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EXHIBIT 10.23
PIONEER NATURAL RESOURCES COMPANY
INDEMNIFICATION AGREEMENT
This Agreement ("Agreement") is made and entered into as of the 8th
day of August, 1997 (the "Effective Date"), by and between Pioneer Natural
Resources Company, a Delaware corporation (the "Company"), and Xxxxx X.
Xxxxxxxxx ("Indemnitee").
RECITALS
A. Highly competent and experienced persons are becoming more
reluctant to serve corporations as directors, executive officers or in other
capacities unless they are provided with adequate protection through insurance
and adequate indemnification against inordinate risks of claims and actions
against them arising out of their service to and activities on behalf of the
Company.
B. The Board of Directors of the Company (the "Board") has
determined that the inability to attract and retain such persons would be
detrimental to the best interests of the Company and its stockholders and that
the Company should act to assure such persons that there will be increased
certainty of such protection in the future.
C. The Board has also determined that it is reasonable, prudent
and necessary for the Company, in addition to purchasing and maintaining
directors's and officers's liability insurance (or otherwise providing for
adequate arrangements of self-insurance), contractually to obligate itself to
indemnify such persons to the fullest extent permitted by applicable law so
that they will serve or continue to serve the Company free from undue concern
that they will not be so indemnified.
D. Indemnitee is willing to serve, continue to serve and to take
on additional service for or on behalf of the Company on the condition that he
be so indemnified to the fullest extent permitted by law.
E. Article Twelfth of the Amended and Restated Certificate of
Incorporation of the Company provides for indemnification, advancement of
expenses, arrangements of insurance and self-insurance and specifically
authorizes the Company to enter into indemnification agreements that
contractually provide to indemnitees the benefits of the provisions of Article
Twelfth and other indemnification protections to the fullest extent permitted
by law.
In consideration of the foregoing and the mutual covenants herein
contained, and other good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, the parties hereby agree as follows:
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ARTICLE I
CERTAIN DEFINITIONS
As used herein, the following words and terms shall have the following
respective meanings (whether singular or plural):
"Acquiring Person" means any person other than (i) the Company, (ii)
any of the Company's s Subsidiaries, (iii) any employee benefit plan of the
Company or of a Subsidiary of the Company or of a Company owned directly or
indirectly by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company, or (iv) any trustee or
other fiduciary holding securities under an employee benefit plan of the
Company or of a Subsidiary of the Company or of a Company owned directly or
indirectly by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company.
"Change in Control" means the occurrence of any of the following
events:
(i) The acquisition by any person of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (x) the then outstanding shares of Common Stock of the Company (the
"Outstanding Company Common Stock") or (y) the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally in
the election of directors (the "Outstanding Company Voting Securities");
provided, however, that for purposes of this Subparagraph (i), the following
acquisitions shall not constitute a Change of Control: (A) any acquisition
directly from the Company, (B) any acquisition by the Company, (C) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company or (D)
any acquisition by any corporation pursuant to a transaction which complies
with clauses (A), (B) and (C) of paragraph (iii) below; or
(ii) Members of the Incumbent Board cease for any reason to
constitute at least a majority of the Board; or
(iii) Consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the assets of the
Company or an acquisition of assets of another corporation (a "Business
Combination"), in each case, unless, following such Business Combination, (A)
all or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company's s assets either directly or through one or
more subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Company
Common Stock and Outstanding Company
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Voting Securities, as the case may be, (B) no person (excluding any employee
benefit plan (or related trust) of the Company or the corporation resulting
from such Business Combination) beneficially owns, directly or indirectly, 20%
or more of, respectively, the then outstanding shares of common stock of the
corporation resulting from such Business Combination or the combined voting
power of the then outstanding voting securities of such corporation except to
the extent that such ownership results solely from ownership of the Company
that existed prior to the Business Combination and (C) at least a majority of
the members of the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board, providing
for such Business Combination; or
(iv) Approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
"Claim" means an actual or threatened claim or request for relief
which is or may be made by reason of anything done or not done by Indemnitee
in, or by reason of any event or occurrence related to, Indemnitee's
Corporate Status.
"Corporate Status" means the status of a person who is, becomes or was
a director, officer, employee, agent or fiduciary of the Company or is, becomes
or was serving at the request of the Company as a director, officer, partner,
venturer, proprietor, trustee, employee, agent, fiduciary or similar
functionary of another foreign or domestic corporation, partnership, joint
venture, sole proprietorship, trust, employee benefit plan or other enterprise.
For purposes of this Agreement, the Company agrees that Indemnitee's service on
behalf of or with respect to any Subsidiary of the Company shall be deemed to
be at the request of the Company.
"DGCL" means the Delaware General Corporation Law and any successor
statute thereto, as either of them may from time to time be amended.
"Disinterested Director" with respect to any request by Indemnitee for
indemnification hereunder, means a director of the Company who at the time of
the vote is not a named defendant or respondent in the Proceeding in respect of
which indemnification is sought by Indemnitee.
"Expenses" means all attorneys' fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses, duplicating
costs, printing and binding costs, telephone charges, postage, delivery service
fees and all other disbursements, costs or expenses of the types customarily
incurred in connection with prosecuting, defending (including affirmative
defenses and counterclaims), preparing to prosecute or defend, investigating or
being or preparing to be a witness in, or participating in or preparing to
participate in (including on appeal), a Proceeding.
"Incumbent Board" means the individuals who, as of the date of this
Agreement, constitute the Board and any other individual who becomes a director
of the Company after that date and whose election or appointment by the Board
or nomination for election by the Corporation's s stockholders was approved by
a vote of at least a majority of the directors then comprising the Incumbent
Board, but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors
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or other actual or threatened solicitation of proxies or consents by or on
behalf of a person other than the Incumbent Board.
