EXHIBIT 10.31
DIRECTOR INDEMNIFICATION AGREEMENT
This Director Indemnification Agreement, dated as of __________, 2005
(this "AGREEMENT"), is made by and between Alon USA Energy, Inc., a Delaware
corporation (the "COMPANY"), and _______________________ ("INDEMNITEE").
RECITALS:
A. Section 141 of the Delaware General Corporation Law provides that
the business and affairs of a corporation shall be managed by or under the
direction of its board of directors.
B. By virtue of the managerial prerogatives vested in the directors of
a Delaware corporation, directors act as fiduciaries of the corporation and its
stockholders.
C. Thus, it is critically important to the Company and its stockholders
that the Company be able to attract and retain the most capable persons
reasonably available to serve as directors of the Company.
D. In recognition of the need for corporations to be able to induce
capable and responsible persons to accept positions in corporate management,
Delaware law authorizes (and in some instances requires) corporations to
indemnify their directors and officers, and further authorizes corporations to
purchase and maintain insurance for the benefit of their directors and officers.
E. The Delaware courts have recognized that indemnification by a
corporation serves the dual policies of (1) allowing corporate officials to
resist unjustified lawsuits, secure in the knowledge that, if vindicated, the
corporation will bear the expense of litigation and (2) encouraging capable
women and men to serve as corporate directors and officers, secure in the
knowledge that the corporation will absorb the costs of defending their honesty
and integrity.
F. The number of lawsuits challenging the judgment and actions of
directors of Delaware corporations, the costs of defending those lawsuits, and
the threat to directors' personal assets have all materially increased over the
past several years, chilling the willingness of capable women and men to
undertake the responsibilities imposed on corporate directors.
G. Recent federal legislation and rules adopted by the Securities and
Exchange Commission and the national securities exchanges have imposed
additional disclosure and corporate governance obligations on directors of
public companies and have exposed such directors to new and substantially
broadened civil liabilities.
H. These legislative and regulatory initiatives have also exposed
directors of public companies to a significantly greater risk of criminal
proceedings, with attendant defense costs and potential criminal fines and
penalties.
I. Under Delaware law, a director's right to be reimbursed for the
costs of defense of criminal actions, whether such claims are asserted under
state or federal law, does not depend upon the merits of the claims asserted
against the director and is separate and distinct from any right to
indemnification the director may be able to establish, and indemnification of
the director
against criminal fines and penalties is permitted if the director satisfies the
applicable standard of conduct.
J. Indemnitee is a director of the Company and his/her willingness to
serve in such capacity is predicated, in substantial part, upon the Company's
willingness to indemnify him/her in accordance with the principles reflected
above, to the fullest extent permitted by the laws of the state of Delaware, and
upon the other undertakings set forth in this Agreement.
K. Therefore, in recognition of the need to provide Indemnitee with
substantial protection against personal liability, in order to procure
Indemnitee's continued service as a director of the Company and to enhance
Indemnitee's ability to serve the Company in an effective manner, and in order
to provide such protection pursuant to express contract rights (intended to be
enforceable irrespective of, among other things, any amendment to the Company's
certificate of incorporation or bylaws (collectively, the "CONSTITUENT
DOCUMENTS"), any change in the composition of the Company's Board of Directors
(the "BOARD") or any change-in-control or business combination transaction
relating to the Company), the Company wishes to provide in this Agreement for
the indemnification of and the advancement of Expenses (as defined in Section
1(e)) to Indemnitee as set forth in this Agreement and for the continued
coverage of Indemnitee under the Company's directors' and officers' liability
insurance policies.
L. In light of the considerations referred to in the preceding
recitals, it is the Company's intention and desire that the provisions of this
Agreement be construed liberally, subject to their express terms, to maximize
the protections to be provided to Indemnitee hereunder.
