Exhibit 99.1
FORM OF INDEMNIFICATION
AGREEMENT
This Agreement is made and entered
into as of
,
20 (the “Agreement”), by and between
World Heart Corporation, a corporation incorporated under the laws
of Canada (the “Company”, which term shall include any
one or more of its subsidiaries where appropriate), and
(“Indemnitee”). Certain capitalized terms are
used in this Agreement as specifically defined in
Section 7.
WHEREAS , the Company and Indemnitee recognize the
substantial increase in corporate litigation in general, subjecting
directors and executive officers to expensive litigation
risks;
WHEREAS , the Company desires to attract and retain the
services of highly qualified individuals, such as Indemnitee, to
serve as directors and executive officers of the Company and to
indemnify its directors and executive officers so as to provide
them with the maximum protection permitted under applicable law and
the Company’s Articles of Incorporation and By-Laws, each as
amended; and
WHEREAS , in view of such considerations, the Company
desires to provide, independent from the indemnification to which
Indemnitee is otherwise entitled by law and under the
Company’s Articles of Incorporation and By-Laws, each as
amended, indemnification to Indemnitee and advances of expenses,
all as set forth in this Agreement.
NOW , THEREFORE , to induce Indemnitee to
serve the Company and in consideration of these premises and the
mutual agreements set forth in this Agreement, as well as other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company and Indemnitee hereby
agree as follows:
1.
Services by Indemnitee
. Indemnitee agrees to serve
or continue to serve as a director or executive officer of the
Company for so long as Indemnitee is duly elected or appointed or
until Indemnitee’s written resignation. This Agreement
shall not impose any obligation on the Company to continue
Indemnitee’s service to the Company beyond any period
otherwise required by law or by other agreements of the parties, if
any.
2.
Indemnification and
Advances .
2.1
The Company shall advance all
Expenses actually and reasonably incurred or expected to be
incurred by or on behalf of Indemnitee in connection with any
Proceeding within fifteen business days after the receipt by the
Company of a written request therefor, accompanied or preceded by
reasonably detailed evidence of such Expenses. Such written
request shall include an undertaking, substantially in the form
attached hereto as Exhibit A , by or on behalf of
Indemnitee to repay all Expenses advanced to the extent Indemnitee
shall be adjudicated, or determined pursuant to Section 3.1,
3.2 or 3.3, to be not entitled to indemnification therefor.
The undertaking as described above shall be unsecured, bear no
interest and be accepted by the Company without reference to
Indemnitee’s financial ability to repay any such
advances. Repayment shall not be required until after the
completion of all legal proceedings that have been initiated by
Indemnitee concerning indemnification.
2.2
Except as specifically provided in
Sections 3.1, 3.2 and 3.3, within 60 calendar days after receipt of
a request for indemnification from Indemnitee the Company shall
indemnify Indemnitee to the fullest extent permitted by law against
all Expenses, judgments, penalties, fines and amounts paid in
settlement actually and reasonably incurred by Indemnitee or on
Indemnitee’s behalf in connection with any Proceeding or any
claim, issue or matter therein. A request for indemnification
must be accompanied by reasonable evidence of the basis of the
amount for which indemnification is requested, and must indicate a
choice of Independent Counsel, if any, to make any determination
pursuant to Section 3.3.
2.3
Notwithstanding any other provision
of this Agreement, Indemnitee shall be indemnified against all
Expenses actually and reasonably incurred by Indemnitee in
connection with any Proceeding (or any claim, issue or matter
relating thereto) which was adjudicated or determined by a court of
competent jurisdiction, on
the merits or otherwise, in Indemnitee’s
favor or which was terminated by dismissal or withdrawal, with or
without prejudice. Without limiting the generality of the
foregoing, if any Proceeding is disposed of, on the merits, by
settlement (with or without court approval) or otherwise (including
a disposition without prejudice), without (i) the disposition
being adverse to Indemnitee, (ii) an adjudication that
Indemnitee was liable to the Company, (iii) a plea of guilty
by Indemnitee, (iv) an adjudication that Indemnitee did not
act in good faith and in a manner Indemnitee reasonably believed to
be in or not opposed to the best interests of the Company, or
(v) with respect to any criminal action or proceeding, an
adjudication that Indemnitee had reasonable cause to believe
Indemnitee’s conduct was unlawful, then the Proceeding shall
be considered for the purpose of this Agreement to have been
resolved in Indemnitee’s favor. For purposes of this
Agreement, the termination of any Proceeding by settlement or upon
a plea of nolo contendere , or its equivalent, shall
not, of itself, 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.
2.4
If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for
some or a portion of the Expenses, judgments, penalties, fines or
amounts paid in settlement actually and reasonably incurred by him
or on his behalf in connection with any Proceeding or any claim,
issue or matter therein, but not, however, for the total amount
thereof, the Company shall nevertheless indemnify Indemnitee for
the portion of such Expenses, judgments, penalties, fines or
amounts paid in settlement to which the Company reasonably believes
the Indemnitee is entitled.
2.5
Indemnitee must notify the Company
in writing as soon as practicable of any Proceeding for which
indemnity will or could be sought by him and provide the Company
with a copy of any summons, citation, subpoena, information or
other document relating to such Proceeding with which Indemnitee is
served. In the event the Company shall be obligated to pay Expenses
of Indemnitee in connection with any Proceeding, the Company shall
have the right in its sole discretion to assume the defense of such
Proceeding, with counsel approved by Indemnitee, which approval
shall not be unreasonably withheld or delayed, upon the delivery to
Indemnitee of written notice of its election to do so.
