Exhibit 10.15
INDEMNITY
AGREEMENT
THIS INDEMNITY AGREEMENT (the “
Agreement ”) is made and entered into as of February
4, 2009 (the “ Effective Date”) between Linn
Energy, LLC , a Delaware limited liability company (the “
Company ”), and George A. Alcorn (the “
Indemnitee ”).
WITNESSETH THAT:
A. Experienced
and competent persons have become more reluctant to serve companies
as directors, managers or officers 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
entity;
B. The
Board of Directors of the Company (the “ Board
”) has determined that, in order to attract and retain
qualified individuals, the Company will attempt to maintain on an
ongoing basis, at its sole expense, liability insurance to protect
persons serving the Company and its subsidiaries from certain
liabilities. The Second Amended and Restated Limited
Liability Company Agreement of the Company, as amended (the “
LLC Agreement ”), requires indemnification of the
officers, managers and directors of the Company. The LLC
Agreement states that its indemnification provisions are in
addition to any other indemnification rights of the Indemnitee
under any other agreement;
C. It
is reasonable, prudent and necessary for the Company to
contractually obligate itself to indemnify, and to advance Expenses
on behalf of, such persons so that they will serve or continue to
serve the Company free from undue concern that they will not be so
indemnified;
D. This
Agreement is supplemental to the LLC Agreement of the Company and
any resolutions adopted pursuant thereto, and shall not be deemed a
substitute therefor, nor to diminish or abrogate any rights of the
Indemnitee thereunder;
E. The
Indemnitee is willing to serve, or to continue to serve, or to take
on additional service for, the Company or its affiliates or other
Enterprise (as defined below) as a director on condition that the
Indemnitee be indemnified, and in consideration for being
indemnified, as provided for in this Agreement.
NOW, THEREFORE, in consideration of the
Indemnitee’s agreement to serve or continue to serve as a
director after the date hereof, the parties hereto agree as
follows:
1.
Definitions . For purposes of this
Agreement:
(a) “
Chancery Court ” means the Delaware Court of
Chancery.
(b) “
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 the Indemnitee.
(c) “
Enterprise ” shall mean the Company and any other
limited liability company, corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise that the
Indemnitee is or was serving at the express written request of the
Company as a director, manager, officer, employee, agent or
fiduciary.
(d) “
Enterprise Fiduciary ” means a person who is or was
serving as a director, manager, officer, employee or agent of an
Enterprise, or, while serving as a director, manager, officer,
employee or agent of an Enterprise, is or was serving as a tax
matters partner of the Company or, at the request of the Company,
as a director, manager, officer, tax matters partner, employee,
partner, manager, fiduciary or trustee of any affiliate of the
Company or any other Enterprise.
(e) “
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 and all other disbursements or expenses of the types
customarily incurred in connection with prosecuting, defending,
preparing to prosecute or defend, investigating, participating, or
being or preparing to be a witness in a
Proceeding. Expenses also shall include 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.
(f)
“Final Adjudication” shall mean a final judicial
decision from which there is no further right to appeal
.
(g) “
Independent Counsel ” means a law firm, or a member of
a law firm, that is experienced in matters of public companies,
fiduciary duties, indemnity matters and corporation and limited
liability company law, and neither presently is, nor in the past
five years has been, retained to represent: (i) the
Company or the 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 Company or the Indemnitee in an action to determine the
Indemnitee’s rights under this Agreement, unless the party
with whom counsel had a conflict of interest agrees, in such
party’s sole discretion, to waive such
conflict. The Company agrees to pay the reasonable fees
of the Independent Counsel referred to above.
(h) “
Proceeding ” includes 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
by or in the right of the Company or otherwise and whether civil,
criminal, administrative or investigative, in which the Indemnitee
was, is or will be involved as a party, witness or otherwise, by
reason of the fact that the Indemnitee is or was an Enterprise
Fiduciary, by reason of any action taken by the Indemnitee or of
any inaction on the Indemnitee’s part while acting as an
Enterprise Fiduciary, or by reason of the fact that the Indemnitee
is or was serving at the request of the Company as a
director, manager, officer,
employee, agent or fiduciary of another limited liability company,
corporation, partnership, joint venture, trust or other Enterprise;
in each case whether or not the Indemnitee is acting or serving in
any such capacity at the time any liability or expense is incurred
for which indemnification can be provided under this Agreement;
including one pending on or before the date of this Agreement, but
excluding one initiated by the Indemnitee pursuant to Section
8 of this Agreement to enforce the Indemnitee’s rights
under this Agreement.
