EXHIBIT 10.28
INDEMNIFICATION AGREEMENT
AGREEMENT, effective as of ____________, 200_, between Xxxxxx
Industries Ltd., a Bermuda exempted company (the "Company"), and
________________ (the "Indemnitee").
WHEREAS, it is essential to the Company to retain and attract as
directors and officers the most capable persons available;
WHEREAS, Indemnitee is a director or officer of the Company;
WHEREAS, both the Company and Indemnitee recognize the increased risk
of litigation and other claims being asserted against directors and officers of
public companies in today's environment;
WHEREAS, the Bye-laws of the Company require the Company to indemnify
and advance expenses to its directors and officers to the full extent permitted
by law and the Indemnitee has been serving and continues to serve as a director
or officer of the Company in part in reliance on such Bye-laws;
WHEREAS, in recognition of Indemnitee's need for substantial protection
against personal liability in order to enhance Indemnitee's continued service to
the Company in an effective manner and Indemnitee's reliance on the aforesaid
Bye-laws, and in part to provide Indemnitee with specific contractual assurance
that the protection promised by such Bye-laws will be available to Indemnitee
(regardless of, among other things, any amendment to or revocation of such
Bye-laws or any change in the composition of the Company's Board of Directors or
acquisition transaction relating to the Company), the Company wishes to provide
in this Agreement for the indemnification of and the advancing of expenses to
Indemnitee to the fullest extent (whether partial or complete) permitted by law
and as set forth in this Agreement, and, to the extent insurance is maintained,
for the continued coverage of Indemnitee under the Company's directors' and
officers' liability insurance policies;
NOW, THEREFORE, in consideration of the premises and of Indemnitee
continuing to serve the Company directly or, at its request, another enterprise,
and intending to be legally bound hereby, the parties hereto agree as follows:
1. Certain Definitions:
(a) Change in Control: A "Change in Control" shall be deemed to
have occurred if (i) any "person" (as such term is used in
Sections 13(d) and 14(d) of the United States Securities
Exchange Act of 1934, as amended (the "Act")), other than a
trustee or other fiduciary holding securities under an
employee benefit plan of the Company or a company,
corporation, limited liability company or other business
entity owned directly or indirectly by the shareholders of
the Company in substantially the same proportions as their
ownership of shares of the Company, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the
Act), directly or indirectly, of securities of the Company
representing 20% or more of the total voting power
represented by the Company's then outstanding Voting
Securities, or (ii) during any period of two consecutive
years, individuals who at the beginning of such period
constitute the Board of Directors of the Company and any
new director whose election by the Board of Directors or
nomination for election by the Company's shareholders was
approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at
the beginning of the period or whose election or nomination
for election was previously so approved, cease for any
reason to constitute a majority thereof, or (iii) the
shareholders of the Company approve a merger or
consolidation of the Company with any other company,
corporation, limited liability company or other business
entity, other than a merger or consolidation which would
result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting
securities of the surviving entity) at least 80% of the
total voting power represented by the voting securities of
the Company or such surviving entity outstanding
immediately after such merger or consolidation, or the
shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or
disposition by the Company of (in one transaction or a
series of transactions) all or substantially all the
Company's assets.
(b) Claim: A "Claim" means any threatened, pending or completed
action, suit or proceeding, or any inquiry or
investigation, whether instituted by the Company or any
other party, that Indemnitee in good faith believes might
lead to the institution of any such action, suit or
proceeding, whether civil, criminal, administrative,
investigative or other.
(c) Expenses: "Expenses" include attorneys' fees and all other
costs, expenses and obligations paid or incurred in
connection with investigating, defending, being a witness
in or participating in (including on appeal), or preparing
to defend, be a witness in or participate in, any Claim
relating to any Indemnifiable Event.
(d) Indemnifiable Event: An "Indemnifiable Event" means any
event or occurrence related to 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, trustee, agent or
fiduciary of another company, corporation, limited
liability company, partnership, joint venture, employee
benefit plan, trust or other enterprise, or by reason of
anything done or not done by Indemnitee in any such
capacity.
