INDEMNIFICATION AGREEMENT
Exhibit 10.1
This INDEMNIFICATION AGREEMENT (this “Agreement”), is effective as of ___,
2005, between Western Refining, Inc., a Delaware corporation (the “Corporation”), and the
undersigned director or officer of the Corporation (“Indemnitee”).
WHEREAS, the Corporation has adopted Bylaws (as the same may be amended from time to time, the
“Bylaws”) providing for indemnification of the Corporation’s directors and officers to the
maximum extent authorized by the Delaware General Corporation Law (the “DGCL”); and
WHEREAS, the Bylaws and the DGCL contemplate that contracts and insurance policies may be
entered into with respect to indemnification of directors and officers; and
WHEREAS, there are questions concerning the adequacy and reliability of the protection which
might be afforded to directors and officers from acquisition of policies of Directors and Officers
Liability Insurance (“D&O Insurance”), covering certain liabilities which might be incurred
by directors and officers in the performance of their services to the Corporation; and
WHEREAS, it is reasonable, prudent and necessary for the Corporation to obligate itself
contractually to indemnify Indemnitee so that he will serve or continue to serve the Corporation
free from undue concern that he will not be adequately protected; and
WHEREAS, Indemnitee is willing to serve, continue to serve and to take on additional service
for or on behalf of the Corporation on condition that he be so indemnified;
NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the
Corporation and Indemnitee do hereby covenant and agree as follows:
1. Definitions. As used in this Agreement:
(a) The term “Proceeding” shall include any threatened, pending or completed action,
suit, inquiry or proceeding, whether brought by or in the right of the Corporation or otherwise and
whether of a civil, criminal, administrative, arbitrative or investigative nature, in which
Indemnitee is or will be involved as a party, as a witness or otherwise, by reason of the fact that
Indemnitee is or was a director or officer of the Corporation, by reason of any action taken by him
or of any inaction on his part while acting as a director or officer or by reason of the fact that
he is or was serving at the request of the Corporation as a director, officer, trustee, employee or
agent of another corporation, partnership, joint venture, trust, limited liability company or other
enterprise; in each case, whether or not he is acting or serving in any such capacity at the time
any liability or expense is incurred for which indemnification or reimbursement can be provided
under this Agreement; provided, however, that any such action, suit or proceeding that is brought
by Indemnitee against the Corporation or directors or officers of the Corporation, other than an
action brought by Indemnitee to enforce his rights under this Agreement, shall not be deemed a
Proceeding without prior approval by a majority of the Board of Directors of the Corporation.
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(b) The term “Expenses” shall include, without limitation, any judgments, fines and
penalties against Indemnitee in connection with a Proceeding; amounts paid by Indemnitee in
settlement of a Proceeding; and all attorneys’ fees and disbursements, accountants’ fees, private
investigation fees and disbursements, retainers, court costs, transcript costs, fees of experts,
fees and expenses of witnesses, travel expenses, duplicating costs, printing and binding costs,
telephone charges, postage, delivery service fees, and all other disbursements, or expenses,
reasonably incurred by or for Indemnitee in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, being or preparing to be a witness in a Proceeding or
establishing Indemnitee’s right of entitlement to indemnification for any of the foregoing.
(c) References to Indemnitee’s being or acting as “a director or officer of the Corporation”
or “serving at the request of the Corporation as a director, officer, trustee, employee or agent of
another corporation, partnership, joint venture, trust, limited liability company or other
enterprise” shall include in each case service to or actions taken while a director, officer,
trustee, employee or agent of any subsidiary or predecessor of the Corporation.
(d) References to “other enterprise” shall include employee benefit plans; references to
“fines” shall include any excise tax assessed with respect to any employee benefit plan; references
to “serving at the request of the Corporation” shall include any service as a director, officer,
employee or agent of the Corporation which imposes duties on, or involves services by, such
director, officer, trustee, employee or agent with respect to an employee benefit plan, its
participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably
believed to be in the interests of the participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner “not opposed to the best interest of the Corporation” as
referred to in this Agreement.
