Jasper

I. FACTUAL AND PROCEDURAL BACKGROUND

The following summary is taken from the parties’ Joint Statement of Stipulated Facts. Carl Jasper was Maxim’s chief financial officer until 2007. An indemnification agreement between Jasper and Maxim had required Maxim to indemnify Jasper and advance his legal defense costs for any action brought against him in his capacity as a corporate officer. The agreement expressly characterized any expenses advanced by Maxim as an undertaking, which Jasper agreed to repay if it were determined he was not entitled to indemnification. Jasper was also covered by both a Broad Form Individual Non-Indemnifiable Loss Directors and Officers Liability Insurance Policy Maxim purchased from Arch Insurance Company, and an Excess Liability Policy from Federal providing an additional $15 million in coverage. The Federal Policy is a “ ‘follow form’ ” policy incorporating the language of the Arch Policy as to provisions relevant to this appeal. The Securities and Exchange Commission filed a civil enforcement action against Jasper in 2007 for violations of the Securities and Exchange Act relating to stock option backdating and for several years of inaccurate…