AGREEMENT:
NOW, THEREFORE, the parties hereby agree as follows:
1. CERTAIN DEFINITIONS. In addition to terms defined elsewhere herein,
the following terms have the following meanings when used in this Agreement with
initial capital letters:
(a) "CHANGE IN CONTROL" means the occurrence after the date of
this Agreement of any of the following events:
(i) the acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a
"PERSON") of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 20% or more of the combined voting power of the
then-outstanding Voting Stock of the Company; provided, however, that:
(A) for purposes of this Section 1(a)(i), the
following acquisitions shall not constitute a Change in Control: (1) any
acquisition of Voting Stock of the Company directly from the Company that is
approved by a majority of the Incumbent Directors, (2) any acquisition of Voting
Stock of the Company by the Company or any Subsidiary, (3) any acquisition of
Voting Stock of the Company by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any Subsidiary, and (4) any
acquisition of Voting Stock of the Company by any Person pursuant to a Business
Combination that complies with clauses (A), (B) and (C) of Section 1(a)(iii)
below;
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(B) if any Person acquires beneficial
ownership of 20% or more of combined voting power of the then-outstanding Voting
Stock of the Company as a result of a transaction described in clause (A)(1) of
Section 1(a)(i) and such Person thereafter becomes the beneficial owner of any
additional shares of Voting Stock of the Company representing 1% or more of the
then-outstanding Voting Stock of the Company, other than in an acquisition
directly from the Company that is approved by a majority of the Incumbent
Directors or other than as a result of a stock dividend, stock split or similar
transaction effected by the Company in which all holders of Voting Stock are
treated equally, such subsequent acquisition shall be deemed to constitute a
Change in Control;
(C) a Change in Control will not be deemed to
have occurred if a Person acquires beneficial ownership of 20% or more of the
Voting Stock of the Company as a result of a reduction in the number of shares
of Voting Stock of the Company outstanding unless and until such Person
thereafter becomes the beneficial owner of any additional shares of Voting Stock
of the Company representing 1% or more of the then-outstanding Voting Stock of
the Company, other than in an acquisition directly from the Company that is
approved by a majority of the Incumbent Directors or other than as a result of a
stock dividend, stock split or similar transaction effected by the Company in
which all holders of Voting Stock are treated equally; and
(D) if at least a majority of the Incumbent
Directors determines in good faith that a Person has acquired beneficial
ownership of 20% or more of the Voting Stock of the Company inadvertently, and
such Person divests as promptly as practicable a sufficient number of shares so
that such Person beneficially owns less than 20% of the Voting Stock of the
Company, then no Change in Control shall have occurred as a result of such
Person's acquisition; or
(ii) a majority of the Directors are not Incumbent
Directors; or
(iii) the consummation of a reorganization, merger or
consolidation, or sale or other disposition of all or substantially all of the
assets of the Company or the acquisition of assets of another corporation, or
other transaction (each, a "BUSINESS COMBINATION"), unless, in each case,
immediately following such Business Combination (A) all or substantially all of
the individuals and entities who were the beneficial owners of Voting Stock of
the Company immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 60% of the combined voting power of the then
outstanding shares of Voting Stock of the entity resulting from such Business
Combination (including an entity which as a result of such transaction owns the
Company or all or substantially all of the Company's assets either directly or
through one or more subsidiaries), (B) no Person (other than the Company, such
entity resulting from such Business Combination, or any employee benefit plan
(or related trust) sponsored or maintained by the Company, any Subsidiary or
such entity resulting from such Business Combination) beneficially owns,
directly or indirectly, 20% or more of the combined voting power of the then
outstanding shares of Voting Stock of the entity resulting from such Business
Combination, and (C) at least a majority of the members of the Board of
Directors of the entity resulting from such Business Combination were Incumbent
Directors at the time of the execution of the initial agreement or of the action
of the Board providing for such Business Combination; or
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(iv) approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company, except pursuant to a
Business Combination that complies with clauses (A), (B) and (C) of Section
1(a)(iii).
(v) For purposes of this Section 1(a) and as used
elsewhere in this Agreement, the following terms shall have the following
meanings:
(A) "EXCHANGE ACT" shall mean the Securities
Exchange Act of 1934, as amended.
(B) "INCUMBENT DIRECTORS" means the
individuals who, as of the date hereof, are Directors of the Company and any
individual becoming a Director subsequent to the date hereof whose election,
nomination for election by the Company's stockholders, or appointment, was
approved by a vote of at least two-thirds of the then Incumbent Directors
(either by a specific vote or by approval of the proxy statement of the Company
in which such person is named as a nominee for director, without objection to
such nomination); provided, however, that an individual shall not be an
Incumbent Director if such individual's election or appointment to the Board
occurs as a result of an actual or threatened election contest (as described in
Rule 14a-12(c) of the Exchange Act) with respect to the election or removal of
Directors or other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board.
(C) "SUBSIDIARY" means an entity in which
the Company directly or indirectly beneficially owns 50% or more of the
outstanding Voting Stock.
(D) "VOTING STOCK" means securities entitled
to vote generally in the election of directors (or similar governing bodies).
(b) "CLAIM" means (i) any threatened, asserted, pending or
completed claim, demand, action, suit or proceeding, whether civil, criminal,
administrative, arbitrative, investigative or other, and whether made pursuant
to federal, state or other law; and (ii) any threatened, pending or completed
inquiry or investigation, whether made, instituted or conducted by the Company
or any other person, including any federal, state or other governmental entity,
that Indemnitee determines might lead to the institution of any such claim,
demand, action, suit or proceeding.
