Exhibit 10.23
MARKWEST ENERGY GP,
L.L.C.
INDEMNIFICATION
AGREEMENT
THIS INDEMNIFICATION
AGREEMENT (this
“Agreement”) is entered into as of the
day of
,
20 , by and between MarkWest
Energy GP, L.L.C., a Delaware limited liability company, and
MarkWest Energy Partners, L.P. (the “Partnership”), a
Delaware limited partnership (collectively and severally referred
to herein as the “General Partner”), and the
undersigned Director and/or Officer
(“Indemnitees”).
RECITALS
A.
The General Partner is aware that competent and experienced persons
are increasingly reluctant to serve or continue serving as
directors or officers of companies unless they are protected by
comprehensive liability insurance and adequate indemnification due
to the increased exposure to litigation costs and risks resulting
from service to such companies that often bear no relationship to
the compensation of such directors or officers.
B.
The statutes and judicial decisions regarding the duties of
directors and officers are often difficult to apply, ambiguous, or
conflicting, and therefore often fail to provide directors and
officers with adequate, reliable knowledge of the legal risks to
which they are exposed or the manner in which they are expected to
execute their fiduciary duties and responsibilities.
C.
The General Partner and the Indemnitees recognize that plaintiffs
often seek damages in such large amounts, and the costs of
litigation may be so great (whether or not the case is
meritorious), that the defense and/or settlement of such litigation
can create an extraordinary burden on the personal resources of
directors and officers.
D.
The General Partner believes that it is unreasonable for its
directors, officers and agents and the directors, officers and
agents of its subsidiaries to assume the risk of judgments and
other expenses which may occur in cases in which the director,
officer or agent received no personal benefit or was not
culpable.
E.
The General Partner recognizes that the issues in controversy in
litigation against a director, officer or agent of a corporation
such as the General Partner or its subsidiaries are often related
to the knowledge, motives and intent of such director, officer or
agent, that he or she is usually the only witness with knowledge of
the essential facts and exculpating circumstances regarding such
matters, and that the long period of time which usually elapses
before the trial or other disposition of such litigation often
extends beyond the time that the director, officer or agent can
reasonably recall such matters and may extend beyond the normal
time for retirement for such director, officer or agent with the
result that he or she, after retirement or in the event of his or
her death, his or her spouse, heirs, executors or administrators
may be faced with limited ability and undue hardship in maintaining
an adequate defense, which may discourage such a director, officer
or agent from serving in that position.
F.
The Board of Directors of the General Partner (the
“Board”) has concluded that, to attract and retain
competent and experienced persons to serve as directors and
officers of the General Partner, it is not only reasonable and
prudent but necessary to promote the best interests of the General
Partner and its stockholders for the General Partner to
contractually indemnify its directors and certain of its officers
in the manner set forth herein, and to assume for itself liability
for expenses and damages in connection with claims against such
directors and officers in connection with their service to the
General Partner as provided herein.
G.
Section 18-108 of the Delaware Limited Liability Company Act,
under which MarkWest Energy GP, L.L.C. is organized (the
“Act”), and Article 9 of the MarkWest Energy GP,
L.L.C.’s Amended and Restated Limited Liability Company
Agreement, empowers the MarkWest Energy GP, L.L.C. to indemnify its
members, managers, directors, officers, employees and agents by
agreement and to indemnify persons who serve, at the request of the
General Partner, as the directors, officers, employees or agents of
other corporations or enterprises.
H.
The General Partner desires and has requested the Indemnitees to
serve or continue to serve as a director and/or officer of the
General Partner, and the Indemnitees only is willing to serve, or
to continue to serve, as a director and/or officer of the General
Partner if the Indemnitees is furnished the indemnity provided for
herein by the General Partner.
NOW, THEREFORE,
in consideration of the foregoing
premises and the mutual covenants and agreements set forth below,
the parties hereto, intending to be legally bound, hereby agree as
follows:
1.
