Exhibit 4.8
-------------------------------------------------------------------------------
MANAGEMENT AGREEMENT
Dated February 21, 2002
-------------------------------------------------------------------------------
between
GOLAR LNG LIMITED
and
FRONTLINE MANAGEMENT (BERMUDA) LIMITED
I N D E X
1. APPOINTMENT.........................................................4
2. THE COMPANY'S MANAGEMENT FUNCTIONS..................................4
3. SUBSIDIARIES........................................................4
4. SERVICES............................................................4
5. GENERAL CONDITIONS..................................................9
6. COMPENSATION.......................................................10
7. AUTHORITY..........................................................11
8. INDEMNITY..........................................................11
9. CONFIDENTIALITY....................................................12
10.TERMINATION........................................................13
11.DEFAULT............................................................14
12.FORCE MAJEURE......................................................14
13.NOTICES............................................................14
14.MISCELLANEOUS......................................................15
15.GOVERNING LAW......................................................15
APPENDIX I - FEE SCHEDULE
Page 2
THIS MANAGEMENT AGREEMENT (the "Agreement") is made on February 21, 2002
BETWEEN :
(1) GOLAR LNG LIMITED, Par-la-Ville Place, 00 Xxx-xx-Xxxxx Xxxx, Xxxxxxxx XX 08
Bermuda (the "Company")
on the one part; and
(2) FRONTLINE MANAGEMENT (BERMUDA) LIMITED, Par-la-Ville Place, 00 Xxx-xx-Xxxxx
Xxxx, Xxxxxxxx XX 08 Bermuda ("FrontManBer");
on the other part.
FrontManBer is hereinafter referred to as the "Manager" ", while the Company and
the Manager are referred to collectively as the "Parties" or, separately, as a
"Party"). The Company and its subsidiaries and associated companies are referred
to collectively as the "Group".
WHEREAS :
(A) The Company is a limited company organised under the laws of Bermuda,
having its registered office at the address stated above.
(B) The Company's shares are currently listed on the Oslo Stock Exchange and
the Company is in the process of being listed on the Nasdaq National
Market.
(C) The Company is, through direct and indirect subsidiaries established in
various jurisdictions, the owner and/or operator of a substantial number of
LNG vessels and other assets.
Page 3
(D) It is the Company's policy to outsource certain of its administrative needs
to other corporate entities, either owned or controlled by itself, by
related parties or by third parties.
NOW THEREFORE, the Parties have agreed as follows:
1. APPOINTMENT
1.1 The Company hereby confirms the appointment of the Manager on the terms and
conditions set forth below
1.2 The Parties agree that the terms set forth herein shall regulate the
management services provided to the Group by the Manager with effect from
June 1, 2001 and that all other agreements, whether oral or in writing,
relevant thereto shall terminate with effect from the same date.
2. THE COMPANY'S MANAGEMENT FUNCTIONS
2.1 Ultimate responsibility for the administration of the Group lies with the
Company's board of directors (the "Board").
2.2 The Board has appointed its vice chairman as the Company's Chief Executive
Officer and the managing director of FrontManBer as the Company's chief
accounting officer and Company Secretary. (All of the above hereinafter
jointly referred to as the "Officers" or, individually, as an "Officer").
3. SUBSIDIARIES
3.1 The Group's assets are, generally, held by partly or wholly owned
subsidiaries of the Company (the "Subsidiaries"). The Group, in addition,
provides ship management services to third parties.
4. SERVICES
4.1 The Manager shall, throughout the terms of this Agreement, make such
assistance and such services in relation to the management of the Group and
the Subsidiaries available to the Group as the Company and the Officers
from time to time may specify.
Without prejudice to the generality of the foregoing, the Manager
shall provide the following services to the Group:
4.1.1 Corporate Governance Services
a. The Manager shall assist the Company Secretary in preparing material
for and convening the meetings of the Board and the follow-up and
implementation of the resolutions passed by the Board from time to
time.
Page 4
b. The Manager shall assist the Company Secretary in preparing material
for and convening the meetings of the Company's shareholders and the
follow-up and implementation of the resolutions passed therein.
c. The Manager shall assist the Company Secretary in preparing and
implementing all aspects of the Company's employee share option plan
from time to time.
d. The Manager shall be responsible for the operation of the Company's
shareholder register and any and all sub-registers thereof.
