FORM OF INDEMNIFICATION AGREEMENT
Exhibit 10.3
FORM
OF INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this “Agreement”) is made as of •, 2010, by and between HiSoft
Technology International Limited, an exempted company duly incorporated and validly existing under
the Law of the Cayman Islands (the “Company”), and • (the “Indemnitee”), [a director/an officer] of
the Company.
WHEREAS, the Indemnitee has agreed to serve as [a director/an officer] of the Company and in
such capacity will render valuable services to the Company; and
WHEREAS, in order to induce and encourage highly experienced and capable persons such as the
Indemnitee to serve as directors of the Company or in other capacities, the Board of Directors has
determined that this Agreement is not only reasonable and prudent, but necessary to promote and
ensure the best interests of the Company and its shareholders;
NOW, THEREFORE, in consideration of the premises and mutual agreements hereinafter set forth,
and other good and valuable consideration, including, without limitation, the service of the
Indemnitee, the receipt of which hereby is acknowledged, and in order to induce the Indemnitee to
serve as [a director/an officer] of the Company, the Company and the Indemnitee hereby agree as
follows:
1. Definitions. As used in this Agreement:
(a) “Board of Directors” shall mean the board of directors of the Company.
(b) “Change in Control” shall mean a change in control of the Company of a nature that would
be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in
response to any similar item on any similar or successor schedule or form) promulgated under the
United States Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder (collectively, the “Act”), whether or not the Company is then subject to
such reporting requirement; provided, however, that, without limitation, such a Change in Control
shall be deemed to have occurred (irrespective of the applicability of the initial clause of this
definition) if (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Act, but
excluding any trustee or other fiduciary holding securities pursuant to an employee benefit or
welfare plan or employee share plan of the Company or any subsidiary of the Company, or any entity
organized, appointed, established or holding securities of the Company with voting power for or
pursuant to the terms of any such plan) 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 combined voting power of the Company’s then outstanding securities without the prior
approval of at least two-thirds of the Continuing Directors (as defined below) in office
immediately prior to such person’s attaining such interest; (ii) the Company is a party to a
merger, consolidation, scheme of arrangement, sale of assets or other reorganization, or a proxy
contest, as a consequence of which Continuing Directors in office immediately prior to such
transaction or event constitute less than a majority of the Board of Directors of the Company (or
any successor entity) thereafter; or (iii) during any period of two (2) consecutive years,
individuals who at the beginning of such period constituted the Board of Directors of the Company
(including for this purpose any new director whose election or
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nomination for election by the Company’s shareholders was approved by a vote of at least
two-thirds of the directors then still in office who were directors at the beginning of such
period) (such directors being referred to herein as “Continuing Directors”) cease for any reason to
constitute at least a majority of the Board of Directors of the Company.
(c) “Disinterested Director” with respect to any request by the Indemnitee for indemnification
or advancement of expenses hereunder shall mean a director of the Company who neither is nor was a
party to the Proceeding (as defined below) in respect of which indemnification or advancement is
being sought by the Indemnitee.
(d) The term “Expenses” shall mean, without limitation, expenses of Proceedings, including
attorneys’ fees, disbursements and retainers, accounting and witness fees, expenses related to the
preparation or service as a witness, travel and deposition costs, expenses of investigations,
judicial or administrative proceedings and appeals, amounts paid in settlement of a Proceeding by
or on behalf of the Indemnitee, costs of attachment or similar bonds, any expenses of attempting to
establish or establishing a right to indemnification or advancement of expenses, under this
Agreement, the Company’s Memorandum of Association and Articles of Association as currently in
effect (the “Articles”), applicable law or otherwise, and reasonable compensation for time spent by
the Indemnitee in connection with the investigation, defense or appeal of a Proceeding or action
for indemnification for which the Indemnitee is not otherwise compensated by the Company or any
third party. The term “Expenses” shall not include the amount of judgments, fines, interest or
penalties, or excise taxes assessed with respect to any employee benefit or welfare plan, which are
actually levied against or sustained by the Indemnitee to the extent sustained after final
adjudication.