"Independent Counsel" means a law firm, or a member of a law firm,
that is experienced in matters of corporation law and neither contemporaneously
is, nor in the five years theretofore has been, retained to represent: (a) the
Company or Indemnitee in any matter material to either such party (other than
as Independent Counsel under this Agreement or similar agreements, (b) any
other party to the Proceeding giving rise to a claim for indemnification
hereunder or (c) the beneficial owner, directly or indirectly, of securities of
the Company representing 40% or more of the combined voting power of the
Corporation's s then outstanding voting securities (other than, in each such
case, with respect to matters concerning the rights of Indemnitee under this
Agreement, or of other indemnitees under similar indemnification agreements).
Notwithstanding the foregoing, the term "Independent Counsel" shall not include
any person who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the
Company or Indemnitee in an action to determine Indemnitee's s rights under
this Agreement.
"person" means any individual, entity or group (within the meaning of
Sections 13(d)(3) and 14(d)(2) of the Exchange Act).
"Potential Change in Control" shall be deemed to have occurred if (i)
the Company enters into an agreement, the consummation of which would result in
the occurrence of a Change in Control; (ii) any person (including the Company)
publicly announces an intention to take or consider taking actions that, if
consummated, would constitute a Change in Control; (iii) any Acquiring Person
who is or becomes the beneficial owner (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of securities of the Company representing
10% or more of the combined voting power of the then Outstanding Company Voting
Securities increases his beneficial ownership of such securities by 5% or more
over the percentage so owned by the person on the date hereof; or (iv) the
Board adopts a resolution to the effect that, for purposes of this Agreement, a
Potential Change of Control has occurred.
"Proceeding" means any threatened, pending or completed action, suit,
arbitration, investigation, alternate dispute resolution mechanism,
administrative hearing or any other proceeding (including, without limitation,
any securities laws action, suit, arbitration, alternative dispute resolution
mechanism, hearing or procedure) whether civil, criminal, administrative,
arbitrative or investigative and whether or not based upon events occurring, or
actions taken, before the date hereof, and any appeal in or related to any such
action, suit, arbitration, investigation, hearing or proceeding and any inquiry
or investigation (including discovery), whether conducted by the Company or any
other party, that Indemnitee in good faith believes could lead to any appeal in
or related to, any such action, suit, arbitration, alternative dispute
resolution mechanism, hearing or other proceeding.
"Subsidiary" means, with respect to any person, any corporation or
other entity of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by that person.
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"Voting Securities" means any securities that vote generally in the
election of directors, in the admission of general partners, or in the
selection of any other similar governing body.
ARTICLE II
SERVICES BY INDEMNITEE
Indemnitee is serving as Director, President & Chief Executive Officer
of the Company. Indemnitee may from time to time also agree to serve, as the
Company may request from time to time, in another capacity for the Company
(including another officer or director position) or as a director, officer,
partner, venturer, proprietor, trustee, employee, agent, fiduciary or similar
functionary of another foreign or domestic corporation, partnership, joint
venture, sole proprietorship, trust, employee benefit plan or other enterprise.
Indemnitee and the Company each acknowledge that they have entered into this
Agreement as a means of inducing Indemnitee to serve, or continue to serve,
the Company in such capacities. Indemnitee may at any time and for any reason
resign from such position or positions (subject to any other contractual
obligation or any obligation imposed by operation of law). The Company shall
have no obligation under this Agreement to continue Indemnitee in any such
position or positions.
ARTICLE III
INDEMNIFICATION
Section 3.1 General. Subject to the provisions set forth in
Article V, the Company shall indemnify, and advance Expenses to, Indemnitee to
the fullest extent permitted by applicable law in effect on the date hereof and
to such greater extent as applicable law may thereafter from time to time
permit. The other provisions set forth in this Agreement are provided in
addition to and as a means of furtherance and implementation of, and not in
limitation of, the obligations expressed in this Article III. No requirement,
condition to or limitation of any right to indemnification III, or to
advancement of Expenses under this Article III, shall in any way limit the
rights of Indemnitee under Section 7.3.
Section 3.2 Additional Indemnity of the Company. Indemnitee
shall be entitled to indemnification pursuant to this Section 3.2 if, by reason
of anything done or not done by Indemnitee in, or by reason of any event or
occurrence related to, Indemnitee's s Corporate Status, Indemnitee is, was or
becomes, or is threatened to be made, a party to, or witness or other
participant in any Proceeding. Pursuant to this Section 3.2, Indemnitee shall
be indemnified against any and all Expenses, judgments, penalties (including
excise or similar taxes), fines and amounts paid in settlement (including all
interest, assessments and other charges paid or payable in connection with or
in respect of any such Expenses, judgments, penalties, fines and amounts paid
in settlement) actually and reasonably incurred by him or on his behalf in
connection with such Proceeding or any Claim, issue or matter therein.
Notwithstanding the foregoing, the obligations of the Company under this
Section 3.2 shall be subject to the condition that no determination (which, in
any case in which Independent Counsel is involved, shall be in a form of a
written opinion) shall have been made
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pursuant to Article V that Indemnitee would not be permitted to be indemnified
under applicable law. Nothing in this Section 3.2 shall limit the benefits of
Section 3.1 or any other Section hereunder.
