EXHIBIT 10.8
INDEMNITY AGREEMENT
This Agreement is made effective as of the ______ day of ____________, 1997,
between VALERO ENERGY CORPORATION (FORMERLY VALERO REFINING AND MARKETING
COMPANY), a Delaware corporation (the "Corporation"), and the undersigned
XXXXXXX X. XXXXXXX ("Agent") with reference to the following facts.
The Agent is currently serving as a Director and/or Officer of the Corporation
at the request of the Corporation and the Corporation wishes the Agent to
continue in such capacity. The Agent is willing, under certain circumstances,
to continue in such capacity.
In addition to the indemnification to which the Agent is entitled pursuant to
the By-Laws, as amended (the "By-Laws"), and Restated Certificate of
Incorporation of the Corporation, and as additional consideration for the
Agent's service, the Corporation has obtained at its expense directors' and
officers' liability insurance protecting the Agent in connection with such
service. However, such insurance may be subject to cancellation and does not
fully protect Agent with respect to the advancement of expenses.
The Agent has indicated that he/she does not regard the indemnities available
under the Corporation's By-Laws and Restated Certificate of Incorporation, as
amended, and such insurance as adequate to protect him/her against the risks
associated with service to the Corporation.
In order to induce the Agent to continue to serve as a Director and/or Officer
of the Corporation and in consideration for his/her continued service, the
Corporation hereby agrees to indemnify the Agent as follows:
1. The Corporation will pay on behalf of the Agent, and the Agent's executors,
administrators or assigns, to the fullest extent permitted by the provisions of
the General Corporation Law of the State of Delaware, or by any amendment
thereof or other statutory provisions authorizing or permitting such
indemnification which is adopted after the date hereof, any amount which the
Agent is or becomes legally obligated to pay because of any claim or claims made
against the Agent because of any act or omission or neglect or breach of duty,
including any actual or alleged error or misstatement or misleading statement,
which the Agent commits or suffers while acting in the Agent's capacity as a
Director or Officer of the Corporation or, at the request of the Corporation, as
a director, officer, employee or agent of another corporation, partnership,
joint venture, trust, other enterprise or employee benefit plan (a "Designated
Entity") and solely because of the Agent's being or acting in such capacity. In
the event the Agent shall be a director or officer of any corporation, 35% or
more of the common stock or other voting securities of which are owned, directly
or indirectly, by the Corporation, it shall be presumed conclusively that the
Agent is so acting at the request of the Corporation. The payments which the
Corporation will be obligated to make hereunder shall include, inter alia,
damages, judgments, settlements and costs, costs of investigation (excluding
salaries of officers or employees of the Corporation) and costs of defense of
legal, arbitral, or administrative actions, suits, claims, proceedings or
investigations (whether civil, criminal or investigative in nature) and appeals
therefrom, and costs of attachment, appeal or similar bonds; provided, however,
that the Corporation shall not be obligated to make any payments
hereunder (including payment of any fines or other obligations or fees imposed
by law or otherwise) which it is prohibited by applicable law from paying.
2. If a claim under this Agreement is not paid by the Corporation, or on its
behalf, within forty-five days after a written claim has been received by the
Corporation, the Agent or other claimant may at any time thereafter bring suit
against the Corporation to recover the unpaid amount of the claim and, if
successful in whole or in part, the claimant shall be entitled to be paid also
the expense of prosecuting such claim (including reasonable attorneys fees).
3. In the event of payment under this Agreement, the Corporation shall be
subrogated to the extent of such payment to all of the rights of recovery of the
Agent, who shall execute all papers reasonably required and shall, at the
expense of the Corporation, do everything that may be reasonably necessary to
secure such rights, including the execution of such documents reasonably
necessary to enable the Corporation effectively to bring suit to enforce such
rights.
