Document:

exv10w1

Exhibit 10.1

TESORO CORPORATION

BOARD OF DIRECTORS

DEFERRED COMPENSATION PLAN

(as amended and restated effective May 1, 2009)

 

 

TESORO CORPORATION

BOARD OF DIRECTORS

DEFERRED COMPENSATION PLAN

TABLE
OF CONTENTS

	 	 	 	 	 
	 	 	Page
	ARTICLE I DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	1.1 Account
	 	 	1	 
	1.2 Aggregated Plan
	 	 	1	 
	1.3 Beneficiary
	 	 	1	 
	1.4 Board
	 	 	1	 
	1.5 Change of Control
	 	 	1	 
	1.6 Code
	 	 	2	 
	1.7 Committee
	 	 	2	 
	1.8 Common Stock
	 	 	2	 
	1.9 Corporation
	 	 	2	 
	1.10 Deferred Cash Account
	 	 	2	 
	1.11 Deferral Ledger
	 	 	2	 
	1.12 Deferred Phantom Stock Account
	 	 	2	 
	1.13 Disability
	 	 	3	 
	1.14 Distribution Schedule
	 	 	3	 
	1.15 Effective Date
	 	 	3	 
	1.16 Fair Market Value
	 	 	3	 
	1.17 Participant
	 	 	3	 
	1.18 Plan
	 	 	3	 
	1.19 Plan Year
	 	 	3	 
	1.20 Regulations
	 	 	3	 
	1.21 Separation from Service
	 	 	3	 
	1.22 Spouse
	 	 	4	 
	1.23 Trust
	 	 	4	 
	1.24 Unit
	 	 	4	 
	1.25 Valuation Date
	 	 	4	 
	 
	 	 	 	 
	ARTICLE II ELIGIBILITY AND PARTICIPATION
	 	 	4	 
	 
	 	 	 	 
	2.1 Eligibility
	 	 	4	 
	2.2 Participation
	 	 	4	 
	 
	 	 	 	 
	ARTICLE III DEFERRED CASH ACCOUNT
	 	 	4	 
	 
	 	 	 	 
	3.1 Elective Deferrals Upon Commencement of Participation
	 	 	4	 
	3.2 Annual Elective Deferrals
	 	 	5	 
	3.3 Subsequent Elections Regarding Timing and Method of Payment
	 	 	5	 
	3.4 Restrictions on Deferral Amount
	 	 	5	 
	 
	 	 	 	 
	ARTICLE IV DEFERRED PHANTOM STOCK ACCOUNT
	 	 	6	 
	 
	 	 	 	 
	4.1 Nonelective Deferral Contributions
	 	 	6	 
	4.2 Elective Deferrals Upon Commencement of Participation
	 	 	6	 
	4.3 Annual Elective Deferrals
	 	 	7	 
	4.4 Subsequent Elections Regarding Method of Payment
	 	 	7	 
	4.5 Restrictions on Deferral Amount
	 	 	7	 

i

 

TABLE
OF CONTENTS
(continued)

	 	 	 	 	 
	 	 	Page
	ARTICLE V CREDITING ACCOUNTS
	 	 	7	 
	 
	 	 	 	 
	5.1 Establishing a Participant’s Account
	 	 	7	 
	5.2 Credits to the Deferred Cash Account
	 	 	8	 
	5.3 Credits to the Deferred Phantom Stock Account
	 	 	8	 
	 
	 	 	 	 
	ARTICLE VI VESTING
	 	 	9	 
	 
	 	 	 	 
	ARTICLE VII DISTRIBUTIONS
	 	 	9	 
	 
	 	 	 	 
	7.1 General
	 	 	9	 
	7.2 Distribution Upon Death
	 	 	9	 
	7.3 Designation of Beneficiary
	 	 	10	 
	7.4 Disability
	 	 	10	 
	7.5 Unforeseeable Emergency
	 	 	10	 
	7.6 Change of Control
	 	 	11	 
	7.7 Change in Time of Payments
	 	 	11	 
	7.8 Cashout Distributions
	 	 	12	 
	 
	 	 	 	 
	ARTICLE VIII ADMINISTRATION
	 	 	12	 
	 
	8.1 Committee Appointment
	 	 	12	 
	8.2 Committee Organization and Voting
	 	 	13	 
	8.3 Powers of the Committee
	 	 	13	 
	8.4 Committee Discretion
	 	 	13	 
	8.5 Committee Discretion on Change of Control
	 	 	13	 
	8.6 Annual Statements
	 	 	14	 
	8.7 Reimbursement of Expenses
	 	 	14	 
	8.8 Indemnification
	 	 	14	 
	 
	 	 	 	 
	ARTICLE IX AMENDMENT AND/OR TERMINATION
	 	 	14	 
	 
	 	 	 	 
	9.1 Amendment or Termination of the Plan
	 	 	14	 
	9.2 No Retroactive Effect on Account
	 	 	14	 
	9.3 Effect of Termination
	 	 	14	 
	 
	 	 	 	 
	ARTICLE X UNFUNDED PLAN
	 	 	15	 
	 
	 	 	 	 
	10.1 Benefits from General Assets of Corporation
	 	 	15	 
	10.2 No Requirement to Fund
	 	 	15	 
	10.3 Adoption of Trust
	 	 	15	 
	10.4 Status as Unsecured Creditor
	 	 	15	 
	 
	 	 	 	 
	ARTICLE XI MISCELLANEOUS
	 	 	16	 
	 
	 	 	 	 
	11.1 Distributions to Incompetents or Minors
	 	 	16	 
	11.2 Nonalienation of Benefits
	 	 	16	 
	11.3 Reliance Upon Information
	 	 	16	 
	11.4 Severability
	 	 	16	 
	11.5 Notice
	 	 	16	 
	11.6 Gender and Number
	 	 	16	 
	11.7 Governing Law
	 	 	17	 

ii

 

TESORO CORPORATION

BOARD OF DIRECTORS

DEFERRED COMPENSATION PLAN

     WHEREAS, Tesoro Corporation (the “Corporation”) previously established the Tesoro Corporation
Board of Directors Deferred Compensation Plan, effective April 1, 1995, as subsequently amended and
restated effective January 1, 2009 (the “Deferred Compensation Plan”), to permit non-employee
members of the Board to voluntarily defer any part or all of the cash portion of their directors’
fees;

     WHEREAS, the Corporation also previously established the Tesoro Corporation Board of Directors
Deferred Phantom Stock Plan, effective March 6, 1997, as subsequently amended and restated
effective January 1, 2009 (the “Deferred Phantom Stock Plan”), for the benefit of non-employee
members of the Board, pursuant to which certain director fees, together with voluntary deferrals,
were credited annually on behalf of said non-employee members of the Board as units of beneficial
interest; and

     WHEREAS, the Corporation desires to merge the Deferred Phantom Stock Plan into the Deferred
Compensation Plan, effective May 1, 2009, and, accordingly, to amend and restate the Deferred
Compensation Plan to incorporate the changes contemplated in connection with said merger;

     NOW, THEREFORE, effective May 1, 2009, the Deferred Phantom Stock Plan shall be merged into
the Deferred Compensation Plan and said Deferred Compensation Plan is accordingly amended and
restated in its entirety, superseded and replaced by this restated plan (the “Plan”), effective May
1, 2009, except as otherwise specifically set forth herein, the terms and conditions of which are
as follows:

ARTICLE I

DEFINITIONS

     1.1 Account. “Account” means a bookkeeping account in the Deferral Ledger that reflects the
benefits to which a Participant is entitled under this Plan.

     1.2 Aggregated Plan. “Aggregated Plan” means all agreements, methods, programs, and other
arrangements sponsored by the Corporation that would be aggregated with this Plan under Section
1.409A-1(c) of the Regulations.

     1.3 Beneficiary. “Beneficiary” means a person or entity designated by the Participant in
accordance with Section 7.3 hereof to receive amounts credited to his Account following his death.

     1.4 Board. “Board” means the Board of Directors of the Corporation.

     1.5 Change of Control. “Change of Control” means the occurrence of any one of the following
events:

 

 

     (a) any one person, or more than one person acting as a group, acquires ownership of
stock of the Corporation that, together with stock held by such person or group,
constitutes more than 50% of the total Fair Market Value or total voting power of the
stock of the Corporation;

     (b) any one person, or more than one person acting as a group, acquires (or has
acquired during any twelve (12) month period) ownership of stock of the Corporation
possessing 30% or more of the total voting power of the stock of the Corporation;

     (c) a majority of the members of the Board is replaced during any twelve (12) month
period by directors whose appointment is not endorsed by a majority of the members of the
Board before the date of the appointment or election; or

     (d) any one person, or more than one person acting as a group, acquires (or has
acquired during any twelve (12) month period) assets from the Corporation that have a
total gross Fair Market Value equal to or more than 40% of the total gross Fair Market
Value of all of the assets of the Corporation immediately before such acquisition or
acquisitions.

The determination of whether a Change of Control has occurred shall be made by the Committee in
accordance with the provisions of Code Section 409A and the Regulations promulgated thereunder.

     1.6 Code. “Code” means the Internal Revenue Code of 1986, as amended from time to time.

     1.7 Committee. “Committee” means the committee designated by the Corporation to administer
the Plan.

     1.8 Common Stock. “Common Stock” means the common stock, $.16 par value, of the Corporation.

     1.9 Corporation. “Corporation” means Tesoro Corporation, or any successor entity that
maintains the Plan.

     1.10 Deferred Cash Account. “Deferred Cash Account” means a bookkeeping account in the
Deferral Ledger which reflects a Participant’s deferrals under Article III. The Deferred Cash
Account shall include all amounts previously credited to Participant under the Deferred
Compensation Plan prior to the Effective Date.

     1.11 Deferral Ledger. “Deferral Ledger” means the ledger established and maintained by the
Committee to reflect each Participant’s Account under the Plan. Such Deferral Ledger shall contain
a Deferred Phantom Stock Account and, as applicable, a Deferred Cash Account, to reflect the
benefit of each Participant under the Plan.

     1.12 Deferred Phantom Stock Account. “Deferred Phantom Stock Account” means a bookkeeping
account in the Deferral Ledger which reflects a Participant’s deferrals under

 

 

Article
IV. The Deferred Phantom Stock Account shall include all amounts previously credited to
Participant under the Deferred Phantom Stock Plan prior to the Effective Date.

