Indemnity Agreement - Unocal Corp. and Director
Unocal Corporation Director
Indemnity Agreement
This Agreement is made as of [Insert Date of Appt] by and among Unocal
Corporation, a Delaware corporation (the "Corporation"), and [Insert Name of
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Unocal Director] (the "Director") with reference to the following facts:
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RECITALS
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A. The Director is currently a member of the Board of Directors of the
Corporation and of certain subsidiaries of the Corporation and is performing
valuable services for the Corporation. The Corporation wishes the Director to
continue in such capacity, and the Director is willing, under certain
circumstances, to continue in such capacity.
B. The Corporation's Certificate of Incorporation, as permitted by Section
102(b)(7) of the Delaware General Corporation Law, has been amended to eliminate
the Director's liability to the Corporation and its shareholders for monetary
damages for certain breaches of fiduciary duty.
C. The Bylaws of the Corporation provide for the indemnification of the
officers, directors, agents, and employees of the Corporation to the maximum
extent authorized by Section 145 of the Delaware General Corporation Law, as
amended or as may be amended, revised, or superseded.
D. In addition to the indemnification to which the Director is entitled
pursuant to the Bylaws of the Corporation and as additional consideration for
the Director's services, the Corporation has, in the past, furnished at its
expense directors and officers liability insurance protecting the Director in
connection with such services. The Corporation is continuing to furnish such
insurance at its expense and will continue to do so, subject to the availability
of such insurance at a reasonable cost. Moreover, insurance carriers, as a
condition of issuing director and officer liability insurance policies, are
requiring that corporations protect directors from liability to the maximum
extent permitted by the Delaware General Corporation Law.
E. The Director has indicated that he does not regard the Certificate of
Incorporation (as amended to incorporate the protections permitted by Section
102(b)(7) of the Delaware General Corporation Law), the indemnities available
under the Corporation's Bylaws, and the directors and officers liability
insurance in effect as adequate to protect him against the risks associated with
his services to the Corporation. The Director may not be willing to continue in
office in the absence of the further lawful protections afforded by the instant
Agreement.
AGREEMENT
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NOW, THEREFORE, in order to induce the Director to continue to serve as a
Director of the Corporation and of certain subsidiaries of the Corporation, in
consideration for his continued services, and in order to do everything possible
to procure and maintain adequate director and officer liability insurance
policies, the Corporation hereby agrees to indemnify the Director as follows:
1. The Corporation will pay on behalf of the Director and his executors,
administrators, or assigns, any amount which he is or becomes legally obligated
to pay because of any claim or claims made against him because of any act or
omission or neglect or breach of duty, including any actual or alleged error or
misstatement or misleading statement, which he commits or suffers while acting
in his capacity as a Director of the Corporation or of certain subsidiaries of
the Corporation and solely because of his being a Director. The payments which
the Corporation will be obligated to make hereunder shall include, inter alia,
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damages, judgments, settlements and costs, costs of investigation (excluding
salaries of officers or employees of the Corporation), and costs of defense of
legal actions, claims, or proceedings and appeals
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therefrom, and costs of attachment or similar bonds; provided, however, that the
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Corporation shall not be obligated to pay fines or other obligations or fees
imposed by law or otherwise which it is prohibited from paying as indemnity by
applicable law or public policy or for any other reason.
2. If a claim under this Agreement is not paid by the Corporation, or on its
behalf, within sixty (60) days after a written claim has been received by the
Corporation, the Director may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim; and, if successful in
whole or in part, circumstance Director shall also be entitled to be paid the
expense of prosecuting such claim.
3. In the event of payment under this Agreement, the Corporation shall be
subrogated to the extent of such payment to all of the rights of recovery of the
Director, who shall execute all papers required and shall do everything that may
be necessary to secure such rights, including the execution of such documents
necessary to enable the Corporation effectively to bring suit to enforce such
rights.
4. The Corporation shall not be liable under this Agreement to make any
payment in connection with any claim made against the Director:
(a) for which payment is actually made to the Director under a valid
and collectible insurance policy, except in respect of any excess
beyond the amount of payment under such insurance;
(b) for which the Director is entitled to indemnity and/or payment by
reason of having given notice of any circumstance which might give rise
to a claim under any policy of insurance, the terms of which have
expired prior to the effective date of this Agreement;
(c) for which the Director is indemnified by the Corporation
otherwise than pursuant to this Agreement;
(d) based upon or attributable to the Director gaining in fact any
personal profit or advantage to which he was not legally entitled;
(e) for an accounting or profits made from the purchase or sale by
the Director of securities of the Corporation within the meaning of
Section 16(b) of the Securities Exchange Act of 1934 and amendments
thereto or similar provisions of any state statutory law or common law;
(f) brought about or contributed to by the dishonesty of the Director
seeking payment hereunder; however, notwithstanding the foregoing, the
Director shall be protected under this Agreement as to any claims upon
which suit may be brought against him by reason of any alleged
dishonesty on his part, unless a judgment or other final adjudication
thereof adverse to the Director shall establish that he committed (i)
acts of active and deliberate dishonesty (ii) with actual dishonest
purpose and intent, which acts were material to the cause of action so
adjudicated; or
(g) if a court holds that such payment is prohibited by applicable
law or is against public policy.
5. No costs, charges, or expenses for which indemnity shall be sought
hereunder shall be incurred without the Corporation's consent, which consent
shall not be unreasonably withheld.
6. The Director, as a condition precedent to his right to be indemnified
under this Agreement, shall give to the Corporation notice in writing as soon as
practicable of any claim made against him for which indemnity will or could be
sought under this Agreement. Notice to the Corporation shall be directed to
Unocal Corporation, Attention: Corporate Secretary, 2141 Rosecrans Avenue, Suite
4000, El Segundo, California 90245 (or such other address as to the Corporation
shall designate in writing to Director); notice shall be deemed received if sent
by prepaid mail properly addressed, the date of such notice being the date
postmarked. In addition, the Director shall give the Corporation such
information and cooperation as it may reasonably require and as shall be within
the Director's power.
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7. This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one instrument.
8. Nothing herein shall be deemed to diminish or otherwise restrict the
Director's right to indemnification under any provision of the Certificate of
Incorporation or Bylaws of the Corporation or under Delaware law.
9. This Agreement shall be governed by and construed in accordance with
Delaware law .
10. This Agreement shall be binding upon all successors and assigns of the
Corporation (including any transferee of all or substantially all of its assets
and any successor by merger, consolidation, or operation of law) and shall inure
to the benefit of the heirs, personal representatives and estate of the
Director.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and signed as of the day and year first above written.
DIRECTOR:
UNOCAL CORPORATION
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By_______________________________________________ [Insert Director's Name]
Dennis P.R. Codon, Vice President, Chief Legal
Officer and General Counsel
By_______________________________________________
Brigitte M. Dewez, Corporate Secretary
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