(c) "CONTROLLED AFFILIATE" means any corporation, limited
liability company, partnership, joint venture, trust or other entity or
enterprise, whether or not for profit, that is directly or indirectly controlled
by the Company. For purposes of this definition, "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of an entity or enterprise, whether through the ownership
of voting securities, through other voting rights, by contract or otherwise;
provided that direct or indirect beneficial ownership of capital stock or other
interests in an entity or enterprise entitling the holder to cast 20% or more of
the total number of votes generally entitled to be cast in the election of
directors (or persons performing comparable functions) of such entity or
enterprise shall be deemed to constitute control for purposes of this
definition.
(d) "DISINTERESTED DIRECTOR" means a director of the Company
who is not and was not a party to the Claim in respect of which indemnification
is sought by Indemnitee.
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(e) "EXPENSES" means attorneys' and experts' fees and expenses
and all other costs and expenses paid or payable in connection with
investigating, defending, being a witness in or participating in (including on
appeal), or preparing to investigate, defend, be a witness in or participate in
(including on appeal), any Claim.
(f) "INDEMNIFIABLE CLAIM" means any Claim based upon, arising
out of or resulting from (i) any actual, alleged or suspected act or failure to
act by Indemnitee in his or her capacity as a director, officer, employee or
agent of the Company or as a director, officer, employee, member, manager,
trustee or agent of any other corporation, limited liability company,
partnership, joint venture, trust or other entity or enterprise, whether or not
for profit, as to which Indemnitee is or was serving at the request of the
Company as a director, officer, employee, member, manager, trustee or agent,
(ii) any actual, alleged or suspected act or failure to act by Indemnitee in
respect of any business, transaction, communication, filing, disclosure or other
activity of the Company or any other entity or enterprise referred to in clause
(i) of this sentence, or (iii) Indemnitee's status as a current or former
director, officer, employee or agent of the Company or as a current or former
director, officer, employee, member, manager, trustee or agent of the Company or
any other entity or enterprise referred to in clause (i) of this sentence or any
actual, alleged or suspected act or failure to act by Indemnitee in connection
with any obligation or restriction imposed upon Indemnitee by reason of such
status. In addition to any service at the actual request of the Company, for
purposes of this Agreement, Indemnitee shall be deemed to be serving or to have
served at the request of the Company as a director, officer, employee, member,
manager, trustee or agent of another entity or enterprise if Indemnitee is or
was serving as a director, officer, employee, member, manager, trustee or agent
of such entity or enterprise and (i) such entity or enterprise is or at the time
of such service was a Controlled Affiliate, (ii) such entity or enterprise is or
at the time of such service was an employee benefit plan (or related trust)
sponsored or maintained by the Company or a Controlled Affiliate, or (iii) the
Company or a Controlled Affiliate directly or indirectly caused or authorized
Indemnitee to be nominated, elected, appointed, designated, employed, engaged or
selected to serve in such capacity.
(g) "INDEMNIFIABLE LOSSES" means any and all Losses relating
to, arising out of or resulting from any Indemnifiable Claim.
(h) "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 past five years has been, retained to represent: (i)
the Company (or any Subsidiary) or Indemnitee in any matter material to either
such party (other than with respect to matters concerning the Indemnitee under
this Agreement, or of other indemnitees under similar indemnification
agreements), or (ii) any other named (or, as to a threatened matter, reasonably
likely to be named) party to the Indemnifiable Claim giving rise to a claim for
indemnification hereunder. Notwithstanding the foregoing, the term "Independent
Counsel" shall not include any person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of interest in
representing either the Company or Indemnitee in an action to determine
Indemnitee's rights under this Agreement.
(i) "LOSSES" means any and all Expenses, damages, losses,
liabilities, judgments, fines, penalties (whether civil, criminal or other) and
amounts paid in settlement, including all
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interest, assessments and other charges paid or payable in connection with or in
respect of any of the foregoing.
2. INDEMNIFICATION OBLIGATION. Subject to Section 7, the Company shall
indemnify, defend and hold harmless Indemnitee, to the fullest extent permitted
or required by the laws of the State of Delaware in effect on the date hereof or
as such laws may from time to time hereafter be amended to increase the scope of
such permitted indemnification, against any and all Indemnifiable Claims and
Indemnifiable Losses; provided, however, that, except as provided in Sections 4
and 20, Indemnitee shall not be entitled to indemnification pursuant to this
Agreement in connection with any Claim initiated by Indemnitee against the
Company or any director or officer of the Company unless the Company has joined
in or consented to the initiation of such Claim.