     1.13 Disability. “Disability” means a Participant’s inability to engage in any substantial
gainful activity by reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period of not less than
twelve (12) months. The determination of whether a Participant suffers from a Disability shall be
made by the Committee in accordance with the provisions of Code Section 409A and the Regulations
promulgated thereunder.

     1.14 Distribution Schedule. “Distribution Schedule” shall mean the time and method of
distributions elected (or deemed elected) by a Participant, which method may be either a lump sum
payment or installment payments, pursuant to which distribution of the Participant’s Account shall
be made or shall commence. Such election shall be made at the time and in the manner described in
Articles III and IV hereof; provided, however, that a Distribution Schedule elected by the
Participant pursuant to which installment payments are to be made must require annual installments
for a period not to exceed ten (10) years.

     1.15 Effective Date. “Effective Date” means May 1, 2009, the date on which this amended and
restated Plan is effective, except as otherwise specifically set forth herein. The Plan shall be
effective only with respect to those non-employee directors of the Corporation who are in active
service on the Effective Date.

     1.16 Fair Market Value. “Fair Market Value” means the closing price of the Common Stock on
the New York Stock Exchange on the determination date, or if the Common Stock is not traded on that
date, then the closing price on the immediately preceding date on which the Common Stock is traded.

     1.17 Participant. “Participant” means a non-employee member of the Board with respect to
which all or any portion of his directors’ fees are deferred or otherwise credited under this Plan.

     1.18 Plan. “Plan” means this amended and restated Tesoro Corporation Board of Directors
Deferred Compensation Plan, effective May 1, 2009 (except as specifically noted herein), as set
forth in this document and as may be amended from time to time.

     1.19 Plan Year. “Plan Year” means the calendar year.

     1.20 Regulations. “Regulations” means the Treasury Regulations promulgated under the Code.

     1.21 Separation from Service. “Separation from Service” means the date on which the
Participant ceases to be a director of the Corporation; provided that a Separation from Service
shall not have occurred if the Corporation anticipates that the Participant will continue to
provide services to the Corporation or a subsidiary, whether as an employee or consultant or in any
other capacity. The determination of whether a Separation from Service has occurred shall be made
by the Committee in accordance with Section 1.409A-1(h) of the Regulations, or such

 

 

other guidance
with respect to Code Section 409A that may be in effect on the date of determination.

     1.22 Spouse. “Spouse” means, for purposes of Section 7.5, an individual of the opposite sex
who is married to a Participant and, for all other purposes, an individual who is married to the
Participant in a legal union recognized by the state in which the Participant resides.

     1.23 Trust. “Trust” means the Tesoro Corporation Board of Directors Deferred Compensation
Trust created by separate agreement.

     1.24 Unit. “Unit” means a unit of beneficial interest credited to a Participant’s Deferred
Phantom Stock Account pursuant to Article IV hereunder. The value of a Unit for purposes of this
Plan shall be determined by the Committee, based upon the closing quotation of the Common Stock on
the New York Stock Exchange on the date of the determination. Where applicable, such cash shall be
converted into Units and vice versa in accordance with Sections 5.3(a) and (c) and Section 7.1(d).

     1.25 Valuation Date. “Valuation Date” means the day on which the financial markets are open
and that is closest in proximity to the last business day of each calendar quarter.

ARTICLE II

ELIGIBILITY AND PARTICIPATION

     2.1 Eligibility. All members of the Board who are not otherwise employed by the Corporation
or a subsidiary of the Corporation shall be eligible to participate in this Plan.

     2.2 Participation. An eligible member of the Board shall automatically become a Participant
in this Plan as of the date on which his service as a member of the Board commences.

ARTICLE III

DEFERRED CASH ACCOUNT

     3.1 Elective Deferrals Upon Commencement of Participation. Effective January 1, 2010, a
Participant may elect to defer all or any portion of his director fees, including his Annual
Retainer fee, Lead Director fees and Committee Chairman fees, that is not otherwise deferred
pursuant to the provisions of Section 4.1 hereof by executing a participation agreement in such
form and at such time as the Committee shall require, provided that the participation agreement
shall be executed within thirty (30) days of the date on which his service as a member of the Board
commences. The Participant’s election shall become effective immediately following the Committee’s
receipt of the Participant’s executed participation agreement. The Participant may, at such time,
also irrevocably elect the Distribution Schedule under which amounts deferred under this Article
III shall be paid, subject to the restrictions of the Plan. A Participant’s failure to timely
submit a participation agreement in accordance with this Section 3.1 shall be deemed an election by
the Participant to defer zero percent (0%) of his director fees into a Deferred Cash Account for
the Plan Year during which the Participant first becomes eligible to participate. A Participant’s
failure to elect a Distribution Schedule in accordance with this Section 3.1 shall be deemed an
election by the Participant to receive

 

 

amounts credited hereunder to his Deferred Cash Account in a
lump sum payment within the ninety (90) day period following such Participant’s Separation from
Service. The Participant’s elections (or
deemed elections) shall become irrevocable as of the last day of the (thirty) 30 day period
during which the Participant is permitted to make an election in accordance with this Section 3.1.

     3.2 Annual Elective Deferrals. A Participant’s elections (or deemed elections) under this
Article III shall remain effective for each subsequent Plan Year for which the Participant is
eligible to participate in the Plan, unless and until such elections (or deemed elections) are
modified or revoked by the Participant in accordance with this Section 3.2 or until the Participant
supersedes such election with an election under Section 4.3 hereof. A Participant may modify or
revoke an election (including a deemed election) with respect to the deferral of (or the
Distribution Schedule applicable to) his director fees to be earned in a subsequent Plan Year by
submitting an executed agreement to the Committee, in such form as the Committee shall require, no
later than the last day of the Plan Year immediately preceding the Plan Year in which such director
fees will be earned. In any case in which the date elected on a Distribution Schedule predates or
coincides with the date on which a deferred amount would otherwise have been paid, the date of
distribution shall instead be the date of the Participant’s Separation from Service.

     3.3 Subsequent Elections Regarding Timing and Method of Payment. The Committee may, in its
sole and absolute discretion, permit a Participant to subsequently modify a prior election (or
deemed election) under this Article III in order to change the timing or method of payment to be
received hereunder, provided that (i) such subsequent election shall not take effect for at least
twelve (12) months following the date on which the subsequent election is made; (ii) with respect
to a payment that the Participant is entitled to receive following his Separation from Service or
pursuant to a Distribution Schedule, the payment with respect to which such subsequent election is
made is deferred at least five (5) years from the date on which such payment would otherwise have
been made absent such subsequent election (or in the case of installment payments, five (5) years
from the date the first payment was scheduled to be made); and (iii) with respect to the payment of
benefits hereunder pursuant to a Distribution Schedule, such subsequent election is made no less
than twelve (12) months prior to the date the payment is scheduled to be made (or in the case of
installment payments, five (5) years from the date the first payment was scheduled to be made).

     3.4 Restrictions on Deferral Amount. A Participant may elect to defer into the Deferred Cash
Account up to one hundred percent (100%) of that portion of his director fees that is not otherwise
automatically deferred pursuant to the provisions of Section 4.1 hereof; provided, however, as
to each such fee, the election must be made in ten percent (10%) increments and must be made
with respect to at least twenty percent (20%) of each such fee subject to the deferral.
Notwithstanding the foregoing, effective for Plan Years commencing on or after January 1, 2010, a
Participant may not make a deferral election under this Article III with respect to such portion of
his Annual Retainer fee for a Plan Year for which an elective deferral of such portion of his
Annual Retainer fee is made under Section 4.2 or 4.3 hereof. Lead Director fees, Committee
Chairman fees, and any other fees to which a Participant may be entitled as a result of his service
with the Corporation and that are not otherwise deferred pursuant to the provisions of Section 4.1
hereof (excluding, however, his Annual Retainer fee)

 

 

may be deferred only to the Participant’s
Deferred Cash Account. Annual Retainer fees may be deferred to the Participant’s Deferred Cash
Account or, as provided in Article IV hereof, to his Deferred Phantom Stock Account.

ARTICLE IV

DEFERRED PHANTOM STOCK ACCOUNT

     4.1 Nonelective Deferral Contributions.

     (a) Annual Retainer Fee. At the end of each quarter in a Plan Year, one-half
of that portion of the Participant’s Annual Retainer fee that would otherwise be paid to
Participant on such date shall be automatically deferred as a nonelective contribution
into such Participant’s Deferred Phantom Stock Account. Such deferral shall be for a
period of at least three Plan Years, beginning with the Plan Year in which such fee would
otherwise have been paid. The Participant may elect to defer such amount to a date beyond
said three-year period; provided, however, that such election must be made no later than
the time set forth in Section 4.2 or 4.3 hereof, as applicable.

     (b) New Director Sign-On Award. Any award provided to a new non-employee
member of the Board as an inducement to join the Board shall automatically be deferred in
its entirety, in a manner consistent with the provisions of Section 4.1(a) hereof.

     4.2 Elective Deferrals Upon Commencement of Participation. Effective January 1, 2010, a
Participant may elect to defer all or any portion of his Annual Retainer fee that is not otherwise
deferred pursuant to the provisions of Section 4.1 or Article III hereof by executing a
participation agreement in such form and at such time as the Committee shall require, provided that
the participation agreement shall be executed within thirty (30) days of the date on which his
service as a member of the Board commences. This Section 4.2 shall apply only to a Participant’s
Annual Retainer fee and not to any Lead Director fees, Committee Chairman Fees, or any other fees
to which a Participant may be entitled as a result of his service with the Corporation. The
Participant’s election shall become effective immediately following the Committee’s receipt of the
Participant’s executed participation agreement. The Participant may, at such time, also
irrevocably elect the Distribution Schedule under which amounts deferred under this Article IV
shall be paid, subject to the restrictions of the Plan; provided, however, that amounts
automatically deferred pursuant to Section 4.1 hereof must be deferred for a period of at least
three Plan Years, beginning with the Plan Year in which the fee would otherwise have been paid. A
Participant’s failure to timely submit a participation agreement in accordance with this Section
4.2 hereof shall be deemed an election by the Participant to defer zero percent (0%) of that
portion of his Annual Retainer fee eligible for deferral under this Section 4.2 into a Deferred
Phantom Stock Account for the Plan Year during which the Participant first becomes eligible to
participate. A Participant’s failure to elect a Distribution Schedule in accordance with this
Section 4.2 shall be deemed an election by the Participant to receive amounts credited hereunder to
his Deferred Phantom Stock Account in a lump sum payment within the ninety (90) day period
following such Participant’s Separation from Service. The Participant’s elections (or deemed
elections) shall become irrevocable as of the last day of the (thirty) 30 day period during which
the Participant is permitted to make an election in accordance with this Section 4.2.