2.
Indemnification of the Indemnitee . The Company
hereby agrees to indemnify the Indemnitee to the fullest extent
permitted by applicable Delaware law as it currently exists and to
such greater extent as applicable law may hereafter permit, with
respect to claims asserted from and after the Effective Date, which
claims relate to any act or alleged act of Indemnitee, or other
event, regardless of whether any such act, alleged act or event
occurred prior to or after the Effective Date, but subject to the
limitations expressly provided in this Agreement. The
Company shall be deemed to have requested the Indemnitee to serve
as fiduciary of an employee benefit plan whenever the performance
by the Indemnitee to the Company also imposes duties on, or
otherwise involves services by the Indemnitee to the plan or
participants or beneficiaries of the plan. In such case,
the Indemnitee shall be deemed to be an “Enterprise
Fiduciary.” Excise taxes assessed on the
Indemnitee with respect to an employee benefit plan pursuant to
applicable law shall constitute “fines” within the
meaning of Sections 2(a) and 2(b) . In
furtherance of the foregoing indemnification, and without limiting
the generality thereof:
(a)
Proceedings Other Than Proceedings by or in the Right of the
Company . The Indemnitee shall be entitled to the
rights of indemnification provided in this Section 2(a) to
the extent that the Indemnitee was or is a party or is threatened
to be made a party to, or otherwise requires representation of
counsel in connection with, any Proceeding (other than an action by
or in the right of the Company which is governed by Section
2(b) below) by reason of the fact that the Indemnitee is or was
an Enterprise Fiduciary or by reason of any action alleged to have
been taken or omitted in such capacity, against losses, Expenses,
judgments, fines, damages, penalties, interest, liabilities and
amounts paid in settlement actually and reasonably incurred by the
Indemnitee in connection with such Proceeding if the Indemnitee
acted in good faith and in a manner the Indemnitee reasonably
believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding,
had no reasonable cause to believe that the Indemnitee’s
conduct was unlawful. The termination of any Proceeding by
judgment, order, settlement, conviction or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a
presumption that the Indemnitee did not act in good faith and in a
manner which the Indemnitee reasonably believed to be in or not
opposed to the best interests of the Company, and, with respect to
any criminal action or proceeding, had reasonable cause to believe
that the Indemnitee’s conduct was unlawful.
(b)
Proceedings by or in the Right of the Company
. The Indemnitee shall be entitled to the rights of
indemnification provided in this Section 2(b) to the extent
that the Indemnitee was or is a party or is threatened to be made a
party to, or otherwise requires representation of counsel in
connection with, any threatened, pending or completed action, suit
or proceeding, by or in the right of the Company to procure a
judgment in its favor by reason of the fact that the Indemnitee was
or is an Enterprise Fiduciary, or by reason of any action alleged
to have been taken or omitted in such capacity, against losses,
Expenses, judgments, fines, damages, penalties, interest,
liabilities and amounts paid in settlement actually and
reasonably
incurred by the Indemnitee in
connection with such action, suit or proceeding if the Indemnitee
acted in good faith and in a manner the Indemnitee reasonably
believed to be in or not opposed to the best interests of the
Company and except that no indemnification shall be made in respect
of any claim, issue or matter as to which the Indemnitee shall have
been adjudged to be liable to the Company unless and only to the
extent that the Indemnitee obtains a Final Adjudication that,
despite the adjudication of liability but in view of all the
circumstances of the case, the Indemnitee is fairly and reasonably
entitled to indemnity for such Expenses. Action taken or
omitted by the Indemnitee with respect to any employee benefit plan
in the performance of the Indemnitee’s duties for a purpose
reasonably believed by the Indemnitee to be in the interest of the
participants and beneficiaries of the plan shall be deemed to be
for a purpose that is in, or not opposed to, the best interests of
the Company.