(e) The term “substantiating documentation” shall mean copies of bills or invoices for costs
incurred by or for Indemnitee, or copies of court or agency orders or decrees or settlement
agreements, as the case may be, accompanied by a sworn statement from Indemnitee that such bills,
invoices, court or agency orders or decrees or settlement agreements represent costs or liabilities
meeting the definition of “Expenses” herein.
(f) The terms “he” and “his” have been used for convenience and mean “she” and “her” if
Indemnitee is a female.
2. Indemnity of Director or Officer. The Corporation hereby agrees to hold harmless
and indemnify Indemnitee against Expenses to the fullest extent authorized or permitted by law
(including the applicable provisions of the DGCL). The phrase “to the fullest extent permitted by
law” shall include, but not be limited to, (a) to the fullest extent permitted by any provision of
the DGCL that authorizes or permits additional indemnification by agreement, or the corresponding
provision of any amendment to or replacement of the DGCL and (b) to the fullest extent authorized
or permitted by any amendments to or replacements of the DGCL adopted after the date of this
Agreement that increase the extent to which a corporation may indemnify its officers and directors.
Any amendment, alteration or repeal of the DGCL that adversely affects any right of Indemnitee
shall be prospective only and shall not limit or eliminate any such right with respect to any
Proceeding involving any occurrence or alleged occurrence of any action or omission to act that
took place prior to such amendment or repeal.
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3. Additional Indemnity. The Corporation hereby further agrees to hold harmless and
indemnify Indemnitee against Expenses incurred by reason of the fact that Indemnitee is or was a
director, officer, employee or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, trustee, employee or agent of another corporation, partnership,
joint venture, trust, limited liability company or other enterprise, including, without limitation,
any predecessor, subsidiary or affiliated entity of the Corporation, but only if Indemnitee acted
in good faith and in a manner that he reasonably believed to be in, or not opposed to, the best
interests of the Corporation. In addition, in the case of a criminal Proceeding, Indemnitee must
have had no reasonable cause to believe that his conduct was unlawful. The termination of any
Proceeding by judgment, order of the court, settlement, conviction or upon a plea of nolo
contendere, or its equivalent, shall not, of itself, create a presumption (a) that Indemnitee did
not act in good faith and in a manner which he reasonably believed to be in, or not opposed to, the
best interests of the Corporation, and (b) with respect to any criminal Proceeding, that Indemnitee
had reasonable cause to believe that his conduct was unlawful.
4. Choice of Counsel. If Indemnitee is not an officer of the Corporation, he,
together with the other directors who are not officers of the Corporation (the “Outside
Directors”), shall be entitled to employ, and be reimbursed for the fees and disbursements of,
counsel separate from that chosen by Indemnitees who are officers of the Corporation. The
principal counsel for Outside Directors (the “Principal Counsel”) shall be determined by
majority vote of the Outside Directors, and the principal counsel for Indemnitees who are not
Outside Directors (the “Separate Counsel”) shall be determined by majority vote of such
Indemnitees, in each case subject to the consent of the Corporation (not to be unreasonably
withheld or delayed). The obligation of the Corporation to reimburse Indemnitee for the fees and
disbursements of counsel hereunder shall not extend to the fees and disbursements of any counsel
employed by Indemnitee other than the Principal Counsel or the Separate Counsel, as the case may
be, unless Indemnitee has interests that are different from those of the other Indemnitees or
defenses available to him that are in addition to or different from those of the other Indemnitees
such that the Principal Counsel or the Separate Counsel, as the case may be, would have an actual
or potential conflict of interest in representing Indemnitee.
