Item 6.
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Indemnification of Directors and Officers.
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Panama Law
Under the Civil Code of the
Republic of Panama (the PCC), an agent is indemnified against liability incurred in acting without fault or imprudence on behalf of the agents principal. It is the opinion of Arias, Fabrega & Fabrega, McDermotts
Panamanian counsel (Panamanian Counsel), that this provision would apply to indemnify directors and officers against liability incurred in connection with the performance of their duties. According to Panamanian Counsel, Panamanian law
does not recognize the concept of actions brought by stockholders in the right of the corporation against directors or officers (i.e., derivative actions). Directors can be held liable to the corporation or stockholders only on demand made by
resolution of the stockholders, which McDermott believes is difficult to achieve in a public company.
By-Laws
of McDermott
Article VI of the Amended and Restated
By-Laws
of McDermott provides for the
indemnification of officers and directors as follows:
ARTICLE VI INDEMNIFICATION
Section 1. Each person (and the heirs, executors and administrators of such person) who is or was a director
and/or officer of the Company, whether elected or appointed (each such person being an Indemnitee), shall in accordance with Section 2 of this Article VI be indemnified and held harmless by the Company to the fullest extent
permitted by applicable law in effect on the date of amendment and restatement of these
By-Laws,
and to such greater extent as applicable law may thereafter permit, including against any and all losses,
liabilities, costs, damages and reasonable expenses that may be paid or incurred by such Indemnitee in connection with or resulting from any actual or threatened claim, action, suit or proceeding (whether brought by or in the right of the Company or
otherwise), civil, criminal, administrative or investigative, or in connection with an appeal relating thereto, in which such Indemnitee may become involved, as a party or otherwise, by reason of such Indemnitee being or having been a director or
officer of the Company or, if such Indemnitee shall be serving or shall have served in such capacity at the request of the Company, as a director, officer, employee or agent of another corporation or any partnership, joint venture, trust or other
entity whether or not such Indemnitee continues to be such at the time such liability or expense shall have been paid or incurred, provided such Indemnitee acted, in good faith, in a manner he or she reasonably believed to be in or not opposed to
the best interest of the Company and in addition, in criminal actions or proceedings, had no reasonable cause to believe that his or her conduct was unlawful. As used in this ARTICLE VI, the terms, liability and expense shall
include, but shall not be limited to, counsel fees and disbursements and amounts of judgments, fines or penalties against, and amounts paid in settlement by, such director or officer. The termination of any actual or threatened claim, action, suit
or proceeding, civil, criminal, administrative, or investigative, by judgment, settlement (whether with or without court approval), conviction or upon a plea of guilty or nolo contendere, or its equivalent, shall not create a presumption that such
Indemnitee did not meet the standards of conduct set forth in this Section 1.
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