3. ADVANCEMENT OF EXPENSES. Indemnitee shall have the right to
advancement by the Company prior to the final disposition of any Indemnifiable
Claim of any and all Expenses relating to, arising out of or resulting from any
Indemnifiable Claim paid or incurred by Indemnitee or which Indemnitee
determines are reasonably likely to be paid or incurred by Indemnitee.
Indemnitee's right to such advancement is not subject to the satisfaction of any
standard of conduct. Without limiting the generality or effect of the foregoing,
within five business days after any request by Indemnitee, the Company shall, in
accordance with such request (but without duplication), (a) pay such Expenses on
behalf of Indemnitee, (b) advance to Indemnitee funds in an amount sufficient to
pay such Expenses, or (c) reimburse Indemnitee for such Expenses; provided that
Indemnitee shall repay, without interest any amounts actually advanced to
Indemnitee that, at the final disposition of the Indemnifiable Claim to which
the advance related, were in excess of amounts paid or payable by Indemnitee in
respect of Expenses relating to, arising out of or resulting from such
Indemnifiable Claim. In connection with any such payment, advancement or
reimbursement, Indemnitee shall execute and deliver to the Company an
undertaking, which need not be secured and shall be accepted without reference
to Indemnitee's ability to repay the Expenses, by or on behalf of the
Indemnitee, to repay any amounts paid, advanced or reimbursed by the Company in
respect of Expenses relating to, arising out of or resulting from any
Indemnifiable Claim in respect of which it shall have been determined, following
the final disposition of such Indemnifiable Claim and in accordance with Section
7, that Indemnitee is not entitled to indemnification hereunder.
4. INDEMNIFICATION FOR ADDITIONAL EXPENSES. Without limiting the
generality or effect of the foregoing, the Company shall indemnify and hold
harmless Indemnitee against and, if requested by Indemnitee, shall reimburse
Indemnitee for, or advance to Indemnitee, within five business days of such
request, any and all Expenses paid or incurred by Indemnitee or which Indemnitee
determines are reasonably likely to be paid or incurred by Indemnitee in
connection with any Claim made, instituted or conducted by Indemnitee for (a)
indemnification or reimbursement or advance payment of Expenses by the Company
under any provision of this Agreement, or under any other agreement or provision
of the Constituent Documents now or hereafter in effect relating to
Indemnifiable Claims, and/or (b) recovery under any directors' and officers'
liability insurance policies maintained by the Company, regardless in each case
of whether Indemnitee ultimately is determined to be entitled to such
indemnification, reimbursement, advance or insurance recovery, as the case may
be; provided, however, that Indemnitee shall return, without interest, any such
advance of Expenses (or portion thereof) which remains unspent at the final
disposition of the Claim to which the advance related.
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5. PARTIAL INDEMNITY. If Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a portion of any
Indemnifiable Loss, but not for all of the total amount thereof, the Company
shall nevertheless indemnify Indemnitee for the portion thereof to which
Indemnitee is entitled.
6. PROCEDURE FOR NOTIFICATION. To obtain indemnification under this
Agreement in respect of an Indemnifiable Claim or Indemnifiable Loss, Indemnitee
shall submit to the Company a written request therefor, including a brief
description (based upon information then available to Indemnitee) of such
Indemnifiable Claim or Indemnifiable Loss. If, at the time of the receipt of
such request, the Company has directors' and officers' liability insurance in
effect under which coverage for such Indemnifiable Claim or Indemnifiable Loss
is potentially available, the Company shall give prompt written notice of such
Indemnifiable Claim or Indemnifiable Loss to the applicable insurers in
accordance with the procedures set forth in the applicable policies. The Company
shall provide to Indemnitee a copy of such notice delivered to the applicable
insurers, and copies of all subsequent correspondence between the Company and
such insurers regarding the Indemnifiable Claim or Indemnifiable Loss, in each
case substantially concurrently with the delivery or receipt thereof by the
Company. The failure by Indemnitee to timely notify the Company of any
Indemnifiable Claim or Indemnifiable Loss shall not relieve the Company from any
liability hereunder unless, and only to the extent that, the Company did not
otherwise learn of such Indemnifiable Claim or Indemnifiable Loss and such
failure results in forfeiture by the Company of substantial defenses, rights or
insurance coverage.
7. DETERMINATION OF RIGHT TO INDEMNIFICATION.
(a) To the extent that Indemnitee shall have been successful
on the merits or otherwise in defense of any Indemnifiable Claim or any portion
thereof or in defense of any issue or matter therein, including dismissal
without prejudice, Indemnitee shall be indemnified against all Indemnifiable
Losses relating to, arising out of or resulting from such Indemnifiable Claim in
accordance with Section 2 and no Standard of Conduct Determination (as defined
in Section 7(b)) shall be required.
