EXHIBIT 10.8
PIONEER NATURAL RESOURCES COMPANY
INDEMNIFICATION AGREEMENT
This Agreement ("Agreement") is made and entered into as of the 8th day of
August, 1997 (the "Effective Date"), by and between Pioneer Natural Resources
Company, a Delaware corporation (the "Company"), and Xxxxx X. Xxxxxxxxx
("Indemnitee").
RECITALS
A. Highly competent and experienced persons are becoming more reluctant to
serve corporations as directors, executive officers or in other capacities
unless they are provided with adequate protection through insurance and adequate
indemnification against inordinate risks of claims and actions against them
arising out of their service to and activities on behalf of the Company.
B. The Board of Directors of the Company (the "Board") has determined that
the inability to attract and retain such persons would be 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.
C. The Board has also determined that it is reasonable, prudent and
necessary for the Company, in addition to purchasing and maintaining directors'
and officers' liability insurance (or otherwise providing for adequate
arrangements of self-insurance), contractually to obligate itself to indemnify
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.
D. 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 to the fullest extent permitted by law.
E. Article Twelfth of the Amended and Restated Certificate of Incorporation
of the Company provides for indemnification, advancement of expenses,
arrangements of insurance and self-insurance and specifically authorizes the
Company to enter into indemnification agreements that contractually provide to
indemnitees the benefits of the provisions of Article Twelfth and other
indemnification protections to the fullest extent permitted by law.
In consideration of the foregoing and the mutual covenants herein
contained, and other good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, the parties hereby agree as follows:
ARTICLE I
Certain Definitions
As used herein, the following words and terms shall have the following
respective meanings (whether singular or plural):
"Acquiring Person" means any person other than (i) the Company, (ii) any of
the Company's Subsidiaries, (iii) any employee benefit plan of the Company or of
a Subsidiary of the Company or of a Company owned directly or indirectly by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company, or (iv) any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or of a
Subsidiary of the Company or of a Company owned directly or indirectly by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company.
"Change in Control" means the occurrence of any of the following events:
(i) The acquisition by any person of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (x) the then outstanding shares of Common Stock of the Company (the
"Outstanding Company Common Stock") or (y) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Company Voting Securities"); provided,
however, that for purposes of this Subparagraph (i), the following acquisitions
shall not constitute a Change of Control: (A) any acquisition directly from the
Company, (B) any acquisition by the Company, (C) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company or (D) any acquisition by any corporation
pursuant to a transaction which complies with clauses (A), (B) and (C) of
paragraph (iii) below; or
(ii) Members of the Incumbent Board cease for any reason to constitute at
least a majority of the Board; or
(iii) Consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of the Company or an
acquisition of assets of another corporation (a "Business Combination"), in each
case, unless, following such Business Combination, (A) all or substantially all
of the individuals and entities who were the beneficial owners, respectively, of
the Outstanding Company Common Stock and Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination (including,
without limitation, a corporation which as a result of such transaction owns the
Company or all or substantially all of the Company's assets either directly or
through one or more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination of the Outstanding
Company Common Stock and Outstanding Company Voting Securities, as the case may
be, (B) no person (excluding any employee benefit plan (or related trust) of the
Company or the corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 20% or more of, respectively, the
then outstanding shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership results
solely from ownership of the Company that existed prior to the Business
Combination and (C) at least a majority of the members of the board of directors
of the corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or of the
action of the Board, providing for such Business Combination; or
(iv) Approval by the stockholders of the Company of a complete liquidation
or dissolution of the Company.
"Claim" means an actual or threatened claim or request for relief which is
or may be made by reason of anything done or not done by Indemnitee in, or by
reason of any event or occurrence related to, Indemnitee's Corporate Status.
"Corporate Status" means the status of a person who is, becomes or was a
director, officer, employee, agent or fiduciary of the Company or is, becomes or
was serving at the request of the Company as a director, officer, partner,
venturer, proprietor, trustee, employee, agent, fiduciary or similar functionary
of another foreign or domestic corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan or other enterprise. For purposes
of this Agreement, the Company agrees that Indemnitee's service on behalf of or
with respect to any Subsidiary of the Company shall be deemed to be at the
request of the Company.
"DGCL" means the Delaware General Corporation Law and any successor statute
thereto, as either of them may from time to time be amended.
"Disinterested Director" with respect to any request by Indemnitee for
indemnification hereunder, means a director of the Company who at the time of
the vote is not a named defendant or respondent in the Proceeding in respect of
which indemnification is sought by Indemnitee.
"Expenses" means all attorneys' fees, retainers, court costs, transcript
costs, fees of experts, witness fees, travel expenses, duplicating costs,
printing and binding costs, telephone charges, postage, delivery service fees
and all other disbursements, costs or expenses of the types customarily incurred
in connection with prosecuting, defending (including affirmative defenses and
counterclaims), preparing to prosecute or defend, investigating or being or
preparing to be a witness in, or participating in or preparing to participate in
(including on appeal), a Proceeding.
"Incumbent Board" means the individuals who, as of the date of this
Agreement, constitute the Board and any other individual who becomes a director
of the Company after that date and whose election or appointment by the Board or
nomination for election by the Corporation's stockholders was approved by a vote
of at least a majority of the directors then comprising the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a person other than the
Incumbent Board.
