Seagate 2014 Annual Report Download - page 112
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SEAGATETECHNOLOGYPLC
NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued)
16.Guarantees
IndemnificationstoOfficersandDirectors
OnMay4,2009,SeagateTechnology,anexemptedcompanyincorporatedwithlimitedliabilityunderthelawsoftheCaymanIslands("Seagate-Cayman"),
thentheparentcompany,enteredintoanewformofindemnificationagreement(the"RevisedIndemnificationAgreement")withitsofficersanddirectorsof
Seagate-Caymananditssubsidiaries(each,an"Indemnitee").TheRevisedIndemnificationAgreementprovidesindemnificationinadditiontoanyofIndemnitee's
indemnificationrightsunderSeagate-Cayman'sArticlesofAssociation,applicablelaworotherwise,andindemnifiesanIndemniteeforcertainexpenses(including
attorneys'fees),judgments,finesandsettlementamountsactuallyandreasonablyincurredbyhimorherinanyactionorproceeding,includinganyactionbyorin
therightofSeagate-Caymanoranyofitssubsidiaries,arisingoutofhisorherserviceasadirector,officer,employeeoragentofSeagate-Caymanoranyofits
subsidiariesorofanyotherentitytowhichheorsheprovidesservicesatSeagate-Caymans'srequest.However,anIndemniteeshallnotbeindemnifiedunderthe
RevisedIndemnificationAgreementfor(i)anyfraudordishonestyintheperformanceofIndemnitee'sdutytoSeagate-Caymanortheapplicablesubsidiaryof
Seagate-Caymanor(ii)Indemnitee'sconscious,intentionalorwillfulfailuretoacthonestly,lawfullyandingoodfaithwithaviewtothebestinterestsofSeagate-
CaymanortheapplicablesubsidiaryofSeagate-Cayman.Inaddition,theRevisedIndemnificationAgreementprovidesthatSeagate-Caymanwilladvance
expensesincurredbyanIndemniteeinconnectionwithenforcementoftheRevisedIndemnificationAgreementorwiththeinvestigation,settlementorappealof
anyactionorproceedingagainsthimorherastowhichheorshecouldbeindemnified.
OnJuly3,2010,pursuanttoacorporatereorganization,thecommonshareholdersofSeagate-CaymanbecameordinaryshareholdersofSeagate
Technologyplc(the"Company")andSeagate-CaymanbecameawhollyownedsubsidiaryoftheCompany,asdescribedmorefullyintheCurrentReporton
Form8-KfiledbytheCompanyonJuly6,2010(the"Redomestication").OnJuly27,2010,inconnectionwiththeRedomestication,theCompany,assole
shareholderofSeagate-Cayman,approvedaformofdeedofindemnity(the"DeedofIndemnity"),whichprovidesfortheindemnificationbySeagate-Caymanof
anydirector,officer,employeeoragentoftheCompany,Seagate-CaymanoranysubsidiaryoftheCompany(each,a"DeedIndemnitee"),inadditiontoanyofa
DeedIndemnitee'sindemnificationrightsundertheCompany'sArticlesofAssociation,applicablelaworotherwise,withasimilarscopetotheRevised
IndemnificationAgreement.Seagate-CaymanenteredintotheDeedofIndemnitywithcertainDeedIndemniteeseffectiveasofJuly3,2010andcontinuestoenter
intotheDeedofIndemnitywithadditionalDeedIndemniteesfromtimetotime.
ThenatureoftheseindemnificationobligationspreventstheCompanyfrommakingareasonableestimateofthemaximumpotentialamountitcouldbe
requiredtopayonbehalfofitsofficersanddirectors.Historically,theCompanyhasnotmadeanysignificantindemnificationpaymentsundersuchagreementsand
noamounthasbeenaccruedintheaccompanyingconsolidatedfinancialstatementswithrespecttotheseindemnificationobligations.
IntellectualPropertyIndemnificationObligations
TheCompanyhasenteredintoagreementswithcustomersandsuppliersthatincludelimitedintellectualpropertyindemnificationobligationsthatare
customaryintheindustry.TheseguaranteesgenerallyrequiretheCompanytocompensatetheotherpartyforcertaindamagesandcostsincurredasaresultofthird
partyintellectualpropertyclaimsarisingfromthesetransactions.ThenatureoftheintellectualpropertyindemnificationobligationspreventstheCompanyfrom
makingareasonableestimateofthemaximumpotentialamountitcouldberequiredtopaytoitscustomersandsuppliers.
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