INDEMNIFICATION AGREEMENT
Exhibit 10.1
This Indemnification Agreement (this “Agreement”) is made as of the day of , 200 ,
by and between Magellan Petroleum Corporation, a Delaware corporation (the “Company”), and [name],
an individual residing at [address] (the “Indemnitee”).
Recitals
A. The Indemnitee is a director, officer, employee or agent of the Company and in such
capacity is performing a valuable service for the Company.
B. The Delaware General Corporation Law, as amended from time to time (the “DGCL”), permits
the Company to indemnify the officers, directors, employees and agents of the Company.
C. The Company desires to hold harmless and indemnify the Indemnitee to the fullest extent
authorized or permitted by the provisions of the DGCL, or by any amendment thereof or other
statutory provisions authorizing or permitting such indemnification which hereafter may be adopted.
D. The Company has entered into this Agreement and has assumed the obligations imposed on the
Company hereby in order to induce the Indemnitee to serve or to continue to serve as a director,
officer, employee or agent of the Company, and acknowledges that the Indemnitee is relying upon
this Agreement in serving or continuing to serve in such capacity.
Agreement
Accordingly, in consideration of the Indemnitee’s agreement to serve or continue to serve as a
director and/or officer of the Company, the Company and the Indemnitee agree as follows:
1. Initial Indemnification.
(a) General. From and after the date hereof, the Company shall indemnify the
Indemnitee whenever he was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Company to procure a judgment in its
favor), by reason of the fact that he is or was a director, officer, employee or agent of the
Company, or is or was serving at the request of the Company as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other enterprise, or by reason
of any action alleged to have been taken or omitted in any such capacity, against any and all
expenses (including, without limitation, attorneys’ fees and expenses), judgments, fines,
settlements and other amounts actually and reasonably incurred by the Indemnitee in connection with
such action, suit or proceeding and any appeal therefrom if the Indemnitee acted in good faith and
in a manner which he reasonably believed to be in or not opposed to the best interests
of the Company and, with respect to any criminal action or proceeding, had no reasonable cause
to believe his conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent shall
not, of itself, create a presumption that the Indemnitee did not satisfy the foregoing standard of
conduct to the extent applicable thereto.
(b) Derivative Actions. From and after the date hereof, the Company shall indemnify
the Indemnitee when he was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding by or in the right of the Company to procure a
judgment in its favor by reason of the fact that he is or was or had agreed to become a director,
officer, employee or agent of the Company, or is or was serving at the request of the Company as a
director, officer, employee, or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including, without limitation, attorneys’ fees and expenses)
actually and reasonably incurred by him in connection with the defense or settlement of such
action, suit or proceeding or any appeal therefrom if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the Company, except that no
indemnification shall be made in respect of any claim, issue or matter as to which the Indemnitee
shall have been adjudged to be liable to the Company unless and only to the extent that the
Delaware Court of Chancery, or the court in which such action, suit or proceeding is or was
brought, shall determine upon application that, despite the adjudication of liability, but in view
of all the circumstances of the case, the Indemnitee is fairly and reasonably entitled to indemnity
for such expenses and then only to the extent that the Delaware Court of Chancery or such other
court shall determine.
(c) Determination of Entitlement. Any indemnification under Section 1(a) or 1(b)
hereof (unless ordered by a court) shall be made by the Company only if authorized in the specific
case upon a determination, in accordance with Section 4 hereof or any applicable provision of the
Company’s Restated Certificate of Incorporation, as then amended (the “Charter”), its By-laws as
then amended (the “By-laws”), any other agreement, any resolution or otherwise, that
indemnification of the Indemnitee is proper in the circumstances because he has met the applicable
standard of conduct set forth in Section 1(a) or (b) above. Such determination shall be made (i)
by the Company’s Board of Directors (the “Board”) by a majority vote of a quorum consisting of
directors who are not parties to such action, suit or proceeding, (ii) by a committee of such
directors designate by majority vote of such directors, even though less than a quorum, (iii) if
such a quorum of disinterested directors is not available, or if such directors so direct, by
independent legal counsel in a written opinion or (iv) by the stockholders of the Company (the
“Stockholders”).