(e) The term “Independent Legal Counsel” shall mean any firm of attorneys reasonably selected
by the Board of Directors of the Company, so long as such firm has not represented the Company, the
Company’s subsidiaries or affiliates, the Indemnitee, any entity controlled by the Indemnitee, or
any party adverse to the Company, within the preceding five (5) years. Notwithstanding the
foregoing, the term “Independent Legal Counsel” shall not include any person who, under applicable
standards of professional conduct then prevailing, would have a conflict of interest in
representing either the Company or the Indemnitee in an action to determine the Indemnitee’s right
to indemnification or advancement of expenses under this Agreement, the Company’s Articles,
applicable law or otherwise.
(f) The term “Proceeding” shall mean any threatened, pending or completed action, suit,
arbitration, alternate dispute resolution mechanism, or any other proceeding (including, without
limitation, an appeal therefrom), formal or informal, whether brought in the name of the Company or
otherwise, whether of a civil, criminal, administrative or investigative nature, and whether by, in
or involving a court or an administrative, other governmental or private entity or body (including,
without limitation, an investigation by the Company or its Board of Directors), by reason of (i)
the fact that the Indemnitee is or was [a director/an officer] of the Company, or is or was serving
at the request of the Company as an agent of another enterprise, whether or not the Indemnitee is
serving in such capacity at the time any liability or expense is incurred for which indemnification
or reimbursement is to be provided under this Agreement, (ii) any actual or alleged act or omission
or neglect or breach of duty, including,
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without limitation, any actual or alleged error or misstatement or misleading statement, which
the Indemnitee commits or suffers while acting in any such capacity, or (iii) the Indemnitee
attempting to establish or establishing a right to indemnification or advancement of expenses
pursuant to this Agreement, the Company’s Articles, applicable law or otherwise.
(g) The phrase “serving at the request of the Company as an agent of another enterprise” or
any similar terminology shall mean, unless the context otherwise requires, serving at the request
of the Company as a director, officer, employee or agent of another corporation, partnership, joint
venture, limited liability company, trust, employee benefit or welfare plan or other enterprise,
foreign or domestic. The phrase “serving at the request of the Company” shall include, without
limitation, any service as [a director/an officer] of the Company which imposes duties on, or
involves services by, such [director/officer] with respect to the Company or any of the Company’s
subsidiaries, affiliates, employee benefit or welfare plans, such plan’s participants or
beneficiaries or any other enterprise, foreign or domestic. In the event that the Indemnitee shall
be a director, officer, employee or agent of another corporation, partnership, joint venture,
limited liability company, trust, employee benefit or welfare plan or other enterprise, foreign or
domestic, 50% or more of the ordinary shares, combined voting power or total equity interest of
which is owned by the Company or any subsidiary or affiliate thereof, then it shall be presumed
conclusively that the Indemnitee is so acting at the request of the Company.
2. Services by the Indemnitee. The Indemnitee agrees to serve as [a director/an
officer] of the Company under the terms of the Indemnitee’s agreement with the Company for so long
as the Indemnitee is [duly elected and qualified,] appointed or until such time as the Indemnitee
tenders a resignation in writing or is removed as [a director/an officer]; provided, however, that
the Indemnitee may at any time and for any reason resign from such position (subject to any other
contractual obligation or other obligation imposed by operation of law).
3. Proceeding Other Than a Proceeding By or In the Right of the Company. The Company
shall indemnify the Indemnitee if the Indemnitee is a party to or threatened to be made a party to
or is otherwise involved in any Proceeding (other than a Proceeding by or in the right of the
Company), by reason of the fact that the Indemnitee is or was [a director/an officer] of the
Company, or is or was serving at the request of the Company as an agent of another enterprise,
against all Expenses, judgments, fines, interest or penalties, and excise taxes assessed with
respect to any employee benefit or welfare plan, which are actually and reasonably incurred by the
Indemnitee in connection with such a Proceeding, to the fullest extent permitted by applicable law;
provided, however, that any settlement of a Proceeding must be approved in advance in writing by
the Company (which approval shall not be unreasonably withheld).