"Independent Counsel" means a law firm, or a member of a law firm, that is
experienced in matters of corporation law and neither contemporaneously is, nor
in the five years theretofore has been, retained to represent: (a) the Company
or Indemnitee in any matter material to either such party (other than as
Independent Counsel under this Agreement or similar agreements, (b) any other
party to the Proceeding giving rise to a claim for indemnification hereunder or
(c) the beneficial owner, directly or indirectly, of securities of the Company
representing 40% or more of the combined voting power of the Corporation's then
outstanding voting securities (other than, in each such case, with respect to
matters concerning the rights of Indemnitee under this Agreement, or of other
indemnitees under similar indemnification agreements). 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.
"person" means any individual, entity or group (within the meaning of
Sections 13(d)(3) and 14(d)(2) of the Exchange Act).
"Potential Change in Control" shall be deemed to have occurred if (i) the
Company enters into an agreement, the consummation of which would result in the
occurrence of a Change in Control; (ii) any person (including the Company)
publicly announces an intention to take or consider taking actions that, if
consummated, would constitute a Change in Control; (iii) any Acquiring Person
who is or becomes the beneficial owner (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of securities of the Company representing
10% or more of the combined voting power of the then Outstanding Company Voting
Securities increases his beneficial ownership of such securities by 5% or more
over the percentage so owned by the person on the date hereof; or (iv) the Board
adopts a resolution to the effect that, for purposes of this Agreement, a
Potential Change of Control has occurred.
"Proceeding" means any threatened, pending or completed action, suit,
arbitration, investigation, alternate dispute resolution mechanism,
administrative hearing or any other proceeding (including, without limitation,
any securities laws action, suit, arbitration, alternative dispute resolution
mechanism, hearing or procedure) whether civil, criminal, administrative,
arbitrative or investigative and whether or not based upon events occurring, or
actions taken, before the date hereof, and any appeal in or related to any such
action, suit, arbitration, investigation, hearing or proceeding and any inquiry
or investigation (including discovery), whether conducted by the Company or any
other party, that Indemnitee in good faith believes could lead to any appeal in
or related to, any such action, suit, arbitration, alternative dispute
resolution mechanism, hearing or other proceeding.
"Subsidiary" means, with respect to any person, any corporation or other
entity of which a majority of the voting power of the voting equity securities
or equity interest is owned, directly or indirectly, by that person.
"Voting Securities" means any securities that vote generally in the
election of directors, in the admission of general partners, or in the selection
of any other similar governing body.
ARTICLE II
Services by Indemnitee
Indemnitee is serving as Director, President & Chief Executive Officer of
the Company. Indemnitee may from time to time also agree to serve, as the
Company may request from time to time, in another capacity for the Company
(including another officer or director position) or as a director, officer,
partner, venturer, proprietor, trustee, employee, agent, fiduciary or similar
functionary of another foreign or domestic corporation, partnership, joint
venture, sole proprietorship, trust, employee benefit plan or other enterprise.
Indemnitee and the Company each acknowledge that they have entered into this
Agreement as a means of inducing Indemnitee to serve, or continue to serve, the
Company in such capacities. Indemnitee may at any time and for any reason resign
from such position or positions (subject to any other contractual obligation or
any obligation imposed by operation of law). The Company shall have no
obligation under this Agreement to continue Indemnitee in any such position or
positions.
ARTICLE III
Indemnification
Section 3.1 General. Subject to the provisions set forth in Article V, the
Company shall indemnify, and advance Expenses to, Indemnitee to the fullest
extent permitted by applicable law in effect on the date hereof and to such
greater extent as applicable law may thereafter from time to time permit. The
other provisions set forth in this Agreement are provided in addition to and as
a means of furtherance and implementation of, and not in limitation of, the
obligations expressed in this Article III. No requirement, condition to or
limitation of any right to indemnification III, or to advancement of Expenses
under this Article III, shall in any way limit the rights of Indemnitee under
Section 7.3.
Section 3.2 Additional Indemnity of the Company. Indemnitee shall be
entitled to indemnification pursuant to this Section 3.2 if, by reason of
anything done or not done by Indemnitee in, or by reason of any event or
occurrence related to, Indemnitee's Corporate Status, Indemnitee is, was or
becomes, or is threatened to be made, a party to, or witness or other
participant in any Proceeding. Pursuant to this Section 3.2, Indemnitee shall be
indemnified against any and all Expenses, judgments, penalties (including excise
or similar taxes), fines and amounts paid in settlement (including all interest,
assessments and other charges paid or payable in connection with or in respect
of any such Expenses, judgments, penalties, fines and amounts paid in
settlement) actually and reasonably incurred by him or on his behalf in
connection with such Proceeding or any Claim, issue or matter therein.
Notwithstanding the foregoing, the obligations of the Company under this Section
3.2 shall be subject to the condition that no determination (which, in any case
in which Independent Counsel is involved, shall be in a form of a written
opinion) shall have been made pursuant to Article V that Indemnitee would not be
permitted to be indemnified under applicable law. Nothing in this Section 3.2
shall limit the benefits of Section 3.1 or any other Section hereunder.
Section 3.3 Advancement of Expenses. The Company shall pay all reasonable
Expenses incurred by or on behalf of Indemnitee (or, if applicable, reimburse
Indemnitee for any and all Expenses reasonable incurred by Indemnitee and
previously paid by Indemnitee) in connection with any Claim or Proceeding,
whether brought by the Company or otherwise, in advance of any determination
respecting entitlement to indemnification pursuant to Article IV hereof within
10 days after the receipt by the Company of (a) a written request from
Indemnitee requesting such payment or payments from time to time, whether prior
to or after final disposition of such Proceeding, and (b) a written affirmation
from Indemnitee of his good faith belief that he has met the standard of conduct
necessary for Indemnitee to be permitted to be indemnified under applicable law.