 

 

     4.3 Annual Elective Deferrals. A Participant’s elections (or deemed elections) under Section
4.2 hereof shall remain effective for each subsequent Plan Year for which the Participant is
eligible to participate in the Plan, unless and until such elections (or deemed elections) are
modified or revoked by the Participant in accordance with this Section 4.3 or until
the Participant supersedes such election with an election under Section 3.2 hereof. A
Participant may modify or revoke such an election under Section 4.2 (including a deemed election)
with respect to the deferral of (or the Distribution Schedule applicable to) that portion of his
Annual Retainer fee to be earned in a subsequent Plan Year and eligible for elective deferral under
this Article IV by submitting an executed agreement to the Committee, in such form as the Committee
shall require, no later than the last day of the Plan Year immediately preceding the Plan Year in
which such Annual Retainer fee will be earned. In any case in which the date elected on a
Distribution Schedule predates or coincides with the date on which a deferred amount would
otherwise have been paid, the date of distribution shall instead be the date of the Participant’s
Separation from Service.

     4.4 Subsequent Elections Regarding Method of Payment. The Committee may, in its sole and
absolute discretion, permit a Participant to subsequently modify a prior election (or deemed
election) under this Article IV in order to change the timing or method of payment to be received
hereunder, provided that (i) such subsequent election shall not take effect for at least twelve
(12) months following the date on which the subsequent election is made; (ii) with respect to a
payment that the Participant is entitled to receive following his Separation from Service or
pursuant to a Distribution Schedule, the payment with respect to which such subsequent election is
made is deferred at least five (5) years from the date on which such payment would otherwise have
been made absent such subsequent election (or in the case of installment payments, five (5) years
from the date the first payment was scheduled to be made); and (iii) with respect to the payment of
benefits hereunder pursuant to a Distribution Schedule, such subsequent election is made no less
than twelve (12) months prior to the date the payment is scheduled to be made (or in the case of
installment payments, five (5) years from the date the first payment was scheduled to be made).

     4.5 Restrictions on Deferral Amount. A Participant may elect to defer into the Deferred
Phantom Stock Account up to one hundred percent (100%) of that portion of his Annual Retainer fee
that is not otherwise automatically deferred pursuant to the provisions of Section 4.1 hereof;
provided, however, that such election must be made in ten percent (10%) increments and must be made
with respect to at least twenty percent (20%) of that portion of his Annual Retainer fee eligible
for elective deferral under this Article IV; and, further provided, that effective for Plan Years
commencing on or after January 1, 2010, a Participant may not make a deferral election under this
Article IV with respect to such portion of his Annual Retainer fee for a Plan Year for which an
elective deferral of such portion of his Annual Retainer fee is made under Section 3.1 or 3.2
hereof.

ARTICLE V

CREDITING ACCOUNTS

     5.1 Establishing a Participant’s Account. The Committee shall establish and maintain an
Account for each Participant, which shall be reflected in the Deferral Ledger.

 

 

     5.2 Credits to the Deferred Cash Account.

     (a) Deferral Amounts. The Committee shall credit the amount of a
Participant’s deferrals under Article III to the Participant’s Deferred Cash Account as of
the Valuation Date applicable to the date on which the fees subject to such deferral
would otherwise have been paid.

     (b) Crediting of Interest. Except as otherwise provided herein, the
Committee shall credit interest to a Participant’s Deferred Cash Account as of each
Valuation Date. Interest shall be calculated at the prime rate published in The Wall
Street Journal (Southwest Edition) on such Valuation Date plus two percentage points.

     5.3 Credits to the Deferred Phantom Stock Account.

     (a) Deferral Amounts. As of the Valuation Date applicable to the date on
which fees that would otherwise have been paid but instead were deferred under Article IV,
whether pursuant to an elective or nonelective deferral, the Committee shall convert such
deferred fees into Units and shall credit the Participant’s Deferred Phantom Stock Account
accordingly. For purposes of this conversion, the Participant’s Deferred Phantom Stock
Account shall be credited with a number of Units equal to a fraction, the numerator of
which is equal to the amount of the fees deferred under Article IV and the denominator of
which is the Fair Market Value of one share of common stock as of such Valuation Date,
with any fractional Units being rounded to the nearest three decimal points.

     (b) Earnings and Losses. As of each Valuation Date, the Committee shall
adjust each Participant’s Deferred Phantom Stock Account to reflect the increase or
decrease in the value of the Units credited to such Deferred Phantom Stock Account.

     (c) Dividends and Dividend Equivalents. As of the date on which dividends or
dividend equivalents are paid with respect to Common Stock, the Committee shall credit
each Participant’s Deferred Phantom Stock Account with an amount equal to the value of
such dividends or dividend equivalents as if paid with respect to the Units credited to
the Participant’s Deferred Phantom Stock Account on such date. If dividends or dividend
equivalents are paid in the form of shares of Common Stock, the Participant’s Deferred
Phantom Stock Account shall be credited with a number of Units equal to the number of
shares deemed distributed with respect to each Unit credited to his Deferred Phantom Stock
Account on such date. If dividends or dividend equivalents are paid in any other form,
the Participant’s Deferred Phantom Stock Account shall be credited with a number of Units
equal in value to the amounts deemed distributed with respect to each Unit credited to his
Deferred Phantom Stock Account on such date. The value of any dividend or dividend
equivalent that is not paid in cash or shares of Common Stock shall be determined by the
Committee in its sole and absolute discretion.

     (d) Voting Rights. No Participant shall have voting rights with respect to
any Units credited to his Deferred Phantom Stock Account.

 

 

ARTICLE VI

VESTING

     Each Participant shall be immediately 100% vested in all amounts that are credited to his
Account on or after May 1, 2009.

ARTICLE VII

DISTRIBUTIONS

     7.1 General.

     (a) All Distributions Made in Cash. All distributions of a Participant’s
Account shall be made in cash.

     (b) Distributions of Amounts Subject to Elective Deferral. Except as
otherwise provided in this Article VII, distribution of amounts deferred under Article III
and Section 4.2 of this Plan shall commence on the earlier of: (i) March 31st
of the year in which the date elected (or deemed elected) by such Participant on a
Distribution Schedule falls or (ii) within the ninety (90) day period following the date
of the Participant’s Separation from Service. The amount credited to a Participant’s
Account for purposes of a distribution hereunder shall be determined as of the Valuation
Date that applies to such March 31st or, if applicable, date of the
Participant’s Separation from Service.

     (c) Distributions of Amounts Subject to Mandatory Deferral. Except as
otherwise provided under this Article VII, distribution of amounts deferred under Section
4.1, shall commence on the March 31st immediately following the end of the
three-year deferral period set forth in Section 4.1, unless the Participant has timely
elected to defer the commencement of such amounts. In the event that a Participant has
timely elected to defer the commencement of such amounts, then distribution of such
amounts shall commence on the earlier of: (i) March 31st of the year in which
the date elected (or deemed elected) by such Participant on a Distribution Schedule falls
or (ii) within the ninety (90) day period following the date of the Participant’s
Separation from Service. The amount credited to a Participant’s Account for purposes of a
distribution hereunder shall be determined as of the Valuation Date that applies to such
March 31st or, if applicable, date of the Participant’s Separation from
Service.

     (d) Conversion of Units to Cash. Upon distribution, the Units credited to a
Participant’s Deferred Phantom Stock Account shall be converted to cash. Such conversion
shall be accomplished by multiplying the number of Units by the Fair Market Value of one
share of Common Stock as of the applicable Valuation Date, and rounding to the nearest two
decimal points. In the event of a distribution on account of a Participant’s death or
Disability, Fair Market Value shall be determined as of the date of the Participant’s
death or, as applicable, the date of the Committee’s determination of Disability, for
purposes of such conversion.

     7.2 Distribution Upon Death. Any distribution of a Participant’s Account that is made on
account of such Participant’s death while serving as a director shall be made in a lump

 

 

sum payment to his Beneficiary(ies) within the ninety (90) day period following the
Participant’s death. In the event of the Participant’s death during a period of installment
payments, the remainder of the Participant’s Account shall be paid to his Beneficiary(ies) in a
lump sum within the ninety (90) day period following the Participant’s death. The amount credited
to a Participant’s Account for purposes of a distribution under this Section 7.2 shall be
determined as of the Valuation Date coincident with or immediately preceding the date of
distribution; provided, however, that the Participant’s Deferred Cash Account shall be credited
with interest, prorated from such Valuation Date to the date of the Participant’s death based on
the rate in effect on such Valuation Date.

     7.3 Designation of Beneficiary. Each Participant, upon notification of his eligibility to
participate in the Plan, must file with the Committee a designation of one or more Beneficiaries to
whom distributions otherwise due the Participant shall be made in the event of his death prior to
the complete distribution of the amount credited to his Account. The designation shall be
effective upon receipt by the Committee of a properly executed form which the Committee has
approved for that purpose. The Participant may from time to time revoke or change any designation
of Beneficiary by filing another approved Beneficiary designation form with the Committee. If
there is no valid designation of Beneficiary on file with the Committee at the time of the
Participant’s death, or if all of the Beneficiaries designated in the last Beneficiary designation
have predeceased the Participant or otherwise ceased to exist, the Beneficiary shall be the
Participant’s Spouse, if the Spouse survives the Participant, or otherwise the Participant’s
estate. A Beneficiary must survive the Participant by sixty (60) days in order to be considered to
be living on the date of the Participant’s death. If any Beneficiary survives the Participant but
dies or otherwise ceases to exist before receiving all amounts due to the Beneficiary from the
Participant’s Account, the balance of the amount that would have been paid to that Beneficiary
shall, unless the Participant’s designation provides otherwise, be distributed to the individual
deceased Beneficiary’s estate or to the Participant’s estate in the case of a Beneficiary which is
not an individual.