Section 3.3 Advancement of Expenses. The Company shall pay all
reasonable Expenses incurred by or on behalf of Indemnitee (or, if applicable,
reimburse Indemnitee for any and all Expenses reasonable incurred by Indemnitee
and previously paid by Indemnitee) in connection with any Claim or Proceeding,
whether brought by the Company or otherwise, in advance of any determination
respecting entitlement to indemnification pursuant to Article IV hereof within
10 days after the receipt by the Company of (a) a written request from
Indemnitee requesting such payment or payments from time to time, whether prior
to or after final disposition of such Proceeding, and (b) a written affirmation
from Indemnitee of his good faith belief that he has met the standard of
conduct necessary for Indemnitee to be permitted to be indemnified under
applicable law. Such statement or statements shall reasonably evidence the
Expenses incurred by Indemnitee. Any such payment by the Company is referred
to in this Agreement as an "Expense Advance." In connection with any request
for an Expense Advance, if requested by the Company, Indemnitee or Indemnitee's
s counsel shall also submit an affidavit stating that the Expenses incurred
were reasonable. Any dispute as to the reasonableness of any Expense shall not
delay an Expense Advance by the Company, and the Company agrees that any such
dispute shall be resolved only upon the disposition or conclusion of the
underlying Claim against the Indemnitee. Indemnitee hereby undertakes and
agrees (which agreement shall be an unsecured obligation of Indemnitee) that he
will reimburse and repay the Company without interest for any Expenses Advance
to the extent that it shall ultimately be determined (in a final adjudication
by a court from which there is no further right of appeal or in a final
adjudication of an arbitration pursuant to Section 5.1 if Indemnitee elects to
seek such arbitration) that Indemnitee is not entitled to be indemnified by the
Company against such Expenses.
Section 3.4 Indemnification for Additional Expenses. The Company
shall indemnity Indemnitee against any and all costs and expenses (including
attorneys's and expert witnesses's fees) and, if requested by Indemnitee,
shall (within two business days of that request) advance those costs and
expenses to Indemnitee, that are incurred by Indemnitee in connection with any
claim asserted against or action brought by Indemnitee for (i) indemnification
or an Expense Advance by the Company under this Agreement or any other
agreement or provision of the Corporation's s Certificate of Incorporation or
Bylaws now or hereafter in effect relating to any Claim or Proceeding, or (ii)
recovery under any directors's and officers's liability insurance policies
maintained by the Company, regardless of whether Indemnitee ultimately is
determined to be entitled to that indemnification, advance expense payment, or
insurance recovery, as the case may be.
Section 3.5 Partial Indemnity. If Indemnitee is entitled under
any provision of this Agreement to indemnification by the Company for some or a
portion of the Expenses, judgments, fines, penalties, and amounts paid in
settlement of a Claim or Proceeding but not, however, for all of the total
amount thereof, the Company shall nevertheless indemnify Indemnitee for the
portion thereof to which Indemnitee is entitled. Moreover, notwithstanding any
other provision of this Agreement, to the extent that Indemnitee has been
successful on the merits or otherwise in defense of any or all Claims or
Proceedings, or in defense of any issue or matter therein, including dismissal
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without prejudice, Indemnitee shall be indemnified against all Expenses
incurred in connection therewith.
ARTICLE IV
PROCEDURE FOR DETERMINATION OF ENTITLEMENT
TO INDEMNIFICATION
Section 4.1 Request by Indemnitee. To obtain indemnification
under this Agreement, Indemnitee shall submit to the Company a written request,
including therein or therewith such documentation and information as is
reasonably available to Indemnitee and is reasonably necessary to determine
whether and to what extent Indemnitee is entitled to indemnification. The
Secretary or an Assistant Secretary of the Company shall, promptly upon receipt
of such a request for indemnification, advise the Board in writing that
Indemnitee has requested indemnification.
Section 4.2 Determination of Request. Upon written request by
Indemnitee for indemnification pursuant to the first sentence of Section 4.1
hereof, a determination, if required by applicable law, with respect to whether
Indemnitee is permitted under applicable law to be indemnified shall be made in
accordance with the terms of Section 4.5(b), in the specific case as follows:
(a) If a Potential Change in Control or a Change in
Control shall have occurred, by Independent Counsel (selected in
accordance with Section 4.3) in a written opinion to the Board and
Indemnitee, unless Indemnitee shall request that such determination be
made by the Board, or a committee of the Board, in which case by the
person or persons or in the manner provided for in clause (i) or (ii)
of paragraph (b) below; or
(b) If a Potential Change in Control or a Change in
Control shall not have occurred, (i) by the Board by a majority vote
of a quorum of the Board consisting of Disinterested Directors, or
(ii) if there are no Disinterested Directors, or if a quorum of the
Board consisting of Disinterested Directors is not obtainable, by a
majority vote of a committee of the Board designated to act in the
matter by a majority vote of the entire Board, consisting solely of
two or more Disinterested Directors, or (iii) by Independent Counsel
selected by the Board or a committee of the Board by a vote as set
forth in clauses (i) or (ii) of this paragraph (b), or if such quorum
is not obtainable or such a committee cannot be established, by a
majority vote of all directors, or (iv) if Indemnitee and the Company
agree, by the stockholders of the Company in a vote that excludes the
shares held by directors who are not Disinterested Directors.
If it is so determined that Indemnitee is permitted to be indemnified under
applicable law, payment to Indemnitee shall be made within 10 days after such
determination. Nothing contained in this Agreement shall require that any
determination be made under this Section 4.2 prior to the disposition or
conclusion of a Claim or Proceeding against the Indemnitee; provided, however,
that Expense Advances shall continue to be made by the Company pursuant to, and
to the extent required
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by, the provisions of Article III. Indemnitee shall cooperate with the person
or persons making such determination with respect to Indemnitee's 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's fees and disbursements) incurred by Indemnitee in so cooperating
with the person or persons making such determination shall be borne by the
Company (irrespective of the determination as to Indemnitee's s entitlement to
indemnification) and the Company shall indemnify and hold harmless Indemnitee
therefrom.
