20 July 2007

Directors & Officers Liability Insurance

The information in this document has been compiled not as a comprehensive review but rather as a guidance document only. The admissibility of any claims revolve around specific circumstances and legal interpretations of the policy at the material time. We are not providing legal advice and Marsh FINPRO ASEAN accepts no liability for any loss or damage arising directly or indirectly out of any error in or omission from this document.

MARSH VIETNAM LTD. Level 10, #8 Nguyen Hue HCMC, Vietnam Tel: 848 822 7456 Fax: 848 822 7343 FINPRO Division: Collin CP Yap - FINPRO Practice Leader Duong TN Phuong Deputy GD Hoang M Tuan - Special Practice Leader Bui H Tri - Client Development Executive

20 July 2007

BO HIM TRACH NHIEM CHO GIAM OC VA NGI IEU HANH

Tai lieu nay c bien soan mang tnh chat tham khao. Viec giai quyet boi thng thiet hai khi co ton that xay ra da tren thi iem thc te va pham vi bao hiem cua n bao hiem a c cap. Chung toi se khong cung cap cac t van phap l thong qua tai lieu nay va Marsh cung khong chu trach nhiem cho nhng ton that hoac thiet hai trc tiep hay gian tiep gay ra bi sai sot cua tai lieu nay.
MARSH VIETNAM LTD. Level 10, #8 Nguyen Hue HCMC, Vietnam Tel: 848 822 7456 Fax: 848 822 7343 FINPRO Division: Collin CP Yap - FINPRO Practice Leader Duong TN Phuong - Deputy GD Hoang M Tuan - Special Practice Leader Bui H Tri - Client Development Executive

Contents

1- Why is there a need for Directors & Officers Liability Insurance 2- Essence of D&O Liability Insurance Policy 3- Features of D&O Liability Insurance Policy 4- Principal Extensions 5- What are the Exclusions under the Policy 6- Notification Provisions 7- Introduction to Marsh

Marsh

NOI DUNG
1- V sao can bao hiem trach nhiem cho Giam oc va ngi ieu hanh (D&O) 2- S can thiet cua bao hiem D&O 3- iem ac trng trong bao hiem D&O 4- Cac pham vi bao hiem m rong quan trong cua n bao hiem D&O 5- Nhng iem loai tr trong n bao hiem D&O 6- Ngha vu khai bao 7- Gii thieu ve Marsh

Marsh

Why is there the need for D&O Liability Insurance?

Directors and officers could be potentially exposed to allegations of wrongful acts The policy protects the directors & officers personal liability against suits and claims alleging, e.g. breach of duty, breach of trust etc. The policy pays for defence cost and judgments awarded against directors and officers Article 165(1) of the Enterprise Law 2005 subjects directors and officers to consequences when the law is breached
Marsh 5

V SAO CAN BAO HIEM D&O?

Giam oc & ngi ieu hanh co the b oi au vi cac li cao buoc ve cac hanh vi sai trai cua ho Hp ong bao hiem dung e bao ve trach nhiem ca nhan cua Giam oc & ngi ieu hanh trc nhng li cao buoc va khieu kienVD: thieu trach nhiem, thieu tn nhiem/ tin cay n bao hiem chi tra chi ph bao cha & an ph ma Giam oc & ngi ieu hanh phai chu theo phan quyet cua toa ieu khoan 165(1) Luat Doanh Nghiep nm 2005 quy nh ro trach nhiem cua Giam oc & ngi ieu hanh khi ho vi pham luat
Marsh 6

Why is there a need for D&O Liability Insurance

Article 165(1) (Dealing with violations) of the Enterprise law 2005

Depending on the nature and extent of the breach, person who commits such a breach will be subject to a discipline, administrative punishment or criminal prosecution in accordance with the laws. The offender will be liable to indemnify any damage caused to the enterprise, owner, members, shareholders, creditors or other persons in accordance with the laws.

Marsh

V SAO CAN BAO HIEM D&O?

ieu khoan 165(1) (lien quan en vi pham) cua Luat Doanh Nghiep nam 2005 Ngi co hanh vi vi pham cac qui nh cua luat nay th tuy theo tnh chat va mc o vi pham ma x l k luat, x phat hanh chnh hoac b truy cu trach nhiem hnh s theo qui nh cua phap luat; trng hp gay thiet hai en li ch cua doanh nghiep, chu s hu, thanh vien, co ong, chu n cua doanh nghiep hoac ngi khac th phai boi thng theo qui nh cua phap luat.