Such statement or statements shall reasonably evidence the Expenses incurred by
Indemnitee. Any such payment by the Company is referred to in this Agreement as
an "Expense Advance." In connection with any request for an Expense Advance, if
requested by the Company, Indemnitee or Indemnitee's counsel shall also submit
an affidavit stating that the Expenses incurred were reasonable. Any dispute as
to the reasonableness of any Expense shall not delay an Expense Advance by the
Company, and the Company agrees that any such dispute shall be resolved only
upon the disposition or conclusion of the underlying Claim against the
Indemnitee. Indemnitee hereby undertakes and agrees (which agreement shall be an
unsecured obligation of Indemnitee) that he will reimburse and repay the Company
without interest for any Expenses Advance to the extent that it shall ultimately
be determined (in a final adjudication by a court from which there is no further
right of appeal or in a final adjudication of an arbitration pursuant to Section
5.1 if Indemnitee elects to seek such arbitration) that Indemnitee is not
entitled to be indemnified by the Company against such Expenses.
Section 3.4 Indemnification for Additional Expenses. The Company shall
indemnity Indemnitee against any and all costs and expenses (including
attorneys' and expert witnesses' fees) and, if requested by Indemnitee, shall
(within two business days of that request) advance those costs and expenses to
Indemnitee, that are incurred by Indemnitee in connection with any claim
asserted against or action brought by Indemnitee for (i) indemnification or an
Expense Advance by the Company under this Agreement or any other agreement or
provision of the Corporation's Certificate of Incorporation or Bylaws now or
hereafter in effect relating to any Claim or Proceeding, or (ii) recovery under
any directors' and officers' liability insurance policies maintained by the
Company, regardless of whether Indemnitee ultimately is determined to be
entitled to that indemnification, advance expense payment, or insurance
recovery, as the case may be.
Section 3.5 Partial Indemnity. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of the Expenses, judgments, fines, penalties, and amounts paid in
settlement of a Claim or Proceeding but not, however, for all of the total
amount thereof, the Company shall nevertheless indemnify Indemnitee for the
portion thereof to which Indemnitee is entitled. Moreover, notwithstanding any
other provision of this Agreement, to the extent that Indemnitee has been
successful on the merits or otherwise in defense of any or all Claims or
Proceedings, or in defense of any issue or matter therein, including dismissal
without prejudice, Indemnitee shall be indemnified against all Expenses incurred
in connection therewith.
ARTICLE IV
Procedure for Determination of Entitlement
to Indemnification
Section 4.1 Request by Indemnitee. 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. The Secretary or an
Assistant Secretary of the Company shall, promptly upon receipt of such a
request for indemnification, advise the Board in writing that Indemnitee has
requested indemnification.
Section 4.2 Determination of Request. Upon written request by Indemnitee
for indemnification pursuant to the first sentence of Section 4.1 hereof, a
determination, if required by applicable law, with respect to whether Indemnitee
is permitted under applicable law to be indemnified shall be made in accordance
with the terms of Section 4.5(b), in the specific case as follows:
(a) If a Potential Change in Control or a Change in Control shall have
occurred, by Independent Counsel (selected in accordance with Section 4.3)
in a written opinion to the Board and Indemnitee, unless Indemnitee shall
request that such determination be made by the Board, or a committee of the
Board, in which case by the person or persons or in the manner provided for
in clause (i) or (ii) of paragraph (b) below; or
(b) If a Potential Change in Control or a Change in Control shall not have
occurred, (i) by the Board by a majority vote of a quorum of the Board
consisting of Disinterested Directors, or (ii) if there are no
Disinterested Directors, or if a quorum of the Board consisting of
Disinterested Directors is not obtainable, by a majority vote of a
committee of the Board designated to act in the matter by a majority vote
of the entire Board, consisting solely of two or more Disinterested
Directors, or (iii) by Independent Counsel selected by the Board or a
committee of the Board by a vote as set forth in clauses (i) or (ii) of
this paragraph (b), or if such quorum is not obtainable or such a committee
cannot be established, by a majority vote of all directors, or (iv) if
Indemnitee and the Company agree, by the stockholders of the Company in a
vote that excludes the shares held by directors who are not Disinterested
Directors.
If it is so determined that Indemnitee is permitted to be indemnified under
applicable law, payment to Indemnitee shall be made within 10 days after such
determination. Nothing contained in this Agreement shall require that any
determination be made under this Section 4.2 prior to the disposition or
conclusion of a Claim or Proceeding against the Indemnitee; provided, however,
that Expense Advances shall continue to be made by the Company pursuant to, and
to the extent required by, the provisions of Article III. Indemnitee shall
cooperate with the person or persons making such determination with respect to
Indemnitee's entitlement to indemnification, including providing to such person
upon reasonable advance request any documentation or information that is not
privileged or otherwise protected from disclosure and that 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 or persons making such
determination shall be borne by the Company (irrespective of the determination
as to Indemnitee's entitlement to indemnification) and the Company shall
indemnify and hold harmless Indemnitee therefrom.