Section 4.3 Independent Counsel. If a Potential Change in
Control or a Change in Control shall not have occurred and the determination of
entitlement to indemnification is to be made by Independent Counsel, the
Independent Counsel shall be selected by (a) a majority vote of the
Disinterested Directors, even though less than a quorum of the Board or (b) if
there are no Disinterested Directors, by a majority vote of the Board, and the
Company shall give written notice to Indemnitee, within 10 days after receipt
by the Company of Indemnitee's request for indemnification, specifying the
identity and address of the Independent Counsel so selected. If a Potential
Change in Control or a Change in Control shall have occurred and the
determination of entitlement to indemnification is to be made by Independent
Counsel, the Independent Counsel shall be selected by Indemnitee, and
Indemnitee shall give written notice to the Company, within 10 days after
submission of Indemnitee's s request for indemnification, specifying the
identity and address of the Independent Counsel so selected (unless Indemnitee
shall request that such selection be made by the Disinterested Directors or a
committee of the Board, in which event the Company shall give written notice to
Indemnitee within 10 days after receipt of Indemnitee's s request for the Board
or a committee of the Disinterested Directors to make such selection,
specifying the identity and address of the Independent Counsel so selected).
In either event, (i) such notice to Indemnitee or the Company, as the case may
be, shall be accompanied by a written affirmation of the Independent Counsel so
selected that it satisfies the requirements of the definition of "Independent
Counsel" in Article I and that it agrees to serve in such capacity and (ii)
Indemnitee or the Company, as the case may be, may, within seven days after
such written notice of selection shall have been given, deliver to the Company
or to Indemnitee, as the case may be, a written objection to such selection.
Any objection to selection of Independent Counsel pursuant to this Section 4.3
may be asserted only on the ground that the Independent Counsel so selected
does not meet the requirements of the definition of "Independent Counsel" in
Article I, and the objection shall set forth with particularity the factual
basis of such assertion. If such written objection is timely made, the
Independent Counsel so selected may not serve as Independent Counsel unless and
until a court of competent jurisdiction (the "Court") has determined that such
objection is without merit. In the event of a timely written objection to a
choice of Independent Counsel, the party originally selecting the Independent
Counsel shall have seven days to make an alternate selection of Independent
Counsel and to give written notice of such selection to the other party, after
which time such other party shall have five days to make a written objection to
such alternate selection. If, within 30 days after submission of Indemnitee's
s request for indemnification pursuant to Section 4.1, no Independent Counsel
shall have been selected and not objected to, either the Company or Indemnitee
may petition the Court for resolution of any objection that shall have been
made by the Company or Indemnitee to the
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other's selection of Independent Counsel and/or for the appointment as
Independent Counsel of a person selected by the Court or by such other person
as the Court shall designate, and the person with respect to whom an objection
is so resolved or the person so appointed shall act as Independent Counsel
under Section 4.2. The Company shall pay any and all reasonable fees and
expenses incurred by such Independent Counsel in connection with acting
pursuant to Section 4.2, and the Company shall pay all reasonable fees and
expenses incident to the procedures of this Section 4.3, regardless of the
manner in which such Independent Counsel was selected or appointed. Upon the
due commencement of any judicial proceeding or arbitration pursuant to Section
5.1, Independent Counsel shall be discharged and relieved of any further
responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).
Section 4.4 Establishment of a Trust. In the event of a
Potential Change in Control or a Change in Control, the Company shall, upon
written request by the Indemnitee, create a trust for the benefit of the
Indemnitee (the "Trust") and from time to time upon written request of the
Indemnitee shall fund the Trust in an amount sufficient to satisfy any and all
Expenses reasonably anticipated at the time of each such request to be incurred
in connection with investigating, preparing for, and defending any Claim, and
any and all judgments, fines, penalties, and settlement amounts of any and all
Claims from time to time actually paid or claimed, reasonably anticipated, or
proposed to be paid. The amount to be deposited in the Trust pursuant to the
foregoing funding obligation shall be determined by the Independent Counsel (or
other person(s) making the determination of whether Indemnitee is permitted to
be indemnified by applicable law). The terms of the Trust shall provide that,
upon a Change in Control, (i) the Trust shall not be revoked or the principal
thereof invaded, without the written consent of the Indemnitee; (ii) the
trustee of the Trust shall advance, within ten business days of a request by
Indemnitee, any and all reasonable Expenses to Indemnitee, any required
determination concerning the reasonableness of the Expenses to be made by the
Independent Counsel (and Indemnitee hereby agrees to reimburse the Trust under
the circumstances in which Indemnitee would be required to reimburse the
Company for Expenses Advances under Section 3.3 of this Agreement); (iii) the
Trust shall continue to be funded by the Company in accordance with the funding
obligation set forth above; (iv) the trustee of the Trust shall promptly pay to
Indemnitee all amounts for which Indemnitee shall be entitled to
indemnification pursuant to this Agreement; and (v) all unexpended funds in the
Trust shall revert to the Company upon a final determination by the Independent
Counsel or a court of competent jurisdiction, as the case may be, that
Indemnitee has been fully indemnified under the terms of this Agreement. The
trustee of the Trust shall be chosen by Indemnitee and shall be an institution
that is not affiliated with the Indemnitee. Nothing in this Section 4.4 shall
relieve the Company of any of its obligations under this Agreement.
