INDEMNIFICATION AGREEMENT
EXHIBIT
10.1
FORM
OF INDEMNIFICATION AGREEMENT
This
Indemnification Agreement
("Agreement") is made as of ________ __, 2005, by and between XTO Energy Inc.,
a
Delaware corporation (the "Company"), and ______________
("Indemnitee").
RECITALS
WHEREAS,
because of the increased exposure to litigation subjecting directors and
officers to expensive litigation risks, talented and experienced persons are
increasingly reluctant to serve or continue to serve as directors and officers
of publicly-held corporations unless they are provided with adequate protection
through insurance or adequate indemnification against inordinate risks of claims
and actions against them arising out of their service to and activities on
behalf of the corporation;
WHEREAS,
the Board of Directors of the Company (the "Board") has determined that, in
order to attract and retain qualified individuals, the Company will attempt
to
maintain on an ongoing basis, at its sole expense, liability insurance to
protect persons serving the Company and its subsidiaries from certain
liabilities. Although the furnishing of such insurance has been a customary
and
widespread practice among United States-based corporations and other business
enterprises, the Company believes that, given current market conditions and
trends, such insurance may be available to it in the future only at higher
premiums and with more exclusions. At the same time, directors, officers, and
other persons in service to corporations or business enterprises are being
increasingly subjected to expensive and time-consuming litigation relating
to,
among other things, matters that traditionally would have been brought only
against the Company or business enterprise itself. The By-laws of the Company
require indemnification of the officers and directors of the Company. Indemnitee
may also be entitled to indemnification pursuant to the General Corporation
Law
of the State of Delaware ("DGCL"). The By-laws and the DGCL expressly provide
that the indemnification provisions set forth therein are not exclusive, and
thereby contemplate that contracts may be entered into between the Company
and
members of the board of directors, officers and other persons with respect
to
indemnification;
WHEREAS,
the uncertainties relating to such insurance and to indemnification have
increased the difficulty of attracting and retaining such persons;
WHEREAS,
the Board has determined that the increased difficulty in attracting and
retaining such persons is detrimental to the best interests of the Company's
stockholders and that the Company should act to assure such persons that there
will be increased certainty of such protection in the future;
WHEREAS,
it
is reasonable, prudent and necessary for the Company contractually to obligate
itself to indemnify, and to advance expenses on behalf of, such persons to
the
fullest extent permitted by applicable law so that they will serve or continue
to serve the Company free from undue concern that they will not be so
indemnified;
WHEREAS,
this Agreement is a supplement to and in furtherance of the By-laws of the
Company and any resolutions adopted pursuant thereto, and shall not be deemed
a
substitute therefor, nor to diminish or abrogate any rights of Indemnitee
thereunder;
WHEREAS,
the Company desires Indemnitee to serve in his capacity as an officer or
director, and Indemnitee is willing to serve, continue to serve and to take
on
additional service for or on behalf of the Company on the condition that he
be
so indemnified; and
NOW,
THEREFORE, in consideration of the premises and the covenants contained herein,
the Company and Indemnitee do hereby covenant and agree as follows:
Section
1. Services to the
Company. Indemnitee agrees to serve as a [director] [officer] of the
Company. Indemnitee may at any time and for any reason resign from such position
(subject to any other contractual obligation or any obli-gation imposed by
operation of law), in which event the Company shall have no obliga-tion under
this Agreement to continue Indemnitee in such position. This Agreement shall
not
be deemed an employment contract between the Company (or any of its subsidiaries
or any Enterprise) and Indemnitee. Indemnitee specifically acknowledges that
Indemnitee's employment with the Company (or any of its subsidiaries or any
Enterprise), if any, is at will, and the Indemnitee may be discharged at any
time for any reason, with or without cause, except as may be otherwise provided
in any written employment contract between Indemnitee and the Company (or any
of
its subsidiaries or any Enterprise), other applicable formal severance policies
duly adopted by the Board, or, with respect to service as a director or officer
of the Company, by the Company's Certificate of Incorporation, the Company's
By-laws, and the General Corporation Law of the State of Delaware. The foregoing
notwithstanding, this Agreement shall continue in force after Indemnitee has
ceased to serve as an [officer] [director] of the Company.
Section
2. Definitions. As used
in this Agreement:
(a) A
"Change in Control" shall be
deemed to occur upon the earliest to occur after the date of this Agreement
of
any of the following events:
i. Acquisition
of Stock by Third Party. Any Person (as defined below) is or becomes the
Beneficial Owner (as defined below), directly or indirectly, of securities
of
the Company representing fifteen percent (15%) or more of the combined voting
power of the Company's then outstanding securities;
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ii. Change
in Board of Directors. During any period of two (2) consecutive years (not
including any period prior to the execution of this Agreement), individuals
who
at the beginning of such period constitute the Board, and any new director
(other than a director designated by a person who has entered into an agreement
with the Company to effect a transaction described in Sections 2(a)(i),
2(a)(iii) or 2(a)(iv)) whose election by the Board or nomination for election
by
the Company's stockholders was approved by a vote of at least two-thirds of
the
directors then still in office who either were directors at the beginning of
the
period or whose election or nomination for election was previously so approved,
cease for any reason to constitute a least a majority of the members of the
Board;
iii. Corporate
Transactions. The effective date of a merger or consolidation of the Company
with any other entity, other than a merger or consolidation which would result
in the voting securities of the Company outstanding immediately prior to such
merger or consolidation continuing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving entity) more
than
51% of the combined voting power of the voting securities of the surviving
entity outstanding immediately after such merger or consolidation and with
the
power to elect at least a majority of the board of directors or other governing
body of such surviving entity;
iv. Liquidation.
