Escrow Agreement dated June 4, 1999, between the Company and The
Bank of New York, as Escrow Agent.
2. I am requesting indemnification against expenses (including, without
limitation, attorneys' fees and expenses), costs, judgments, damages, fines and
amounts paid in settlement, all of which (collectively, "Liabilities") have been
actually and necessarily incurred by me in connection with an actual or
threatened action, suit or proceeding to which I was or am a party or am
threatened to be made a party by reason of the fact that I am or was a director
or officer of the Company.
3. With respect to all matters related to any such action, suit or
proceeding, I am entitled to be indemnified as herein contemplated pursuant to
the aforesaid Indemnification Agreement or otherwise.
4. Without limiting any other rights which I have or may have, I am
requesting indemnification against Liabilities which have arisen out of the
following matter:
---------------------------------
Name of Indemnitee
Subscribed and sworn to before me, a Notary Public in and for said County and
State, this _____ day of _____________, 199 /200_.
[Seal]
My commission expires the ______ day of _____________, 19 .
EXHIBIT B
Undertaking
STATE OF )
)ss.
COUNTY OF )
I, __________________, being first duly sworn, do depose and state as
follows:
1. This Undertaking is submitted pursuant to the Indemnification Agreement,
dated as of April 29, 1999, among NYMAGIC, Inc., a New York corporation (the
"Company"), certain other persons and the undersigned and the related Escrow
Agreement dated June 4, 1999, between the Company and The Bank of New York, as
Escrow Agent.
2. I am requesting advancement of certain expenses (including, without
limitation, attorneys' fees and expenses) which I have actually and necessarily
incurred in defending an actual or threatened action, suit or proceeding to
which I am or was a party or am threatened to be made a party by reason of the
fact that I was or am a director or officer of the Company.
3. I hereby undertake to repay this advancement of expenses if it shall
ultimately be determined that I am not entitled to be indemnified by the Company
under the aforesaid Indemnification Agreement or otherwise.
4. The expenses for which advance is requested are, in general, all
expenses related to the following matter:
---------------------------------
Name of Indemnitee
Subscribed and sworn to before me, a Notary Public in and for said County and
State, this _____ day of ______________, 199_ /200_.
[Seal]
My commission expires the ____ day of ________, 199_/200_.
Schedule 1
NYMAGIC, INC
Names and Addresses of Indemnitees
Xxxxxx X. Xxxxxx [ADDRESSES OMITTED]
Xxxx X. Xxxxxxxx
Xxxx Xxxx, Xx.
Xxxxxxx X. Xxxxxxxxxx
Xxxxxxx Xxxxxxx
Xxxxxxx X. Xxxxx
Xxxxxxx Xxxxxx
Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxxxxxx
Xxxxxxx Xxxxxxxx
Xxxxx X. Xxxxxxx
Xxxx X. Xxxxxxxx
Xxxx X. Xxxxxxxx
