Exhibit 10.4
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (this "Agreement"), is made and entered into
as of the 21st day of April, 2003 by and between Syntroleum Corporation, a
Delaware corporation (the "Corporation"), and Branch X. Xxxxxxx ("Indemnitee").
WITNESSETH:
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WHEREAS, Indemnitee is currently serving or is about to begin serving as a
director and/or officer of the Corporation and/or in another Corporate Status,
and Indemnitee is willing, subject to, among other things, the Corporation's
execution and performance of this Agreement, to continue in or assume such
capacity or capacities; and
WHEREAS, the Bylaws of the Corporation provide that the Corporation shall
indemnify directors and officers of the Corporation in the manner set forth
therein; and
WHEREAS, the Corporation and Indemnitee desire to enter into this Agreement
to induce Indemnitee to provide services as contemplated hereby and the
Corporation has deemed it to be in its best interest to enter into this
Agreement with Indemnitee.
NOW, THEREFORE, in consideration of Indemnitee's agreement to provide
services to the Corporation and/or certain of its affiliates as contemplated by
this Agreement, the mutual agreements contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows.
1. Certain Definitions
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As used herein, the following words and terms shall have the following
respective meanings (whether singular or plural):
"Change of Control" means a change in control of the Corporation after the
date Indemnitee acquired his Corporate Status, which shall be deemed to have
occurred in any one of the following circumstances occurring after such date:
(i) there shall have occurred an event required to be reported with respect to
the Corporation in response to Item 6(e) of Schedule 14A of Regulation 14A (or
in response to any similar item or any similar schedule or form) promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
whether or not the Corporation is then subject to such reporting requirement;
(ii) any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) shall have become the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the
Corporation representing 40% or more of the combined voting power of the
Corporation's then outstanding voting securities without prior approval of at
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the members of the Board of Directors in office immediately prior to such person
attaining such percentage interest; (iii) the Corporation is a party to a
merger, consolidation, sale of assets or other reorganization, or a proxy
contest, as a consequence of which members of the Board of Directors in office
immediately prior to such transaction or event constitute less than a majority
of the Board of Directors thereafter; or (iv) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Board of Directors (including, for this purpose, any new director whose
election or nomination for election by the Corporation'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) cease for any reason to
constitute at least a majority of the Board of Directors.
"Corporate Status" describes the status of Indemnitee as a director,
officer, employee, agent or fiduciary of the Corporation or of any other
corporation, partnership, limited liability company, association, joint venture,
trust, employee benefit plan or other enterprise that Indemnitee is or was
serving at the request of the Corporation.
"Court" means the District Court of Tulsa County of the State of Oklahoma
or any other court of competent jurisdiction.
"DGCL" means the Delaware General Corporation Law, as amended from time to
time.
"Expenses" shall include all reasonable attorneys' fees, retainers, court
costs, transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees, and all other disbursements or expenses of the types
customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, or being or preparing to be a witness in a
Proceeding.
"Independent Counsel" means a law firm, or a member of a law firm, that is
experienced in matters of corporation law and neither presently is, nor in the
five years previous to his selection or appointment has been, retained to
represent: (i) the Corporation or Indemnitee in any matter material to either
such party or (ii) any other party to the Proceeding giving rise to a claim for
indemnification hereunder.
"Matter" is a claim, a material issue or a substantial request for relief.
"Proceeding" includes any action, suit, arbitration, alternate dispute
resolution mechanism, investigation, administrative hearing or any other
proceeding, whether civil, criminal, administrative or investigative, except one
initiated by Indemnitee pursuant to Section 6.01 of this Agreement to enforce
his rights under this Agreement.
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2. Services by Indemnitee
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2.01 Services by Indemnitee. Indemnitee agrees to serve or continue to serve in
his current capacity or capacities as a director, officer, employee, agent
or fiduciary of the Corporation. Indemnitee also agrees to serve, as the
Corporation may request from time to time, as a director, officer,
employee, agent or fiduciary of any other corporation, partnership,
limited liability company, association, joint venture, trust or other
enterprise in which the Corporation has an interest. Indemnitee and the
Corporation each acknowledge that they have entered into this Agreement as
a means of inducing Indemnitee to serve the Corporation in such
capacities.
2.02 Termination of Services. Indemnitee may at any time and for any reason
resign from such position or positions (subject to any other contractual
obligation or any obligation imposed by operation of law). The Corporation
shall have no obligation under this Agreement to continue Indemnitee in
any such position for any period of time and shall not be precluded by the
provisions of this Agreement from removing or terminating Indemnitee from
any such position at any time.
