Exhibit
10.1


 


INDEMNIFICATION
AGREEMENT


 


THIS INDEMNIFICATION AGREEMENT (this “Agreement”) is made
as of [·], 2010, by and between Xueda Education Group, an
exempted company duly incorporated and validly existing under the laws of the
Cayman Islands (the “Company”),
and [·] (the “Indemnitee”), [a director/an officer] of the
Company.


 


WHEREAS, the Indemnitee has agreed to serve as [a
director/an officer] of the Company and in such capacity will render valuable
services to the Company; and


 


WHEREAS, in order to induce and encourage highly
experienced and capable persons such as the Indemnitee to serve as directors of
the Company or in other capacities, the Board of Directors has determined that
this Agreement is reasonable, prudent and necessary to promote and ensure the
best interests of the Company and its shareholders;


 


NOW, THEREFORE, in consideration of the premises and
mutual agreements hereinafter set forth, and other good and valuable
consideration, including, without limitation, the service of the Indemnitee,
the receipt of which hereby is acknowledged, and in order to induce the
Indemnitee to serve as [a director/an officer] of the Company, the Company and
the Indemnitee hereby agree as follows:


 


1.              Definitions. As used in this Agreement:


 


(a)           “Board of Directors”
shall mean the board of directors of the Company.


 


(b)           “Change in Control”
shall mean a change in control of the Company of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A (or in response to any similar item on any similar or
successor schedule or form) promulgated under the United States Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder (collectively, the “Act”), whether or not the Company is then subject to
such reporting requirement; provided, however, that, without limitation, such a
Change in Control shall be deemed to have occurred (irrespective of the
applicability of the initial clause of this definition) if (i) any
“person” (as such term is used in Sections 13(d) and 14(d) of the Act, but
excluding any trustee or other fiduciary holding securities pursuant to an
employee benefit or welfare plan or employee share plan of the Company or any
subsidiary of the Company, or any entity organized, appointed, established or
holding securities of the Company with voting power for or pursuant to the
terms of any such plan) is or becomes the “beneficial owner” (as defined in
Rule 13d-3 under the Act), directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the Company’s then
outstanding securities without the prior approval of at least two-thirds of the
Continuing Directors (as defined below) in office immediately prior to such
person’s attaining such interest; (ii) the Company is a party to a merger,
consolidation, scheme of arrangement, sale of assets or other reorganization,
or a proxy contest, as a consequence of which Continuing Directors in office
immediately prior to such transaction or event constitute less than a majority
of the Board of Directors of the Company (or any successor entity) thereafter;
or (iii) during any period of two (2) consecutive years, 


 


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individuals who at the beginning of such period
constituted the Board of Directors of the Company (including for this purpose
any new director whose election or nomination for election by the Company’s
shareholders was approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of such period) (such
directors being referred to herein as “Continuing Directors”) cease for any reason
to constitute at least a majority of the Board of Directors of the Company.


 


(c)   “Disinterested Director” with respect to any
request by the Indemnitee for indemnification or advancement of expenses
hereunder shall mean a director of the Company who neither is nor was a party
to the Proceeding (as defined below) in respect of which indemnification or
advancement is being sought by the Indemnitee.


 


(d)   The term “Expenses” shall mean, without
limitation, expenses of Proceedings, including attorneys’ fees, disbursements
and retainers, accounting and witness fees, expenses related to the preparation
or service as a witness, travel and deposition costs, expenses of
investigations, judicial or administrative proceedings and appeals, amounts
paid in settlement of a Proceeding by or on behalf of the Indemnitee, costs of
attachment or similar bonds, any expenses of attempting to establish or
establishing a right to indemnification or advancement of expenses, under this
Agreement, the Company’s Memorandum of Association and Articles of Association
as currently in effect (the “Articles”), applicable law or otherwise, and reasonable
compensation for time spent by the Indemnitee in connection with the
investigation, defense or appeal of a Proceeding or action for indemnification
for which the Indemnitee is not otherwise compensated by the Company or any
third party. The term “Expenses” shall not include the amount of judgments,
fines, interest or penalties, or excise taxes assessed with respect to any
employee benefit or welfare plan, which are actually levied against or
sustained by the Indemnitee to the extent sustained after final adjudication.