(b) To the extent that the provisions of Section 7(a) are
inapplicable to an Indemnifiable Claim that shall have been finally disposed of,
any determination of whether Indemnitee has satisfied any applicable standard of
conduct under Delaware law that is a legally required condition precedent to
indemnification of Indemnitee hereunder against Indemnifiable Losses relating
to, arising out of or resulting from such Indemnifiable Claim (a "STANDARD OF
CONDUCT DETERMINATION") shall be made as follows: (i) if a Change in Control
shall not have occurred, or if a Change in Control shall have occurred but
Indemnitee shall have requested that the Standard of Conduct Determination be
made pursuant to this clause (i), (A) by a majority vote of the Disinterested
Directors, even if less than a quorum of the Board, (B) if such Disinterested
Directors so direct, by a majority vote of a committee of Disinterested
Directors designated by a majority vote of all Disinterested Directors, or (C)
if there are no such Disinterested Directors, by Independent Counsel in a
written opinion addressed to the Board, a copy of which shall be delivered to
Indemnitee; and (ii) if a Change in Control shall have occurred and Indemnitee
shall not have requested that the Standard of Conduct Determination be made
pursuant to clause (i), by Independent Counsel in a written opinion addressed to
the Board, a copy of which shall be delivered to Indemnitee. Indemnitee will
cooperate with the person or persons making such Standard of Conduct
Determination, including providing to such person or
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persons, upon reasonable advance request, any documentation or information which
is not privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination. The
Company shall indemnify and hold harmless Indemnitee against and, if requested
by Indemnitee, shall reimburse Indemnitee for, or advance to Indemnitee, within
five business days of such request, any and all costs and expenses (including
attorneys' and experts' fees and expenses) incurred by Indemnitee in so
cooperating with the person or persons making such Standard of Conduct
Determination.
(c) The Company shall use its reasonable best efforts to cause
any Standard of Conduct Determination required under Section 7(b) to be made as
promptly as practicable. If (i) the person or persons empowered or selected
under Section 7 to make the Standard of Conduct Determination shall not have
made a determination within 30 days after the later of (A) receipt by the
Company of written notice from Indemnitee advising the Company of the final
disposition of the applicable Indemnifiable Claim (the date of such receipt
being the "NOTIFICATION Date") and (B) the selection of an Independent Counsel,
if such determination is to be made by Independent Counsel, that is permitted
under the provisions of Section 7(e) to make such determination and (ii)
Indemnitee shall have fulfilled his/her obligations set forth in the second
sentence of Section 7(b), then Indemnitee shall be deemed to have satisfied the
applicable standard of conduct; provided that such 30-day period may be extended
for a reasonable time, not to exceed an additional 30 days, if the person or
persons making such determination in good faith requires such additional time
for the obtaining or evaluation or documentation and/or information relating
thereto.
(d) If (i) Indemnitee shall be entitled to indemnification
hereunder against any Indemnifiable Losses pursuant to Section 7(a), (ii) no
determination of whether Indemnitee has satisfied any applicable standard of
conduct under Delaware law is a legally required condition precedent to
indemnification of Indemnitee hereunder against any Indemnifiable Losses, or
(iii) Indemnitee has been determined or deemed pursuant to Section 7(b) or (c)
to have satisfied any applicable standard of conduct under Delaware law which is
a legally required condition precedent to indemnification of Indemnitee
hereunder against any Indemnifiable Losses, then the Company shall pay to
Indemnitee, within five business days after the later of (x) the Notification
Date in respect of the Indemnifiable Claim or portion thereof to which such
Indemnifiable Losses are related, out of which such Indemnifiable Losses arose
or from which such Indemnifiable Losses resulted and (y) the earliest date on
which the applicable criterion specified in clause (i), (ii) or (iii) above
shall have been satisfied, an amount equal to the amount of such Indemnifiable
Losses.