     7.4 Disability. Distribution of a Participant’s Account on account of Disability while
serving as a director shall be made in a lump sum payment to him within the ninety (90) day period
following the Committee’s determination of his Disability. In the event of the Participant’s
Disability during a period of installment payments, the remainder of the Participant’s Account
shall be paid to him in a lump sum within the ninety (90) day period following the Committee’s
determination of his Disability. The amount credited to a Participant’s Account for purposes of a
distribution under this Section 7.4 shall be determined as of the Valuation Date coincident with or
immediately preceding the date of distribution; provided, however, that the Participant’s Deferred
Cash Account shall be credited with interest, prorated from such Valuation Date to the date of the
Committee’s determination of Disability, based on the rate in effect on such Valuation Date.

     7.5 Unforeseeable Emergency. Any Participant who is in pay status may request a withdrawal
from his Account on account of an unforeseeable emergency. For these purposes, an unforeseeable
emergency is a severe financial hardship to the Participant resulting from an illness or accident
of the Participant, the Participant’s Spouse or the Participant’s dependent (as defined in Code
Section 152, without regard to Section 152(b)(1), (b)(2), and (d)(1)(B)); loss of the Participant’s
property due to casualty (including the need to rebuild a home following

 

 

damage to
a home not otherwise covered by insurance); or other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the Participant. Whether a
Participant is faced with an unforeseeable emergency permitting a withdrawal under this Section is
to be determined in the sole and absolute discretion of the Committee based on the relevant facts
and circumstances of each case, but, in any case, a withdrawal on account of unforeseeable
emergency may not be made to the extent that such emergency is or may be relieved through
reimbursement or compensation by insurance or otherwise, by liquidation of the Participant’s assets
(to the extent the liquidation of such assets would not cause a severe financial hardship), or by
cessation of deferrals under the Plan. The amount of the hardship withdrawal may not exceed the
lesser of (a) the amount credited to the Participant’s Account or (b) the amount reasonably
necessary to satisfy the emergency need, including any Federal, state, local or foreign income
taxes or penalties reasonably anticipated to result from the distribution. The Committee shall have
the authority to require a Participant to provide such proof as it deems necessary to establish the
existence and nature of the Participant’s unforeseeable emergency. The decision of the Committee
regarding the existence of an unforeseeable emergency of a Participant shall be final and binding.
A withdrawal on account of the Participant’s unforeseeable emergency that is approved by the
Committee shall be paid to the Participant within ten (10) days of the Committee’s determination.

     7.6 Change of Control. Notwithstanding the above, in the event of a Change of Control, all
Accounts shall be adjusted as of the date of such Change of Control, but otherwise as provided in
Article V, and, subject to Section 9.3 hereof, shall be distributed to the Participants as a lump
sum cash payment within thirty (30) days after the date of the Change of Control.

     7.7 Change in Time of Payments. Notwithstanding any provision of this Article VII or in the
Plan to the contrary, the benefits payable hereunder may, to the extent expressly provided in this
Section 7.7, be paid prior to or later than the date on which they would otherwise be paid to the
Participant.

     (a) Distribution in the Event of Income Inclusion Under Code Section 409A.
If any portion of a Participant’s Account is required to be included in income by the
Participant prior to receipt due to a failure of this Plan or any Aggregated Plan to
comply with the requirements of Code Section 409A and the Regulations, the Committee may
determine that such Participant shall receive a distribution from the Plan in an amount
equal to the lesser of: (i) the portion of his or her Account required to be included in
income as a result of the failure of the Plan or any Aggregated Plan to comply with the
requirements of Code Section 409A and the Regulations, or (ii) the balance of the
Participant’s Account.

     (b) Distribution Necessary to Satisfy Applicable Tax Withholding. If the
Corporation is required to withhold amounts to pay the Participant’s portion of the
Federal Insurance Contributions Act (FICA) tax imposed under Code Sections 3101, 3121(a)
or 3121(v)(2) with respect to amounts that are or will be paid to the Participant under
the Plan before they otherwise would be paid, the Committee may determine that such
Participant shall receive a distribution from the Plan in an amount equal to the lesser
of: (i) the amount in the Participant’s Account or (ii) the aggregate of the FICA taxes
imposed and the income tax withholding related to such amount.

 

 

     (c) Delay for Payments in Violation of Federal Securities Laws or Other
Applicable Law. In the event the Corporation reasonably anticipates that the payment
of benefits as specified hereunder would violate Federal securities laws or other
applicable law, the Committee may delay the payment under this Article VII until the
earliest date at which the Corporation reasonably anticipates that making of such payment
would not cause such violation.

     (d) Delay for Insolvency or Compelling Business Reasons. In the event the
Corporation determines that the making of any payment of benefits on the date specified
hereunder would jeopardize the ability of the Corporation to continue as a going concern,
the Committee may delay the payment of benefits under this Article VII until the first
calendar year in which the Corporation notifies the Committee that the payment of benefits
would not have such effect.

     (e) Administrative Delay in Payment. The payment of benefits hereunder shall
begin at the date specified in accordance with the provisions of the foregoing paragraphs
of this Article VII; provided that, in the case of administrative necessity, the payment
of such benefits may be delayed up to the later of the last day of the calendar year in
which payment would otherwise be made or the 15th day of the third calendar
month following the date on which payment would otherwise be made. Further, if, as a
result of events beyond the control of the Participant (or following the Participant’s
death, the Participant’s Beneficiary), it is not administratively practicable for the
Committee to calculate the amount of benefits due to Participant as of the date on which
payment would otherwise be made, the payment may be delayed until the first calendar year
in which calculation of the amount is administratively practicable.

     (f) No Participant Election. Notwithstanding the foregoing provisions, if
the period during which payment of benefits hereunder will be made occurs, or will occur,
in two calendar years, the Participant shall not be permitted to elect the calendar year
in which the payment shall be made.

     7.8 Cashout Distributions. If, at the time an installment distribution of a Participant’s
Account is scheduled to commence, or at any time thereafter, the Fair Market Value of such Account
does not exceed the amount specified in Section 402(g)(1)(B) of the Code, then distribution of such
Account may, in the sole and absolute discretion of the Committee, be made in the form of a single
lump sum payment, provided that such payment will result in the complete distribution of the
Participant’s benefit under this Plan and all agreements, methods, programs and arrangements
sponsored by the Corporation that would be aggregated with this Plan under §1.409A-1(c)(2) of the
Regulations.

ARTICLE VIII

ADMINISTRATION

     8.1 Committee Appointment. Members of the Committee shall be appointed by the Board. The
Board shall have the sole discretion to remove any one or more Committee members and appoint one or
more replacement or additional Committee members from time to time.

 

 

     8.2 Committee Organization and Voting. The Committee shall select from among its members a
chairman who shall preside at all of its meetings and shall elect a secretary without regard to
whether that person is a member of the Committee. The secretary shall keep all records, documents
and data pertaining to the Committee’s supervision and administration of the Plan. A majority of
the members of the Committee will constitute a quorum for the transaction of business and the vote
of a majority of the members present at any meeting will decide any question brought before the
meeting. In addition, the Committee may decide any question by vote, taken without a meeting, of a
majority of its members. A member of the Committee who is also a Participant will not vote or act
on any matter relating solely to himself.

     8.3 Powers of the Committee. The Committee will have the exclusive responsibility for the
general administration of the Plan according to the terms and provisions of the Plan and will have
all powers necessary to accomplish those purposes, including but not by way of limitation the
right, power and authority:

     (a) To make rules and regulations for the administration of the Plan;

     (b) To construe all terms, provisions, conditions and limitations of the Plan;

     (c) To correct any defect, supply any omission or reconcile any inconsistency that
may appear in the Plan in the manner and to the extent it deems expedient to carry the
Plan into effect for the greatest benefit of all parties at interest;

     (d) To determine all controversies relating to the administration of the Plan,
including but not limited to:

     (i) Differences of opinion arising between Corporation and a Participant except
when the difference of opinion relates to the entitlement to, the amount of or the
method or timing of payment of a benefit affected by a Change of Control; and

     (ii) Any question relating to the uniform administration of the Plan;

     (e) To delegate those clerical and recordation duties of the Committee, as it deems
necessary or advisable for the proper and efficient administration of the Plan.

     8.4 Committee Discretion. The Committee in exercising any power or authority granted under
this Plan or in making any determination under this Plan shall perform, or refrain from performing,
those acts using its sole discretion and judgment. Any decision made by the Committee or any
refraining to act or any act taken by the Committee in good faith shall be final and binding on all
parties. The Committee’s decision shall be final and binding on the parties and shall not be
subject to review.

     8.5 Committee Discretion on Change of Control. Notwithstanding the foregoing, the Committee’s
decisions, refraining to act or acting is to be subject to review by the Corporation for those
incidents occurring during the Plan Year in which a Change of Control occurs.

 

 

     8.6 Annual Statements. The Committee will cause each Participant to receive an annual
statement as soon as administratively practicable after the conclusion of each Plan Year, which
statement shall describe the amounts credited to his Account for that Plan Year and the total
amount credited to his Account at the end of the Plan Year.

     8.7 Reimbursement of Expenses. The members of the Committee will serve without compensation
for their services but will be reimbursed by the Corporation for all expenses properly and actually
incurred in the performance of their duties under the Plan.

     8.8 Indemnification. To the extent permitted by applicable law, the Corporation shall
indemnify and hold harmless each member of the Committee from and against any and all claims and
expenses (including, without limitation, attorney’s fees and related costs), in connection with the
performance by such member of his duties in that capacity, other than any of the foregoing arising
in connection with the willful neglect or willful misconduct of the person so acting.

ARTICLE IX

AMENDMENT AND/OR TERMINATION

     9.1 Amendment or Termination of the Plan. The Corporation may amend or terminate this Plan at
any time by written instrument adopted by the members of the Board who are not eligible to
participate in the Plan.

     9.2 No Retroactive Effect on Account. No amendment will affect the rights of any Participant
to the amounts credited to his Account or to change the method of calculating the interest to be
credited with respect to amounts previously deferred by him prior to the date of the amendment
without the Participant’s consent.

