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EXHIBIT 10.6
INDEMNITY AGREEMENT
This Indemnity Agreement (the "Agreement") dated as of _______, 2000 by
and between Encore Acquisition Company, a Delaware corporation (the
"Indemnitor") and ________ (the "Indemnitee").
RECITALS
The Indemnitee is a director and/or officer of the Indemnitor and/or an
Affiliate Indemnitee (as hereinafter defined). The Indemnitor and the Indemnitee
recognize the increased risk of litigation and other claims being asserted
against directors and officers in today's environment.
The Bylaws of the Indemnitor requires the Indemnitor to indemnify its
directors and officers as currently provided therein, and the Indemnitee has
been serving and continues to serve as a director and/or officer of the
Indemnitor in part in reliance on such provisions. The Bylaws of the Indemnitor
permit the Indemnitor to purchase and maintain insurance or to furnish similar
protection or make other arrangements (any such insurance, protection or
arrangement, an "Indemnification Arrangement") on behalf of the Indemnitee
against personal liability (including, but not limited to, providing for
Advanced Amounts as hereinafter defined) asserted against him or incurred by or
on behalf of him in such capacity as a director or officer of the Indemnitor or
as an Affiliate Indemnitee, or arising out of his status as such, whether or not
the Indemnitor would have the power to indemnify him against such liability
under the provisions of this Agreement or under the Delaware General Corporation
Law (the "DGCL"), as it may then be in effect.
In part to provide the Indemnitee with specific contractual assurance
of substantial protection against personal liability (regardless of, among other
things, any amendment to or revocation of the aforementioned provisions of the
Indemnitor's Bylaws or any change in the composition of the Indemnitor's Board
of Directors or control of the Indemnitor), the Indemnitor desires to enter into
this Agreement. DGCL Section 145(f) expressly recognizes that the
indemnification provisions of the DGCL are not exclusive of any other rights to
which a person seeking indemnification may be entitled under the Certificate of
Incorporation or Bylaws of the Indemnitor, or an agreement providing for
indemnification, or a resolution of stockholders or directors, or otherwise, and
the Bylaws of the Indemnitor expressly recognize that the indemnification
provisions of the Bylaws of the Indemnitor shall not be deemed exclusive of, and
shall not affect, any other rights to which a person seeking indemnification may
be entitled under any agreement, and this Agreement is being entered into
pursuant to the Bylaws of the Indemnitor, as permitted by the DGCL, and has been
authorized by the stockholders of the Indemnitor.
In order to induce the Indemnitee to serve as a director and/or officer
of the Indemnitor and in consideration of the Indemnitee's so servicing, the
Indemnitor desires to hold harmless and indemnify the Indemnitee and to make
arrangements pursuant to which the Indemnitee may be advanced or reimbursed
expenses incurred by the Indemnitee in certain proceedings, in every case to the
fullest extent authorized or permitted by the DGCL, or any other applicable law,
or by any amendment thereof or other statutory provisions authorizing or
permitting such indemnification which are adopted after the date hereof (but, in
the case of any such amendment,
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only to the extent that such amendment permits the Indemnitor to provide broader
indemnification rights than the DGCL, or other applicable law, permitted the
Indemnitor to provide prior to such amendment).