5. Advances of Expenses. Expenses (other than judgments, penalties, fines and
settlements) incurred by Indemnitee shall be paid by the Corporation, in advance of the final
disposition of the Proceeding, within 20 calendar days after receipt by the Corporation of
Indemnitee’s written request accompanied by (a) substantiating documentation, (b) Indemnitee’s
written affirmation that he has met the standard of conduct for indemnification and (c) a written
undertaking to repay such amount to the extent that it is ultimately determined that indemnitee is
not entitled to indemnification. No objections based on or involving the question whether such
charges meet the definition of “Expenses,” including any question regarding the reasonableness of
such Expenses, shall be grounds for failure to advance to such Indemnitee, or to reimburse such
Indemnitee for, the amount claimed within such 20-day period, and the undertaking of Indemnitee set
forth in Section 7 hereof to repay any such amount to the extent that it is ultimately determined
that Indemnitee is not entitled to indemnification shall be deemed to include an undertaking to
repay any such amounts determined not to have met such definition.
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6. Right of Indemnitee to Indemnification Upon Application; Procedure Upon
Application.
(a) Timing. Any indemnification under this Agreement, other than pursuant to Section 5
hereof, shall be made no later than 60 days after receipt by the Corporation of the written request
of Indemnitee, accompanied by substantiating documentation, unless a determination is made within
said 60-day period by (i) the Board of Directors by a majority vote of a quorum consisting of
directors who are not or were not parties to such Proceeding, (ii) a committee (comprised of
members who are not or were not parties to such Proceeding) of the Board of Directors designated by
majority vote of the Board of Directors, although less than a quorum, (iii) if there are no such
directors, or if such directors so direct, independent legal counsel in a written opinion or (iv)
the stockholders, that Indemnitee has not met the relevant standards for indemnification set forth
in Section 3 hereof.
(b) Burden of Proof. The right to indemnification or advances as provided by this Agreement
shall be enforceable by Indemnitee in any court of competent jurisdiction. The burden of proving
that indemnification is not appropriate shall be on the Corporation. Neither the failure of the
Corporation (including its Board of Directors, any committee thereof, independent legal counsel or
its stockholders) to have made a determination prior to the commencement of such action that
indemnification is proper in the circumstances because Indemnitee has met the applicable standards
of conduct, nor an actual determination by the Corporation (including its Board of Directors, any
committee thereof, independent legal counsel or its stockholders) that Indemnitee has not met such
applicable standard of conduct, shall be a defense to the action or create a presumption that
Indemnitee has not met the applicable standard of conduct.
7. Undertaking By Indemnitee. Indemnitee hereby undertakes to repay to the
Corporation (a) any advances of Expenses pursuant to Section 5 hereof and (b) any judgments,
penalties, fines and settlements paid to or on behalf of Indemnitee hereunder, in each case to the
extent that it is finally determined that Indemnitee is not entitled to indemnification. As a
condition to the advancement of such Expenses or the payment of such judgments, penalties, fines
and settlements, Indemnitee shall, at the request of the Company, execute an acknowledgment that
such Expenses or such judgments, penalties, fines and settlements, as the case may be, are
delivered pursuant and are subject to the provisions of this Agreement.
8. Indemnification Hereunder Not Exclusive. The indemnification and advancement of
Expenses provided by this Agreement shall not be deemed exclusive of any other rights to which
Indemnitee may be entitled under the Company’s Certificate of Incorporation (as the same may be
amended from time to time), the Bylaws, the DGCL, any D&O Insurance, any agreement or otherwise,
both as to action in his official capacity and as to action in another capacity while holding such
office; provided, however, that this Agreement supersedes all prior written indemnification
agreements between the Corporation (or any predecessor thereof) and Indemnitee with respect to the
subject matter hereof. However, Indemnitee shall reimburse the Corporation for amounts paid to him
pursuant to such other rights to the extent that such payments duplicate any payments received
pursuant to this Agreement.