     9.3 Effect of Termination. If the Plan is terminated, all deferrals shall thereupon cease,
but interest, earnings and losses shall continue to be credited to the Accounts in accordance with
Article V as if the Participant began receiving installment payments on the date the Plan
terminated. Notwithstanding the foregoing, to the extent provided by the Corporation in accordance
with Section 9.1, the Plan may be liquidated following a termination under any of the following
circumstances:

     (a) the termination and liquidation of the Plan within twelve (12) months of a
complete dissolution of the Corporation taxed under Section 331 of the Code or with the
approval of a bankruptcy court pursuant to 11 U.S.C. § 503(b)(1)(A); provided that the
amounts deferred under this Plan are included in the Participants’ gross incomes in the
latest of the following years (or, if earlier, the taxable year in which the amount is
actually or constructively received): (i) the calendar year in which the Plan is
terminated; (ii) the first calendar year in which the amount is no longer subject to a
substantial risk of forfeiture; or (iii) the first calendar year in which the payment is
administratively practicable.

     (b) the termination and liquidation of the Plan pursuant to irrevocable action taken
by the Corporation within the thirty (30) days preceding or the twelve (12) months
following a Change of Control; provided that all Aggregated Plans are

 

 

terminated and
liquidated with respect to each Participant that experienced the Change of Control,
so that under the terms of the termination and liquidation, all such Participants are
required to receive all amounts of deferred compensation under this Plan and any other
Aggregated Plans within twelve (12) months of the date the Corporation irrevocably takes
all necessary action to terminate and liquidate this Plan and such other Aggregated Plans;

     (c) the termination and liquidation of the Plan, provided that: (i) the termination
and liquidation does not occur proximate to a downturn in the Corporation’s financial
health; (ii) the Corporation terminates and liquidates all Aggregated Plans; (iii) no
payments in liquidation of this Plan are made within twelve (12) months of the date the
Corporation irrevocably takes all necessary action to terminate and liquidate this Plan,
other than payments that would be payable under the terms of this Plan if the action to
terminate and liquidate this Plan had not occurred; (iv) all payments are made within
twenty four (24) months of the date on which the Corporation irrevocably takes all action
necessary to terminate and liquidate this Plan; and (v) the Corporation does not adopt a
new Aggregated Plan at any time within three (3) years following the date on which the
Corporation irrevocably takes all action necessary to terminate and liquidate the Plan.

ARTICLE X

UNFUNDED PLAN

     10.1 Benefits from General Assets of Corporation. The Corporation may establish a Trust for
the purpose of retaining assets set aside by the Corporation pursuant to the trust agreement for
payment of all or a portion of the benefits payable pursuant to Article VII of the Plan. Any such
benefits not paid from a Trust shall be paid from the Corporation’s general assets. The Trust, if
such shall be established, shall be subject to the claims of general creditors of the Corporation
in the event the Corporation is Insolvent (as defined in a related trust agreement, if any).

     10.2 No Requirement to Fund. The Corporation is not required to set aside any assets for
payment of the benefits provided under this Plan; however, it may do so as provided in the trust
agreement, if any. A Participant shall have no security interest in any such amounts.

     10.3 Adoption of Trust. All benefits under the Plan shall be the unsecured obligations of the
Corporation and, except for those assets that may be placed in a Trust established in connection
with this Plan, no assets will be placed in trust or otherwise segregated from the general assets
of the Corporation for the payment of obligations hereunder. If assets are placed in a Trust, the
trust agreement, to the extent required by the Code, shall conform in all material respects to the
model trust set forth in Internal Revenue Service Revenue Procedure 92-64. To the extent that any
person acquires a right to receive payments hereunder, such right shall be no greater than the
right of any unsecured general creditor of the Corporation.

     10.4 Status as Unsecured Creditor. The establishment of this Plan shall not be construed as
giving to any Participant or Beneficiary or any person whomsoever, any legal, equitable or other
rights against the Corporation, or its officers, directors, agents or shareholders, or as giving to
any Participant or Beneficiary any equity or other interest in the assets or business

 

 

of the Corporation or shares of Corporation stock or as giving any director the right to be
retained in the service of the Corporation. All directors shall be subject to discharge to the
same extent they would have been if this Plan had never been adopted. The rights of a Participant
hereunder shall be solely those of an unsecured general creditor of the Corporation.

ARTICLE XI

MISCELLANEOUS

     11.1 Distributions to Incompetents or Minors. Should a Participant become incompetent or
should a Participant designate a Beneficiary who is a minor or incompetent, the Committee is
authorized to pay the funds due to the parent of the minor or to the guardian of the minor or
incompetent or directly to the minor or to apply those funds for the benefit of the minor or
incompetent in any manner the Committee determines in its sole discretion.

     11.2 Nonalienation of Benefits. No right or benefit provided in this Plan will be
transferable by the Participant except, upon his death, to a named Beneficiary as provided in this
Plan. No right or benefit under this Plan will be subject to anticipation, alienation, sale,
assignment, pledge, encumbrance or charge, and any attempt to anticipate, alienate, sell, assign,
pledge, encumber, or charge the same will be void. No right or benefit under this Plan will in any
manner be liable for or subject to any debts, contracts, liabilities or torts of the person
entitled to such benefits. If any Participant or any Beneficiary becomes bankrupt or attempts to
anticipate, alienate, sell, assign, pledge, encumber or charge any right or benefit under this
Plan, that right or benefit will, in the discretion of the Committee, cease. In that event, the
Committee may have the Corporation hold or apply the right or benefit or any part of it to the
benefit of the Participant or Beneficiary, his or her spouse, children or other dependents or any
of them in any manner and in any proportion the Committee believes to be proper in its sole and
absolute discretion, but is not required to do so.

     11.3 Reliance Upon Information. The Committee will not be liable for any decision or action
taken in good faith in connection with the administration of this Plan. Without limiting the
generality of the foregoing, any decision or action taken by the Committee when it relies upon
information supplied it by any officer of the Corporation, the Corporation’s legal counsel, the
Corporation’s independent accountants or other advisors in connection with the administration of
this Plan will be deemed to have been taken in good faith.

     11.4 Severability. If any term, provision, covenant or condition of the Plan is held to be
invalid, void or otherwise unenforceable, the rest of the Plan will remain in full force and effect
and will in no way be affected, impaired or invalidated.

     11.5 Notice. Any notice or filing required or permitted to be given to the Committee or a
Participant will be sufficient if in writing and hand delivered or sent by U.S. mail to the
principal office of the Corporation or to the last known residential mailing address of the
Participant. Notice will be deemed to be given as of the date of hand delivery or if delivery is
by mail, as of the date shown on the postmark.

     11.6 Gender and Number. Words used in this Plan of one gender are to be construed as though
they were also used in another gender in all cases where they would so apply and

 

 

likewise words in the singular or plural are to be construed as though they also included the
other in all cases where they would so apply.

     11.7 Governing Law. The Plan will be construed, administered and governed in all respects by
the laws of the State of Texas.

     IN WITNESS WHEREOF,
the Corporation has executed this document on this 8th day of
November, 2009, to be effective as of May 1, 2009, except as otherwise specifically set forth
herein.

	 	 	 	 	 	 	 
	 	 	TESORO CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Susan A. Lerette
 

Susan A. Lerette
	 	 
	 

	 	Its:
	 	Senior Vice President, Administrationexv10w5

Exhibit 10.5

INDEMNIFICATION AGREEMENT

     This Indemnification Agreement (“Agreement”) is made as of                           , 20      by and between
The Advisory Board Company, a Delaware corporation (the “Company”), and                          
(“Indemnitee”). This Agreement supersedes and replaces any and all previous agreements between the
Company and Indemnitee covering the subject matter of this Agreement.

RECITALS

     WHEREAS, highly competent persons have become more reluctant to serve publicly-held
corporations as directors or officers or in other capacities 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 corporation;

     WHEREAS, 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. Although the furnishing of such insurance has been a
customary and widespread practice among United States-based corporations and other business
enterprises, the Company believes that, given current market conditions and trends, such insurance
may be available to it in the future only at higher premiums and with more exclusions. At the same
time, directors, officers, and other persons in service to corporations or business enterprises are
being increasingly subjected to expensive and time-consuming litigation relating to, among other
things, matters that traditionally would have been brought only against the Company or business
enterprise itself. The Bylaws of the Company (the “By-laws”) and the Certificate of Incorporation
of the Company (the “Certificate of Incorporation”) require indemnification of the officers and
directors of the Company. Indemnitee may also be entitled to indemnification pursuant to the
General Corporation Law of the State of Delaware (the “DGCL”). The Bylaws, Certificate of
Incorporation and the DGCL expressly provide that the indemnification provisions set forth therein
are not exclusive, and thereby contemplate that contracts may be entered into between the Company
and members of the board of directors, officers and other persons with respect to indemnification;

     WHEREAS, the uncertainties relating to such insurance and to indemnification have increased
the difficulty of attracting and retaining such persons;

     WHEREAS, the Board has determined that the increased difficulty in attracting and retaining
such persons is detrimental to the best interests of the Company and its stockholders and that the
Company should act to assure such persons that there will be increased certainty of such protection
in the future;

     WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate
itself to indemnify, and to advance expenses on behalf of, such persons to the fullest

 

 

extent permitted by applicable law so that they will serve or continue to serve the Company
free from undue concern that they will not be so indemnified;

     WHEREAS, this Agreement is a supplement to and in furtherance of the Bylaws and the
Certificate of Incorporation and any resolutions adopted pursuant thereto, and shall not be deemed
a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder;

     WHEREAS, Indemnitee does not regard the protection available under the Bylaws and the
Certificate of Incorporation and insurance as adequate in the present circumstances, and may not be
willing to serve as an officer or director without adequate protection, and the Company desires
Indemnitee to serve in such capacity. 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 so
indemnified; and

     NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the
Company and Indemnitee do hereby covenant and agree as follows:

     Section 1. Services to the Company. Indemnitee agrees to serve and/or continue to
serve as a director, officer, employee and/or other agent of the Company. Indemnitee may at any
time and for any reason resign from such position (subject to any other contractual obligation or
any obligation imposed by operation of law), in which event the Company shall have no obligation
under this Agreement to continue Indemnitee in such position. This Agreement shall not be deemed
an employment contract between the Company (or any of its subsidiaries or any Enterprise) and
Indemnitee. Indemnitee specifically acknowledges that Indemnitee’s employment with the Company (or
any of its subsidiaries or any Enterprise), if any, is at will, and the Indemnitee may be
discharged at any time for any reason, with or without cause, except as may be otherwise provided
in any written employment contract between Indemnitee and the Company (or any of its subsidiaries
or any Enterprise), other applicable formal severance policies duly adopted by the Board, or, with
respect to service as a director or officer of the Company, by the Certificate of Incorporation,
the Company’s By-laws, and the DGCL. The foregoing notwithstanding, this Agreement shall continue
in force after Indemnitee has ceased to serve as a director, officer and/or other agent of the
Company, as provided in Section 16 hereof.