4.1.2 The Manager shall be responsible for all corporate secretarial functions
of the Company's Subsidiaries, joint venture interests and equity
investments as appropriate, such responsibilities to include assisting
the Company Secretary in preparing material for and convening the
meetings of the boards and shareholders and the follow up and
implementation of the resolutions passed by the boards and shareholders
from time to time.
4.1.3 Investor relations
a. The Manager shall assist the Board and the Officers in all aspects
relevant to investor relations, including, but not limited to:
- distribution of annual and quarterly reports and such other
information as the Board from time to time shall decide to the
Company's shareholders and others;
- presentations of the Company to investors and financial analysts;
- communication with media and the public in general in respect of
the Company's performance.
b. The Manager shall provide the Company with such information and
analysis as the Company shall require on the trading of its securities
in the markets where they are regularly traded.
4.1.4 Accounting
a. The Manager shall be responsible for the supervision of the Group's
accounting functions and shall, in this respect, report to the
Company's chief accounting officer and the Board.
b. The Group's accounting shall be based on US GAAP and such accounting
principles as the Board from time to time shall have approved.
4.1.5 Auditing
a. The Manager shall assist the Company's auditors in the continuous and
annual audit of the Group's accounts.
4.1.6 Company Records
a. The Manager shall be responsible for the safekeeping and professional
filing of all original corporate documents, such archive being
physically located in Bermuda.
Page 5
4.1.7 Stock Exchanges
a. The Manager shall, on the instructions of the Company, negotiate all
listing and similar agreements relevant to the listing of the
Company's securities on stock exchanges in such jurisdictions as the
Board, from time to time, shall decide.
b. The Manager shall ensure compliance by the Company with all
contractual and legal obligations of the Company in relation to such
stock exchanges and similar trading systems as the Company's
securities from time to time are listed on.
c. The Manager shall, in particular, ensure that all the Company's
obligations to inform stock exchanges of the Company's activities and
results are complied with and shall enter into such agreements or
other arrangements as shall be required by relevant stock exchanges
for this purpose.
d. The Manager shall develop and implement rules in relation to the
possible trading by their employees of securities issued by the
Company ensuring that such rules comply with applicable laws in
relevant jurisdictions.
4.1.8 Government Relations - Taxes
a. The Manager shall ensure compliance by the Company with all laws,
regulations and provisions applicable to the Company in Bermuda and
such other jurisdictions as the Group from time to time shall operate
in.
b. The Manager shall monitor the tax position of the Group and propose
transactions and asset allocations to the Board with a view to
minimising its overall tax exposure.
4.1.9 Corporate Finance
a. The Manager shall when requested assist the Officers and the Company
in all matters relevant to the financing of the Group's activities.
b. The Manager shall, in accordance with specific instructions from the
Board, assist the Board and the Officers in relation to the issue
and/or repurchase of the Company's securities.
4.1.10 Treasury Functions
a. The Manager shall be authorised to open and operate the Group's bank
accounts in accordance with such principles therefore as the Board
from time to time shall approve. The Manager shall, in this respect,
be authorised to enter into account agreements and all such other
contracts or agreements as shall be required by the banks and others
for this purpose.
Page 6
4.1.11 Technical Supervision Services
a. The Manager shall participate in restructuring and arranging of the
Group technical management function and monitor and follow up the
efficiency and quality of Group ship management.
b. The Manager shall participate in developing company-wide standards for
the technical operation of the vessels controlled by the Group
(including vessels managed under contract) and a policy in this
respect. Such policy document shall be submitted to the Board for
approval and shall, thereafter, be reviewed regularly by the Managers
with a view to improvements.
c. The Manager shall, on a regular basis, provide audits of technical
management and crewing arrangements, such audits to include physical
inspections of vessels.
d. The Manager shall participate in the negotiation of terms and
arrangements for drydocking of the vessels controlled by the Group,
both in line with the regular schedule therefore and where
circumstances otherwise require and shall be physically present at the
drydocking.
e. The Manager shall continuously endeavour to improve the operational
standard and cost effectiveness of the fleet of vessels controlled by
the Group and shall be responsible for the continuous improvement
thereof.
f. The Manager shall extend the benefit of its bulk purchasing agreements
and arrangements to the vessels controlled by the Group.
g. The Manager shall keep regular contact with charterers of the Group's
vessels and participate in the marketing of the vessels to charterers.
