Exhibit
99.1
INDEMNIFICATION
AGREEMENT
Parties
This INDEMNIFICATION AGREEMENT (the
“Agreement”) is made by STAR GAS LLC, a Delaware
limited liability company (the “Company”), and
(the “Indemnitee”) as of
.
Background
A. Recently highly competent persons
have become more reluctant to serve publicly-held companies as
directors, officers, or in other capacities, unless they are
provided with better protection from the risk of claims and actions
against them arising out of their service to and activities on
behalf of such corporations.
B. The high cost of obtaining
adequate insurance and the uncertainties related to indemnification
have increased the difficulty of attracting and retaining such
persons.
C. The Board of Directors of the
Company (the “Board”) has determined that the potential
inability to attract and retain such persons is detrimental to the
best interests of the Company’s securityholders and that such
persons should be assured that they will have better protection in
the future.
D. It is reasonable, prudent and
necessary for the Company to obligate itself contractually to
indemnify such persons to the fullest extent permitted by
applicable law so that such persons will serve or continue to serve
the Company free from undue concern that they will not be
adequately indemnified.
E. In recognition of
Indemnitee’s need for substantial protection against personal
liability in order to enhance Indemnitee’s continued service
to the Company in an effective manner and Indemnitee’s
reliance on the protections currently provided by the
Company’s Operating Agreement and in part to provide
Indemnitee with specific contractual assurance that the protection
promised thereby will be available to Indemnitee (regardless of,
among other things, any amendment thereto or revocation thereof or
any change in the composition of the Company’s Board of
Directors or acquisition transaction relating to the Company), the
Company wishes to provide in this Agreement for the indemnification
of and the advancing of expenses to Indemnitee to the fullest
extent permitted by law and as set forth in this Agreement, and, to
the extent insurance is maintained, for the continued coverage of
Indemnitee under the Company’s directors’ and
officers’ liability insurance policies.
F. Indemnitee is willing to serve,
continue to serve and to take on additional service for or on
behalf of the Company on the condition that he be indemnified
according to the terms of this Agreement.
Terms of Agreement
In consideration of the premises and
the mutual covenants contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Indemnitee hereby agree as
follows:
Section 1. Definitions . For
purposes of this Agreement:
(a) “Change in Control”
means a change in control of the Company occurring after the date
of this Agreement of a nature that would be required to be reported
in response to Item 6(e) of Schedule 14A of Regulation 14A (or in
response to any similar item on any similar schedule or form)
promulgated, under the Securities Exchange Act of 1934, as amended
(the “1934 Act”), whether or not the Company is then
subject to such reporting requirement; provided , that,
without limitation, such change in control shall be deemed to have
occurred if (i) any “person” (as such term is used in
Sections 13(d) and 14(d) of the 1934 Act) is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the
1934 Act), directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the
Company’s then outstanding securities without the prior
approval of at least two-thirds of the members of the Board in
office immediately prior to such person attaining such percentage
interest; (ii) the Company is a party to a merger, consolidation,
sale of assets or other reorganization, or a proxy contest, as a
consequence of which members of the Board in office immediately
prior to such transaction or event constitute less than a majority
of the Board thereafter, or (iii) during any period of two
consecutive years, individuals who at the beginning of such period
constituted the Board (including for this purpose any new director
whose election or nomination for election by the Company’s
stockholders was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning
of such period) cease for any reason to constitute at least a
majority of the Board.
(b) “Company Status”
means the status of a person who is or was a director, officer,
employee, agent or fiduciary of the Company or of any other
corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise which such person is or was serving at the
request of the Company.
(c) “Disinterested
Director” means a director of the Company who is not and was
not a party to the Proceeding in respect of which indemnification
is sought by Indemnitee.
(d) “Expense” means 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, and all other disbursements or
expenses of the types customarily incurred in connection with
prosecuting, defending, preparing to prosecute or defend,
investigating, or being or preparing to be a witness in a
Proceeding.
(e) “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
Company or Indemnitee in any other matter material to either such
party, 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 Company or Indemnitee in an
action to determine Indemnitee’s rights under this
Agreement.
(f) “Potential Change in
Control” shall be deemed to have occurred if (i) the Company
enters into an agreement or arrangement, the consummation of which
would result in the occurrence of a Change in Control or (ii) the
Board adopts a resolution to the effect that, for purposes of this
Agreement, a Potential Change in Control has occurred.
(g) “Proceeding” means
any threatened, pending or completed action, suit, arbitration,
alternate dispute resolution mechanism, investigation,
administrative hearing or any other proceeding, whether civil,
criminal, administrative or investigative, whether formal or
informal, except one initiated by an Indemnitee pursuant to Section
11 of this Agreement to enforce his rights under this
Agreement.
Section 2. Services by
Indemnitee . Indemnitee agrees to serve as a director of the
Company, and, at its request, as a director, officer, employee,
agent or fiduciary of certain other corporations and entities.
Indemnitee may at any time and for any reason resign from any such
position (subject to any other contractual obligation or any
obligation imposed by operation of law).