     Section 2. Definitions. As used in this Agreement:

          (a) References to “agent” shall mean any person who is or was a director, officer, or employee
of the Company or a subsidiary of the Company or other person authorized by the Company to act for
the Company, to include such person serving in such capacity as a director, officer, employee,
fiduciary or other official of another corporation, partnership, limited liability company, joint
venture, trust or other enterprise at the request of, for the convenience of, or to represent the
interests of the Company or a subsidiary of the Company.

          (b) A “Change in Control” shall be deemed to occur upon the earliest to occur after the date
of this Agreement of any of the following events:

               i. Acquisition of Stock by Third Party. Any Person (as defined below) is or becomes the
Beneficial Owner (as defined below), directly or indirectly, of

-2-

 

securities of the Company representing twenty percent (20%) or more of the combined voting
power of the Company’s then outstanding securities unless the change in relative Beneficial
Ownership of the Company’s securities by any Person results solely from a reduction in the
aggregate number of outstanding shares of securities entitled to vote generally in the election of
directors;

               ii. Change in Board of Directors. During any period of two (2) consecutive years (not
including any period prior to the execution of this Agreement), individuals who at the beginning of
such period constitute the Board, and any new director (other than a director designated by a
person who has entered into an agreement with the Company to effect a transaction described in
Sections 2(b)(i), 2(b)(iii) or 2(b)(iv)) whose election by the Board 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 either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to constitute at least a
majority of the members of the Board;

               iii. Corporate Transactions. The effective date of a merger or consolidation of the Company
with any other entity, other than a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior to such merger or consolidation continuing
to represent (either by remaining outstanding or by being converted into voting securities of the
surviving entity) more than 51% of the combined voting power of the voting securities of the
surviving entity outstanding immediately after such merger or consolidation and with the power to
elect at least a majority of the board of directors or other governing body of such surviving
entity;

               iv. Liquidation. The approval by the stockholders of the Company of a complete liquidation of
the Company or an agreement for the sale or disposition by the Company of all or substantially all
of the Company’s assets; and

               v. Other Events. There occurs any other event of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a response to any similar
item on any similar schedule or form) promulgated under the Exchange Act (as defined below),
whether or not the Company is then subject to such reporting requirement.

For purposes of this Section 2(b), the following terms shall have the following meanings:

     (A) “Exchange Act” shall mean the Securities Exchange Act of
1934, as amended from time to time.

     (B) “Person” shall have the meaning as set forth in Sections
13(d) and 14(d) of the Exchange Act; provided, however, that Person
shall exclude (i) the Company, (ii) any trustee or other fiduciary
holding securities under an employee benefit plan of the Company,
and (iii) any corporation owned, directly or indirectly,

-3-

 

by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company.

     (C) “Beneficial Owner” shall have the meaning given to such
term in Rule 13d-3 under the Exchange Act; provided, however, that
Beneficial Owner shall exclude any Person otherwise becoming a
Beneficial Owner by reason of the stockholders of the Company
approving a merger of the Company with another entity.

          (c) “Corporate Status” describes the status of a person who is or was a director, officer,
employee or agent of the Company or of any other corporation, limited liability company,
partnership or joint venture, trust or other enterprise which such person is or was serving at the
request of the Company.

          (d) “Disinterested Director” shall mean 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.

          (e) “Enterprise” shall mean the Company and any other corporation, limited liability company,
partnership, joint venture, trust or other enterprise of which Indemnitee is or was serving at the
request of the Company as a director, officer, trustee, partner, managing member, employee, agent
or fiduciary.

          (f) “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs,
transcript costs, fees of experts and other professionals, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees,
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, ERISA excise taxes and penalties, and all
other disbursements or expenses of the types customarily incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in,
or otherwise participating in, a Proceeding. Expenses also shall include (i) 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, and (ii) for purposes of Section 14(d) only, Expenses incurred by Indemnitee in
connection with the interpretation, enforcement or defense of Indemnitee’s rights under this
Agreement, by litigation or otherwise. The parties agree that for the purposes of any advancement
of Expenses for which Indemnitee has made written demand to the Company in accordance with this
Agreement, all Expenses included in such demand that are certified by affidavit of Indemnitee’s
counsel as being reasonable shall be presumed conclusively to be reasonable. Expenses, however,
shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines
against Indemnitee.

          (g) “Independent Counsel” shall mean 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 matter material to

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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 Indemnitee in an action to determine Indemnitee’s rights under
this Agreement. The Company agrees to pay the reasonable fees and expenses of the Independent
Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims,
liabilities and damages arising out of or relating to this Agreement or its engagement pursuant
hereto.

          (h) The term “Proceeding” shall include any threatened, pending or completed action, suit,
claim, counterclaim, cross claim, arbitration, mediation, alternate dispute resolution mechanism,
investigation, inquiry, administrative hearing or any other actual, threatened or completed
proceeding, whether brought in the right of the Company or otherwise and whether of a civil,
criminal, administrative, legislative, or investigative (formal or informal) nature, including any
appeal therefrom, in which Indemnitee was, is or will be involved as a party, potential party,
non-party witness or otherwise by reason of the fact that Indemnitee is or was a director or
officer of the Company, by reason of any action taken by him (or a failure to take action by him)
or of any action (or failure to act) on his part while acting pursuant to his Corporate Status, in
each case whether or not serving in such capacity at the time any liability or Expense is incurred
for which indemnification, reimbursement, or advancement of Expenses can be provided under this
Agreement. If the Indemnitee believes in good faith that a given situation may lead to or
culminate in the institution of a Proceeding, this shall be considered a Proceeding under this
paragraph.

          (i) Reference to “other enterprise” shall include employee benefit plans; references to
“fines” shall include any excise tax assessed with respect to any employee benefit plan; references
to “serving at the request of the Company” shall include any service as a director, officer,
employee or agent of the Company which imposes duties on, or involves services by, such director,
officer, employee or agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in
the best interests of the participants and beneficiaries of an employee benefit plan shall be
deemed to have acted in manner “not opposed to the best interests of the Company” as referred to in
this Agreement.

     Section 3. Indemnity in Third-Party Proceedings. The Company shall indemnify
Indemnitee in accordance with the provisions of this Section 3 if Indemnitee is, or is threatened
to be made, a party to or a participant in any Proceeding, other than a Proceeding by or in the
right of the Company to procure a judgment in its favor. Pursuant to this Section 3, Indemnitee
shall be indemnified to the fullest extent permitted by applicable law against all Expenses,
judgments, fines and amounts paid in settlement (including all interest, assessments and other
charges paid or payable in connection with or in respect of such Expenses, judgments, fines and
amounts paid in settlement) actually and reasonably incurred by Indemnitee or on his behalf in
connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best interests of

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the Company and, in the case of a criminal Proceeding had no reasonable cause to believe that
his conduct was unlawful. The parties hereto intend that this Agreement shall provide to the
fullest extent permitted by law for indemnification in excess of that expressly permitted by
statute, including, without limitation, any indemnification provided by the Certificate of
Incorporation, the By-laws, vote of its stockholders or disinterested directors or applicable law.

     Section 4. Indemnity in Proceedings by or in the Right of the Company. The Company
shall indemnify Indemnitee in accordance with the provisions of this Section 4 if Indemnitee is, or
is threatened to be made, a party to or a participant in any Proceeding by or in the right of the
Company to procure a judgment in its favor. Pursuant to this Section 4, Indemnitee shall be
indemnified to the fullest extent permitted by applicable law against all Expenses actually and
reasonably incurred by him or on his behalf in connection with such Proceeding or any claim, issue
or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the Company. No indemnification for Expenses shall be
made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee shall
have been finally adjudged by a court to be liable to the Company, unless and only to the extent
that the Delaware Court of Chancery or any court in which the Proceeding was brought shall
determine upon application that, despite the adjudication of liability but in view of all the
circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification.

     Section 5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful.
Notwithstanding any other provisions of this Agreement, to the fullest extent permitted by
applicable law and to the extent that Indemnitee is a party to (or a participant in) and is
successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or
matter therein, in whole or in part, the Company shall indemnify Indemnitee against all Expenses
actually and reasonably incurred by him 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 or
related to each successfully resolved claim, issue or matter to the fullest extent permitted by
law. 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.

     Section 6. Indemnification For Expenses of a Witness. Notwithstanding any other
provision of this Agreement, to the fullest extent permitted by applicable law and to the extent
that Indemnitee is, by reason of his Corporate Status, a witness or otherwise asked to participate
in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses
actually and reasonably incurred by him or on his behalf in connection therewith.

     Section 7. Partial Indemnification. If Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a portion of Expenses, but not,
however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the
portion thereof to which Indemnitee is entitled.

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     Section 8. Additional Indemnification.

          (a) Notwithstanding any limitation in Sections 3, 4, or 5, the Company shall indemnify
Indemnitee to the fullest extent permitted by applicable law if Indemnitee is a party to or
threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the
Company to procure a judgment in its favor) against all Expenses, judgments, fines and amounts paid
in settlement (including all interest, assessments and other charges paid or payable in connection
with or in respect of such Expenses, judgments, fines and amounts paid in settlement) actually and
reasonably incurred by Indemnitee in connection with the Proceeding.

          (b) For purposes of Section 8(a), the meaning of the phrase “to the fullest extent permitted
by applicable law” shall include, but not be limited to:

               i. to the fullest extent permitted by the provision of the DGCL that authorizes or
contemplates additional indemnification by agreement, or the corresponding provision of any
amendment to or replacement of the DGCL, and

               ii. to the fullest extent authorized or permitted by any amendments to or replacements of the
DGCL adopted after the date of this Agreement that increase the extent to which a corporation may
indemnify its officers and directors.