 


(e)   The term “Independent Legal Counsel” shall mean
any firm of attorneys reasonably selected by the Board of Directors of the
Company, so long as such firm has not represented the Company, the Company’s
subsidiaries or affiliates, the Indemnitee, any entity controlled by the
Indemnitee, or any party adverse to the Company, within the preceding five
(5) years. Notwithstanding the foregoing, the term “Independent Legal
Counsel” shall not include any person who, under applicable standards of
professional conduct then prevailing, would have a conflict of interest in
representing either the Company or the Indemnitee in an action to determine the
Indemnitee’s right to indemnification or advancement of expenses under this
Agreement, the Company’s Articles, applicable law or otherwise.


 


(f)    The term “Proceeding” shall mean any threatened,
pending or completed action, suit, arbitration, alternate dispute resolution
mechanism, or any other proceeding (including, without limitation, an appeal therefrom),
formal or informal, whether brought in the name of the Company or otherwise,
whether of a civil, criminal, administrative or investigative nature, and
whether by, in or involving a court or an administrative, other governmental or
private entity or body (including, without limitation, an investigation by the
Company or its Board of Directors), by reason of (i) the fact that the
Indemnitee is or 


 


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was [a director/an officer] of the Company, or is or
was serving at the request of the Company as an agent of another enterprise,
whether or not the Indemnitee is serving in such capacity at the time any
liability or expense is incurred for which indemnification or reimbursement is
to be provided under this Agreement, (ii) any actual or alleged act or
omission or neglect or breach of duty, including, without limitation, any
actual or alleged error or misstatement or misleading statement, which the
Indemnitee commits or suffers while acting in any such capacity, or
(iii) the Indemnitee attempting to establish or establishing a right to
indemnification or advancement of expenses pursuant to this Agreement, the
Company’s Articles, applicable law or otherwise.


 


(g)   The phrase “serving at the request of the Company as an agent of
another enterprise” or any similar terminology shall mean,
unless the context otherwise requires, serving at the request of the Company as
a director, officer, employee or agent of another corporation, partnership,
joint venture, limited liability company, trust, employee benefit or welfare
plan or other enterprise, foreign or domestic. The phrase “serving at the
request of the Company” shall include, without limitation, any service as [a
director/an officer] of the Company which imposes duties on, or involves
services by, such [director/officer] with respect to the Company or any of the
Company’s subsidiaries, affiliates, employee benefit or welfare plans, such
plan’s participants or beneficiaries or any other enterprise, foreign or domestic.
In the event that the Indemnitee shall be a director, officer, employee or
agent of another corporation, partnership, joint venture, limited liability
company, trust, employee benefit or welfare plan or other enterprise, foreign
or domestic, 50% or more of the ordinary shares, combined voting power or total
equity interest of which is owned by the Company or any subsidiary or affiliate
thereof, then it shall be presumed conclusively that the Indemnitee is so
acting at the request of the Company.


 


2.     Services by the Indemnitee. The
Indemnitee agrees to serve as [a director/an officer] of the Company under the
terms of the Indemnitee’s agreement with the Company for so long as the
Indemnitee is [duly elected and qualified,] appointed or until such time as the
Indemnitee tenders a resignation in writing or is removed as [a director/an
officer]; provided, however, that the Indemnitee may at any time and for any
reason resign from such position (subject to any other contractual obligation
or other obligation imposed by operation of law).


 


3.     Proceeding Other Than a Proceeding By or In the Right
of the Company. The Company shall indemnify the Indemnitee if
the Indemnitee is a party to or threatened to be made a party to or is
otherwise involved in any Proceeding (other than a Proceeding by or in the
right of the Company), by reason of the fact that the Indemnitee is or was [a
director/an officer] of the Company, or is or was serving at the request of the
Company as an agent of another enterprise, against all Expenses, judgments,
fines, interest or penalties, and excise taxes assessed with respect to any
employee benefit or welfare plan, which are actually and reasonably incurred by
the Indemnitee in connection with such a Proceeding, to the fullest extent permitted
by applicable law; provided, however, that any settlement of a Proceeding must
be approved in advance in writing by the Company (which approval 


 


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shall not be unreasonably withheld).