Section 4.3 Independent Counsel. If a Potential Change in Control or a
Change in Control shall not have occurred and the determination of entitlement
to indemnification is to be made by Independent Counsel, the Independent Counsel
shall be selected by (a) a majority vote of the Disinterested Directors, even
though less than a quorum of the Board or (b) if there are no Disinterested
Directors, by a majority vote of the Board, and the Company shall give written
notice to Indemnitee, within 10 days after receipt by the Company of
Indemnitee's request for indemnification, specifying the identity and address of
the Independent Counsel so selected. If a Potential Change in Control or a
Change in Control shall have occurred and the determination of entitlement to
indemnification is to be made by Independent Counsel, the Independent Counsel
shall be selected by Indemnitee, and Indemnitee shall give written notice to the
Company, within 10 days after submission of Indemnitee's request for
indemnification, specifying the identity and address of the Independent Counsel
so selected (unless Indemnitee shall request that such selection be made by the
Disinterested Directors or a committee of the Board, in which event the Company
shall give written notice to Indemnitee within 10 days after receipt of
Indemnitee's request for the Board or a committee of the Disinterested Directors
to make such selection, specifying the identity and address of the Independent
Counsel so selected). In either event, (i) such notice to Indemnitee or the
Company, as the case may be, shall be accompanied by a written affirmation of
the Independent Counsel so selected that it satisfies the requirements of the
definition of "Independent Counsel" in Article I and that it agrees to serve in
such capacity and (ii) Indemnitee or the Company, as the case may be, may,
within seven 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. Any objection to selection of Independent Counsel pursuant to
this Section 4.3 may be asserted only on the ground that the Independent Counsel
so selected does not meet the requirements of the definition of "Independent
Counsel" in Article I, and the objection shall set forth with particularity the
factual basis of such assertion. If such written objection is timely made, the
Independent Counsel so selected may not serve as Independent Counsel unless and
until a court of competent jurisdiction (the "Court") has determined that such
objection is without merit. In the event of a timely written objection to a
choice of Independent Counsel, the party originally selecting the Independent
Counsel shall have seven days to make an alternate selection of Independent
Counsel and to give written notice of such selection to the other party, after
which time such other party shall have five days to make a written objection to
such alternate selection. If, within 30 days after submission of Indemnitee's s
request for indemnification pursuant to Section 4.1, no Independent Counsel
shall have been selected and not objected to, either the Company or Indemnitee
may petition the Court for resolution of any objection that 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 the
Court or by such other person as the Court shall designate, and the person with
respect to whom an objection is so resolved or the person so appointed shall act
as Independent Counsel under Section 4.2. The Company shall pay any and all
reasonable fees and expenses incurred by such Independent Counsel in connection
with acting pursuant to Section 4.2, and the Company shall pay all reasonable
fees and expenses incident to the procedures of this Section 4.3, regardless of
the manner in which such Independent Counsel was selected or appointed. Upon the
due commencement of any judicial proceeding or arbitration pursuant to Section
5.1, 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 4.4 Establishment of a Trust. In the event of a Potential Change in
Control or a Change in Control, the Company shall, upon written request by the
Indemnitee, create a trust for the benefit of the Indemnitee (the "Trust") and
from time to time upon written request of the Indemnitee shall fund the Trust in
an amount sufficient to satisfy any and all Expenses reasonably anticipated at
the time of each such request to be incurred in connection with investigating,
preparing for, and defending any Claim, and any and all judgments, fines,
penalties, and settlement amounts of any and all Claims from time to time
actually paid or claimed, reasonably anticipated, or proposed to be paid. The
amount to be deposited in the Trust pursuant to the foregoing funding obligation
shall be determined by the Independent Counsel (or other person(s) making the
determination of whether Indemnitee is permitted to be indemnified by applicable
law). The terms of the Trust shall provide that, upon a Change in Control, (i)
the Trust shall not be revoked or the principal thereof invaded, without the
written consent of the Indemnitee; (ii) the trustee of the Trust shall advance,
within ten business days of a request by Indemnitee, any and all reasonable
Expenses to Indemnitee, any required determination concerning the reasonableness
of the Expenses to be made by the Independent Counsel (and Indemnitee hereby
agrees to reimburse the Trust under the circumstances in which Indemnitee would
be required to reimburse the Company for Expenses Advances under Section 3.3 of
this Agreement); (iii) the Trust shall continue to be funded by the Company in
accordance with the funding obligation set forth above; (iv) the trustee of the
Trust shall promptly pay to Indemnitee all amounts for which Indemnitee shall be
entitled to indemnification pursuant to this Agreement; and (v) all unexpended
funds in the Trust shall revert to the Company upon a final determination by the
Independent Counsel or a court of competent jurisdiction, as the case may be,
that Indemnitee has been fully indemnified under the terms of this Agreement.
The trustee of the Trust shall be chosen by Indemnitee and shall be an
institution that is not affiliated with the Indemnitee. Nothing in this Section
4.4 shall relieve the Company of any of its obligations under this Agreement.