The approval by the stockholders of the Company of a complete liquidation of
the
Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets; and
v. Other
Events. There occurs any other event of a nature that would be required to
be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a
response to any similar item on any similar schedule or form) promulgated under
the Exchange Act (as defined below), whether or not the Company is then subject
to such reporting requirement.
For
purposes of this Section 2(a), the following terms shall have the following
meanings:
(A) "Exchange
Act" shall mean the Securities Exchange Act of 1934, as amended.
(B) "Person"
shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange
Act; provided, however, that Person shall exclude (i) the Company, (ii) any
trustee or other fiduciary holding securities under an employee benefit plan
of
the Company, and (iii) any corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company.
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(C) "Beneficial
Owner" shall have the meaning given to such term in Rule 13d-3 under the
Exchange Act; provided, however, that Beneficial Owner shall exclude any Person
otherwise becoming a Beneficial Owner by reason of the stockholders of the
Company approving a merger of the Company with another entity.
(b) "Corporate
Status" describes
the status of a person who is or was a director, officer, employee or agent
of
the Company or of any other corporation, limited liability company, partnership
or joint venture, trust, employee benefit plan or other enterprise which such
person is or was serving at the request of the Company.
(c) "Disinterested
Director" means
a director of the Company who is not and was not a party to the Proceeding
in
respect of which indemnification is sought by Indemnitee.
(d) "Enterprise"
shall mean the
Company and any other corporation, limited liability company, partnership,
joint
venture, trust, employee benefit plan or other enterprise of which Indemnitee
is
or was serving at the request of the Company as a director, officer, employee,
agent or fiduciary.
(e) "Expenses"
shall include all
reasonable 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 customarily incurred in connection with
prosecuting, defending, preparing to prosecute or defend, investigating, being
or preparing to be a witness in, or otherwise participating in, a Proceeding.
Expenses also shall include (i) Expenses incurred in connection with any appeal
resulting from any Proceeding, including without limitation the premium,
security for, and other costs relating to any cost bond, supersedeas bond,
or
other appeal bond or its equivalent, and (ii) for purposes of Section 13(d)
only, Expenses incurred by Indemnitee in connection with the interpretation,
enforcement or defense of Indemnitee's rights under this Agreement, by
litigation or otherwise. Expenses, however, shall not include amounts paid
in
settlement by Indemnitee or the amount of judgments or fines against
Indemnitee.
(f) "Independent
Counsel" means a
law firm, or a member of a law firm, that is experienced in matters of
corporation law and neither presently is, nor in the past five years has been,
retained to represent: (i) the Company or Indemnitee in any matter material
to
either such party (other than with respect to matters concerning the Indemnitee
under this Agreement, or of other indemnitees under similar indemnification
agreements), or (ii) any other party to the Proceeding giving rise to a claim
for indemnification hereunder. Notwithstanding the foregoing, the term
"Independent Counsel" shall not include any person who, under the applicable
standards of professional conduct then prevailing, would have a conflict of
interest in representing either the Company or Indemnitee in an action to
determine Indemnitee's rights under this Agreement. The Company agrees to pay
the reasonable fees and expenses of the Independent Counsel
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referred
to above and to fully indemnify such counsel against any and all Expenses,
claims, liabilities and damages arising out of or relating to this Agreement
or
its engagement pursuant hereto.
(g) The
term "Proceeding"
shall include any threatened, pending or completed action, suit, arbitration,
alternate dispute resolution mechanism, investigation, inquiry, administrative
hearing or any other actual, threatened or completed proceeding, whether brought
in the right of the Company or otherwise and whether of a civil, criminal,
administrative, legislative or investigative nature, including any appeal
therefrom, in which Indemnitee was, is or will be involved as a party, potential
party, non-party witness or otherwise by reason that Indemnitee is or was a
director or officer of the Company, by reason of any action taken by him or
of
any action on his part while acting as director or officer of the Company,
or by
reason that he is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, limited liability company,
partnership, joint venture, trust or other enterprise, in each case whether
or
not serving in such capacity at the time any liability or expense is incurred
for which indemnification, reimbursement, or advancement of expenses can be
provided under this Agreement; except one initiated by a Indemnitee to enforce
his rights under this Agreement.
(h) Reference
to "other
enterprise" shall include employee benefit plans; references to "fines" shall
include any excise tax assessed with respect to any employee benefit plan;
references to "serving at the request of the Company" shall include any service
as a director, officer, employee or agent of the Company which imposes duties
on, or involves services by, such director, officer, employee or agent with
respect to an employee benefit plan, its participants or beneficiaries; and
a
person who acted in good faith and in a manner he reasonably believed to be
in
the best interests of the participants and beneficiaries of an employee benefit
plan shall be deemed to have acted in manner "not opposed to the best interests
of the Company" as referred to in this Agreement.
Section
3. Indemnity in Third-Party Proceedings. The Company shall indemnify
Indemnitee in accordance with the provisions of this Section 3 if Indemnitee
is,
or is threatened to be made, a party to or a participant in any Proceeding,
other than a Proceeding by or in the right of the Company to procure a judgment
in its favor. Pursuant to this Section 3, Indemnitee shall be indemnified to
the
fullest extent permitted by applicable law against all Expenses, judgments,
fines and amounts paid in settlement actually and reasonably incurred by
Indemnitee or on his behalf in connection with such Proceeding or any claim,
issue or matter therein, if Indemnitee acted in good faith and in a manner
he
reasonably believed to be in or not opposed to the best interests of the Company
and, in the case of a criminal proceeding had no reasonable cause to believe
that his conduct was unlawful.
Section
4. Indemnity in Proceedings by or in the Right of the Company. The
Company shall indemnify Indemnitee in accordance with the provisions of this
Section 4 if Indemnitee is, or is threatened to be made, a party to or a
participant in any Proceeding by or in the right of the
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Company
to procure a judgment in its favor. Pursuant to this Section 4, Indemnitee
shall
be indemnified to the fullest extent permitted by applicable law against all
Expenses actually and reasonably incurred by him or on his behalf in connection
with such Proceeding or any claim, issue or matter therein, if Indemnitee acted
in good faith and in a manner he reasonably believed to be in or not opposed
to
the best interests of the Company. No indemnification for Expenses shall be
made
under this Section 4 in respect of any claim, issue or matter as to which
Indemnitee shall have been finally adjudged by a court to be liable to the
Company, unless and only to the extent that the Delaware Court of Chancery
or
any court in which the Proceeding was brought shall determine upon application
that, despite the adjudication of liability but in view of all the circumstances
of the case, Indemnitee is fairly and reasonably entitled to
indemnification.
Section
5. Indemnification for Expenses of a Party Who is Wholly or Partly
Successful. Notwithstanding any other provisions of this Agreement, to the
fullest extent permitted by applicable law and to the extent that Indemnitee
is
a party to (or a participant in) and is successful, on the merits or otherwise,
in any Proceeding or in defense of any claim, issue or matter therein, in whole
or in part, the Company shall indemnify Indemnitee against all Expenses actually
and reasonably incurred by him in connection therewith. If Indemnitee is not
wholly successful in such Proceeding but is successful, on the merits or
otherwise, as to one or more but less than all claims, issues or matters in
such
Proceeding, the Company shall indemnify Indemnitee against all Expenses actually
and reasonably incurred by him or on his behalf in connection with each
successfully resolved claim, issue or matter. If the Indemnitee is not wholly
successful in such Proceeding, the Company also shall indemnify Indemnitee
against all Expenses reasonably incurred in connection with a claim, issue
or
matter related to any claim, issue, or matter on which the Indemnitee was
successful. For purposes of this Section and without limitation, the termination
of any claim, issue or matter in such a Proceeding by dismissal, with or without
prejudice, shall be deemed to be a successful result as to such claim, issue
or
matter.
Section
6. Indemnification For Expenses of a Witness. Notwithstanding any other
provision of this Agreement, to the fullest extent permitted by applicable
law
and to the extent that Indemnitee is, by reason of his Corporate Status, a
witness in any Proceeding to which Indemnitee is not a party, he shall be
indemnified against all Expenses actually and reasonably incurred by him or
on
his behalf in connection therewith.
Section
7. Additional Indemnification.
(a) Notwithstanding
any limitation
in Sections 3, 4, or 5, the Company shall indemnify Indemnitee to the fullest
extent permitted by applicable law if Indemnitee is a party to or threatened
to
be made a party to any Proceeding (including a Proceeding by or in the right
of
the Company to procure a judgment in its favor) against all Expenses, judgments,
fines and amounts paid in settlement actually and reasonably incurred by
Indemnitee in connection with the Proceeding.
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(b) For
purposes of Section 7(a),
the meaning of the phrase "to the fullest extent permitted by applicable law"
shall include, but not be limited to:
i. to
the fullest extent permitted by the provision of the DGCL that authorizes or
contemplates additional indemnification by agreement, or the corresponding
provision of any amendment to or replacement of the DGCL, and
ii. to
the fullest extent authorized or permitted by any amendments to or replacements
of the DGCL adopted after the date of this Agreement that increase the extent
to
which a corporation may indemnify its officers and directors.
Section
8. Exclusions. Notwithstanding any provision in this Agreement, the
Company shall not be obligated under this Agreement to make any indemnity in
connection with any claim made against Indemnitee:
(a) for
which payment has actually
been made to or on behalf of Indemnitee under any insurance policy or other
indemnity provision, except with respect to any excess beyond the amount paid
under any insurance policy or other indemnity provision; or
(b) for
(i) an accounting of
profits made from the purchase and sale (or sale and purchase) by Indemnitee
of
securities of the Company within the meaning of Section 16(b) of the Exchange
Act (as defined in Section 2(a) hereof) or similar provisions of state statutory
law or common law, (ii) any reimbursement of the Company by the Indemnitee
of
any bonuses or other incentive-based or equity-based compensation, and the
reimbursement of the Company of profits realized from the sale of securities
of
the Company by Indemnitee, to the extent that such reimbursements directly
arise
from an accounting restatement of the Company pursuant to Section 304 of the
Xxxxxxxx-Xxxxx Act of 2002 (the “Xxxxxxxx-Xxxxx Act”), or (iii) the payment to
the Company of profits arising from the purchase and sale by Indemnitee of
securities in violation of Section 306 of the Xxxxxxxx-Xxxxx Act;
or
(c) except
as provided in Section
13(d) of this Agreement, in connection with any Proceeding (or any part of
any
Proceeding) initiated by Indemnitee, including any Proceeding (or any part
of
any Proceeding) initiated by Indemnitee against the Company or its directors,
officers, employees or other indemnitees, unless (i) the Board of Directors
of
the Company authorized the Proceeding (or any part of any Proceeding) prior
to
its initiation or (ii) the Company provides the indemnification, in its sole
discretion, pursuant to the powers vested in the Company under applicable law;
or
(d) for
any acts or omissions or
transactions, if and to the extent that it shall be determined by a final
judgment or other final adjudication, not subject to further appeal or review,
that a director or officer may not be relieved of liability arising from any
such acts or omissions or transactions under the DGCL or applicable securities
laws; or
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(e) for
Expenses in connection
with proceedings or claims involving the enforcement of non-compete and/or
non-disclosure agreements or the non-compete and/or non-disclosure provisions
of
employment, consulting or similar agreements Indemnitee may be a party to with
the Company (or any of its subsidiaries or any Enterprise), if any.
Section
9. Advances of Expenses. In accordance with (but in addition to) the
pre-existing requirement of Section 7.8(b) of Article VII of the By-laws of
the
Company, and notwithstanding any provision of this Agreement to the contrary,
the Company shall advance, to the extent not prohibited by law, the Expenses
incurred by Indemnitee in connection with any Proceeding, and such advancement
shall be made within thirty (30) days after the receipt by the Company of a
statement or statements requesting such advances from time to time, whether
prior to or after final disposition of any Proceeding. Advances shall be
unsecured and interest free. Advances shall be made without regard to
Indemnitee's ability to repay the Expenses and without regard to Indemnitee's
ultimate entitlement to indemnification under the other provisions of this
Agreement. Advances shall include any and all reasonable Expenses incurred
pursuing an action to enforce this right of advancement, including Expenses
incurred preparing and forwarding statements to the Company to support the
advances claimed. The Indemnitee shall qualify for advances upon the execution
and delivery to the Company of this Agreement, which shall constitute an
undertaking providing that the Indemnitee undertakes to repay the advance to
the
extent that it is ultimately determined that Indemnitee is not entitled to
be
indemnified by the Company. This Section 9 shall not apply to any claim made
by
Indemnitee for which indemnity is excluded pursuant to Section 8.
Section
10. Procedure for Notification and Defense of Claim.
(a) Indemnitee
shall notify the
Company in writing of any matter with respect to which Indemnitee intends to
seek indemnification or advancement of Expenses hereunder as soon as reasonably
practicable following the receipt by Indemnitee of written notice thereof.
The
written notification to the Company shall include a description of the nature
of
the Proceeding and the facts underlying the Proceeding. To obtain
indemnification under this Agreement, Indemnitee shall submit to the Company
a
written request, including therein or therewith such documentation and
information as is reasonably available to Indemnitee and is reasonably necessary
to determine whether and to what ex-tent Indemnitee is entitled to
indemnifica-tion following the final disposition of such action, suit or
proceeding. The omission by Indemnitee to notify the Company hereunder will
not
relieve the Company from any liability which it may have to Indemnitee hereunder
or otherwise than under this Agreement, and any delay in so notifying the
Company shall not constitute a waiver by Indemnitee of any rights under this
Agreement. The Sec-retary of the Company shall, promptly upon receipt of such
a
request for indemnification, advise the Board in writing that Indemnitee has
requested indemnification.
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(b) The
Company will be entitled
to participate in the Proceeding at its own expense.
(c) The
Company shall not be
liable to indemnify Indemnitee under this Agreement or otherwise for any amounts
paid in settlement of any Proceeding effected without the Company’s prior
written consent; provided that if a Change in Control has occurred, the Company
shall be liable for indemnification of Indemnitee for amounts paid in settlement
if an Independent Counsel selected by Indemnitee has approved the settlement.
The Company shall not settle any Proceeding in any manner that would impose
any
penalty, liability or limitation on Indemnitee without Indemnitee’s prior
written consent; provided that the Company shall not be required to obtain
the
consent of Indemnitee to the settlement of any Proceeding the Company has
undertaken to defend if the settlement grants Indemnitee a complete and
unqualified release in respect of the potential liability. Neither the Company
nor Indemnitee will unreasonably withhold their consent to any proposed
settlement.
Section
11. Procedure Upon Application for Indemnification.
(a) Upon
written request by
Indemnitee for indemnification pursuant to the Section 10(a), a determination,
if required by applicable law, with respect to Indemnitee's entitlement thereto
shall be made in the specific case: (i) if a Change in Control shall have
occurred, by Independent Counsel in a written opinion to the Board of Directors,
a copy of which shall be delivered to Indemnitee; or (ii) if a Change in Control
shall not have occurred, (A) by a majority vote of the Disinterested Directors,
even though less than a quorum of the Board, (B) by a committee of Disinterested
Directors designated by a majority vote of the Disinterested Directors, even
though less than a quorum of the Board, (C) if there are no such Disinterested
Directors or, if such Disinterested Directors so direct, by Independent Counsel
in a written opinion to the Board, a copy of which shall be delivered to
Indemnitee or (D) if so directed by the Board, by the stockholders of the
Company; and, if it is so determined that Indemnitee is entitled to
indemnification, payment to Indemnitee shall be made within ten (10) days after
such determination. Indemnitee shall cooperate with the person, persons or
entity making such determination with respect to Indemnitee's entitlement to
indemnification, including providing to such person, persons or entity upon
reasonable advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination. Any
costs or Expenses (including attorneys' fees and disbursements) incurred by
Indemnitee in so cooperating with the person, persons or entity making such
determination shall be borne by the Company (irrespective of the determination
as to Indemnitee's entitlement to indemnification), and the Company hereby
indemnifies and agrees to hold Indemnitee harmless therefrom.
(b) In
the event the determination
of entitlement to indemnification is to be made by Independent Counsel pursuant
to Section 11(a) hereof, the Independent Counsel shall be selected as provided
in this Section 11(b). If a Change in Control shall not have occurred,
the
Independent Counsel shall be selected by the Board of Directors, and the Company
shall give
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written
notice to Indemnitee advising him of the identity of the Independent Counsel
so
selected. If a Change in Control shall have occurred, the Independent Counsel
shall be selected by Indemnitee (unless Indemnitee shall request that such
selection be made by the Board of Directors, in which event the preceding
sentence shall apply), and Indemnitee shall give written notice to the Company
advising it of the identity of the Independent Counsel so selected. In either
event, Indemnitee or the Company, as the case may be, may, within ten (10)
days
after such written notice of selection shall have been given, deliver to the
Company or to Indemnitee, as the case may be, a written objection to such
selection; provided, however, that such objection may be asserted only on the
ground that the Independent Counsel so selected does not meet the requirements
of "Independent Counsel" as defined in Section 2 of this Agreement,
and the
objection shall set forth with particularity the factual basis of such
assertion. Absent a proper and timely objection, the person so selected shall
act as Independent Counsel. If such written objection is so made and
substantiated, the Independent Counsel so selected may not serve as Independent
Counsel unless and until such objection is withdrawn or a court has determined
that such objection is without merit. If, within twenty (20) days after the
later of submission by Indemnitee of a written request for indemnification
pursuant to Section 10(a) hereof and the final disposition of the
Proceeding, no Independent Counsel shall have been selected and not objected
to,
either the Company or Indemnitee may petition a court of competent jurisdiction
for resolution of any objection which shall have been made by the Company or
Indemnitee to the other's selection of Independent Counsel and/or for the
appointment as Independent Counsel of a person selected by the Court or by
such
other person as the Court shall designate, and the person with respect to whom
all objections are so resolved or the person so appointed shall act as
Independent Counsel under Section 11(a) hereof. Upon the due commencement
of any judicial proceeding or arbitration pursuant to Section 13(a) of this
Agreement, Independent Counsel shall be discharged and relieved of any further
responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).
Section
12. Presumptions and Effect of Certain Proceedings.
(a) In
making a determination with
respect to entitlement to indemnification hereunder, the person or persons
or
entity making such determination shall, to the fullest extent not prohibited
by
law, presume that Indemnitee is entitled to indemnification under this Agreement
if Indemnitee has submitted a request for indemnification in accordance with
Section 10(a) of this Agreement, and the Company shall, to the fullest extent
not prohibited by law, have the burden of proof to overcome that presumption
in
connection with the making by any person, persons or entity of any determination
contrary to that presumption. Neither the failure of the Company (including
by
its directors or independent legal counsel) to have made a determination prior
to the commencement of any action pursuant to this Agreement that
indemnification is proper in the circumstances because Indemnitee has met the
applicable standard of conduct, nor an actual determination by the Company
(including by its directors or independent legal counsel) that Indemnitee has
not met such applicable standard of conduct, shall be a defense to the action
or
create a presumption that Indemnitee has not met the applicable standard of
conduct.
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(b) Subject
to Section 13(e), if
the person, persons or entity empowered or selected under Section 11 of this
Agreement to determine whether Indemnitee is entitled to indemnification shall
not have made a determination within sixty (60) days after receipt by the
Company of the request therefor, the requisite determination of entitlement
to
indemnification shall, to the fullest extent not prohibited by law, be deemed
to
have been made and Indemnitee shall be entitled to such indemnification, absent
(i) a misstatement by Indemnitee of a material fact, or an omission of a
material fact necessary to make Indemnitee's statement not materially
misleading, in connection with the request for indemnification, or (ii) a
prohibition of such indemnification under applicable law; provided, however,
that such 60-day period may be extended for a reasonable time, not to exceed
an
additional thirty (30) days, if the person, persons or entity making the
determination with respect to entitlement to indemnification in good faith
requires such additional time for the obtaining or evaluating of documentation
and/or information relating thereto; and provided, further, that the foregoing
provisions of this Section 12(b) shall not apply (i) if the determination of
entitlement to indemnification is to be made by the stockholders pursuant to
Section 11(a) of this Agreement and if (A) within fifteen (15) days after
receipt by the Company of the request for such determination the Board of
Directors has resolved to submit such determination to the stockholders for
their consideration at an annual meeting thereof to be held within seventy-five
(75) days after such receipt and such determination is made thereat, or (B)
a
special meeting of stockholders is called within fifteen (15) days after such
receipt for the purpose of making such determination, such meeting is held
for
such purpose within sixty (60) days after having been so called and such
determination is made thereat, or (ii) if the determination of entitlement
to
indemnification is to be made by Independent Counsel pursuant to Section 11(a)
of this Agreement.
(c) The
termination of any
Proceeding or of any claim, issue or matter therein, by judgment, order,
settlement or conviction, or upon a plea of nolo contendere or its equivalent,
shall not (except as otherwise expressly provided in this Agreement) of itself
adversely affect the right of Indemnitee to indemnification or create a
presumption that Indemnitee did not act in good faith and in a manner which
he
reasonably believed to be in or not opposed to the best interests of the Company
or, with respect to any criminal Proceeding, that Indemnitee had reasonable
cause to believe that his conduct was unlawful.
(d) Reliance
as Safe Harbor. For
purposes of any determination of good faith, Indemnitee shall be deemed to
have
acted in good faith if Indemnitee's action is based on the records or books
of
account of the Enterprise, including financial statements, or on information
supplied to Indemnitee by the officers of the Enterprise in the course of their
duties, or on the advice of legal counsel for the Enterprise or on information
or records given or reports made to the Enterprise by an independent certified
public accountant or by an appraiser or other expert selected with the
reasonable care by the Enterprise. The provisions of this Section 12(d) shall
not be deemed to be exclusive or to limit in any way the other circumstances
in
which the Indemnitee may be deemed to have met the applicable standard of
conduct set forth in this Agreement.
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(e) Actions
of Others. The
knowledge and/or actions, or failure to act, of any director, officer, agent
or
employee of the Enterprise shall not be imputed to Indemnitee for purposes
of
determining the right to indemnification under this Agreement.
Section
13. Remedies of Indemnitee.
(a) Subject
to Section 13(e), in
the event that (i) a determination is made pursuant to Section 11 of this
Agreement that Indemnitee is not entitled to indemnification under this
Agreement, (ii) advancement of Expenses is not timely made pursuant to
Section 9 of this Agreement, (iii) no determination of entitlement to
indemnification shall have been made pursuant to Section 11(a) of this Agreement
within ninety (90) days after receipt by the Company of the request for
indemnification, (iv) payment of indemnification is not made pursuant to
Section 5 or 6 or the last sentence of Section 11(a) of this Agreement
within ten (10) days after receipt by the Company of a written request therefor,
(v) payment of indemnification pursuant to Section 3, 4 or 7 of this Agreement
is not made within ten (10) days after a determination has been made that
Indemnitee is entitled to indemnification, or (vi) in the event that the Company
or any other person takes or threatens to take any action to declare this
Agreement void or unenforceable, or institutes any litigation or other action
or
Proceeding designed to deny, or to recover from, the Indemnitee the benefits
provided or intended to be provided to the Indemnitee hereunder, Indemnitee
shall be entitled to an adjudication by a court of his entitlement to such
indemnification or advancement of Expenses. Alternatively, Indemnitee, at his
option, may seek an award in arbitration to be conducted by a single arbitrator
pursuant to the Commercial Arbitration Rules of the American Arbitration
Association. Indemnitee shall commence such proceeding seeking an adjudication
or an award in arbitra-tion within 180 days following the date on which
Indemnitee first has the right to commence such proceeding pursuant to this
Section 13(a); provided, however, that the foregoing clause shall not apply
in
respect of a proceeding brought by Indemnitee to enforce his rights under
Section 5 of this Agreement. The Company shall not oppose Indemnitee's
right to seek any such adjudication or award in arbitration.
(b) In
the event that a
determination shall have been made pursuant to Section 11(a) of this Agreement
that Indemnitee is not entitled to indemnification, any judicial proceeding
or
arbitration commenced pursuant to this Section 13 shall be conducted
in all
respects as a de novo trial, or arbitration, on the merits and Indemnitee shall
not be prejudiced by reason of that adverse determination. In any judicial
proceeding or arbitration commenced pursuant to this Section 13 the Company
shall have the burden of proving Indemnitee is not entitled to indemnification
or advancement of Expenses, as the case may be.
(c) If
a determination shall have
been made pursuant to Section 11(a) of this Agreement that Indemnitee
is
entitled to indemnification, the Company shall be bound by such determination
in
any judicial proceeding or arbitration commenced pursuant to this
Section 13, absent (i) a misstatement by Indemnitee of a material fact,
or
an omission of a material fact
-12-
necessary
to make Indemnitee's statement not materially misleading, in connection with
the
request for indemnification, or (ii) a prohibition of such indemnification
under
applicable law.
(d) The
Company shall, to
the fullest extent not prohibited by law, be precluded from asserting in any
judicial proceeding or arbitration commenced pursuant to this Section 13 that
the procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
that the Company is bound by all the provisions of this Agreement. It is the
intent of the Company that the Indemnitee not be required to incur legal fees
or
other Expenses associated with the interpretation, enforcement or defense of
Indemnitee's rights under this Agreement by litigation or otherwise because
the
cost and expense thereof would substantially detract from the benefits intended
to be extended to the Indemnitee hereunder. The Company shall indemnify
Indemnitee against any and all Expenses and, if requested by Indemnitee, shall
(within ten (10) days after receipt by the Company of a written request
therefor) advance, to the extent not prohibited by law, such Expenses to
Indemnitee, which are incurred by Indemnitee in connection with any action
brought by Indemnitee for indemnification or advance of Expenses from the
Company under this Agreement or under any directors' and officers' liability
insurance policies maintained by the Company, regardless of whether Indemnitee
ultimately is determined to be entitled to such indemnification, advancement
of
Expenses or insurance recovery, as the case may be, unless it shall be
determined by a final judgment or other final adjudication, not subject to
further appeal or review, that each of the material assertions made by
Indemnitee in such proceeding was not made in good faith or was
frivolous.
(e) Notwithstanding
anything in
this Agreement to the contrary, no determination as to entitlement to
indemnification under this Agreement shall be required to be made prior to
the
final disposition of the Proceeding.
Section
14. Non-exclusivity; Survival of Rights; Insurance;
Subrogation.
(a) The
rights of indemnification
and to receive advancement of Expenses as provided by this Agreement shall
not
be deemed exclusive of any other rights to which Indemnitee may at any time
be
entitled under applicable law, the Company's Certificate of Incorporation,
the
Company's By-laws, any agreement, a vote of stockholders or a resolution of
directors, or otherwise. No amendment, alteration or repeal of this Agreement
or
of any provision hereof shall limit or restrict any right of Indemnitee under
this Agreement in respect of any action taken or omitted by such Indemnitee
in
his Corporate Status prior to such amendment, alteration or repeal. To the
extent that a change in Delaware law, whether by statute or judicial decision,
permits greater indemnification or advancement of Expenses than would be
afforded currently under the Company's By-laws and this Agreement, it is the
intent of the parties hereto that Indemnitee shall enjoy by this Agreement
the
greater benefits so afforded by such change. No right or remedy herein conferred
is intended to be exclusive of any other right or remedy, and every other right
and remedy shall be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or
-13-
employment
of any right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other right or remedy.
(b) To
the extent that the Company maintains an insurance policy or policies providing
liability insurance for directors, officers, employees, or agents of the Company
or of any other corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise which such person serves at the request of the Company,
Indemnitee shall be covered by such policy or policies in accordance with its
or
their terms to the maximum extent of the coverage available for any such
director, officer, employee or agent under such policy or policies. If, at
the
time of the receipt of a notice of a claim pursuant to the terms hereof, the
Company has director and officer liability insurance in effect, the Company
shall give prompt notice of the commencement of such proceeding to the insurers
in accordance with the procedures set forth in the respective policies. The
Company shall thereafter take all necessary or desirable action to cause such
insurers to pay, on behalf of the Indemnitee, all amounts payable as a result
of
such proceeding in accordance with the terms of such policies.
(c) In
the event of any payment
under this Agreement, the Company shall be subrogated to the extent of such
payment to all of the rights of recovery of Indemnitee, who shall execute all
papers required and take all action necessary to secure such rights, including
execution of such documents as are necessary to enable the Company to bring
suit
to enforce such rights.
(d) The
Company shall not be
liable under this Agreement to make any payment of amounts otherwise
indemnifiable (or for which advancement is provided hereunder) hereunder if
and
to the extent that Indemnitee has otherwise actually received such payment
under
any insurance policy, contract, agreement or otherwise.
(e) The
Company's obligation to
indemnify or advance Expenses hereunder to Indemnitee who is or was serving
at
the request of the Company as a director, officer, employee or agent of any
other corporation, limited liability company, partnership, joint venture, trust,
employee benefit plan or other enterprise shall be reduced by any amount
Indemnitee has actually received as indemnification or advancement of Expenses
from such other corporation, limited liability company, partnership, joint
venture, trust, employee benefit plan or other enterprise.
Section
15. Duration of Agreement. This Agreement shall continue until and
terminate upon the later of: (a) 10 years after the date that Indemnitee shall
have ceased to serve as a [director] [officer] of the Company, (b) 1 year after
the final termina-tion of any Proceeding then pending in respect of which
Indemnitee is granted rights of indemnifi-cation or advance-ment of Expenses
hereunder and of any pro-ceeding commenced by Indemnitee pursuant to
Section 13 of this Agreement relating thereto. This Agree-ment shall
be
binding upon the Company and its successors and assigns and shall inure to
the
benefit of Indemnitee and his heirs, execu-tors and administrators.
-14-
Section
16. Severability. If any provision or provisions of this Agreement shall
be held to be invalid, illegal or unenforceable for any reason whatsoever:
(a)
the validity, legality and enforceability of the remaining provisions of this
Agreement (including without limitation, each portion of any Section of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall
not
in any way be affected or impaired thereby and shall remain enforceable to
the
fullest extent permitted by law; (b) such provision or provisions shall be
deemed reformed to the extent necessary to conform to applicable law and to
give
the maximum effect to the intent of the parties hereto; and (c) to the fullest
extent possible, the provisions of this Agreement (including, without
limitation, each portion of any Section of this Agreement containing any such
provision held to be invalid, illegal or unenforceable, that is not itself
invalid, illegal or unenforceable) shall be construed so as to give effect
to
the intent manifested thereby.
Section
17. Enforcement.
(a) The
Company expressly confirms
and agrees that it has entered into this Agreement and assumed the obligations
imposed on it hereby in order to induce Indemnitee to serve as a director or
officer of the Company, and the Company acknowledges that Indemnitee is relying
upon this Agreement in serving as a director or officer of the
Company.
(b) This
Agreement constitutes the
entire agreement between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings, oral, written
and
implied, between the parties hereto with respect to the subject matter hereof;
provided, however, that this Agreement is a supplement to and in furtherance
of
the Certificate of Incorporation of the Company, the By-laws of the Company
and
applicable law, and shall not be deemed a substitute therefor, nor to diminish
or abrogate any rights of Indemnitee thereunder.
Section
18. Modification and Waiver. No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by the parties
thereto. No waiver of any of the provisions of this Agreement shall be deemed
or
shall constitute a waiver of any other provisions of this Agreement nor shall
any waiver constitute a continuing waiver.
Section
19. Notice by Indemnitee. Indemnitee agrees promptly to notify the
Company in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to any Proceeding
or matter which may be subject to indemnification or advancement of Expenses
covered hereunder. The failure of Indemnitee to so notify the Company shall
not
relieve the Company of any obligation which it may have to the Indemnitee under
this Agreement or otherwise.
Section
20. Notices. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed
to
have been duly given if (a) delivered
-15-
by
hand
and receipted for by the party to whom said notice or other communication shall
have been directed, (b) mailed by certified or registered mail with postage
prepaid, on the third business day after the date on which it is so mailed,
(c)
mailed by reputable overnight courier and receipted for by the party to whom
said notice or other communication shall have been directed or (d) sent by
facsimile transmission, with receipt of oral confirmation that such transmission
has been received:
(a) If
to Indemnitee, at the address indicated on the signature page of this Agreement,
or such other address as Indemnitee shall provide to the Company.
(b) If
to the Company
to:
Attention:
General Counsel
000
Xxxxxxx Xxxxxx
Xxxx
Xxxxx, Xxxxx 00000
Phone:
(000) 000-0000
Fax:
(000) 000-0000
or
to any
other address as may have been furnished to Indemnitee by the
Company.
Section
21. Contribution. To the fullest extent permissible under applicable law,
if the indemnification provided for in this Agreement is unavailable to
Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying
Indemnitee, shall contribute to the amount incurred by Indemnitee, whether
for
judgments, fines, penalties, excise taxes, amounts paid or to be paid in
settlement and/or for Expenses, in connection with any claim relating to an
indemnifiable event under this Agreement, in such proportion as is deemed fair
and reasonable in light of all of the circumstances of such Proceeding in order
to reflect (i) the relative benefits received by the Company and Indemnitee
as a
result of the event(s) and/or transaction(s) giving cause to such Proceeding;
and/or (ii) the relative fault of the Company (and its directors, officers,
employees and agents) and Indemnitee in connection with such event(s) and/or
transaction(s).
Section
22. Applicable Law and Consent to Jurisdiction. This Agreement and the
legal relations among the parties shall be governed by, and construed and
enforced in accordance with, the laws of the State of Delaware, without regard
to its conflict of laws rules. Except with respect to any arbitration commenced
by Indemnitee pursuant to Section 13(a) of this Agreement, the Company and
Indemnitee hereby irrevocably and unconditionally (i) agree that any action
or
proceeding arising out of or in connection with this Agreement shall be brought
only in the Chancery Court of the State of Delaware (the "Delaware Court"),
and
not in any other state or federal court in the United States of America or
any
court in any other country, (ii) consent to submit to the exclusive jurisdiction
of the Delaware Court for purposes of any action or proceeding arising out
of or
in connection with this Agreement, (iii) appoint, to the extent such party
is
not otherwise subject to service of process in the State of
Delaware, irrevocably RL&F
Service Corp., One Xxxxxx
Square, 10th Floor, 10th and King Streets, Wilmington, Delaware 19801 as
its
agent in the State of Delaware as such party's agent for acceptance of
legal
process in connection with any such action or proceeding against such party
with
the same legal force and validity as if served upon such party personally
within
the State of Delaware, (iv) waive any objection to the laying of venue
of any
such action or proceeding in the Delaware Court, and (v) waive, and agree
not to
plead or to make, any claim that any such action or proceeding brought
in the
Delaware Court has been brought in an improper or inconvenient
forum.
-16-
Section
23. Identical Counterparts. This Agree-ment may be
executed in one or more counterparts, each of which shall for all purposes
be
deemed to be an original but all of which together shall constitute one and
the
same Agreement. Only one such counterpart signed by the party against whom
enforceability is sought needs to be produced to evidence the existence of
this
Agreement.
Section
24. Miscellaneous. Use of the masculine pronoun
shall be deemed to include usage of the feminine pronoun where appropriate.
The
headings of the para-graphs of this Agreement are inserted for convenience
only
and shall not be deemed to constitute part of this Agreement or to affect
the
construction thereof.
IN
WITNESS WHEREOF,
the parties have caused this Agreement to be signed as of the day and year
first
above written.
| XTO ENERGY INC. | INDEMNITEE | |||
| By: _____________________ |
_____________________________
|
|||
| Name: Xxxxx X. XxXxxxxx | Name: | |||
| Office: Vice President | Address: |
______________________
|
||
|
______________________
|
||||
|
______________________
|
||||
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