Marsh

Essence of the D&O Policy

Structure of a typical D&O cover

Covered claim against Directors & Officers Covered securities claim against corporate entity

Indemnification?

No

Yes Insured Corporate entity to the extent it has indemnified D&Os Insured Corporate entity as a defendant in securities claims only

Who? What?

Insured Directors & Officers

Personal assets

Corporate assets

Corporate assets

Where?

D&O Insurance Insuring Agreement A:

D&O Insurance Insuring Agreement B: Corporate Reimbursement

D&O Insurance Insuring Agreement C: Corporate entity coverage for securities claims

Retention applies

Retention applies

Marsh

Side A

Side B

Side C

AC IEM N D&O

C cau n BH D&O
Covered claim Khie u nai cho ng lai againstD&O Directors & Officers Covered Khie u nai lq securities chng khoan claim Choagainst ng lai corporate entity Doanh nghie p

Indemnification? Boi thng?

No

Yes Insured Corporate entity to thecextent Trach nhie m ran g buo gia it has indemnified D&Os DN va G & NH Insured Corporate entitypas a Doanh Nghie defendant in securities la b n trong khieu nai claims Lq chng only khoan

Ai? Cai g?

InsuredInsured Directors Officers G && NH

Personal assets Tai san ca nhan

Corporate assets Ta i san doanh nghiep

Corporate assets Ta i san doanh nghiep

BH Insurance TN D&O D&O Insuring Agreement Thoa thua n BH A: A:

au?

D&O Insurance BH TN D&O Insuring Agreement Thoa thua n BH B: B: Corporate DN boi Reimbursement thng trc

D&O BH Insurance TN D&O Insuring Agreement Thoa thua n BH C: C: Corporate Phamentity vi BHcoverage DN securities claims Chofor khie u nai lq ch ng khoan

Retention applies Mc mien th ng ap dung

Retention applies Mc mien th ng ap dung

Marsh

Side A

Side B

Side C

10

Essence of the D&O Policy (contd)

Who is Insured?
(a)

all PAST, PRESENT and FUTURE directors and officers of the insured organisation and its subsidiary companies nominee directors of the insured organisation on the Board of its associate companies heirs, estates, legal representatives and lawful spouse any natural person who is a trustee of a pension, retirement or provident benefit fund established for employees benefit the policy is NOT intended to cover the own liability of the corporate entity

(b)

(c) (d)

(e)

Marsh

11

AC IEM N BH D&O (tt)

Ai la Ngi c Bao Hiem ?

(a)

Tat ca Giam oc & ngi ieu hanh trong QUA KH, HIEN TAI va TNG LAI va cac cong ty thanh vien cua doanh nghiep c bao hiem Cac Giam oc cua doanh ngiep c bao hiem c bo nhiem vao hoi ong quan tr cua cong ty phu thuoc Ngi tha ke, tai san tha ke, ai dien hp phap va v/chong hp phap Nhng ngi tha ke hien nhien c uy thac oi vi CNV chc ve hu, hu tr hoac cac khoan tiet kiem c n BH nay KHONG c bao hiem cho trach nhiem cua n v kinh doanh doanh nghiep
12

(b)

(c)

(d)

(e)

Marsh

Essence of the D&O Policy (contd)

The policy insures against LOSS resulting from CLAIMS against the directors and officers of the insured organisation alleging a Wrongful Act committed while acting in their capacity as directors and officers

Marsh

13

AC IEM N BH D&O (tt)

n bao hiem nay bao hiem cho nhng TON THAT phat sinh t vu KHIEU KIEN chong lai Giam oc & ngi ieu hanh cua doanh nghiep c bao hiem vien do Hanh Vi Sai Trai xay ra trong khi ho thc hien chc nang cua G & NH.

Marsh

14

Essence of the D&O Policy (contd)

Wrongful Act means any actual or alleged breach of duty, breach of trust, neglect, error, misstatement, misleading statement, omission, breach of warranty of authority or other act by the directors and officers in their respective capacities

Marsh

15

AC IEM N BH D&O

Hanh vi sai trai (Wrongful Act) co ngha bat k hanh ong trc tiep hay gian tiep nao dan en viec thieu trach nhiem, thieu tn nhiem, l la, sao lang, phat ngon sai, phat ngon dan en hieu nham, vi pham cac cam ket oi vi chnh quyen hoac cac hanh ong khac cua G & NH trong kha nang ca nhan cua ho

Marsh

16

Essence of the D&O Policy (contd)

What is a covered Loss under the Policy?