Section 4.5 Presumptions and Effect of Certain Proceedings.
i. The Indemnitee shall be presumed to be entitled to indemnification
under this Agreement upon submission of a request for indemnification
under Section 4.1, and the Company shall have the burden of proof in
overcoming that presumption in reaching a determination contrary to
that presumption. Such presumption shall be used by Independent
Counsel (or other person or persons determining entitlement to
indemnification) as a basis for a determination of entitlement to
indemnification unless the Company provides information sufficient to
overcome such presumption by clear and convincing evidence or unless
the investigation, review and analysis of Independent Counsel (or such
other person or persons) convinces him by clear and convincing
evidence that the presumption should not apply.
ii. If the person or persons empowered or selected under Article IV of
this Agreement to determine whether Indemnitee is entitled to
indemnification shall not have made a determination within 60 days
after receipt by the Company of the request by Indemnitee therefor,
the requisite determination of entitlement to indemnification shall be
deemed to have been made and Indemnitee shall be entitled to such
indemnification, absent (i) a knowing misstatement by Indemnitee of a
material fact, or knowing 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 30 days, if the person 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 to such determination; and provided,
further, that the 60-day limitation set forth in this Section 4.5(b)
shall not apply and such period shall be extended as necessary (i) if
within 30 days after receipt by the Company of the request for
indemnification under Section 4.1 Indemnitee and the Company have
agreed, and the Board has resolved to submit such determination to the
stockholders of the Company pursuant to Section 4.2(b) for their
consideration at an annual meeting of stockholders to be held within
90 days after such agreement and such determination is made thereat,
or a special meeting of stockholders is called within 30 days after
such receipt for the purpose of making such determination, such
meeting is held for such purpose within 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 4.2(a) of this Agreement, in
which case the applicable period shall be as set forth in Section
5.1(c).
iii. The termination of any Proceeding or of any Claim, issue or matter by
judgment, order, settlement (whether with or without court approval)
or conviction, or upon a plea of nolo contendere or its equivalent,
shall not (except as otherwise expressly provided in this Agreement)
by itself adversely affect the rights of Indemnitee to indemnification
or create a presumption that Indemnitee meet any particular standard
of conduct or have any particular belief or that a court has
determined that indemnification is not permitted by applicable law.
Indemnitee shall be deemed to have been found liable in respect of any
Claim, issue or matter only after he shall have been so adjudged by
the Court after exhaustion of all appeals therefrom.
ARTICLE V
Certain Remedies of Indemnitee
Section 5.1 Indemnitee Entitled to Adjudication in an Appropriate Court. If
(a) a determination is made pursuant to Article IV that Indemnitee is not
entitled to indemnification under this Agreement; (b) there has been any failure
by the Company to make timely payment or advancement of any amounts due
hereunder; or (c) the determination of entitlement to indemnification is to be
made by Independent Counsel pursuant to Section 4.2 and such determination shall
not have been made and delivered in a written opinion within 90 days after the
latest of (i) such Independent Counsel's being appointed, (ii) the overruling by
the Court of objections to such counsel's selection or (iii) expiration of all
periods for the Company or Indemnitee to object to such counsel's selection,
Indemnitee shall be entitled to commence an action seeking an adjudication in
the 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 action
seeking an adjudication or an award in arbitration within 180 days following the
date on which Indemnitee first has the right to commence such action pursuant to
this Section 5.1, or such right shall expire. The Company agrees not to oppose
Indemnitee's right to seek any such adjudication or award in arbitration.
Section 5.2 Adverse Determination Not to Affect any Judicial Proceeding. If
a determination shall have been made pursuant to Article IV that Indemnitee is
not entitled to indemnification under this Agreement, any judicial proceeding or
arbitration commenced pursuant to this Article V 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 such initial adverse determination. In any
judicial proceeding or arbitration commenced pursuant to this Article V,
Indemnitee shall be presumed to be entitled to indemnification or advancement of
Expenses, as the case may be, under this Agreement and the Company shall have
the burden of proof in overcoming such presumption and to show by clear and
convincing evidence that Indemnitee is not entitled to indemnification or
advancement of Expenses, as the case may be.
Section 5.3 Company Bound by Determination Favorable to Indemnitee in any
Judicial Proceeding or Arbitration. If a determination shall have been made or
deemed to have been made pursuant to Article IV that Indemnitee is entitled to
indemnification, the Company shall be irrevocably bound by such determination in
any judicial proceeding or arbitration commenced pursuant to this Article V, and
shall be precluded from asserting that such determination has not been made or
that the procedure by which such determination was made is not valid, binding
and enforceable, in each such case absent (a) a knowing misstatement by
Indemnitee of a material fact, or a knowing omission of a material fact
necessary to make a statement by Indemnitee not materially misleading, in
connection with the request for indemnification or (b) a prohibition of such
indemnification under applicable law.
Section 5.3 Company Bound by the Agreement. The Company shall be precluded
from asserting in any judicial proceeding or arbitration commenced pursuant to
this Article V 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.
Section 5.4 Indemnitee Entitled to Expenses of Judicial Proceeding. If
Indemnitee seeks a judicial adjudication of or an award in arbitration to
enforce his rights under, or to recover damages for breach of, this Agreement,
Indemnitee shall be entitled to recover from the Company, and the Company shall
indemnify Indemnitee against, any and all expenses (of the types described in
the definition of Expenses in Article I) actually and reasonably incurred by him
in such judicial adjudication or arbitration but only if Indemnitee prevails
therein. If it shall be determined in such judicial adjudication or arbitration
that Indemnitee is entitled to receive part but not all of the indemnification
or advancement of expenses or other benefit sought, the expenses incurred by
Indemnitee in connection with such judicial adjudication or arbitration shall be
equitably allocated between the Company and Indemnitee. Notwithstanding the
foregoing, if a Change in Control shall have occurred, Indemnitee shall be
entitled to indemnification under this Section 5.5 regardless of whether
Indemnitee ultimately prevails in such judicial adjudication or arbitration.
ARTICLE VI
Contribution
Section 6.1 Contribution Payment. To the extent the indemnification
provided for under any provision of this Agreement is determined (in the manner
hereinabove provided) not to be permitted under applicable law, then in the
event Indemnitee was, is, or becomes a party to or witness or other participant
in, or is threatened to be made a party to or witness or other participant in, a
Proceeding by reason of (or arising in part out of) Indemnitee's Corporate
Status, the Company, in lieu of indemnifying Indemnitee, shall contribute to the
amount of any and all Expenses, judgments, fines, or penalties assessed against
or incurred or paid by Indemnitee on account of such Proceeding and any and all
amounts paid in settlement of that Proceeding (including all interest,
assessments, and other charges paid or payable in connection with or in respect
of such Expenses, judgments, fines, penalties, or amounts paid in settlement)
for which such indemnification is not permitted ("Contribution Amounts"), in
such proportion as is appropriate to reflect the relative fault with respect to
the subject matter of the Proceeding giving rise to the Contribution Amounts of
Indemnitee, on the one hand, and of the Company and any and all other parties
(including officers and directors of the Company other than Indemnitee) who may
be at fault with respect to such matter (collectively, including the Company,
the "Third Parties") on the other hand.
Section 6.2 Relative Fault. The relative fault of the Third Parties and the
Indemnitee shall be determined (i) by reference to the relative fault of
Indemnitee as determined by the court or other governmental agency assessing the
Contribution Amounts or (ii) to the extent such court or other governmental
agency does not apportion relative fault, by the Independent Counsel (or such
other party which makes a determination under Article IV after giving effect to,
among other things, the relative intent, knowledge, access to information, and
opportunity to prevent or correct the subject matter of the Proceedings and
other relevant equitable considerations of each party. The Company and
Indemnitee agree that it would not be just and equitable if contribution
pursuant to this Section 6.2 were determined by pro rata allocation or by any
other method of allocation which does take account of the equitable
considerations referred to in this Section 6.2.
ARTICLE VII
Miscellaneous
Section 7.1 Non-Exclusivity. The rights of Indemnitee to receive
indemnification and advancement of Expenses under this Agreement shall be in
addition to, and shall not be deemed exclusive of, any other rights Indemnitee
shall have under the DGCL or other applicable law, the charter or bylaws of the
Company, any other agreement, vote of stockholders or a resolution of directors,
or otherwise. No amendment or alteration of the charter or bylaws of the Company
or any provision thereof shall adversely affect Indemnitee's rights hereunder
and such rights shall be in addition to any rights Indemnitee may have under the
charter, Bylaws and the DGCL or other applicable law. To the extent that there
is a change in the DGCL or other applicable law (whether by statute or judicial
decision) that allows greater indemnification by agreement than would be
afforded currently under the Corporation's charter or bylaws and this Agreement,
it is the intent of the parties hereto that the Indemnitee shall enjoy by virtue
of this Agreement the greater benefit so afforded by such change.
Section 7.2 Insurance and Subrogation.
(a) To the extent that the Company maintains an insurance policy or policies
providing liability insurance for directors, officers, employees, agents or
fiduciaries of the Company or for individuals serving at the request of the
Company as directors, officers, partners, venturers, proprietors, trustees,
employees, agents, fiduciaries or similar functionaries of another foreign
or domestic corporation, partnership, joint venture, sole proprietorship,
trust, employee benefit plan or other 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, agent or fiduciary under such policy or policies.
(b) In the event of any payment by the Company 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.
(c) The Company shall not be liable under this Agreement to make any payment of
amounts otherwise indemnifiable hereunder if and to the extent that
Indemnitee has otherwise actually received such payment under the
Corporation's charter or bylaws or any insurance policy, contract,
agreement or otherwise.
Section 7.3 Self Insurance of the Company; Other Arrangements. The parties
hereto recognize that the Company may, but is not required to, procure or
maintain insurance or other similar arrangements, at its expense, to protect
itself and any person, including the Indemnitee, who is or was a director,
officer, employee, agent or fiduciary of the Company or who is or was serving at
the request of the Company as a director, officer, partner, venturer,
proprietor, trustee, employee, agent, fiduciary or similar functionary of
another foreign or domestic corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan or other enterprise against any
expense, liability or loss asserted against or incurred by such person, in such
a capacity or arising out of his status as such a person, whether or not the
Company would have the power to indemnify such person against such expense or
liability or loss.
In considering the cost and availability of such insurance, the Company
(through the exercise of the business judgment of its directors and officers)
may, from time to time, purchase insurance which provides for certain (i)
deductibles, (ii) limits on payments required to be made by the insurer or (iii)
coverage which may not be as comprehensive as that previously included in
insurance purchased by the Company or its predecessors. The purchase of
insurance with deductibles, limits on payments and coverage exclusions, even if
in the best interest of the Company, may not be in the best interest of the
Indemnitee. As to the Company, purchasing insurance with deductibles, limits on
payments and coverage exclusions is similar to the Corporation's practice of
self-insurance in other areas. In order to protect Indemnitee who would
otherwise be more fully or entirely covered under such policies, the Company
shall, to the maximum extent permitted by applicable law, indemnify and hold
Indemnitee harmless to the extent (i) of such deductibles, (ii) of amounts
exceeding payments required to be made by an insurer or (iii) that prior
policies of officer's and director's liability insurance held by the Company or
its predecessors would have provided for payment to Indemnitee, if by reason of
his Corporate Status he is or is threatened to be made a party to any
Proceeding. The obligation of the Company in the preceding sentence shall be
without regard to whether the Company would otherwise be required to indemnify
such officer or director under the other provisions of this Agreement, or under
any law, agreement, vote of stockholders or directors or other arrangement.
