EXHIBIT 99.1
INDEMNIFICATION AGREEMENT
This Agreement, made and entered into as of this 31st day of March,
2005 ("AGREEMENT"), by and between Xxxxx Xxxxxxxx Corporation, a British Virgin
Islands corporation ("COMPANY"), and _______________________ ("INDEMNITEE").
WHEREAS, highly competent persons are becoming more reluctant to serve
publicly-held corporations as directors, officers or in other capacities unless
they are provided with adequate protection through insurance or adequate
indemnification against inordinate risks of claims and actions against them
arising out of their service to and activities on behalf of the corporation; and
WHEREAS, the Board of Directors of the Company has determined that
attracting and retaining such persons is in the best interests of the Company's
stockholders and that the Company should act to assure such persons that there
will be increased certainty of such protection in the future; and
WHEREAS, it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify such persons to the fullest extent
permitted by applicable law so that they will serve or continue to serve the
Company free from undue concern that they 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:
ARTICLE I - DEFINITIONS
For purposes of this Agreement the following terms shall have the
meaning given here:
1.01 "BOARD" shall mean the Board of Directors of the Company.
1.02 "CHANGE OF CONTROL" shall mean:
(i) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "EXCHANGE ACT")) of beneficial ownership (within the meaning of
Rule 13d-3
promulgated under the Exchange Act) of 35% or more of either (A) the
then-outstanding ordinary shares of the Company (the "OUTSTANDING COMPANY
ORDINARY SHARES") or (B) the combined voting power of the then-outstanding
voting securities entitled to vote generally in the election of directors (the
"OUTSTANDING VOTING SECURITIES") of the Company (the "OUTSTANDING COMPANY VOTING
SECURITIES"); provided that, for purposes of this definition, the following
acquisitions shall not constitute a Change of Control: (I) any acquisition
directly from the Company; (II) any acquisition by the Company; and (III) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any of its affiliates;
(ii) Individuals who, as of the date of this Agreement, constitute
the Board (the "INCUMBENT BOARD") cease for any reason to constitute at least a
majority of the Board; provided that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board;
(iii) Consummation of a merger or consolidation involving the
Company or a sale or other disposition of all or substantially all of the assets
of the Company (each, a "BUSINESS COMBINATION"), in each case unless, following
such Business Combination, all or substantially all of the individuals and
entities that were the beneficial owners of the Outstanding Company Ordinary
Shares immediately prior to such Business Combination beneficially own, directly
or indirectly, either (A) more than 50% of the Outstanding Company Voting
Securities immediately following the consummation of the Business Combination or
(B) in the event the Business Combination results in another corporation ("NEW
PARENT CORPORATION") owning the Company or all or substantially all of the
Company's assets either directly or through one or more subsidiaries, more than
50% of the Outstanding Voting Securities of the New Parent Corporation; or
(iv) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
1.03 "CORPORATE STATUS" describes the status of a person who is or was
a director or officer of the Company or is or was serving at the request of the
Company as a director or officer of, or in any other capacity for, any other
Enterprise. For purposes of this Agreement, it is understood that service at the
Company's request as a fiduciary, administrator or member of an administrative
committee of an employee benefit plan shall be deemed to constitute Corporate
Status for such individual.
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1.04 "DISINTERESTED DIRECTOR" shall mean a director of the Company who
is not and was not a party to the Proceeding in respect of which indemnification
is sought by Indemnitee.
1.05 "ENTERPRISE" shall mean any corporation, partnership, limited
liability company, joint venture, trust, employee benefit plan or other
enterprise of which Indemnitee is or was serving at the request of the Company
in a Corporate Status.
1.06 "EXCLUDED CLAIM" shall mean any claim:
(i) for an accounting of profits in fact made from the
purchase or sale by Indemnitee of securities of the Company within the meaning
of Section 16 of the Exchange Act or similar provisions of any federal or state
law; or
(ii) resulting from Indemnitee's knowingly fraudulent,
dishonest or willful misconduct; or
(iii) for which the payment of Losses or Expenses under this
Agreement is not permitted by applicable law.