(d) Expenses. To the extent that the Indemnitee has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in Section 1(a) or 1(b) hereof,
or in defense of any claim, issue or matter therein, he shall be indemnified against expenses
(including, without limitation, attorneys’ fees and expenses) actually and reasonably incurred by
him in connection therewith. Expenses (including, without limitation, attorneys’ fees and
expenses) incurred by the Indemnitee in defending a civil, criminal, administrative or
investigative action, suit or proceeding shall be paid by the Company in advance of the final
disposition of such action, suit or proceeding as authorized in accordance with Section 4 hereof
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or any applicable provision of the Charter, the By-laws, any other agreement, any resolution
or otherwise.
(e) Benefit Plan Matters. For purposes of this Agreement, references to “other
enterprises” shall include employee benefit plans; references to “fines” shall include any excise
taxes assessed on the Indemnitee with respect to any employee benefit plan; references to “serving
at the request of the Company” shall include any service as a director, officer, employee or agent
of the Company which imposes duties on, or involves services by, the Indemnitee with respect to an
employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and
in a manner he reasonably believed to be in the interest of the participants and the beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best
interests of the Company” as referred to in this Section 1.
2. Additional Indemnification.
(a) General. If and to the extent that (i) the DGCL is amended hereafter to require
or permit indemnification, expense advancement or exculpation that is or may be more favorable to
the Indemnitee than the maximum permissible indemnification, expense advancement and exculpation
now permitted thereunder and provided in this Agreement, or (ii) the Company reincorporates in or
merges, consolidates or combines into or with any other corporation or entity by virtue of which
transaction the Company is not the surviving, resulting or acquiring corporation and the surviving,
resulting or acquiring corporation is incorporated in a different jurisdiction which at such time
requires or permits indemnification, expense advancement or exculpation that is or may be more
favorable to the Indemnitee than the maximum permissible indemnification, expense advancement and
exculpation now permitted under the DGCL and provided in this Agreement, then pursuant to this
Agreement the Indemnitee shall be entitled to, and this Agreement shall be deemed to be amended to
provide for the Indemnitee’s contractual entitlement to, indemnification, expense advancement and
exculpation to the maximum extent that may be permitted or required under such applicable law at
the time of any initial or subsequent request for indemnity hereunder (determined as contemplated
by Section 4 hereof), whether or not the Company has adopted any Charter or By-law provisions
adopting, effecting or implementing any provisions thereof which are permissive and not mandatory
in nature. Nothing contained herein shall be deemed to detract from, diminish, impair, limit or
adversely affect any right which the Indemnitee may have under this Agreement, and to the extent
that any terms, conditions or provisions of this Agreement (including, without limitation, those in
Section 1 hereof) are more favorable to the Indemnitee than the maximum indemnification, expense
advancement and exculpation then permitted or required under such applicable law (determined as
aforesaid), then such terms, conditions and provisions of this Agreement shall be preserved and
integrated with such more favorable terms from then applicable law and shall continue to apply to
the Indemnitee’s rights by virtue of this Agreement. The same expansion of the Indemnitee’s rights
and deemed inclusion herein and integration herewith of any terms, conditions or provisions more
favorable to the Indemnitee shall occur upon and with respect to any amendment of the provisions
relating to indemnification, expense advancement and exculpation in the Company’s Charter or
By-laws and any provision by the Company to any other officer or director of the Company of any
other different form of indemnification contract or agreement.
