Exhibit 3.1
AMENDED AND RESTATED BYLAWS
OF
TESORO CORPORATION
ARTICLE 1
OFFICES
1.1
Registered Office
. The Corporation shall at all times maintain a registered
office in the State of Delaware.
1.2
Other Offices
. The Corporation may also have offices at such other places
within or outside of the State of Delaware as the Board of Directors shall from time to time
appoint or the business of the Corporation require.
ARTICLE 2
STOCKHOLDERS AND MEETINGS OF STOCKHOLDERS
2.1
Place of Meetings
. All meetings of stockholders shall be held at such place
within or outside of the State of Delaware, including by means of remote communication, as shall be
fixed by the Board of Directors and stated in the notice of meeting.
2.2
Annual Meeting
. The Annual Meeting of Stockholders of the Corporation shall
be held on such date and at such time as is fixed by the Board of Directors and stated in the
notice of meeting. Directors shall be elected in accordance with the provisions of the Certificate
of Incorporation of the Corporation (the “Certificate of Incorporation”) and these Bylaws and such
other business shall be transacted as may properly come before the meeting.
2.3
Adjournment of Annual Meeting
. The Annual Meeting of Stockholders may be
adjourned by the presiding officer of the meeting for any reason (including, if the presiding
officer determines that it would be in the best interests of the Corporation to extend the period
of time for the solicitation of proxies) from time to time and place to place until the presiding
officer shall determine that the business to be conducted at the meeting is completed, which
determination shall be conclusive.
2.4
Conduct of Business at Annual Meeting
. At an Annual Meeting of the
Stockholders, only such business shall be conducted as shall have been properly brought before the
meeting. To be properly brought before an Annual Meeting, business must be (a) specified in the
notice of meeting (or any supplement thereto) given by or at the direction of the Board of
Directors, (b) otherwise properly brought before the meeting by or at the direction of the Board of
Directors or (c) otherwise properly brought before the meeting by a stockholder of the Corporation.
For business to be properly brought before an Annual Meeting of Stockholders by a stockholder, the
stockholder must have given timely notice thereof in writing to the Secretary of the Corporation.
To be timely, a stockholder’s notice must be delivered to or mailed and received at the principal
executive offices of the Corporation, not less than 90 days nor more than 180 days prior to the
anniversary date of the immediately preceding Annual Meeting of Stockholders; provided, however,
that in the event that the date of the Annual Meeting of Stockholders is more than 45 days later
than the anniversary date of the immediately preceding Annual Meeting of
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Stockholders, notice by the stockholder to be timely must be received by the Secretary not later
than the close of business on the tenth day following the day on which a written statement setting
forth the date of the Annual Meeting of Stockholders was mailed to stockholders or the date on
which it is first disclosed to the public. A stockholder’s notice to the Secretary shall set forth
as to each matter the stockholder proposes to bring before the Annual Meeting of Stockholders (a) a
brief description of the business desired to be brought before the Annual Meeting of Stockholders,
(b) the name and address, as they appear on the Corporation’s books, of the stockholder proposing
such proposal, (c) the class and number of shares of the Corporation that are beneficially owned by
the stockholder and (d) any material interest of the stockholder in such business. In addition, if
the stockholder’s ownership of shares of the Corporation, as set forth in the notice, is solely
beneficial, documentary evidence of such ownership must accompany the notice. Notwithstanding
anything in these Bylaws to the contrary, no business shall be conducted at an Annual Meeting of
Stockholders except in accordance with the procedures set forth in this Section. The presiding
officer of an Annual Meeting of Stockholders shall, if the facts warrant, determine and declare to
the meeting that any business that was not properly brought before the meeting is out of order and
shall not be transacted at the meeting.
2.5
Special Meetings
. Except as otherwise required by law and subject to the
rights of the holders of any series of stock having a preference over the common stock of the
Corporation (the “Common Stock”) as to dividends or on liquidation, a special meeting of
stockholders may only be called by the Chairman of the Board, the Chief Executive Officer or the
Board of Directors pursuant to a resolution adopted by two-thirds of the directors then in office.
The notice of every special meeting of stockholders shall state the purpose for which it is called.
At any special meeting of stockholders, only such business shall be conducted as shall be provided
for in the resolution or resolutions calling the special meeting or, where no such resolution or
resolutions have been adopted, only such business shall be conducted as shall be provided in the
notice to stockholders of the special meeting. Any special meeting of stockholders may be adjourned
by the presiding officer of the meeting for any reason (including, if the presiding officer
determines that it would be in the best interests of the Corporation to extend the period of time
for the solicitation of proxies) from time to time and from place to place until the presiding
officer shall determine that the business to be conducted at the meeting is completed, which
determination shall be conclusive.
2.6
Notice of Meetings
. Written notice or notice by a form of electronic
transmission (as that term is defined in Section 232 of the Delaware General Corporation Law) of
each meeting of stockholders shall be mailed or transmitted to each stockholder of record at his
last address as it appears on the books of the Corporation at least ten days, but no more than
sixty, prior to the date of the meeting.
2.7
Record Date
. The Board of Directors shall have the power to close the stock
transfer books of the Corporation for a period not more than sixty nor less than ten days preceding
the date of any meeting of stockholders, or the date for payment of any dividend, or the date for
the allotment of rights, or the date when any reclassification or change or conversion or exchange
of capital stock shall go into effect; provided, however, that in lieu of closing the stock
transfer books as aforesaid, the Board of Directors may fix in advance a date not more than sixty
nor less than ten days preceding the date of any meeting of stockholders, or the date for any
payment of dividends, or the date for allotment of rights, or the date when any reclassification or
change or conversion or exchange of capital stock shall go into effect, as a record date for the
determination of the stockholders entitled to vote at any such meeting or entitled to receive
payment of any such dividend or to any such allotment of rights, or to exercise the rights in
respect of any such reclassification, change, conversion or exchange of capital stock, and in such
cases only such stockholders as shall be stockholders of record on the date so fixed shall be
entitled to vote at such meeting, or to receive payment of such dividend, or to receive such
allotment of rights, or to exercise such rights or to participate in the effect of any such
transaction, as the case may be, notwithstanding any transfer of any stock on the books of the
Corporation after any such record date fixed as aforesaid. This
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Bylaw shall in no way affect the rights of a stockholder and his transferee or transferor as
between themselves.
2.8
Stockholder List
. The officer who has charge of the stock ledger of the
Corporation shall make, at least 10 days before every meeting of stockholders, a complete list of
the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the
address of each stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder for any purpose germane to the
meeting for a period of at least 10 days prior to the meeting: (i) on a reasonably accessible
electronic network, provided that the information received to gain access to such list is provided
with the notice of the meeting, or (ii) during ordinary business hours, at the principal place of
business of the Corporation. The list shall also be produced and kept at the time and place of the
meeting during the whole time thereof, and may be inspected by any stockholder who is present.
2.9
Quorum
. The holders of a majority of the outstanding shares of stock of the
Corporation having voting power with respect to a subject matter (excluding shares held by the
Corporation for its own account) present or represented by proxy shall constitute a quorum at the
meeting of stockholders for the transaction of business with respect to such subject matter;
provided, however, that if the subject matter is one as to which a higher vote is required (as
contemplated by the Certificate of Incorporation or the laws of the State of Delaware, then the
holders of that number of shares equal to at least that higher number of outstanding shares of
stock of the Corporation having voting power with respect to such subject matter (excluding shares
held by the Corporation for its own account) present or represented by proxy shall constitute a
quorum at the meeting of stockholders solely for the transaction of business with respect to such
subject matter. In the absence of a quorum with respect to a particular subject matter, the
presiding officer of the meeting shall have power to adjourn the meeting from time to time, without
notice other than an announcement at the meeting stating the time, place, if any, thereof, and the
means of remote communication, if any, until a quorum is present with respect to that subject
matter. If the adjournment is for more than 30 days, or if after the adjournment a new record date
is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting. At such adjourned meeting, any business may
be transacted that might have been transacted at the meeting as originally notified.
2.10
Majority Vote
. When a quorum is present or represented at any meeting of
stockholders, the affirmative vote of the holders of a majority of the shares present in person or
represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of
the stockholders in all matters, unless the matter is one upon which, by express provision of the
laws of the State of Delaware, of the Certificate of Incorporation or of these Bylaws, a different
vote is required, in which case such express provision shall govern and control the decision of
that matter. Directors shall be elected by a plurality of the votes of the shares present in person
or represented by proxy and entitled to vote on the election of directors.
2.11
Proxies
. Every stockholder having the right to vote shall be entitled to
vote in person, or by proxy appointed by an instrument in writing subscribed by such stockholder
(which for purposes of this paragraph may include a signature and form of proxy pursuant to a
facsimile or telegraphic form of proxy or any other instruments acceptable to the Judge of
Election), bearing a date not more than three years prior to voting, unless such instrument
provides for a longer period, and filed with the Secretary of the Corporation before, or at the
time of, the meeting. If such instrument shall designate two or more persons to act as proxies,
unless such instrument shall provide to the contrary, a majority of such persons present at any
meeting at which their powers thereunder are to be exercised shall have and may exercise all the
powers of voting thereby conferred, or if only one be present, then such powers may be exercised by
that one; or, if an even number attend and a majority do not agree on any particular issue, each
proxy so attending shall be entitled to exercise such powers in respect of the same portion of the
shares as he is of the proxies representing such shares.
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2.12
One Vote Per Share
. Unless otherwise provided by the Certificate of
Incorporation or by the laws of the State of Delaware, each stockholder of the Corporation shall,
at every meeting of stockholders, be entitled to one vote in person or by proxy for each share of
capital stock of the Corporation registered in his name.
2.13
Shares Held by Certain Holders
. Any other corporation owning voting shares
in this Corporation may vote the same by its President or by proxy appointed by him, unless some
other person shall be appointed to vote such shares by resolution of the Board of Directors of such
stockholder corporation. A partnership holding shares of this Corporation may vote such shares by
any general partner or by proxy appointed by any general partner. Shares standing in the name of a
deceased person may be voted by the executor or administrator of such deceased person, either in
person or by proxy. Shares standing in the name of a guardian, conservator or trustee may be voted
by such fiduciary, either in person or by proxy, but no such fiduciary shall be entitled to vote
shares held in such fiduciary capacity without a transfer of such shares into the name of such
fiduciary. Shares standing in the name of a receiver may be voted by such receiver. A stockholder
whose shares are pledged shall be entitled to vote such shares, unless in the transfer by the
pledgor on the books of the Corporation, he has expressly empowered the pledgee to vote thereon, in
which case only the pledgee, or his proxy, may represent the stock and vote thereon.
2.14
Conduct of Meeting
. The order of business and all other matters of procedure
at every meeting of the stockholders may be determined by the presiding officer of the meeting, who
shall be the Chairman of the Board, or in his absence the Chief Executive Officer, or in the
absence of both of them such other officer of the Corporation as designated by the Board. The
presiding officer of the meeting shall have all the powers and authority vested in a presiding
officer by law or practice without restriction, including, without limitation, the authority, in
order to conduct an orderly meeting, to impose reasonable limits on the amount of time at the
meeting taken up in remarks by any one stockholder and to declare any business not properly brought
before the meeting to be out of order.
2.15
Judge of Election
. The Board shall appoint one or more Judges of Election to
serve at every meeting of the stockholders.
ARTICLE 3
DIRECTORS AND MEETINGS OF DIRECTORS
3.1
General Powers
. The business and affairs of the Corporation shall be managed
by a Board of Directors (herein the “Board of Directors” or the “Board”) who may exercise all the
powers of the Corporation not reserved to or conferred on the stockholders by statute, the
Certificate of Incorporation or the Bylaws of the Corporation.
3.2
Number of Directors
. Except as otherwise fixed pursuant to the provisions of
the Certificate of Incorporation relating to the rights of the holders of any class or series of
stock having a preference over the Common Stock as to dividends or upon liquidation to elect
additional directors under specified circumstances, the number of directors shall be as fixed from
time to time by resolution of the Board adopted by the affirmative vote of at least a majority of
the directors then in office, provided the number shall not be less than the minimum nor more than
the maximum number permitted by the Certificate of Incorporation, provided further that if no such
minimum or maximum number is stated in the Certificate of Incorporation the number shall not be
less than three. The directors shall hold office until the next Annual Meeting of Stockholders and
until their successors shall have been elected and qualified. During the intervals between Annual
Meetings of Stockholders, any vacancy occurring in the Board of Directors caused by resignation,
removal, death or other incapacity, and any newly-created directorships resulting
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from an increase in the number of directors, shall be filled by a majority vote of the directors
then in office, whether or not a quorum. Directors are not required to be residents of Delaware or
stockholders of the Corporation.
3.3
Maximum Age of Directors
. No person may be elected or re-elected as a
director of the Corporation if at the time of his election or reelection he shall have attained the
age of 75 years; provided, however, that a director who shall attain the age of 75 years while
serving as a director shall continue in office until the expiration of the term for which he was
elected.
3.4
Nomination
. Subject to the rights of holders of any class or series of stock
having a preference over the Common Stock as to dividends or upon liquidation, nominations for the
election of directors may be made by the Board of Directors or a committee appointed by the Board
of Directors or by any stockholder entitled to vote in the election of directors generally.
