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EXHIBIT 10
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this "Agreement"), made and entered
into as of the 25th day of April, 1995, by and between TOREADOR ROYALTY
CORPORATION, a Delaware corporation (the "Corporation") and
______________________________ ("Director").
W I T N E S S E T H:
WHEREAS, it is essential to the Company to retain and attract as
directors the most capable persons available;
WHEREAS, Director is a director of the Company;
WHEREAS, both the Company and Director recognize the risk of
litigation and other claims being asserted against directors of public
companies; and
WHEREAS, in recognition of Director's need for substantial protection
against personal liability in order to maintain continued service to the
Company in an effective manner and to provide Director with specific
contractual assurance that the protection will be available to Director, the
Company desires to provide in this Agreement for the indemnification of and the
advance of expenses to Director to the full extent permitted by law, as set
forth in this Agreement;
NOW THEREFORE, in consideration of the premises and mutual agreements
contained herein, including Director's continued service to the Corporation,
the Corporation and Director hereby agree as follows:
Section 1. Definitions. The following terms, as used herein,
shall have the following respective meanings:
"Change of Control" means a change in control of the Corporation after
the date of this Agreement in any one of the following circumstances: (a)
there shall have occurred an event required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on
any similar schedule or form) promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), whether or not the Corporation is then
subject to such reporting requirement; (b) any "person" (as such term is used
in Sections 13(d) and 14(d) of the Exchange Act) shall have become the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Corporation representing 20% or more of the
combined voting power of the Corporation's then outstanding voting securities
without prior approval of at least two-thirds of the members of the Board of
Directors in office immediately prior to such person's attaining such
percentage interest; (c) the Corporation is a party to a merger, consolidation,
sale of assets or other reorganization, or a proxy contest, as a consequence of
which members of the Board of Directors in office
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immediately prior to such transaction or event constitute less than a majority
of the Board of Directors thereafter or (d) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Board of Directors (including for this purpose any new director whose
election or nomination for election by the Corporation's stockholders was
approved by a vote of at least two-thirds of the directors then still in office
who were directors at the beginning of such period) cease for any reason to
constitute at least a majority of the Board of Directors.
"D.G.C.L." means the Delaware General Corporation Law, as currently in
effect or as amended from time to time.
"Expenses" shall include reasonable attorneys' fees, retainers, court
costs, transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees, and all other disbursements or expenses of the types
customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating or being or preparing to be a witness in a
Proceeding.
"Independent Counsel" means a law firm, or member of a law firm, that
is experienced in matters of corporation law and neither presently is, nor in
the five years previous to his or her selection or appointment has been,
retained to represent: (a) the Corporation or Director in any matter material
to either such party, (b) any other party to the Proceeding giving rise to a
claim for indemnification hereunder or (c) the beneficial owners, directly or
indirectly, of securities of the Corporation representing 5% or more of the
combined voting power of the Corporation's then outstanding voting securities.
"Matter" is a claim, a material issue, or a substantial request for
relief.
"Proceeding" includes any action, suit, arbitration, alternate dispute
resolution mechanism, investigation, administrative hearing or any other
proceeding, whether civil, criminal, administrative or investigative, except
one initiated by Director pursuant to Section 10 of this Agreement to enforce
his or her rights under this Agreement.
Section 2. Indemnification. The Corporation shall indemnify,
and advance Expenses to, Director to the fullest extent permitted by applicable
law in effect on the date of the effectiveness of this Agreement, and to such
greater extent as applicable law may thereafter permit. The rights of Director
provided under the preceding sentence shall include, but not be limited to, the
right to be indemnified to the fullest extent permitted by Section 145(b) of
the D.G.C.L. in Proceedings by or in the right of the Corporation and to the
fullest extent permitted by Section 145(a) of the D.G.C.L. in all other
Proceedings. The provisions set forth below in this Agreement are provided in
furtherance, and not by way of limitation, of the obligations expressed in this
Section 2.
Section 3. Expenses Related to Proceedings. If Director is, by
reason of his or her status as a director of the Corporation, a witness in or a
party to and is successful, on the merits or otherwise, in any Proceeding, he
or she shall be indemnified against all Expenses actually and reasonably
incurred by him or her or on his or her behalf in connection therewith. If
Director
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is not wholly successful in such Proceeding but is successful, on the merits or
otherwise, as to any Matter in such Proceeding, the Corporation shall indemnify
Director against all Expenses actually and reasonably incurred by him or her or
on his or her behalf relating to each Matter. The termination of any Matter in
such a Proceeding by dismissal, with or without prejudice, shall be deemed to
be a successful result as to such Matter.
Section 4. Advancement of Expenses. Director shall be advanced
Expenses within ten days after requesting them to the fullest extent permitted
by Section 145(e) of the D.G.C.L.