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(b) Examples and Limitations. Without limiting the generality of Section 2(a) hereof,
the Indemnitee hereby may become entitled to indemnification of any and all amounts which he
becomes legally obligated to pay (including, without limitation, damages, judgments, fines,
settlements, expenses of investigation and defense of legal actions, proceedings or claims and
appeals therefrom, and expenses of appeal, attachment or similar bonds) relating to or arising out
of any claim made against him because of any act, failure to act or neglect or breach of duty,
including any actual or alleged error, misstatement or misleading statement, which he commits,
suffers, permits or acquiesces in while acting in his capacity as an officer, director, employee or
agent of the Company, subject only to any limitations on the maximum permissible, expense
advancement or indemnification which may exist under applicable law (determined as provided in
Section 2(a) hereof). In no event, however, shall the Company be obligated under this Section 2 to
make any payment in connection with any claim against the Indemnitee:
(i) for which payment actually has been made to the Indemnitee under a valid and
collectible insurance policy, except in respect of any retention or excess beyond the amount
of payment under such insurance;
(ii) which results in a final, nonappealable order for the Indemnitee to pay a fine or
similar governmental imposition which the Company is prohibited by applicable law from
paying; or
(iii) which is based upon or attributable to the Indemnitee gaining in fact a personal
profit to which he was not legally entitled, including, without limitation, any profits made
from the purchase and sale by the Indemnitee of equity securities of the Company which are
recoverable by the Company pursuant to Section 16(b) of the Securities Exchange Act of 1934
and any profits arising from transactions in any publicly traded securities of the Company
which were effected by the Indemnitee in violation of Section 10(b) of the Securities
Exchange Act of 1934 or Rule 10b-5 promulgated thereunder.
3. Effect of Future Adverse Changes in Charter, By-laws or Applicable Law.
Nothing herein shall prevent the adoption by the Board or Stockholders of the Company of any
amendment to the Charter or By-laws of the Company, the effect of which would be to detract from,
diminish, impair, limit or adversely affect the Indemnitee’s rights to indemnification, expense
advancement or exculpation that otherwise exist as of the date hereof pursuant to such Charter or
By-laws as applied to any act or failure to act occurring in whole or in part after the date
hereof. In the event that the Company shall adopt any such amendment to its Charter or By-laws,
however, or in the event that the indemnification, expense advancement or exculpation provisions of
the DGCL (or any other then applicable law) hereafter shall be amended in a manner which may be
deemed to detract from, diminish, impair, limit or adversely affect the Indemnitee’s rights with
respect thereto, such events and changes shall not in any manner or to any extent detract from,
diminish, impair, limit or adversely affect in any manner the contractual indemnification rights
and procedures granted to and benefiting the Indemnitee
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under this Agreement, unless and then except only to the extent that any of such rights or any
of the terms, conditions and provisions of this Agreement shall thereby be made illegal or
otherwise violative of applicable law, in which case the provisions of Section 10(c) hereof shall
apply. For purposes only of determining the Indemnitee’s rights to indemnification pursuant to the
Company’s Charter or By-laws as so amended, and not for purposes of the continuing applicability of
this Agreement in accordance with its terms, any such amendment to the Company’s Charter or By-laws
shall apply to acts or failures to act occurring entirely after the date on which such amendment
was approved and adopted by the Board or the Stockholders, as the case may be, unless the
Indemnitee shall have voted in favor of such approval and adoption as a director or holder of
record of the Company’s voting stock, as the case may be.