Definitions . For purposes of this Agreement, the following
terms shall have the corresponding meanings set forth
below:
“Claim” means a claim or
action asserted by a Person in a Proceeding.
“Covered Entity”
means the General Partner, any subsidiary or affiliate of the
General Partner or any other Person for which Indemnitees is or was
or may be deemed to be serving at the request of the General
Partner, or any subsidiary of the General Partner, as a director,
officer, employee, controlling person, agent or
fiduciary.
“Disinterested Director”
means, with respect to any determination contemplated by this
Agreement, any Person who, as of the time of such determination, is
a member of the MarkWest Energy GP, L.L.C.’s board of
directors but is not a party to any Proceeding then pending with
respect to any Indemnification Event.
“ERISA” means Employee
Retirement Income Security Act of 1974, as amended, or any similar
Federal statute then in effect.
“Exchange Act” means the
Securities Exchange Act of 1934, as amended, or any similar Federal
statute then in effect.
“Expenses” means any and
all direct and indirect fees and costs, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses,
duplicating, printing and binding costs, telephone charges, postage
and delivery service fees and all other disbursements or expenses
of any type or nature whatsoever reasonably incurred by Indemnitees
(including fees of investment bankers,
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accountants and, subject to the
limitations set forth in Section 3(c) below, reasonable
attorneys’ fees) in connection with or arising from an
Indemnification Event, including, without limitation: (i) the
investigation or defense of a Claim; (ii) being, or preparing to
be, a witness or otherwise participating, or preparing to
participate, in any Proceeding; (iii) furnishing, or preparing to
furnish, documents in response to a subpoena or otherwise in
connection with any Proceeding; (iv) any appeal of any judgment,
outcome or determination in any Proceeding (including, without
limitation, any premium, security for and other costs relating to
any cost bond, supersedes bond or any other appeal bond or its
equivalent); (v) establishing or enforcing any right to
indemnification under this Agreement (including, without
limitation, pursuant to Section 2(c) below), Delaware law or
otherwise, regardless of whether Indemnitees is ultimately
successful in such action, unless as a part of such action, a court
of competent jurisdiction over such action determines that each of
the material assertions made by Indemnitees as a basis for such
action was not made in good faith or was frivolous; (vi)
Indemnitees’ defense of any Proceeding instituted by or in
the name of the General Partner under this Agreement to enforce or
interpret any of the terms of this Agreement (including, without
limitation, costs and expenses incurred with respect to Indemnitees
counterclaims and cross-claims made in such action); and (vii) any
Federal, state, local or foreign taxes imposed on Indemnitees as a
result of the actual or deemed receipt of any payments under this
Agreement, including all interest, assessments and other charges
paid or payable with respect to such payments.
“General Partner Action”
means a Proceeding in which a Claim has been brought by or in the
name of the General Partner to procure a judgment in its
favor.
An “Indemnification
Event” shall be deemed to have occurred if Indemnitees was or
is or becomes, or is threatened to be made, a party to or witness
or other participant in, or was or is or becomes obligated to
furnish or furnishes documents in response to a subpoena or
otherwise in connection with, any Proceeding by reason of the fact
that Indemnitees is or was or may be deemed a director, officer,
employee, controlling person, agent or fiduciary of any Covered
Entity, or by reason of any action or inaction on the part of
Indemnitees while serving in any such capacity (including, without
limitation, rendering any written statement that is a Required
Statement or is made to another officer or employee of the Covered
Entity to support a Required Statement).
“Independent Legal
Counsel” means an attorney or firm of attorneys designated by
the Indemnitees that is satisfactory to a majority of the
Disinterested Directors (or, if there are no Disinterested
Directors, the MarkWest Energy GP, L.L.C.’s board of
directors) that is experienced in matters of corporate law and
neither presently is, nor in the twenty-four (24) months prior to
such designation has been, retained to represent: (i) the General
Partner or Indemnitees in any matter material to either such party,
or (ii) any other party to the Proceeding giving rise to a claim
for indemnification hereunder.