Notwithstanding the foregoing, the Company shall not be permitted
to settle any Proceeding on behalf of Indemnitee in any manner
which would impose any unindemnified liability or penalty on
Indemnitee or require any acknowledgment of wrongdoing on the part
of Indemnitee without Indemnitee’s written consent. The
Company shall not be required to indemnify Indemnitee for any
amounts paid in settlement of any Proceeding effected without its
written consent (which consent shall not be unreasonably withheld
or delayed). After delivery of such notice, approval of such
counsel by Indemnitee and the retention of such counsel by the
Company, the Company will not be liable to Indemnitee under this
Agreement for any other fees of counsel subsequently incurred by
Indemnitee with respect to the same Proceeding, provided that
(i) Indemnitee shall have the right to employ his own counsel
in any such Proceeding at Indemnitee’s own expense; and
(ii) if (A) the employment of separate counsel by
Indemnitee has been previously authorized in writing by the
Company, or (B) Indemnitee shall have reasonably concluded
based on the advice of legal counsel that there is an actual
conflict of interest between the Company and Indemnitee in the
conduct of any such defense, or (C) the Company shall not, in
fact, have employed counsel to assume the defense of such
Proceeding, then the fees of Indemnitee’s counsel shall be at
the expense of the Company. The Company shall not be
entitled, without the consent of Indemnitee (which consent shall
not be unreasonably withheld or delayed), to assume the defense of
any claim brought by or in the right of the Company or as to which
counsel for Indemnitee shall have reasonably made the conclusion
provided for in clause (ii)(B) above.
3.
Exceptions
.
3.1
No indemnification shall be provided
with respect to the following: (a) any Proceeding to the
extent that Indemnitee has been finally adjudicated not to have
acted in good faith and in the reasonable belief that
Indemnitee’s action or inaction was in the best interests of
the Company (or, in the case of service with respect to an employee
benefit plan, in the best interests of the participants or
beneficiaries of such employee benefit plan); (b) any of
Indemnitee’s Expenses or liabilities to the extent that such
Expenses or liabilities have been actually paid by an insurance
carrier under a policy of insurance; or (c) the payment of
profits inuring to and recoverable by the Company pursuant to
Section 16(b) of the Securities and Exchange Act of 1934,
as amended, or any similar successor statute, and any Expenses
incurred with respect thereto; or (d) any Proceeding initiated
or brought voluntarily by Indemnitee and not by way of defense,
counterclaim or crossclaim, except (i) with respect to
a
Proceeding brought to establish or enforce a
right to indemnification under this Agreement (unless otherwise
prohibited by this Agreement), or (ii) in specific cases where
the Board of Directors has approved the initiation or bringing of
such Proceeding; or (e) any Proceeding in which Indemnitee has
been finally adjudicated to have committed fraud; or (f) any
Proceeding in which it has been finally adjudicated that Indemnitee
may not be relieved of liability under applicable law or public
policy for Indemnitee’s acts, errors, omissions or
transactions.
3.2
If a Change of Control has not
occurred since the date hereof, no indemnification shall be
provided under this Agreement to the extent that, within 60
calendar days of the receipt by the Company of a request for
indemnification, Indemnitee has been determined (after
investigation) by:
(a) the Board of Directors of
the Company by majority vote of a quorum of Disinterested
Directors; or
(b) if such a quorum is not
obtainable, or if directed by majority vote of a quorum of
Disinterested Directors, Independent Counsel (selected by majority
vote of the Disinterested Directors or, if none, by majority vote
of the Board of Directors) in a written opinion, not to be entitled
to such indemnification pursuant to any of the exceptions set forth
in Section 3.1 above.
3.3
If a Change in Control has occurred
since the date hereof, no indemnification shall be provided under
this Agreement to the extent that, within 60 calendar days of the
receipt by the Company of a request for indemnification, Indemnitee
has been determined (after investigation) by:
(a) the Independent Counsel
specified by Indemnitee in the request for indemnification and
approved by the Company (such approval not to be unreasonably
withheld); or
(b) if the Indemnitee makes no
such specification, by a person, persons or entity who would be
entitled to make such a determination pursuant to Section 3.2
if a Change in Control had not occurred, not to be entitled to such
indemnification pursuant to any of the exceptions set forth in
Section 3.1 above. A person, persons or entity making a
determination pursuant to this Section 3.3 shall presume that
Indemnitee acted so as to be entitled to indemnification, and the
Company shall have the burden of proof in overcoming that
presumption.
3.4
Indemnitee shall cooperate with any
person, persons or entity making an investigation pursuant to
Sections 3.2 or 3.3 to the extent reasonably requested. Any
costs or expenses (including attorney’s fees and
disbursements) incurred by Indemnitee in so cooperating shall be
borne by the Company (irrespective of the determination as to
Indemnitee’s entitlement to indemnification), and the Company
hereby agrees to indemnify and agrees to hold Indemnitee harmless
therefrom.
3.5
For purposes of any determination of
good faith, Indemnitee shall be deemed to have acted in good faith
if Indemnitee’s action is based on the records or books of
account of the Company or relevant Subsidiary, including financial
statements, or on information supplied to Indemnitee by the
officers of the Company or relevant Subsidiary in the course of
their duties, or on the advice of legal counsel for the Company or
relevant Subsidiary, by an independent certified public accountant
or by an appraiser or other expert selected with reasonable care by
the Company or relevant Subsidiary. The knowledge and
actions, or failure to act, of any other director, officer, agent
or employee of