Section 4.5 Presumptions and Effect of Certain Proceedings.
i. The Indemnitee shall be presumed to be
entitled to indemnification under this Agreement upon
submission of a request for indemnification under
Section 4.1, and the Company shall have the burden of
proof in overcoming that presumption in reaching a
determination contrary to that presumption. Such
presumption shall be used by Independent Counsel (or
other person or
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persons determining entitlement to indemnification)
as a basis for a determination of entitlement to
indemnification unless the Company provides
information sufficient to overcome such presumption
by clear and convincing evidence or unless the
investigation, review and analysis of Independent
Counsel (or such other person or persons) convinces
him by clear and convincing evidence that the
presumption should not apply.
ii. If the person or persons empowered or
selected under Article IV of this Agreement to
determine whether Indemnitee is entitled to
indemnification shall not have made a determination
within 60 days after receipt by the Company of the
request by Indemnitee therefor, the requisite
determination of entitlement to indemnification shall
be deemed to have been made and Indemnitee shall be
entitled to such indemnification, absent (i) a
knowing misstatement by Indemnitee of a material
fact, or knowing omission of a material fact
necessary to make Indemnitee's s statement not
materially misleading, in connection with the request
for indemnification, or (ii) a prohibition of such
indemnification under applicable law; provided,
however, that such 60-day period may be extended for
a reasonable time, not to exceed an additional 30
days, if the person making the determination with
respect to entitlement to indemnification in good
faith requires such additional time for the obtaining
or evaluating of documentation and/or information
relating to such determination; and provided,
further, that the 60-day limitation set forth in this
Section 4.5(b) shall not apply and such period shall
be extended as necessary (i) if within 30 days after
receipt by the Company of the request for
indemnification under Section 4.1 Indemnitee and the
Company have agreed, and the Board has resolved to
submit such determination to the stockholders of the
Company pursuant to Section 4.2(b) for their
consideration at an annual meeting of stockholders to
be held within 90 days after such agreement and such
determination is made thereat, or a special meeting
of stockholders is called within 30 days after such
receipt for the purpose of making such determination,
such meeting is held for such purpose within 60 days
after having been so called and such determination is
made thereat, or (ii) if the determination of
entitlement to indemnification is to be made by
Independent Counsel pursuant to Section 4.2(a) of
this Agreement, in which case the applicable period
shall be as set forth in Section 5.1(c).
iii. The termination of any Proceeding or of any
Claim, issue or matter by judgment, order, settlement
(whether with or without court approval) or
conviction, or upon a plea of nolo contendere or its
equivalent, shall not (except as otherwise expressly
provided in this Agreement) by itself adversely
affect the rights of Indemnitee to indemnification or
create a presumption that Indemnitee meet any
particular standard of conduct or have any particular
belief or that a court has determined that
indemnification is not permitted by applicable law.
Indemnitee shall be deemed to have been found
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liable in respect of any Claim, issue or matter only
after he shall have been so adjudged by the Court
after exhaustion of all appeals therefrom.
ARTICLE V
CERTAIN REMEDIES OF INDEMNITEE
Section 5.1 Indemnitee Entitled to Adjudication in an Appropriate
Court. If (a) a determination is made pursuant to Article IV that Indemnitee is
not entitled to indemnification under this Agreement; (b) there has been any
failure by the Company to make timely payment or advancement of any amounts due
hereunder; or (c) the determination of entitlement to indemnification is to be
made by Independent Counsel pursuant to Section 4.2 and such determination
shall not have been made and delivered in a written opinion within 90 days
after the latest of (i) such Independent Counsel's s being appointed, (ii) the
overruling by the Court of objections to such counsel's s selection or (iii)
expiration of all periods for the Company or Indemnitee to object to such
counsel's s selection, Indemnitee shall be entitled to commence an action
seeking an adjudication in the Court of his entitlement to such indemnification
or advancement of Expenses. Alternatively, Indemnitee, at his option, may seek
an award in arbitration to be conducted by a single arbitrator pursuant to the
commercial arbitration rules of the American Arbitration Association.
Indemnitee shall commence such action seeking an adjudication or an award in
arbitration within 180 days following the date on which Indemnitee first has
the right to commence such action pursuant to this Section 5.1, or such right
shall expire. The Company agrees not to oppose Indemnitee's s right to seek
any such adjudication or award in arbitration.
Section 5.2 Adverse Determination Not to Affect any Judicial
Proceeding. If a determination shall have been made pursuant to Article IV
that Indemnitee is not entitled to indemnification under this Agreement, any
judicial proceeding or arbitration commenced pursuant to this Article V shall
be conducted in all respects as a de novo trial or arbitration on the merits,
and Indemnitee shall not be prejudiced by reason of such initial adverse
determination. In any judicial proceeding or arbitration commenced pursuant to
this Article V, Indemnitee shall be presumed to be entitled to indemnification
or advancement of Expenses, as the case may be, under this Agreement and the
Company shall have the burden of proof in overcoming such presumption and to
show by clear and convincing evidence that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be.
Section 5.3 Company Bound by Determination Favorable to
Indemnitee in any Judicial Proceeding or Arbitration. If a determination shall
have been made or deemed to have been made pursuant to Article IV that
Indemnitee is entitled to indemnification, the Company shall be irrevocably
bound by such determination in any judicial proceeding or arbitration commenced
pursuant to this Article V, and shall be precluded from asserting that such
determination has not been made or that the procedure by which such
determination was made is not valid, binding and enforceable, in each such case
absent (a) a knowing misstatement by Indemnitee of a material fact, or a
knowing omission of a material fact necessary to make a statement by Indemnitee
not materially misleading, in connection with the request for indemnification
or (b) a prohibition of such indemnification under applicable law.
12
Section 5.3 Company Bound by the Agreement. The Company shall be
precluded from asserting in any judicial proceeding or arbitration commenced
pursuant to this Article V that the procedures and presumptions of this
Agreement are not valid, binding and enforceable and shall stipulate in any
such court or before any such arbitrator that the Company is bound by all the
provisions of this Agreement.
Section 5.4 Indemnitee Entitled to Expenses of Judicial
Proceeding. If Indemnitee seeks a judicial adjudication of or an award in
arbitration to enforce his rights under, or to recover damages for breach of,
this Agreement, Indemnitee shall be entitled to recover from the Company, and
the Company shall indemnify Indemnitee against, any and all expenses (of the
types described in the definition of Expenses in Article I) actually and
reasonably incurred by him in such judicial adjudication or arbitration but
only if Indemnitee prevails therein. If it shall be determined in such
judicial adjudication or arbitration that Indemnitee is entitled to receive
part but not all of the indemnification or advancement of expenses or other
benefit sought, the expenses incurred by Indemnitee in connection with such
judicial adjudication or arbitration shall be equitably allocated between the
Company and Indemnitee. Notwithstanding the foregoing, if a Change in Control
shall have occurred, Indemnitee shall be entitled to indemnification under this
Section 5.5 regardless of whether Indemnitee ultimately prevails in such
judicial adjudication or arbitration.
