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Exhibit
10.1
FORM OF SECOND AMENDED AND
RESTATED
INDEMNIFICATION
AGREEMENT
THIS SECOND AMENDED AND
RESTATED INDEMNIFICATION AGREEMENT (this “Agreement”)
is entered into effective as of May 17, 2007 by and between
ACE Limited, a Cayman Islands company (the “Company”),
and
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(“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 and/or officer of the Company;
WHEREAS, both the Company and
Indemnitee recognize the increased risk of litigation and other
claims currently being asserted against directors and officers of
corporations;
WHEREAS, the Articles of
Association of the Company require the Company to indemnify its
directors and officers to the fullest extent permitted by law, and
permit the Company to advance expenses relating to the defense of
indemnification matters, and the Indemnitee has been serving and
continues to serve as a director and/or officer of the Company in
part in reliance on the Company’s Articles of
Association;
WHEREAS, in recognition of
Indemnitee’s need for (i) substantial protection against
personal liability based on Indemnitee’s reliance on the
aforesaid Articles of Association, (ii) specific contractual
assurance that the protection promised by the Articles of
Association will be available to Indemnitee (regardless of, among
other things, any amendment to or revocation of the Articles of
Association or any change in the composition of the Company’s
Board of Directors or acquisition transaction relating to the
Company), and (iii) an inducement to provide effective
services to the Company as a director and/or officer, 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 under law and as set forth
in this Agreement, and, to the extent insurance is maintained, to
provide for the continued coverage of Indemnitee under the
Company’s directors’ and officers’ liability
insurance policies;
WHEREAS, the Company and
Indemnitee have previously entered into an amended and restated
indemnification agreement, dated as of November 17, 2005 (the
“First Amended Agreement”), and now desires to amend
and restate in its entirety the First Amended Agreement as set
forth herein.
NOW, THEREFORE, in
consideration of the above premises and of Indemnitee continuing to
serve the Company directly or, at its request, with another
enterprise, and intending to be legally bound hereby, the parties
agree as follows:
1. Certain
Definitions:
(a) Board : the Board
of Directors of the Company.
(b) Affiliate : any
corporation or other person or entity that directly, or indirectly
through one or more intermediaries, controls or is controlled by,
or is under common control with, the person specified.
(c) Change in Control
: shall be deemed to have occurred if:
(i) any “person,”
as such term is used in Sections 3(a)(9) and 13(d) of the
United States Securities Exchange Act of 1934, becomes a
“beneficial owner,” as such term is used in Rule 13d-3
promulgated under that act, of 50% or more of the Voting Stock (as
defined below) of the Company;
(ii) the majority of the
Board consists of individuals other than Incumbent Directors, which
term means the members of the Board on the Effective Date; provided
that any person becoming a director subsequent to such date whose
election or nomination for election was supported by three-quarters
of the directors who then comprised the Incumbent Directors shall
be considered to be an Incumbent Director;
(iii) the Company adopts any
plan of liquidation providing for the distribution of all or
substantially all of its assets;
(iv) all or substantially all
of the assets or business of the Company is disposed of pursuant to
a merger, consolidation or other transaction (unless the
shareholders of the Company immediately prior to such merger,
consolidation or other transaction beneficially own, directly or
indirectly, in substantially the same proportion as they owned the
Voting Stock of the Company, all of the Voting Stock or other
ownership interests of the entity or entities, if any, that succeed
to the business of the Company); or
(v) the Company combines with
another company and is the surviving corporation but, immediately
after the combination, the shareholders of the Company immediately
prior to the combination hold, directly or indirectly, 50% or less
of the Voting Stock of the combined company (there being excluded
from the number of shares held by such shareholders, but not from
the Voting Stock of the combined company, any shares received by
Affiliates (as defined below) of such other company in exchange for
stock of such other company).
For the purpose of this definition of
“Change in Control,” (I) an
“Affiliate” of a person or other entity shall mean a
person or other entity that directly or indirectly controls, is
controlled by, or is under common control with the person or other
entity specified and (II) “Voting Stock” shall mean
capital stock of any class or classes having general voting power
under ordinary circumstances, in the absence of contingencies, to
elect the directors of a corporation.
(d) Defense Costs :
attorneys’ fees and expenses and costs of investigation paid
or incurred in connection with investigating, defending,
prosecuting (subject to Section 2(b)), being a witness in,
participating in (including on appeal), or preparing for any of the
foregoing in, any Proceeding relating to any Type 2 Indemnifiable
Event.
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(e) Expenses : any
expense, liability, or loss, including attorneys’ fees,
judgments, fines, ERISA excise taxes and penalties, amounts paid or
to be paid in settlement, any interest, assessments, or other
charges imposed thereon, any federal, state, local, or foreign
taxes imposed as a result of the actual or deemed receipt of any
payments under this Agreement, and all other costs and obligations,
paid or incurred in connection with investigating, defending,
prosecuting (subject to Section 2(b)), being a witness in,
participating in (including on appeal), or preparing for any of the
foregoing in, any Proceeding relating to any Type 1 Indemnifiable
Event.
