Exhibit 10.2
INDEMNIFICATION
AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this
“Agreement”) is entered into effective as of
November 20, 2008 by and between ACE Limited, a Swiss company
(the “Company”), and Olivier Steimer
(“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 allow 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, (ii) specific contractual assurance that
the protection allowed 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;
and
WHEREAS, the Company is a New York
Stock Exchange-listed and United States Securities and Exchange
Commission reporting company.
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.
(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,
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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 this 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.
(k) Type 2 Indemnifiable
Event : an Indemnifiable Event of the type described in clause
(ii) of the definition of Indemnifiable Event.
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(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, unless otherwise required by law, 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 or 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, to the fullest extent permitted by law and
the Company’s Articles of Association, 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
Indemnitee (who hereby agrees to reimburse the Company) for all
such amounts theretofore paid. If Indemnitee has commenced or
commences legal proceedings in a
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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 (except
Section 16 below), 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 connection
therewith.
(e) Partial Indemnification .
If Indemnitee is entitled under any provision of this Agreement to
indemnification by the Company for some or a portion of Expenses
(in the case of a Type 1 Indemnifiable Event) or Defense Costs (in
the case of a Type 2 Indemnifiable Event), but not, however, for
the total amount thereof, the Company shall nevertheless indemnify
Indemnitee for the portion thereof to which Indemnitee is
entitled.
(f) Prohibited
Indemnification . No indemnification pursuant to this
Ag