ARTICLE VI
CONTRIBUTION
Section 6.1 Contribution Payment. To the extent the
indemnification provided for under any provision of this Agreement is
determined (in the manner hereinabove provided) not to be permitted under
applicable law, then in the event Indemnitee was, is, or becomes a party to or
witness or other participant in, or is threatened to be made a party to or
witness or other participant in, a Proceeding by reason of (or arising in part
out of) Indemnitee's Corporate Status, the Company, in lieu of indemnifying
Indemnitee, shall contribute to the amount of any and all Expenses, judgments,
fines, or penalties assessed against or incurred or paid by Indemnitee on
account of such Proceeding and any and all amounts paid in settlement of that
Proceeding (including all interest, assessments, and other charges paid or
payable in connection with or in respect of such Expenses, judgments, fines,
penalties, or amounts paid in settlement) for which such indemnification is not
permitted ("Contribution Amounts"), in such proportion as is appropriate to
reflect the relative fault with respect to the subject matter of the Proceeding
giving rise to the Contribution Amounts of Indemnitee, on the one hand, and of
the Company and any and all other parties (including officers and directors of
the Company other than Indemnitee) who may be at fault with respect to such
matter (collectively, including the Company, the "Third Parties") on the other
hand.
13
Section 6.2 Relative Fault. The relative fault of the Third
Parties and the Indemnitee shall be determined (i) by reference to the relative
fault of Indemnitee as determined by the court or other governmental agency
assessing the Contribution Amounts or (ii) to the extent such court or other
governmental agency does not apportion relative fault, by the Independent
Counsel (or such other party which makes a determination under Article IV after
giving effect to, among other things, the relative intent, knowledge, access to
information, and opportunity to prevent or correct the subject matter of the
Proceedings and other relevant equitable considerations of each party. The
Company and Indemnitee agree that it would not be just and equitable if
contribution pursuant to this Section 6.2 were determined by pro rata
allocation or by any other method of allocation which does take account of the
equitable considerations referred to in this Section 6.2.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Non-Exclusivity. The rights of Indemnitee to receive
indemnification and advancement of Expenses under this Agreement shall be in
addition to, and shall not be deemed exclusive of, any other rights Indemnitee
shall under the DGCL or other applicable law, the charter or bylaws of the
Company, any other agreement, vote of stockholders or a resolution of
directors, or otherwise. No amendment or alteration of the charter or bylaws
of the Company or any provision thereof shall adversely affect Indemnitee's s
rights hereunder and such rights shall be in addition to any rights Indemnitee
may have under the charter, Bylaws and the DGCL or other applicable law. To the
extent that there is a change in the DGCL or other applicable law (whether by
statute or judicial decision) that allows greater indemnification by agreement
than would be afforded currently under the Corporation's s charter or bylaws
and this Agreement, it is the intent of the parties hereto that the Indemnitee
shall enjoy by virtue of this Agreement the greater benefit so afforded by such
change.
Section 7.2 Insurance and Subrogation.
(a) To the extent that the Company maintains an insurance
policy or policies providing liability insurance for directors,
officers, employees, agents or fiduciaries of the Company or for
individuals serving at the request of the Company as directors,
officers, partners, venturers, proprietors, trustees, employees,
agents, fiduciaries or similar functionaries of another foreign or
domestic corporation, partnership, joint venture, sole proprietorship,
trust, employee benefit plan or other enterprise, Indemnitee shall be
covered by such policy or policies in accordance with its or their
terms to the maximum extent of the coverage available for any such
director, officer, employee, agent or fiduciary under such policy or
policies.
(b) In the event of any payment by the Company under this
Agreement, the Company shall be subrogated to the extent of such
payment to all of the rights of recovery of Indemnitee, who shall
execute all papers required and take all action necessary to secure
such rights, including execution of such documents as are necessary to
enable the Company to bring suit to enforce such rights.
14
(c) The Company shall not be liable under this Agreement
to make any payment of amounts otherwise indemnifiable hereunder if
and to the extent that Indemnitee has otherwise actually received such
payment under the Corporation's s charter or bylaws or any insurance
policy, contract, agreement or otherwise.
Section 7.3 Self Insurance of the Company; Other Arrangements.
The parties hereto recognize that the Company may, but is not required to,
procure or maintain insurance or other similar arrangements, at its expense, to
protect itself and any person, including the Indemnitee, who is or was a
director, officer, employee, agent or fiduciary of the Company or who is or was
serving at the request of the Company as a director, officer, partner,
venturer, proprietor, trustee, employee, agent, fiduciary or similar
functionary of another foreign or domestic corporation, partnership, joint
venture, sole proprietorship, trust, employee benefit plan or other enterprise
against any expense, liability or loss asserted against or incurred by such
person, in such a capacity or arising out of his status as such a person,
whether or not the Company would have the power to indemnify such person
against such expense or liability or loss.