(e) If a Standard of Conduct Determination is to be made by
Independent Counsel pursuant to Section 7(b)(i), the Independent Counsel shall
be selected by the Board of Directors, and the Company shall give written notice
to Indemnitee advising him or her of the identity of the Independent Counsel so
selected. If a Standard of Conduct Determination is to be made by Independent
Counsel pursuant to Section 7(b)(ii), the Independent Counsel shall be selected
by Indemnitee, and Indemnitee shall give written notice to the Company advising
it of the identity of the Independent Counsel so selected. In either case,
Indemnitee or the Company, as applicable, may, within five business days after
receiving written notice of selection from the other, deliver to the other a
written objection to such selection; provided, however, that such objection may
be asserted only on the ground that the Independent Counsel so selected does not
satisfy the criteria set forth in the definition of "Independent Counsel" in
Section 1(h), and the
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objection shall set forth with particularity the factual basis of such
assertion. Absent a proper and timely objection, the person or firm so selected
shall act as Independent Counsel. If such written objection is properly and
timely made and substantiated, (i) the Independent Counsel so selected may not
serve as Independent Counsel unless and until such objection is withdrawn or a
court has determined that such objection is without merit and (ii) the
non-objecting party may, at its option, select an alternative Independent
Counsel and give written notice to the other party advising such other party of
the identity of the alternative Independent Counsel so selected, in which case
the provisions of the two immediately preceding sentences and clause (i) of this
sentence shall apply to such subsequent selection and notice. If applicable, the
provisions of clause (ii) of the immediately preceding sentence shall apply to
successive alternative selections. If no Independent Counsel that is permitted
under the foregoing provisions of this Section 7(e) to make the Standard of
Conduct Determination shall have been selected within 30 days after the Company
gives its initial notice pursuant to the first sentence of this Section 7(e) or
Indemnitee gives its initial notice pursuant to the second sentence of this
Section 7(e), as the case may be, either the Company or Indemnitee may petition
the Court of Chancery of the State of Delaware for resolution of any objection
which shall have been made by the Company or Indemnitee to the other's selection
of Independent Counsel and/or for the appointment as Independent Counsel of a
person or firm selected by the Court or by such other person as the Court shall
designate, and the person or firm with respect to whom all objections are so
resolved or the person or firm so appointed will act as Independent Counsel. In
all events, the Company shall pay all of the reasonable fees and expenses of the
Independent Counsel incurred in connection with the Independent Counsel's
determination pursuant to Section 7(b).
8. PRESUMPTION OF ENTITLEMENT. In making any Standard of Conduct
Determination, the person or persons making such determination shall presume
that Indemnitee has satisfied the applicable standard of conduct, and the
Company may overcome such presumption only by its adducing clear and convincing
evidence to the contrary. Any Standard of Conduct Determination that is adverse
to Indemnitee may be challenged by the Indemnitee in the Court of Chancery of
the State of Delaware. No determination by the Company (including by its
directors or any Independent Counsel) that Indemnitee has not satisfied any
applicable standard of conduct shall be a defense to any Claim by Indemnitee for
indemnification or reimbursement or advance payment of Expenses by the Company
hereunder or create a presumption that Indemnitee has not met any applicable
standard of conduct.
9. NO OTHER PRESUMPTION. For purposes of this Agreement, the
termination of any Claim by judgment, order, settlement (whether with or without
court approval) or conviction, or upon a plea of nolo contendere or its
equivalent, will not create a presumption that Indemnitee did not meet any
applicable standard of conduct or that indemnification hereunder is otherwise
not permitted.
10. NON-EXCLUSIVITY. The rights of Indemnitee hereunder will be in
addition to any other rights Indemnitee may have under the Constituent
Documents, or the substantive laws of the Company's jurisdiction of
incorporation, any other contract or otherwise (collectively, "OTHER INDEMNITY
PROVISIONS"); provided, however, that (a) to the extent that Indemnitee
otherwise would have any greater right to indemnification under any Other
Indemnity Provision, Indemnitee will be deemed to have such greater right
hereunder and (b) to the extent that any change is made to any Other Indemnity
Provision which permits any greater right to indemnification than that provided
under this Agreement as of the date hereof, Indemnitee will
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be deemed to have such greater right hereunder. The Company will not adopt any
amendment to any of the Constituent Documents the effect of which would be to
deny, diminish or encumber Indemnitee's right to indemnification under this
Agreement or any Other Indemnity Provision.
11. LIABILITY INSURANCE AND FUNDING. For the duration of Indemnitee's
service as a director and/or officer of the Company, and thereafter for so long
as Indemnitee shall be subject to any pending or possible Indemnifiable Claim,
the Company shall use commercially reasonable efforts (taking into account the
scope and amount of coverage available relative to the cost thereof) to cause to
be maintained in effect policies of directors' and officers' liability insurance
providing coverage for directors and/or officers of the Company that is at least
substantially comparable in scope and amount to that provided by the Company's
current policies of directors' and officers' liability insurance. The Company
shall provide Indemnitee with a copy of all directors' and officers' liability
insurance applications, binders, policies, declarations, endorsements and other
related materials, and shall provide Indemnitee with a reasonable opportunity to
review and comment on the same. Without limiting the generality or effect of the
two immediately preceding sentences, the Company shall not discontinue or
significantly reduce the scope or amount of coverage from one policy period to
the next (i) without the prior approval thereof by a majority vote of the
Incumbent Directors, even if less than a quorum, or (ii) if at the time that any
such discontinuation or significant reduction in the scope or amount of coverage
is proposed there are no Incumbent Directors, without the prior written consent
of Indemnitee (which consent shall not be unreasonably withheld or delayed). In
all policies of directors' and officers' liability insurance obtained by the
Company, Indemnitee shall be named as an insured in such a manner as to provide
Indemnitee the same rights and benefits, subject to the same limitations, as are
accorded to the Company's directors and officers most favorably insured by such
policy. The Company may, but shall not be required to, create a trust fund,
grant a security interest or use other means, including without limitation a
letter of credit, to ensure the payment of such amounts as may be necessary to
satisfy its obligations to indemnify and advance expenses pursuant to this
Agreement.