(f) Indemnifiable
Event : (i) any event or occurrence that takes place
either prior to or after the execution of this Agreement, related
to the fact that Indemnitee is or was a director or officer of the
Company, or while a director or officer is or was serving at the
request of the Company as a director, officer, employee, trustee,
agent, or fiduciary of another foreign or domestic corporation,
partnership, limited liability company, joint venture, employee
benefit plan, trust, or other enterprise, or was a director,
officer, employee, or agent of a foreign or domestic corporation
that was a predecessor corporation of the Company or of another
enterprise at the request of such predecessor corporation, or
related to anything done or not done by Indemnitee in any such
capacity, whether or not the basis of the Proceeding is alleged
action in an official capacity as a director, officer, employee, or
agent or in any other capacity while serving as a director,
officer, employee, or agent of the Company, as described above or
(ii) any event or occurrence that takes place either prior to
or after the execution of the First Amended Agreement, related to
the fact that Indemnitee is or was a director, officer, employee,
trustee, agent, or fiduciary of another foreign or domestic
corporation, partnership, limited liability company, joint venture,
employee benefit plan, trust, or other enterprise and that relates
to the subject matter of the investigations referred to in the
Company’s Annual Report on Form 10-K for the year ended
December 31, 2004 or any other investigation (whether or not
the Company is a target of such investigation) by any government
entity covering subject matter that is substantially similar to the
subject matter of, or arises out of, the foregoing
investigations.
(g) Independent
Counsel : the person or body appointed in connection with
Section 3.
(h) Proceeding : any
threatened, pending, or completed action, suit, or proceeding or
any alternative dispute resolution mechanism (including an action
by or in the right of the Company), or any inquiry, hearing, or
investigation, whether conducted 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.
(i) Reviewing Party :
the person or body appointed in accordance with
Section 3.
(j) Type 1 Indemnifiable
Event : an Indemnifiable Event of the type described in clause
(i) of the definition of Indemnifiable Event.
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(k) Type 2 Indemnifiable
Event : an Indemnifiable Event of the type described in clause
(ii) of the definition of Indemnifiable Event.
(l) Voting Securities
: any securities of the Company that vote generally in the election
of directors.
2. Agreement to Indemnify
.
(a) General Agreement
. 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 Proceeding by reason of (or
arising in part out of) a Type 1 Indemnifiable Event, the Company
shall indemnify Indemnitee from and against any and all Expenses to
the fullest extent permitted by law, as the same exists or may
hereafter be amended or interpreted (but in the case of any such
amendment or interpretation, only to the extent that such amendment
or interpretation permits the Company to provide broader
indemnification rights than were permitted prior thereto). 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 Proceeding by reason of (or arising in
part out of) a Type 2 Indemnifiable Event, the Company shall
indemnify Indemnitee from and against any and all Defense Costs to
the fullest extent permitted by law, as the same exists or may
hereafter be amended or interpreted (but in the case of any such
amendment or interpretation, only to the extent that such amendment
or interpretation permits the Company to provide broader
indemnification rights than were permitted prior thereto). The
parties hereto intend that this Agreement shall provide for
indemnification in excess of that expressly permitted by statute,
including, without limitation, any indemnification provided by the
Company’s Articles of Association, vote of its shareholders
or disinterested directors, or applicable law.
(b) Initiation of
Proceeding . Notwithstanding anything in this Agreement to the
contrary, Indemnitee shall not be entitled to indemnification
pursuant to this Agreement in connection with any Proceeding
initiated by Indemnitee against the Company or any director or
officer of the Company unless (i) the Company has joined in or
the Board has consented to the initiation of such Proceeding;
(ii) the Proceeding is one to enforce indemnification rights
under Section 5; or (iii) the Proceeding is instituted
after a Change in Control (other than a Change in Control approved
by a majority of the directors on the Board who were directors
immediately prior to such Change in Control) and Independent
Counsel has approved its initiation.
(c) Expense Advances .
If so requested by Indemnitee, the Company shall advance (within
ten business days of such request) any and all Expenses (in the
case of a Type 1 Indemnifiable Event) or Defense Costs (in the case
of a Type 2 Indemnifiable Event) to Indemnitee (in either case, an
“Expense Advance”); provided that, (i) such an
Expense Advance shall be made only upon delivery to the Company of
an undertaking by or on behalf of the Indemnitee to repay the
amount thereof if it is ultimately determined that Indemnitee is
not entitled to be indemnified by the Company, and (ii) if 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
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Indemnitee (who hereby agrees to
reimburse the Company) for all such amounts theretofore paid. If
Indemnitee has commenced or commences legal proceedings in a court
of competent jurisdiction to secure a determination that Indemnitee
should be indemnified under applicable law, as provided in
Section 4, 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 is made with respect thereto (as to
which all rights of appeal therefrom have been exhausted or have
lapsed). Indemnitee’s obligation to reimburse the Company for
Expense Advances shall be unsecured and no interest shall be
charged thereon.
(d) Mandatory
Indemnification . Notwithstanding any other provision of this
Agreement, to the extent that Indemnitee has been successful on the
merits or otherwise in defense of any Proceeding relating in whole
or in part to a Type 1 Indemnifiable Event or in defense of any
issue or matter therein, Indemnitee shall be indemnified against
all Expenses incurred in connectio
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