(e) Independent Legal Counsel: "Independent Legal Counsel"
means an attorney or firm of attorneys, selected in
accordance with the provisions of Section 3 of this
Agreement, who shall not have otherwise performed services
for the Company or Indemnitee within the last five (5)
years (other than with respect to matters concerning the
rights of Indemnitee under this Agreement, or of other
indemnitees under similar indemnity agreements).
(f) Potential Change in Control: A "Potential Change in
Control" shall be deemed to have occurred if (i) the
Company enters into an agreement, the consummation of which
would result in the occurrence of a Change in Control; (ii)
any person (including the Company) publicly announces an
intention to take or to consider taking actions which if
consummated would constitute a Change in Control; (iii) any
person, other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or
a company, corporation, limited liability company or other
business entity owned, directly or indirectly, by the
shareholders of the Company in substantially the same
proportions as their ownership of shares of the Company,
who is or becomes the beneficial owner, directly or
indirectly, of securities of the Company representing 9.5%
or more of the combined voting power of the Company's then
outstanding Voting Securities, increases his beneficial
ownership of such securities by five percentage points (5%)
or more over the percentage so owned by such person; or
(iv) the Board adopts a resolution to the effect that, for
purposes of this Agreement, a Potential Change in Control
has occurred.
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(g) Reviewing Party: A "Reviewing Party" means any appropriate
person or body consisting of a member or members of the
Company's Board of Directors or any other person or body
appointed by the Board who is not a party to the particular
Claim for which Indemnitee is seeking indemnification, or
Independent Legal Counsel.
(h) Voting Securities: "Voting Securities" means any securities
of the Company which vote generally in the election of
directors.
2. Basic Indemnification Arrangement. (a) In the event Indemnitee was,
is or becomes a party to or witness or other participant in, or is threatened to
be made a party to or witness or other participant in, a Claim by reason of (or
arising in part out of) an Indemnifiable Event, the Company shall indemnify
Indemnitee to the fullest extent permitted by law as soon as practicable but in
any event no later than thirty (30) days after written demand is presented to
the Company, against any and all Expenses, judgments, fines, penalties and
amounts paid in settlement (including all interest, assessments and other
charges paid or payable in connection with or in respect of such Expenses,
judgments, fines, penalties or amounts paid in settlement) of such Claim. If so
requested by Indemnitee, the Company shall advance immediately, and in any event
within one (1) business day of such request, any and all Expenses to Indemnitee
(an "Expense Advance").
(b) Notwithstanding the foregoing, (i) the obligations of
the Company under Section 2(a) shall be subject to the condition that the
Reviewing Party shall not have determined (in a written opinion, in any case in
which the Independent Legal Counsel referred to in Section 3 hereof is involved)
that Indemnitee would not be permitted to be indemnified under applicable law,
and (ii) the obligation of the Company to make an Expense Advance pursuant to
Section 2(a) shall be subject to the condition that, if, when and to the extent
that the Reviewing Party determines that Indemnitee would not be permitted to be
so indemnified under applicable law, the Company shall be entitled to be
reimbursed by Indemnitee (who hereby agrees to reimburse the Company) for all
such amounts theretofore paid; provided, however, that if Indemnitee has
commenced or thereafter commences legal proceedings in a court of competent
jurisdiction to secure a determination that Indemnitee should be indemnified
under applicable law, any determination made by the Reviewing Party that
Indemnitee would not be permitted to be indemnified under applicable law shall
not be binding and Indemnitee shall not be required to reimburse the Company for
any Expense Advance until a final judicial determination
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is made with respect thereto (as to which all rights of appeal therefrom have
been exhausted or lapsed). If there has not been a Change in Control, the
Reviewing Party shall be selected by the Board of Directors, and if there has
been such a Change in Control (other than a Change in Control which has been
approved by a majority of the Company's Board of Directors who were directors
immediately prior to such Change in Control), the Reviewing Party shall be the
Independent Legal Counsel referred to in Section 3 hereof. If there has been no
determination by the Reviewing Party or if the Reviewing Party determines that
Indemnitee substantively would not be permitted to be indemnified in whole or in
part under applicable law, Indemnitee shall have the right to commence
litigation in any court in the Islands of Bermuda or any federal or state court
in any state of the United States, in each case having subject matter
jurisdiction thereof and in which venue is proper seeking an initial
determination by the court or challenging any such determination by the
Reviewing Party or any aspect thereof, including the legal or factual bases
therefor, and the Company hereby consents to service of process and to appear in
any such proceeding. Any determination by the Reviewing Party otherwise shall be
conclusive and binding on the Company and Indemnitee.