12. SUBROGATION. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the related
rights of recovery of Indemnitee against other persons or entities (other than
Indemnitee's successors), including any entity or enterprise referred to in
clause (i) of the definition of "Indemnifiable Claim" in Section 1(f).
Indemnitee shall execute all papers reasonably required to evidence such rights
(all of Indemnitee's reasonable Expenses, including attorneys' fees and charges,
related thereto to be reimbursed by or, at the option of Indemnitee, advanced by
the Company).
13. NO DUPLICATION OF PAYMENTS. The Company shall not be liable under
this Agreement to make any payment to Indemnitee in respect of any Indemnifiable
Losses to the extent Indemnitee has otherwise actually received payment (net of
any unreimbursed Expenses of the Indemnitee incurred in connection therewith)
under any insurance policy, the Constituent Documents and Other Indemnity
Provisions or otherwise (including from any entity or enterprise referred to in
clause (i) of the definition of "Indemnifiable Claim" in Section 1(f)) in
respect of such Indemnifiable Losses otherwise indemnifiable hereunder.
14. DEFENSE OF CLAIMS. The Company shall be entitled to participate in
the defense of any Indemnifiable Claim or to assume the defense thereof, with
counsel reasonably satisfactory to the Indemnitee; provided that if Indemnitee
believes, after consultation with counsel selected
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by Indemnitee, that (a) the use of counsel chosen by the Company to represent
Indemnitee would present such counsel with an actual or potential conflict, (b)
the named parties in any such Indemnifiable Claim (including any impleaded
parties) include both the Company and Indemnitee and Indemnitee shall conclude
that there may be one or more legal defenses available to him or her that are
different from or in addition to those available to the Company, or (c) any such
representation by such counsel would be precluded under the applicable standards
of professional conduct then prevailing, then Indemnitee shall be entitled to
retain separate counsel (but not more than one law firm plus, if applicable,
local counsel in respect of any particular Indemnifiable Claim) at the Company's
expense. The Company shall not be liable to Indemnitee under this Agreement for
any amounts paid in settlement of any threatened or pending Indemnifiable Claim
effected without the Company's prior written consent. The Company shall not,
without the prior written consent of the Indemnitee, effect any settlement of
any threatened or pending Indemnifiable Claim to which the Indemnitee is, or
could have been, a party unless such settlement solely involves the payment of
money and includes a complete and unconditional release of the Indemnitee from
all liability on any claims that are the subject matter of such Indemnifiable
Claim. Neither the Company nor Indemnitee shall unreasonably withhold its
consent to any proposed settlement; provided that Indemnitee may withhold
consent to any settlement that does not provide a complete and unconditional
release of Indemnitee.
15. SUCCESSORS AND BINDING AGREEMENT. (a) The Company shall require any
successor (whether direct or indirect, by purchase, merger, consolidation,
reorganization or otherwise) to all or substantially all of the business or
assets of the Company, by agreement in form and substance satisfactory to
Indemnitee and his or her counsel, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent the Company would be
required to perform if no such succession had taken place. This Agreement shall
be binding upon and inure to the benefit of the Company and any successor to the
Company, including without limitation any person acquiring directly or
indirectly all or substantially all of the business or assets of the Company
whether by purchase, merger, consolidation, reorganization or otherwise (and
such successor will thereafter be deemed the "COMPANY" for purposes of this
Agreement), but shall not otherwise be assignable or delegatable by the Company.
(b) This Agreement shall inure to the benefit of and be
enforceable by the Indemnitee's personal or legal representatives, executors,
administrators, heirs, distributees, legatees and other successors.
(c) This Agreement is personal in nature and neither of the
parties hereto shall, without the consent of the other, assign or delegate this
Agreement or any rights or obligations hereunder except as expressly provided in
Sections 15(a) and 15(b). Without limiting the generality or effect of the
foregoing, Indemnitee's right to receive payments hereunder shall not be
assignable, whether by pledge, creation of a security interest or otherwise,
other than by a transfer by the Indemnitee's will or by the laws of descent and
distribution, and, in the event of any attempted assignment or transfer contrary
to this Section 15(c), the Company shall have no liability to pay any amount so
attempted to be assigned or transferred.
