Exhibit 10.1
INDEMNIFICATION
AGREEMENT
This Indemnification Agreement
(hereinafter the “Agreement”) is made as of the 25
th day of October, 2005 by and between
Venoco, Inc., a Delaware corporation, (hereinafter the
“Company”)
and (hereinafter
the “Indemnitee”).
WHEREAS, competent and experienced
persons often are reluctant to serve as directors of corporations
unless they are protected by comprehensive polices of insurance
and/or indemnification, due to the number of lawsuits against such
corporations and their directors, the attendant expense of
defending against such lawsuits, and the exposure of such directors
to unreasonably high damages;
WHEREAS, present laws and
interpretations are not always sufficiently certain to provide such
directors with adequate, reliable knowledge of the legal risks to
which they might be exposed as a result of serving a
corporation;
WHEREAS, the Company has concluded
that protecting its directors against such risks helps to attract
the most capable persons to such positions;
WHEREAS, applicable law empowers the
Company to indemnify persons who served or are serving as a
director of the Company and further empowers the Company to
purchase and maintain insurance (on behalf of such persons) against
liability which may be asserted against or incurred by such persons
in any such capacity, or arising out of their status as such,
whether or not the Company would have the power to indemnify
against such liability under the provisions of said
laws;
WHEREAS, the Company desires to have
Indemnitee serve or continue to serve as a director of the Company
free from undue concern for damages by reason of Indemnitee being a
director of the Company or by reason of his decisions or actions on
its behalf, and Indemnitee is willing to serve or to continue to
serve in one or more of such capacities, only if he is furnished
the indemnity provided for hereinafter; and
WHEREAS, to induce Indemnitee to
serve or continue to serve as a director of the Company, the
Company has determined to grant to Indemnitee, as permitted by
Section 145(f) of the General Corporation Law of the
State of Delaware (hereinafter, the “DGCL”), rights to
indemnification and advancement of expenses as provided herein,
whether or not expressly provided in the Certificate of
Incorporation or the By-Laws of the Company or other provisions of
Section 145 of the DGCL.
NOW, THEREFORE, in consideration of
Indemnitee’s service as a director of the Company after the
date hereof, the sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
Section 1.
Indemnification. (a) The Company shall hold harmless
and indemnify Indemnitee against expenses (including, without
limitation, attorneys’ fees; all costs, expenses and
obligations incurred in connection with being or preparing to be a
witness in a Proceeding (as defined below); 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
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Agreement), judgments, fines and amounts paid in
settlement (hereinafter, collectively “Losses”)
actually and reasonably incurred by Indemnitee in connection with
any threatened, pending or completed action, suit, alternative
dispute resolution mechanism or proceeding, whether civil,
criminal, administrative or investigative, to which Indemnitee was
or is a party or is threatened to be made a party by reason of the
fact that Indemnitee is or was a director of the Company, or is or
was serving at the request of the Company as a director, officer,
employee or agent of another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise
(hereinafter, a “Proceeding”), to the fullest
extent permitted by Delaware law; provided, however, that the
Company shall not be required to indemnify Indemnitee in connection
with any action, suit or proceeding (or part thereof) initiated by
Indemnitee (excluding compulsory counterclaims and affirmative
defenses) unless: (i) such indemnification is expressly
required to be made by law, (ii) the proceeding was authorized
by a majority of the Company’s disinterested directors,
whether or not such directors constitute a quorum, or
(iii) such indemnification is provided by the Company, in its
sole discretion, pursuant to the powers vested in the Company under
the DGCL.
(b) Selection of Counsel.
Indemnitee shall provide written notice (a “Claim
Notice”) to the Company promptly after receiving notice of
any Proceeding initiated by a third party that may give rise to a
claim for indemnification hereunder. Following its receipt of the
Claim Notice, the Company shall be entitled to assume the defense
of such Proceeding with counsel approved by Indemnitee, which
approval shall not be unreasonably withheld, upon the delivery to
Indemnitee of written notice of its election to do so within 30
days of its receipt of the Claim Notice. After delivery of such
notice, approval of such counsel by Indemnitee and the retention of
such counsel by the Company, the Company shall not be liable to
Indemnitee under this Agreement for any fees of counsel
subsequently incurred by Indemnitee with respect to the same
Proceeding; provided that (i) Indemnitee shall have the right
to employ Indemnitee’s counsel in any such Proceeding at
Indemnitee’s expense and (ii) if (A) the employment
of counsel by Indemnitee has been previously authorized by the
Company, (B) Indemnitee shall have reasonably concluded that
there is a conflict of interest between the Company and
Indemnitee in the conduct of any such defense, or (C) the
Company shall not continue to retain such counsel to defend such
Proceeding, then the fees and expenses of Indemnitee’s
counsel shall be at the expense of the Company.
(c) If Indemnitee is entitled
under any provision of this Agreement to indemnification by the
Company for some or a portion of the Losses actually and reasonably
incurred by Indemnitee in a Proceeding, but not, however, for the
total amount thereof, the Company shall indemnify Indemnitee for
the portion of such Losses to which Indemnitee is
entitled.
Section 2.
Advancement of Expenses . (a) Expenses (including
attorneys’ fees) incurred by Indemnitee in defending a
Proceeding shall be paid by the Company in advance of the final
disposition of such Proceeding upon receipt of an undertaking
(hereinafter, an “Undertaking”) by or on behalf of
Indemnitee to repay such amount if, and to the extent, it shall
ultimately be determined as follows that Indemnitee is not entitled
to be indemnified by the Company: (i) if Indemnitee does not
file suit against the Company for indemnification in accordance
with Section 3 hereof, (A) if requested by
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Indemnitee or if there are no disinterested
directors, by Independent Counsel (as defined below) or (B) by
a majority vote of the Company’s disinterested directors,
even though less than a quorum, or by a majority vote of a
committee of disinterested directors designated by a majority vote
of disinterested directors, even though less than a quorum, or
(ii)