- Insured Persons legal liability to pay for damages, settlements and costs - Defence Costs which is advanced for covered Claims after the applicable retention has been satisfied

Marsh

17

AC IEM N BH D&O

Ton that nao c bao hiem di n D&O?

Trach nhiem phap ly cua Ngi c Bao Hiem phai boi

thng cho nhng thiet hai, khoan thanh toan va cac chi ph

Chi ph bien ho c tam ng trc cho nhng vu kien

c bao hiem sau khi khau tr mc mien thng

Marsh

18

Principal Extensions

Subsidiaries
-

Coverage applies to companies in which the named Insured owns, directly or through one or more Subsidiaries, more than 50% of the outstanding securities

New Subsidiaries
-

The policy automatically provides coverage for new subsidiaries provided that the total asset size of the new subsidiary does not exceed a pre-agreed percentage of the Insured's total asset size A 30 to 60 day coverage window is usually available for new subsidiaries which are larger than this threshold The new subsidiary must be noticed to the Insurer during this window, and the Insurer must agree to provide coverage beyond the window
Marsh 19

NHNG IEU KHOAN M RONG CHNH

Cong ty thanh vien:
-

Pham vi bao hiem ap dung cho cac cong ty Ma Ngi c bao Hiem s hu trc tiep hoac thong qua mot hay nhieu Cong ty thanh vien va chiem hu nhieu hn 50% co phan

Cong ty thanh vien mi thanh lap

-

n bao hiem t ong bao hiem oi vi cac cong ty thanh vien mi c thanh lap vi ieu kien tong gia tr tai san cua cong ty thanh vien mi thanh lap khong vt qua t le a c thoa thuan tren tong tai san cua doanh nghiep c bao hiem Mot thi han 30 hoac 60 ngay co the c chap nhan cho cac cong ty thanh vien mi thanh lap, neu cac cong ty nay co t le vt qua mc thoa thuan neu tren Cong ty mi thanh lap phai thong bao cho Cong ty bao hiem trong khoan thi han neu tren (30-60 ngay) va Cong ty bao hiem phai ong y bao hiem cho khoan thi gian vt qua

Marsh

20

Principal Extensions

Outside Directorships

Provides coverage for claims brought against the Insured's directors and officers while serving as a director or officer of an outside entity (any non-profit organization or scheduled for-profit organization) when the Insured has requested that they serve in such capacity. The coverage applies on either a triple or double excess basis. Triple excess means that the Insurer's policy applies excess of the outside entity's indemnification provisions, the outside entity's applicable insurance, and the Insured's indemnification provisions. Double excess means that the Insurer's policy applies excess of any applicable insurance or indemnification available to the director or officer from the outside entity.
Marsh 21

NHNG IEU KHOAN M RONG CHNH

Kiem nhiem chc vu tai doanh nghiep khac: Cung cap pham vi bao hiem oi vi cac khieu kien chong lai G & NH c bao hiem khi ho thc hien vai tro cua G & NH cua mot cong ty ben ngoai (cho du o la to chc li nhuan hay phi li nhuan) trong trung hp ngi c bao hiem a yeu cau rang ho thc hien ngha vu trong kha nang cua mnh. Pham vi m rong nay se ap dung theo nguyen tac vt qua (cap hai hoac cap ba). Trach nhiem vt qua cap ba co ngha rang n bao hiem nay se boi thng phan trach nhiem vt qua quy d phong boi thng, hp ong bao hiem (neu co) va quy d phong boi thng cua Ngi c Bao Hiem. Trach nhiem vt qua cap hai co ngha rang n bao hiem nay se boi thng phan trach nhiem vt troi cua n bao hiem (neu co) hoac quy boi thng san co oi vi G & NH t doanh nghiep c bao hiem bo sung.
Marsh 22

Principal Extensions (contd)

Employment Practices Liability

-

Extends coverage to directors and officers for claims alleging employment discrimination, sexual harassment, wrongful termination and other related employment torts

