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Exhibit 10.1
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the " Agreement ")
is made and entered into this day
of
, 2008, between Cheniere Energy, Inc., a Delaware corporation (the
" Company "), and
(" Indemnitee ").
INTRODUCTION:
A. Indemnitee, as a member of the Company’s Board of
Directors and/or an officer of the Company, performs valuable
services for the Company.
B. The Company and Indemnitee recognize the substantial increase
in corporate litigation in general, subjecting directors, officers,
employees, controlling persons, agents and fiduciaries to expensive
litigation risks at the same time as the availability and coverage
of liability insurance has been severely limited.
C. The Company’s Amended and Restated Bylaws, as amended
(the " Bylaws "), provide for the indemnification of
the directors, officers, employees and agents of the Company to the
maximum extent authorized by Section 145 of the Delaware
General Corporation Law, as amended (" DGCL ").
D. Indemnitee desires to ensure that the indemnification
currently provided to Indemnitee under the Bylaws is not changed in
the future as a result of an amendment to the Bylaws, and
Indemnitee may not be willing to serve or continue to serve in such
capacities without additional protection.
E. The Bylaws and the DGCL, by their non-exclusive nature,
permit contracts between the Company and its directors, officers,
employees, controlling persons, agents or fiduciaries with respect
to indemnification.
F. The Company (i) desires to attract and retain the
involvement of highly qualified individuals, such as Indemnitee, to
serve the Company and, in part, in order to induce Indemnitee to be
involved with the Company, and (ii) wishes to provide for the
indemnification and advancing of expenses to Indemnitee to the
maximum extent permitted by law.
G. In view of the considerations set forth above, the Company
desires that Indemnitee be indemnified by the Company as set forth
herein.
AGREEMENT:
NOW, THEREFORE , in consideration of Indemnitee’s service
to the Company, the parties hereto agree as follows:
1. Indemnity of Indemnitee . The Company hereby
agrees to indemnify Indemnitee to the fullest extent permitted by
applicable law, the Company’s Restated Certificate of
Incorporation, as amended (the " Certificate "), the
Bylaws or by statute. In the event of any change after the date of
this Agreement in any applicable law, statute or rule that expands
the right of a Delaware corporation to indemnify a member of its
Board of Directors or an officer, employee, controlling person,
agent or fiduciary, it is the intent of the parties hereto that
Indemnitee shall enjoy by this Agreement the greater benefits
afforded by such change. In the event of any change in any
applicable law, statute or rule that narrows the right of a
Delaware corporation to indemnify a member of its Board of
Directors or an officer, employee, agent or fiduciary, such change,
to the extent not otherwise required by such law, statute or rule
to be applied to this Agreement, shall have no effect on this
Agreement or the parties’ rights and obligations hereunder
except as set forth in Section 9(a) hereof.
2. Indemnification Rights .
(a) Indemnification of Expenses . The Company shall
indemnify and hold harmless Indemnitee, together with
Indemnitee’s partners, affiliates, employees, agents and
spouse and each person who controls any of them or who may be
liable within the meaning of Section 15 of the Securities Act
of 1933, as amended (the " Securities Act "), or
Section 20 of the Securities Exchange Act of 1934, as amended
(the " Exchange Act "), to the fullest extent
permitted by law if Indemnitee was or is or becomes a party to or
witness or other participant in, or is threatened to be made a
party to or witness or other participant in, any threatened,
pending or completed action, suit, proceeding or alternative
dispute resolution mechanism, or any hearing, inquiry or
investigation that Indemnitee in good faith reasonably believes
might lead to the institution of any such action, suit, proceeding
or alternative dispute resolution mechanism, whether civil,
criminal, administrative, investigative or other (hereinafter a "
Claim ") against any and all expenses (including
attorneys’ fees and all other costs, expenses and obligations
incurred in connection with investigating, defending, being a
witness in or participating in (including on appeal), or preparing
to defend, be a witness in or participate in, any such action,
suit, proceeding, alternative dispute resolution mechanism,
hearing, inquiry or investigation), judgments, fines, penalties and
amounts paid in settlement (if such settlement is approved in
advance by the Company, which approval shall not be unreasonably
withheld) of any Claim and 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 (collectively, hereinafter " Expenses "),
including all interest, assessments and other charges paid or
payable in connection with or in respect of such Expenses, incurred
by Indemnitee by reason of (or arising in part out of) any event or
occurrence related to the fact that Indemnitee is or was a
director, officer, employee, controlling person, agent or fiduciary
of the Company or any subsidiary of the Company, or is or was
serving at the request of the Company as a director, officer,
employee, controlling person, agent or fiduciary of another
corporation, partnership, joint venture, trust or other enterprise,
or by reason of any action or inaction on the part of Indemnitee
while serving in such capacity including, without limitation, any
and all losses, claims, damages, expenses and liabilities, joint or
several (including any investigation, legal and other expenses
incurred in connection with, and any amount paid in settlement of,
any action, suit, proceeding or any claim asserted) under the
Securities Act, the Exchange Act or other federal or state
statutory law or regulation, at common law or otherwise, that
relate directly or indirectly to the registration, purchase, sale
or ownership of any securities of the Company or to any fiduciary
obligation owed with respect thereto (hereinafter an "
Indemnification Event "). Such payment of Expenses
shall be made by the Company as soon as practicable but in any
event no later than 25 days after written demand by Indemnitee
therefor is presented to the Company.