3. Indemnification
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3.01 General. The Corporation shall, to the fullest extent permitted by
applicable law in effect on the date hereof, and to such greater extent as
applicable law may thereafter permit, indemnify and hold Indemnitee
harmless from and against any and all losses, liabilities, claims, damages
and, subject to Section 3.02, Expenses (as this and all other capitalized
words are defined in Article 1. of this Agreement), whatsoever arising out
of any event or occurrence related to the fact that Indemnitee is or was a
director or officer of the Corporation or is or was serving in another
Corporate Status.
3.02 Expenses. If Indemnitee is, by reason of his Corporate Status, a party to
and is successful, on the merits or otherwise, in any Proceeding, he shall
be indemnified against all Expenses actually and reasonably incurred by
him or on his behalf in connection therewith. If Indemnitee is not wholly
successful in such Proceeding but is successful, on the merits or
otherwise, as to any Matter in such Proceeding, the Corporation shall
indemnify Indemnitee against all Expenses actually and reasonably incurred
by him or on his behalf relating to such Matter. The termination of any
Matter in such a Proceeding by dismissal, with or without prejudice, shall
be deemed to be a successful result as to such Matter. To the extent that
the Indemnitee is, by reason of his Corporate Status, a witness in any
Proceeding, he shall be indemnified against all Expenses actually and
reasonably incurred by him or on his behalf in connection therewith.
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4. Advancement of Expenses
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4.01 Advances. In the event of any threatened or pending action, suit or
proceeding in which Indemnitee is a party or is involved and that may give
rise to a right of indemnification under this Agreement, following written
request to the Corporation by Indemnitee, the Corporation shall promptly
pay to Indemnitee amounts to cover expenses reasonably incurred by
Indemnitee in such proceeding in advance of its final disposition upon the
receipt by the Corporation of (i) a written undertaking executed by or on
behalf of Indemnitee providing that Indemnitee will repay the advance if
it shall ultimately be determined that Indemnitee is not entitled to be
indemnified by the Corporation as provided in this Agreement and (ii)
satisfactory evidence as to the amount of such expenses.
4.02 Repayment of Advances or Other Expenses. Indemnitee agrees that Indemnitee
shall reimburse the Corporation for all expenses paid by the Corporation
in defending any civil, criminal, administrative or investigative action,
suit or proceeding against Indemnitee in the event and only to the extent
that it shall be determined pursuant to the provisions of this Agreement
or by final judgment or other final adjudication under the provisions of
any applicable law that Indemnitee is not entitled to be indemnified by
the Corporation for such expenses.
5. Procedure for Determination of Entitlement to Indemnification
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5.01 Request for Indemnification. To obtain indemnification, Indemnitee shall
submit to the Secretary of the Corporation a written claim or request.
Such written claim or request shall contain sufficient information to
reasonably inform the Corporation about the nature and extent of the
indemnification or advance sought by Indemnitee. The Secretary of the
Corporation shall promptly advise the Board of Directors of such request.
5.02 Determination of Entitlement; No Change of Control. If there has been no
Change of Control at the time the request for indemnification is
submitted, Indemnitee's entitlement to indemnification shall be determined
in accordance with Section 145(d) of the DGCL. If entitlement to
indemnification is to be determined by Independent Counsel, the
Corporation shall furnish notice to Indemnitee within 10 days after
receipt of the request for indemnification, specifying the identity and
address of Independent Counsel. The Indemnitee may, within 14 days after
receipt of such written notice of selection, deliver to the Corporation a
written objection to such selection. Such objection may be asserted only
on the ground that the Independent Counsel so selected does not meet the
requirements of Independent Counsel and the objection shall set forth with
particularity the factual basis for such assertion. If there is an
objection to the selection of Independent Counsel, either the Corporation
or Indemnitee may petition the Court for a determination that the
objection is without a reasonable basis and/or for the appointment of
Independent Counsel selected by the Court.
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5.03 Determination of Entitlement; Change of Control. If there has been a
Change of Control at the time the request for indemnification is
submitted, Indemnitee's entitlement to indemnification shall be determined
in a written opinion by Independent Counsel selected by Indemnitee.
Indemnitee shall give the Corporation written notice advising of the
identity and address of the Independent Counsel so selected. The
Corporation may, within seven days after receipt of such written notice of
selection, deliver to the Indemnitee a written objection to such
selection. Indemnitee may, within five days after the receipt of such
objection from the Corporation, submit the name of another Independent
Counsel and the Corporation may, within seven days after receipt of such
written notice of selection, deliver to the Indemnitee a written objection
to such selection. Any objections referred to in this Section 5.03 may be
asserted only on the ground that the Independent Counsel so selected does
not meet the requirements of Independent Counsel and such objection shall
set forth with particularity the factual basis for such assertion.