Section 5. Request for Indemnification. To obtain
indemnification Director shall submit to the Corporation a written request with
such information as is reasonably available to Director. The Secretary of the
Corporation shall promptly advise the Board of Directors of such request.
Section 6. Determining Entitlement to Indemnification if No
Change of Control. If there has been no Change of Control at the time the
request for Indemnification is sent, Director's entitlement to indemnification
shall be determined in accordance with Section 145(d) of the D.G.C.L. If
entitlement to indemnification is to be determined by Independent Counsel, the
Corporation shall furnish notice to Director within ten days after receipt of
the request for indemnification, specifying the identity and address of
Independent Counsel. Director may, within fourteen days after receipt of such
written notice of selection, deliver to the Corporation a written objection to
such selection. Such objection may be asserted only on the ground that the
Independent Counsel so selected does not meet the requirements of Independent
Counsel and the objection shall set forth with particularity the factual basis
of such assertion. If there is an objection to the selection of Independent
Counsel, either the Corporation or Director may petition the Court of Chancery
of the State of Delaware or any other court of competent jurisdiction for a
determination that the objection is without a reasonable basis and/or for the
appointment of Independent Counsel selected by the court.
Section 7. Determining Entitlement to Indemnification if Change
of Control. If there has been a Change of Control at the time the request for
indemnification is sent, Director's entitlement to indemnification shall be
determined in a written opinion by Independent Counsel selected by Director.
Director shall give the Corporation written notice advising of the identity and
address of the Independent Counsel so selected. The Corporation may, within
seven days after receipt of such written notice of selection, deliver to
Director a written objection to such selection. Director may, within five days
after the receipt of such objection from the Corporation, submit the name of
another Independent Counsel and the Corporation may, within seven days after
receipt of such written notice of selection, deliver to Director a written
objection to such selection. Any objection is subject to the limitations in
Section 6 of this Agreement. Director may petition the Court of Chancery of
the State of Delaware or any other court of competent jurisdiction for a
determination that the Corporation's objection to the first and/or second
selection of Independent Counsel is without a reasonable basis and/or for the
appointment as Independent Counsel of a person selected by the court.
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Section 8. Procedures of Independent Counsel. If there has
been a Change of Control before the time the request for indemnification is
sent by Director, Director shall be presumed (except as otherwise expressly
provided in this Agreement) to be entitled to indemnification upon submission
of a request for indemnification in accordance with Section 5 of this
Agreement, and thereafter the Corporation shall have the burden of proof to
overcome the presumption in reaching a determination contrary to the
presumption. The presumption shall be used by Independent Counsel as a basis
for a determination of entitlement to indemnification unless the Corporation
provides information sufficient to overcome such presumption by clear and
convincing evidence or the investigation, review and analysis of Independent
Counsel convinces him or her by clear and convincing evidence that the
presumption should not apply.
Except in the event that the determination of entitlement to
indemnification is to be made by Independent Counsel, if the person or persons
empowered under Section 6 or 7 of this Agreement to determine entitlement to
indemnification shall not have made and furnished to Director in writing a
determination within sixty days after receipt by the Corporation of the request
therefor, the requisite determination of entitlement to indemnification shall
be deemed to have been made and Director shall be entitled to such
indemnification unless Director knowingly misrepresented a material fact in
connection with the request for indemnification or such indemnification is
prohibited by law. The termination of any Proceeding or of any Matter therein,
by judgment, order, settlement or conviction, or upon a plea of nolo contendere
or its equivalent, shall not (except as otherwise expressly provided in this
Agreement) of itself adversely affect the right of Director to indemnification
or create a presumption that (a) Director did not act in good faith and in a
manner that he or she reasonably believed, in the case of conduct in his or her
official capacity as a director of the Corporation, to be in the best interests
of the Corporation or in all other cases that at least his or her conduct was
not opposed to the Corporation's best interests, or (b) with respect to any
criminal Proceeding, that Director had reasonable cause to believe that his or
her conduct was unlawful.
Section 9. Expenses of Independent Counsel. The Corporation
shall pay any and all reasonable fees and expenses of Independent Counsel
incurred acting pursuant to this Agreement and in any proceeding to which it is
a party or witness in respect of its investigation and written report and shall
pay all reasonable fees and expenses incident to the procedures in which such
Independent Counsel was selected or appointed. No Independent Counsel may
serve if a timely objection has been made to his or her selection until a court
has determined that such objection is without a reasonable basis.