“Losses” means any and
all losses, claims, damages, liabilities, judgments, fines,
penalties, settlement payments, awards and amounts of any type
whatsoever incurred by Indemnitees in connection with or arising
from an Indemnification Event.
“Organizational
Documents” means any and all organizational documents,
charters or similar agreements or governing documents, including,
without limitation (i) with respect to a corporation, its
certificate of incorporation and bylaws, (ii) with respect to a
limited liability company, its operating agreement, and (iii) with
respect to a limited partnership, its partnership
agreement.
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“Person” means an
individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization or other enterprise or
government or agency or political subdivision thereof.
“Proceeding” means any
threatened, pending or completed claim, action, suit, proceeding,
arbitration or alternative dispute resolution mechanism,
investigation (formal or informal), inquiry, administrative
hearing, appeal or any other actual, threatened or completed
proceeding, whether brought in the right of a Covered Entity or
otherwise and whether of a civil (including intentional or
unintentional tort claims), criminal, administrative, arbitrative
or investigative nature.
“Required Statement”
means a written statement of a Person that is required to be, and
is, filed with the SEC regarding the design, adequacy or evaluation
of a Covered Entity’s internal controls or the accuracy,
sufficiency or completeness of reports or statements filed by a
Covered Entity with the SEC pursuant to federal law and/or
administrative regulations, including without limitation, the
certifications contemplated by Sections 302 and 906 of the
Sarbanes-Oxley Act of 2002, as amended, or any rule or regulation
promulgated pursuant thereto.
“Reviewing Party” means,
with respect to any determination contemplated by this Agreement,
any one of the following: (i) a majority vote of a quorum
consisting of the Disinterested Directors; (ii) a committee
consisting solely of Disinterested Directors, even if such Persons
would not constitute a quorum of MarkWest Energy GP, L.L.C.’s
board of directors, so long as such committee was designated by a
majority of the Disinterested Directors; (iii) in the absence of
any Disinterested Directors and upon the written consent of
Indemnitees, MarkWest Energy GP, L.L.C.’s Class A
Member’s disinterested directors; or (iv) Independent Legal
Counsel (in which case, any determination shall be evidenced by the
rendering of a written opinion).
“SEC” means the
Securities and Exchange Commission.
“Securities Act” means
the Securities Act of 1933, as amended, or any similar Federal
statute then in effect.
2.
Indemnification .
(a)
Indemnification of Losses and Expenses . If an
Indemnification Event has occurred, then, subject to Section 9
below, the General Partner shall indemnify and hold harmless
Indemnitees, to the fullest extent permitted by law, against any
and all Losses and Expenses, provided the Indemnitees acted in good
faith and in a manner Indemnitees reasonably believed to be in, or
not opposed to, the best interests of the General Partner, and,
with respect to any criminal Proceeding, had no reasonable cause to
believe Indemnitees’ conduct was unlawful. The
termination of any Proceeding by judgment, court order, settlement
or conviction or on plea of nolo contendere, or its equivalent,
shall not, of itself, create a presumption that Indemnitees (i) did
not act in good faith in a manner which he reasonably believed to
be in, or not opposed to, the best interests of the General
Partner, or (ii) with respect to any criminal Proceeding, had
reasonable cause to believe that Indemnitees’ conduct was
unlawful. Any indemnification provided for herein shall be
made no later than forty-five (45) days after receipt by the
General Partner of the Notice as required by Section 3(a) below and
subject additionally to Section 4 below.
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(b)
Limitation with Respect to General Partner Actions .