4. Certain Procedures.
(a) Indemnification Procedures. For purposes of pursuing his rights to
indemnification under Section 1 (other than the second sentence of Section 1(d) hereof, which shall
be governed by Section 4(b) hereof) or Section 2 hereof, as the case may be, the Indemnitee shall
be required to submit to the Board a sworn statement of request for indemnification substantially
in the form of Exhibit 1 hereto (the “Indemnification Statement”) averring that he is entitled to
indemnification hereunder. Submission of an Indemnification Statement to the Board shall create a
presumption that the Indemnitee is entitled to indemnification under Section 1 (other than the
second sentence of Section 1(d) hereof, which shall be governed by Section 4(b) hereof) or Section
2 hereof, as the case may be, and, except as set forth below, the Board shall within 30 calendar
days after submission of the Indemnification Statement specifically determine that the Indemnitee
is so entitled, unless within such 30-calendar day period it shall determine by Board action, based
upon clear and convincing evidence (sufficient to rebut the foregoing presumption) that the
Indemnitee is not entitled to indemnification under Sections 1 or 2 hereof. The Company shall
notify the Indemnitee promptly in writing following such determination. Any evidence rebutting the
Indemnitee’s presumption, to which the Board gave weight in arriving at its determination, shall be
disclosed to the Indemnitee with particularity in such written notice. Notwithstanding anything to
the contrary contained in the three preceding sentences, if the Board determines that it cannot act
on the request for indemnification submitted by the Indemnitee because a determination of
entitlement can not be made in the manner required by Section 1(c) hereof, the Board will act
promptly to retain independent legal counsel or convene a meeting of Stockholders to act on the
request.
(b) Expense Advancement Procedures. For purposes of determining whether to authorize
advancement of expenses pursuant to the second sentence of Section 1(d) hereof or Section 2(b)
hereof, the Indemnitee shall be required to submit to the Board a sworn statement of request for
advancement of expenses substantially in the form of Exhibit 2 hereto (the “Undertaking”), averring
that (i) he has incurred or will incur actual expenses in defending a civil, criminal,
administrative or investigative action, suit or proceeding and (ii) he undertakes to repay such
amount if it shall be determined ultimately that he is not entitled to be indemnified by the
Company under this Agreement or otherwise. Within 30 calendar days after receipt of the
Undertaking, the Board shall authorize payment of the expenses described in the Undertaking,
whereupon such payments shall be made promptly by the Company. No security shall be
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required in connection with any Undertaking, and any Undertaking shall be accepted without
reference to the Indemnitee’s ability to make repayment.
(c) Selection of Counsel. In the event the Company shall be obligated under this
Section 4 to pay the expenses of any action, suit or proceeding against the Indemnitee, the Company
shall be entitled to assume the defense of such proceeding, with counsel acceptable to and approved
by the Indemnitee, upon the delivery to the Indemnitee of written notice of the Company’s election
to do so. After delivery of such notice, approval of such counsel by the Indemnitee and the
retention of such counsel by the Company, the Company will not be liable to the Indemnitee under
this Agreement for any fees of separate counsel subsequently incurred by the Indemnitee with
respect to the same action, suit or proceeding; provided, however, that if (i) the
employment of counsel by the Indemnitee has been previously 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 any such defense, or (iii) the Company shall not, in
fact, have employed counsel to assume the defense of such proceeding, then the Indemnitee may
select and employ his own counsel to direct the defense thereof and the fees and expenses of such
counsel shall be paid by the Company. Notwithstanding any assumption of the defense of any such
action, suit or proceeding and employment of counsel with respect thereto by the Company in
accordance with the foregoing, the Indemnitee shall have the right to employ his own separate
counsel to participate in any such action, suit or proceeding at the Indemnitee’s expense.
5. Corporate Approval. The Company represents and warrants to the Indemnitee that:
(i) the Company has all requisite power and authority to enter into this Agreement and to perform
its obligations hereunder; (ii) this Agreement and the performance of all of the Company’s
obligations hereunder have been approved by all corporate action required on the part of the
Company under the Charter, the By-laws or applicable law or contract; and (iii) this Agreement,
when executed, will constitute the valid and legally binding obligation of the Company, enforceable
against the Company in accordance with its terms, subject to any applicable bankruptcy law and
equitable limitations.
6. Fees and Expenses of Enforcement. It is the intent of the Company that the
Indemnitee not be required to incur the expenses associated with the enforcement of his rights
under this Agreement by litigation or other legal action because the cost and expense thereof would
substantially detract from the benefits intended to be extended to the Indemnitee hereunder.