(c)
Indemnification for Expenses of a Party Who is Wholly or Partly
Successful . To the extent that the Indemnitee is
successful, on the merits or otherwise, in any Proceeding, the
Indemnitee shall be indemnified with respect to Expenses to the
maximum extent permitted by this Agreement and by
Delaware law if greater, against all Expenses actually and
reasonably incurred by the Indemnitee or on the Indemnitee’s
behalf in connection with the successful resolution of a
Proceeding. If the 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 the Indemnitee against
all Expenses actually and reasonably incurred by the Indemnitee or
on the Indemnitee’s behalf in connection with each
successfully resolved claim, issue or matter. 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.
3.
Insurance . If available, the Company shall
maintain an insurance policy or policies providing liability
insurance for Enterprise Fiduciaries which is at least as favorable
to the Indemnitee as the policy in effect on the Effective Date and
for so long as the Indemnitee's services are covered pursuant to
this Agreement, regardless of whether the Company would have the
power to indemnify such Enterprise Fiduciaries against such
liability under the provisions of this Agreement; provided and to
the extent that such insurance is available on a reasonable
commercial basis, as determined by the Board. To the
extent that the Company maintains an insurance policy or policies
providing liability insurance for its Enterprise Fiduciaries, the
Indemnitee shall be covered by such policy or policies to the
maximum extent permitted under its or their
terms. However, the Indemnitee shall continue to be
entitled to the indemnification rights provided pursuant to this
Agreement regardless of whether liability or other insurance
coverage is at any time obtained or retained by the
Company.
(a) Whether
or not the indemnification provided in Sections 2 and
3 hereof is available, in respect of any Proceeding in which
the Company is jointly liable with the Indemnitee (or would be if
joined in such Proceeding), the Company shall pay, in the first
instance, the entire amount of any judgment or settlement of such
action, suit or proceeding without requiring the Indemnitee to
contribute to such payment and the Company hereby waives and
relinquishes any right of contribution it may have against the
Indemnitee. The Company
shall not enter into a settlement of
any Proceeding in which the Company is jointly liable with the
Indemnitee (or would be if joined in such Proceeding) unless such
settlement provides for a full and final release of all claims
asserted against the Indemnitee.
(b) Without
diminishing or impairing the obligations of the Company set forth
in Section 4(a) , if, for any reason, the Indemnitee shall
elect or be required to pay all or any portion of any judgment or
settlement in any Proceeding in which the Company is jointly liable
with the Indemnitee (or would be if joined in such Proceeding), the
Company shall contribute to the amount of Expense, judgments, fines
and settlements actually and reasonably incurred and paid or
payable by the Indemnitee in proportion to the relative benefits
received by the Company and all officers, directors, managers or
employees of the Company, other than the Indemnitee, who are
jointly liable with the Indemnitee (or would be if joined in such
Proceeding), on the one hand, and the Indemnitee, on the other
hand, from the transaction from which such Proceeding arose;
provided, however, that the proportion determined on the basis of
relative benefit may, to the extent necessary to conform to law, be
further adjusted by reference to the relative fault of the Company
and all officers, directors, managers or employees of the Company
other than the Indemnitee who are jointly liable with the
Indemnitee (or would be if joined in such Proceeding), on the one
hand, and the Indemnitee, on the other hand, in connection with the
events that resulted in such Expense, judgments, fines or
settlement amounts, as well as any other equitable considerations
which the law may require to be considered. The relative
fault of the Company and all officers, directors, managers or
employees of the Company, other than the Indemnitee, who are
jointly liable with the Indemnitee (or would be if joined in such
Proceeding), on the one hand, and the Indemnitee, 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.
(c) To
the fullest extent permissible under applicable law, if the
indemnification provided for in this Agreement is unavailable to
the Indemnitee for any reason whatsoever, the Company, in lieu of
indemnifying the Indemnitee, shall contribute to the amount
incurred by the 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 Company and the 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 Company (and its directors,
managers, officers, employees and agents) and the Indemnitee in
connection with such event(s) and/or transaction(s).
5.
Indemnification for Expenses of a Witness
.
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