NOW THEREFORE, in consideration of the foregoing recitals and of the
Indemnitee's continuing to serve the Indemnitor as a director and/or officer,
the parties agree as follows:
1. Indemnification. To the fullest extent allowed by law, the
Indemnitor shall hold harmless and indemnify the Indemnitee, his executors,
administrators or assigns against any and all expenses, liabilities and losses
(including, without limitation, investigation expenses, expert witnesses' and
attorneys' fees and expenses, judgments, penalties, fines, amounts paid or to be
paid in settlement any interest, assessments, or other charges imposed thereon
and any federal, state, local or foreign taxes imposed as a result of actual or
deemed receipt of any payment hereunder) actually incurred by the Indemnitee
(net of any related insurance proceeds or other amounts received by the
Indemnitee or paid by or on behalf of an Indemnitor on the Indemnitee's behalf
in compensation of such expenses, liabilities or losses) in connection with any
actual or threatened action, suit or proceeding, whether civil, criminal,
administrative or investigative or in arbitration, to which the Indemnitee is a
party or participant or is threatened to be made a party or participant (a
"Proceeding"), as a plaintiff, defendant, respondent, witness or otherwise,
based upon, arising from, relating to or by reason of the fact that the
Indemnitee: (a) is, was, shall be or shall have been a director and/or officer
of the Indemnitor; or (b) is or was serving, shall serve, or shall have served
at the request of the Indemnitor as a director, officer, partner, trustee,
fiduciary, employee or agent ("Affiliate Indemnitee") of another foreign or
domestic corporation or non-profit corporation, cooperative, partnership, joint
venture, trust, employee benefit plan, or other incorporated or unincorporated
enterprise (each, a "Company Affiliate"); or arising from or relating to any
action or omission to act taken by the Indemnitee in any of the foregoing
capacities; provided, however, that, except as provided in Section 9(b) hereof,
the Indemnitor shall indemnify the Indemnitee in connection with a Proceeding
initiated by the Indemnitee only if such proceeding (or part thereof) was
authorized by a two-thirds vote of the Board of Directors of the Indemnitor.
The Indemnitee shall be presumed to be entitled to such indemnification
under this Agreement upon submission of a written claim pursuant to Section 4
hereof. Thereafter, the Indemnitor shall have the burden of proof to overcome
the presumption that the Indemnitee is so entitled. Such presumption shall only
be overcome by a judgment or other final adjudication, after all appeals and all
time for appeals has expired ("Final Determination"), which is adverse to the
Indemnitee and which establishes (i) that his acts were committed in bad faith,
or were the result of active and deliberate dishonesty, and were material to the
cause of action so adjudicated and (ii) that the Indemnitee in fact personally
gained a financial profit or other advantage to which he was not legally
entitled. If the Indemnitee is not wholly successful in any 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 Indemnitor agrees to indemnify
the Indemnitee to the maximum extent permitted by law against all losses and
expenses incurred by the Indemnitee in connection with each successfully
resolved claim, issue or matter. Neither the failure of the Indemnitor
(including its Board of Directors, its legal counsel or its stockholders) to
have made a determination prior to the commencement of such Proceeding that
indemnification of the Indemnitee is proper in the circumstances because such
person has met the applicable standard of conduct set forth in the DGCL, nor an
actual determination by the Indemnitor (including its
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Board of Directors, its legal counsel or its stockholders) that the Indemnitee
has not met the applicable standard of conduct, shall be a defense to the action
or create a presumption that the Indemnitee has not met the applicable standard
of conduct. The purchase, establishment or maintenance of any Indemnification
Arrangement shall not in any way diminish, restrict, limit or adversely affect
the rights and obligations of the Indemnitor or of the Indemnitee under this
Agreement, except as expressly provided herein, and the execution and delivery
of this Agreement by the Indemnitor and the Indemnitee shall not in any way
diminish, restrict, limit or adversely affect the Indemnitee's right to
indemnification from the Indemnitor or any other party or parties under any
other Indemnification Arrangement, the Certificate of Incorporation or Bylaws of
the Indemnitor, or the DGCL.
2. Period of Limitations. No legal action shall be brought and no cause
of action shall be asserted by or on behalf of the Indemnitor or any affiliate
of the Indemnitor against the Indemnitee, Indemnitee's spouse, heirs, executors,
or personal or legal representatives after the expiration of two years from the
date of accrual of such cause of action, or such longer period as may be
required by applicable law under the circumstances. Any claim or cause of action
of the Indemnitor or its affiliates shall be extinguished and deemed released
unless asserted by the timely filing of a legal action within such period;
provided, however, that if any shorter period of limitations is otherwise
applicable to any such cause of action the shorter period shall govern.