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9. Continuation of Indemnity. All agreements and obligations of the Corporation
contained herein shall continue during the period that Indemnitee is a director or officer of the
Corporation (or is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust, limited liability
company or other enterprise) and shall continue thereafter as long as Indemnitee shall be subject
to any possible Proceeding (notwithstanding the fact that Indemnitee has ceased to serve as an
officer or director of the Corporation).
10. Partial Indemnification. If Indemnitee is entitled under any provision of this
Agreement to indemnification by the Corporation for a portion of Expenses, but not, however, for
the total amount thereof, the Corporation shall nevertheless indemnify Indemnitee for the portion
of such Expenses to which Indemnitee is entitled.
11. Settlement of Claims.
(a) Settlements. The Corporation shall not be liable to indemnify Indemnitee under this
Agreement for any amounts paid in settlement of any Proceeding effected without the Corporation’s
prioir written consent. The Corporation shall not settle any Proceeding in any manner which would
impose any penalty or limitation on Indemnitee without Indemnitee’s prior written consent.
(b) Consent. Neither the Corporation nor Indemnitee will unreasonably withhold or delay their
consent to any proposed settlement. The Corporation shall not be liable to indemnify Indemnitee
under this Agreement with regard to any judicial award if the Corporation was not given a
reasonable and timely opportunity, at its expense, to participate in the defense of such action.
12. Acknowledgments.
(a) Corporation Acknowledgment. The Corporation (i) expressly confirms and agrees that it has
entered into this Agreement and assumed the obligations imposed on the Corporation hereby in order
to induce Indemnitee to serve or to continue to serve as a director or officer of the Corporation
and (ii) acknowledges that Indemnitee is relying upon this Agreement in agreeing to serve or in
continuing to serve as a director or officer of the Corporation.
(b) Mutual Acknowledgment. Both the Corporation and Indemnitee acknowledge that in certain
instances, Federal law or public policy may override applicable state law and prohibit the
Corporation from indemnifying its directors and officers under this Agreement or otherwise. For
example, the Corporation and Indemnitee acknowledge that the Securities and Exchange Commission
(the “SEC”) has taken the position that indemnification is not permissible for liabilities
arising under certain federal securities laws, and federal legislation prohibits indemnification
for certain ERISA violations. Indemnitee understands and acknowledges that the Corporation has
undertaken, or may be required in the future to undertake, with the SEC 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.
13. Enforcement. In the event that Indemnitee is required to bring any action or
other proceeding to enforce rights or to collect moneys due under this Agreement and is successful
in
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such action, the Corporation shall reimburse Indemnitee for all of Indemnitee’s Expenses in
bringing and pursuing such action.
14. Exceptions. Any other provision herein to the contrary notwithstanding, the
Corporation shall not be obligated pursuant to the terms of this Agreement:
(a) No Entitlement to Indemnification. To indemnify Indemnitee for any expenses incurred by
Indemnitee with respect to any proceeding instituted by Indemnitee to enforce or interpret this
Agreement, if a court of competent jurisdiction determines that Indemnitee was not entitled to
indemnification hereunder;
(b) Insured Claims. To indemnify Indemnitee for Expenses of any type whatsoever (including,
but not limited to, judgments, fines, ERISA excise taxes or penalties, and amounts paid in
settlement) to the extent that such Expenses have been paid directly to Indemnitee by an insurance
carrier under a D&O Insurance policy maintained by the Corporation;
(c) Remuneration in Violation of Law. To indemnify Indemnitee in respect of remuneration paid
to Indemnitee if it shall be determined by a final judgment or other final adjudication that such
remuneration was in violation of law;
(d) Indemnification Unlawful. To indemnify Indemnitee if a final decision by a court having
jurisdiction in the matter shall determine that such indemnification is not lawful;
(e) Misconduct, Etc. To indemnify Indemnitee on account of Indemnitee’s conduct which is
finally adjudged to have been knowingly fraudulent or deliberately dishonest or to constitute
intentional misconduct, a knowing violation of law, a violation of Section 174 of the DGCL or a
transaction from which Indemnitee derived an improper personal benefit;
(f) Breach of Duty. To indemnify Indemnitee on account of Indemnitee’s conduct which is the
subject of any Proceeding brought by the Corporation and approved by a majority of the Board of
Directors which alleges willful misappropriation of corporate assets by Indemnitee, disclosure of
confidential information in violation of Indemnitee’s fiduciary or contractual obligations to the
Corporation, or any other willful and deliberate breach in bad faith of Indemnitee’s duty to the
Corporation or its stockholders, unless such action is finally resolved in favor of Indemnitee; or
(g) Claims Under Section 16(b). To indemnify Indemnitee for expenses or the payment of
profits arising from the purchase and sale by Indemnitee of securities in violation of Section
16(b) of the Securities Exchange Act of 1934, as amended, or any similar successor statute.