1.07 "EXPENSES" shall mean all reasonable attorneys' fees and all other
costs and expenses incurred in connection with defending, preparing to defend,
investigating, or being or preparing to be a witness in, or otherwise
participating in, a Proceeding or in connection with seeking indemnification or
enforcing Indemnitee's rights under this Agreement, but shall not include any
fines or penalties.
1.08 "GOOD FAITH" shall mean Indemnitee having acted honestly and in
good faith with a view to the best interests of the Company and, with respect to
any criminal Proceeding, having had no reasonable cause to believe Indemnitee's
conduct was unlawful.
1.09 "INDEPENDENT COUNSEL" shall mean a law firm, or a member of a law
firm, that is experienced in matters of corporation law and neither presently
is, nor in the past three 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 rights under this
Agreement.
1.10 "LOSSES" shall mean all losses, liabilities, judgments, damages,
amounts paid in settlement, or, with respect to an employee benefit plan, excise
taxes or penalties assessed with respect thereto, including all interest,
assessments and other charges paid or payable in connection with or in respect
of any of the foregoing, but shall not include any fines and penalties.
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1.11 "PROCEEDING" shall mean any threatened, pending or completed
action, suit, claim, demand, arbitration, investigation, inquiry or proceeding,
including any and all appeals, whether civil, criminal, administrative,
investigative or other nature, in which Indemnitee was, is or will be involved
as a party or otherwise by reason of or relating to Indemnitee's Corporate
Status, other than one initiated by Indemnitee. For purposes of this Agreement,
a "Proceeding" shall not be deemed to have been initiated by Indemnitee where
Indemnitee seeks pursuant to Article VI of this Agreement to enforce
Indemnitee's rights under this Agreement.
ARTICLE II - SERVICES BY INDEMNITEE, NOTICE OF PROCEEDINGS
2.01 SERVICES. Indemnitee agrees to serve as a director or officer of
the Company. Indemnitee may at any time and for any reason resign from such
position (subject to any other contractual obligation or any obligation imposed
by operation of law).
2.02 NOTICE OF PROCEEDING; COOPERATION. Indemnitee agrees promptly to
notify the Company in writing upon being served with any summons, citation,
subpoena, complaint, indictment or information relating to any Proceeding or
matter which may be subject to indemnification or advancement of Expenses
covered hereunder; PROVIDED, HOWEVER, that a delay in giving such notice shall
not deprive Indemnitee of any right to be indemnified or to receive an
advancement of Expenses under this Agreement unless, and then only to the extent
that, the Company did not otherwise learn of the claim and such delay is
materially prejudicial to the Company's ability to defend such claim; and,
PROVIDED, FURTHER that notice shall be deemed to have been given without any
action on the part of Indemnitee in the event that the Company is a party to the
same Proceeding. Indemnitee agrees to cooperate fully with the Company in
responding to any Proceeding, providing all required information and documents,
and being available for testimony in each case as reasonably requested by the
Company. The failure to notify or cooperate with the Company will not relieve
the Company from any liability for indemnification or advancement of Expenses
which it may have to Indemnitee otherwise than under this Agreement.
ARTICLE III - INDEMNIFICATION
3.01 IN GENERAL. The Company shall indemnify Indemnitee to the fullest
extent permitted by applicable law, if, by reason of Indemnitee's Corporate
Status, Indemnitee was or is, or was or is threatened to be made, a party to or
a participant (as a witness or otherwise) in any Proceeding against Expenses and
Losses actually and reasonably paid or incurred by Indemnitee or on Indemnitee's
behalf in connection with such Proceeding or any claim, issue or matter therein,
if Indemnitee acted in Good Faith. Indemnitee shall be entitled to rely in good
faith on the records or books of account of the Company or other Enterprise, or
on information supplied to Indemnitee by the officers of
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the Company or other Enterprise in the course of their duties, or on the advice
of legal counsel for the Company or other Enterprise or on information or
records given or reports made to the Company or other Enterprise by an
independent certified public accountant or by an appraiser or other expert
selected with reasonable care by the Company or other Enterprise as to matters
which the Indemnitee reasonably believes are within such other person's
professional or expert competence.