3. Change in Control. The Company agrees that if there is a Change in
Control of the Company (other than a Change in Control which has been approved
by a majority of the Company's Board of Directors who were directors immediately
prior to such Change in Control) then with respect to all matters thereafter
arising concerning the rights of Indemnitee to indemnity payments and Expense
Advances under this Agreement or any other agreement or Company Bye-law now or
hereafter in effect relating to Claims for Indemnifiable Events, the Company
shall seek legal advice only from Independent Legal Counsel selected by
Indemnitee and approved by the Company (which approval shall not be unreasonably
withheld). Such counsel, among other things, shall render its written opinion to
the Company and Indemnitee as to whether and to what extent the Indemnitee would
be permitted to be indemnified under applicable law. The Company agrees to pay
the reasonable fees of the Independent Legal Counsel referred to above and to
indemnify fully such counsel against any and all expenses (including attorneys'
fees), claims, liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto.
4. Establishment of Trust. In the event of a Potential Change in
Control, the Company shall, upon written request by Indemnitee, create a trust
for the benefit of Indemnitee and from time to time upon written request of
Indemnitee shall fund such trust in an amount sufficient to satisfy any and all
Expenses reasonably anticipated at the time of each such request to be incurred
in connection with investigating, preparing for and defending any Claim relating
to an Indemnifiable Event, and any and
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all judgments, fines, penalties and settlement amounts of any and all Claims
relating to an Indemnifiable Event from time to time actually paid or claimed,
reasonably anticipated or proposed to be paid, provided that in no event shall
more than $200,000 be required to be deposited in any trust created hereunder in
excess of amounts deposited in respect of reasonably anticipated Expenses. The
amount or amounts to be deposited in the trust pursuant to the foregoing funding
obligation shall be determined by the Reviewing Party, in any case in which the
Independent Legal Counsel referred to above is involved. The terms of the trust
shall provide that upon a Change in Control (i) the trust shall not be revoked
or the principal thereof invaded, without the written consent of the Indemnitee,
(ii) the trustee shall advance, within two business days of a request by the
Indemnitee, any and all Expenses to the Indemnitee (and the Indemnitee hereby
agrees to reimburse the trust under the circumstances under which the Indemnitee
would be required to reimburse the Company under Section 2(b) of this
Agreement), (iii) the trust shall continue to be funded by the Company in
accordance with the funding obligation set forth above, (iv) the trustee shall
promptly pay to Indemnitee all amounts for which Indemnitee shall be entitled to
indemnification pursuant to this Agreement or otherwise, and (v) all unexpended
funds in such trust shall revert to the Company upon a final determination by
the Reviewing Party or a court of competent jurisdiction, as the case may be,
that Indemnitee has been fully indemnified under the terms of this Agreement.
The trustee shall be chosen by Indemnitee. Nothing in this Section 4 shall
relieve the Company of any of its obligations under this Agreement.
5. Indemnification for Additional Expenses. The Company shall indemnify
Indemnitee against any and all expenses (including attorneys' fees) and, if
requested by Indemnitee, shall (within two business days of such request)
advance such expenses to Indemnitee, which are incurred by Indemnitee in
connection with any action brought by Indemnitee for (i) indemnification or
advance payment of Expenses by the Company under this Agreement or any other
agreement or Company Bye-law now or hereafter in effect relating to Claims for
Indemnifiable Events and/or (ii) recovery under any directors' and officers'
liability insurance policies maintained by the Company, regardless of whether
Indemnitee ultimately is determined to be entitled to such indemnification,
advance expense payment or insurance recovery, as the case may be.
