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EXHIBIT 10.12
INDEMNITY AGREEMENT
AGREEMENT, dated as of November 1, 1995, by and between Sonat Inc. (the
"Company") and the undersigned director of the Company (the "Director").
The Company's Certificate of Incorporation provides that the Company
shall indemnify the Directors to the full extent permitted by the laws of the
State of Delaware as from time to time in effect. Section 145 of the General
Corporation Law of Delaware (relating to the indemnification of officers,
directors, employees and agents) provides that the indemnification afforded by
that section shall not be deemed exclusive of any other rights to which those
seeking indemnification may be entitled under any by-law, agreement, vote of
stockholders or disinterested directors or otherwise. Section 145 also
expressly empowers the Company to purchase and maintain insurance on behalf of
the Director.
In exercising the discretion with respect to indemnification given it
by the Company's Certificate of Incorporation, the Board of Directors of the
Company has considered the following, among other factors:
(a) It is essential to the Company to attract and retain as
directors the most capable persons available.
(b) The substantial increase in corporate litigation that may
subject directors to litigation costs and risks and the recent
limitations on the availability of director's liability insurance have
made and will make it increasingly difficult for the Company to attract
and retain such persons.
(c) When obtainable, insurance policies relating to indemnification
are often subject to retentions by the insured, co-insurance
requirements, exclusions and other limitations on coverage.
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In view of the foregoing and the fact that the Director is rendering
valuable services to the Company and desires to continue to provide such
services provided he receives assurance that the Company will indemnify him to
the full extent permitted by its Certificate of Incorporation, the Board of
Directors has determined to provide such assurance.
In consideration of the Director's continued service to the Company,
the Company hereby agrees with the Director as follows:
Section 1. General Right to Indemnification. Notwithstanding any
other provision of this Agreement except for Section 8, the Company shall
indemnify the Director to the full extent permitted by the laws of the State of
Delaware as from time to time in effect. Without limiting the generality of
the foregoing, the Company shall indemnify the Director in accordance with the
provisions set forth below.
Section 2. Actions, Suits or Proceedings Other Than by or in the Right
of the Company. The Company shall indemnify the Director in the event that he
was or is a party or is threatened to be made a party to, or otherwise requires
representation by counsel in connection with, any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the Company) by
reason of the fact that he is or was or has agreed to become a director,
officer, employee or agent of the Company, or is or was serving or has agreed
to serve as a director, officer, employee or agent of any corporation,
partnership, joint venture or other entity of which the Company owns 50% or
more of the voting or equity interest (an "Affiliate") or any employee benefit
plan of the Company or an Affiliate, or by reason of any action alleged to have
been taken or omitted in such capacity, against costs, charges, expenses
(including attorneys' fees),
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judgments, fines and amounts paid in settlement actually and reasonably
incurred by him or on his behalf in connection with such action, suit or
proceeding and any appeal therefrom, if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon
a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the Director 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
Company, and, with respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful.
Section 3. Actions or Suits by or in the Right of the Company. The
Company shall indemnify the Director in the event that he was or is a party or
is threatened to be made a party to, or otherwise requires representation by
counsel in connection with, any threatened, pending or completed action or suit
by or in the right of the Company to procure a judgment in its favor by reason
of the fact that he is or was or has agreed to become a director, officer,
employee or agent of the Company, or is or was serving or has agreed to serve
as a director, officer, employee or agent of any Affiliate or any employee
benefit plan of the Company or an Affiliate, or by reason of any action alleged
to have been taken or omitted in such capacity, against costs, charges and
expenses (including attorneys' fees) actually and reasonably incurred by him or
on his behalf in connection with the defense or settlement of such action or
suit and any appeal therefrom, if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company except that no indemnification shall be made in
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respect of any claim, issue or matter as to which such Director shall have been
adjudged to be liable to the Company unless and only to the extent that the
Court of Chancery of Delaware or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of such
liability but in view of all the circumstances of the case, such Director is
fairly and reasonably entitled to indemnity for such costs, charges and
expenses which the Court of Chancery or such other court shall deem proper.