4. The Corporation shall not be liable under this Agreement to make any
payment in connection with any claim made against the Agent:
(a) for which payment is actually made under a valid and collectible insurance
policy, except in respect of any excess beyond the amount of payment under
such policy;
(b) for which the Agent has been indemnified by the Corporation otherwise than
pursuant to this Agreement, except in respect of any excess beyond the
amount of payment under such other indemnification;
(c) based upon or attributable to the Agent gaining in fact (as established in
a final and binding judgment or other adjudication of such issue) any
material personal profit or advantage to which he/she was not legally
entitled;
(d) for an accounting of profits made from the purchase or sale by the Agent of
securities of the Corporation pursuant to Section 16(b) of the Securities
and Exchange Act of 1934, as amended, and the rules and regulations
promulgated by the Securities and Exchange Commission thereunder;
(e) brought about or contributed to by the knowingly fraudulent, deliberately
dishonest or willful misconduct of the Agent; provided however, that
notwithstanding the foregoing, the Agent shall be protected under this
Agreement as to any claims upon which suit may be brought against Agent by
reason of any such alleged misconduct, unless a judgment or other final
adjudication thereof adverse to the Agent shall establish that Agent
committed (i) acts of active and deliberate fraud, dishonesty or misconduct
(ii) with actual fraudulent, dishonest or willful purpose and intent, (iii)
which acts were material to the cause of action so adjudicated; or
(f) with respect to any action, suit, claim, proceeding or investigation to
which Agent and the Corporation (or a Designated Entity, as hereinafter
defined, or other subsidiary or affiliate of the Corporation) are both
parties, if the Agent has not fully cooperated in the joint defense thereof
and the Corporation (or such other entity) is materially prejudiced
thereby.
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The Corporation shall advance costs and expenses (including reasonable
attorneys' fees) incurred by Agent in connection with any claim described in
clauses (a) through (e) above, in accordance with paragraph 7 hereof, unless the
determination specified in such paragraph 7 is made.
Except as expressly set forth above or otherwise expressly limited herein, the
parties intend, and this Agreement shall be construed, to provide
indemnification to the Agent to the fullest extent permitted by applicable law.
5. The Agent shall give to the Corporation notice in writing as soon as
practicable of any claim made against him/her for which indemnity will or could
be sought under this Agreement. Notice to the Corporation shall be directed to
Valero Energy Corporation, 000 XxXxxxxxxx Xxxxxx, Xxx Xxxxxxx, XX 00000
Attention: General Counsel (or such other address as to the Corporation shall
designate in writing to the Agent); notice shall be deemed received if sent by
prepaid mail properly addressed, the date of such notice being the date
postmarked. In addition, the Agent shall give the Corporation such information
and cooperation as it may reasonably require and as shall be within the Agent's
power. However, failure to give any such notice, information or cooperation
shall relieve Corporation of its obligation hereunder only to the extent it is
materially prejudiced thereby.
6. With respect to any such claim, action, suit, proceeding or investigation
as to which Agent notifies Corporation of the commencement thereof:
(a) Corporation will be entitled to participate therein at its own expense; and
(b) Except as otherwise provided below, to the extent that it may wish,
Corporation jointly with any other indemnifying party similarly notified
will be entitled to assume the defense thereof, with counsel satisfactory
to Agent. After receipt of notice from Corporation to Agent of its
election to so assume the defense thereof, Corporation will not be liable
to Agent under this Agreement for any legal or other expenses subsequently
incurred by Agent in connection with the defense thereof other than
reasonable costs of investigation or as otherwise provided below. Agent
shall have the right to employ his/her own counsel in such action, suit,
proceeding or investigation but the fees and expenses of such counsel
incurred after notice from Corporation of its assumption of the defense
thereof shall be at the expense of Agent unless (i) the employment of
counsel by Agent has been authorized by Corporation, (ii) Agent shall have
reasonably concluded that there may be a conflict of interest between
Corporation and Agent in the conduct of the defense of such action, or
(iii) 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 Agent shall be at the expense of Corporation.
Corporation shall not be entitled to assume the defense of any action,
suit, proceeding or investigation brought by or on behalf of Corporation or
as to which Agent shall have made the conclusion provided for in (ii)
above.
(c) Corporation shall not be liable to indemnify Agent under this Agreement for
any amounts paid in settlement of any action or claim effected without its
written consent. Corporation shall not settle any action or claim in any
manner which would impose any penalty or limitation on Agent without
Agent's written consent. Neither Corporation nor Agent will unreasonably
withhold their consent to any proposed settlement.
