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EXHIBIT 10.2
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT the ("Agreement") is made this
________________________ by and between UNITED MERIDIAN CORPORATION, a
Delaware corporation (the "Company"), and _____________________ ("Director").
RECITALS
WHEREAS, Director is a member of the Board of Directors of the Company
and in such capacity is performing a valuable service to the Company;
WHEREAS, the Company's By-Laws (the "By-Laws") provide for the
indemnification of the directors, officers, employees and agents of the Company
to the extent set forth in the Certificate of Incorporation of the Company (the
"Certificate");
WHEREAS, the Certificate provides that the Company shall indemnify the
directors, officers, employees and agents of the Company to the fullest extent
permitted by any applicable law including, without limitation, Section 145 of
the Delaware General Corporation Law, as amended to date (the "Corporation
Law");
WHEREAS, the Corporate Law specifically provides that indemnification
and advancement of expenses provided in such statute shall not be exclusive of
any other rights under any agreement, and thereby contemplate that agreements
may be entered into between the Company and members of the Board of Directors
of the Company with respect to the indemnification of such directors;
WHEREAS, in accordance with the authorization provided in the
Corporation Law, the Company has purchased and presently maintains a policy or
policies of directors' and officers' liability insurance (the "Insurance")
covering certain liabilities which may be incurred by the Company's directors
and officers in the performance of their services to the Company;
WHEREAS, recent developments with respect to the terms and conditions
of the Insurance and exclusions from coverage thereby, the general availability
of comparable directors' and officers' liability insurance and the
applicability, amendment and enforcement of statutory and by-law
indemnification provisions have raised questions concerning the adequacy and
reliability of the protection afforded to directors thereby; and
WHEREAS, in order to resolve such questions and to induce Director to
continue to serve as a member of the Board of Directors of the Company for the
remainder of his term and for any subsequent term to which he is elected by the
stockholders of the Company, the Company has deemed it to be in its best
interest to enter into this Agreement with Director;
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NOW, THEREFORE, in consideration of Director's agreement to continue
to serve as a member of the Board of Directors of the Company after the date
hereof, the parties agree as follows:
1. Definitions.
As used in this Agreement, the following terms shall have the
following meanings:
(a) Change in Control. A "Change in Control" shall be
deemed to have occurred if (i) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended), other than a trustee or other fiduciary holding securities
under an employee benefit plan of the Company, is or becomes the
"beneficial owner" (as such term is defined in Rule 13d-3 under the
Act), directly or indirectly, of securities of the Company
representing 25% or more of the combined voting power of the
outstanding securities of the Company, or (ii) during any period of
two consecutive years, individuals who at the beginning of such period
constitute the Board of Directors of the Company and any new director
whose election by the Board of Directors or nomination for election by
the Company's stockholders was approved by a vote of at least
two-thirds (2/3) 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 a majority thereof, or (iii) the stockholders of
the Company approve (A) 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 thereto continuing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving entity)
at least 80% of the combined voting power of the voting securities of
the Company or such surviving entity outstanding immediately after
such merger or consolidation), (B) a plan of complete liquidation of
the Company or (C) an agreement or agreements for the sale or
disposition, in a single transaction or series of related
transactions, by the Company of all or substantially all of the
property and assets of the Company. Notwithstanding the foregoing,
events otherwise constituting a Change in Control in accordance with
the foregoing shall not constitute a Change in Control if such events
are solicited by the Company and are approved, recommended or
supported by the Board of Directors of the Company in actions taken
prior to, and with respect to, such events.
(b) Reviewing Party. A "Reviewing Party" means (i) the
Board of Directors or a committee of directors of the Company, who are
not officers, appointed by the Board of Directors, provided that a
majority of such directors are not parties to the claim or (ii)
special, independent counsel selected and appointed by the Board of
Directors or by a committee of directors of the Company who are not
officers.
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2. Indemnification of Director.
The Company hereby agrees that it shall hold harmless and indemnify
Director to the fullest extent authorized and permitted by the provisions of
the Certificate and By-Laws and the provisions of the Corporation Law, or by
any amendment thereof, but in the case of any such amendment, only to the
extent that such amendment permits the Company to provide broader
indemnification rights than the Certificate, By-Laws or Corporation Law
permitted the Company to provide prior to such amendment, or other statutory
provisions authorizing or permitting such indemnification which is adopted
after the date hereof.
3. Insurance.
3.1. Insurance Policies. So long as Director may be subject to any
possible claim or threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that Director is or was a director, to the extent that the Company maintains
one or more insurance policy or policies providing directors' and officers'
liability insurance, Director shall be covered by such policy or policies in
accordance with its or their terms, to the maximum extent of the coverage
applicable to any director or officer then serving the Company.