     Section 9. Exclusions. Notwithstanding any provision in this Agreement, the Company
shall not be obligated under this Agreement to make any indemnification payment in connection with
any claim made against Indemnitee:

          (a) for which payment has actually been made to or on behalf of Indemnitee under any insurance
policy or other indemnity provision, except with respect to any excess beyond the amount paid under
any insurance policy or other indemnity provision; or

          (b) for (i) an accounting of profits made from the purchase and sale (or sale and purchase) by
Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act (as
defined in Section 2(b) hereof) or similar provisions of state statutory law or common law, or (ii)
any reimbursement of the Company by the Indemnitee of any bonus or other incentive-based or
equity-based compensation or of any profits realized by the Indemnitee from the sale of securities
of the Company, as required in each case under the Exchange Act (including any such reimbursements
that arise from an accounting restatement of the Company pursuant to Section 304 of the
Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), or the payment to the Company of profits
arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the
Sarbanes-Oxley Act); or

          (c) except as provided in Section 14(d) of this Agreement, in connection with any Proceeding
(or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of
any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees
or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any
Proceeding) prior to its initiation or (ii) the Company provides the indemnification, in its sole
discretion, pursuant to the powers vested in the Company under applicable law.

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     Section 10. Advances of Expenses. Notwithstanding any provision of this Agreement to
the contrary (other than Section 14(d)), the Company shall advance, to the extent not prohibited by
law, the Expenses incurred by Indemnitee in connection with any Proceeding (or any part of any
Proceeding) not initiated by Indemnitee, and such advancement shall be made within twenty (20) days
after the receipt by the Company of a statement or statements requesting such advances from time to
time, whether prior to or after final disposition of any Proceeding. Advances shall be unsecured
and interest free. Advances shall be made without regard to Indemnitee’s ability to repay the
Expenses and without regard to Indemnitee’s ultimate entitlement to indemnification under the other
provisions of this Agreement. In accordance with Section 14(d), advances shall include any and all
reasonable Expenses incurred pursuing an action to enforce this right of advancement, including
Expenses incurred preparing and forwarding statements to the Company to support the advances
claimed. The Indemnitee shall qualify for advances upon the execution and delivery to the Company
of this Agreement, which shall constitute an undertaking providing that the Indemnitee undertakes
to repay the amounts advanced (without interest) to the extent that it is ultimately determined
that Indemnitee is not entitled to be indemnified by the Company. No other form of undertaking
shall be required other than the execution of this Agreement. This Section 10 shall not apply to
any claim (x) for which payment has actually been made to or on behalf of Indemnitee under any
insurance policy or other advancement provision, except with respect to any excess beyond the
amount paid under any insurance policy or other advancement provision or (y) made by Indemnitee for
which indemnity is excluded pursuant to Section 9(b) or (z) except as provided in Section 14(d) of
this Agreement, in connection with any Proceeding (or any part of any Proceeding) initiated by
Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee
against the Company or its directors, officers, employees or other indemnitees, unless (i) the
Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the
Company provides the advancement, in its sole discretion, pursuant to the powers vested in the
Company under applicable law.

     Section 11. Procedure for Notification and Defense of Claim.

          (a) Indemnitee shall notify the Company in writing of any matter with respect to which
Indemnitee intends to seek indemnification or advancement of Expenses hereunder as soon as
reasonably practicable following the receipt by Indemnitee of written notice thereof. The written
notification to the Company shall include a description of the nature of the Proceeding and the
facts underlying the Proceeding. To obtain indemnification under this Agreement, 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 following the final
disposition of such Proceeding. The omission by Indemnitee to notify the Company hereunder will
not relieve the Company from any liability which it may have to Indemnitee hereunder or otherwise
than under this Agreement, and any delay in so notifying the Company shall not constitute a waiver
by Indemnitee of any rights under this Agreement. The Secretary of the Company shall, promptly
upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has
requested indemnification.

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          (b) The Company will be entitled to participate in the Proceeding at its own expense.

     Section 12. Procedure Upon Application for Indemnification.

          (a) Upon written request by Indemnitee for indemnification pursuant to Section 11(a), a
determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto
shall be made in the specific 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; or
(ii) if a Change in Control shall not have occurred, (A) by a majority vote of the Disinterested
Directors, even though less than a quorum of the Board, (B) by a committee of Disinterested
Directors designated by a majority vote of the Disinterested Directors, even though less than a
quorum of the Board, (C) if there are no such Disinterested Directors or, if such Disinterested
Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which
shall be delivered to Indemnitee or (D) if so directed by the Board, by the stockholders of the
Company; and, if it is so determined that Indemnitee is entitled to indemnification, payment to
Indemnitee shall be made within ten (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 or entity upon
reasonable advance request any documentation or information which is not privileged or otherwise
protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary
to such determination. Any costs or Expenses (including attorneys’ fees and disbursements)
incurred by Indemnitee in so cooperating with the person, persons or entity making such
determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s
entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee
harmless therefrom. The Company promptly will advise Indemnitee in writing with respect to any
determination that Indemnitee is or is not entitled to indemnification, including a description of
any reason or basis for which indemnification has been denied.

          (b) In the event the determination of entitlement to indemnification is to be made by
Independent Counsel pursuant to Section 12(a) hereof, the Independent Counsel shall be selected as
provided in this Section 12(b). If a Change in Control shall not have occurred, the Independent
Counsel shall be selected by the Board, and the Company shall give written notice to Indemnitee
advising him of the identity of the Independent Counsel so selected. If a Change in Control shall
have occurred, the Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall
request that such selection be made by the Board, in which event the preceding sentence shall
apply), and Indemnitee shall give written notice to the Company advising it of the identity of the
Independent Counsel so selected. In either event, Indemnitee or the Company, as the case may be,
may, within ten (10) days after such written notice of selection shall have been given, deliver to
the Company or to Indemnitee, as the case may be, a written objection to such selection;
provided, however, that such objection may be asserted only on the ground that the
Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined
in Section 2 of this Agreement, and the objection shall set forth with particularity the factual
basis of such assertion. Absent a proper and timely objection, the person so selected shall act as
Independent Counsel. If such written objection is so made and substantiated, the

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Independent Counsel so selected may not serve as Independent Counsel unless and until such
objection is withdrawn or the Delaware Court has determined that such objection is without merit.
If, within twenty (20) days after the later of submission by Indemnitee of a written request for
indemnification pursuant to Section 11(a) hereof and the final disposition of the Proceeding, no
Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee
may petition the Delaware Court for resolution of any objection which shall have been made by the
Company or Indemnitee to the other’s selection of Independent Counsel and/or for the appointment as
Independent Counsel of a person selected by such court or by such other person as such court shall
designate, and the person with respect to whom all objections are so resolved or the person so
appointed shall act as Independent Counsel under Section 12(a) hereof. Upon the due commencement
of any judicial proceeding or arbitration pursuant to Section 14(a) of this Agreement, Independent
Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to
the applicable standards of professional conduct then prevailing).

     Section 13. Presumptions and Effect of Certain Proceedings.

          (a) In making a determination with respect to entitlement to indemnification hereunder, the
person or persons or entity making such determination shall, to the fullest extent not prohibited
by law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee
has submitted a request for indemnification in accordance with Section 11(a) of this Agreement, and
the Company shall, to the fullest extent not prohibited by law, have the burden of proof to
overcome that presumption in connection with the making by any person, persons or entity of any
determination contrary to that presumption. Neither the failure of the Company (including by its
directors or Independent Counsel) to have made a determination prior to the commencement of any
action pursuant to this Agreement that indemnification is proper in the circumstances because
Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company
(including by its directors or Independent Counsel) that Indemnitee has not met such applicable
standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has
not met the applicable standard of conduct.

          (b) Subject to Section 14(e), if the person, persons or entity empowered or selected under
Section 12 of this Agreement to determine whether Indemnitee is entitled to indemnification shall
not have made a determination within sixty (60) days after receipt by the Company of the request
therefor, the requisite determination of entitlement to indemnification shall, to the fullest
extent not prohibited by law, be deemed to have been made and Indemnitee shall be entitled to such
indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a
material fact necessary to make Indemnitee’s statement not materially misleading, in connection
with the request for indemnification, or (ii) a prohibition of such indemnification under
applicable law; provided, however, that such 60-day period may be extended for a reasonable time,
not to exceed an additional thirty (30) days, if the person, persons or entity making the
determination with respect to entitlement to indemnification in good faith requires such additional
time for the obtaining or evaluating of documentation and/or information relating thereto; and
provided, further, that the foregoing provisions of this Section 13(b) shall not apply (i) if the
determination of entitlement to indemnification is to be made by the stockholders pursuant to
Section 12(a) of this Agreement and if (A) within fifteen (15) days

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after receipt by the Company of the request for such determination the Board has resolved to
submit such determination to the stockholders for their consideration at an annual meeting thereof
to be held within seventy-five (75) days after such receipt and such determination is made thereat,
or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for
the purpose of making such determination, such meeting is held for such purpose within sixty (60)
days after having been so called and such determination is made thereat, or (ii) if the
determination of entitlement to indemnification is to be made by Independent Counsel pursuant to
Section 12(a) of this Agreement.

          (c) The termination of any Proceeding or of any claim, issue or matter therein, by judgment,
order, settlement or conviction, or upon a plea of nolo contendere or its
equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself
adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee
did not act in good faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had
reasonable cause to believe that his conduct was unlawful.

          (d) For purposes of any determination of good faith, Indemnitee shall be deemed to have acted
in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise,
including financial statements, or on information supplied to Indemnitee by the directors or
officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the
Enterprise or on information or records given or reports made to the Enterprise by an independent
certified public accountant or by an appraiser or other expert selected with the reasonable care by
the Enterprise. The provisions of this Section 13(d) shall not be deemed to be exclusive or to
limit in any way the other circumstances in which the Indemnitee may be deemed to have met the
applicable standard of conduct set forth in this Agreement.

          (e) The knowledge and/or actions, or failure to act, of any director, officer, trustee,
partner, managing member, fiduciary, agent or employee of the Enterprise shall not be imputed to
Indemnitee for purposes of determining the right to indemnification under this Agreement.

     Section 14. Remedies of Indemnitee.