3. Insurance. Subject only to the provisions of this Section 3, as long
as the Indemnitee shall continue to serve as a director and/or officer of the
Indemnitor (or shall continue at the request of the Indemnitor to serve as an
Affiliate Indemnitee) and, thereafter, as long as the Indemnitee shall be
subject to any possible Proceeding by reason of the fact that the Indemnitee was
a director and/or officer of the Indemnitor (or served in any of said other
capacities), the Indemnitor shall, unless no such policies are available in any
market, purchase and maintain in effect for the benefit of the Indemnitee one or
more valid, binding and enforceable policies (the "Insurance Policies") of the
directors' and officers' liability insurance ("D&O Insurance") providing
adequate liability coverage for the Indemnitee's acts as a director and/or
officer of the Indemnitor or as an Affiliate Indemnitee. The Indemnitor shall
promptly notify the Indemnitee of any lapse, amendment or failure to renew said
policy or policies or any provision thereof relating to the extent or nature of
coverage provided thereunder. In the event the Indemnitor does not purchase and
maintain in effect said policy or policies of D&O Insurance pursuant to the
provisions of this Section 3, the Indemnitor shall, in addition to and not in
limitation of the other rights granted the Indemnitee under this Agreement, hold
harmless and indemnify the Indemnitee to the full extent of coverage which would
otherwise have been provided for the benefit of the Indemnitee pursuant to the
Insurance Policies.
4. Claims for Payments. The Indemnitee shall have the right to receive
from the Indemnitor on demand or, at his option, to have the Indemnitor pay
promptly on his behalf, in advance of the Final Determination of a Proceeding,
all amounts payable by the Indemnitor pursuant to the terms of this Agreement as
corresponding amounts are expended or incurred by the Indemnitee in connection
with any Proceeding or otherwise (such amounts so expended or incurred being
referred to as "Advanced Amounts"). In making any claim for payment by the
Indemnitor of any amount, including any Advanced Amount, pursuant to this
Agreement, the Indemnitee shall submit to the Indemnitor a written request for
payment (a "Claim") which includes a schedule setting forth in reasonable detail
the dollar amount expended (or incurred or expected to be expended or incurred).
Each item on such schedule shall be supported by the xxxx,
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agreement, or other documentation relating thereto, a copy of which shall be
appended to the schedule as an exhibit.
Where the Indemnitee is requesting Advanced Amounts, the Indemnitee
must also provide an undertaking to repay such Advanced Amounts if a Final
Determination is made that the Indemnitee is not entitled to indemnification
hereunder.
5. Section 16(b) Liability. No Indemnitor shall be liable under this
Agreement to make any payment in connection with any claim made against the
Indemnitee for an accounting of profits made from the purchase or sale by the
Indemnitee of securities of the Indemnitor within the meaning of Section 16(b)
of the Securities Exchange Act of 1934, and amendments thereto, or similar
provisions of any state statutory law or common law.
6. Continuation of Indemnity. All agreements and obligations of the
Indemnitor contained herein shall continue during the period the Indemnitee is a
director and/or officer of the Indemnitor (or is serving at the request of the
Indemnitor as an Affiliate Indemnitee) and shall continue thereafter so long as
the Indemnitee shall be subject to any possible Proceeding by reason of the fact
that the Indemnitee was a director or officer of the Indemnitor or served as
such an Affiliate Indemnitee.
7. Successors; Binding Agreement. This Agreement shall be binding on,
and shall inure to the benefit of and be enforceable by, the Indemnitor's
successors and assigns and by the Indemnitee's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
divisees and legatees. The Indemnitor shall require any successor or assignee
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Indemnitor, by
written agreement in form and substance reasonably satisfactory to the
Indemnitor and to the Indemnitee, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Indemnitor would be
required to perform if no such succession or assignment had taken place.