Section 10. Trial De Novo. In the event that (a) a determination
is made pursuant to Section 6 or 7 of this Agreement that Director is not
entitled to indemnification under this Agreement, (b) advancement of Expenses
is not timely made pursuant to Section 4 of this Agreement, (c) Independent
Counsel has not made and delivered a written opinion determining the request
for indemnification (i) within ninety days after being appointed by a court,
(ii) within ninety days after objections to his or her selection have been
overruled by a court or (iii) within ninety days after the time for the
Corporation or Director to object to his or her selection or (d) payment of
indemnification is not made within five days after a determination of
entitlement to indemnification has been made or deemed to have been made
pursuant to Section 6, 7 or 8 of this Agreement, Director shall be entitled to
an adjudication in any court of competent
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jurisdiction of his or her entitlement to such indemnification or advancement
of Expenses. In the event that a determination shall have been made that
Director is not entitled to indemnification, any judicial proceeding or
arbitration commenced pursuant to this Section 10 shall be conducted in all
respects as a de novo trial on the merits, and Director shall not be prejudiced
by reasons of that adverse determination. If a Change of Control shall have
occurred, in any judicial proceeding commenced pursuant to this Section 10, the
Corporation shall have the burden of proving that Director is not entitled to
indemnification or advancement of Expenses, as the case may be. If a
determination shall have been made or deemed to have been made that Director is
entitled to indemnification, the Corporation shall be bound by such
determination in any judicial proceeding commenced pursuant to this Section 10,
or otherwise, unless Director knowingly misrepresented a material fact in
connection with the request for indemnification, or such indemnification is
prohibited by law.
The Corporation shall be precluded from asserting in any judicial
proceeding commenced pursuant to this Section 10 that the procedures and
presumptions of this Agreement are not valid, binding and enforceable and shall
stipulate in any such court that the Corporation is bound by all provisions of
this Agreement. In the event that Director, pursuant to this Section 10, seeks
a judicial adjudication to enforce his or her rights under, or to recover
damages for breach of, this Agreement, Director shall be entitled to recover
from the Corporation, and shall be indemnified by the Corporation against, any
and all Expenses actually and reasonably incurred by him or her in such
judicial adjudication, but only if he or she prevails therein. If it shall be
determined in such judicial adjudication that Director is entitled to receive
part but not all of the indemnification or advancement of Expenses sought, the
Expenses incurred by Director in connection with such judicial adjudication or
arbitration shall be appropriately prorated.
Section 11. Non-Exclusivity. The rights of indemnification and
to receive advancement of Expenses as provided by this Agreement shall not be
deemed exclusive of any other rights to which Director may at any time be
entitled under applicable law, the Certificate of Incorporation, Bylaws, a vote
of stockholders, a resolution of the Board of Directors or otherwise. No
amendment or modification of this Agreement or any provision hereof shall be
effective as to any Director for acts, events and circumstances that occurred,
in whole or in part, before such amendment or modification. The provisions of
this Agreement shall continue as to an Director whose status as a director of
the Corporation has ceased and shall inure to the benefit of his or her heirs,
executors and administrators.
Section 12. Insurance and Subrogation. To the extent the
Corporation maintains an insurance policy or policies providing liability
insurance for directors or officers of the Corporation or of any other
corporation, partnership, joint venture, trust employee benefit plan or other
enterprise which such person serves at the request of the Corporation,
Directors shall be covered by such policy or policies in accordance with its or
their terms to the maximum extent of coverage available for any such director
or officer under such policy or policies.
In the event of any payment hereunder, the Company shall be subrogated
to the extent of such payment to all the rights of recovery of Director, who
shall execute all papers required and take all action necessary to secure such
rights, including execution of such documents as are necessary to enable the
Company to bring suit to enforce such rights.
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The Company shall not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable hereunder if, and to the extent
that, Director has otherwise actually received such payment under any insurance
policy, contract, agreement or otherwise.
Section 13. Severability. If any provision or provisions of this
Agreement shall be held to be invalid, illegal or unenforceable for any reason
whatsoever, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby; and, 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.
Section 14. Circumstances When Director is Not Entitled to
Indemnification. Notwithstanding any other provision of this Agreement,
Director shall not be entitled to indemnification or advancement of Expenses
under this Agreement with respect to any Proceeding, or any Matter therein,
brought or made by Director against the Corporation.
Section 15. Notices. Any communication required or permitted to
the Corporation shall be addressed to the Secretary of the Corporation and any
such communication to Director shall be given in writing by depositing the same
in the United States mail, with postage thereon prepaid, addressed to the
person to whom such notice is directed at the address of such person on the
records of the Corporation, and such notice shall be deemed given at the time
when the same shall be so deposited in the United States mail.
Section 16. Choice of Law. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
DELAWARE.
Section 17. Consent to Jurisdiction. THE CORPORATION AND
DIRECTOR EACH HEREBY IRREVOCABLY CONSENT TO THE JURISDICTION OF THE COURTS 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 STATE
COURTS OF THE STATE OF DELAWARE.
Section 18. Amendment. No amendment, modification, termination
or cancellation of this Agreement shall be effective unless made in a writing
signed by each of the parties hereto.
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IN WITNESS WHEREOF, the Company and Director have executed this
Agreement as of the day and year first above written.
TOREADOR ROYALTY CORPORATION
By:___________________________________
Peter R. Vig
Chairman and Chief Executive Officer
______________________________________
(Name of Director)
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