Notwithstanding the foregoing, the General Partner shall not
indemnify and hold harmless Indemnitees with respect to any Losses
(as opposed to Expenses) in connection with or arising from any
General Partner Action. Furthermore, the General Partner
shall not indemnify and hold harmless Indemnitees with respect to
any Expenses in connection with or arising from any General Partner
Action as to which the Indemnitees shall have been finally adjudged
to be liable to the General Partner by a court of competent
jurisdiction due to Indemnitees’ gross negligence or willful
misconduct of a culpable nature in the performance of
Indemnitees’ duties to the General Partner, unless, and then
only to extent that, any court in which such General Partner Action
was brought shall determine upon application that, despite the
adjudication of liability, but in view of all the circumstances of
the case, the Indemnitees is fairly and reasonably entitled to
Expenses for such indemnification as such court shall deem
proper.
(c)
Advancement of Expenses . The General Partner shall
advance Expenses to or on behalf of Indemnitees as soon as
practicable, but in any event not later than 20 days after written
request therefore by Indemnitees which request shall be accompanied
by vouchers, invoices or similar evidence documenting in reasonable
detail the Expenses incurred or to be incurred by
Indemnitees. The Indemnitees hereby undertakes to repay such
amounts advanced only if, and to the extent that, it shall
ultimately be determined that Indemnitees is not entitled to be
indemnified by the General Partner as authorized under Delaware
law. In the event that the General Partner fails to pay
expenses as incurred by Indemnitees as required by this paragraph,
Indemnitees may seek mandatory injunctive relief from any court
having jurisdiction to require the General Partner to pay expenses
as set forth in this paragraph. If Indemnitees seeks
mandatory injunctive relief pursuant to this paragraph, it shall
not be a defense to enforcement of the General Partner’s
obligations set forth in this paragraph that Indemnitees has an
adequate remedy at law for damages.
(d)
Contribution . If, and to the extent, the
indemnification of Indemnitees provided for in Section 2(a) above
for any reason is held by a court of competent jurisdiction not to
be permissible for liabilities arising under Federal securities
laws or ERISA, then the General Partner, in lieu of indemnifying
Indemnitees under this Agreement, shall contribute to the amount
paid or payable by Indemnitees as a result of such Losses or
Expenses (i) in such proportion as is appropriate to reflect the
relative benefits received by the Covered Entities and all
officers, directors or employees of the Covered Entities other than
Indemnitees who are jointly liable with Indemnitees (or would be if
joined in such Proceeding), on the one hand, and Indemnitees, on
the other hand, or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to
in clause (i) above but also the relative fault of the Covered
Entities and all officers, directors or employees of the Covered
Entities other than Indemnitees who are jointly liable with
Indemnitees (or would be if joined in such Proceeding), on the one
hand, and the Indemnitees, on the other hand, in connection with
the action or inaction that resulted in such Losses or Expenses, as
well as any other relevant equitable considerations. The
relative fault of the Covered Entities and all officers, directors
or employees of the Covered Entities other than Indemnitees who are
jointly liable with Indemnitees (or would be if joined in such
Proceeding), on the one hand, and Indemnitees, on the other hand,
shall be determined by reference to, among other things, the degree
to which their actions were motivated by intent to gain personal
profit or advantage, the degree to which their liability is primary
or secondary, and the degree to which their conduct is active or
passive. No Person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person
who was not found guilty of such fraudulent
misrepresentation.
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(e)
Actions where Indemnitees is Deceased . If an
Indemnification Event has occurred, and if prior to, during the
pendency of or after completion of a Proceeding Indemnitees dies,
the General Partner shall indemnify and hold harmless
Indemnitees’ heirs, executors and administrators against any
and all Expenses and Losses to the extent Indemnitees would have
been entitled to indemnification pursuant to Sections 2(a)
above if Indemnitees were still alive.
3.
Indemnification Procedures .
(a)
Notice of Indemnification Event . Indemnitees shall
give the General Partner notice as soon as practicable of any
Indemnification Event of which Indemnitees becomes aware, provided
that any failure to so notify the General Partner shall not relieve
the General Partner of any of its obligations under this Agreement,
except if, and then only to the extent that, such failure increases
the liability of the General Partner under this Agreement. In
addition, Indemnitees shall give the General Partner such
informa