 


4.     Proceedings By or In the Right of the Company.
The Company shall indemnify the Indemnitee if the Indemnitee is a party to or
threatened to be made a party to or is otherwise involved in any Proceeding by
or in the right of the Company to procure a judgment in its favor by reason of
the fact that the Indemnitee is or was [a director/an officer] of the Company,
or is or was serving at the request of the Company as an agent of another
enterprise, against all Expenses, judgments, fines, interest or penalties, and
excise taxes assessed with respect to any employee benefit or welfare plan,
which are actually and reasonably incurred by the Indemnitee  in connection with the defense or settlement
of such a Proceeding, to the fullest extent permitted by applicable law.


 


5.     Indemnification for Costs, Charges and Expenses of
Witness or Successful Party. Notwithstanding any other provision
of this Agreement (except as set forth in subparagraph 9(a) hereof), and
without a requirement for determination as required by Paragraph 8 hereof,
to the extent that the Indemnitee (a) has prepared to serve or has served
as a witness in any Proceeding in any way relating to (i) the Company or
any of the Company’s subsidiaries, affiliates, employee benefit or welfare
plans or such plan’s participants or beneficiaries or (ii) anything done
or not done by the Indemnitee as [a director/an officer] of the Company or in
connection with serving at the request of the Company as an agent of another
enterprise, or (b) has been successful in defense of any Proceeding or in
defense of any claim, issue or matter therein, on the merits or otherwise,
including the dismissal of a Proceeding without prejudice or the settlement of
a Proceeding without an admission of liability, the Indemnitee shall be
indemnified against all Expenses actually and reasonably incurred by the
Indemnitee in connection therewith to the fullest extent permitted by
applicable law.


 


6.     Partial Indemnification. If the
Indemnitee is entitled under any provision of this Agreement to indemnification
by the Company for a portion of the Expenses, judgments, fines, interest or
penalties, or excise taxes assessed with respect to any employee benefit or
welfare plan, which are actually and reasonably incurred by the Indemnitee in
the investigation, defense, appeal or settlement of any Proceeding, but not,
however, for the total amount of the Indemnitee’s Expenses, judgments, fines,
interest or penalties, or excise taxes assessed with respect to any employee
benefit or welfare plan, then the Company shall nevertheless indemnify the
Indemnitee for the portion of such Expenses, judgments, fines, interest
penalties or excise taxes to which the Indemnitee is entitled.


 


7.     Advancement of Expenses. The Expenses
incurred by the Indemnitee in any Proceeding shall be paid promptly by the
Company in advance of the final disposition of the Proceeding at the written
request of the Indemnitee to the fullest extent permitted by applicable law;
provided, however, that the Indemnitee shall set forth in such request reasonable
evidence that such Expenses have been incurred by the Indemnitee in connection
with such Proceeding, a statement that such Expenses do not relate to any
matter described in subparagraph 9(a) of this Agreement, and an undertaking in
writing to repay any advances if it is ultimately determined as provided in
subparagraph 8(b) of this 


 


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Agreement that the Indemnitee is not entitled to
indemnification under this Agreement.


 


8.     Indemnification Procedure; Determination of Right to
Indemnification.


 