3.2. Maintenance of Insurance. The Company shall not be required
to maintain the Insurance or any policy or policies of comparable insurance, as
the case may be, if such insurance is not reasonably available or if, in the
reasonable business judgment of the Board of Directors of the Company which
shall be conclusively established by such determination by the Board of
Directors, or any appropriate committee thereof, either (i) the premium cost
for such insurance is substantially disproportionate to the amount of coverage
thereunder or (ii) the coverage provided by such insurance is so limited by
exclusions that there is insufficient benefit from such insurance.
3.3. Self-Insurance. To the extent Director is not indemnified
under other Sections of this Agreement and is not fully, by reason of
deductible or otherwise, covered by directors' and officers' liability
insurance, the Company shall maintain self-insurance for, and thereby indemnify
and hold harmless, Director from and against any and all expenses, including
attorneys' fees, judgments, fines and amounts paid in settlement actually and
reasonably incurred by Director in connection with any possible claim or
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, in which Director was or is made a
party or was or is involved by reason of the fact that Director is or was a
director of the Company. Notwithstanding the foregoing, payments of
self-insurance under this Section to Director by the Company shall not exceed
the amount of $5,000,000 for any event and further shall be limited in
accordance with Section 5 thereof. An "event" as used in the preceding sentence
in reference to a limitation on self-insurance shall include the same acts or
omissions by Director and interrelated, repeated or continuous acts or
omissions.
4. Additional Indemnification.
Subject only to the exclusions set forth in Section 5 hereof, the
Company hereby agrees that it shall hold harmless and indemnify Director:
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(a) against any and all expenses, including attorneys'
fees, judgments, fines and amounts paid in settlement actually and
reasonably incurred by Director in connection with any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, including an action by or
on behalf of stockholders of the Company or by or in the right of the
Company, to which Director is, was or at any time becomes a party, or
is threatened to be made a party, by reason of the fact that Director
is, was or at any time becomes a director, officer, employee or agent
of the Company, or is or was serving or at any time serves at the
request of the Company as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise; and
(b) otherwise to the fullest extent as may be provided to
Director by the Company under the non-exclusivity provisions of the
Corporation Law.
5. Limitations on Additional Indemnification.
No indemnification pursuant to this Agreement shall be paid by the
Company:
(a) in respect to any transaction if it shall be
determined by the Reviewing Party, or by final judgment or other final
adjudication, that Director derived an improper personal benefit;
(b) in respect to the return by Director of any
remuneration paid to Director if it shall be determined by the
Reviewing Party, or by final judgment or other final adjudication,
that such remuneration was not approved by the stockholders of the
Company and was thereby in violation of law;
(c) on account of Director's conduct which is determined
by the Reviewing Party, or by final judgment or other final
adjudication, to have involved acts or omissions not in good faith,
intentional misconduct or a knowing violation of law;
(d) if the Reviewing Party or a court having jurisdiction
in the matter shall determine that such indemnification is in
violation of the Certificate, the By-Laws or the law.
6. Advancement of Expenses.
In the event of any threatened or pending action, suit or proceeding
in which Director is a party or is involved and which may give rise to a right
of indemnification under this Agreement, following written request to the
Company by Director, the Company shall pay promptly to Director amounts to
cover expenses incurred by Director in such proceeding in advance of its final
disposition upon the receipt by the Company of (i) a written undertaking
executed by or on behalf of Director to repay the advance if it shall
ultimately be determined that Director is not entitled to be indemnified by the
Company as provided in this Agreement and (ii) satisfactory evidence as to the
amount of such expenses.
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7. Repayment of Expenses.
Director agrees that Director shall reimburse the Company for all
reasonable expenses paid by the Company in defending any civil, criminal,
administrative or investigative action, suit or proceeding against Director in
the event and only to the extent that it shall be determined by final judgment
or other final adjudication that Director is not entitled to be indemnified by
the Company for such expenses under the provisions of the Corporation Law or
any applicable law.
8. Determination of Indemnification; Burden of Proof.
With respect to all matters concerning the rights of Director to
indemnification and payment of expenses under this Agreement or under the
provisions of the Certificate and By-Laws now or hereafter in effect, the
Company shall appoint a Reviewing Party and any determination by the Reviewing
Party shall be conclusive and binding on the Company and Director. If under
applicable law, the entitlement of Director to be indemnified under this
Agreement depends on whether a standard of conduct has been met, the burden of
proof of establishing that Director did not act in accordance with such
standard of conduct shall rest with the Company. Director shall be presumed to
have acted in accordance with such standard and entitled to indemnification or
advancement of expenses hereunder, as the case may be, unless, based upon a
preponderance of the evidence, it shall be determined by the Reviewing Party
that Director did not meet such standard. For purposes of this Agreement,
unless otherwise expressly stated herein, the termination of any action, suit
or proceeding by judgment, order, settlement, whether with or without court
approval, or conviction, or upon plea of nolo contendere or its equivalent
shall not create a presumption that Director did not 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.