Section 4. Indemnification for Costs, Charges and Expenses of
Successful Party. Notwithstanding the other provisions of this Agreement, to
the extent that the Director has been successful on the merits or otherwise,
including, without limitation, the dismissal of an action without prejudice, in
defense of any action, suit or proceeding covered by this Agreement, or in
defense of any claim, issue or matter therein, he shall be indemnified against
all costs, charges and expenses (including attorneys' fees) actually and
reasonably incurred by him or on his behalf in connection therewith.
Section 5. Adverse Finding. Any indemnification under Sections 2 and
3 of this Agreement (unless ordered by a court) shall be paid by the Company,
in accordance with the procedures set forth in Section 7 of this Agreement,
unless a determination is made within the 90-day period set forth in Section 7
(A) by the Board of Directors by a majority vote of a quorum consisting of
directors who were not parties to such action, suit or proceeding, or (B) if
such a quorum is not obtainable, or, even if obtainable a quorum of
disinterested directors so directs, by independent legal counsel in a written
opinion, or (C) by the stockholders, that indemnification of the Director is
not proper in the circumstances because he has not met the applicable standard
of conduct set forth in Sections 2 and 3 of this Agreement.
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Section 6. Advances. Costs, charges, expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement incurred by the Director
covered by Sections 1 and 2 of this Agreement in defending any pending,
threatened or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, and costs, charges and expenses (including
attorneys' fees) incurred by the Director covered by Section 3 of this
Agreement in defending an action by or in the right of the Company shall be
paid by the Company in advance of the determination of the Director's
entitlement to indemnification promptly upon receipt by the Company of evidence
of the Director's obligation to pay such costs, charges, expenses, judgments,
fines or amounts paid in settlement (as the case may be); provided, however,
that such payment shall be made in advance of the determination of the
Director's entitlement to indemnification only with the undertaking of the
Director (which the Director hereby gives) that the Director shall repay all
amounts so advanced in the event that it shall ultimately be determined that
the Director is not entitled to be indemnified by the Company as authorized in
this Agreement. The Board of Directors may, upon approval of the Director,
authorize the Company's counsel to represent the Director, in any action, suit
or proceeding, whether or not the Company is a party to such action, suit or
proceeding.
Section 7. Procedure for Indemnification. After the final disposition
of any action, suit or proceeding covered by this Agreement, the Director shall
send to the Company a written request for any indemnification sought under this
Agreement. No later than 90 days following receipt by the Company of such
request, the Company shall cause the indemnification provided hereunder to be
authorized and paid, unless during such 90-day period, with respect to
indemnification under Section 1 of this Agreement, a finding by the Company
that the
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indemnification requested is not permitted by the laws of the State of Delaware
then in effect is made and with respect to indemnification under Section 2 or 3
of this Agreement, the adverse finding described in Section 5 of this Agreement
is made pursuant to such Section. The burden of proving that such standard has
not been met shall be on the Company. The Director shall be given an
opportunity to be heard and to present evidence on his behalf in connection
with consideration by the Board of Directors, independent legal counsel, or the
stockholders, as the case may be, of any findings required by applicable law.
If the Company (A) does not pay the indemnification requested by the Director
within 90 days after the receipt of such request, or (B) does not pay promptly
an advance in accordance with Section 6, the Director's right to
indemnification or to any advance and the Company's right to the repayment of
any advance shall be enforceable in any court of competent jurisdiction. In
any such action, neither the failure of the Company (including its Board of
Directors, its independent legal counsel, and its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the Director is proper in the circumstances because he has met the applicable
standard of conduct set forth in Section 2 or 3 of this Agreement, nor the fact
that the Company has made an adverse finding pursuant to Section 5 of this
Agreement, shall be a defense to the action or create a presumption that the
Director has not met the applicable standard of conduct. However, it shall be
a defense to the action (other than an action brought to enforce a claim for an
advance) if it is established that the Director has not met the applicable
standard of conduct set forth in Section 2 or 3 of this Agreement. The
Director's costs and expenses (including attorneys' fees) incurred in
connection with successfully establishing his right to indemnification
(including his right to indemnification in the event he shall have been
adjudged to be liable to the
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Company under Section 3 of this Agreement) or any advance, in whole or in part,
in any such action shall also be indemnified by the Company. Any action
instituted by the Company or by the Director under this Agreement may be
maintained as to the Company and the Director in any court of competent
jurisdiction, including but not limited to the courts of the State of Delaware.