(a)   Promptly
after receipt by the Indemnitee of notice of the commencement of any
Proceeding, the Indemnitee shall, if a claim for indemnification or advancement
of Expenses in respect thereof is to be made against the Company under this
Agreement, notify the Company of the commencement thereof in writing. The
omission to so notify the Company will not relieve the Company from any
liability which the Company may have to the Indemnitee under this Agreement
unless the Company shall have lost significant substantive or procedural rights
with respect to the defense of any Proceeding as a result of such omission to
so notify. The Indemnitee shall be conclusively presumed to have met the
relevant standards of conduct, if any, as defined by applicable law, for
indemnification pursuant to this Agreement and shall be absolutely entitled to
such indemnification, unless a determination by clear and convincing evidence
is made that the Indemnitee has not met such standards by (i) the Board of
Directors by a majority vote of a quorum thereof consisting of Disinterested
Directors, (ii) the shareholders of the Company by majority vote of a
quorum thereof consisting of shareholders who are not parties to the Proceeding
due to which a claim for indemnification is made under this Agreement,
(iii) Independent Legal Counsel as set forth in a written opinion (it
being understood that such Independent Legal Counsel shall make such
determination only if the quorum of Disinterested Directors referred to in
clause (i) of this subparagraph 8(b) is not obtainable or if the Board of
Directors of the Company by a majority vote of a quorum thereof consisting of
Disinterested Directors so directs), or (iv) a court of competent
jurisdiction; provided, however, that if a Change of Control shall have
occurred and the Indemnitee so requests in writing, such determination shall be
made only by a court of competent jurisdiction.


 


(b)   If a claim
for indemnification or advancement of Expenses under this Agreement is not paid
by the Company within thirty (30) days after receipt by the Company of
written notice thereof, the rights provided by this Agreement shall be
enforceable by the Indemnitee in any court of competent jurisdiction. Such
judicial proceeding shall be made de novo. The burden of proving by clear and
convincing evidence that indemnification or advances are not appropriate shall
be on the Company. Neither the failure of the directors or shareholders of the
Company or Independent Legal Counsel to have made a determination prior to the
commencement of such action that indemnification or advancement of Expenses is
proper in the circumstances because the Indemnitee has met the applicable
standard of conduct, if any, nor an actual determination by the directors or
shareholders of the Company or Independent Legal Counsel that the Indemnitee
has not met the applicable standard of conduct shall be a defense to an action
by the Indemnitee or create a presumption for the purpose of such an action
that the Indemnitee has not met the applicable standard of conduct. The
termination of any Proceeding by judgment, order, settlement or conviction, or
upon a plea of nolo contendere or
its equivalent, shall not, of itself (i) create a presumption that the
Indemnitee did not act in good faith and in a manner which he reasonably
believed to be in the best interests of the Company and/or its shareholders,
and, with respect to any 


 


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criminal Proceeding, that the Indemnitee had
reasonable cause to believe that his conduct was unlawful or
(ii) otherwise adversely affect the rights of the Indemnitee to
indemnification or advancement of Expenses under this Agreement, except as may
be provided herein. The Company further agrees to stipulate in any such
judicial proceeding that the Company is bound by all the provisions of this
Agreement and is precluded from making any assertion to the contrary.


 


(c)   If a court
of competent jurisdiction shall determine that the Indemnitee is entitled to
any indemnification or advancement of Expenses hereunder, the Company shall pay
all Expenses actually and reasonably incurred by the Indemnitee in connection
with such adjudication (including, but not limited to, any appellate
proceedings). The Indemnitee’s Expenses incurred in connection with any
Proceeding concerning the Indemnitee’s right to indemnification or advancement
of Expenses in whole or in part pursuant to this Agreement shall also be
indemnified by the Company, regardless of the outcome of such a Proceeding, to
the fullest extent permitted by applicable law and the Company’s Articles. With
respect to any Proceeding for which indemnification or advancement of Expenses
is requested, the Company will be entitled to participate therein at its own
expense and, except as otherwise provided below, to the extent that it may
wish, the Company may assume the defense thereof, with counsel reasonably
satisfactory to the Indemnitee. After notice from the Company to the Indemnitee
of its election to assume the defense of a Proceeding, the Company will not be
liable to the Indemnitee under this Agreement for any Expenses subsequently
incurred by the Indemnitee in connection with the defense thereof, other than
as provided below. The Company shall not settle any Proceeding in any manner
which would impose any penalty or limitation on the Indemnitee without the
Indemnitee’s written consent. The Indemnitee shall have the right to employ his
own counsel in any Proceeding, but the fees and expenses of such counsel
incurred after notice from the Company of its assumption of the defense of the
Proceeding shall be at the expense of the Indemnitee, unless (i) the
employment of counsel by the Indemnitee has been authorized by the Company,
(ii) the Indemnitee shall have reasonably concluded that there may be a
conflict of interest between the Company and the Indemnitee in the conduct of
the defense of a Proceeding, or (iii) the Company shall not in fact have
employed counsel to assume the defense of a proceeding, in each of which cases
the fees and expenses of the Indemnitee’s counsel shall be advanced by the
Company. The Company shall not be entitled to assume the defense of any
Proceeding brought by or on behalf of the Company or as to which the Indemnitee
has reasonably concluded that there may be a conflict of interest between the
Company and the Indemnitee.