Indemnitee may petition the Court for a determination that the
Corporation's objection to the first and/or second selection of
Independent Counsel is without a reasonable basis and/or for the
appointment as Independent Counsel of a person selected by the Court.
5.04 Procedures of Independent Counsel. If a Change of Control shall have
occurred before the request for indemnification is sent by Indemnitee,
Indemnitee shall be presumed (except as otherwise expressly provided in
this Agreement) to be entitled to indemnification upon submission of a
request for indemnification in accordance with Section 5.01 of this
Agreement, and thereafter the Corporation shall have the burden of proof
to overcome the presumption in reaching a determination contrary to the
presumption. The presumption shall be used by Independent Counsel as a
basis for a determination of entitlement to indemnification unless the
Corporation provides information sufficient to overcome such presumption
by clear and convincing evidence or the investigation, review and analysis
of Independent Counsel convinces him by clear and convincing evidence that
the presumption should not apply.
Except in the event that the determination of entitlement to
indemnification is to be made by Independent Counsel, if the person or
persons empowered under Section 5.02 or 5.03 of this Agreement to
determine entitlement to indemnification shall not have made and furnished
to Indemnitee in writing a determination within 60 days after receipt by
the Corporation of the request therefor, the requisite determination of
entitlement to indemnification shall be deemed to have been made and
Indemnitee shall be entitled to such indemnification unless Indemnitee
knowingly misrepresented a material fact in connection with the request
for indemnification or such indemnification is prohibited by applicable
law. The termination of any Proceeding or of any Matter therein, by
judgment, order, settlement or conviction, or upon a plea of nolo
contendere or its equivalent, shall not (except as otherwise expressly
provided in this Agreement) of itself adversely affect the right of
Indemnitee to indemnification or create a presumption that Indemnitee did
not act in good faith and in a manner that he reasonably believed to be in
or not opposed to
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the best interests of the Corporation, or with respect to any criminal
Proceeding, that Indemnitee had reasonable cause to believe that his
conduct was unlawful. A person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan of the Corporation shall be
deemed to have acted in a manner not opposed to the best interests of the
Corporation.
For purposes of any determination hereunder, a person shall be deemed to
have acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the Corporation, or, with respect
to any criminal action or Proceeding, to have had no reasonable cause to
believe his conduct was unlawful, if his action is based on the records or
books of account of the Corporation or another enterprise or on
information supplied to him by the officers of the Corporation or another
enterprise in the course of their duties or on the advice of legal counsel
for the Corporation or another enterprise or on information or records
given or reports made to the Corporation or another enterprise by an
independent certified public accountant or by an appraiser or other expert
selected with reasonable care by the Corporation or another enterprise.
The term "another enterprise" as used in this Section shall mean any other
corporation or any partnership, limited liability company, association,
joint venture, trust, employee benefit plan or other enterprise of which
such person is or was serving at the request of the Corporation as a
director, officer, employee or agent. The provisions of this paragraph
shall not be deemed to be exclusive or to limit in any way the
circumstances in which an Indemnitee may be deemed to have met the
applicable standards of conduct for determining entitlement to rights
under this Agreement.
5.05 Independent Counsel Expenses. The Corporation shall pay any and all
reasonable fees and expenses of Independent Counsel incurred acting
pursuant to this Article 5. and in any proceeding to which it is a party
or witness in respect of its investigation and written report and shall
pay all reasonable fees and expenses incident to the procedures in which
such Independent Counsel was selected or appointed. No Independent Counsel
may serve if a timely objection has been made to his selection until a
Court has determined that such objection is without a reasonable basis.