9. Effect of Change in Control.
If there has not been a Change in Control after the date of this
Agreement, the determination of the (i) rights of Director to indemnification
and payment of expenses under this Agreement or under the provisions of the
Certificate and the By-Laws, (ii) standard of conduct and (iii) evaluation of
the reasonableness of amounts claimed by Director shall be made by the
Reviewing Party or such other body or persons as may be permitted by the
Corporation Law. If there has been a Change in Control after the date of this
Agreement, such determination and evaluation shall be made by a special,
independent counsel who is selected by Director and approved by the Company,
which approval shall not be unreasonably withheld, and who has not otherwise
performed services for Director or the Company.
10. Continuation of Indemnification.
All agreements and obligations of the Company contained herein shall
continue during the period that Director is director, officer, employee or
agent of the Company, or is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise at the request of the Company,
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and shall continue thereafter so long as Director shall be subject to any
possible claim or threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that Director was a director of the Company or serving in any other capacity
referred to herein.
11. Notification and Defense of Claim.
Promptly after receipt by Director of notice of the commencement of
any action, suit or proceeding, Director shall, if a claim in respect hereof is
to be made against the Company under this Agreement, notify the Company of the
commencement thereof; provided, however, that delay in so notifying the Company
shall not constitute a waiver or release by Director of rights hereunder and
that omission by Director to so notify the Company shall not relieve the
Company from any liability which it may have to Director otherwise than under
this Agreement. With respect to any such action, suit or proceeding as to which
Director notifies the Company of the commencement thereof:
(a) The Company shall be entitled to participate therein
at its own expense; and
(b) Except as otherwise provided below, to the extent
that it may wish, the Company, jointly with any other indemnifying
party similarly notified, shall be entitled to assume the defense
thereof and to employ counsel reasonably satisfactory to Director.
After notice from the Company to Director of its election to so assume
the defense thereof, the Company shall not be liable to Director under
this Agreement for any legal or other expenses subsequently incurred
by Director in connection with the defense thereof other than
reasonable costs of investigation or as otherwise provided below.
Director shall have the right to employ counsel of his own choosing in
such action, suit or proceeding but the fees and expenses of such
counsel incurred after notice from the Company of assumption by the
Company of the defense thereof shall be at the expense of the Director
unless (i) the employment of counsel by Director has been specifically
authorized by the Company, such authorization to be conclusively
established by action by disinterested members of the Board of
Directors though less than a quorum; (ii) representation by the same
counsel of both Director and the Company would, in the reasonable
judgment of Director and the Company, be inappropriate due to an
actual or potential conflict of interest between the Company and
Director in the conduct of the defense of such action, such conflict
of interest to be conclusively established by an opinion of counsel to
the Company to such effect; (iii) the counsel employed by the Company
and reasonably satisfactory to Director has advised Director in
writing that such counsel's representation of Director would likely
involve such counsel in representing differing interests which could
adversely affect the judgment or loyalty of such counsel to Director,
whether it be a conflicting, inconsistent, diverse or other interest;
or (iv) the Company shall not in fact have employed counsel to assume
the defense of such action, in each of which cases the fees and
expenses of counsel shall be paid by the Company. The Company shall
not be entitled to assume the defense of any action, suit or
proceeding brought by or on behalf of the Company or as to which a
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conflict of interest has been established as provided in (ii) hereof.
Notwithstanding the foregoing, if an insurance company has supplied
directors' and officers' liability insurance covering an action, suit
or proceeding, then such insurance company shall employ counsel to
conduct the defense of such action, suit or proceeding unless Director
and the Company reasonably concur in writing that such counsel is
unacceptable.
(c) The Company shall not be liable to indemnify Director
under this Agreement for any amounts paid in settlement of any action
or claim effected without its written consent. The Company shall not
settle any action or claim in any manner which would impose any
liability or penalty on Director without Director's written consent.
Neither the Company nor Director shall unreasonably withhold consent
to any proposed settlement.
12. Enforcement.
(a) The Company expressly confirms and agrees that it has
entered into this Agreement and assumed the obligations imposed on the
Company hereby in order to induce Director to serve as a director of
the Company and acknowledges that Director is relying upon this
Agreement in continuing in such capacity.