However, any stockholder entitled to vote in the election of directors generally may nominate one
or more persons for election as directors at a meeting only if written notice of such stockholder’s
intent to make such nomination or nominations has been given, either by personal delivery or by
United States mail, postage prepaid, to the Secretary of the Corporation not later than (a) with
respect to an election to be held at an Annual Meeting of Stockholders, not later than 90 days nor
more than 180 days prior to the date of the anniversary date of the immediately preceding Annual
Meeting of Stockholders; provided, however, that in the event that the date of the Annual Meeting
of Stockholders is more than 45 days later than the anniversary date of the immediately preceding
Annual Meeting of Stockholders, notice by the stockholder to be timely must be received by the
Secretary not later than the close of business on the tenth day following the earlier of the day on
which a written statement setting forth the date of the Annual Meeting of Stockholders was mailed
to stockholders or the date on which it is first disclosed to the public, and (b) with respect to
an election to be held at a special meeting of stockholders for the election of directors, the
close of business on the tenth day following the earlier of date on which notice of the date of the
special meeting of stockholders was mailed or such public disclosure was made to the stockholders.
Notwithstanding the foregoing if an existing director is not standing for reelection to a
directorship that is the subject of an election at such meeting, then a stockholder may make a
nomination with respect to such directorship at anytime not later than the close of business on the
tenth day following the earlier of the date on which a written statement setting forth the fact
that such directorship is to be elected and the name of the nominee proposed by the Board of
Directors is first mailed to stockholders or the date on which such information is first disclosed
to the public. Each notice of a nomination from a stockholder shall set forth: (a) the name and
address of the stockholder who intends to make the nomination and of the person or persons to be
nominated; (b) a representation that the stockholder is a holder of record of stock of the
Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the
meeting to nominate the person or persons specified in the notice; (c) a description of all
arrangements or understandings between the stockholder and each nominee and any other person or
persons (naming such person or persons) pursuant to which the nomination or nominations are to be
made by the stockholder; (d) such other information regarding each nominee proposed by such
stockholder as would be required to be included in a proxy statement filed pursuant to the
Securities Exchange Act of 1934 and the rules and regulations thereunder (or any subsequent
provisions replacing such Act, rules or regulations); and (e) the consent of each nominee to serve
as a director of the Corporation if so elected. The presiding officer of the meeting may refuse to
acknowledge the nomination of any person not made in compliance with the foregoing procedure.
3.5
Removal
. Any director may be removed from office as a director at any time,
but only for cause, by the affirmative vote of stockholders of record holding a majority of the
outstanding shares of stock of the Corporation entitled to vote in elections of directors at a
meeting of the stockholders called for that purpose.
3.6
Regular Meetings
. Regular meetings of the Board of Directors shall be held at
such times and at
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such place or places as the directors shall, from time to time, determine at a prior meeting.
Special meetings of the Board may be called by the Chairman of the Board or President of the
Corporation and shall be called by either of said officers upon the written request of any two
directors. Special meetings shall be held at the office of the Corporation or at such place as is
stated in the notice of the meeting. No notice shall be required for regular meetings of the Board.
Notices of special meetings shall be given by mail at least five days before the meeting or by
telephone, telecopy, telegram or a form of electronic transmission (as that term is defined in
Section 232 of the Delaware General Corporation Law) at least two days before the meeting. Notices
may be waived. Notices need not include any statement of the purpose of the meeting.
3.7
Unanimous Action; Telephonic and Other Participation
. When all of the
directors shall be present at any meeting, however called or notified, they may act upon any
business that might lawfully be transacted at regular meetings of the Board, or at special meetings
duly called, and action taken at such meetings shall be as valid and binding as if legally called
and notified. Members of the Board of Directors may participate in a meeting of the Board by means
of conference telephone or similar communications equipment to the full extent and with the same
effect as authorized and permitted by the laws of the State of Delaware.
3.8
Quorum
. One-third of the total number of the members of the Board of
Directors (but in no event less than two directors) shall constitute a quorum for the transaction
of business, and the acts of a majority of the directors present at any meeting at which there is a
quorum present shall be the acts of the Board; provided, however, that the directors may act in
such other manner, with or without a meeting, as may be permitted by the laws of the State of
Delaware and provided further, that if all of the directors shall consent in writing to any action
taken by the Corporation, such action shall be as valid as though it had been authorized at a
meeting of the Board.
3.9
Compensation
. Directors shall receive such compensation and reimbursement for
expenses for attendance at meetings of the Board or of committees thereof and such other
compensation as shall be fixed by a majority of the entire Board.
ARTICLE 4
COMMITTEES
4.1
Designation
. The Board of Directors may designate from among its members an
executive committee and/or one or more other committees, each consisting of one or more directors.
The designation of a committee, and the delegation of authority to it, shall not operate to relieve
the Board of Directors, or any member thereof, of any responsibility imposed by law. No member of
any committee shall continue to be a member thereof after ceasing to be a director of the
Corporation. The Board of Directors shall have the power at any time to increase or decrease the
number of members of any committee, to fill vacancies thereon, to change any member thereof and to
change the functions or terminate the existence thereof.
4.2
Powers
. Any such committee, to the extent provided by resolution of the Board
of Directors, shall have and may exercise all the powers and authority of the Board of Directors in
the management of the business and affairs of the Corporation, and may authorize the seal of the
Corporation to be affixed to all papers which may require it; but no such committee shall have the
power or authority in reference to amending the Certificate of Incorporation; adopting an agreement
of merger or consolidation; recommending to the stockholders the sale, lease or exchange of all or
substantially all of the Corporation’s property and assets; recommending to the stockholders a
dissolution of the Corporation or a revocation of a dissolution; or amending the Bylaws of the
Corporation; and, unless the resolution
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expressly so provides, no such committee shall have the power or authority to declare a dividend,
to authorize the issuance of stock or to adopt a certificate of ownership and merger with respect
to the merger into the Corporation of a subsidiary of which at least 90 percent of the outstanding
shares of each class are owned by the Corporation.
4.3
Procedures.
The Board of Directors shall appoint a chairman from among the
members of the committee and shall appoint a secretary who may, but need not, be a member of the
committee. The chairman shall preside at all committee meetings and the secretary of the committee
shall keep a record of its acts and proceedings.
4.4
Meetings
. Regular meetings of a committee, of which no notice shall be
necessary, shall be held on such days and at such places as shall be fixed by resolution adopted by
the committee. Special meetings of a committee shall be called at the request of the President or
of any member of the committee, and shall be held upon such notice as is required by these Bylaws
for special meetings of the Board of Directors, provided that notice by word of mouth or telephone
shall be sufficient if received in the city where the meeting is to be held not later than the day
immediately preceding the day of the meeting. A waiver of notice of a meeting, signed by the person
or persons entitled to such notice, whether before or after the event stated therein, shall be
deemed equivalent to the giving of such notice.
4.5
Notice
. Attendance of any member of a committee at a meeting shall constitute
a waiver of notice of the meeting. A majority of a committee, from time to time, shall be necessary
to constitute a quorum for the transaction of any business, and the act of a majority of the
members present at a meeting at which a quorum is present shall be the act of the committee.
Members of a committee may hold a meeting of such committee by means of conference telephone or
similar communications equipment by means of which all persons participating in the meeting can
hear each other, and participation in such a meeting shall constitute presence in person at the
meeting.
4.6
Consent
. Any action which may be taken at a meeting of a committee may be
taken without a meeting if a consent in writing setting forth the actions so taken shall be signed
by all members of the committee entitled to vote with respect to the subject matter thereof. The
consent shall have the same effect as a unanimous vote of the committee.
4.7
Compensation
. The Board of Directors may vote to the members of any committee
a reasonable fee as compensation for attendance at meetings of the committee.
ARTICLE 5
OFFICERS
5.1
Number
. The Board of Directors shall elect a President and a Secretary, and
may elect a Chairman of the Board, one or more Vice Presidents, a General Counsel, a Treasurer, a
Controller, one or more assistant secretaries and assistant treasurers, and such other officers as
the Board of Directors shall deem appropriate. The Chairman of the Board shall be a director of the
Corporation. Other officers need not be directors.
5.2
Election and Term of Office
. Officers of the Corporation shall hold office
until their successors are chosen and qualified or until their earlier resignation or removal. Any
officer, agent or employee may be removed at any time, with or without cause, by the Board but such
removal shall be without prejudice to the contractual rights, if any, of the person so removed.
Election or appointment of an officer or agent shall not of itself create contract rights. Vacancy
occurring in any office or position at any time may be
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filled by the Board. All officers, agents and employees of the Corporation shall respectively have
such authority and perform such duties in the conduct and management of the Corporation as may be
delegated by the Board of Directors or by these Bylaws.
5.3
Compensation
. Officers shall receive such compensation as may from time to
time be determined by the Board of Directors; provided, however that no officer shall also receive
compensation by reason of such officer also being a director. Agents and employees shall receive
such compensation as may from time to time be determined by the Chief Executive Officer.
5.4
Chairman of the Board
. The Chairman of the Board, if one is elected, may
preside, or may direct that the President to preside, at all meetings of the stockholders and at
all meetings of the directors. In the absence of the Chairman of the Board, or if no Chairman of
the Board is elected, the President shall so preside. If the Board of Directors shall elect a
person to be the Chairman of the Board and shall designate such person the Chief Executive Officer
of the Corporation, the Chairman of the Board shall supervise and direct the operations of the
business of the Corporation in accordance with the policies determined by the Board of Directors.
5.5
President
. Unless the Board of Directors shall have elected a Chairman of the
Board of Directors and designated such person the Chief Executive Officer of the Corporation, the
President shall be the Chief Executive Officer of the Corporation, supervising and directing the
operations of the business of the Corporation in accordance with the policies determined by the
Board of Directors. If the Board of Directors shall have elected a person as Chairman of the Board
and designated such person as a Chief Executive Officer of the Corporation, the President shall be
responsible for the general supervision and control of the business and the affairs of the
Corporation subject to the directions of the Chairman of the Board and the Board of Directors. If
the Board of Directors shall have elected a person Chairman of the Board and shall designate such
person the Chief Executive Officer of the Corporation, the President, in the absence or incapacity
of such Chairman of the Board, shall perform the duties of that office.
5.6
Vice President
. A Vice President, if one is elected, in the absence or
incapacity of the President, shall perform the duties of the President. If there be more than one
Vice President, the Board of Directors shall designate the Vice President who is to perform the
duties of the President in the event of his absence or incapacity. Each Vice President shall have
such other duties and authority as shall be assigned by the Chief Executive Officer or may be
delegated by the Board of Directors. The Executive Vice President and Chief Financial Officer, if
one is elected, shall be responsible for and direct, either directly or indirectly through any
Treasurer, Controller or Director of Data Processing of the Corporation, all treasury, accounting,
cost and budgeting, and data collection functions. He will report directly to the President with a
report and policy relationship to the Chairman of the Board and the Board of Directors.
5.7
Secretary
. The Secretary shall attend all meetings of the Board of Directors
and all meetings of stockholders and shall record all votes and minutes from all proceedings in a
book to be kept for that purpose. He shall keep in safe custody the seal of the Corporation and
affix the same to any instrument requiring it, and when so affixed, it shall be attested by his
signature or by the signature of the Treasurer or an Assistant Secretary; provided, however, that
the affixing of the seal of the Corporation to any document or instrument specifically shall
not
be required in order for such document or instrument to be binding on or the official act
of the Corporation, and the signature of any authorized officer, without the seal of the
Corporation, shall be sufficient for such purposes. The Secretary shall perform such other duties
and have such other authorities as are delegated to him by the Board of Directors.
5.8
Treasurer
. The Treasurer, if one is elected, shall be responsible for the
care and custody of all funds and other financial assets, taxes, corporate debt, order entry and
sales invoicing including credit memos, credit and collection of accounts receivable, cash
receipts, and the banking and insurance
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functions of the Corporation. He shall report directly to and perform such other duties as shall be
assigned by the Executive Vice President and Chief Financial Officer, if one is elected, or
otherwise the President.
5.9
Controller
. The Controller, if one is elected, shall be responsible for the
installation and supervision of all general accounting records of the Corporation, preparation of
financial statements and the annual and operating budgets and profit plans, continuous audit of
accounts and records of the Corporation, preparation and interpretation of statistical records and
reports, taking and costing of all physical inventories and administering the inventory levels,
supervision of accounts payable and cash disbursements function and hourly and salary payrolls. He
shall report directly to and perform such other functions as shall be assigned him by the Executive
Vice President and Chief Financial Officer, if one is elected, or otherwise the President.
ARTICLE 6
NOTICE
6.1
Methods of Giving Notice
. Whenever, under the provisions of applicable
statutes, the Certificate of Incorporation or these bylaws, notice is required to be given to any
director, member of any committee or stockholder, such notice may be given in writing and delivered
personally or mailed to such director, member or stockholder; provided that in the case of a
director or a member of any committee such notice may be given orally or by telephone. If mailed,
notice to a director, member of a committee or stockholder shall be deemed to be given when
deposited in the United States mail first class in a sealed envelope, with postage thereon prepaid,
addressed, in the case of a stockholder, to the stockholder at the stockholder’s address as it
appears on the records of the Corporation or, in the case of a director or member of a committee,
to such a persons at his business address. Notice to directors and stockholders may also be given
by facsimile telecommunication. Notice may also be given to any director, member of any committee
or stockholder by a form of electronic transmission as that term is defined in Section 232 of the
Delaware General Corporation Law.