Without limiting the generality of any provision of this Agreement, the
procedures in Article IV hereof shall, to the extent applicable, be used for
determining entitlement to indemnification under this Section 7.3.
Section 7.4 Certain Settlement Provisions. The Company shall have no
obligation to indemnify Indemnitee under this Agreement for amounts paid in
settlement of a Proceeding or Claim without the Corporation's prior written
consent. The Company shall not settle any Proceeding or Claim in any manner that
would impose any fine or other obligation on Indemnitee without Indemnitee's
prior written consent. Neither the Company nor Indemnitee shall unreasonably
withhold their consent to any proposed settlement.
Section 7.5 Exculpation of Directors. If Indemnitee is or was a director of
the Company, he shall not in that capacity be liable to the Company or its
stockholders for monetary damages for an act or omission in Indemnitee's
capacity as a director, except that Indemnitee's liability shall not be
eliminated or limited for: (a) any breach of Indemnitee's duty of loyalty to the
Company or its stockholders; (b) any acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of the law; (c) a
transaction from which Indemnitee received an improper benefit, whether or not
the benefit resulted from an action taken within the scope of Indemnitee's
office; or (d) an act or omission for which the liability of Indemnitee is
expressly provided for by statute.
Section 7.6 Duration of Agreement. This Agreement shall continue for so
long as Indemnitee serves as a director, officer, employee, agent or fiduciary
of the Company or, at the request of the Company, as a director, officer,
partner, venturer, proprietor, trustee, employee, agent, fiduciary or similar
functionary of another foreign or domestic corporation, partnership, joint
venture, sole proprietorship, trust, employee benefit plan or other enterprise,
and thereafter shall survive until and terminate upon the later to occur of: (a)
the expiration of 20 years after the latest date that Indemnitee shall have
ceased to serve in any such capacity; (b) the final termination of all pending
Proceedings in respect of which Indemnitee is granted rights of indemnification
or advancement of Expenses hereunder and of any proceeding commenced by
Indemnitee pursuant to Article IV relating thereto; or (c) the expiration of all
statutes of limitation applicable to possible Claims arising out of Indemnitee's
Corporate Status.
Section 7.7 Notice by Each Party. Indemnitee shall promptly notify the
Company in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document or communication relating
to any Proceeding or Claim for which Indemnitee may be entitled to
indemnification or advancement of Expenses hereunder; provided, however, that
any failure of Indemnitee to so notify the Company shall not adversely affect
Indemnitee's rights under this Agreement except to the extent the Company shall
have been materially prejudiced as a direct result of such failure. The Company
shall promptly notify Indemnitee in writing as to the pendency of any Proceeding
or Claim that may involve a claim against the Indemnitee for which Indemnitee
may be entitled to indemnification or advancement of Expenses hereunder.
Section 7.8 Amendment. This Agreement may not be modified or amended except
by a written instrument executed by or on behalf of each of the parties hereto.
Section 7.9 Waivers. The observance of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively or
prospectively) by the party entitled to enforce such term only by a writing
signed by the party against which such waiver is to be asserted. Unless
otherwise expressly provided herein, no delay on the part of any party hereto in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of any party hereto of any right,
power or privilege hereunder operate as a waiver of any other right, power or
privilege hereunder nor shall any single or partial exercise of any right, power
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder.
Section 7.10 Entire Agreement. This Agreement and the documents expressly
referred to herein constitute the entire agreement between the parties hereto
with respect to the matters covered hereby, and any other prior or
contemporaneous oral or written understandings or agreements with respect to the
matters covered hereby are expressly superseded by this Agreement.
Section 7.11 Severability. If any provision of this Agreement (including
any provision within a single section, paragraph or sentence) or the application
of such provision to any person or circumstance, shall be judicially declared to
be invalid, unenforceable or void, such decision will not have the effect of
invalidating or voiding the remainder of this Agreement or affect the
application of such provision to other persons or circumstances, it being the
intent and agreement of the parties that this Agreement shall be deemed amended
by modifying such provision to the extent necessary to render it valid, legal
and enforceable while preserving its intent, or if such modification is not
possible, by substituting therefor another provision that is valid, legal and
unenforceable and that achieves the same objective. Any such finding of
invalidity or unenforceability shall not prevent the enforcement of such
provision in any other jurisdiction to the maximum extent permitted by
applicable law.
Section 7.12 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given upon (a) transmitter's confirmation of a
receipt of a facsimile transmission, (b) confirmed delivery of a standard
overnight courier or when delivered by hand or (c) the expiration of five
business days after the date mailed by certified or registered mail (return
receipt requested), postage prepaid, to the parties at the following addresses
(or at such other addresses for a party as shall be specified by like notice):
If to the Company, to it at:
Pioneer Natural Resources Company
0000 Xxxxxxxx Xxxxxx Xxxx
0000 Xxxxx X'Xxxxxx Xxxx.
Xxxxxx, Xxxxx 00000-0000
Attn: Chief Financial Officer
If to Indemnitee, to him at:
Xxxxx X. Xxxxxxxxx
Pioneer Natural Resources Company
0000 Xxxxxxxx Xxxxxx Xxxx
0000 X. X'Xxxxxx Xxxx.
Xxxxxx, Xxxxx 00000
or to such other address or to such other individuals as any party shall have
last designated by notice to the other parties. All notices and other
communications given to any party in accordance with the provisions of this
Agreement shall be deemed to have been given when delivered or sent to the
intended recipient thereof in accordance with the provisions of this Section
7.12.