The Company and the Director each consents to the exercise of jurisdiction over
it or him, as the case may be, by the Court of Chancery of Delaware.
Section 8. Voluntary Proceedings. The Company shall not indemnify the
Director or pay any advance to the Director in connection with any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, voluntarily commenced by such Director against
the Company, any affiliate or any other director, officer, employee or agent of
the Company or any Affiliate or any employee benefit plan of the Company or an
Affiliate unless the institution of such action, suit or proceeding was
authorized prior to its commencement by a majority vote of the Board of
Directors or the Director is successful on the merits in such action, suit or
proceeding.
Section 9. Notice to Company. The Director must provide prompt
written notice to the Company of any pending or threatened action, suit or
proceeding in connection with which the Director may assert a right to be
indemnified hereunder; however, failure to provide such notice shall not be
construed as a waiver of any right to an advance or indemnification hereunder.
Section 10. Other Rights; Continuation of Right to Indemnification.
The indemnification and advances provided by this Agreement shall not be deemed
exclusive of any other rights to which a Director seeking indemnification may
be entitled under any law (common or
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statutory), provision of the Company's Certificate of Incorporation or By-Laws,
vote of stockholders or disinterested directors or otherwise, both as to action
in his official capacity and as to action in another capacity while holding
office or while employed by or acting as agent for the Company, and shall
continue as to a person who has ceased to be a Director, and shall inure to the
benefit of the estate, heirs, executors and administrators of the Director.
Section 11. Amendments. This Agreement may not be amended without the
agreement in writing of the Company and the Director.
Section 12. Savings Clause. If this Agreement or any portion hereof
shall be deemed invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby, and the Company shall
nevertheless indemnify the Director as to costs, charges and expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
with respect to any action, suit or proceeding, whether civil, criminal,
administrative or investigative, including an action by or in the right of the
to the full extent permitted by any applicable portion of this Agreement that
shall not have been invalidated and to the full extent permitted by applicable
law.
Section 13. Survival Clause. The Company acknowledges that in
continuing to provide services to the Company, the Director is relying on this
Agreement. Accordingly, the Company agrees that its obligations hereunder will
survive (a) any actual or purported termination of this Agreement by the
Company or its successors or assigns whether by operation of law or otherwise,
and (b) termination of the Director's services to the Company, whether such
services were terminated by the Company or the Director, with respect to any
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claim, action, suit or proceeding covered by Section 1, 2 or 3 hereof, whether
or not such claim is made or action, suit or proceeding is threatened or
commenced before or after the actual or purported termination of this Agreement
or the termination of the Director's services to the Company.
Section 14. Successors and Assigns. This Agreement shall be binding
on the successors and assigns of the Company whether by operation of law or
otherwise and shall inure to the benefit of the estate, heirs and personal
representatives of the Director.
Section 15. Governing Law. This Agreement shall be governed in all
respects, including validity, interpretation and effect, by the laws of the
State of Delaware (without giving effect to the provisions thereof relating to
conflicts of law).
IN WITNESS WHEREOF, this Agreement has been executed by the parties
thereto, in the case of the Company, by a duly authorized officer thereof on
its behalf.
SONAT INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
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Xxxxxx X. Xxxxx, Xx.
Chairman of the Board,
President and
Chief Executive Officer
/s/ Xxx X. Xxxxxx
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Xxx X. Xxxxxx
Signature page of Indemnity Agreement dated as of November 1, 1995,
between Sonat Inc. and above named Director.
