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EXHIBIT 10.11
INDEMNIFICATION AGREEMENT
AGREEMENT, effective as of December 12, 1996 between GETTY PETROLEUM
MARKETING INC., a Maryland corporation (the "Company"), and (the "Director"), a
director of the Company;
WHEREAS, in recognition of Director's need for substantial protection
against personal liability in order to enhance Director's continued service to
the Company in an effective manner and Director's reliance on the provisions of
the By-Laws requiring indemnification of the Director under certain
circumstances, and in part to provide Director with specific contractual
assurance that the protection promised by such By-Laws will be available to
Director (regardless of, among other things, any amendment to or revocation of
such By-Laws or any change in the composition of the Company's Board of
Directors or acquisition transaction relating to the Company), the Company
wishes to provide in this Agreement for the indemnification of and the
advancing of expenses to Director to the full extent (whether partial or
complete) permitted by law and as set forth in this Agreement, and, to the
extent insurance is maintained, for the continued coverage of Director under
the Company's directors' and officers' liability insurance policies.
NOW, THEREFORE, in consideration of the premises and of Director
agreeing to serve or continuing to serve the Company directly or, at its
request, with another enterprise, and intending to be legally bound hereby, the
parties hereto agree as follows:
1. Basic Indemnification Agreement.
(a) In the event Director was, is or becomes a party to or
witness or other participant in, or is threatened to be made a party to or
witness or other participant in, a Claim (as hereinafter defined) by reason of
(or arising in part out of) an Indemnifiable Event (as hereinafter defined),
the Company shall indemnify Director to the fullest extent permitted by law as
soon as practicable but in any event no later than 30 days after written demand
is presented to the Company, against any and all Expenses (as hereinafter
defined), judgments, fines, penalties and amounts paid in settlement of such
Claim. If so requested by Director, the Company shall advance (within ten
business days of such written request) any and all Expenses to Director (an
"Expense Advance"). Notwithstanding anything in this Agreement to the contrary,
and except as provided in Section 3, prior to a Change in Control (as
hereinafter defined) Director shall not be entitled to indemnification pursuant
to this Agreement in connection with any Claim initiated by Director 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.
(b) Notwithstanding the foregoing, (i) the obligations of
the Company under Section 1(a) shall be subject to the condition that the
Reviewing Party (as hereinafter defined) shall not have determined (in a
written opinion, in any case in which the special independent counsel referred
to in Section 2 is involved) that Director would not be permitted to be
indemnified under applicable law, and (ii) the obligation of the Company to
make an Expense Advance pursuant to Section 1(a) shall be subject to the
condition that, if, when and to the extent that the Reviewing Party determines
that
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Director would not be permitted to be so indemnified under applicable
law, the Company shall be entitled to be reimbursed by Director (who hereby
agrees to reimburse the Company) for all such amounts theretofore paid;
provided, however, that if Director has commenced legal proceedings in a court
of competent jurisdiction to secure a determination that Director should be
indemnified under applicable law, any determination made by the Reviewing Party
that Director would not be permitted to be indemnified under applicable law
shall not be binding and Director shall not be required to reimburse the
Company for any Expense Advance until a final judicial determination that
Director shall reimburse the Company for any Expense Advance is made with
respect thereto (as to which all rights of appeal therefrom have been exhausted
or lapsed). If there has not been a Change in Control, the Reviewing Party
shall be selected by the Board of Directors, and if there has been such a
Change in Control, the Reviewing Party shall be the special independent counsel
referred to in Section 2. The Board of Directors will appoint the Reviewing
Party no later than 10 days after receipt of a demand for indemnification
(including, without limitation, a demand for Expense Advance). The Reviewing
Party shall make his determination no later than 20 days after his appointment.