Accordingly, if it should appear to the Indemnitee that the Company has failed to comply with any
of its obligations under this Agreement or in the event that the Company or any other person takes
any action to declare this Agreement void or unenforceable, or institutes any action, suit or
proceeding designed (or having the effect of being designed) to deny, or to recover from, the
Indemnitee the benefits intended to be provided to the Indemnitee hereunder, the Company
irrevocably authorizes the Indemnitee from time to time to retain counsel of his choice, at the
expense of the Company as hereafter provided, to represent the Indemnitee in connection with the
initiation or defense of any litigation or other legal action, whether by or against the Company or
any director, officer, stockholder or other person affiliated with the Company, in any
jurisdiction. Regardless of the outcome thereof, the Company shall pay and be solely responsible
for any and all expenses, including without limitation attorneys’ fees and
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expenses, actually and reasonably incurred by the Indemnitee (i) as a result of the Company’s
failure to perform this Agreement or any provision hereof or (ii) as a result of the Company or any
person contesting the validity or enforceability of this Agreement or any provision hereof as
aforesaid.
7. Maintenance of Insurance and Self Insurance.
(a) Company represents that it presently has in force and effect policies of D & O Insurance
in insurance companies and amounts as follows (the “Insurance Policies”).
| Insurer | Policy No. | Amount | Deductible | |||||||||
Chubb Group of Insurance
Companies |
81691712 | $ | 10,000,000 | $ | 250,000 | |||||||
Subject only to the provisions of Section 7(b) hereof, Company hereby agrees that, so long as
Indemnitee shall continue to serve as a director or officer of Company (or shall continue at the
request of Company to serve as a director, officer, employee or agent of another company,
partnership, joint venture, trust or other enterprise) and thereafter so long as Indemnitee shall
be subject to any possible claim or threatened, pending or completed action, suit or proceeding,
whether civil, criminal or investigative by reason of the fact that Indemnitee was a director of
Company (or served in any of said other capacities), Company will purchase and maintain in effect
for the benefit of Indemnitee one or more valid, binding and enforceable policy or policies of D &
O Insurance providing, in all respects, coverage at least comparable to that presently provided
pursuant to the Insurance Policies.
(b) Company shall not be required to maintain said policy or policies of D & O Insurance in
effect if said insurance is not reasonably available or if, in the reasonable business judgment of
the then directors of Company, either (i) the premium cost for such insurance is substantially
disproportionate to the amount of coverage or (ii) the coverage provided by such insurance is so
limited by exclusions that there is insufficient benefit from such insurance.
8. Reorganizations. In the event that the Company shall be a constituent corporation
(including any constituent of a constituent) in a merger, reorganization, consolidation,
combination or similar transaction, the Company, if it shall not be the surviving, resulting or
acquiring corporation therein, shall require as a condition thereto the surviving, resulting or
acquiring corporation to expressly assume and adopt this Agreement and to agree to indemnify the
Indemnitee to the full extent provided in this Agreement. Whether or not the Company is the
resulting, surviving or acquiring corporation in any such transaction, the Indemnitee shall stand
in the same position under this Agreement with respect to the resulting, surviving or acquiring
corporation as he would have with respect to the Company if its separate existence had continued.
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9. Nonexclusivity, Survival and Subrogation.
(a) Nonexclusivity. The rights to indemnification and advancement provided by this
Agreement shall not be exclusive of any other rights to which the Indemnitee may be entitled under
the Charter, the By-laws, the DGCL, any other statute, insurance policy, agreement, vote of
shareholders or of directors or otherwise, both as to actions in his official capacity and as to
actions in another capacity while holding such office.
(b) Survival. The provisions of this Agreement shall survive the death, disability,
or incapacity of the Indemnitee or the termination of the Indemnitee’s service as an officer,
director, employee or agent of the Company and shall inure to the benefit of, and be enforceable
by, the Indemnitee’s heirs, executors, guardians, administrators or assigns.
(c) Subrogation. In the event of any payment by the Company under this Agreement, the
Company shall be subrogated to the extent thereof to all rights of recovery previously vested in
the Indemnitee, who shall cooperate with the Company, at the Company’s expense, in executing all
such instruments and taking all such other actions as shall be reasonably necessary for the Company
to enforce such right or as the Company may reasonably request.
10. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, without giving effect to the principles of conflict of laws
thereof.
11. Miscellaneous.
(a) This Agreement contains the entire agreement of the parties relating to the subject matter
hereof.
(b) Any provision of this Agreement may be amended or waived only if such amendment or waiver
is in writing and signed, in the case of an amendment, by both parties hereto or, in the case of a
waiver, by the party against whom the waiver is to be effective. No failure or delay by either
party in exercising any right, power or privilege hereunder shall operate as a waiver hereof nor
shall any single or partial exercise thereof preclude any other or future exercise thereof or the
exercise of any other right, power or privilege.
(c) If any provision of this Agreement or the application of any provision hereof to any
person or circumstance is held invalid, unenforceable or otherwise illegal, the remainder of this
Agreement and the application of such provision to other persons or circumstances shall not be
affected, and the provision so held to be invalid, unenforceable or otherwise illegal shall be
reformed to the extent (and only to the extent) necessary to make it enforceable, valid and legal.
(d) Nothing contained in this Agreement is intended to create in the Indemnitee any separate
or independent right to continued employment by the Company.
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(e) This Agreement may be executed in counterparts, but all such counterparts taken together
shall constitute on and the same Agreement.
(f) The descriptive headings of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement. The use of the word “including” in this Agreement shall be by
way of example rather than limitation. The use of the word “or” in this Agreement is intended to
be conjunctive rather than disjunctive.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first
above written.
| MAGELLAN PETROLEUM CORPORATION | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| [NAME OF INDEMNITEE] | ||||
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EXHIBIT 1
Indemnification Statement
STATE OF
|
) | |||||||
| ) | ss. | |||||||
COUNTY OF
|
) |
I, , being first duly sworn, do depose and state as follows:
1. This Indemnification Statement is submitted pursuant to the Indemnification Agreement,
dated
, 200___ between Magellan Petroleum Corporation, a Delaware corporation
(the “Company”), and the undersigned.
2. I am requesting indemnification against expenses (including, without limitation, attorneys’
fees and expenses), costs, judgments, damages, fines and amounts paid in settlement, all of which
(collectively, “Liabilities”) have been or will be actually and reasonably incurred by me in
connection with an actual or threatened action, suit or proceeding to which I was or am a party or
am threatened to be made a party.
3. With respect to all matters related to any such action, suit or proceeding, I am entitled
to be indemnified as herein contemplated pursuant to the aforesaid Indemnification Agreement.
4. Without limiting any other rights which I have or may have, I am requesting indemnification
against Liabilities which have arisen or may arise out of
.
| Indemnitee | ||||
Subscribed
and sworn to before me, a Notary Public in and for said County and State, this ___ day
of , 20___.
[Seal]
My
commission expires the ___ day of _______, 20 ___.
EXHIBIT 2
Undertaking
STATE OF
|
) | |||||||
| ) | ss. | |||||||
COUNTY OF
|
) |
I, , being first duly sworn, do depose and state as follows:
1. This Undertaking is submitted pursuant to the Indemnification Agreement, dated
___, 200___, between Magellan Petroleum Corporation, a Delaware corporation (the
“Company”), and the undersigned.
2. I am requesting advancement of certain expenses (including, without limitation, attorneys’
fees and expenses) which I have incurred or will incur in defending a civil, criminal,
administrative or investigative action, suit or proceeding.
3. I hereby undertake to repay this advancement of expenses if it shall ultimately be
determined that I am not entitled to be indemnified by the Company under the aforesaid
Indemnification Agreement or otherwise.
4. The expenses for which advance is requested are, in general, all expenses related
to
.
| Indemnitee | ||||
Subscribed
and sworn to before me, a Notary Public in and for said County and State, this ___ day
of , 20___.
[Seal]
My
commission expires the ___ day of , 20___.