6.2
Written Waiver
. Whenever any notice is required to be given under the
provisions of an applicable statute, the Certificate of Incorporation or these bylaws, a waiver
thereof in writing signed by the person or persons entitled to such notice, or a waiver by
electronic transmission by the person or persons entitled to such notice, in each case either
before or after the time stated therein, shall be deemed equivalent to the required notice.
ARTICLE 7
INDEMNIFICATION
7.1.
Right to Indemnification
. The Corporation shall indemnify and hold
harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter
be amended, any person (an “Article 7 Person”) who was or is made or is threatened to be made a
party or is otherwise involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he, or a person for whom he is the
legal representative, (i) is or was a director or officer of the Corporation or a subsidiary of the
Corporation, or (ii) is or was serving at the request of the Corporation or a subsidiary of the
Corporation as a director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust, enterprise or nonprofit entity, including service with respect to employee
benefit plans (a “proceeding”), in each case whether or not serving in such capacity at the time
any liability or expense is incurred for which indemnification, reimbursement, or advancement of
expenses can be provided under this Article 7, against all expenses (including attorneys’ fees),
judgments, fines, liability, loss suffered and amounts paid in settlement actually and reasonably
incurred by such Article 7 Person in connection
-9-
therewith. Such indemnification shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of his or her heirs, executors and
administrators. Notwithstanding the above, except as otherwise provided in Section 7.3, the
Corporation shall be required to indemnify an Article 7 Person in connection with a proceeding (or
part thereof) commenced by such Article 7 Person only if the commencement of such proceeding (or
part thereof) by the Article 7 Person was authorized by the Board of Directors of the Corporation,
provided
,
however
, that this prohibition shall not apply to indemnification or reimbursement
limited to and arising out of any counter-claim, cross-claim or third-party claim brought against
the Article 7 Person in any proceeding.
7.2.
Advances of Expenses
. The Corporation shall pay the expenses (including
attorneys’ fees) incurred by an Article 7 Person in defending any threatened, pending or completed
proceeding, and such advances shall be made within thirty (30) days after the receipt by the
Corporation of a statement or statements requesting such advances from time to time, whether in
advance of or after final disposition of any proceeding, provided, however, that, to the extent
required by law, any payment of expenses in advance of the final disposition of a proceeding shall
be made only upon receipt of an undertaking by the Article 7 Person to repay all amounts advanced
if it should be ultimately determined that the Article 7 Person is not entitled to be indemnified
under this Article 7 or otherwise. Notwithstanding the above, except as otherwise provided in
Section 7.3, the Corporation shall be required to advance expenses to an Article 7 Person in
connection with a proceeding (or part thereof) commenced by such Article 7 Person only if the
commencement of such proceeding (or part thereof) by the Article 7 Person was authorized by the
Board of Directors of the Corporation,
provided
,
however
, that this prohibition shall not apply to
advancement of expenses limited to and arising out of any counter-claim, cross-claim or third-party
claim brought against the Article 7 Person in any proceeding.
7.3.
Claims
. If a claim for indemnification or advancement of expenses under
this Article 7 is not paid in full within thirty days after a written claim therefor by the Article
7 Person has been received by the Corporation, the Article 7 Person may file suit to recover the
unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid
the expense of prosecuting such claim. In any such action the Corporation shall have the burden of
proving that the Article 7 Person is not entitled to the requested indemnification or advancement
of expenses under applicable law.
7.4.
Nonexclusivity of Rights
. Each right conferred on any Article 7 Person by
this Article 7 shall be a contract right, but shall not be exclusive of any other rights which such
Article 7 Person may have or hereafter acquire under any statute, provision of the Restated
Certificate of Incorporation of the Corporation, these by-laws, agreement, vote of stockholders or
disinterested directors or otherwise.
7.5.
Other Sources
. The Corporation’s obligation, if any, to indemnify or to
advance expenses to any Article 7 Person who was or is serving at its request as a director,
officer, employee or agent of another Corporation, partnership, joint venture, trust, enterprise or
nonprofit entity shall be reduced by any amount such Article 7 Person may collect as
indemnification or advancement of expenses from such other Corporation, partnership, joint venture,
trust, enterprise or non-profit enterprise.
7.6.
Amendment or Repeal
. Any repeal or modification of the foregoing provisions
of this Article 7 shall not adversely affect any right or protection hereunder of any person in
respect of any proceeding (regardless of when such proceeding is first threatened, commenced or
completed and even if such proceeding is not commenced or completed until after such repeal or
modification) arising out of, or related to, any act or omission occurring prior to the time of
such repeal or modification.
7.7.
Other Indemnification and Advancement of Expenses
. This Article 7 shall not
limit the right of the Corporation, to the extent and in the manner permitted by law, to indemnify
and to advance expenses to persons other than Article 7 Persons when and as authorized by
appropriate corporate action.
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ARTICLE 8
CAPITAL STOCK
8.1
Issuance of Stock
. The Board of Directors may authorize the issuance of the
capital stock of the Corporation at such times, for such consideration, and on such terms and
conditions as the Board may deem advisable, subject to any restrictions and provisions of law, the
Certificate of Incorporation, as amended and restated from time to time, of the Corporation or any
other provisions of these Bylaws.
8.2
Certificates for Shares
. The shares of the Corporation shall be represented
by certificates, provided that the Board of Directors may provide by resolution or resolutions that
some or all of any or all classes or series of its stock shall be uncertificated shares. Any such
resolution shall not apply to shares represented by a certificate until such certificate is
surrendered to the Corporation. Notwithstanding the adoption of such a resolution by the Board of
Directors, every holder of stock represented by certificates and upon request every holder of
uncertificated shares shall be entitled to have a certificate signed by, or in the name of the
Corporation by, the chairman or vice-chairman of the board of directors, or the president or
vice-president, and by the treasurer or an assistant treasurer, or the secretary or an assistant
secretary of the Corporation representing the number of shares registered in certificate form. Any
or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent
or registrar who has signed or whose facsimile signature has been placed upon a certificate shall
have ceased to be such officer, transfer agent or registrar before such certificate is issued, it
may be issued by the Corporation with the same effect as if he were such officer, transfer agent or
registrar at the date of issue. The certificates shall otherwise be in such form as may be
determined by the Board of Directors, shall be issued in numerical order, shall be entered in the
books of the Corporation as they are issued and shall exhibit the holder’s name and number of
shares.
8.3
Transfer of Shares
. The shares of the capital stock of the Corporation are
transferable only on the books of the Corporation upon surrender, in the case of certificated
shares, of the certificates therefor properly endorsed for transfer, or otherwise properly
assigned, and upon the presentation of such evidences of ownership of the shares and validity of
the assignment as the Corporation may require.
8.4
Registered Stockholders
. The Corporation shall be entitled to treat the
person in whose name any share of stock is registered as the owner thereof for purposes of
dividends and other distributions in the course of business or in the course of recapitalization,
consolidation, merger, reorganization, liquidation, or otherwise, and for the purpose of votes,
approvals and consents by stockholders, and for the purpose of notices to stockholders, and for all
other purposes whatsoever, and shall not be bound to recognize any equitable or other claim to or
interest in such share on the part of any other person, whether or not the Corporation shall have
notice thereof, save as expressly required by the laws of the State of Delaware.
8.5
Transfer Agent and Registrar
. The Board of Directors may appoint one or more
transfer agents and registrars, and may require certificates for shares to bear the signature of
such transfer agent(s) and registrar(s).
8.6
Replacement Certificates
. Upon the presentation to the Corporation of a
proper affidavit attesting the loss, destruction or mutilation of any certificate for shares of
stock of the Corporation, the Board of Directors may direct the issuance of a new certificate or
uncertificated shares in lieu of and to replace the certificate so alleged to be lost, destroyed or
mutilated. The Board of Directors may require as a condition precedent to the issuance of a new
certificate or uncertificated shares any or all of the following: (a) additional evidence of the
loss, destruction or mutilation claimed; (b) advertisement of the loss in such manner as the Board
of Directors may direct or approve; (c) a bond or agreement of indemnity, in such
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form and amount and with such surety (or without surety) as the Board of Directors may direct or
approve; and (d) the order or approval of a court.
ARTICLE 9
DIVIDENDS
9.1
Declaration
. Dividends with respect to the shares of the Corporation’s
capital stock, subject to the provisions of the Certificate of Incorporation, if any, may be
declared by the Board of Directors at any regular or special meeting, pursuant to applicable law.
Dividends may be paid in cash, in property or in shares of capital stock, subject to the provisions
of the Certificate of Incorporation.
9.2
Reserve
. Before payment of any dividend, there may be set aside out of any
funds of the Corporation available for dividends such sum or sums as the Board of Directors from
time to time, in its absolute discretion, deems proper as a reserve or reserves to meet
contingencies, or for equalizing dividends, or for repairing or maintaining any property of the
Corporation, or for such other purpose as the Board of Directors shall deem to be in the interest
of the Corporation, and the Board of Directors may modify or abolish any such reserve in the manner
in which it was created.
ARTICLE 10
BOOKS AND RECORDS
The proper officers and agents of the Corporation shall keep and maintain such books,
records and accounts of the Corporation’s business and affairs and such stock ledgers and lists of
stockholders as the Board of Directors shall deem advisable and as shall be required by the laws of
the State of Delaware or other states or jurisdictions empowered to impose such requirements.
ARTICLE 11
CONTRACTS, LOANS, CHECKS AND OTHER INSTRUMENTS
11.1
Contracts
. The Board of Directors may authorize any officer or officers and
agent or agents to enter into any contract or execute and deliver any instrument in the name of and
on behalf of the Corporation, and such authority may be general or confined to specific instances.
11.2
Loans
. No loans shall be contracted on behalf of the Corporation and no
evidence of indebtedness shall be issued in its name unless authorized by a resolution of the Board
of Directors. Such authority may be general or confined to specific instances.
11.3
Checks, Drafts, etc.
All checks, drafts or other orders for the payment of
money and notes or other evidences of indebtedness issued in the name of the Corporation shall be
signed by such officer or officers and agent or agents of the Corporation and in such manner as
shall from time to time be determined by resolution of the Board of Directors.
ARTICLE 12
FISCAL YEAR
The fiscal year of the Corporation shall begin on the first day of January and end on the
thirty-first day
-12-
of December.
ARTICLE 13
SEAL AND OTHER MATTERS
13.1
Seal
. The seal of the Corporation shall be circular in form and shall have
inscribed thereon the name of the Corporation and the state of incorporation and the words
“Corporate Seal”.
13.2
Severability
. Any determination that any provision of these Bylaws is for
any reason inapplicable, invalid, illegal or otherwise ineffective shall not affect or invalidate
any other provision of these Bylaws.
13.3
Evidence of Authority
. A certificate by the Secretary or an Assistant
Secretary as to any action taken by the stockholders, directors, any committee or any officer or
representative of the Corporation shall as to all persons who rely on the certificate in good faith
be conclusive evidence of such action.
ARTICLE 14
AMENDMENTS
Except as otherwise provided in the Certificate of Incorporation, these Bylaws may be
altered, amended or repealed and new Bylaws may be adopted at any regular meeting of the
stockholders or Board of Directors; or at any special meeting of the stockholders or Board of
Directors; provided that notice of such proposed making, alteration or repeal be included in the
notice of such special meeting. The Board of Directors may take such action by the vote of a
majority of those Directors present and voting at a meeting where a quorum is present. Subject to
applicable provisions of the Certificate of Incorporation, the stockholders may make new Bylaws, or
adopt, alter, amend, or repeal Bylaws adopted by either the stockholders or the Board of Directors
by the affirmative vote of the holders of not less than a majority of the voting power of all of
the then outstanding shares of capital stock of the Corporation then entitled to vote generally in
the election of directors.
-13-
10.2
[officer]
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (“Agreement”) is made and entered into as of
, 2008
by and between Tesoro Corporation, a Delaware corporation (the “Corporation”), and
(“Indemnitee”). This Agreement supersedes and replaces any and all previous Agreements between the
Corporation and Indemnitee covering the subject matter of this Agreement.
RECITALS
WHEREAS, highly competent persons have become more reluctant to serve publicly-held
corporations as directors and officers or in other capacities unless they are provided with
adequate protection through insurance or adequate indemnification against inordinate risks of
claims and actions against them arising out of their service to and activities on behalf of the
corporation;
WHEREAS, the Board of Directors of the Corporation (the “Board”) has determined that, in order
to attract and retain qualified individuals, the Corporation will attempt to maintain on an ongoing
basis, at its sole expense, liability insurance to protect persons serving the Corporation and its
subsidiaries from certain liabilities. Although the furnishing of such insurance has been a
customary and widespread practice among United States-based corporations and other business
enterprises, the Corporation believes that, given current market conditions and trends, such
insurance may be available to it in the future only at higher premiums and with more exclusions.
At the same time, directors, officers, and other persons in service to corporations or business
enterprises are being increasingly subjected to expensive and time-consuming litigation relating
to, among other things, matters that traditionally would have been brought only against the
Corporation or business enterprise itself. Article 7 of the By-Laws of the Corporation requires
indemnification of the officers and directors of the Corporation. Indemnitee may also be entitled
to indemnification pursuant to the General Corporation Law of the State of Delaware (the “DGCL”).