If after 30 days there has been no determination by the Reviewing Party or if
the Reviewing Party determines that Director substantively would not be
permitted to be indemnified in whole or in part under applicable law, Director
shall have the right to commence litigation in any court in the states of New
York or Maryland having subject matter jurisdiction thereof and in which venue
is proper seeking an initial determination by the court or challenging any such
determination by the Reviewing Party of any aspect thereof, and the Company
hereby consents to service of process and to appear in any such proceeding. Any
determination by the Reviewing Party otherwise shall be conclusive and binding
on the Company and Director.
2. Change in Control. The Company agrees that, if there is a Change in
Control of the Company (other than a Change in Control which has been approved
by a majority of the Company's Board of Directors who were directors
immediately prior to such Change in Control) then with respect to all matters
thereafter arising concerning the rights of Director to indemnity payments and
Expense Advances under this Agreement or any other agreement or Company By-Law
now or hereafter in effect relating to Claims for Indemnifiable Events, the
Company shall seek legal advice only from special independent counsel selected
by Director and approved by the Company (which approval shall not be
unreasonably withheld), and who has not otherwise performed services for the
Company within the last five years (other than in connection with such matters)
or for Director. Such counsel, among other things, shall render a written
opinion to the Company and Director as to whether and to what extent Director
would be permitted to be indemnified under applicable law. The Company agrees
to pay the reasonable fees of the special, independent counsel referred to
above and to fully indemnify such counsel against any and all expenses
(including attorneys' fees), claims, liabilities and damages arising out of or
relating to this Agreement or its engagement pursuant hereto.
3. Indemnification for Additional Expenses. The Company shall indemnify
Director against any and all expenses (including attorneys' fees) and, if
requested by Director, shall (within ten business days of such written request)
advance such expenses to Director, which are incurred by Director in connection
with any claim asserted against or action brought by Director for (i)
indemnification or advance payment of Expenses by the Company under this
Agreement or any other agreement or Company By-Law now or hereafter in effect
relating to Claims for Indemnifiable Events and/or (ii) recovery under any
directors' and officers liability insurance policies maintained by the
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Company, regardless of whether Director ultimately is determined to be entitled
to such indemnification, advance expense payment or insurance recovery, as the
case may be.
4. Partial Indemnity, Etc. If Director is entitled under any provision of
this Agreement to indemnification by the Company of some or a portion of the
Expenses, judgments, fines, penalties and amounts paid in settlement of a Claim
but not, however, for all of the total amount thereof, the Company shall
nevertheless indemnify Director for the portion thereof to which Director is
entitled. Moreover, notwithstanding any other provision of this Agreement, to
the extent that Director has been successful on the merits or otherwise in
defense of any or all Claims relating in whole or in part to an Indemnifiable
Event or in defense of any issue or matter therein, including dismissal without
prejudice, Director shall be indemnified against all Expenses incurred in
connection therewith. In connection with any determination by the Reviewing
Party or otherwise as to whether Director is entitled to be indemnified
hereunder the burden of proof shall be on the Company to establish that
Director is not so entitled.
5. No Presumption. For purposes of this Agreement, the termination of any
action, suit or proceeding by judgment, order, settlement (whether with or
without court approval) or conviction, shall not create a presumption that
Director did not meet any particular standard of conduct or have any particular
belief or that a court has determined that indemnification is not permitted by
applicable law.
6. Non-exclusivity, Etc. The rights of Director hereunder shall be in
addition to any other rights Director may have under the Company's By-Laws or
the Maryland General Corporation Law or otherwise. To the extent that a change
in the Maryland General Corporation Law (whether by statute or judicial
decision), or the Company's By-Laws, permits greater indemnification by
agreement than would be afforded currently under the Company's By-Laws and this
Agreement, it is the intent of the parties hereto that Director shall enjoy by
this Agreement the greater benefits so afforded by such change.
7. Liability Insurance. To the extent the Company maintains an insurance
policy or policies providing directors' and officers' liability insurance,
Director shall be covered by such policy or policies, in accordance with its or
their terms, to the maximum extent of the coverage reasonably and economically
available (as solely determined by the Board of Directors) for any Company
director.