In considering the cost and availability of such insurance, the
Company (through the exercise of the business judgment of its directors and
officers) may, from time to time, purchase insurance which provides for certain
(i) deductibles, (ii) limits on payments required to be made by the insurer or
(iii) coverage which may not be as comprehensive as that previously included in
insurance purchased by the Company or its predecessors. The purchase of
insurance with deductibles, limits on payments and coverage exclusions, even if
in the best interest of the Company, may not be in the best interest of the
Indemnitee. As to the Company, purchasing insurance with deductibles, limits
on payments and coverage exclusions is similar to the Corporation's s practice
of self-insurance in other areas. In order to protect Indemnitee who would
otherwise be more fully or entirely covered under such policies, the Company
shall, to the maximum extent permitted by applicable law, indemnify and hold
Indemnitee harmless to the extent (i) of such deductibles, (ii) of amounts
exceeding payments required to be made by an insurer or (iii) that prior
policies of officer's s and director's s liability insurance held by the
Company or its predecessors would have provided for payment to Indemnitee, if
by reason of his Corporate Status he is or is threatened to be made a party to
any Proceeding. The obligation of the Company in the preceding sentence shall
be without regard to whether the Company would otherwise be required to
indemnify such officer or director under the other provisions of this
Agreement, or under any law, agreement, vote of stockholders or directors or
other arrangement. Without limiting the generality of any provision of this
Agreement, the procedures in Article IV hereof shall, to the extent applicable,
be used for determining entitlement to indemnification under this Section 7.3.
Section 7.4 Certain Settlement Provisions. The Company shall
have no obligation to indemnify Indemnitee under this Agreement for amounts
paid in settlement of a Proceeding or Claim without the Corporation's s prior
written consent. The Company shall not settle any Proceeding or Claim in any
manner that would impose any fine or other obligation on Indemnitee without
Indemnitee's s prior written consent. Neither the Company nor Indemnitee shall
unreasonably withhold their consent to any proposed settlement.
15
Section 7.5 Exculpation of Directors. If Indemnitee is or was a
director of the Company, he shall not in that capacity be liable to the Company
or its stockholders for monetary damages for an act or omission in Indemnitee's
s capacity as a director, except that Indemnitee's s liability shall not be
eliminated or limited for: (a) any breach of Indemnitee's s duty of loyalty to
the Company or its stockholders; (b) any acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of the law; (c) a
transaction from which Indemnitee received an improper benefit, whether or not
the benefit resulted from an action taken within the scope of Indemnitee's s
office; or (d) an act or omission for which the liability of Indemnitee is
expressly provided for by statute.
Section 7.6 Duration of Agreement. This Agreement shall continue
for so long as Indemnitee serves as a director, officer, employee, agent or
fiduciary of the Company or, at the request of the Company, as a director,
officer, partner, venturer, proprietor, trustee, employee, agent, fiduciary or
similar functionary of another foreign or domestic corporation, partnership,
joint venture, sole proprietorship, trust, employee benefit plan or other
enterprise, and thereafter shall survive until and terminate upon the later to
occur of: (a) the expiration of 20 years after the latest date that Indemnitee
shall have ceased to serve in any such capacity; (b) the final termination of
all pending Proceedings in respect of which Indemnitee is granted rights of
indemnification or advancement of Expenses hereunder and of any proceeding
commenced by Indemnitee pursuant to Article IV relating thereto; or (c) the
expiration of all statutes of limitation applicable to possible Claims arising
out of Indemnitee's s Corporate Status.
Section 7.7 Notice by Each Party. Indemnitee shall promptly
notify the Company in writing upon being served with any summons, citation,
subpoena, complaint, indictment, information or other document or communication
relating to any Proceeding or Claim for which Indemnitee may be entitled to
indemnification or advancement of Expenses hereunder; provided, however, that
any failure of Indemnitee to so notify the Company shall not adversely affect
Indemnitee's s rights under this Agreement except to the extent the Company
shall have been materially prejudiced as a direct result of such failure. The
Company shall promptly notify Indemnitee in writing as to the pendency of any
Proceeding or Claim that may involve a claim against the Indemnitee for which
Indemnitee may be entitled to indemnification or advancement of Expenses
hereunder.
Section 7.8 Amendment. This Agreement may not be modified or
amended except by a written instrument executed by or on behalf of each of the
parties hereto.
Section 7.9 Waivers. The observance of any term of this
Agreement may be waived (either generally or in a particular instance and
either retroactively or prospectively) by the party entitled to enforce such
term only by a writing signed by the party against which such waiver is to be
asserted. Unless otherwise expressly provided herein, no delay on the part of
any party hereto in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any waiver on the part of any party
hereto of any right, power or privilege hereunder operate as a waiver of any
other right, power or privilege hereunder nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder.
16
Section 7.10 Entire Agreement. This Agreement and the documents
expressly referred to herein constitute the entire agreement between the
parties hereto with respect to the matters covered hereby, and any other prior
or contemporaneous oral or written understandings or agreements with respect to
the matters covered hereby are expressly superseded by this Agreement.
Section 7.11 Severability. If any provision of this Agreement
(including any provision within a single section, paragraph or sentence) or the
application of such provision to any person or circumstance, shall be
judicially declared to be invalid, unenforceable or void, such decision will
not have the effect of invalidating or voiding the remainder of this Agreement
or affect the application of such provision to other persons or circumstances,
it being the intent and agreement of the parties that this Agreement shall be
deemed amended by modifying such provision to the extent necessary to render it
valid, legal and enforceable while preserving its intent, or if such
modification is not possible, by substituting therefor another provision that
is valid, legal and unenforceable and that achieves the same objective. Any
such finding of invalidity or unenforceability shall not prevent the
enforcement of such provision in any other jurisdiction to the maximum extent
permitted by applicable law.