3.02 EXCLUDED CLAIMS. Notwithstanding anything to the contrary in
Section 3.01, the Company shall have no obligation to indemnify Indemnitee for
any Loss or Expense which has been determined, by final adjudication by a court
of competent jurisdiction, to constitute an Excluded Claim.
3.03 PARTIAL INDEMNITY. If Indemnitee is entitled under any provision
of this Agreement to indemnification by the Company for some or a portion of the
Losses and Expenses arising from or relating to a Proceeding but not, however,
for all of the total amount thereof, the Company shall indemnify Indemnitee for
the portion thereof to which Indemnitee is entitled.
ARTICLE IV - PAYMENT IN ADVANCE OF EXPENSES
The Company shall pay in advance of the final disposition of a
Proceeding all reasonable Expenses which, by reason of Indemnitee's Corporate
Status, were incurred by or on behalf of Indemnitee in connection with any
Proceeding, within thirty days after the receipt by the Company of a statement
or statements from Indemnitee requesting such payment, whether prior to or after
final disposition of such Proceeding. Such statement or statements shall
reasonably evidence the Expenses incurred by Indemnitee and shall include or be
preceded or accompanied by an undertaking by or on behalf of Indemnitee to repay
any Expenses if it shall ultimately be determined that Indemnitee is not
entitled to be indemnified against such Expenses. Payments in advance of the
final determination shall include reasonable Expenses paid or incurred pursuing
a Proceeding to enforce the right of payment hereunder, pursuant to the
indemnification provisions of the Company's Articles of Association or under the
Company's director and officer liability insurance policies.
ARTICLE V - PROCEDURES FOR DETERMINATION OF ENTITLEMENT
5.01 INITIAL REQUEST. To obtain indemnification under this Agreement,
Indemnitee shall submit to the Company a written request, and shall submit such
other documentation and information reasonably requested by the Company as is
reasonably available to Indemnitee.
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5.02 METHOD OF DETERMINATION. A determination (if required by
applicable law or requested by the Board) with respect to Indemnitee's
entitlement to indemnification shall be made as follows:
(a) if a Change of Control has occurred, unless Indemnitee
shall request in writing that such determination be made
in accordance with clause (b) of this Section 5.02, the
determination shall be made by Independent Counsel in a
written opinion to the Board, a copy of which shall be
delivered to Indemnitee; or
(b) if a Change of Control has not occurred, the
determination shall be made by the Board by a majority
vote of a quorum consisting of Disinterested Directors.
In the event that a quorum of the Board consisting of
Disinterested Directors is not obtainable or, even if
obtainable, such quorum of Disinterested Directors so
directs, the determination shall be made by Independent
Counsel in a written opinion to the Board, a copy of
which shall be delivered to Indemnitee.
For the sake of clarity, no determination of entitlement shall be required to
the extent that Indemnitee is successful, on the merits or otherwise (including
by dismissal with or without prejudice), in any Proceeding or in defense of any
claim, issue or matter therein, in whole or in part.
5.03 SELECTION AND PAYMENT OF INDEPENDENT COUNSEL. In the event the
determination of entitlement to indemnification is to be made by Independent
Counsel pursuant to Section 5.02 of this Agreement, the Independent Counsel
shall be selected by the Board, and the Company shall give written notice to
Indemnitee advising Indemnitee of the identity of the Independent Counsel so
selected. The Company shall pay the fees and expenses of Independent Counsel
incurred by such Independent Counsel in connection with acting pursuant to this
Agreement.
5.04 COOPERATION. Indemnitee shall reasonably cooperate with the person
or entity making the determination with respect to Indemnitee's entitlement to
indemnification under this Agreement, including providing to such person or
entity upon reasonable advance request any documentation or information which is
not privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee.