8. Certain Definitions:
(a) "Change in Control" shall be deemed to have occurred if (i)
any "person" (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended), other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company or a
corporation owned directly or indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company,
is or becomes the "beneficial owner" (as defined in Rule 13d-3 under said Act),
directly or indirectly, of securities of the Company representing 20% or more of
the total voting power represented by the Company's then outstanding Voting
Securities, or (ii) during any period of two consecutive years, individuals who
at the beginning of such two-year period constitute the Board of Directors of
the Company and any new director whose election by the Board of Directors or
nomination for election by the Company's stockholders was approved by a vote of
at least two-thirds (2/3) of the directors then still in office who
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either were directors at the beginning of such two-year period or whose election
or nomination for election was previously so approved, cease for any reason to
constitute a majority of the Board of Directors, or (iii) the stockholders of
the Company approve a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in the
Voting Securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into Voting Securities of the surviving entity) at least 80% of the total
voting power represented by the Voting Securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation, or
(iv) the stockholders of the Company approve a plan of complete liquidation of
the Company or an agreement for the sale or disposition by the Company of all
or substantially all the Company's assets.
(b) "Claim" shall mean any threatened, pending or completed
action, suit or proceeding, or any inquiry or investigation whether conducted by
the Company or any other party, whether civil, criminal, administrative or
investigative.
(c) "Expenses" include attorneys' fees and all other costs,
expenses and obligations paid or incurred in connection with investigating,
defending, being a witness in or participating in (including on appeal), or
preparing to defend, be a witness in or participate in any Claim relating to any
Indemnifiable Event.
(d) "Indemnifiable Event" is any event or occurrence related to the
fact that Director is or was a director, officer, employee, agent or
fiduciary of the Company, or is or was serving at the request of the Company as
a director, officer, employee, trustee, agent or fiduciary of another
corporation, partnership, joint venture, employee benefit plan, trust or other
enterprise, or arising by reason of anything done or not done by Director in
any such capacity.
(e) "Reviewing Party" is any appropriate person or body consisting
of a member or members of the Company's Board of Directors or any other person
or body appointed by the Board (including the special independent counsel
referred to in Section 2) who is not a party to the particular Claim for which
Director is seeking indemnification.
(f) "Voting Securities" are any securities of the Company which
vote generally in the election of directors.
9. Amendments and Waiver. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both of the parties
hereto. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provisions hereof (whether or not
similar) nor shall such waiver constitute a continuing waiver.
10. Subrogation. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Director, who shall execute all papers required and shall do
everything that may be necessary to secure such rights, including the execution
of such documents necessary to enable the Company effectively to bring suit to
enforce such rights.
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11. No Duplication of Payments. The Company shall not be liable under
this Agreement to make any payment in connection with any claim made against
Director to the extent Director has otherwise actually received payment (under
any insurance policy, By-Law or otherwise) of the amounts otherwise
indemnifiable hereunder.
12. Binding Effect, Etc. This Agreement shall be binding upon and inure
to the benefit of and be enforceable by the parties hereto and their respective
successors and assigns, including any (i) direct or indirect successor by
purchase, merger, consolidation or otherwise to all or substantially all of the
business and/or assets of the Company, and (ii) spouses, heirs, and personal and
legal representatives. This Agreement shall continue in effect regardless of
whether Director continues to serve as a director (or in one of the capacities
enumerated in Section 8(d) hereof) of the Company or of any other enterprise at
the Company's request.
13. Severability. The provisions of this Agreement shall be severable in
the event that any of the provisions hereof (including any provisions within a
single section, paragraph or sentence) are held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, and the remaining
provisions shall remain enforceable to the fullest extent permitted by law.
14. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Maryland applicable to
contracts made and to be performed in such state without giving effect to the
principles of conflicts of laws.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
ATTEST: GETTY PETROLEUM MARKETING INC.
By:
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Secretary Xxx Xxxxxxxxx, President
WITNESS DIRECTOR
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