4. Proceedings By or In the Right of the Company. The Company shall indemnify the
Indemnitee if the Indemnitee is a party to or threatened to be made a party to or is otherwise
involved in any Proceeding by or in the right of the Company to procure a judgment in its favor by
reason of the fact that the Indemnitee is or was [a director/an officer] of the Company, or is or
was serving at the request of the Company as an agent of another enterprise, against all Expenses,
judgments, fines, interest or penalties, and excise taxes assessed with respect to any employee
benefit or welfare plan, which are actually and reasonably incurred by the Indemnitee
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in connection with the defense or settlement of such a Proceeding, to the fullest extent
permitted by applicable law.
5. Indemnification for Costs, Charges and Expenses of Witness or Successful Party.
Notwithstanding any other provision of this Agreement (except as set forth in subparagraph 9(a)
hereof), and without a requirement for determination as required by Paragraph 8 hereof, to the
extent that the Indemnitee (a) has prepared to serve or has served as a witness in any Proceeding
in any way relating to (i) the Company or any of the Company’s subsidiaries, affiliates, employee
benefit or welfare plans or such plan’s participants or beneficiaries or (ii) anything done or not
done by the Indemnitee as [a director/an officer] of the Company or in connection with serving at
the request of the Company as an agent of another enterprise, or (b) has been successful in defense
of any Proceeding or in defense of any claim, issue or matter therein, on the merits or otherwise,
including the dismissal of a Proceeding without prejudice or the settlement of a Proceeding without
an admission of liability, the Indemnitee shall be indemnified against all Expenses actually and
reasonably incurred by the Indemnitee in connection therewith to the fullest extent permitted by
applicable law.
6. Partial Indemnification. If the Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for a portion of the Expenses, judgments, fines,
interest or penalties, or excise taxes assessed with respect to any employee benefit or welfare
plan, which are actually and reasonably incurred by the Indemnitee in the investigation, defense,
appeal or settlement of any Proceeding, but not, however, for the total amount of the Indemnitee’s
Expenses, judgments, fines, interest or penalties, or excise taxes assessed with respect to any
employee benefit or welfare plan, then the Company shall nevertheless indemnify the Indemnitee for
the portion of such Expenses, judgments, fines, interest penalties or excise taxes to which the
Indemnitee is entitled.
7. Advancement of Expenses. The Expenses incurred by the Indemnitee in any Proceeding
shall be paid promptly by the Company in advance of the final disposition of the Proceeding at the
written request of the Indemnitee to the fullest extent permitted by applicable law; provided,
however, that the Indemnitee shall set forth in such request reasonable evidence that such Expenses
have been incurred by the Indemnitee in connection with such Proceeding, a statement that such
Expenses do not relate to any matter described in subparagraph 9(a) of this Agreement, and an
undertaking in writing to repay any advances if it is ultimately determined as provided in
subparagraph 8(b) of this Agreement that the Indemnitee is not entitled to indemnification under
this Agreement.
8. Indemnification Procedure; Determination of Right to Indemnification.
(a) Promptly after receipt by the Indemnitee of notice of the commencement of any Proceeding,
the Indemnitee shall, if a claim for indemnification or advancement of Expenses in respect thereof
is to be made against the Company under this Agreement, notify the Company of the commencement
thereof in writing. The omission to so notify the Company will not relieve the Company from any
liability which the Company may have to the Indemnitee under this Agreement unless the Company
shall have lost significant substantive or procedural rights with respect to the defense of any
Proceeding as a result of such omission to so notify.