4.1.12 Mergers and Acquisitions
a. The Manager shall, in accordance with specific instructions from the
Board or the Officers, assist the Company in all matters relevant to
corporate mergers and/or acquisitions of other companies. Such
assistance shall include, but shall not be limited to arranging the
financing of any acquisition, renegotiating existing financing and
other contractual arrangement required by the acquisition/merger and
the general completion of the transaction in question.
Page 7
b. The Manager shall always report on their activities in matters related
to mergers and acquisitions to the Officers and keep the Officers
continuously updated on the same.
c. The Manager shall, in accordance with specific instructions from the
Board or the Officers, assist the Company in the sale of Subsidiaries.
4.1.13 Subsidiaries
a. The Manager shall prepare general guidelines for the establishment of
Subsidiaries to the Board for its approval and ensure implementation
thereof thereafter.
b. The Manager shall endeavour to make its senior employees available to
the Subsidiaries as directors and/or officers.
c. The Manager shall be responsible for maintaining the number of
Subsidiaries from time to time at a level coherent with the Board's
policy and ensure that dormant Subsidiaries are liquidated in
accordance with such policy.
4.1.14 Sale and Purchase of Assets
a. The Manager shall, if requested and in accordance with specific
instructions from the Board and the Subsidiary in question, supervise
the sale and purchase of vessels or other assets including the
completion of such transaction.
b. A sale or purchase of a vessel shall always be finally approved by the
Board and the board of the relevant Subsidiary.
c. The Manager shall, if requested, assist the Officers and the Board in
following the market for the sale and purchase of vessels and other
assets and provide the Board with recommendations in this respect.
4.1.15 Newbuildings
a. The Manager, shall, if requested, assist the Officers and the Board in
following the market for newbuildings and, in this respect,
continuously liaise with relevant yards, brokers and analysts.
b. The Manager shall, if requested and always in accordance with specific
instructions from the Officers and the Board, assist the Group in
negotiating newbuilding contracts. Any such contract shall always be
subject to the final approval of the Board and the board of the
subsidiary ordering the said newbuilding.
4.1.16 General Purchasing Authority
a. The Manager shall be generally authorised to conclude purchases of
goods and services on the Group's behalf within such limits as are set
forth in each year's budget.
Page 8
5. General Conditions
5.1 The Manager shall, in performing their duties hereunder, effectively and
faithfully serve the Group. In exercising the powers and authorities hereby
conferred on them, the Manager shall:
(i) always use its best endeavours to protect and promote the Group's
interests;
(ii) observe all applicable laws and regulations relevant to the Group's
activities; and
(iii)always act in accordance with good and professional management
practice.
5.2 The Manager shall have the right to sub-contract parts of the Services to
related companies or to third parties on commercial terms. Any such
sub-contracting arrangements with third parties shall be made in writing.
The Company shall be provided with copies of such agreements.
5.3 The Manager shall be entitled to provide management services to other
companies or entities.
Such entities can either be other companies or groups of companies under
the ultimate control of the Company, related parties or genuine third party
entities.
The Manager shall not afford preference to any vessel or company under
their management but shall, so far as practicable, ensure a fair
distribution of service to all vessels and companies under management from
time to time.
The Manager shall, in the performance of the Services, be entitled to have
regard to their overall responsibility in relation to all matters as may
from time to time be entrusted to their management and in particular, but
without prejudice to the generality of the foregoing, be entitled to
allocate available supplies, manpower and services between their management
assignments in such manner as in the prevailing circumstances the Manager
considers to be fair and reasonable.
5.4 All discounts, commissions and other benefits received by the Manager
and/or their employees from third parties as a consequence of the services
to be provided to the Group hereunder shall be disclosed to the Company
and, unless otherwise agreed, placed at the Company's disposal.
5.5 The Company shall, at all times, be allowed full access to the accounts and
records of the Manager which are relevant to the performance of their
obligations vis-a-vis the Group hereunder.