Section 7.12 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given upon (a) transmitter's
s confirmation of a receipt of a facsimile transmission, (b) confirmed delivery
of a standard overnight courier or when delivered by hand or (c) the expiration
of five business days after the date mailed by certified or registered mail
(return receipt requested), postage prepaid, to the parties at the following
addresses (or at such other addresses for a party as shall be specified by like
notice):
If to the Company, to it at:
Pioneer Natural Resources Company
0000 Xxxxxxxx Xxxxxx Xxxx
0000 Xxxxx X'Xxxxxx Xxxx.
Xxxxxx, Xxxxx 00000-0000
Attn: Chief Financial Officer
If to Indemnitee, to him at:
Xxxxx X. Xxxxxxxxx
Pioneer Natural Resources Company
0000 Xxxxxxxx Xxxxxx Xxxx
0000 X. X'Xxxxxx Xxxx.
Xxxxxx, Xxxxx 00000
or to such other address or to such other individuals as any party shall have
last designated by notice to the other parties. All notices and other
communications given to any party in accordance with
17
the provisions of this Agreement shall be deemed to have been given when
delivered or sent to the intended recipient thereof in accordance with the
provisions of this Section 7.12.
Section 7.13 Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of Delaware without
regard to the principles of conflict of laws.
18
Section 7.14 Certain Construction Rules.
(a) The article and section headings contained in this
Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement. As used in this
Agreement, unless otherwise provided to the contrary, all references
to days shall be deemed references to calendar days and any reference
to a "Section" or "Article" shall be deemed to refer to a section or
article of this Agreement. The words "hereof," "herein" and
"hereunder" and words of similar import referring to this Agreement
refer to this Agreement as a whole and not to any particular provision
of this Agreement. Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation." Unless otherwise
specifically provided for herein, the term "or" shall not be deemed to
be exclusive. Whenever the context may require, any pronoun used in
this Agreement shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns, pronouns and verbs shall
include the plural and vice versa.
(b) For purposes of this Agreement, references to "other
enterprises" shall include employee benefit plans; references to
"fines" shall include any excise taxes assessed on a person with
respect to any employee benefit plan; references to "serving at the
request of the Company" shall include any service as a director,
officer, employee or agent of the Company which imposes duties on, or
involves services by, such director, nominee, officer, employee or
agent with respect to an employee benefit plan, its participants or
beneficiaries.
Section 7.15 Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed to be an original and all
of which together shall be deemed to be one and the same instrument,
notwithstanding that both parties are not signatories to the original or same
counterpart.
Section 7.16 Certain Persons Not Entitled to Indemnification.
Notwithstanding any other provision of this Agreement, Indemnitee shall not be
entitled to indemnification or advancement of Expenses hereunder with respect
to any Proceeding or any Claim, issue or matter therein, brought or made by
such person against the Company, except as specifically provided in Article III
or Article IV hereof.
Section 7.17 Indemnification for Negligence, Gross Negligence,
etc. Without limiting the generality of any other provision hereunder, it is
the express intent of this Agreement that Indemnitee be indemnified and
Expenses be advanced regardless of Indemnitee's s acts of negligence, gross
negligence, intentional or willful misconduct to the extent that
indemnification and advancement of Expenses is allowed pursuant to the terms of
this Agreement and under applicable law.
Section 7.18 Mutual Acknowledgment. Both the Company and
Indemnitee acknowledge that in certain instances, applicable law or public
policy may prohibit the Company from indemnifying the directors, officers,
employees, agents or fiduciaries of the Company under this Agreement or
otherwise. Indemnitee understands and acknowledges that the Company has
undertaken or may be required in the future to undertake with the Securities
and Exchange
19
Commission to submit the question of indemnification to a court in certain
circumstances for a determination of the Corporation's s right under public
policy to indemnify Indemnitee.
Section 7.19 Enforcement. The Company agrees that its execution
of this Agreement shall constitute a stipulation by which it shall be
irrevocably bound in any court or arbitration in which a proceeding by
Indemnitee for enforcement of his rights hereunder shall have been commenced,
continued or appealed, that its obligations set forth in this Agreement are
unique and special, and that failure of the Company to comply with the
provisions of this Agreement will cause irreparable and irremediable injury to
Indemnitee, for which a remedy at law will be inadequate. As a result, in
addition to any other right or remedy he may have at law or in equity with
respect to breach of this Agreement, Indemnitee shall be entitled to injunctive
or mandatory relief directing specific performance by the Company of its
obligations under this Agreement.
Section 7.20 Successors and Assigns. All of the terms and
provisions of this Agreement shall be binding upon, shall inure to the benefit
of and shall be enforceable by the parties hereto and their respective
successors, assigns, heirs, executors, administrators, legal representatives.
Section 7.21 Period of Limitations. No legal action shall be
brought and no cause of action shall be asserted by or on behalf of the Company
or any affiliate of the Company against Indemnitee or Indemnitee's s spouse,
heirs, executors, or personal or legal representatives after the expiration of
three years from the date of accrual of that cause of action, and any claim or
cause of action of the Company or its affiliate shall be extinguished and
deemed released unless asserted by the timely filing of a legal action within
that three-year period; provided, however, that, if any shorter period of
limitations is otherwise applicable to any such cause of action, the shorter
period shall govern.
20
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered to be effective as of the date first above written.
PIONEER NATURAL RESOURCES COMPANY
By: /s/ Xxxx X. Xxxxxxx
---------------------------------
Name: Xxxx X. Xxxxxxx
Title: Executive Vice President
INDEMNITEE:
/s/ Xxxxx X. Xxxxxxxxx
-------------------------------------
Xxxxx X. Xxxxxxxxx
21
SCHEDULE I
I. Xxx Xxxxxxx
Xxxxxxx X. Xxxx
Xxxxxx X. Xxxxxxxxxx
Xxx Xxxxxxx
Xxxx X. Xxxxxxx
Xxx X. Xxxx
M. Xxxxxxx Xxxxx
X. Xxxxxxxx Xxxxxxx
Xxxx X. Xxxxxxxxxx
Xxxxxxx X. Xxxxx
Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxx
Xxxxx Xxxxxxx
Xxxxxxx X. Xxxxxxxxx
Xxxxxxx X. Xxxxxx, Xx.
Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxxxxxx
Xxxxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxxx