1
EXHIBIT 10.6
CARRIZO OIL & GAS, INC.
INDEMNIFICATION AGREEMENT
This Agreement ("Agreement") is made and entered into as of the
____ day of ___________, 1997, by and between Carrizo Oil & Gas, Inc., a Texas
corporation (the "Corporation"), and ___________________ ("Indemnitee").
RECITALS
A. Highly competent 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 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.
B. The Board of Directors of the Corporation (the "Board")
has determined that the inability to attract and retain such persons would be
detrimental to the best interests of the Corporation and its shareholders and
that the Corporation 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 Corporation, in addition to purchasing and
maintaining directors' and officers' liability insurance, contractually to
obligate itself to indemnify such persons to the fullest extent permitted by
applicable law and to provide an arrangement of self-insurance so that they
will serve or continue to serve the Corporation free from undue concern that
they will not be so indemnified.
D. Indemnitee is willing to serve, continue to serve and on
behalf of the Corporation on the condition that he be so indemnified.
E. In ____________, 1997, the Amended and Restated Bylaws of
the Corporation were approved by the Board and by the Corporation's
shareholders which Bylaws provided for indemnification, advancement of
expenses, arrangements of insurance and self-insurance and specifically
authorized the Corporation to enter into indemnification agreements that
contractually provide to indemnitees the benefits of the provisions of Article
V of such Bylaws and that include related provisions and which agreements
facilitate indemnitees' receipt of such benefits and such other indemnification
protections as may be deemed appropriate.
In consideration of the mutual covenants herein contained, the
parties agree as follows:
-1-
2
ARTICLE I
CERTAIN DEFINITIONS
As used herein, the following words and terms shall have the
following respective meanings (whether singular or plural):
"Change in Control" means a change in control of the Corporation
occurring after the date of this Agreement of a nature that would be required
to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or
in response to any similar item on any similar schedule or form) promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
whether or not the Corporation is then subject to such reporting requirement;
provided, however, that, without limitation, such a Change in Control shall be
deemed to have occurred if at any time after the date of this Agreement (i) any
"person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Corporation
representing 40% or more of the combined voting power of the Corporation's then
outstanding securities without the prior approval of at least two-thirds of the
members of the Board of Directors in office immediately prior to such person
attaining such percentage interest; (ii) the Corporation is a party to a
merger, consolidation, share exchange, sale of assets or other reorganization,
or a proxy contest, as a consequence of which members of the Board of Directors
in office immediately prior to such transaction or event constitute less than a
majority of the Board of Directors thereafter or (iii) during any 15-month
period, individuals who at the beginning of such period constituted the Board
of Directors (including for this purpose any new director whose election or
nomination for election by the Corporation's shareholders was approved by a
vote of at least two-thirds of the directors then still in office who were
directors at the beginning of such period) cease for any reason to constitute
at least a majority of the Board of Directors.
"Claim" means an actual or threatened claim or request for
relief.
"Corporate Status" means the status of a person who is or was a
director, officer, partner, employee, agent or fiduciary of the Corporation or
of any other corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise which such person is or was serving at the request of
the Corporation.
"Disinterested Director" means a director of the Corporation who
is not a named defendant or respondent to the Proceeding or subject to a Claim
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 or expenses of the types
- 2 -
3
customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating or being or preparing to be a witness in a
Proceeding.
"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 Corporation or Indemnitee in any matter material to either
such party, (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 Corporation representing 40% or more of the combined
voting power of the Corporation's then outstanding voting securities.
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
Corporation or Indemnitee in an action to determine Indemnitee's rights under
this Agreement.
"person" shall have the meaning ascribed to such term in Sections
13(d) and 14(d) of the Exchange Act.
"Proceeding" means any threatened, pending or completed action,
suit, arbitration, investigation, administrative hearing or any other
proceeding whether civil, criminal, administrative or investigative (except one
initiated by Indemnitee pursuant to Article VI of this Agreement to enforce his
rights under this Agreement), and any appeal in or related to any such action,
suit, arbitration, investigation, hearing or proceeding and any inquiry or
investigation that could lead to such an action, suit, proceeding or
arbitration.
"TBCA" means the Texas Business Corporation Act and any successor
statute thereto as either of them may from time to time be amended.
ARTICLE II
SERVICES BY INDEMNITEE
Indemnitee agrees to serve as a director of the Corporation.
Indemnitee may from time to time also agree to serve, as the Corporation may
request from time to time, as a director, officer, partner, employee, agent or
fiduciary of either the Corporation or any other corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise in which the
Corporation has an interest. Indemnitee and the Corporation each acknowledge
that they have entered into this Agreement as a means of inducing Indemnitee to
serve the Corporation 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
Corporation shall have no obligation under this Agreement to continue
Indemnitee in any such position or positions.
- 3 -
4
ARTICLE III
INDEMNIFICATION
Section 3.1. General. The Corporation 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 rights of Indemnitee provided
under the preceding sentence shall include, but shall not be limited to, the
right to be indemnified and to have Expenses advanced in all Proceedings to the
fullest extent permitted by Article 2.02-1 of the TBCA. The 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 under this Article III, or to advancement of
Expenses under Articles III and IV shall in any way limit the rights of
Indemnitee under Section 7.3.
Section 3.2. Additional Indemnity of the Corporation.
Indemnitee shall be entitled to indemnification pursuant to this Section 3.2
if, by reason of his Corporate Status, he is, or is threatened to be made, a
party to any Proceeding (except to the extent limited by Section 3.3).
Pursuant to this Section 3.2, Indemnitee shall be indemnified against Expenses,
judgments, penalties (including excise or similar taxes), fines and amounts
paid in settlement actually and reasonably incurred by him or on his behalf in
connection with such Proceeding or any Claim therein, if (1) he conducted
himself in good faith; (2) he reasonably believed: (a) in the case of conduct
in his official capacity, that his conduct was in the Corporation's best
interest; and (b) in all other cases, that his conduct was at least not opposed
to the Corporation's best interests and, (3) in the case of any criminal
Proceeding, had no reasonable cause to believe his conduct was unlawful.
Nothing in this Section 3.2 shall limit the benefits of Section 3.1 or any
other Section hereunder.
Section 3.3. Limitation on Indemnity. The Indemnification
otherwise available to an Indemnitee under Section 3.2 shall be limited to the
extent set forth in this Section 3.3. In the event that an Indemnitee is found
liable to the Corporation or is found liable on the basis that personal benefit
was improperly received by the Indemnitee whether or not the benefit resulted
from an action taken in Indemnitee's official capacity the Indemnitee shall,
with respect to the Claim in the Proceeding in which such finding is made, be
indemnified only against reasonable Expenses actually incurred by him in
connection with that Claim. Notwithstanding the foregoing, no indemnification
against such Expenses shall be made in respect of any Claim in such Proceeding
as to which Indemnitee shall have been adjudged to be liable for willful or
intentional misconduct in the performance of his duty to the Corporation;
provided, however, that, if applicable law so permits, indemnification against
such Expenses shall nevertheless be made by the Corporation in such event if
and only to the extent that the court in which such Proceeding shall have been
brought or is pending, shall determine.
- 4 -
5
ARTICLE IV
EXPENSES
Section 4.1. Expenses of a Party Who Is Wholly or Partly
Successful. Notwithstanding any other provision of this Agreement, Indemnitee
shall be indemnified against all Expenses actually and reasonably incurred by
him in connection with any Proceeding to which Indemnitee is a party by reason
of his Corporate Status and in which Indemnitee is successful, on the merits or
otherwise. In the event that Indemnitee is not wholly successful, on the
merits or otherwise, in a Proceeding but is successful, on the merits or
otherwise, as to any Claim in such Proceeding, the Company shall indemnify
Indemnitee against all Expenses actually and reasonably incurred by him or on
his behalf relating to each Claim. For purposes of this Section 4.1 and
without limitation, the termination of a Claim in a Proceeding by dismissal,
with or without prejudice, shall be deemed to be a successful result as to such
Claim.
Section 4.2. Expenses of a Witness. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee is, by reason of his
Corporate Status, a witness or otherwise participates in any Proceeding at a
time when he is not named a defendant or respondent in the Proceeding, he shall
be indemnified against all Expenses actually and reasonably incurred by him or
on his behalf in connection therewith.
Section 4.3. Advancement of Expenses. The Corporation shall pay
all reasonable Expenses incurred by or on behalf of Indemnitee in connection
with any Proceeding or Claim, whether brought by the Corporation or otherwise,
in advance of any determination respecting entitlement to indemnification
pursuant to Article V hereof within 10 days after the receipt by the
Corporation of a written request from Indemnitee requesting such payment or
payments from time to time, whether prior to or after final disposition of such
Proceeding or Claim. Such statement or statements shall reasonably evidence
the Expenses incurred by Indemnitee. Indemnitee hereby undertakes and agrees
that he will reimburse and repay the Corporation for any Expenses so advanced
to the extent that it shall ultimately be determined by a court in a final
adjudication from which there is no further right of appeal, that Indemnitee is
not entitled to be indemnified against such Expenses.
ARTICLE V
PROCEDURE FOR DETERMINATION OF ENTITLEMENT
TO INDEMNIFICATION
Section 5.1. Request by Indemnitee. To obtain indemnification
under this Agreement, Indemnitee shall submit to the Corporation 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 Corporation shall, promptly upon
- 5 -
6
receipt of such a request for indemnification, advise the Board in writing that
Indemnitee has requested indemnification.
Section 5.2. Determination of Request. Upon written request by
Indemnitee for indemnification pursuant to the first sentence of Section 5.1
hereof, a determination, if required by applicable law, with respect to
Indemnitee's entitlement thereto shall be made in the specific case: (a) if a
Change in Control shall have occurred, by Independent Counsel (selected in
accordance with Section 5.3) in a written opinion to the Board, a copy of which
shall be delivered to Indemnitee, unless Indemnitee shall request that such
determination be made in accordance with Article 2.02-1F (1) or (2) of the
TBCA; (b) if a Change in Control shall not have occurred, in accordance with
Article 2.02-1 of the TBCA. If it is so determined that Indemnitee is entitled
to indemnification hereunder, payment to Indemnitee shall be made within 10
days after such determination. Indemnitee shall cooperate with the person
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 making such determination shall be borne by the Corporation
(irrespective of the determination as to Indemnitee's entitlement to
indemnification) and the Corporation hereby agrees to indemnify and hold
harmless Indemnitee therefrom.
Section 5.3. Independent Counsel. If a Change in Control shall
have occurred and Indemnitee elects that the determination as 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 Corporation within 10 days advising it of the identity of the Independent
Counsel so selected (unless Indemnitee shall request that such selection be
made by the Board, in which event the Corporation shall give written notice to
Indemnitee within 10 days after receipt of Indemnitee's request for
indemnification advising him of the identity of the Independent Counsel so
selected). In either event, Indemnitee or the Corporation, as the case may be,
may, within seven days after such written notice of selection shall have been
given, deliver to the Corporation 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 5.3 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 hereof, 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 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 by Indemnitee of
a written request for indemnification pursuant to Section 5.1 hereof, no
Independent Counsel shall have been selected and not objected to, either the
Corporation or Indemnitee may petition a court of competent jurisdiction (the
"Court") for resolution
- 6 -
7
of any objection that shall have been made by the Corporation 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 5.2 hereof. The Corporation shall pay any and all reasonable
fees and expenses of Independent Counsel incurred by such Independent Counsel
in connection with acting pursuant to Section 5.2, and the Corporation shall
pay all reasonable fees and expenses incident to the procedures of this Section
5.3, 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 6.1(c) 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 5.4. Presumptions and Effect of Certain Proceedings.
(a) If a Change in Control shall have occurred, the Indemnitee
shall be presumed (except as otherwise expressly provided in this Agreement) to
be entitled to indemnification under this Agreement upon submission of a
request for indemnification under Section 5.1, and thereafter the Corporation
shall have the burden of proof in overcoming that presumption in reaching a
determination contrary to that presumption. The 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 Corporation provides information sufficient to
overcome such presumption by clear and convincing evidence or 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.
(b) If the person or persons empowered or selected under
Article V of this Agreement to determine whether Indemnitee is entitled to
indemnification shall not have made a determination within 60 days after
receipt by the Corporation 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 5.4(b) shall not apply and such period shall be extended as
necessary (i) if within 30 days after receipt by the Corporation of the request
for indemnification under Section 5.1 the Board has resolved to submit such
determination to the shareholders pursuant to Section 5.2(b) of this Agreement
for their consideration at an annual meeting thereof to be held within 90 days
after such receipt and such determination is made thereat, or a special meeting
of shareholders is called within 30 days after such receipt for the purpose of
making such determination, such meeting is held for such purpose
- 7 -
8
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 5.2(a) of this Agreement, in
which case the applicable period shall be as set forth in Section 6.1(c).
(c) The termination of any Proceeding or of any Claim 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) by itself adversely affect the right of Indemnitee to
indemnification or create a presumption that Indemnitee did conduct himself in
good faith and in a manner that he reasonably believed in the case of conduct
in his official capacity, that was in the best interests of the Corporation or,
in all other cases, that was not opposed to the best interests of the
Corporation or, with respect to any criminal Proceeding, that Indemnitee had
reasonable cause to believe that his conduct was unlawful. Indemnitee shall be
deemed to have been found liable in respect of any Claim only after he shall
have been so adjudged by a court in competent jurisdiction after exhaustion of
all appeals therefrom.
ARTICLE VI
CERTAIN REMEDIES OF INDEMNITEE
Section 6.1. Indemnitee Entitled to Adjudication in an
Appropriate Court. In the event (a) a determination is made pursuant to
Article V that Indemnitee is not entitled to indemnification under this
Agreement; (b) there has been any failure by the Corporation 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 5.2 and such determination shall not have been made and delivered in
a written opinion within 90 days after (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 Corporation or Indemnitee
to object to such counsel's selection, Indemnitee shall be entitled to commence
an action seeking an adjudication in an appropriate court of the State of
Texas, or in any other court of competent jurisdiction, 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 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 6.1, or such right
shall expire. The Corporation agrees not to oppose Indemnitee's right to seek
any such adjudication or award in arbitration.
Section 6.2. Adverse Determination Not to Affect any Judicial
Proceeding. In the event that a determination shall have been made pursuant to
Article V that Indemnitee is not entitled to indemnification, any judicial
proceeding or arbitration commenced pursuant to this Article VI 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
- 8 -
9
arbitration commenced pursuant to this Article VI, the Corporation shall have
the burden of proving that Indemnitee is not entitled to indemnification or
advancement of Expenses, as the case may be.
Section 6.3. 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 V that
Indemnitee is entitled to indemnification, the Corporation shall be bound by
such determination in any judicial proceeding or arbitration commenced pursuant
to this Article VI, absent 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.
Section 6.4. Corporation Bound by the Agreement. The
Corporation shall be precluded from asserting in any judicial proceeding or
arbitration commenced pursuant to this Article VI 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 Corporation
is bound by all the provisions of this Agreement.
Section 6.5. Indemnitee Entitled to Expenses of Judicial
Proceeding. In the event that 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
Corporation, and shall be indemnified by the Corporation 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 he prevails therein. If it shall be determined in said
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 reasonably prorated in good faith
by counsel for Indemnitee. Notwithstanding the foregoing, if a Change in
Control shall have occurred, Indemnitee shall be entitled to indemnification
under this Section 6.5 regardless of whether Indemnitee ultimately prevails in
such judicial adjudication or arbitration.
ARTICLE VII
MISCELLANEOUS
Section 7.1. Non-Exclusivity. The rights of Indemnitee to
receive indemnification and advancement of Expenses under this Agreement shall
not be deemed exclusive of any other rights to which Indemnitee may at any time
be entitled under applicable law, the Articles of Incorporation or Bylaws of
the Corporation, any other agreement, vote of shareholders or a resolution of
directors, or otherwise. No amendment or alteration of the Articles of
Incorporation or Bylaws of the Corporation 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 Corporation's Articles of
Incorporation, Bylaws and the TBCA or otherwise. To the extent that there is a
change in the TBCA (whether by statute or judicial decision) which allows
greater
- 9 -
10
indemnification by agreement than would be afforded currently under the
Corporation's Articles of Incorporation 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 Corporation maintains an insurance
policy or policies providing liability insurance for directors, officers,
employees, agents or fiduciaries of the Corporation or of any other
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise that such person serves at the request of the Corporation,
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 Corporation under this
Agreement, the Corporation 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 Corporation to bring
suit to enforce such rights.
(c) The Corporation 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 any
Bylaw, insurance policy, contract, agreement or otherwise.
Section 7.3. Self Insurance of the Corporation. The parties
hereto recognize that the Corporation 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 Corporation or who is or was
serving at the request of the Corporation as a director, officer, partner,
venturer, proprietor, trustee, employee, agent or similar functionary of
another corporation, partnership, joint venture, 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 Corporation would have the power to indemnify
such person against such expense or liability.