Such access shall be granted to the Officers and Directors and such other
persons as shall be specifically authorised by the Company. Representatives of
the Company's auditor shall, in relation to the audit of the Group's accounts,
always be considered as authorised.
Page 9
5.6 The Manager shall, upon request, provide the Company with copies of all
documents relevant to the Group in their possession and otherwise compile
such facts and records on the basis of such documents as shall, from time
to time be requested by the Company.
5.7 In order to facilitate the provision of Services the Directors and Officers
shall communicate all instructions and requests in respect of the Services
to the Manager and their employees through the Manager.
5.8 FrontManBer shall be primary responsible for the following functions of the
Services:
a. all governmental relations in Bermuda;
b. all filings to governmental authorities and the stock exchange in the
United States;
c. all services related to the meetings of the Board, shareholder
meetings and other corporate governance issues relevant to Bermuda
law;
d. maintaining the Company's official records as required by Bermuda law;
e. assisting the Company in relation to specific corporate transactions
as per instructions from the Board from time to time.
FrontManBer shall, in the matters referred to in (a) to (e) above, report
to the Board.
The principle set forth above shall not apply in respect of the duties and
obligations of FrontManBer's managing director in relation to the functions
undertaken by such person in his capacity as the Company's chief accounting
officer and company secretary. In discharging these functions,
FrontManBer's managing director shall report to the other Officers and the
Board.
6. COMPENSATION
6.1 The Manager shall receive a fee as set out in Appendix 1 hereto for the
Services as set out below.
6.2a. Provision of corporate secretarial services for Group companies.
6.3b. Provision of directors and officers services for Group companies.
6.4c. Provision of corporate secretarial services for dormant Group
companies.
6.5d. Provision of directors and officers services for dormant Group
companies.
6.6e. Provision of technical supervision services.
6.7f. Provision of all other services provided for herein.
Page 10
6.2 The budgeted annual fee due to the Manager shall be quoted by the Manager
to the Board no later than 15 December each year. The fee shall be market
compatible.
6.3 The preliminary fees approved by the Board shall be paid to the Manager in
advance on a quarterly basis in 4 equal amounts throughout the year.
6.4 In the event the Group increases or reduces its activities materially
during a year, each of the Parties shall have the right to require that the
preliminary fees are adjusted. Such adjustment shall always take place if
any of the Manager, as a consequence of such increase or decrease in the
scope of the Services will have to increase its cost base.
6.5 Any adjustment shall be effective as from the month following agreement
between the Parties on the revision.
6.6 The Manager's out-of-pocket expenses for providing the services shall be
paid by the Company in addition to the above fees. Out-of-pocket expenses
include travelling expenses incurred in the Manager's performance of the
services and any payments to third parties directly attributable to the
services.
7. AUTHORITY
7.1 The Manager is authorised and (subject to Bermudan law and their compliance
with the provisions hereof) obligates the Company by its signature in all
transactions connected with the day-to-day operation of the Group's
activities.
All matters of an irregular nature or special importance, and all
matters which, according to the Company's by-laws, applicable Bermudan
law and/or this Agreement, require a decision by the Board, shall be
submitted to the Board and the Officers and shall not be actioned upon
by the Manager without the prior written consent of the Company having
been obtained.
7.2 The Company hereby ratifies and confirms and undertakes, at all times, to
allow, ratify and confirm all the Manager shall lawfully do or cause to be
done in the bona fide performance of their duties hereunder.
8. INDEMNITY
8.1 The Manager shall be under no responsibility or liability for loss or
damage, whether as a loss of profits or otherwise, to the Group arising out
of any act or omission involving any error of judgment or any negligence on
the part of the Manager or any of them or any of their officers or
employees or in connection with the performance of their duties under this
Agreement, unless acts or omissions are caused by gross negligence or
wilful misconduct.
In any event, the manager shall not be liable under any circumstances
to compensate the Group in an amount exceeding the aggregate of the
annual fee.