6. Certain Remedies of Indemnitee
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6.01 Adjudication. In the event that (i) a determination is made pursuant to
Section 5.02 or 5.03 hereof that Indemnitee is not entitled to
indemnification under this Agreement; (ii) advancement of Expenses is not
timely made pursuant to Section 4.01 of this Agreement; (iii) Independent
Counsel has not made and delivered a written opinion determining the
request for indemnification (a) within 90 days after being appointed by
the Court, or (b) within 90 days after objections to his selection have
been overruled by the Court or (c) within 90 days after the time for the
Corporation or Indemnitee to object to his selection; or (iv) payment of
indemnification is not made within five days after a determination of
entitlement to indemnification has been made or deemed to have been
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made pursuant to Section 5.02, 5.03 or 5.04 of this Agreement, Indemnitee
shall be entitled to an adjudication in the Court, or in any other court
of competent jurisdiction, of his entitlement to such indemnification or
advancement of Expenses. In the event that a determination shall have been
made that Indemnitee is not entitled to indemnification, any judicial
proceeding or arbitration commenced pursuant to this Section 6.01 shall be
conducted in all respects as a de novo trial on the merits and Indemnitee
shall not be prejudiced by reason of that adverse determination. If a
Change of Control shall have occurred, in any judicial proceeding
commenced pursuant to this Section 6.01, the Corporation shall have the
burden of proving that Indemnitee is not entitled to indemnification or
advancement of Expenses, as the case may be. If a determination shall have
been made or deemed to have been made that Indemnitee is entitled to
indemnification, the Corporation shall be bound by such determination in
any judicial proceeding commenced pursuant to this Section 6.01, or
otherwise, unless Indemnitee knowingly misrepresented a material fact in
connection with the request for indemnification, or such indemnification
is prohibited by law.
The Corporation shall be precluded from asserting in any judicial
proceeding commenced pursuant to this Section 6.01 that the procedures and
presumptions of this Agreement are not valid, binding and enforceable, and
shall stipulate in any such proceeding that the Corporation is bound by
all provisions of this Agreement. In the event that Indemnitee, pursuant
to this Section 6.01, seeks a judicial adjudication to enforce his rights
under, or to recover damages for breach of, this Agreement, Indemnitee
shall be entitled to recover from the Corporation, and shall be
indemnified by the Corporation against, any and all Expenses actually and
reasonably incurred by him in such judicial adjudication, but only if he
prevails therein. If it shall be determined in such judicial adjudication
that Indemnitee is entitled to receive part but not all of the
indemnification or advancement of Expenses sought, the Expenses incurred
by Indemnitee in connection with such judicial adjudication or arbitration
shall be appropriately prorated.
7. Participation by the Corporation
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7.01 Participation by the Corporation. With respect to any such claim, action,
suit, proceeding or investigation as to which Indemnitee notifies the
Corporation of the commencement thereof: (a) the Corporation will be
entitled to participate therein at its own expense; (b) except as
otherwise provided below, to the extent that it may wish, the Corporation
(jointly with any other indemnifying party similarly notified) will be
entitled to assume the defense thereof, with counsel reasonably
satisfactory to Indemnitee. After receipt of notice from the Corporation
to Indemnitee of the Corporation's election so to assume the defense
thereof, the Corporation will not be liable to Indemnitee under this
Agreement for any legal or other expenses subsequently incurred by
Indemnitee in connection with the defense thereof other than reasonable
costs of investigation or as otherwise provided below. Indemnitee shall
have the right to employ his own counsel in such action, suit, proceeding
or investigation but the fees and expenses of such counsel
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incurred after notice from the Corporation of its assumption of the
defense thereof shall be at the expense of Indemnitee unless (i) the
employment of counsel by Indemnitee has been authorized by the
Corporation, (ii) Indemnitee shall have reasonably concluded that there is
a conflict of interest between the Corporation and Indemnitee in the
conduct of the defense of such action or (iii) the Corporation shall not
in fact have employed counsel to assume the defense of such action, in
each of which cases the fees and expenses of counsel employed by
Indemnitee shall be subject to indemnification pursuant to the terms of
this Agreement (the Corporation shall not be entitled to assume the
defense of any action, suit, proceeding or investigation brought in the
name of or on behalf of the Corporation or as to which Indemnitee shall
have made the conclusion provided for in (ii) above); and (c) the
Corporation shall not be liable to indemnify Indemnitee under this
Agreement for any amounts paid in settlement of any action or claim
effected without its written consent, which consent shall not be
unreasonably withheld. The Corporation shall not settle any action or
claim in any manner that would impose any limitation or unindemnified
penalty on Indemnitee without Indemnitee's written consent, which consent
shall not be unreasonably withheld.
8. Miscellaneous
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8.01 Nonexclusivity of Rights. The rights of indemnification and advancement of
Expenses as provided by this Agreement shall not be deemed exclusive of
any other rights to which Indemnitee may at any time be entitled to under
applicable law, the Corporation's Certificate of Incorporation, the
Corporation's Bylaws, any agreement, a vote of shareholders or a
resolution of directors, or otherwise. No amendment, alteration or repeal
of this Agreement or any provision hereof shall be effective as to
Indemnitee for acts, events and circumstances that occurred, in whole or
in part, before such amendment, alteration or repeal. The provisions of
this Agreement shall continue as to Indemnitee whose Corporate Status has
ceased for any reason and shall inure to the benefit of his heirs,
executors and administrators.