The By-Laws and the DGCL expressly provide that the indemnification provisions set forth therein
are not exclusive, and thereby contemplate that contracts may be entered into between the
Corporation and members of the board of directors, officers and other persons with respect to
indemnification;
WHEREAS, the uncertainties relating to such insurance and to indemnification have increased
the difficulty of attracting and retaining such persons;
WHEREAS, the Board has determined that the increased difficulty in attracting and retaining
such persons is detrimental to the best interests of the Corporation and its stockholders and that
the Corporation should act to assure such persons that there will be increased certainty of such
protection in the future;
WHEREAS, it is reasonable, prudent and necessary for the Corporation contractually to obligate
itself to indemnify, and to advance expenses on behalf of, such persons to the fullest
extent
permitted by applicable law so that they will serve or continue to serve the Corporation free from
undue concern that they will not be so indemnified;
WHEREAS, this Agreement is a supplement to and in furtherance of Article 7 of the By-Laws of
the Corporation and any rights granted under the Restated Certificate of Incorporation of the
Corporation and any resolutions adopted pursuant thereto, and shall not be deemed a substitute
therefor, nor to diminish or abrogate any rights of Indemnitee thereunder;
WHEREAS, Indemnitee is willing to serve as an officer of the Corporation, and the Corporation
desires Indemnitee to serve in such capacity and is willing to indemnify Indemnitee as described
hereunder; and
NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the
Corporation and Indemnitee do hereby covenant and agree as follows:
Section 1.
Services to the Corporation.
Indemnitee agrees to serve as an officer of
the Corporation and, at the request of the Corporation, as a director, officer, employee, or agent
of another corporation, partnership, joint venture, trust employee benefit plan or other
enterprise. Indemnitee may at any time and for any reason resign or be removed from such position
(subject to any other contractual obligation or any obligation imposed by operation of law), in
which event the Corporation shall have no obligation under this Agreement to continue Indemnitee in
such position. This Agreement shall not be deemed an employment contract between the Corporation
(or any of its subsidiaries or any Enterprise) and Indemnitee. Indemnitee specifically
acknowledges that Indemnitee’s employment with the Corporation (or any of its subsidiaries or any
Enterprise), if any, is at will, and the Indemnitee may be discharged at any time for any reason,
with or without cause, except as may be otherwise provided in any written employment contract
between Indemnitee and the Corporation (or any of its subsidiaries or any Enterprise), other
applicable formal severance policies duly adopted by the Board, or, with respect to service as an
officer of the Corporation, by the Corporation’s Restated Certificate of Incorporation, the
Corporation’s By-laws, and the DGCL. The foregoing notwithstanding, this Agreement shall continue
in force after Indemnitee has ceased to serve as an officer of the Corporation.
Section 2.
Definitions.
As used in this Agreement:
(a) References to “agent” shall mean any person who is or was a director, officer, or employee
of the Corporation or a Subsidiary of the Corporation or other person authorized by the Corporation
to act for the Corporation, to include such person serving in such capacity as a director, officer,
employee, fiduciary or other official of another corporation, partnership, limited liability
company, joint venture, trust or other Enterprise at the request of, for the convenience of, or to
represent the interests of the Corporation or a Subsidiary of the Corporation.
(b) A “Change in Control” shall be deemed to occur upon the earliest to occur after the date
of this Agreement of any of the following events:
-2-
i. Acquisition of Stock by Third Party. Any Person (as defined below) is or becomes the
Beneficial Owner (as defined below), directly or indirectly, of securities of the Corporation
representing thirty-five percent (35%) or more of the combined voting power of the Corporation’s
then outstanding securities, without prior approval of at least two-thirds members of the Board of
Directors in office immediately prior to such person attained such percentage interest;
ii. Change in Board of Directors. During any period of two (2) consecutive years (not
including any period prior to the execution of this Agreement), individuals who at the beginning of
such period constitute the Board, and any new director (other than a director designated by a
person who has entered into an agreement with the Corporation to effect a transaction described in
Sections 2(b)(i), 2(b)(iii) or 2(b)(iv)) whose election by the Board 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 either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to constitute at least a
majority of the members of the Board;
iii. Corporate Transactions. The effective date of a merger or consolidation of the
Corporation with any other entity, other than a merger or consolidation which would result in the
voting securities of the Corporation outstanding immediately prior to such merger or consolidation
continuing to represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 51% of the combined voting power of the voting
securities of the surviving entity outstanding immediately after such merger or consolidation and
with the power to elect at least a majority of the board of directors or other governing body of
such surviving entity;
iv. Liquidation. The approval by the stockholders of the Corporation of a complete
liquidation of the Corporation or an agreement for the sale or disposition by the Corporation of
all or substantially all of the Corporation’s assets; and
v. Other Events. There occurs any other event of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a response to any similar
item on any similar schedule or form) promulgated under the Exchange Act (as defined below),
whether or not the Corporation is then subject to such reporting requirement.
For purposes of this Section 2(b), the following terms shall have the following meanings:
(A) “Exchange Act” shall mean the Securities Exchange Act of
1934, as amended from time to time.
(B) “Person” shall have the meaning as set forth in Sections
13(d) and 14(d) of the Exchange Act; provided, however, that Person
shall exclude (i) the Corporation, (ii) any trustee or other
fiduciary holding securities under an employee benefit plan of the
Corporation, and (iii) any corporation owned, directly or
-3-
indirectly, by the stockholders of the Corporation in substantially
the same proportions as their ownership of stock of the
Corporation.
(C) “Beneficial Owner” shall have the meaning given to such
term in Rule 13d-3 under the Exchange Act; provided, however, that
Beneficial Owner shall exclude any Person otherwise becoming a
Beneficial Owner by reason of the stockholders of the Corporation
approving a merger of the Corporation with another entity.
(c) “Corporate Status” describes the status of a person who is or was a director, officer,
employee or agent of the Corporation or of any other corporation, limited liability company,
partnership or joint venture, trust, employee benefit plan or other enterprise which such person is
or was serving at the request of the Corporation.
(d) “Disinterested Director” means a director of the Corporation who is not and was not a
party to the Proceeding in respect of which indemnification is sought by Indemnitee.
(e) “Enterprise” shall mean the Corporation and any other corporation, limited liability
company, partnership, joint venture, trust, employee benefit plan or other enterprise of which
Indemnitee is or was serving at the request of the Corporation as a director, officer, employee,
agent or fiduciary.
(f) “Expenses” shall include all 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, any federal, state, local or
foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments
under this Agreement, ERISA excise taxes and penalties, and all other disbursements or expenses of
the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or
defend, investigating, being or preparing to be a witness in, or otherwise participating in, a
Proceeding. Expenses also shall include (i) Expenses incurred in connection with any appeal
resulting from any Proceeding, including without limitation the premium, security for, and other
costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent, and (ii)
for purposes of Section 14(d) only, Expenses incurred by Indemnitee in connection with the
interpretation, enforcement or defense of Indemnitee’s rights under this Agreement, by litigation
or otherwise. The parties agree that for the purposes of any advancement of Expenses for which
Indemnitee has made written demand to the Corporation in accordance with this Agreement, all
Expenses included in such demand that are certified by affidavit of Indemnitee’s counsel as being
reasonable shall be presumed conclusively to be reasonable. Expenses, however, shall not include
amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.
(g) “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in
matters of corporation law and neither presently is, nor in the past five years
-4-
has been, retained
to represent: (i) the Corporation or Indemnitee in any matter material to either such party (other
than with respect to matters concerning the Indemnitee under this Agreement,
or of other indemnitees under similar indemnification agreements), or (ii) any other party to
the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the
foregoing, the term “Independent Counsel” shall not include any person who, under the applicable
standards of professional conduct then prevailing, would have a conflict of interest in
representing either the Corporation or Indemnitee in an action to determine Indemnitee’s rights
under this Agreement. The Corporation agrees to pay the reasonable fees and expenses of the
Independent Counsel referred to above and to fully indemnify such counsel against any and all
Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its
engagement pursuant hereto.
(h) The term “Proceeding” shall include any threatened, pending or completed action, suit,
arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing
or any other actual, threatened or completed proceeding, whether brought in the right of the
Corporation or otherwise and whether of a civil, criminal, administrative legislative, or
investigative (formal or informal) nature, including any appeal therefrom, in which Indemnitee was,
is or will be involved as a party, potential party, non-party 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 action on his part while acting as director or officer of the Corporation,
or by reason of the fact that he is or was serving at the request of the Corporation as a director,
officer, employee or agent of another corporation, limited liability company, partnership, joint
venture, trust or other enterprise, in each case whether or not serving in such capacity at the
time any liability or expense is incurred for which indemnification, reimbursement, or advancement
of expenses can be provided under this Agreement. If the Indemnitee believes in good faith that a
given situation may lead to or culminate in the institution of a Proceeding, this shall be
considered a Proceeding under this paragraph.
(i) Reference 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, 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 best interests of the participants and beneficiaries of an employee benefit plan shall be
deemed to have acted in manner “not opposed to the best interests of the Corporation” as referred
to in this Agreement.
Section 3.
Indemnity in Third-Party Proceedings.
The Corporation shall indemnify
Indemnitee in accordance with the provisions of this Section 3 if Indemnitee is, or is threatened
to be made, a party to or a participant in any Proceeding, other than a Proceeding by or in the
right of the Corporation to procure a judgment in its favor. Pursuant to this Section 3,
Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all
Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by
Indemnitee or on his behalf in connection with such Proceeding or any claim, issue or matter
therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be in or not
-5-
opposed to the best interests of the Corporation and, in the case of a criminal Proceeding had no
reasonable cause to believe that his conduct was unlawful. The parties hereto intend that this
Agreement shall provide to the fullest extent permitted by law for indemnification in excess of
that expressly permitted by statute, including, without limitation, any indemnification
provided by the Corporation’s Restated Certificate of Incorporation, its Bylaws, vote of its
stockholders or disinterested directors or applicable law.
Section 4.
Indemnity in Proceedings by or in the Right of the Corporation.
The
Corporation shall indemnify Indemnitee in accordance with the provisions of this Section 4 if
Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding by or in
the right of the Corporation to procure a judgment in its favor. Pursuant to this Section 4,
Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all
Expenses actually and reasonably incurred by him or on his behalf in connection with such
Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the Corporation. No
indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue or
matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the
Corporation, unless and only to the extent that the Delaware Court of Chancery or any court in
which the Proceeding was brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably
entitled to indemnification.
Section 5.
Indemnification for Expenses of a Party Who is Wholly or Partly Successful.
Notwithstanding any other provisions of this Agreement, to the fullest extent permitted by
applicable law and to the extent that Indemnitee is a party to (or a participant in) and is
successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or
matter therein, in whole or in part, the Corporation shall indemnify Indemnitee against all
Expenses actually and reasonably incurred by him in connection therewith. If Indemnitee is not
wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or
more but less than all claims, issues or matters in such Proceeding, the Corporation shall
indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf
in connection with or related to each successfully resolved claim, issue or matter to the fullest
extent permitted by law. For purposes of this Section and without limitation, the termination of
any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be
deemed to be a successful result as to such claim, issue or matter.
Section 6.
Indemnification For Expenses of a Witness.
Notwithstanding any other
provision of this Agreement, to the fullest extent permitted by applicable law and to the extent
that Indemnitee is, by reason of his Corporate Status, a witness or otherwise asked to participate
in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses
actually and reasonably incurred by him or on his behalf in connection therewith.
Section 7.
Partial Indemnification.
If Indemnitee is entitled under any provision of
this Agreement to indemnification by the Corporation for some or a portion of Expenses, but not,
however, for the total amount thereof, the Corporation shall nevertheless indemnify Indemnitee for
the portion thereof to which Indemnitee is entitled.
-6-
Section 8.
Additional Indemnification.
(a) Notwithstanding any limitation in Sections 3, 4, or 5, the Corporation shall indemnify
Indemnitee to the fullest extent permitted by applicable law if Indemnitee is a party to or
threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the
Corporation to procure a judgment in its favor) against all Expenses, judgments, fines and amounts
paid in settlement actually and reasonably incurred by Indemnitee in connection with the
Proceeding.
(b) For purposes of Section 8(a), the meaning of the phrase “to the fullest extent permitted
by applicable law” shall include, but not be limited to:
i. to the fullest extent permitted by the provision of the DGCL that authorizes or
contemplates additional indemnification by agreement, or the corresponding provision of any
amendment to or replacement of the DGCL, and
ii. 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.
Section 9.
Exclusions.
Notwithstanding any provision in this Agreement, the
Corporation shall not be obligated under this Agreement to make any indemnity in connection with
any claim made against Indemnitee:
(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance
policy or other indemnity provision, except with respect to any excess beyond the amount paid under
any insurance policy or other indemnity provision; or
(b) for (i) an accounting of profits made from the purchase and sale (or sale and purchase) by
Indemnitee of securities of the Corporation within the meaning of Section 16(b) of the Exchange Act
(as defined in Section 2(b) hereof) or similar provisions of state statutory law or common law, or
(ii) any reimbursement of the Corporation by the Indemnitee of any bonus or other incentive-based
or equity-based compensation or of any profits realized by the Indemnitee from the sale of
securities of the Corporation, as required in each case under the Exchange Act (including any such
reimbursements that arise from an accounting restatement of the Corporation pursuant to Section 304
of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), or the payment to the Corporation of
profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306
of the Sarbanes-Oxley Act); or
(c) except as provided in Section 14(d) of this Agreement, in connection with any Proceeding
(or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of
any Proceeding) initiated by Indemnitee against the Corporation or its directors, officers,
employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any
Proceeding) prior to its initiation or (ii) the Corporation provides the indemnification, in its
sole discretion, pursuant to the powers vested in the Corporation under
-7-
applicable law,
provided
,
however
, that this prohibition shall not apply to any counter-claim, cross-claim or third-party
claim brought against the Indemnitee in any Proceeding.
Section 10.
Advances of Expenses.
In accordance with the pre-existing requirement of
Section 7.2 of Article 7 of the By-Laws of the Corporation, and notwithstanding any provision of
this Agreement to the contrary, the Corporation shall advance, to the extent not prohibited by law,
the Expenses incurred by Indemnitee in connection with any Proceeding, and such advancement shall
be made within thirty (30) days after the receipt by the Corporation of a statement or statements
requesting such advances from time to time, whether prior to or after final disposition of any
Proceeding. Advances shall be unsecured and interest free. Advances shall be made without regard
to Indemnitee’s ability to repay the Expenses and without regard to Indemnitee’s ultimate
entitlement to indemnification under the other provisions of this Agreement. Advances shall
include any and all reasonable Expenses incurred pursuing an action to enforce this right of
advancement, including Expenses incurred preparing and forwarding statements to the Corporation to
support the advances claimed. The Indemnitee shall qualify for advances upon the execution and
delivery to the Corporation of this Agreement, which shall constitute an undertaking providing that
the Indemnitee undertakes to repay the amounts advanced (without interest) to the extent that it is
ultimately determined that Indemnitee is not entitled to be indemnified by the Corporation. No
other form of undertaking shall be required other than the execution of this Agreement. This
Section 10 shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant
to Section 9.
Section 11.
Procedure for Notification and Defense of Claim.
(a) Indemnitee shall notify the Corporation in writing of any matter with respect to which
Indemnitee intends to seek indemnification or advancement of Expenses hereunder as soon as
reasonably practicable following the receipt by Indemnitee of written notice thereof. The written
notification to the Corporation shall include a description of the nature of the Proceeding and the
facts underlying the Proceeding. To obtain indemnification under this Agreement, Indemnitee shall
submit to the Corporation a written request, including therein or therewith such documentation and
information as is reasonably available to Indemnitee and is reasonably necessary to determine
whether and to what extent Indemnitee is entitled to indemnification following the final
disposition of such action, suit or proceeding. The omission by Indemnitee to notify the
Corporation hereunder will not relieve the Corporation from any liability which it may have to
Indemnitee hereunder or otherwise than under this Agreement, and any delay in so notifying the
Corporation shall not constitute a waiver by Indemnitee of any rights under this Agreement. The
Secretary of the Corporation shall, promptly upon receipt of such a request for indemnification,
advise the Board in writing that Indemnitee has requested indemnification.
(b) The Corporation will be entitled to participate in the Proceeding at its own expense.
Section 12.
Procedure Upon Application for Indemnification.
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(a) Upon written request by Indemnitee for indemnification pursuant to the Section 11(a), a
determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto
shall be made in the specific case: (i) if a Change in Control shall have occurred, by Independent
Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee; or
(ii) if a Change in Control shall not have occurred, (A) by a majority
vote of the Disinterested Directors, even though less than a quorum of the Board, (B) by a
committee of Disinterested Directors designated by a majority vote of the Disinterested Directors,
even though less than a quorum of the Board, (C) if there are no such Disinterested Directors or,
if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the
Board, a copy of which shall be delivered to Indemnitee or (D) if so directed by the Board, by the
stockholders of the Corporation; and, if it is so determined that Indemnitee is entitled to
indemnification, payment to Indemnitee shall be made within ten (10) days after such determination.
Indemnitee shall cooperate with the person, persons or entity making such determination with
respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons
or entity upon reasonable advance request any documentation or information which is not privileged
or otherwise protected from disclosure and which is reasonably available to Indemnitee and
reasonably necessary to such determination. Any costs or Expenses (including attorneys’ fees and
disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making
such determination shall be borne by the Corporation (irrespective of the determination as to
Indemnitee’s entitlement to indemnification) and the Corporation hereby indemnifies and agrees to
hold Indemnitee harmless therefrom.
(b) In the event the determination of entitlement to indemnification is to be made by
Independent Counsel pursuant to Section 12(a) hereof, the Independent Counsel shall be selected as
provided in this Section 12(b). If a Change in Control shall not have occurred, the Independent
Counsel shall be selected by the Board, and the Corporation shall give written notice to Indemnitee
advising him of the identity of the Independent Counsel so selected. If a Change in Control shall
have occurred, the Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall
request that such selection be made by the Board, in which event the preceding sentence shall
apply), and Indemnitee shall give written notice to the Corporation advising it of the identity of
the Independent Counsel so selected. In either event, Indemnitee or the Corporation, as the case
may be, may, within ten (10) days after such written notice of selection shall have been given,
deliver to the Corporation or to Indemnitee, as the case may be, a written objection to such
selection;
provided
,
however
, that such objection may be asserted only on the
ground that the Independent Counsel so selected does not meet the requirements of “Independent
Counsel” as defined in Section 2 of this Agreement, and the objection shall set forth with
particularity the factual basis of such assertion. Absent a proper and timely objection, the
person so selected shall act as Independent Counsel. If such written objection is so made and
substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and
until such objection is withdrawn or a court has determined that such objection is without merit.
If, within twenty (20) days after the later of submission by Indemnitee of a written request for
indemnification pursuant to Section 11(a) hereof and the final disposition of the Proceeding, no
Independent Counsel shall have been selected and not objected to, either the Corporation or
Indemnitee may petition a court of competent jurisdiction for resolution of any objection which
shall have been made by the Corporation or Indemnitee to the other’s selection of Independent
Counsel and/or for the appointment as Independent Counsel of a person selected by the Court or
-9-
by
such other person as the Court shall designate, and the person with respect to whom all objections
are so resolved or the person so appointed shall act as Independent Counsel under Section 12(a)
hereof. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section
14(a) of this Agreement, Independent Counsel shall be discharged and relieved of any further
responsibility in such capacity (subject to the applicable standards of professional conduct then
prevailing).
Section 13.
Presumptions and Effect of Certain Proceedings.
(a) In making a determination with respect to entitlement to indemnification hereunder, the
person or persons or entity making such determination shall, to the fullest extent not prohibited
by law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee
has submitted a request for indemnification in accordance with Section 11(a) of this Agreement, and
the Corporation shall, to the fullest extent not prohibited by law, have the burden of proof to
overcome that presumption in connection with the making by any person, persons or entity of any
determination contrary to that presumption. Neither the failure of the Corporation (including by
its directors or independent legal counsel) to have made a determination prior to the commencement
of any action pursuant to this Agreement that indemnification is proper in the circumstances
because Indemnitee has met the applicable standard of conduct, nor an actual determination by the
Corporation (including by its directors or independent legal counsel) 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.
(b) Subject to Section 14(e), if the person, persons or entity empowered or selected under
Section 12 of this Agreement to determine whether Indemnitee is entitled to indemnification shall
not have made a determination within sixty (60) days after receipt by the Corporation of the
request therefor, the requisite determination of entitlement to indemnification shall, to the
fullest extent not prohibited by law, be deemed to have been made and Indemnitee shall be entitled
to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission
of a material fact necessary to make Indemnitee’s statement not materially misleading, in
connection with the request for indemnification, or (ii) a prohibition of such indemnification
under applicable law; provided, however, that such 60-day period may be extended for a reasonable
time, not to exceed an additional thirty (30) days, if the person, persons or entity making the
determination with respect to entitlement to indemnification in good faith requires such additional
time for the obtaining or evaluating of documentation and/or information relating thereto; and
provided, further, that the foregoing provisions of this Section 13(b) shall not apply (i) if the
determination of entitlement to indemnification is to be made by the stockholders pursuant to
Section 12(a) of this Agreement and if (A) within fifteen (15) days after receipt by the
Corporation of the request for such determination the Board has resolved to submit such
determination to the stockholders for their consideration at an annual meeting thereof to be held
within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a
special meeting of stockholders is called within fifteen (15) days after such receipt for the
purpose of making such determination, such meeting is held for such purpose within sixty (60) days
after having been so called and such determination is made thereat, or (ii)
-10-
if the determination of
entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) of
this Agreement.
(c) The termination of any Proceeding or of any claim, issue or 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 Indemnitee to indemnification or create a presumption 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 or, with respect to any criminal Proceeding, that Indemnitee had
reasonable cause to believe that his conduct was unlawful.
(d)
Reliance as Safe Harbor
. For purposes of any determination of good faith,
Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the
records or books of account of the Enterprise, including financial statements, or on information
supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the
advice of legal counsel for the Enterprise or on information or records given or reports made to
the Enterprise by an independent certified public accountant or by an appraiser or other expert
selected with the reasonable care by the Enterprise. The provisions of this Section 13(d) shall
not be deemed to be exclusive or to limit in any way the other circumstances in which the
Indemnitee may be deemed to have met the applicable standard of conduct set forth in this
Agreement.
(e)
Actions of Others
. The knowledge and/or actions, or failure to act, of any
director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for
purposes of determining the right to indemnification under this Agreement.
Section 14.
Remedies of Indemnitee.
(a) Subject to Section 14(e), in the event that (i) a determination is made pursuant to
Section 12 of this Agreement that Indemnitee is not entitled to indemnification under this
Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 10 of this
Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant
to Section 12(a) of this Agreement within ninety (90) days after receipt by the Corporation of the
request for indemnification, (iv) payment of indemnification is not made pursuant to Section 5, 6
or 7 or the last sentence of Section 12(a) of this Agreement within ten (10) days after receipt by
the Corporation of a written request therefor, (v) payment of indemnification pursuant to Section
3, 4 or 8 of this Agreement is not made within ten (10) days after a determination has been made
that Indemnitee is entitled to indemnification, or (vi) in the event that the Corporation or any
other person takes or threatens to take any action to declare this Agreement void or unenforceable,
or institutes any litigation or other action or Proceeding designed to deny, or to recover from,
the Indemnitee the benefits provided or intended to be provided to the Indemnitee hereunder,
Indemnitee shall be entitled to an adjudication by a court of his entitlement to such
indemnification or advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an
award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration
Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking
an adjudication or an award in arbitration
-11-
within 180 days following the date on which Indemnitee
first has the right to commence such proceeding pursuant to this Section 14(a);
provided
,
however
, that the foregoing clause shall not apply in respect of a proceeding brought by
Indemnitee to enforce his rights under Section 5 of this Agreement. The Corporation shall not
oppose Indemnitee’s right to seek any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made pursuant to Section 12(a) of this
Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or
arbitration commenced pursuant to this Section 14 shall be conducted in all
respects as a
de
novo
trial, or arbitration, on the merits and Indemnitee
shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or
arbitration commenced pursuant to this Section 14 the Corporation shall have the burden of proving
Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.
(c) If a determination shall have been made pursuant to Section 12(a) of this Agreement that
Indemnitee is entitled to indemnification, the Corporation shall be bound by such determination in
any judicial proceeding or arbitration commenced pursuant to this Section 14, absent (i) a
misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make
Indemnitee’s statement not materially misleading, in connection with the request for
indemnification, or (ii) a prohibition of such indemnification under applicable law.
(d) The Corporation shall, to the fullest extent not prohibited by law, be precluded from
asserting in any judicial proceeding or arbitration commenced pursuant to this Section 14 that the
procedures and presumptions of this Agreement are not valid, binding and enforceable and shall
stipulate in any such court or before any such arbitrator that the Corporation is bound by all the
provisions of this Agreement. It is the intent of the Corporation that, to the fullest extent
permitted by law, the Indemnitee not be required to incur legal fees or other Expenses associated
with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement by
litigation or otherwise because the cost and expense thereof would substantially detract from the
benefits intended to be extended to the Indemnitee hereunder. The Corporation shall, to the
fullest extent permitted by law, indemnify Indemnitee against any and all Expenses and, if
requested by Indemnitee, shall (within ten (10) days after receipt by the Corporation of a written
request therefor) advance, to the extent not prohibited by law, such Expenses to Indemnitee, which
are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification
or advance of Expenses from the Corporation under this Agreement or under any directors’ and
officers’ liability insurance policies maintained by the Corporation if Indemnitee is wholly
successful on the underlying claims; if Indemnitee is not wholly successful on the underlying
claims, then such indemnification and advancement shall be only to the extent Indemnitee is
successful on such underlying claims or otherwise as permitted by law, whichever is greater.
(e) Notwithstanding anything in this Agreement to the contrary, no determination as to
entitlement of Indemnitee to indemnification under this Agreement shall be required to be made
prior to the final disposition of the Proceeding.
-12-
Section 15.
Non-exclusivity; Survival of Rights; Insurance; Subrogation.
(a) 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 Indemnitee may at any time be
entitled under applicable law, the Corporation’s Restated Certificate of Incorporation, the
Corporation’s By-laws, any agreement, a vote of stockholders or a resolution of directors, or
otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall
limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or
omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal.
To the extent that a change in Delaware law, whether by statute or judicial decision, permits
greater indemnification or advancement of Expenses than would be
afforded currently under the Corporation’s By-Laws and this Agreement, it is the intent of the
parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by
such change. No right or remedy herein conferred is intended to be exclusive of any other right or
remedy, and every other right and remedy shall be cumulative and in addition to every other right
and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other right or remedy.