(b) If a claim for indemnification or advancement of
expenses is not paid in full by the Company within thirty (30) days
after a written claim by Director has been received by the Company,
Director may at any time assert the claim and bring suit against the
Company to recover the unpaid amount of the claim. In the event
Director is required to bring any action to enforce rights or to
collect moneys due under this Agreement and is successful in such
action, the Company shall reimburse Director for all of Director's
reasonable attorneys' fees and expenses in bringing and pursuing such
action.
13. Proceedings by Director.
The Company shall not be liable to make any payment under this
Agreement in connection with any action, suit or proceeding, or any party
thereof, initiated by Director unless such action, suit or proceeding, or part
thereof, was authorized by the Company, such authorization to be conclusively
established by action by disinterested members of the Board of Directors though
less than a quorum.
14. Effectiveness.
This Agreement is effective for, and shall apply to, (i) any claim
which is asserted or threatened before, on or after the date of this Agreement
but for which no action, suit or proceeding has been brought prior to the date
hereof and (ii) any action, suit or proceeding which is threatened before, on
or after the date of this Agreement but which is not pending prior to the date
hereof. This Agreement shall not apply to any action, suit or proceeding which
has brought before the date of this Agreement. So long as the foregoing is
satisfied, this Agreement
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shall be effective for, and be applicable to, acts or omissions occurring prior
to, on or after the date hereof.
15. Non-exclusivity.
The rights of Director under this Agreement shall not be deemed
exclusive, or in limitation of, any rights to which Director may be entitled
under any applicable common or statutory law, or pursuant to the Certificate,
the By-Laws, vote of stockholders or otherwise.
16. Other Payments.
The Company shall not be liable to make any payment under this
Agreement in connection with any action, suit, or proceeding against Director
to the extent Director has otherwise received payment of the amounts otherwise
payable by the Company hereunder.
17. Subrogation.
In the event that Company makes any payment under this Agreement, the
Company shall be subrogated, to the extent of such payment, to all rights of
recovery of Director with respect thereto, and Director shall execute all
agreements, instruments, certificates or other documents and do or cause to be
done all things necessary or appropriate to secure such recovery rights to the
Company including, without limitation, executing such documents as shall enable
the Company to bring an action or suit to enforce such recovery rights.
18. Severability.
Each of the provisions of the Agreement is a separate and distinct
agreement and independent of the others. If any provision hereof shall be held
invalid or unenforceable for any reason, such invalidity or unenforceability
shall not effect the validity or enforceability of the other provisions hereof
which shall continue with full force and effect.
19. Entire Agreement.
This Agreement shall constitute the entire agreement between the
parties hereto regarding the subject matter hereof.
20. Survival; Continuation.
The rights of Director under this Agreement shall inure to the benefit
of Director, his heirs, executors, administrators, personal representatives and
assigns, and this Agreement shall be binding upon the Company, its successors
and assigns. The rights of Director under this Agreement shall continue so long
as Director may be subject to any action, suit or proceeding because of the
fact that Director is or was a director, officer, employee or agent of the
company or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise. If the Company, in a
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single transaction or series of related transactions, sells, leases, exchanges,
or otherwise disposes of all or substantially all of its property and assets,
the Company shall, as a condition precedent to any such transaction, cause
effective provision to be made so that the persons or entities acquiring such
property and assets shall become bound by and replace the Company under this
Agreement.
21. Amendment and Termination.
No amendment, modification, termination or cancellation of this
Agreement shall be effective unless made in writing signed by both parties
hereto.
22. Headings.
Section headings are used herein for convenience only and shall not
control or affect the meaning or construction of any of the provisions of this
Agreement.
23. Governing Law.
This Agreement shall be governed and interpreted and enforced in
accordance with the laws of the State of Delaware.
24. Notices.
All notices required to be given under this Agreement shall be in
writing and shall be deemed to be given when delivered by hand or deposited in
the United States mail or a recognized overnight delivery service, receipt to
be acknowledged, postage or fees prepaid and addressed as follows:
If to the Company: United Meridian Corporation
0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Corporate Secretary
with a copy to: Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
0000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Attn:
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If to Director:
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25. Counterparts.
This Agreement may be executed in several counterparts and it shall
not be necessary for each party to execute each of such counterparts, but when
both of the parties have executed and delivered one of such counterparts, the
counterparts, when taken together, shall be deemed to constitute one and the
same instrument, enforceable against each party in accordance with its terms.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed on the day and year first above written.
UNITED MERIDIAN CORPORATION
By:
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Name:
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Title:
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Director
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SCHEDULE OF DIRECTOR SIGNATORIES
J. Xxxxxx Xxxxxx
Xxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