5.05 BURDEN OF PROOF. In making an initial determination with respect
to entitlement to indemnification hereunder, the person or entity making such
determination shall presume that Indemnitee is entitled to indemnification under
this Agreement if Indemnitee has submitted a request for indemnification in
accordance with Section 5.01 of this Agreement, and the Company shall have the
burden of proof on the balance of probabilities to overcome that presumption.
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5.06 EFFECT OF OTHER PROCEEDINGS. The termination of any Proceeding or
of any claim, issue or matter therein, by judgment, order, settlement or
conviction, or upon a plea of NOLO CONTENDERE or its equivalent, shall not
(except as otherwise expressly provided in this Agreement) of itself adversely
affect the right of Indemnitee to indemnification or create a presumption that
Indemnitee did not act in Good Faith.
5.07 PAYMENT. If it is determined that Indemnitee is entitled to
indemnification, payment to Indemnitee shall be made within thirty (30) days
after such determination.
ARTICLE VI - REMEDIES OF INDEMNITEE
6.01 ADJUDICATION. If there has been no determiniation pursuant to
Article V of entitlement to indemnification within sixty days after receipt by
the Company of the request for indemnification, or an adverse determination is
made, Indemnitee shall be entitled to an adjudication in an appropriate court of
the British Virgin Islands, or in any other court of competent jurisdiction, of
Indemnitee's entitlement to such indemnification.
6.02 BURDEN OF PROOF. In the event that a determination shall have been
made pursuant to Article V of this Agreement that Indemnitee is not entitled to
indemnification, the Indemnitee shall have the burden of proving in any judicial
proceeding commenced pursuant to this Article VI that indemnification is
required under this Agreement.
6.03 COMPANY BOUND. If a determination shall have been made pursuant to
Article V of this Agreement that Indemnitee is entitled to indemnification, the
Company shall be bound by such determination in any judicial proceeding absent
(i) a misstatement by Indemnitee of a material fact, or an omission of a
material fact necessary to make Indemnitee's statement not materially
misleading, in connection with the request for indemnification, or (ii) a
prohibition of such indemnification under applicable law.
ARTICLE VII - NON-EXCLUSIVITY, INSURANCE AND SUBROGATION
7.01 NON-EXCLUSIVITY. The rights of indemnification and to receive
payment in advance of Expenses as provided by this Agreement shall not be deemed
to be exclusive of any other rights to which Indemnitee may at any time be
entitled under applicable law, the Company's Articles of Association, any
agreement, a vote of stockholders or a resolution of directors, director and
officer liability insurance policies or otherwise. To the extent Indemnitee
otherwise would have any greater right to indemnification or payment in advance
of expenses under any other provisions under applicable law, the Company's
Articles of Association, any agreement, a vote of stockholders, a resolution of
directors, director and officer liability insurance policies or otherwise,
Indemnitee will be deemed to have such greater right hereunder.
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7.02 INSURANCE. The Company shall use its best efforts to continue to
maintain directors' and officers' liability insurance policies for the benefit
of Indemnitee having at least the same liability coverage amounts as the
Company's current directors' and officers' liability insurance policies;
PROVIDED, that the Company shall not be obligated to pay premiums for such
insurance that are, in the good faith determination of the Board of Directors of
the Company, unreasonable for the Company to undertake, and under such
circumstances shall use its best efforts to obtain the greatest coverage
available for a cost that is not unreasonable. Schedule 7.02 sets forth the
coverage and annual premium for the Company's current directors' and officers'
liability insurance policies. The Company shall give written notice to
Indemnitee in the event that its directors' and officers' liability coverage
lapses or the coverage amount is reduced below the current level. To the extent
that the Company or any parent company or subsidiary thereof maintains an
insurance policy or policies providing liability insurance for directors or
officers of the Company or of any other Enterprise which such person serves at
the request of the Company, 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 such director or officer under such policy or
policies. If, at the time of the receipt by the Company of a notice from any
source of a Proceeding as to which Indemnitee is a party or participant (as a
witness or otherwise), the Company has director and officer liability insurance
in effect, the Company shall give prompt notice of such Proceeding to the
insurers in accordance with the procedures set forth in the respective policies,
and the Company shall provide Indemnitee with a copy of such notice. The Company
shall thereafter take all necessary or desirable action to cause such insurers
to pay, on behalf of the Indemnitee, all amounts payable as a result of such
Proceeding in accordance with the terms of such policies.
7.03 SUBROGATION. In the event of any 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 take all
action necessary to secure such rights, including execution of such documents as
are necessary to enable the Company to bring suit to enforce such rights.
7.04 NO DUPLICATIVE PAYMENT. The Company shall not be liable under this
Agreement to make any payment of amounts otherwise indemnifiable hereunder if
and to the extent that Indemnitee has otherwise actually received such payment
under any insurance policy, agreement or otherwise.
ARTICLE VIII - GENERAL PROVISIONS
8.01 BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto, the successors and
assigns of the Company and the heirs, executors and administrators of
Indemnitee. This Agreement shall continue in effect regardless of whether
Indemnitee continues to serve as a director,
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officer or representative of the Company or any other Enterprise at the
Company's request.
8.02 SEVERABILITY. If any provision or provisions of this Agreement
shall be held to be invalid, illegal or unenforceable for any reason whatsoever,
the validity, legality and enforceability of the remaining provisions of this
Agreement (including without limitation, each portion of any Section of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall not
in any way be affected or impaired thereby.
8.03 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
but all of which together shall constitute one and the same Agreement.
8.04 HEADINGS. The headings of the paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.
8.05 MODIFICATION AND WAIVER. 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.
8.06 NOTICES. All notices, requests, demands, service of process and
other communications hereunder shall be in writing and shall be deemed to have
been duly given if (i) delivered by hand and receipted for by the party to whom
said notice or other communication shall have been directed, or (ii) mailed by
certified or registered mail with postage prepaid, on the third business day
after the date on which it is so mailed:
If to Indemnitee to:
As shown with Indemnitee's Signature below.
If to the Company to:
c/o Xxxxx Xxxxxxxx U.S.A., Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Office of the General Counsel
or to such other address as may have been furnished to Indemnitee by the Company
or to the Company by the Indemnitee, as the case may be.
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8.07 GOVERNING LAW. The parties agree that this Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
British Virgin Islands without application of the conflict of laws principles
thereof. For purposes of this Agreement, the Company submits to the
non-exclusive jurisdiction of the state and federal courts in the Borough of
Manhattan, City of New York.
8.08 SETTLEMENT. Notwithstanding anything in this Agreement to the
contrary, the Company shall have no obligation to indemnify Indemnitee under
this Agreement for any amounts paid in settlement of any Proceeding effected
without the Company's prior written consent. The Company shall not settle any
Proceeding which would impose any fine or penalty or non-monetary relief on
Indemnitee without Indemnitee's written consent. Neither the Company nor
Indemnitee shall unreasonably withhold their consent to any proposed settlement.
8.09 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
and understanding between the parties hereto in reference to all the matters
herein agreed upon.
8.10 EFFECTIVENESS OF AGREEMENT. This Agreement shall be effective as
of the date set forth on the first page and may apply to acts or omissions of
Indemnitee which occurred prior to such date if Indemnitee was an officer,
director, employee, fiduciary or other agent of the Company, or was serving at
the request of the Company as a director, officer, employee, trustee, partner,
manager, member, fiduciary or agent of another Enterprise, at the time such act
or omission occurred.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
XXXXX XXXXXXXX CORPORATION
By ______________________________________________
Name: Xxxxx Xxxxxxxxx
Title: Executive Vice President - General Counsel
INDEMNITEE ______________________________________
Name:
Address:
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