(b) To the extent that the Corporation maintains an insurance policy or policies providing
liability insurance for directors, officers, employees, or agents 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, Indemnitee shall be covered by such
policy or policies in accordance with its or their terms to the maximum extent of the coverage
available for any such director, officer, employee or agent under such policy or policies. If, at
the time of the receipt of a notice of a claim pursuant to the terms hereof, the Corporation has
director and officer liability insurance in effect, the Corporation shall give prompt notice of
such claim or of the commencement of a proceeding, as the case may be, to the insurers in
accordance with the procedures set forth in the respective policies. The Corporation shall
thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the
Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such
policies.
(c) In the event of any 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
papers required and take all action necessary to secure such rights, including execution of such
documents as are necessary to enable the Corporation to bring suit to enforce such rights.
(d) The Corporation shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable (or for which advancement is provided hereunder) hereunder if and to the
extent that Indemnitee has otherwise actually received such payment under any insurance policy,
contract, agreement or otherwise.
(e) The Corporation’s obligation to indemnify or advance Expenses hereunder to Indemnitee who
is or was serving at the request of the Corporation as a director, officer,
-13-
employee or agent of
any other corporation, limited liability company, partnership, joint venture, trust, employee
benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received as
indemnification or advancement of Expenses from such other corporation, limited liability company,
partnership, joint venture, trust, employee benefit plan or other enterprise.
Section 16.
Duration of Agreement.
This Agreement shall continue until and terminate
upon the later of: (a) ten (10) years after the date that Indemnitee shall have ceased to serve as
an 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 employee benefit plan
or other enterprise or (b) one (1) year after the final termination of any Proceeding then pending
in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses
hereunder and of any proceeding commenced by Indemnitee pursuant to Section 14 of this
Agreement relating thereto. This Agreement shall be binding upon the Corporation and its
successors and assigns and shall inure to the benefit of Indemnitee and his heirs, executors and
administrators.
Section 17.
Severability.
If any provision or provisions of this Agreement shall be
held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality
and enforceability of the remaining provisions of this Agreement (including without limitation,
each portion of any Section of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any
way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by
law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform
to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to
the fullest extent possible, the provisions of this Agreement (including, without limitation, each
portion of any Section of this Agreement containing any such provision held to be invalid, illegal
or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to
give effect to the intent manifested thereby.
Section 18.
Enforcement.
(a) The Corporation expressly confirms and agrees that it has entered into this Agreement and
assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as an officer
of the Corporation, and the Corporation acknowledges that Indemnitee is relying upon this Agreement
in serving as a director or officer of the Corporation.
(b) This Agreement constitutes the entire agreement between the parties hereto with respect to
the subject matter hereof and supersedes all prior agreements and understandings, oral, written and
implied, between the parties hereto with respect to the subject matter hereof; provided, however,
that this Agreement is a supplement to and in furtherance of the Restated Certificate of
Incorporation of the Corporation, the By-laws of the Corporation and applicable law, and shall not
be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.
-14-
Section 19.
Modification and Waiver.
No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by the parties thereto. No waiver of any of
the provisions of this Agreement shall be deemed or shall constitute a waiver of any other
provisions of this Agreement nor shall any waiver constitute a continuing waiver.
Section 20.
Notice by Indemnitee.
Indemnitee agrees promptly to notify the
Corporation in writing upon being served with any summons, citation, subpoena, complaint,
indictment, information or other document relating to any Proceeding or matter which may be subject
to indemnification or advancement of Expenses covered hereunder. The failure of Indemnitee to so
notify the Corporation shall not relieve the Corporation of any obligation which it may have to the
Indemnitee under this Agreement or otherwise.
Section 21.
Notices.
All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered
by hand and receipted for by the party to whom said notice or other communication shall have
been directed, (b) mailed by certified or registered mail with postage prepaid, on the third
business day after the date on which it is so mailed, (c) mailed by reputable overnight courier and
receipted for by the party to whom said notice or other communication shall have been directed or
(d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has
been received:
(a) If to Indemnitee, at the address indicated on the signature page of this Agreement, or
such other address as Indemnitee shall provide to the Corporation.
(b) If to the Corporation to
Tesoro Corporation
Attention: Corporate Secretary
300 Concord Plaza Drive
San Antonio, Texas 78216-6999
or to any other address as may have been furnished to Indemnitee by the Corporation.
Section 22.
Contribution.
To the fullest extent permissible under applicable law, if
the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason
whatsoever, the Corporation, in lieu of indemnifying Indemnitee, shall contribute to the amount
incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to
be paid in settlement and/or for Expenses, in connection with any claim relating to an
indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in
light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits
received by the Corporation and Indemnitee as a result of the event(s) and/or transaction(s) giving
cause to such Proceeding; and/or (ii) the relative fault of the Corporation (and its directors,
officers, employees and agents) and Indemnitee in connection with such event(s) and/or
transaction(s).
-15-
Section 23.
Applicable Law and Consent to Jurisdiction.
This Agreement and the legal
relations among the parties shall be governed by, and construed and enforced in accordance with,
the laws of the State of Delaware, without regard to its conflict of laws rules. Except with
respect to any arbitration commenced by Indemnitee pursuant to Section 14(a) of this Agreement, the
Corporation and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or
proceeding arising out of or in connection with this Agreement shall be brought only in the
Chancery Court of the State of Delaware (the “Delaware Court”), and not in any other state or
federal court in the United States of America or any court in any other country, (ii) consent to
submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding
arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not
otherwise subject to service of process in the State of Delaware, irrevocably
as its agent in the State of Delaware as such party’s agent
for acceptance of legal process in connection with any such action or proceeding against such party
with the same legal force and validity as if served upon such party personally within the State of
Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the
Delaware Court, and (v) waive, and agree not to plead or to
make, any claim that any such action or proceeding brought in the Delaware Court has been
brought in an improper or inconvenient forum.
Section 24.
Identical Counterparts.
This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original but all of which
together shall constitute one and the same Agreement. Only one such counterpart signed by the
party against whom enforceability is sought needs to be produced to evidence the existence of this
Agreement.
Section 25.
Miscellaneous.
Use of the masculine pronoun shall be deemed to include
usage of the feminine pronoun where appropriate. The headings of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement or to affect the
construction thereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year
first above written.
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TESORO CORPORATION
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INDEMNITEE
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Name:
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Name:
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Title:
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Address:
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10.3
[director]
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (“Agreement”) is made and entered into as of
, 2008
by and between Tesoro Corporation, a Delaware corporation (the “Corporation”), and
(“Indemnitee”). This Agreement supersedes and replaces any and all previous Agreements between the
Corporation and Indemnitee covering the subject matter of this Agreement.
RECITALS
WHEREAS, highly competent persons have become more reluctant to serve publicly-held
corporations as directors and officers or in other capacities unless they are provided with
adequate protection through insurance or adequate indemnification against inordinate risks of
claims and actions against them arising out of their service to and activities on behalf of the
corporation;
WHEREAS, the Board of Directors of the Corporation (the “Board”) has determined that, in order
to attract and retain qualified individuals, the Corporation will attempt to maintain on an ongoing
basis, at its sole expense, liability insurance to protect persons serving the Corporation and its
subsidiaries from certain liabilities. Although the furnishing of such insurance has been a
customary and widespread practice among United States-based corporations and other business
enterprises, the Corporation believes that, given current market conditions and trends, such
insurance may be available to it in the future only at higher premiums and with more exclusions.
At the same time, directors, officers, and other persons in service to corporations or business
enterprises are being increasingly subjected to expensive and time-consuming litigation relating
to, among other things, matters that traditionally would have been brought only against the
Corporation or business enterprise itself. Article 7 of the By-Laws of the Corporation requires
indemnification of the officers and directors of the Corporation. Indemnitee may also be entitled
to indemnification pursuant to the General Corporation Law of the State of Delaware (the “DGCL”).
The By-Laws and the DGCL expressly provide that the indemnification provisions set forth therein
are not exclusive, and thereby contemplate that contracts may be entered into between the
Corporation and members of the board of directors, officers and other persons with respect to
indemnification;
WHEREAS, the uncertainties relating to such insurance and to indemnification have increased
the difficulty of attracting and retaining such persons;
WHEREAS, the Board has determined that the increased difficulty in attracting and retaining
such persons is detrimental to the best interests of the Corporation and its stockholders and that
the Corporation should act to assure such persons that there will be increased certainty of such
protection in the future;
WHEREAS, it is reasonable, prudent and necessary for the Corporation contractually to obligate
itself to indemnify, and to advance expenses on behalf of, such persons to the fullest
extent permitted by applicable law so that they will serve or continue to serve the
Corporation free from undue concern that they will not be so indemnified;
WHEREAS, this Agreement is a supplement to and in furtherance of Article 7 of the By-Laws of
the Corporation and any rights granted under the Restated Certificate of Incorporation of the
Corporation and any resolutions adopted pursuant thereto, and shall not be deemed a substitute
therefor, nor to diminish or abrogate any rights of Indemnitee thereunder;
WHEREAS, Indemnitee is willing to serve as a director of the Corporation, and the Corporation
desires Indemnitee to serve in such capacity and is willing to indemnify Indemnitee as described
hereunder; and
NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the
Corporation and Indemnitee do hereby covenant and agree as follows:
Section 1.
Services to the Corporation.
Indemnitee agrees to serve as a director of
the Corporation and, at the request of the Corporation, as a director, officer, employee, or agent
of another corporation, partnership, joint venture, trust employee benefit plan or other
enterprise. Indemnitee may at any time and for any reason resign or be removed from such position
(subject to any other contractual obligation or any obligation imposed by operation of law), in
which event the Corporation shall have no obligation under this Agreement to continue Indemnitee in
such position. This Agreement shall continue in force after Indemnitee has ceased to serve as a
director of the Corporation.
Section 2.
Definitions.
As used in this Agreement:
(a) References to “agent” shall mean any person who is or was a director, officer, or employee
of the Corporation or a Subsidiary of the Corporation or other person authorized by the Corporation
to act for the Corporation, to include such person serving in such capacity as a director, officer,
employee, fiduciary or other official of another corporation, partnership, limited liability
company, joint venture, trust or other Enterprise at the request of, for the convenience of, or to
represent the interests of the Corporation or a Subsidiary of the Corporation.
(b) A “Change in Control” shall be deemed to occur upon the earliest to occur after the date
of this Agreement of any of the following events:
i. Acquisition of Stock by Third Party. Any Person (as defined below) is or becomes the
Beneficial Owner (as defined below), directly or indirectly, of securities of the Corporation
representing thirty-five percent (35%) or more of the combined voting power of the Corporation’s
then outstanding securities, without prior approval of at least two-thirds members of the Board of
Directors in office immediately prior to such person attained such percentage interest;
ii. Change in Board of Directors. During any period of two (2) consecutive years (not
including any period prior to the execution of this Agreement),
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individuals who at the beginning of
such period constitute the Board, and any new director (other
than a director designated by a person who has entered into an agreement with the Corporation
to effect a transaction described in Sections 2(b)(i), 2(b)(iii) or 2(b)(iv)) whose election by the
Board 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 either were directors at the beginning
of the period or whose election or nomination for election was previously so approved, cease for
any reason to constitute at least a majority of the members of the Board;
iii. Corporate Transactions. The effective date of a merger or consolidation of the
Corporation with any other entity, other than a merger or consolidation which would result in the
voting securities of the Corporation outstanding immediately prior to such merger or consolidation
continuing to represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 51% of the combined voting power of the voting
securities of the surviving entity outstanding immediately after such merger or consolidation and
with the power to elect at least a majority of the board of directors or other governing body of
such surviving entity;
iv. Liquidation. The approval by the stockholders of the Corporation of a complete
liquidation of the Corporation or an agreement for the sale or disposition by the Corporation of
all or substantially all of the Corporation’s assets; and
v. Other Events. There occurs any other event of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a response to any similar
item on any similar schedule or form) promulgated under the Exchange Act (as defined below),
whether or not the Corporation is then subject to such reporting requirement.
For purposes of this Section 2(b), the following terms shall have the following meanings:
(A) “Exchange Act” shall mean the Securities Exchange Act of
1934, as amended from time to time.
(B) “Person” shall have the meaning as set forth in Sections
13(d) and 14(d) of the Exchange Act; provided, however, that Person
shall exclude (i) the Corporation, (ii) any trustee or other
fiduciary holding securities under an employee benefit plan of the
Corporation, and (iii) any corporation owned, directly or
indirectly, by the stockholders of the Corporation in substantially
the same proportions as their ownership of stock of the Corporation.
(C) “Beneficial Owner” shall have the meaning given to such
term in Rule 13d-3 under the Exchange Act; provided, however, that
Beneficial Owner shall exclude any Person otherwise becoming a
Beneficial Owner by reason of the
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stockholders of the Corporation
approving a merger of the Corporation with another entity.
(c) “Corporate Status” describes the status of a person who is or was a director, officer,
employee or agent of the Corporation or of any other corporation, limited liability company,
partnership or joint venture, trust, employee benefit plan or other enterprise which such person is
or was serving at the request of the Corporation.
(d) “Disinterested Director” means a director of the Corporation who is not and was not a
party to the Proceeding in respect of which indemnification is sought by Indemnitee.
(e) “Enterprise” shall mean the Corporation and any other corporation, limited liability
company, partnership, joint venture, trust, employee benefit plan or other enterprise of which
Indemnitee is or was serving at the request of the Corporation as a director, officer, employee,
agent or fiduciary.