15. Severability. If any provision of this Agreement shall be held to be invalid,
illegal or unenforceable (a) the validity, legality and enforceability of the remaining provisions
of this Agreement shall not be in any way affected or impaired thereby and (b) 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. Each section of this
Agreement is a separate and independent portion of this Agreement. If the indemnification to
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which Indemnitee is entitled with respect to any aspect of any claim varies between two or
more sections of this Agreement, that section providing the most comprehensive indemnification
shall apply.
16. Miscellaneous.
(a) Governing Law. This Agreement, and all acts and transactions pursuant hereto and the
rights and obligations of the parties hereto, shall be governed, construed and interpreted in
accordance with the substantive laws of the State of Delaware, without reference to the choice of
law provisions therein.
(b) Entire Agreement; Enforcement of Rights. This Agreement sets forth the entire agreement
and understanding of the parties relating to the subject matter herein and merges all prior
discussions between them. No modification of or amendment to this Agreement, nor any waiver of any
rights under this Agreement, shall be effective unless in writing signed by the parties to this
Agreement. The failure by either party to enforce any rights under this Agreement shall not be
construed as a waiver of any rights of such party.
(c) Construction. This Agreement is the result of negotiations between and has been reviewed
by each of the parties hereto and their respective counsel, if any; accordingly, this Agreement
shall be deemed to be the product of all of the parties hereto, and no ambiguity shall be construed
in favor of or against any one of the parties hereto.
(d) Notices. All notices, demands or other communications to be given or delivered under or
by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been
given (i) when delivered personally to the recipient, (ii) when sent to the recipient by telecopy
(receipt electronically confirmed by sender’s telecopy machine) if during normal business hours of
the recipient, otherwise on the next business day, (iii) one business day after the date when sent
to the recipient by reputable overnight courier service (charges prepaid), or (iv) five business
days after the date when mailed to the recipient by certified or registered mail, return receipt
requested and postage prepaid. Such notices, demands and other communications shall be sent to the
parties at the addresses indicated on the signature page hereto, or to such other address as any
party hereto may, from time to time, designate in writing delivered pursuant to the terms of this
Section 16(d).
(e) Counterparts. This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original and all of which together shall constitute one instrument.
(f) Successors and Assigns. This Agreement shall be binding upon the Corporation and its
successors and assigns and shall inure to the benefit of Indemnitee and Indemnitee’s heirs, legal
representatives and assigns.
(g) Subrogation. 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 Indemnitee, who shall
execute all documents required and shall do all acts that may be necessary to secure such rights
and to enable the Corporation to effectively bring suit to enforce such rights.
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[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the day and
year first above written.
| WESTERN REFINING, INC. | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| Address: | 0000 Xxxxxxxxxx Xxxxx | |||||
| Xx Xxxx, Xxxxx 00000 | ||||||
| Facsimile: (000) 000-0000 | ||||||
| INDEMNITEE: | ||
| Name: | ||
| Address: | ||
| Facsimile: (___) ___-___ |
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