Section 7.13 Governing Law. This Agreement shall be construed in accordance
with and governed by the laws of the State of Delaware without regard to the
principles of conflict of laws.
Section 7.14 Certain Construction Rules.
(a) The article and section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. As used in this Agreement, unless
otherwise provided to the contrary,
(1) all references to days shall be deemed references to
calendar days and any reference to a "Section" or "Article"
shall be deemed to refer to a section or article of this
Agreement. The words "hereof," "herein" and "hereunder" and
words of similar import referring to this Agreement refer
to this Agreement as a whole and not to any particular
provision of this Agreement. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without
limitation." Unless otherwise specifically provided for
herein, the term "or" shall not be deemed to be exclusive.
Whenever the context may require, any pronoun used in this
Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns,
pronouns and verbs shall include the plural and vice versa.
(b) For purposes of this Agreement, references to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any
excise taxes assessed on a person 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, nominee,
officer, employee or agent with respect to an employee benefit plan, its
participants or beneficiaries.
Section 7.15 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument, notwithstanding that
both parties are not signatories to the original or same counterpart.
Section 7.16 Certain Persons Not Entitled to Indemnification.
Notwithstanding any other provision of this Agreement, Indemnitee shall not be
entitled to indemnification or advancement of Expenses hereunder with respect to
any Proceeding or any Claim, issue or matter therein, brought or made by such
person against the Company, except as specifically provided in Article III or
Article IV hereof.
Section 7.17 Indemnification for Negligence, Gross Negligence, etc. Without
limiting the generality of any other provision hereunder, it is the express
intent of this Agreement that Indemnitee be indemnified and Expenses be advanced
regardless of Indemnitee's acts of negligence, gross negligence, intentional or
willful misconduct to the extent that indemnification and advancement of
Expenses is allowed pursuant to the terms of this Agreement and under applicable
law.
Section 7.18 Mutual Acknowledgment. Both the Company and Indemnitee
acknowledge that in certain instances, applicable law or public policy may
prohibit the Company from indemnifying the directors, officers, employees,
agents or fiduciaries of the Company under this Agreement or otherwise.
Indemnitee understands and acknowledges that the Company has undertaken or may
be required in the future to undertake with the Securities and Exchange
Commission to submit the question of indemnification to a court in certain
circumstances for a determination of the Corporation's right under public policy
to indemnify Indemnitee.
Section 7.19 Enforcement. The Company agrees that its execution of this
Agreement shall constitute a stipulation by which it shall be irrevocably bound
in any court or arbitration in which a proceeding by Indemnitee for enforcement
of his rights hereunder shall have been commenced, continued or appealed, that
its obligations set forth in this Agreement are unique and special, and that
failure of the Company to comply with the provisions of this Agreement will
cause irreparable and irremediable injury to Indemnitee, for which a remedy at
law will be inadequate. As a result, in addition to any other right or remedy he
may have at law or in equity with respect to breach of this Agreement,
Indemnitee shall be entitled to injunctive or mandatory relief directing
specific performance by the Company of its obligations under this Agreement.
Section 7.20 Successors and Assigns. All of the terms and provisions of
this Agreement shall be binding upon, shall inure to the benefit of and shall be
enforceable by the parties hereto and their respective successors, assigns,
heirs, executors, administrators, legal representatives.
Section 7.21 Period of Limitations. No legal action shall be brought and no
cause of action shall be asserted by or on behalf of the Company or any
affiliate of the Company against Indemnitee or Indemnitee's spouse, heirs,
executors, or personal or legal representatives after the expiration of three
years from the date of accrual of that cause of action, and any claim or cause
of action of the Company or its affiliate shall be extinguished and deemed
released unless asserted by the timely filing of a legal action within that
three-year period; provided, however, that, if any shorter period of limitations
is otherwise applicable to any such cause of action, the shorter period shall
govern.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered to
be effective as of the date first above written.
PIONEER NATURAL RESOURCES COMPANY
By: /s/ Xxxx X. Xxxxxxx
--------------------------
Name: Xxxx X. Xxxxxxx
Title: Executive Vice President
INDEMNITEE:
/s/ Xxxxx X. Xxxxxxxxx
----------------------------------
Xxxxx X. Xxxxxxxxx
Schedule I
I. Xxx Xxxxxxx
Xxxxxxx X. Xxxx
Xxxxxx X. Xxxxxxxxxx
Xxx Xxxxxxx
Xxxx X. Xxxxxxx
Xxx X. Xxxx
M. Xxxxxxx Xxxxx
X. Xxxxxxxx Xxxxxxx
Xxxx X. Xxxxxxxxxx
Xxxxxxx X. Xxxxx
Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxx
Xxxxx Xxxxxxx
Xxxxxxx X. Xxxxxxxxx
Xxxxxxx X. Xxxxxx, Xx.
Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxxxxxx
Xxxxxxx X. Xxxxxxx