8.2 The Company covenants to indemnify and keep indemnified the Manager and
their employees against any and all liabilities, costs, claims, demands,
proceedings, charges, actions, suits or expenses of whatsoever kind or
character that may be incurred or suffered by any of them howsoever arising
(other than by reason of fraud or dishonesty on their part) in connection
with the provisions of the Services or the performance of this Agreement.
Page 11
8.3 The Manager shall not be required to take any legal action on behalf of the
Group, the Directors or the Officers unless being fully indemnified (to its
or their reasonable satisfaction) for all costs and liabilities likely to
be incurred or suffered by them. If the Company requires the Manager or
either of them in any capacity, to take any action which, in the opinion of
the Manager, might make the Manager as agents liable for the payment of
money or liable in any other way, the Manager shall be kept indemnified by
the Company in any reasonable amount and form satisfactory to them as a
prerequisite to take such action.
8.4 The indemnities provided by the Company hereunder shall cover all
reasonable costs and expenses payable by the Manager in connection with any
claims.
8.5 To the extent that the Manager is entitled to claim in indemnity in respect
of amounts paid or discharged by the Manager pursuant to this Agreement,
these indemnities shall take effect as an obligation of the Company to
reimburse the Manager making such payment or effecting such discharge.
8.6 The indemnification provided by this clause shall not be deemed exclusive
of any other rights to which those seeking indemnification may be entitled
under any statute, agreement, the by-laws of the Company or otherwise, and
shall continue after the termination of this Agreement.
8.7 The Manager shall be included as co-assured on insurance policies for the
Vessels.
9. CONFIDENTIALITY
9.1 All confidential information furnished to the Manager or any of them or any
of their respective employees, directors or sub-contractors pursuant to
this Agreement and any accounts, accounting and financial records of the
Group created or maintained by the Manager or any of them or any of their
respective employees, directors or sub-contractors as contemplated by this
Agreement shall be and remain the property of the Group and shall be kept
confidential by the Manager.
The Manager hereby agree for themselves and their employees and agents to
keep the same confidential and not to disclose the same to any third party
other than as expressly contemplated hereby or as expressly authorised in
writing by the Company and not to use such information for any purpose
other than the purpose contemplated hereby provided that the provisions of
this clause 9.1 shall not apply to any such confidential information which
is:
Page 12
(i) required to be disclosed by law or court order;
(ii) or becomes public knowledge otherwise than as a result of the conduct
of the Manager or any of them.
For the purpose of this clause "Confidential Information" shall mean:
a. confidential information (including without limitation trade secrets
and confidential know-how) relating to the business of the Group;
b. all other confidential information and know-how of which the Manager
become aware (both before or after the commencement date) or generates
in the course of or in connection with the performance of their
obligations hereunder;
c. all information treated by the Manager in relation to their activities
as confidential other than information that is public knowledge
(otherwise than as a result of a breach of confidentiality pursuant to
this Agreement).
9.2 The Manager shall, if so required by any of the stock exchanges on which
the Company's shares are listed, ensure that each of their respective
employees having access to confidential information shall execute a
specific confidentiality undertaking in favour of the Company.
10. TERMINATION
10.1 The Company may terminate this Agreement with 12 months' prior written
notice to the Manager.
10.2 Termination shall be without prejudice to any rights or liabilities of
either Party hereto arising prior to or in respect of any act or omission
occurring prior to termination.
10.3 In the event of termination, the management fee shall be pro-rated to the
date of termination (after taking into account such additional amounts, if
any, as the time spent and the responsibility undertaken by the Manager
during the relevant period immediately prior to termination justify).
10.4 In the event of termination, the Company and the Manager shall procure that
all such acts are done as may be necessary to give effect to such
termination and the Company shall secure and the Manager shall, subject to
payment of all amounts due to them hereunder, co-operate in the appointment
of a substitute Manager as circumstances may require.
10.5 Upon the termination of this Agreement, the Manager shall hand over to the
Company all books of account, correspondence and records relating to the
affairs of the Company which are the property of the Company and which are
in their possession.
Page 13
11. DEFAULT
11.1 If the Manager, by any act or omission, shall be in breach of any material
obligation under this Agreement and such breach shall continue for a period
of fourteen (14) days after written notice thereof has been given by the
Company to the Manager, the Company shall have the right to terminate this
Agreement with immediate effect by notice to the Manager.