(f) “Expenses” shall include all 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, any federal, state, local or
foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments
under this Agreement, ERISA excise taxes and penalties, and all other disbursements or expenses of
the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or
defend, investigating, being or preparing to be a witness in, or otherwise participating in, a
Proceeding. Expenses also shall include (i) Expenses incurred in connection with any appeal
resulting from any Proceeding, including without limitation the premium, security for, and other
costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent, and (ii)
for purposes of Section 14(d) only, Expenses incurred by Indemnitee in connection with the
interpretation, enforcement or defense of Indemnitee’s rights under this Agreement, by litigation
or otherwise. The parties agree that for the purposes of any advancement of Expenses for which
Indemnitee has made written demand to the Corporation in accordance with this Agreement, all
Expenses included in such demand that are certified by affidavit of Indemnitee’s counsel as being
reasonable shall be presumed conclusively to be reasonable. Expenses, however, shall not include
amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.
(g) “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in
matters of corporation law and neither presently is, nor in the past five years has been, retained
to represent: (i) the Corporation or Indemnitee in any matter material to either such party (other
than with respect to matters concerning the Indemnitee under this Agreement, or of other
indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding
giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term
“Independent Counsel” shall not include any person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of interest in representing either the
Corporation or Indemnitee in an action to determine Indemnitee’s rights under this
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Agreement. The
Corporation agrees to pay the reasonable fees and expenses of the Independent Counsel referred to
above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and
damages arising out of or relating to this Agreement or its engagement pursuant hereto.
(h) The term “Proceeding” shall include any threatened, pending or completed action, suit,
arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing
or any other actual, threatened or completed proceeding, whether brought in the right of the
Corporation or otherwise and whether of a civil, criminal, administrative legislative, or
investigative (formal or informal) nature, including any appeal therefrom, in which Indemnitee was,
is or will be involved as a party, potential party, non-party 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 action on his part while acting as director or officer of the Corporation,
or by reason of the fact that he is or was serving at the request of the Corporation as a director,
officer, employee or agent of another corporation, limited liability company, partnership, joint
venture, trust or other enterprise, in each case whether or not serving in such capacity at the
time any liability or expense is incurred for which indemnification, reimbursement, or advancement
of expenses can be provided under this Agreement. If the Indemnitee believes in good faith that a
given situation may lead to or culminate in the institution of a Proceeding, this shall be
considered a Proceeding under this paragraph.
(i) Reference 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, 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 best interests of the participants and beneficiaries of an employee benefit plan shall be
deemed to have acted in manner “not opposed to the best interests of the Corporation” as referred
to in this Agreement.
Section 3.
Indemnity in Third-Party Proceedings.
The Corporation shall indemnify
Indemnitee in accordance with the provisions of this Section 3 if Indemnitee is, or is threatened
to be made, a party to or a participant in any Proceeding, other than a Proceeding by or in the
right of the Corporation to procure a judgment in its favor. Pursuant to this Section 3,
Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all
Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by
Indemnitee or on his behalf in connection with such Proceeding or any claim, issue or matter
therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation and, in the case of a criminal Proceeding had no
reasonable cause to believe that his conduct was unlawful. The parties hereto intend that this
Agreement shall provide to the fullest extent permitted by law for indemnification in excess of
that expressly permitted by statute, including, without limitation, any indemnification provided by
the Corporation’s Restated Certificate of Incorporation, its Bylaws, vote of its stockholders or
disinterested directors or applicable law.
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Section 4.
Indemnity in Proceedings by or in the Right of the Corporation.
The
Corporation shall indemnify Indemnitee in accordance with the provisions of this Section 4 if
Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding by or in
the right of the Corporation to procure a judgment in its favor. Pursuant to this Section 4,
Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all
Expenses actually and reasonably incurred by him or on his behalf in connection with such
Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the Corporation. No
indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue or
matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the
Corporation, unless and only to the extent that the Delaware Court of Chancery or any court in
which the Proceeding was brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably
entitled to indemnification.
Section 5.
Indemnification for Expenses of a Party Who is Wholly or Partly Successful.
Notwithstanding any other provisions of this Agreement, to the fullest extent permitted by
applicable law and to the extent that Indemnitee is a party to (or a participant in) and is
successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or
matter therein, in whole or in part, the Corporation shall indemnify Indemnitee against all
Expenses actually and reasonably incurred by him in connection therewith. If Indemnitee is not
wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or
more but less than all claims, issues or matters in such Proceeding, the Corporation shall
indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf
in connection with or related to each successfully resolved claim, issue or matter to the fullest
extent permitted by law. For purposes of this Section and without limitation, the termination of
any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be
deemed to be a successful result as to such claim, issue or matter.
Section 6.
Indemnification For Expenses of a Witness.
Notwithstanding any other
provision of this Agreement, to the fullest extent permitted by applicable law and to the extent
that Indemnitee is, by reason of his Corporate Status, a witness or otherwise asked to participate
in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses
actually and reasonably incurred by him or on his behalf in connection therewith.
Section 7.
Partial Indemnification.
If Indemnitee is entitled under any provision of
this Agreement to indemnification by the Corporation for some or a portion of Expenses, but not,
however, for the total amount thereof, the Corporation shall nevertheless indemnify Indemnitee for
the portion thereof to which Indemnitee is entitled.
Section 8.
Additional Indemnification.
(a) Notwithstanding any limitation in Sections 3, 4, or 5, the Corporation shall indemnify
Indemnitee to the fullest extent permitted by applicable law if Indemnitee is a party to or
threatened to be made a party to any Proceeding (including a Proceeding by or in the right of
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the
Corporation to procure a judgment in its favor) against all Expenses, judgments, fines and amounts
paid in settlement actually and reasonably incurred by Indemnitee in connection with the
Proceeding.
(b) For purposes of Section 8(a), the meaning of the phrase “to the fullest extent permitted
by applicable law” shall include, but not be limited to:
i. to the fullest extent permitted by the provision of the DGCL that authorizes or
contemplates additional indemnification by agreement, or the corresponding provision of any
amendment to or replacement of the DGCL, and
ii. 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.
Section 9.
Exclusions.
Notwithstanding any provision in this Agreement, the
Corporation shall not be obligated under this Agreement to make any indemnity in connection with
any claim made against Indemnitee:
(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance
policy or other indemnity provision, except with respect to any excess beyond the amount paid under
any insurance policy or other indemnity provision; or
(b) for (i) an accounting of profits made from the purchase and sale (or sale and purchase) by
Indemnitee of securities of the Corporation within the meaning of Section 16(b) of the Exchange Act
(as defined in Section 2(b) hereof) or similar provisions of state statutory law or common law, or
(ii) any reimbursement of the Corporation by the Indemnitee of any bonus or other incentive-based
or equity-based compensation or of any profits realized by the Indemnitee from the sale of
securities of the Corporation, as required in each case under the Exchange Act (including any such
reimbursements that arise from an accounting restatement of the Corporation pursuant to Section 304
of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), or the payment to the Corporation of
profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306
of the Sarbanes-Oxley Act); or
(c) except as provided in Section 14(d) of this Agreement, in connection with any Proceeding
(or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of
any Proceeding) initiated by Indemnitee against the Corporation or its directors, officers,
employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any
Proceeding) prior to its initiation or (ii) the Corporation provides the indemnification, in its
sole discretion, pursuant to the powers vested in the Corporation under applicable law,
provided
,
however
, that this prohibition shall not apply to any counter-claim, cross-claim or third-party
claim brought against the Indemnitee in any Proceeding.
Section 10.
Advances of Expenses.
In accordance with the pre-existing requirement of
Section 7.2 of Article 7 of the By-Laws of the Corporation, and notwithstanding any provision of
this Agreement to the contrary, the Corporation shall advance, to the extent not prohibited by
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law,
the Expenses incurred by Indemnitee in connection with any Proceeding, and such advancement shall
be made within thirty (30) days after the receipt by the Corporation of a statement or statements
requesting such advances from time to time, whether prior to or after final disposition of any
Proceeding. Advances shall be unsecured and interest free. Advances shall be made without regard
to Indemnitee’s ability to repay the Expenses and without regard to Indemnitee’s ultimate
entitlement to indemnification under the other provisions of this Agreement. Advances shall
include any and all reasonable Expenses incurred pursuing an action
to enforce this right of advancement, including Expenses incurred preparing and forwarding
statements to the Corporation to support the advances claimed. The Indemnitee shall qualify for
advances upon the execution and delivery to the Corporation of this Agreement, which shall
constitute an undertaking providing that the Indemnitee undertakes to repay the amounts advanced
(without interest) to the extent that it is ultimately determined that Indemnitee is not entitled
to be indemnified by the Corporation. No other form of undertaking shall be required other than
the execution of this Agreement. This Section 10 shall not apply to any claim made by Indemnitee
for which indemnity is excluded pursuant to Section 9.
Section 11.
Procedure for Notification and Defense of Claim.
(a) Indemnitee shall notify the Corporation in writing of any matter with respect to which
Indemnitee intends to seek indemnification or advancement of Expenses hereunder as soon as
reasonably practicable following the receipt by Indemnitee of written notice thereof. The written
notification to the Corporation shall include a description of the nature of the Proceeding and the
facts underlying the Proceeding. To obtain indemnification under this Agreement, Indemnitee shall
submit to the Corporation a written request, including therein or therewith such documentation and
information as is reasonably available to Indemnitee and is reasonably necessary to determine
whether and to what extent Indemnitee is entitled to indemnification following the final
disposition of such action, suit or proceeding. The omission by Indemnitee to notify the
Corporation hereunder will not relieve the Corporation from any liability which it may have to
Indemnitee hereunder or otherwise than under this Agreement, and any delay in so notifying the
Corporation shall not constitute a waiver by Indemnitee of any rights under this Agreement. The
Secretary of the Corporation shall, promptly upon receipt of such a request for indemnification,
advise the Board in writing that Indemnitee has requested indemnification.
(b) The Corporation will be entitled to participate in the Proceeding at its own expense.
Section 12.
Procedure Upon Application for Indemnification.
(a) Upon written request by Indemnitee for indemnification pursuant to the Section 11(a), a
determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto
shall be made in the specific case: (i) if a Change in Control shall have occurred, by Independent
Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee; or
(ii) if a Change in Control shall not have occurred, (A) by a majority vote of the Disinterested
Directors, even though less than a quorum of the Board, (B) by a
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committee of Disinterested
Directors designated by a majority vote of the Disinterested Directors, even though less than a
quorum of the Board, (C) if there are no such Disinterested Directors or, if such Disinterested
Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which
shall be delivered to Indemnitee or (D) if so directed by the Board, by the stockholders of the
Corporation; and, if it is so determined that Indemnitee is entitled to indemnification, payment to
Indemnitee shall be made within ten (10) days after such determination. Indemnitee shall cooperate
with the person, persons or entity making such determination with respect to Indemnitee’s
entitlement to indemnification, including providing to
such person, persons or entity upon reasonable advance request any documentation or
information which is not privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination. Any costs or Expenses
(including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the
person, persons or entity making such determination shall be borne by the Corporation (irrespective
of the determination as to Indemnitee’s entitlement to indemnification) and the Corporation hereby
indemnifies and agrees to hold Indemnitee harmless therefrom.
(b) In the event the determination of entitlement to indemnification is to be made by
Independent Counsel pursuant to Section 12(a) hereof, the Independent Counsel shall be selected as
provided in this Section 12(b). If a Change in Control shall not have occurred, the Independent
Counsel shall be selected by the Board, and the Corporation shall give written notice to Indemnitee
advising him of the identity of the Independent Counsel so selected. If a Change in Control shall
have occurred, the Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall
request that such selection be made by the Board, in which event the preceding sentence shall
apply), and Indemnitee shall give written notice to the Corporation advising it of the identity of
the Independent Counsel so selected. In either event, Indemnitee or the Corporation, as the case
may be, may, within ten (10) days after such written notice of selection shall have been given,
deliver to the Corporation or to Indemnitee, as the case may be, a written objection to such
selection;
provided
,
however
, that such objection may be asserted only on the
ground that the Independent Counsel so selected does not meet the requirements of “Independent
Counsel” as defined in Section 2 of this Agreement, and the objection shall set forth with
particularity the factual basis of such assertion. Absent a proper and timely objection, the
person so selected shall act as Independent Counsel. If such written objection is so made and
substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and
until such objection is withdrawn or a court has determined that such objection is without merit.
If, within twenty (20) days after the later of submission by Indemnitee of a written request for
indemnification pursuant to Section 11(a) hereof and the final disposition of the Proceeding, no
Independent Counsel shall have been selected and not objected to, either the Corporation or
Indemnitee may petition a court of competent jurisdiction for resolution of any objection which
shall have been made by the Corporation or Indemnitee to the other’s selection of Independent
Counsel and/or for the appointment as Independent Counsel of a person selected by the Court or by
such other person as the Court shall designate, and the person with respect to whom all objections
are so resolved or the person so appointed shall act as Independent Counsel under Section 12(a)
hereof. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section
14(a) of this Agreement, Independent Counsel shall be discharged and
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relieved of any further
responsibility in such capacity (subject to the applicable standards of professional conduct then
prevailing).
Section 13.
Presumptions and Effect of Certain Proceedings.
(a) In making a determination with respect to entitlement to indemnification hereunder, the
person or persons or entity making such determination shall, to the fullest extent not prohibited
by law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee
has submitted a request for indemnification in accordance with Section 11(a) of this Agreement, and
the Corporation shall, to the fullest extent not prohibited by law,
have the burden of proof to overcome that presumption in connection with the making by any
person, persons or entity of any determination contrary to that presumption. Neither the failure
of the Corporation (including by its directors or independent legal counsel) to have made a
determination prior to the commencement of any action pursuant to this Agreement that
indemnification is proper in the circumstances because Indemnitee has met the applicable standard
of conduct, nor an actual determination by the Corporation (including by its directors or
independent legal counsel) 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.