 


9.     Limitations on Indemnification. No
payments pursuant to this Agreement shall be made by the Company:


 


(a)   To
indemnify or advance funds to the Indemnitee for Expenses with respect to (i)
Proceedings initiated or brought voluntarily by the Indemnitee and not by way
of defense, except with respect to Proceedings brought to establish or enforce
a right to indemnification under this Agreement or any other statute or law or
otherwise as required under applicable law or (ii) Expenses incurred by the
Indemnitee in connection 


 


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with preparing to serve or serving, prior to a Change
in Control, as a witness in cooperation with any party or entity who or which
has threatened or commenced any action or proceeding against the Company, or
any director, officer, employee, trustee, agent, representative, subsidiary,
parent corporation or affiliate of the Company, but such indemnification or
advancement of Expenses in each such case may be provided by the Company if the
Board of Directors finds it to be appropriate;


 


(b)   To
indemnify the Indemnitee for any Expenses, judgments, fines, interest or
penalties, or excise taxes assessed with respect to any employee benefit or
welfare plan, and sustained in any Proceeding for which payment is actually
made to the Indemnitee under a valid and collectible insurance policy, except
in respect of any excess beyond the amount of payment under such insurance;


 


(c)   To
indemnify the Indemnitee for any Expenses, judgments, fines, expenses or
penalties sustained in any Proceeding for an accounting of profits made from
the purchase or sale by the Indemnitee of securities of the Company pursuant to
the provisions of Section 16(b) of the Act or similar provisions of any foreign
or United States federal, state or local statute or regulation;


 


(d)   To
indemnify the Indemnitee for any Expenses, judgments, fines, interest or
penalties, or excise taxes assessed with respect to any employee benefit or
welfare plan, for which the Indemnitee is indemnified by the Company otherwise
than pursuant to this Agreement;


 


(e)   To
indemnify the Indemnitee for any Expenses (including without limitation any
Expenses relating to a Proceeding attempting to enforce this Agreement),
judgments, fines, interest or penalties, or excise taxes assessed with respect
to any employee benefit or welfare plan, on account of the Indemnitee’s conduct
if such conduct shall be finally adjudged to have been knowingly fraudulent,
deliberately dishonest or willful misconduct, including, without limitation,
breach of the duty of loyalty; or


 


(f)    If a court
of competent jurisdiction finally determines that any indemnification hereunder
is unlawful.


 


10.  Continuation of Indemnification. All
agreements and obligations of the Company contained herein shall continue
during the period that the Indemnitee is [a director/an officer] of the Company
(or is or was serving at the request of the Company as an agent of another
enterprise, foreign or domestic) and shall continue thereafter so long as the
Indemnitee shall be subject to any possible Proceeding by reason of the fact
that the Indemnitee was [a director/an officer] of the Company or serving in
any other capacity referred to in this Paragraph 10.


 


11.  Indemnification Hereunder Not Exclusive.
The indemnification provided by this Agreement shall not be deemed to be
exclusive of any other rights to which the Indemnitee may be entitled under the
Company’s Articles, any agreement, vote of shareholders or vote of
Disinterested Directors, provisions of applicable law, or otherwise, 


 


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both as to action or omission in the Indemnitee’s
official capacity and as to action or omission in another capacity on behalf of
the Company while holding such office.