11.2 The right to terminate this Agreement shall be in additional to and without
prejudice to any other rights which the Company may have against the
Manager under this Agreement.
11.3 In the event that either:
a. any payment in respect of the remuneration paid to the Manager or any
other monies due to the Manager is not paid by the Company;
or
b. the Company shall, by any act or omission, be in breach of any
material obligation under this Agreement and such breach shall
continue for a period of fourteen (14) days after written notice
thereof has been given by the Manager to the Company;
the Manager shall have the right to terminate this Agreement with immediate
effect by notice to the Company, any such termination being without
prejudice to any claim the Manager may have on the Company under this
Agreement, and taking effect either forthwith or at such other time as may
be specified in the notice.
11.4 Either Party may forthwith by notice in writing terminate this Agreement if
an order be made or a resolution be passed for the winding up of the other
or if a receiver be appointed of the business or property of the other, or
if the other shall cease to carry on business or make special arrangement
or composition with its creditors or if any event analogous with any of the
foregoing occurs under any applicable law.
12. FORCE MAJEURE
The Manager shall be under no liability of any kind or nature whatsoever in the
event that they should fail to perform any services hereunder if such failure is
directly or indirectly caused by war, war-like activities, government order,
riot, civil commotion, strike or lock-out or similar actions, or Act of God or
peril of the sea or any other similar cause beyond the Manager's control.
13. NOTICES
13.1 All correspondence or notices required or permitted to be given under this
Agreement shall be given in English and sent by first class mail, air mail
or telefax (and in case of telefaxes confirmed by airmail letter) or
delivered by hand addressed as follows:
If to the Company:
------------------
Golar LNG Limited
XX Xxx XX 0000
Xxx-xx-Xxxxx Xxxxx
00 Xxx-xx-Xxxxx Xxxx
Xxxxxxxx XX XX
Xxxxxxx
Xxx.: Chief Executive Officer
Telefax: 0 000 000-0000
Telephone: 0 000 000-0000
If to the Manager:
------------------
Frontline Management (Bermuda) Limited
XX Xxx XX 0000
Xxx-xx-Xxxxx Xxxxx
00 Xxx-xx-Xxxxx Xxxx
Xxxxxxxx XX XX
Xxxxxxx
Xxx.: Managing Director
Telefax: 0 000 000-0000
Telephone: 0 000 000-0000
or such other address as either Party may designate to the other party in
writing.
Page 14
14. MISCELLANEOUS
14.1 No Party shall be entitled to assign its rights and/or obligations under
this Agreement without the prior written consent of the other Parties
hereto.
14.2 Nothing in this Agreement shall be deemed to constitute a partnership
between the Parties.
14.3 No term of this Agreement is enforceable by a person who is not a party to
it.
14.4 This Agreement shall not be amended, supplemented or modified save by
written agreement signed by or on behalf of the Parties.
15. GOVERNING LAW AND ARBITRATION
15.1 This Agreement shall be governed by Bermuda Law.
The Company: The Manager:
For and on behalf of For and on behalf of
GOLAR LNG LIMITED FRONTLINE MANAGEMENT (BERMUDA) LIMITED
--------- ---------
Signature Signature
SVEINUNG STOHLE XXXX XXXXXXXXXXX
---------------- ----------------
Name with block letters Name with block letters
Page 15
APPENDIX I
FEE SCHEDULE
Service Fee
Provision of corporate secretarial $2,500 per company per annum
services for Group companies.
15.2 Provision of directors and officers $2,500 per company per annum
services for Group cmpanies.
15.3 Provision of corporate secretarial $1,000 per company per annum
services for dormant Group companies.
15.4 Provision of directors and officers $1,000 per company per annum
services for dormant Group companies.
15.5 Provision of technical supervision $36,000 per vessel per annum for
services. Golar Freeze, Hilli, Gimi and
Xxxxxxx. $15,600 per vessel per
annum for Xxxxx Xxxx and vessels
managed for third parties
Newbuidings: $24,000 per vessel
per annum until delivery
(pro-rated as necessary for part
of a year) and $15,600 per
vessel per annum thereafter.
Provision of all other services provided $1,000 per day
for in this agreement.
Page 16