Marsh

23

NHNG IEU KHOAN M RONG CHNH

Trach nhiem lien quan en ngi lao ong: - n bao hiem nay m rong bao hiem G & NH cho nhng cao buoc ve phan biet oi x trong cong viec, quay roi tnh duc, ket thuc hp ong khong ung qui nh va sai pham khac lien quan en ngi lao ong

Marsh

24

Principal Extensions Applicable to the Corporate Entity

Entity Coverage for Employment Practices Liability

-

Extends coverage to the corporate entity for claims alleging employment discrimination, sexual harassment, wrongful termination and other related employment torts

Entity Coverage for Securities Claims

-

Extends coverage to the corporate entity for claims alleging violations of the securities laws

Marsh

25

IEU KHOAN M RONG AP DUNG CHO DOANH NGHIEP

Trach nhiem cua doanh nghiep lien quan en ngi lao ong: n bao hiem nay m rong bao hiem G & NH cho nhng cao buoc ve phan biet oi x trong cong viec, quay roi tnh duc, ket thuc hp ong khong ung qui nh va sai pham khac lien quan en ngi lao ong Trach nhiem cua doanh nghiep lien quan en phat hanh chng khoan M rong bao hiem cho doanh nghiep cho nhng khieu kien cao buoc vi pham luat chng khoan

Marsh

26

What are the Exclusions Under the Policy?

4 categories:

1) Personal Conduct Exclusions: - personal profit, advantage insider trading - dishonest or fraudulent act / willful breach final adjudication

2) Known Claims & Circumstances Exclusion or Prior & Pending Litigation

Marsh

27

NHNG IEM LOAI TR TRONG N D&O

4 loai ien hnh: 1) Loai tr cac hanh ong mang tnh ca nhan: - Truc li ca nhan, li dung thong tin kinh doanh noi bo e truc li - Nhng hanh ong khong trung thc hoac la ao / hanh vi chu y vi pham da vao phan quyet cuoi cung 2) Loai tr nhng s co va vu khieu nai a phat sinh hoac vu kien tung a xay ra hoac ang dien tien

Marsh

28

What are the Exclusions Under the Policy? (contd)

3) Other more specific policies available: e.g. Bodily Injury / Property Damage / Pollution / Professional Indemnity

4) Insured vs Insured Exclusion Excludes coverage for claims brought against the directors and officers by or on behalf of other directors and officers. However, you have carve backs from this exclusion for Derivative Suits, Employment Practices Claims and Defence Costs.

Marsh

29

NHNG IEM LOAI TR TRONG N D&O

3) Loai tr nhng ton that hoac thiet hai a c bao hiem bi mot n bao hiem khac: - Thng tat than the / Ton that tai san / O nhiem / Trach nhiem nghe nghiep 4) Loai tr khieu kien cua Ngi c bao hiem kien ngi c bao hiem - Loai tr cac vu kien oi vi Giam oc va ngi ieu hanh thc hien bi hoac ngi ai dien cua G & NH khac. Tuy nhien, ban co the yeu cau mua lai cac ieu khoan loai tr nay cho vu kien, khieu nai trach nhiem ca nhan oi vi ngi lao ong va ph bien ho.

Marsh

30

Notification Provisions

ANY CHANGES / UPDATES / OCCURANCE IN THE FOLLOWING AREAS WOULD REQUIRE IMMEDIATE NOTIFICATION TO YOUR RISK MANAGER AND LEGAL DEPARTMENT

Claims & Circumstances IMPORTANT: The D&O policy is a claims made & notified policy Written notice must be given AS SOON AS PRACTICABLE of any: A. CLAIM B. CIRCUMSTANCES

Marsh

31

NGHA VU KHAI BAO

NGI C BAO HIEM PHAI LAP TC THONG BAO VI BO PHAN QUAN LY RUI RO VA PHAP LY VE BAT KY S THAY OI / OI MI / S CO XAY RA TRONG CAC TRNG HP SAU: S co phat sinh hoac khieu kien: QUAN TRONG: n D&O la hp ong thong bao s co Thong bao bang van ban phai c thong bao ngay lap tc neu co the trong trng hp phat sinh: A. KHIEU KIEN B. S CO PHAT SINH
Marsh 32

Other Notification Provisions

What is required:
-

Description of the claim / circumstance Nature of the alleged Wrongful Act / potential damages / potential claimants How did you first become aware of the claim or circumstance

Marsh

33

NGHA VU KHAI BAO

Thong tin can thiet: Mo ta s co ac iem cua Hanh vi sai trai b cao buoc/ton that tiem nang/ nguyen n tiem nang Ngi c bao hiem sm nhan biet ve s va khieu nai nh the nao

Marsh

34

Marshs FINPRO Practice

Marshs FINPRO Practice is dedicated to financial and professional liability insurance coverages. We have more than 700 colleagues in our practice globally, and FINPRO is represented in virtually every major Marsh office globally.