 


12.  Successors and Assigns.


 


(a)   This
Agreement shall be binding upon, and shall inure to the benefit of, the
Indemnitee and the Indemnitee’s heirs, executors, administrators and assigns,
whether or not the Indemnitee has ceased to be [a director/an officer] of the
Company, and the Company and its successors and assigns. Upon the sale of all
or substantially all of the business, assets or share capital of the Company to,
or upon the merger of the Company into or with, any corporation, partnership,
joint venture, trust or other person, this Agreement shall inure to the benefit
of and be binding upon both the Indemnitee and such purchaser or successor
person. Subject to the foregoing, this Agreement may not be assigned by either
party without the prior written consent of the other party hereto.


 


(b)   If the
Indemnitee is deceased and is entitled to indemnification under any provision
of this Agreement, the Company shall indemnify the Indemnitee’s estate and the
Indemnitee’s spouse, heirs, executors, administrators and assigns against, and
the Company shall, and does hereby agree to assume, any and all Expenses
actually and reasonably incurred by or for the Indemnitee or the Indemnitee’s
estate, in connection with the investigation, defense, appeal or settlement of
any Proceeding. Further, when requested in writing by the spouse of the
Indemnitee, and/or the Indemnitee’s heirs, executors, administrators and
assigns, the Company shall provide appropriate evidence of the Company’s
agreement set out herein to indemnify the Indemnitee against and to itself
assume such Expenses.


 


13.  Subrogation. In the event of payment
under this Agreement, the Company shall be subrogated to the extent of such
payment to all of the rights of recovery of the Indemnitee, who shall execute
all documents required and shall do all acts that may be necessary to secure
such rights and to enable the Company effectively to bring suit to enforce such
rights.


 


14.  Severability. Each and every paragraph,
sentence, term and provision of this Agreement is separate and distinct so that
if any paragraph, sentence, term or provision thereof shall be held to be
invalid, unlawful or unenforceable for any reason, such invalidity,
unlawfulness or unenforceability shall not affect the validity, unlawfulness or
enforceability of any other paragraph, sentence, term or provision hereof. To
the extent required, any paragraph, sentence, term or provision of this
Agreement may be modified by a court of competent jurisdiction to preserve its
validity and to provide the Indemnitee with the broadest possible
indemnification permitted under applicable law. The Company’s inability,
pursuant to a court order or decision, to perform its obligations under this
Agreement shall not constitute a breach of this Agreement.


 


15.  Savings Clause. If this Agreement or
any paragraph, sentence, term or provision hereof is invalidated on any ground
by any court of competent jurisdiction, the Company shall nevertheless
indemnify the Indemnitee as to any Expenses, judgments, fines, 


 


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interest or penalties, or excise taxes assessed with
respect to any employee benefit or welfare plan, which are incurred with
respect to any Proceeding to the fullest extent permitted by any
(a) applicable paragraph, sentence, term or provision of this Agreement
that has not been invalidated or (b) applicable law.


 


16.  Interpretation; Governing Law. This
Agreement shall be construed as a whole and in accordance with its fair meaning
and any ambiguities shall not be construed for or against either party.
Headings are for convenience only and shall not be used in construing meaning.
This Agreement shall be governed and interpreted in accordance with the laws of
the Cayman Islands without regard to the conflict of laws principles thereof.


 


17.  Amendments. No amendment, waiver,
modification, termination or cancellation of this Agreement shall be effective
unless in writing signed by the party against whom enforcement is sought. The
indemnification rights afforded to the Indemnitee hereby are contract rights
and may not be diminished, eliminated or otherwise affected by amendments to
the Company’s Articles, or by other agreements, including directors’ and
officers’ liability insurance policies, of the Company.


 


18.  Counterparts. This Agreement may be
executed in one or more counterparts, all of which shall be considered one and
the same agreement and shall become effective when one or more counterparts
have been signed by each party and delivered to the other.


 


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     IN WITNESS WHEREOF, the
parties have executed this Indemnification Agreement as of the date first
written above.


 


 


	
  INDEMNITEE

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  XUEDA EDUCATION GROUP

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
			



 


 


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