(b) Reviewing Party . If the Reviewing Party (as
described in Section 10(e) hereof) shall have determined (in a
written opinion, in any case in which the Independent Legal Counsel
(as defined below) is involved) that Indemnitee would not be
permitted to be indemnified under applicable law, then (i) the
Company shall not be obligated to provide any indemnification under
Section 1 or 2 and (ii) Indemnitee acknowledges and
agrees that the Company shall not be obligated to make an advance
payment of Expenses to Indemnitee pursuant to Section 3(a) (an
" Expense Advance ") and Indemnitee agrees to
reimburse the Company for such Expense Advance; provided ,
however , that if Indemnitee has commenced or thereafter
commences legal proceedings in a court of competent jurisdiction to
secure a determination that Indemnitee should be indemnified under
applicable law, any determination made by the Reviewing Party that
Indemnitee would not be permitted to be indemnified under
applicable law shall not be binding and Indemnitee shall not be
required to reimburse the Company for any Expense Advance until a
final judicial determination is made with respect thereto (as to
which all rights of appeal therefrom have been exhausted or lapsed)
and until such time, Indemnitee shall be entitled to receive
interim payments of expenses pursuant to Section 3(a).
Indemnitee’s obligation to reimburse the Company for any
Expense Advance shall be unsecured and no interest shall be charged
thereon. If there has not been a Change in Control (as defined in
Section 11(d) hereof), the Reviewing Party shall be selected
by the Board of Directors, and if there has been a Change in
Control (other than a Change in Control that has been approved by a
majority of the Company’s Board of Directors who were
directors immediately prior to such Change in Control), the
Reviewing Party shall be an attorney or firm of attorneys selected
by the Board of Directors who shall not have otherwise performed
services for the Company or any Indemnitee within the last three
years (other than with respect to matters concerning the right of
any Indemnitee under this Agreement, or of other indemnitees under
similar indemnity agreements) (the " Independent Legal
Counsel "). If there has been no determination by the
Reviewing Party or if the Reviewing Party determines that
Indemnitee substantively would not be permitted to be indemnified
in whole or in part under applicable law, Indemnitee shall have the
right to commence litigation seeking an initial determination by
the court or challenging any such determination by the Reviewing
Party or any aspect thereof,
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including the legal or factual bases therefor,
and the Company hereby consents to service of process and to appear
in any such proceeding. Any determination by the Reviewing Party
otherwise shall be conclusive and binding on the Company and
Indemnitee.
(c) Contribution . If the indemnification provided for in
Section 2(a) above is for any reason held by a court of
competent jurisdiction to be unavailable to an Indemnitee in
respect of any losses, claims, damages, expenses or liabilities
referred to therein (after a final judicial determination is made
with respect thereto, and as to which all rights of appeal
therefrom have been exhausted or lapsed), then the Company, in lieu
of indemnifying Indemnitee thereunder, shall contribute to the
amount paid or payable by Indemnitee as a result of such losses,
claims, damages, expenses or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits
received by the Company and Indemnitee, 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 Company and Indemnitee in connection
with the action or inaction that resulted in such losses, claims,
damages, expenses or liabilities, as well as any other relevant
equitable considerations. In connection with the registration of
the Company’s securities, the relative benefits received by
the Company and Indemnitee shall be deemed to be in the same
respective proportions that the net proceeds from the offering
(before deducting expenses) received by the Company and the
Indemnitee, in each case as set forth in the table on the cover
page of the applicable prospectus, bear to the aggregate public
offering price of the securities so offered. The relative fault of
the Company and Indemnitee shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or
Indemnitee and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such
statement or omission.
The Company and Indemnitee agree that it would not be just and
equitable if contribution pursuant to this Section 2(c) were
determined by pro rata or per capita allocation or by any other
method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph.
In connection with the registration of the Company’s
securities, in no event shall an Indemnitee be required to
contribute any amount under this Section 2(c) in excess of the
lesser of (i) that proportion of the total of such losses,
claims, damages or liabilities indemnified against equal to the
proportion of the total securities sold under such registration
statement that is being sold by Indemnitee or (ii) the
proceeds received by Indemnitee from its sale of securities under
such registration statement. No person found guilty of fraudulent
misrepresentation (within the meaning of Section 10(b) of the
Exchange Act) shall be entitled to contribution from any person who
was not found guilty of such fraudulent misrepresentation.
(d) Survival Regardless of Investigation . The
indemnification and contribution provided for herein will remain in
full force and effect regardless of any investigation made by or on
behalf of Indemnitee or any officer, director, employee, agent or
controlling person of Indemnitee.
(e) Mandatory Payment of Expenses . Notwithstanding any
other provision of this Agreement, to the extent that Indemnitee
has been successful on the merits or otherwise,
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including, without limitation, the dismissal of
an action without prejudice, in the defense of any action, suit,
proceeding, inquiry or investigation referred to in
Section 3(a) hereof or in the defense of any claim, issue or
matter therein, Indemnitee shall be indemnified against all
Expenses incurred by Indemnitee in connection herewith.
3. Expenses; Indemnification Procedure .
(a) Advancement of Expenses . The Company shall advance
all Expenses incurred by Indemnitee. The advances to be made
hereunder shall be paid by the Company to Indemnitee as soon as
practicable but in any event no later than twenty-five business
days after written demand by Indemnitee therefor to the
Company.
(b) Notice/Cooperation by Indemnitee . Indemnitee shall
give the Company notice in writing in accordance with
Section 14 of this Agreement as soon as practicable of any
Claim made against Indemnitee for which indemnification will or
could be sought under this Agreement.
(c) No Presumptions; Burden of Proof . For purposes of
this Agreement, the termination of any Claim by judgment, order,
settlement (whether with or without court ap
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