In considering the cost and availability of such insurance, the
Corporation, (through the exercise of the business judgment of its directors
and officers), may from time to time, purchase insurance which provides for any
and all of (i) deductibles, (ii) limits on payments required to be made by the
insurer, or (iii) coverage exclusions and/or coverage which may not be as
comprehensive as that which might otherwise be available to the Corporation but
which otherwise available insurance the officers or directors of the
Corporation determine is inadvisable for the Corporation to purchase given the
cost involved. The purchase of insurance with deductibles, limits on payments
and coverage exclusions will be deemed to be in the best interest of the
Corporation
- 10 -
11
but may not be in the best interest of the Indemnitee. As to the Corporation,
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 Corporation shall 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) of coverage under
policies of officer's and director's liability insurance that are available,
were available or which became available to the Corporation or which are
generally available to companies comparable to the Corporation but which the
officers or directors of the Corporation determine is inadvisable for the
Corporation to purchase, given the cost involved. The obligation of the
Corporation in the preceding sentence shall be without regard to whether the
Corporation would otherwise be entitled to indemnify such officer or director
under the other provisions of this Agreement, or under any law, agreement, vote
of shareholders or directors or other arrangement. Notwithstanding the
foregoing provisions of this Section 7.3, the Indemnitee shall not be entitled
to indemnification for the results of his conduct that is intentionally adverse
to the interests of the Corporation. Without limiting the generality of any
provision of this Agreement, the procedures in Article V hereof shall, to the
extent applicable, be used for determining entitlement to indemnification under
this Section 7.3. This Agreement is authorized by Section 2.02-1(R) of the
TBCA as in effect on _____________, 1997, and further is intended to establish
an arrangement of self-insurance pursuant to that section.
Section 7.4. Certain Settlement Provisions. The Corporation
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 Corporation shall not settle any Proceeding or
Claim in any manner that would impose any fine or other obligation on
Indemnitee without Indemnitee's consent. Neither the Corporation 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 Corporation, he shall not in that capacity be liable to the
Corporation or its shareholders 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) a breach of Indemnitee's duty of loyalty
to the Corporation or its shareholders; (b) an act or omission not in good
faith that constitutes a breach of duty of the director to the Corporation or
an act or omission that involves 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 of the Corporation or
as a director, officer, partner, employee, agent or fiduciary of any other
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise in which the Corporation has an interest, and thereafter shall
survive until and terminate upon the later to occur of: (a) 20 years after the
date that Indemnitee shall have ceased to
- 11 -
12
serve as a director of the Corporation or of any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
which Indemnitee served at the request of the Corporation; (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 VI relating thereto;
or (c) the expiration of all statutes of limitation applicable to possible
Claims arising out of Indemnitee's Corporate Status. This Agreement shall be
binding upon the Corporation and its successors and assigns and shall inure to
the benefit of Indemnitee and his heirs, executors, legal representatives and
administrators.
Section 7.7. Notice by Each Party. Indemnitee agrees to
promptly notify the Corporation 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. The
Corporation agrees to promptly notify Indemnitee in writing, as to the pendency
of any Proceeding or Claim which 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,
and the parties hereto agree that the part or parts of this Agreement so held
to be invalid, unenforceable or void will be deemed to have been stricken
herefrom and the remainder of this Agreement will have the same force and
effectiveness as if such part or parts had never been included herein;
provided, however, that the
- 12 -
13
parties shall negotiate in good faith with respect to an equitable modification
of the provision or application thereof declared to be invalid, unenforceable
or void. 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. Unless otherwise expressly provided
herein, all notices, requests, demands, consents, waivers, instructions,
approvals and other communications hereunder shall be in writing and shall be
deemed to have been duly given if personally delivered to or mailed, certified
mail return receipt requested, first-class postage paid, addressed as follows:
If to the Corporation, to it at:
Carrizo Oil & Gas, Inc.
00000 Xx. Xxxx'x Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: Chief Financial Officer
If to Indemnitee, to him at:
--------------------------
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 Texas without
regard to the principles of conflict of laws.
Section 7.14. Headings. The Article and Section headings in
this Agreement are for convenience of reference only, and shall not be deemed
to alter or affect the meaning or interpretation of any provisions hereof.
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.
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 therein, brought
- 13 -
14
or made by such person against the Corporation, except as specifically provided
in Article V or Article VI 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.
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered to be effective as of the date first above written.
CARRIZO OIL & GAS, INC.
By:
-----------------------------------
Name:
Title:
INDEMNITEE
-------------------------------------------
Name:
- 14 -