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7. Except as limited by paragraph 6 hereof, costs and expenses (including
attorneys' fees) incurred by the Agent in defending or investigating any claim,
action, suit, proceeding or investigation shall be paid by the Corporation in
advance of the final disposition of such matter, and Agent hereby undertakes to
repay any such advances in the event but only to the extent that it is
ultimately determined that the Agent is not entitled to indemnification therefor
under the terms of this Agreement. Notwithstanding the foregoing or any other
provision of this Agreement, no advance shall be made by the Corporation if a
determination is reasonably and promptly made by the Board of Directors by a
majority vote of a quorum of disinterested directors, or (if such a quorum is
not obtainable or, even if obtainable, a quorum of disinterested directors so
directs) by independent legal counsel, that, based upon the facts known to the
Board or counsel at the time such determination is made, either (a) it is more
likely than not that in a judgment or other final adjudication it will
ultimately be determined that the Agent is not entitled to indemnification under
the terms of this Agreement or (b) in the case of any action, suit, claim,
proceeding or investigation to which the Agent and the Corporation (or a
Designated Entity or other subsidiary or affiliate of the Corporation) are both
parties, the Agent has not fully cooperated in the joint defense thereof and the
Corporation (or such entity) has been materially prejudiced thereby.
8. If the Agent is deceased and is entitled to indemnification or advancement
of expenses under any provision of this Agreement, the Corporation shall
indemnify Agent's estate and Agent's spouse, heirs, administrator and executors
against, and the Corporation shall, and does hereby, agree to assume any and all
expenses (including attorneys' fees), penalties and fines actually and
reasonably incurred by or for the Agent or the Agent's estate, in connection
with the investigation, defense, settlement or appeal of any such action, suit,
proceeding or investigation. Further, when requested in writing by the spouse
of Agent and/or the heirs, executors or administrators of Agent's estate, the
Corporation shall provide appropriate evidence of Corporation's agreement set
out herein, to indemnify Agent against and to itself assume such costs,
liabilities and expenses.
9. If Agent is entitled under any provision of this Agreement to
indemnification by the Corporation for some or a portion of the expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by the Agent in the investigation, defense,
appeal or settlement of such suit, action, claim, proceeding or investigation
but not, however, for all of the total amount thereof, the Corporation shall
nevertheless indemnify the Agent for the portion thereof to which the Agent is
entitled.
10. The termination of any action, suit, claim, proceeding or investigation
which is covered by this Agreement by judgment, order, settlement or conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption for the purposes of this Agreement that the Agent did not
act in good faith.
11. This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one instrument.
12. This indemnification and advance payment of expenses as provided by any
provision to this Agreement shall not be deemed exclusive of any other rights to
which Agent may be entitled in any capacity under any provision of law, the
Restated Certificate of Incorporation, as amended, and
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By-Laws, this or other agreement, policy of insurance, vote of stockholders or
disinterested directors, or otherwise. All agreements and obligations of
Corporation contained herein shall continue during the period Agent is a
Director, Officer, employee or agent of Corporation (or is or was serving at the
request of Corporation as a director, officer, employee or agent of another
corporation, joint venture, trust or other enterprise) and shall continue
thereafter so long as Agent shall be subject to any possible claim or
threatened, pending or completed action, suit, claim, proceeding or
investigation, whether, civil, criminal or investigative, by reason of the fact
that Agent was a Director or Officer of Corporation or serving in any other
capacity referred to herein.
13. This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware (exclusive of the conflict-of-laws rule thereof).
14. This Agreement shall be binding upon all successors and assigns of the
Corporation (including any transferee of all or substantially all of its assets
and any successor by merger or operation of law) and shall inure to the benefit
of the heirs, personal representatives and estate of Agent.
15. If any provision or provisions of this Agreement shall be held to be
invalid, illegal or unenforceable for any reason whatsoever, (i) the validity,
legality and enforceability of the remaining provisions of this Agreement
(including without limitation, all portions of any paragraphs of this Agreement
containing any such provision held to be invalid, illegal or unenforceable, that
are not themselves invalid, illegal or unenforceable) shall not in any way be
affected or impaired thereby, and (ii) to the fullest extent possible, the
provisions of this Agreement (including, without limitation, all portions of any
paragraph of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that are not themselves invalid, illegal or
unenforceable) shall be construed so as to give effect to the intent manifested
by the provision held invalid, illegal or unenforceable.
IN WITNESS WHEREOF, the parties hereto have caused the Agreement to be duly
executed and signed effective as of the day and year first above written.
VALERO ENERGY CORPORATION
By:
_______________________________________
AGENT
_______________________________________
[Agent]
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