8.02 Insurance and Subrogation. The Corporation shall not be liable under this
Agreement to make any payment of amounts otherwise indemnifiable hereunder
if, but only to the extent that, Indemnitee has otherwise actually
received such payment under any insurance policy, contract, agreement or
otherwise. In the event of any payment hereunder, the Corporation shall be
subrogated to the extent of such payment to all the rights of recovery of
Indemnitee, who shall execute all papers required and take all action
reasonably requested by the Corporation to secure such rights, including
execution of such documents as are necessary to enable the Corporation to
bring suit to enforce such rights.
8.03 Acknowledgment of Certain Matters. Both the Corporation and Indemnitee
acknowledge that in certain instances, applicable law or public policy may
prohibit indemnification of Indemnitee by the Corporation under this
Agreement or otherwise. Indemnitee understands and acknowledges that the
Corporation has undertaken or may be
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required in the future to undertake, by the Securities and Exchange
Commission, to submit the question of indemnification to a court in
certain circumstances for a determination of the Corporation's right under
public policy to indemnify Indemnitee.
8.04 Amendment. This Agreement may not be modified or amended except by a
written instrument executed by or on behalf of each of the parties hereto.
8.05 Waivers. The observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively) by the party entitled to enforce such term only by a
writing signed by the party against which such waiver is to be asserted.
Unless otherwise expressly provided herein, no delay on the part of any
party hereto in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any waiver on the part of any party
hereto of any right, power or privilege hereunder operate as a waiver of
any other right, power or privilege hereunder nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right,
power or privilege hereunder.
8.06 Entire Agreement. This Agreement and the documents referred to herein
constitute the entire agreement between the parties hereto with respect to
the matters covered hereby, and any other prior or contemporaneous oral or
written understandings or agreements with respect to the matters covered
hereby are superseded by this Agreement.
8.07 Severability. If any provision or provisions of this Agreement shall be
held to be invalid, illegal or unenforceable for any reason whatsoever,
the validity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby; and, to the fullest
extent possible, the provisions of this Agreement shall be construed so as
to give effect to the intent manifested by the provision held invalid,
illegal or unenforceable.
8.08 Certain Actions For Which Indemnification Is Not Provided. Notwithstanding
any other provision of this Agreement, Indemnitee shall not be entitled to
indemnification or advancement of Expenses under this Agreement with
respect to any Proceeding, or any Matter therein, brought or made by
Indemnitee against the Corporation.
8.09 Notices. Promptly after receipt by Indemnitee of notice of the
commencement of any action, suit or proceeding, Indemnitee shall, if he
anticipates or contemplates making a claim for expenses or an advance
pursuant to the terms of this Agreement, notify the Corporation of the
commencement of such action, suit or proceeding; provided, however, that
any delay in so notifying the Corporation shall not constitute a waiver or
release by Indemnitee of rights hereunder and that any omission by
Indemnitee to so notify the Corporation shall not relieve the Corporation
from any liability that it may have to Indemnitee otherwise than under
this Agreement. Any communication required or permitted to the Corporation
shall be addressed to the Secretary of the Corporation and
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any such communication to Indemnitee shall be addressed to the
Indemnitee's address as shown on the Corporation's records unless the
Indemnitee specifies otherwise and shall be personally delivered or
delivered by overnight mail delivery. Any such notice shall be effective
upon receipt.
8.10 Governing Law. This Agreement shall be construed in accordance with and
governed by the laws of the State of Delaware without regard to any
principles of conflict of laws that, if applied, might permit or require
the application of the laws of a different jurisdiction.
8.11 Headings. The Article and Section headings in this Agreement are for
convenience of reference only, and shall not be deemed to alter or affect
the meaning or interpretation of any provisions hereof.
8.12 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original and all of which together shall be
deemed to be one and the same instrument.
8.13 Use of Certain Terms. As used in this Agreement, the words "herein,"
"hereof," and "hereunder" and other words of similar import refer to this
Agreement as a whole and not to any particular paragraph, subparagraph,
section, subsection, or other subdivision. Whenever the context may
require, any pronoun used in this Agreement shall include the
corresponding masculine, feminine or neuter forms, and the singular form
of nouns, pronouns and verbs shall include the plural and vice versa.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
to be effective as of the date first above written.
Syntroleum Corporation
By: /s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx, Xx., President/COO
INDEMNITEE
By: /s/ Branch X. Xxxxxxx
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Branch X. Xxxxxxx
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