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(b) The Indemnitee shall be conclusively presumed to have met the relevant standards of
conduct, if any, as defined by applicable law, for indemnification pursuant to this Agreement and
shall be absolutely entitled to such indemnification, unless a determination by clear and
convincing evidence is made that the Indemnitee has not met such standards by (i) the Board of
Directors by a majority vote of a quorum thereof consisting of Disinterested Directors, (ii) the
shareholders of the Company by majority vote of a quorum thereof consisting of shareholders who are
not parties to the Proceeding due to which a claim for indemnification is made under this
Agreement, (iii) Independent Legal Counsel as set forth in a written opinion (it being understood
that such Independent Legal Counsel shall make such determination only if the quorum of
Disinterested Directors referred to in clause (i) of this subparagraph 8(b) is not obtainable or if
the Board of Directors of the Company by a majority vote of a quorum thereof consisting of
Disinterested Directors so directs), or (iv) a court of competent jurisdiction; provided, however,
that if a Change of Control shall have occurred and the Indemnitee so requests in writing, such
determination shall be made only by a court of competent jurisdiction.
(c) If a claim for indemnification or advancement of Expenses under this Agreement is not paid
by the Company within thirty (30) days after receipt by the Company of written notice thereof, the
rights provided by this Agreement shall be enforceable by the Indemnitee in any court of competent
jurisdiction. Such judicial proceeding shall be made de novo. The burden of proving by clear and
convincing evidence that indemnification or advances are not appropriate shall be on the Company.
Neither the failure of the directors or shareholders of the Company or Independent Legal Counsel to
have made a determination prior to the commencement of such action that indemnification or
advancement of Expenses is proper in the circumstances because the Indemnitee has met the
applicable standard of conduct, if any, nor an actual determination by the directors or
shareholders of the Company or Independent Legal Counsel that the Indemnitee has not met the
applicable standard of conduct shall be a defense to an action by the Indemnitee or create a
presumption for the purpose of such an action that the Indemnitee has not met the applicable
standard of conduct. The termination of any Proceeding by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself (i) create a
presumption that the Indemnitee did not act in good faith and in a manner which he reasonably
believed to be in the best interests of the Company and/or its shareholders, and, with respect to
any criminal Proceeding, that the Indemnitee had reasonable cause to believe that his conduct was
unlawful or (ii) otherwise adversely affect the rights of the Indemnitee to indemnification or
advancement of Expenses under this Agreement, except as may be provided herein. The Company further
agrees to stipulate in any such judicial proceeding that the Company is bound by all the provisions
of this Agreement and is precluded from making any assertion to the contrary.
(d) If a court of competent jurisdiction shall determine that the Indemnitee is entitled to
any indemnification or advancement of Expenses hereunder, the Company shall pay all Expenses
actually and reasonably incurred by the Indemnitee in connection with such adjudication (including,
but not limited to, any appellate proceedings). The Indemnitee’s Expenses incurred in connection
with any Proceeding concerning the Indemnitee’s right to indemnification or advancement of Expenses
in whole or in part pursuant to this Agreement shall also be indemnified by the Company, regardless
of the outcome of such a Proceeding, to the fullest extent permitted by applicable law and the
Company’s Articles.
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(e) With respect to any Proceeding for which indemnification or advancement of Expenses is
requested, the Company will be entitled to participate therein at its own expense and, except as
otherwise provided below, to the extent that it may wish, the Company may assume the defense
thereof, with counsel reasonably satisfactory to the Indemnitee. After notice from the Company to
the Indemnitee of its election to assume the defense of a Proceeding, the Company will not be
liable to the Indemnitee under this Agreement for any Expenses subsequently incurred by the
Indemnitee in connection with the defense thereof, other than as provided below. The Company shall
not settle any Proceeding in any manner which would impose any penalty or limitation on the
Indemnitee without the Indemnitee’s written consent. The Indemnitee shall have the right to employ
his own counsel in any Proceeding, but the fees and expenses of such counsel incurred after notice
from the Company of its assumption of the defense of the Proceeding shall be at the expense of the
Indemnitee, unless (i) the employment of counsel by the Indemnitee has been authorized by the
Company, (ii) the Indemnitee shall have reasonably concluded that there may be a conflict of
interest between the Company and the Indemnitee in the conduct of the defense of a Proceeding, or
(iii) the Company shall not in fact have employed counsel to assume the defense of a proceeding, in
each of which cases the fees and expenses of the Indemnitee’s counsel shall be advanced by the
Company. The Company shall not be entitled to assume the defense of any Proceeding brought by or on
behalf of the Company or as to which the Indemnitee has reasonably concluded that there may be a
conflict of interest between the Company and the Indemnitee.
9. Limitations on Indemnification. No payments pursuant to this Agreement shall be
made by the Company:
(a) To indemnify or advance funds to the Indemnitee for Expenses with respect to (i)
Proceedings initiated or brought voluntarily by the Indemnitee and not by way of defense, except
with respect to Proceedings brought to establish or enforce a right to indemnification under this
Agreement or any other statute or law or otherwise as required under applicable law or (ii)
Expenses incurred by the Indemnitee in connection with preparing to serve or serving, prior to a
Change in Control, as a witness in cooperation with any party or entity who or which has threatened
or commenced any action or proceeding against the Company, or any director, officer, employee,
trustee, agent, representative, subsidiary, parent corporation or affiliate of the Company, but
such indemnification or advancement of Expenses in each such case may be provided by the Company if
the Board of Directors finds it to be appropriate;
(b) To indemnify the Indemnitee for any Expenses, judgments, fines, interest or penalties, or
excise taxes assessed with respect to any employee benefit or welfare plan, and sustained in any
Proceeding for which payment is actually made to the Indemnitee under a valid and collectible
insurance policy, except in respect of any excess beyond the amount of payment under such
insurance;
(c) To indemnify the Indemnitee for any Expenses, judgments, fines, expenses or penalties
sustained in any Proceeding for an accounting of profits made from the purchase or sale by the
Indemnitee of securities of the Company pursuant to the provisions of Section 16(b) of the Act or
similar provisions of any foreign or United States federal, state or local statute or regulation;
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(d) To indemnify the Indemnitee for any Expenses, judgments, fines, interest or penalties, or
excise taxes assessed with respect to any employee benefit or welfare plan, for which the
Indemnitee is indemnified by the Company otherwise than pursuant to this Agreement;
(e) To indemnify the Indemnitee for any Expenses (including without limitation any Expenses
relating to a Proceeding attempting to enforce this Agreement), judgments, fines, interest or
penalties, or excise taxes assessed with respect to any employee benefit or welfare plan, on
account of the Indemnitee’s conduct if such conduct shall be finally adjudged to have been
knowingly fraudulent, deliberately dishonest or willful misconduct, including, without limitation,
breach of the duty of loyalty; or
(f) If a court of competent jurisdiction finally determines that any indemnification hereunder
is unlawful.
10. Continuation of Indemnification. All agreements and obligations of the Company
contained herein shall continue during the period that the Indemnitee is [a director/an officer] of
the Company (or is or was serving at the request of the Company as an agent of another enterprise,
foreign or domestic) and shall continue thereafter so long as the Indemnitee shall be subject to
any possible Proceeding by reason of the fact that the Indemnitee was [a director/an officer] of
the Company or serving in any other capacity referred to in this Paragraph 10.
11. Indemnification Hereunder Not Exclusive. The indemnification provided by this
Agreement shall not be deemed to be exclusive of any other rights to which the Indemnitee may be
entitled under the Company’s Articles, any agreement, vote of shareholders or vote of Disinterested
Directors, provisions of applicable law, or otherwise, both as to action or omission in the
Indemnitee’s official capacity and as to action or omission in another capacity on behalf of the
Company while holding such office.
12. Successors and Assigns.
(a) This Agreement shall be binding upon, and shall inure to the benefit of, the Indemnitee
and the Indemnitee’s heirs, executors, administrators and assigns, whether or not the Indemnitee
has ceased to be [a director/an officer] of the Company, and the Company and its successors and
assigns. Upon the sale of all or substantially all of the business, assets or share capital of the
Company to, or upon the merger of the Company into or with, any corporation, partnership, joint
venture, trust or other person, this Agreement shall inure to the benefit of and be binding upon
both the Indemnitee and such purchaser or successor person. Subject to the foregoing, this
Agreement may not be assigned by either party without the prior written consent of the other party
hereto.
(b) If the Indemnitee is deceased and is entitled to indemnification under any provision of
this Agreement, the Company shall indemnify the Indemnitee’s estate and the Indemnitee’s spouse,
heirs, executors, administrators and assigns against, and the Company shall, and does hereby agree
to assume, any and all Expenses actually and reasonably incurred by or for the Indemnitee or the
Indemnitee’s estate, in connection with the investigation, defense,
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appeal or settlement of any Proceeding. Further, when requested in writing by the spouse of
the Indemnitee, and/or the Indemnitee’s heirs, executors, administrators and assigns, the Company
shall provide appropriate evidence of the Company’s agreement set out herein to indemnify the
Indemnitee against and to itself assume such Expenses.
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 the Indemnitee, who
shall execute all documents required and shall do all acts that may be necessary to secure such
rights and to enable the Company effectively to bring suit to enforce such rights.
14. Severability. Each and every paragraph, sentence, term and provision of this
Agreement is separate and distinct so that if any paragraph, sentence, term or provision thereof
shall be held to be invalid, unlawful or unenforceable for any reason, such invalidity,
unlawfulness or unenforceability shall not affect the validity, unlawfulness or enforceability of
any other paragraph, sentence, term or provision hereof. To the extent required, any paragraph,
sentence, term or provision of this Agreement may be modified by a court of competent jurisdiction
to preserve its validity and to provide the Indemnitee with the broadest possible indemnification
permitted under applicable law. The Company’s inability, pursuant to a court order or decision, to
perform its obligations under this Agreement shall not constitute a breach of this Agreement.
15. Savings Clause. If this Agreement or any paragraph, sentence, term or provision
hereof is invalidated on any ground by any court of competent jurisdiction, the Company shall
nevertheless indemnify the Indemnitee as to any Expenses, judgments, fines, interest or penalties,
or excise taxes assessed with respect to any employee benefit or welfare plan, which are incurred
with respect to any Proceeding to the fullest extent permitted by any (a) applicable paragraph,
sentence, term or provision of this Agreement that has not been invalidated or (b) applicable law.
16. Interpretation; Governing Law. This Agreement shall be construed as a whole and
in accordance with its fair meaning and any ambiguities shall not be construed for or against
either party. Headings are for convenience only and shall not be used in construing meaning. This
Agreement shall be governed and interpreted in accordance with the laws of the State of New York
without regard to the conflict of laws principles thereof.
17. Amendments. No amendment, waiver, modification, termination or cancellation of
this Agreement shall be effective unless in writing signed by the party against whom enforcement is
sought. The indemnification rights afforded to the Indemnitee hereby are contract rights and may
not be diminished, eliminated or otherwise affected by amendments to the Company’s Articles, or by
other agreements, including directors’ and officers’ liability insurance policies, of the Company.
18. Counterparts. This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement and shall become effective when one or more
counterparts have been signed by each party and delivered to the other.
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Notices. Any notice required to be given under this Agreement shall be directed to HiSoft
Technology International Limited, 00 Xxxxxx Xxxxxx, Xxxxxxxxxx Industrial Base, Hi-Tech Zone,
Dalian 116023, Attention: Xx. Xxxx Xxxx Xxx, and to the Indemnitee at [•], or to such other address
as either shall designate to the other in writing.
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IN WITNESS WHEREOF, the parties have executed this Indemnification Agreement as of the date
first written above.
| INDEMNITEE |
||||
| Name: | ||||
| HISOFT TECHNOLOGY INTERNATIONAL LIMITED |
||||
| By: | ||||
| Name: | Xx. Xxxx Xxxx LOH | |||
| Title: | Chief Executive Officer | |||
HiSoft Indemnification Agreement