8. Notification and Defense of Claim. Promptly after receipt by the
Indemnitee of notice of the commencement of any Proceeding, the Indemnitee
shall, if a claim in respect thereof is to be made against the Indemnitor under
this Agreement, notify the Indemnitor of the commencement thereof, but the
failure to so notify the Indemnitor will not relieve the Indemnitor from any
liability which it may have to the Indemnitee. With respect to any such
Proceeding:
(i) The Indemnitor shall be entitled to participate therein at its
own expense;
(ii) Except with prior written consent of the Indemnitee, the
Indemnitor shall not be entitled to assume the defense of any
Proceeding; and
(iii) The Indemnitor shall not settle any Proceeding in any manner
which would impose any penalty or limitation on the Indemnitee without
the Indemnitee's prior written consent.
The Indemnitee shall not settle any Proceeding with respect to which the
Indemnitee has received indemnified amounts or Advanced Amounts without the
Indemnitor's prior written consent, nor will the Indemnitee unreasonably
withhold consent to any proposed settlement.
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9. Enforcement. (a) The Indemnitor has entered into this Agreement and
assumed the obligations imposed on the Indemnitor hereby in order to induce the
Indemnitee to act as a director and/or officer of the Indemnitor or as an
Affiliate Indemnitee and acknowledges that the Indemnitee is relying upon this
Agreement in continuing in such capacity.
(b) All expenses incurred by the Indemnitee in connection with the
preparation and submission of the Indemnitee's request for indemnification
hereunder shall be borne by the Indemnitor. In the event the Indemnitee has
requested payment of any amount under this Agreement and has not received
payment thereof within thirty (30) days of such request, the Indemnitee may
bring any action to enforce rights or collect moneys due under this Agreement,
and, if the Indemnitee is successful in such action, the Indemnitor shall
reimburse the Indemnitee for all of the Indemnitee's fees and expenses in
bringing and pursuing such action. If it is determined that the Indemnitee is
entitled to indemnification for part (but not all) of the indemnification so
requested, expenses incurred in seeking enforcement of such partial
indemnification shall be reasonably prorated among the claims, issues or matters
for which the Indemnitee is not so entitled. The Indemnitee shall be entitled to
the advancement of such amounts to the full extent contemplated by Section 4
hereof in connection with such Proceeding.
10. Severability. If any provision or provisions of this Agreement
shall be held to be invalid, illegal or unenforceable for any reason whatsoever,
(i) the validity, legality and enforceability of the remaining provisions of
this Agreement (including, without limitation, all portions of any sections or
subsections of this Agreement containing any such provision held to be invalid,
illegal or unenforceable) shall not in any way be affected or impaired thereby,
and (ii) to the fullest extent possible, the provisions of any section or
subsections of this Agreement containing any such provisions held to be invalid,
illegal or unenforceable shall be construed so as to give effect to the intent
of the parties that the Indemnitor provide protection to the Indemnitee to the
fullest extent enforceable.
11. Miscellaneous. No provisions of this Agreement may be modified,
waived or discharged unless such modification, waiver or discharge is agreed to
in writing signed by the Indemnitee and an officer of the Indemnitor designated
by the Board of Directors of the Indemnitor. No waiver by either party at any
time of any breach by the other party of, or of compliance with, any condition
or provision of this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same
time or at any prior or subsequent time. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of Delaware, without giving effect to the principles of conflicts of
laws thereof. The Indemnitee may bring an action seeking resolution of disputes
or controversies arising under, or in any way related to, this Agreement in the
state or federal court jurisdiction in which the Indemnitee resides or in which
his place of business is located and in any related appellate courts, and the
Indemnitor hereby consents to the jurisdiction of such courts and to such venue.
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12. Notices. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, as follows:
If to the Indemnitee:
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If to the Indemnitor: Encore Acquisition Partners, Inc.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
Attn:
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or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
13. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
14. Effectiveness. This Agreement shall be effective as of the day and
year first above written.
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed as of the day and year first above written.
ENCORE ACQUISITION COMPANY
By:
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Name:
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Title:
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INDEMNITEE
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Name:
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Title:
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