Section 3. Indemnification -
General. The Company shall indemnify, and advance Expenses to,
Indemnitee as provided in this Agreement to the fullest extent
permitted by applicable law in effect on the date hereof and to
such greater extent as applicable law may thereafter from time to
time permit. The rights of Indemnitee provided under the preceding
sentence shall include, but shall not be limited to, the rights set
forth in the other Sections of this Agreement.
Section 4. Proceedings Other Than
Proceedings by or in the Right of the Company . Indemnitee
shall be entitled to the rights of indemnification provided in this
Section if, by reason of his Company Status, he is, or is
threatened to be made, a party to any threatened, pending or
completed Proceeding, other than a Proceeding by or in the right of
the Company. Pursuant to this Section, Indemnitee shall be
indemnified against Expenses, judgments, penalties, fines and
amounts paid in settlement actually and reasonably incurred by him
or on his behalf in connection with any such Proceeding or any
claim, issue or matter therein, if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal
Proceeding, had no reasonable cause to believe his conduct was
unlawful.
Section 5. Proceedings by or in
the Right of the Company . Indemnitee shall be entitled to the
rights of indemnification provided in this Section if, by reason of
his Company Status, he is, or is threatened to be made, a party to
any threatened proceeding or completed Proceeding brought by or in
the right of the Company to procure a judgment in its favor.
Pursuant to this Section, Indemnitee shall be indemnified against
Expenses actually and reasonably incurred by him or on his behalf
in connection with any such Proceeding if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to
the best interests of the Company. Notwithstanding the foregoing,
no indemnification against such Expenses shall be made
in
respect of any claim, issue or matter in any
such proceeding as to which Indemnitee shall have been adjudged to
be liable to the Company if applicable law prohibits such
indemnification unless the Court of Chancery of the State of
Delaware, or the court in which such Proceeding shall have been
brought or is pending, shall determine that indemnification against
Expenses may nevertheless be made by the Company.
Section 6. Indemnification for
Expenses of Party Who is Wholly or Partly Successful .
Notwithstanding any other provision of this Agreement, to the
extent the Indemnitee is, by reason of his Company Status, a party
to and is successful, on the merits or otherwise, in any
Proceeding, he shall be indemnified against all Expenses actually
and reasonably incurred by him or on his behalf 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 Company shall indemnify Indemnitee against all
Expenses actually and reasonably incurred by him or on his behalf
in connection with each successfully resolved claim, issue or
matter. For the purposes of this Section and without limiting the
foregoing, the termination of any claim, issue or matter in any
such Proceeding by dismissal, with or without prejudice, shall be
deemed to be a successful result as to such claim, issue or
matter.
Section 7. Indemnification of
Expenses of a Witness . Notwithstanding any other provision of
this Agreement, to the extent that Indemnitee is, by reason of his
Company Status, a witness in any Proceeding, he shall be
indemnified against all Expenses actually and reasonably incurred
by him or on his behalf in connection therewith.
Section 8. Advancement of
Expenses . The Company shall advance all Expenses incurred by
or on behalf of Indemnitee in connection with any Proceeding within
20 days after the receipt by the Company of a statement or
statements from Indemnitee requesting such advance or advances from
time to time, whether prior to or after final disposition of such
Proceeding. Such statement or statements shall reasonably evidence
the Expenses incurred by Indemnitee and shall include or be
preceded or accompanied by an undertaking by or on behalf of
Indemnitee repay any Expenses advanced if it shall ultimately be
determined that Indemnitee is not entitled to be indemnified
against such Expenses.
Section 9. Procedure for
Determination of Entitlement to Indemnification .
(a) To obtain indemnification under
this Agreement in connection with any Proceeding, and for the
duration thereof, Indemnitee shall submit to the Company 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. The Secretary of the
Company shall, promptly upon receipt of any such request for
indemnification, advise the Board in writing that Indemnitee has
requested indemnification.
(b) Upon written request by
Indemnitee for indemnification pursuant to Section 9(a) hereof, a
determination, if required by applicable law, with respect to
Indemnitee’s entitlement thereto shall be made in such 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
(unless Indemnitee shall request that such
determination be made by the Board or the securityholders, in which
case in the manner provided for in clauses (ii) or (iii) of this
Section 9(b)); (ii) if a Change in Control shall not have occurred,
(A) by the Board by a majority vote of a quorum consisting of
Disinterested Directors, or (B) if a quorum of the Board consisting
of Disinterested Directors is not obtainable, or even if such
quorum is obtainable, if such quorum of Disinterested Directors so
directs, either (x) by Independent Counsel in a written opinion to
the Board, a copy of which shall be delivered to Indemnitee, or (y)
by the securityholders of the Company, as determined by such quorum
of Disinterested Directors, or a quorum of the Board, as the case
may be; or (iii) as provided in Section 10(b) of this Agreement. If
it is so determined that Indemnitee is entitled to indemnification,
payment to Indemnitee shall be made within 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 o