6. Partial Indemnity, Etc. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of the Expenses, judgments, fines, penalties and amounts paid in
settlement of a Claim but not, however, for all of the total amount thereof, the
Company shall nevertheless indemnify Indemnitee for the portion thereof to which
Indemnitee is entitled. Moreover, notwithstanding any other provision of this
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Agreement, to the extent that Indemnitee has been successful on the merits or
otherwise in defense of any or all Claims relating in whole or in part to an
Indemnifiable Event or in defense of any issue or matter therein, including
dismissal without prejudice, Indemnitee shall be indemnified against all
Expenses incurred in connection therewith.
7. Burden of Proof. In connection with any determination by the
Reviewing Party or otherwise as to whether Indemnitee is entitled to be
indemnified hereunder the burden of proof shall be on the Company to establish
that Indemnitee is not so entitled.
8. No Presumptions. For purposes of this Agreement, the termination of
any claim, action, suit or proceeding, by judgment, order, settlement (whether
with or without court approval) or conviction, or upon a plea of nolo
contendere, or its equivalent, shall not create a presumption that Indemnitee
did not meet any particular standard of conduct or have any particular belief or
that a court has determined that indemnification is not permitted by applicable
law. In addition, neither the failure of the Reviewing Party to have made a
determination as to whether Indemnitee has met any particular standard of
conduct or had any particular belief, nor an actual determination by the
Reviewing Party that Indemnitee has not met such standard of conduct or did not
have such belief, prior to the commencement of legal proceedings by Indemnitee
to secure a judicial determination that Indemnitee should be indemnified under
applicable law shall be a defense to Indemnitee's claim or create a presumption
that Indemnitee has not met any particular standard of conduct or did not have
any particular belief.
9. Nonexclusivity, Etc. The rights of the Indemnitee hereunder shall be
in addition to any other rights Indemnitee may have under the Company's Bye-laws
or The Companies Act 1981 (Bermuda), as amended (the "Companies Act"), or
otherwise. To the extent that a change in the Companies Act (whether by statute
or judicial decision) permits greater indemnification by agreement than would be
afforded currently under the Company's Bye-laws and this Agreement, it is the
intention of the parties hereto that Indemnitee shall enjoy by this Agreement
the greater benefits so afforded by such change.
10. 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.
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11. Period of Limitations. No legal action shall be brought and no
cause of action shall be asserted by or in the right of the Company against
Indemnitee, Indemnitee's spouse, heirs, executors or personal or legal
representatives after the expiration of two years from the date of accrual of
such cause of action, and any claim or cause of action of the Company shall be
extinguished and deemed released unless asserted by the timely filing of a legal
action within such two-year period; provided, however, that if any shorter
period of limitations is otherwise applicable to any such cause of action such
shorter period shall govern.
12. Amendments, Etc. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both of the 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.
13. Subrogation. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee, who shall execute all papers required and shall do
everything that may be necessary to secure such rights, including the execution
of such documents necessary to enable the Company effectively to bring suit to
enforce such rights.
14. No Duplication of Payments. The Company shall not be liable under
this Agreement to make any payment in connection with any Claim made against
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under any insurance policy, Bye-law or otherwise) of the amounts otherwise
indemnifiable hereunder.
15. Binding Effect, Etc. This Agreement shall be binding upon and inure
to the benefit of and be enforceable by the parties hereto and their respective
successors or assigns, including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
and/or assets of the Company, spouses, heirs, executors and personal and legal
representatives. This Agreement shall continue in effect regardless of whether
Indemnitee continues to serve as an officer or director of the Company or of any
other enterprise at the Company's request.
16. Severability. The provisions of this Agreement shall be severable
in the event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) are held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable in any respect, and
the validity and enforceability of any such provision in every other respect and
of
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the remaining provisions hereof shall not be in any way impaired and shall
remain enforceable to the fullest extent permitted by law.
17. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of England applicable to contracts made
and to be performed in such jurisdiction without giving effect to the principles
of conflicts of laws.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
XXXXXX INDUSTRIES LTD.
By:
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(Indemnitee)
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SCHEDULE
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