Marsh

35

BO PHAN FINPRO CUA MARSH

Marsh FINPRO la dch vu chuyen sau tap trung ve bao hiem tai chnh va trach nhiem nghe nghiep, chung toi co hn 700 chuyen gia hoat ong khap toan cau va FINPRO la mot bo phan chnh trong hau het cac van phong cua Marsh khap the gii.

Marsh

36

Our Geography

Beijing Seoul Osaka Shanghai

Karachi New Delhi

Tokyo

Taipei Guangzhou Macau Hong Kong

Mumbai

Chennai

Bangkok

Manila Ho Chi Minh City

Guam

Subsidiary
Affiliate Correspondent

Kuala Lumpur

Singapore

Updated June 2007

Jakarta

FINPRO ASEAN
Sydney Melbourne

Marsh

37

Our Organisation Chart

FINPRO Asia Pacific Ray Armstrong

CEO, Marsh ASEAN Alan Cheah

FINPRO ASEAN Collin Yap

FINPRO Singapore Collin Yap

FINPRO Malaysia Devakumaran Painisamy

FINPRO Thailand Theeraya Phongpool

FINPRO Indonesia Dino Ary

FINPRO Philippines Larie Concepcin

FINPRO Vietnam Gary Leong

Andrew G Paul

Gunenthiran Gunaratnam

Meena Thanarattanavichai

Mary Ann Geronimo

Duong TN Phuong Hoang M Tuan Bui H Tri

Kelly Wong

Michelle Chung

Suteera Ua-Amporn

Yin Peng Foo (Regional Placement)

Weslin Wee

Felix Liu

Ikhmal Hadi Ibrahim

Salamah Subri

Lee Mei Li

Marsh

38

Marsh & McLennan Companies Structure

MMC

Marsh
Risk and Insurance Services

Mercer
HR Consulting

Kroll
Due Diligent

Revenues exceeding US$11.7Billion Approximately 62,500 employees worldwide 400 offices; 100 countries
Marsh 39

Worlds 10 Largest Insurance Brokers 2006

(ranked by brokerage revenues)
Marsh & McLennan Companies (MMC) has been ranked as the world's largest insurance broker for the 36th consecutive year by Business Insurance on publication of its annual 2007 brokerage report.

Rank 1 2 3 4 5 6 7 8 9 10
Marsh

Company Marsh & McLennan Companies, Inc. Aon Corporation Willis Group Holdings Ltd. Arthur J Gallagher & Co. Wells Fargo Insurance Services Inc. Brown & Brown Inc. Jardine Lloyd Thompson Group P.L.C. BB&T Insurance Services Inc. Hilb Rogal & Hobbs Co. Lockton Cos. L.L.C.

Brokerage Revenue 2006 (US$) 10,474,000,000 6,709,000,000 2,341,000,000 1,437,800,000 1,008,737,000 864,662,662 847,042,300 842,295,600 696,041,000 657,161,000
40

*Complied by Business Insurance magazine Jul, 2007

Marsh Vietnam

MARSH VIETNAM LTD Presented in Vietnam since 1994 30 experienced specialists in two offices: - Head Office: Level 10, #8 Nguyen Hue, District 1 HCMC, Vietnam Tel: 848 822 7456 Fax 848 822 7343 - Hanoi Office: Unit 301 - NorthStar Building, #4 Da Tuong, Hoan Kiem District Hanoi, Vietnam Tel: 844 942 9646 Fax 844 942 9573
Marsh 41

Our Contacts

- Collin CP Yap [email protected] - Gary CH Leong [email protected]

- FINPRO Practice Learder

- General Director/CEO

- Duong TN Phuong - Deputy General Director [email protected] - Hoang M Tuan [email protected] - Bui H Tri [email protected]
Marsh

- Specialty Practice Leader

- Client Development Executive

42

QUESTION & ANSWER

Marsh

43