16. NOTICES. For all purposes of this Agreement, all communications,
including without limitation notices, consents, requests or approvals, required
or permitted to be given hereunder shall be in writing and shall be deemed to
have been duly given when hand delivered or dispatched by electronic facsimile
transmission (with receipt thereof orally confirmed), or five
11
business days after having been mailed by United States registered or certified
mail, return receipt requested, postage prepaid or one business day after having
been sent for next-day delivery by a nationally recognized overnight courier
service, addressed to the Company (to the attention of the Secretary of the
Company) and to Indemnitee at the applicable address shown on the signature page
hereto, or to such other address as any party may have furnished to the other in
writing and in accordance herewith, except that notices of changes of address
will be effective only upon receipt.
17. GOVERNING LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by and construed in accordance
with the substantive laws of the State of Delaware, without giving effect to the
principles of conflict of laws of such State. The Company and Indemnitee each
hereby irrevocably consent to the jurisdiction of the Chancery Court of the
State of Delaware for all purposes in connection with any action or proceeding
which arises out of or relates to this Agreement and agree that any action
instituted under this Agreement shall be brought only in the Chancery Court of
the State of Delaware.
18. VALIDITY. 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 any other person or circumstance 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 or legal. In the event that any court or other
adjudicative body shall decline to reform any provision of this Agreement held
to be invalid, unenforceable or otherwise illegal as contemplated by the
immediately preceding sentence, the parties hereto shall take all such action as
may be necessary or appropriate to replace the provision so held to be invalid,
unenforceable or otherwise illegal with one or more alternative provisions that
effectuate the purpose and intent of the original provisions of this Agreement
as fully as possible without being invalid, unenforceable or otherwise illegal.
19. MISCELLANEOUS. No provision of this Agreement may be waived,
modified or discharged unless such waiver, modification or discharge is agreed
to in writing signed by Indemnitee and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto or compliance with
any condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, expressed or implied with respect to the subject matter
hereof have been made by either party that are not set forth expressly in this
Agreement.
20. LEGAL FEES AND EXPENSES. It is the intent of the Company that
Indemnitee not be required to incur legal fees and or other Expenses associated
with the interpretation, exercise, enforcement or defense of Indemnitee's rights
under this Agreement by litigation or otherwise because the cost and expense
thereof would substantially detract from the benefits intended to be extended to
Indemnitee hereunder. Accordingly, without limiting the generality or effect of
any other provision hereof, the Company irrevocably authorizes the Indemnitee
from time to time to retain counsel of Indemnitee's choice, at the expense of
the Company as hereafter provided, to advise and represent Indemnitee in
connection with any such interpretation, exercise, enforcement or defense,
including without limitation the initiation or defense of any litigation or
other legal action, whether by or against the Company or any director, officer,
stockholder or
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other person affiliated with the Company. Notwithstanding any existing or prior
attorney-client relationship between the Company and such counsel, the Company
irrevocably consents to Indemnitee's entering into an attorney-client
relationship with such counsel, and in that connection the Company and
Indemnitee agree that a confidential relationship shall exist between Indemnitee
and such counsel. Without respect to whether Indemnitee prevails, in whole or in
part, in connection with any of the foregoing, the Company will pay and be
solely financially responsible for any and all attorneys' and related fees and
expenses incurred by Indemnitee in connection with any of the foregoing.
21. CERTAIN INTERPRETIVE MATTERS. Unless the context of this Agreement
otherwise requires, (a) "it" or "its" or words of any gender include each other
gender, (b) words using the singular or plural number also include the plural or
singular number, respectively, (c) the terms "hereof," "herein," "hereby" and
derivative or similar words refer to this entire Agreement, (d) references to
"Sections" are references to "Sections" of this Agreement, (e) the terms
"include," "includes" and "including" will be deemed to be followed by the words
"without limitation" (whether or not so expressed), and (f) the word "or" is
disjunctive but not exclusive. Whenever this Agreement refers to a number of
days, such number will refer to calendar days unless business days are specified
and whenever action must be taken (including the giving of notice or the
delivery of documents) under this Agreement during a certain period of time or
by a particular date that ends or occurs on a non-business day, then such period
or date will be extended until the immediately following business day. As used
herein, "business day" means any day other than Saturday, Sunday or a United
States federal holiday.
22. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original but all of which
together shall constitute one and the same agreement.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, Indemnitee has executed and the Company has caused
its duly authorized representative to execute this Agreement as of the date
first above written.
ALON USA ENERGY, INC.
0000 XXX Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
By:
---------------------------------
Name:
Title:
------------------------------------
Name:
Address:
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