          (a) Subject to Section 14(e), in the event that (i) a determination is made pursuant to
Section 12 of this Agreement that Indemnitee is not entitled to indemnification under this
Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 10 of this
Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant
to Section 12(a) of this Agreement within ninety (90) days after receipt by the Company of the
request for indemnification, (iv) payment of indemnification is not made pursuant to Section 5, 6
or 7 or the last sentence of Section 12(a) of this Agreement within ten (10) days after receipt by
the Company of a written request therefor, (v) payment of indemnification pursuant to Section 3, 4
or 8 of this Agreement is not made within ten (10) days after a determination has been made that
Indemnitee is entitled to indemnification, or (vi) in the event that the Company or any other
person takes or threatens to take any action to declare this

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Agreement void or unenforceable, or institutes any litigation or other action or Proceeding
designed to deny, or to recover from, the Indemnitee the benefits provided or intended to be
provided to the Indemnitee hereunder, Indemnitee shall be entitled to an adjudication by a court of
his entitlement to such indemnification or advancement of Expenses. Alternatively, Indemnitee, at
his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the
Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence
such proceeding seeking an adjudication or an award in arbitration within 180 days following the
date on which Indemnitee first has the right to commence such proceeding pursuant to this Section
14(a); provided, however, that the foregoing clause shall not apply in respect of a
proceeding brought by Indemnitee to enforce his rights under Section 5 of this Agreement. The
Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.

          (b) In the event that a determination shall have been made pursuant to Section 12(a) of this
Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or
arbitration commenced pursuant to this Section 14 shall be conducted in all respects as a
de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced
by reason of that adverse determination. In any judicial proceeding or arbitration commenced
pursuant to this Section 14 the Company shall have the burden of proving Indemnitee is not entitled
to indemnification or advancement of Expenses, as the case may be.

          (c) If a determination shall have been made pursuant to Section 12(a) of this Agreement that
Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any
judicial proceeding or arbitration commenced pursuant to this Section 14, absent (i) a misstatement
by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s
statement not materially misleading, in connection with the request for indemnification, or (ii) a
prohibition of such indemnification under applicable law.

          (d) The Company shall, to the fullest extent not prohibited by law, be precluded from
asserting in any judicial proceeding or arbitration commenced pursuant to this Section 14 that the
procedures and presumptions of this Agreement are not valid, binding and enforceable and shall
stipulate in any such court or before any such arbitrator that the Company is bound by all the
provisions of this Agreement. It is the intent of the Company that, to the fullest extent
permitted by law, the Indemnitee not be required to incur legal fees or other Expenses associated
with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement by
litigation or otherwise because the cost and expense thereof would substantially detract from the
benefits intended to be extended to the Indemnitee hereunder. The Company shall, to the fullest
extent permitted by law, indemnify Indemnitee against any and all Expenses and, if requested by
Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefor)
advance, to the extent not prohibited by law, such Expenses to Indemnitee, which are incurred by
Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of
Expenses from the Company under this Agreement or under any directors’ and officers’ liability
insurance policies maintained by the Company if, in the case of indemnification, Indemnitee is
wholly successful on the underlying claims; if Indemnitee is not wholly successful on the
underlying claims, then such

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indemnification shall be only to the extent Indemnitee is successful on such underlying claims
or otherwise as permitted by law, whichever is greater.

          (e) Notwithstanding anything in this Agreement to the contrary, no determination as to
entitlement of Indemnitee to indemnification under this Agreement shall be required to be made
prior to the final disposition of the Proceeding.

     Section 15. Non-exclusivity; Survival of Rights; Insurance; Subrogation.

          (a) The rights of indemnification and to receive advancement of Expenses as provided by this
Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be
entitled under applicable law, the Certificate of Incorporation, the By-laws, any agreement, a vote
of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of
this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under
this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status
prior to such amendment, alteration or repeal. To the extent that a change in Delaware law,
whether by statute or judicial decision, permits greater indemnification or advancement of Expenses
than would be afforded currently under the Bylaws or the Certificate of Incorporation and this
Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the
greater benefits so afforded by such change. No right or remedy herein conferred is intended to be
exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other right or remedy.

          (b) To the extent that the Company maintains an insurance policy or policies providing
liability insurance for directors, officers, employees, or agents of the Enterprise, Indemnitee
shall be covered by such policy or policies in accordance with its or their terms to the maximum
extent of the coverage available for any such director, officer, employee or agent under such
policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms
hereof, the Company has director and officer liability insurance in effect, the Company shall give
prompt notice of such claim or of the commencement of a Proceeding, as the case may be, to the
insurers in accordance with the procedures set forth in the respective policies. The Company shall
thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the
Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such
policies.

          (c) In the event of any payment under this Agreement, the Company shall be subrogated to the
extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers
required and take all action necessary to secure such rights, including execution of such documents
as are necessary to enable the Company to bring suit to enforce such rights.

          (d) The Company shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable (or for which advancement is provided hereunder)

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hereunder if and to the extent that Indemnitee has otherwise actually received such payment
under any insurance policy, contract, agreement or otherwise.

          (e) The Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is
or was serving at the request of the Company as a director, officer, trustee, partner, managing
member, fiduciary, employee or agent of any other corporation, limited liability company,
partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by
any amount Indemnitee has actually received as indemnification or advancement of Expenses from such
other corporation, limited liability company, partnership, joint venture, trust or other
enterprise.

     Section 16. Duration of Agreement. This Agreement shall continue until and terminate
upon the later of: (a) ten (10) years after the date that Indemnitee shall have ceased to serve as
a director, officer and/or other agent of the Company or (b) one (1) year after the final
termination of any Proceeding then pending in respect of which Indemnitee is granted rights of
indemnification or advancement of Expenses hereunder and of any proceeding commenced by Indemnitee
pursuant to Section 14 of this Agreement relating thereto. The indemnification and advancement of
expenses rights provided by or granted pursuant to this Agreement shall be binding upon and be
enforceable by the parties hereto and their respective successors and assigns (including any direct
or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all
of the business or assets of the Company), shall continue as to an Indemnitee who has ceased to be
a director, officer, employee or agent of the Company or of any other Enterprise, and shall inure
to the benefit of Indemnitee and his or her spouse, assigns, heirs, devisees, executors and
administrators and other legal representatives.

     Section 17. Severability. If any provision or provisions of this Agreement shall be
held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality
and enforceability of the remaining provisions of this Agreement (including without limitation,
each portion of any Section of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any
way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by
law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform
to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to
the fullest extent possible, the provisions of this Agreement (including, without limitation, each
portion of any Section of this Agreement containing any such provision held to be invalid, illegal
or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to
give effect to the intent manifested thereby.

     Section 18. Enforcement.

          (a) The Company expressly confirms and agrees that it has entered into this Agreement and
assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director
or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this
Agreement in serving as a director or officer of the Company.

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          (b) This Agreement constitutes the entire agreement between the parties hereto with respect to
the subject matter hereof and supersedes all prior agreements and understandings, oral, written and
implied, between the parties hereto with respect to the subject matter hereof; provided, however,
that this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, the
By-laws and applicable law, and shall not be deemed a substitute therefor, nor to diminish or
abrogate any rights of Indemnitee thereunder.

     Section 19. Modification and Waiver. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by the parties hereto. No waiver of any of
the provisions of this Agreement shall be deemed or shall constitute a waiver of any other
provisions of this Agreement nor shall any waiver constitute a continuing waiver.

     Section 20. Notice by Indemnitee. Indemnitee agrees promptly to notify the Company in
writing upon being served with any summons, citation, subpoena, complaint, indictment, information
or other document relating to any Proceeding or matter which may be subject to indemnification or
advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Company
shall not relieve the Company of any obligation which it may have to the Indemnitee under this
Agreement or otherwise.

     Section 21. Notices. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by
hand and receipted for by the party to whom said notice or other communication shall have been
directed, (b) mailed by certified or registered mail with postage prepaid, on the third business
day after the date on which it is so mailed, (c) mailed by reputable overnight courier and
receipted for by the party to whom said notice or other communication shall have been directed or
(d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has
been received:

          (a) If to Indemnitee, at the address indicated on the signature page of this Agreement, or
such other address as Indemnitee shall provide to the Company.

          (b) If to the Company to

The Advisory Board Company

2445 M Street, N.W.

Washington, D.C. 20037

Attention: General Counsel

or to any other address as may have been furnished to Indemnitee by the Company.

     Section 22. Contribution. To the fullest extent permissible under applicable law, if
the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason
whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount
incurred by 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

-15-

 

received by the Company and 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,
officers, employees and agents) and Indemnitee in connection with such event(s) and/or
transaction(s).

     Section 23. Applicable Law and Consent to Jurisdiction. This Agreement and the legal
relations among the parties shall be governed by, and construed and enforced in accordance with,
the laws of the State of Delaware, without regard to its conflict of laws rules. Except with
respect to any arbitration commenced by Indemnitee pursuant to Section 14(a) of this Agreement, the
Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or
proceeding arising out of or in connection with this Agreement shall be brought only in the
Chancery Court of the State of Delaware (the “Delaware Court”), and not in any other state or
federal court in the United States of America or any court in any other country, (ii) consent to
submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding
arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not
otherwise subject to service of process in the State of Delaware, irrevocably RL&F Service Corp.,
One Rodney Square, 10th Floor, 10th and King Streets, Wilmington, Delaware 19801 as its agent in
the State of Delaware as such party’s agent for acceptance of legal process in connection with any
such action or proceeding against such party with the same legal force and validity as if served
upon such party personally within the State of Delaware, (iv) waive any objection to the laying of
venue of any such action or proceeding in the Delaware Court, and (v) waive, and agree not to plead
or to make, any claim that any such action or proceeding brought in the Delaware Court has been
brought in an improper or inconvenient forum.

     Section 24. Identical Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original but all of which
together shall constitute one and the same Agreement. Only one such counterpart signed by the
party against whom enforceability is sought needs to be produced to evidence the existence of this
Agreement.

     Section 25. Miscellaneous. Use of the masculine pronoun shall be deemed to include
usage of the feminine pronoun where appropriate. The headings of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement or to affect the
construction thereof.

     IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year
first above written.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	THE ADVISORY BOARD COMPANY	 	 	 	INDEMNITEE	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 
	 	 	 	 	 	 	 	 
	 

	 	Title:
	 	 	 	 	 	Address:	 	 	 	 
	 

	 	 	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 

-16-

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