(b) Subject to Section 14(e), if the person, persons or entity empowered or selected under
Section 12 of this Agreement to determine whether Indemnitee is entitled to indemnification shall
not have made a determination within sixty (60) days after receipt by the Corporation of the
request therefor, the requisite determination of entitlement to indemnification shall, to the
fullest extent not prohibited by law, be deemed to have been made and Indemnitee shall be entitled
to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission
of a material fact necessary to make Indemnitee’s statement not materially misleading, in
connection with the request for indemnification, or (ii) a prohibition of such indemnification
under applicable law; provided, however, that such 60-day period may be extended for a reasonable
time, not to exceed an additional thirty (30) days, if the person, persons or entity making the
determination with respect to entitlement to indemnification in good faith requires such additional
time for the obtaining or evaluating of documentation and/or information relating thereto; and
provided, further, that the foregoing provisions of this Section 13(b) shall not apply (i) if the
determination of entitlement to indemnification is to be made by the stockholders pursuant to
Section 12(a) of this Agreement and if (A) within fifteen (15) days after receipt by the
Corporation of the request for such determination the Board has resolved to submit such
determination to the stockholders for their consideration at an annual meeting thereof to be held
within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a
special meeting of stockholders is called within fifteen (15) days after such receipt for the
purpose of making such determination, such meeting is held for such purpose within sixty (60) days
after having been so called and such determination is made thereat, or (ii) if the determination of
entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) of
this Agreement.
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(c) The termination of any Proceeding or of any claim, issue or 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 Indemnitee to indemnification or create a presumption 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 or, with respect to any criminal Proceeding, that Indemnitee
had reasonable cause to believe that his conduct was unlawful.
(d)
Reliance as Safe Harbor
. For purposes of any determination of good faith,
Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the
records or books of account of the Enterprise, including financial statements, or on information
supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the
advice of legal counsel for the Enterprise or on information or records given or reports made
to the Enterprise by an independent certified public accountant or by an appraiser or other expert
selected with the reasonable care by the Enterprise. The provisions of this Section 13(d) shall
not be deemed to be exclusive or to limit in any way the other circumstances in which the
Indemnitee may be deemed to have met the applicable standard of conduct set forth in this
Agreement.
(e)
Actions of Others
. The knowledge and/or actions, or failure to act, of any
director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for
purposes of determining the right to indemnification under this Agreement.
Section 14.
Remedies of Indemnitee.
(a) Subject to Section 14(e), in the event that (i) a determination is made pursuant to
Section 12 of this Agreement that Indemnitee is not entitled to indemnification under this
Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 10 of this
Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant
to Section 12(a) of this Agreement within ninety (90) days after receipt by the Corporation of the
request for indemnification, (iv) payment of indemnification is not made pursuant to Section 5, 6
or 7 or the last sentence of Section 12(a) of this Agreement within ten (10) days after receipt by
the Corporation of a written request therefor, (v) payment of indemnification pursuant to Section
3, 4 or 8 of this Agreement is not made within ten (10) days after a determination has been made
that Indemnitee is entitled to indemnification, or (vi) in the event that the Corporation or any
other person takes or threatens to take any action to declare this Agreement void or unenforceable,
or institutes any litigation or other action or Proceeding designed to deny, or to recover from,
the Indemnitee the benefits provided or intended to be provided to the Indemnitee hereunder,
Indemnitee shall be entitled to an adjudication by a court of his entitlement to such
indemnification or advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an
award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration
Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking
an adjudication or an award in arbitration within 180 days following the date on which Indemnitee
first has the right to commence such proceeding pursuant to this Section 14(a);
provided
,
however
, that the foregoing clause shall not
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apply in respect of a proceeding brought by
Indemnitee to enforce his rights under Section 5 of this Agreement. The Corporation shall not
oppose Indemnitee’s right to seek any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made pursuant to Section 12(a) of this
Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or
arbitration commenced pursuant to this Section 14 shall be conducted in all respects as a
de
novo
trial, or arbitration, on the merits and Indemnitee shall not be prejudiced
by reason of that adverse determination. In any judicial proceeding or arbitration commenced
pursuant to this Section 14 the Corporation shall have the burden of proving Indemnitee is not
entitled to indemnification or advancement of Expenses, as the case may be.
(c) If a determination shall have been made pursuant to Section 12(a) of this Agreement that
Indemnitee is entitled to indemnification, the Corporation shall be bound by such determination in
any judicial proceeding or arbitration commenced pursuant to this Section 14, absent (i) a
misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make
Indemnitee’s statement not materially misleading, in connection with the request for
indemnification, or (ii) a prohibition of such indemnification under applicable law.
(d) The Corporation shall, to the fullest extent not prohibited by law, be precluded from
asserting in any judicial proceeding or arbitration commenced pursuant to this Section 14 that the
procedures and presumptions of this Agreement are not valid, binding and enforceable and shall
stipulate in any such court or before any such arbitrator that the Corporation is bound by all the
provisions of this Agreement. It is the intent of the Corporation that, to the fullest extent
permitted by law, the Indemnitee not be required to incur legal fees or other Expenses associated
with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement by
litigation or otherwise because the cost and expense thereof would substantially detract from the
benefits intended to be extended to the Indemnitee hereunder. The Corporation shall, to the
fullest extent permitted by law, indemnify Indemnitee against any and all Expenses and, if
requested by Indemnitee, shall (within ten (10) days after receipt by the Corporation of a written
request therefor) advance, to the extent not prohibited by law, such Expenses to Indemnitee, which
are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification
or advance of Expenses from the Corporation under this Agreement or under any directors’ and
officers’ liability insurance policies maintained by the Corporation if Indemnitee is wholly
successful on the underlying claims; if Indemnitee is not wholly successful on the underlying
claims, then such indemnification and advancement shall be only to the extent Indemnitee is
successful on such underlying claims or otherwise as permitted by law, whichever is greater.
(e) Notwithstanding anything in this Agreement to the contrary, no determination as to
entitlement of Indemnitee to indemnification under this Agreement shall be required to be made
prior to the final disposition of the Proceeding.
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Section 15.
Non-exclusivity; Survival of Rights; Insurance; Subrogation.
(a) 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 Indemnitee may at any time be
entitled under applicable law, the Corporation’s Restated Certificate of Incorporation, the
Corporation’s By-laws, any agreement, a vote of stockholders or a resolution of directors, or
otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall
limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or
omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal.
To the extent that a change in Delaware law, whether by statute or judicial decision, permits
greater indemnification or advancement of Expenses than would be afforded currently under the
Corporation’s By-Laws and this Agreement, it is the intent of the parties hereto that Indemnitee
shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy
herein conferred is intended to be exclusive of any other right or remedy, and every other right
and remedy shall be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not
prevent the concurrent assertion or employment of any other right or remedy.
(b) To the extent that the Corporation maintains an insurance policy or policies providing
liability insurance for directors, officers, employees, or agents 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, Indemnitee shall be covered by such
policy or policies in accordance with its or their terms to the maximum extent of the coverage
available for any such director, officer, employee or agent under such policy or policies. If, at
the time of the receipt of a notice of a claim pursuant to the terms hereof, the Corporation has
director and officer liability insurance in effect, the Corporation shall give prompt notice of
such claim or of the commencement of a proceeding, as the case may be, to the insurers in
accordance with the procedures set forth in the respective policies. The Corporation shall
thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the
Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such
policies.
(c) In the event of any 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
papers required and take all action necessary to secure such rights, including execution of such
documents as are necessary to enable the Corporation to bring suit to enforce such rights.
(d) The Corporation shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable (or for which advancement is provided hereunder) hereunder if and to the
extent that Indemnitee has otherwise actually received such payment under any insurance policy,
contract, agreement or otherwise.
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(e) The Corporation’s obligation to indemnify or advance Expenses hereunder to Indemnitee who
is or was serving at the request of the Corporation as a director, officer, employee or agent of
any other corporation, limited liability company, partnership, joint venture, trust, employee
benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received as
indemnification or advancement of Expenses from such other corporation, limited liability company,
partnership, joint venture, trust, employee benefit plan or other enterprise.
Section 16.
Duration of Agreement.
This Agreement shall continue until and terminate
upon the later of: (a) ten (10) years after the date that Indemnitee shall have ceased to serve as
a director of the Corporation or, at the request of the Corporation, as a director, officer,
employee, or agent of another corporation, partnership, joint venture, trust employee benefit plan
or other enterprise or (b) one (1) year after the final termination of any Proceeding then pending
in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses
hereunder and of any proceeding commenced by Indemnitee pursuant to Section 14 of this Agreement
relating thereto. This Agreement shall be binding upon the Corporation and its
successors and assigns and shall inure to the benefit of Indemnitee and his heirs, executors
and administrators.
Section 17.
Severability.
If any provision or provisions of this Agreement shall be
held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality
and enforceability of the remaining provisions of this Agreement (including without limitation,
each portion of any Section of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any
way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by
law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform
to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to
the fullest extent possible, the provisions of this Agreement (including, without limitation, each
portion of any Section of this Agreement containing any such provision held to be invalid, illegal
or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to
give effect to the intent manifested thereby.
Section 18.
Enforcement.
(a) The Corporation expressly confirms and agrees that it has entered into this Agreement and
assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director
of the Corporation, and the Corporation acknowledges that Indemnitee is relying upon this Agreement
in serving as a director or officer of the Corporation.
(b) This Agreement constitutes the entire agreement between the parties hereto with respect to
the subject matter hereof and supersedes all prior agreements and understandings, oral, written and
implied, between the parties hereto with respect to the subject matter hereof; provided, however,
that this Agreement is a supplement to and in furtherance of the Restated Certificate of
Incorporation of the Corporation, the By-laws of the Corporation and
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applicable law, and shall not
be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.
Section 19.
Modification and Waiver.
No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by the parties thereto. No waiver of any of
the provisions of this Agreement shall be deemed or shall constitute a waiver of any other
provisions of this Agreement nor shall any waiver constitute a continuing waiver.
Section 20.
Notice by Indemnitee.
Indemnitee agrees promptly to notify the
Corporation in writing upon being served with any summons, citation, subpoena, complaint,
indictment, information or other document relating to any Proceeding or matter which may be subject
to indemnification or advancement of Expenses covered hereunder. The failure of Indemnitee to so
notify the Corporation shall not relieve the Corporation of any obligation which it may have to the
Indemnitee under this Agreement or otherwise.
Section 21.
Notices.
All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by
hand and receipted for by the party to whom said notice or other communication shall have
been directed, (b) mailed by certified or registered mail with postage prepaid, on the third
business day after the date on which it is so mailed, (c) mailed by reputable overnight courier and
receipted for by the party to whom said notice or other communication shall have been directed or
(d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has
been received:
(a) If to Indemnitee, at the address indicated on the signature page of this Agreement, or
such other address as Indemnitee shall provide to the Corporation.
(b) If to the Corporation to
Tesoro Corporation
Attention: Corporate Secretary
300 Concord Plaza Drive
San Antonio, Texas 78216-6999
or to any other address as may have been furnished to Indemnitee by the Corporation.
Section 22.
Contribution.
To the fullest extent permissible under applicable law, if
the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason
whatsoever, the Corporation, in lieu of indemnifying Indemnitee, shall contribute to the amount
incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to
be paid in settlement and/or for Expenses, in connection with any claim relating to an
indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in
light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits
received by the Corporation and Indemnitee as a result of the event(s) and/or transaction(s) giving
cause to such Proceeding; and/or (ii) the relative fault of the Corporation (and its
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directors,
officers, employees and agents) and Indemnitee in connection with such event(s) and/or
transaction(s).
Section 23.
Applicable Law and Consent to Jurisdiction.
This Agreement and the legal
relations among the parties shall be governed by, and construed and enforced in accordance with,
the laws of the State of Delaware, without regard to its conflict of laws rules. Except with
respect to any arbitration commenced by Indemnitee pursuant to Section 14(a) of this Agreement, the
Corporation and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or
proceeding arising out of or in connection with this Agreement shall be brought only in the
Chancery Court of the State of Delaware (the “Delaware Court”), and not in any other state or
federal court in the United States of America or any court in any other country, (ii) consent to
submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding
arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not
otherwise subject to service of process in the State of Delaware, irrevocably
as its agent in the State of Delaware as such party’s agent
for acceptance of legal process in connection with any such action or proceeding against such party
with the same legal force and validity as if served upon such party personally within the State of
Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the
Delaware Court, and (v) waive, and agree not to plead or to
make, any claim that any such action or proceeding brought in the Delaware Court has been
brought in an improper or inconvenient forum.
Section 24.
Identical Counterparts.
This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original but all of which
together shall constitute one and the same Agreement. Only one such counterpart signed by the
party against whom enforceability is sought needs to be produced to evidence the existence of this
Agreement.
Section 25.
Miscellaneous.
Use of the masculine pronoun shall be deemed to include
usage of the feminine pronoun where appropriate. The headings of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement or to affect the
construction thereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year
first above written.
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TESORO CORPORATION
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INDEMNITEE
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By:
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Name:
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Name:
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Title:
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Address:
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