INDEMNIFICATION AGREEMENT
THIS
INDEMNIFICATION AGREEMENT
(this
“Agreement”)
is
effective as of July __, 2005 and is by and between Newfield Exploration
Company, a Delaware corporation (the “Company”),
and
the undersigned director or officer of the Company (“Indemnitee”).
WHEREAS,
the
Company’s Amended and Restated Bylaws (as the same have been and may be amended
from time to time, the “Bylaws”)
provide for indemnification of the Company’s directors and officers to the
maximum extent permitted by the General Corporation Law of the State of Delaware
(the “DGCL”);
WHEREAS,
the
Company’s Second Restated Certificate of Incorporation (as the same has been and
may be amended from time to time, the “Charter”)
provides for indemnification of the Company’s directors and officers to the
maximum extent permitted by law;
WHEREAS,
the
Board of Directors of the Company (the “Board”)
has
determined that, in order to attract and retain qualified individuals to serve
as directors and officers of the Company, the Company will attempt to maintain
on an ongoing basis, at its sole expense, liability insurance to protect such
persons from certain liabilities (“D&O
Insurance”);
WHEREAS,
the
Company believes, in light of current market conditions and trends, that D&O
Insurance may be available to it in the future only at higher premiums and
with
more exclusions;
WHEREAS,
the
Charter, the Bylaws and the DGCL contemplate that contracts may be entered
into
with respect to indemnification of directors and officers;
WHEREAS,
it is
reasonable, prudent and necessary for the Company to obligate itself
contractually to indemnify Indemnitee so that Indemnitee may serve or continue
to serve the Company free from undue concern that Indemnitee will not be
adequately protected; and
WHEREAS,
Indemnitee is willing to serve or continue to serve the Company on the condition
that Indemnitee be so indemnified;
NOW,
THEREFORE,
in
consideration of the premises and the covenants contained herein, the Company
and Indemnitee do hereby agree as follows:
1. Definitions.
The
following capitalized terms shall have the meanings given to them
below:
“Capacity”
means,
with respect to an Enterprise, serving such Enterprise in any capacity,
including as a director, officer, partner (limited or general), venturer,
proprietor, trustee, employee, agent, manager, member, fiduciary, committee
member, chairperson, sponsor or functionary.
“Covered
Proceeding”
means
any Proceeding, whether brought by or in the right of the Company or otherwise,
in which Indemnitee is or will be involved as a party, as a witness or
otherwise, because (a) Indemnitee is or previously was a director or officer
of
the Company, (b) of any action taken by Indemnitee or of any inaction on the
part of Indemnitee while so acting as a director or officer of the Company
or
(c) because Indemnitee is or previously was, at the request of the Company,
serving another Enterprise in any Capacity; provided
that any
Proceeding that is brought by Indemnitee against the Company or any of its
directors or officers, other than a Proceeding brought by Indemnitee to enforce
Indemnitee’s rights under this Agreement, shall not be deemed a “Covered
Proceeding” without prior approval by a majority of the Board.
“Enterprise”
means a
corporation, partnership (general or limited), limited liability company, joint
venture, sole proprietorship, trust, employee benefit plan, committee or other
similar enterprise, entity, organization, association, venture or
group.
“Expenses”
means
any judgments, fines and penalties (including any excise tax assessed with
respect to an employee benefit plan) against Indemnitee in connection with
a
Covered Proceeding; amounts paid by Indemnitee in settlement of a Covered
Proceeding and all attorneys’ fees and disbursements, accountants’ fees, private
investigation fees and disbursements, retainers, court costs, transcript costs,
fees of experts, fees and expenses of witnesses, travel expenses, duplicating
costs, printing and binding costs, telephone charges, postage, delivery service
fees and all other disbursements and expenses reasonably incurred by or for
Indemnitee in connection with prosecuting, defending, preparing to prosecute
or
defend, investigating or being or preparing to be a witness in, a Covered
Proceeding or to establish Indemnitee’s right of entitlement to indemnification
for any of the foregoing.
“Proceeding”
means
any threatened, pending or completed action, suit, inquiry or proceeding,
whether of a civil, criminal, administrative, arbitrative or investigative
nature.
“Substantiating
Documentation”
means
copies of bills, invoices or receipts for costs incurred by or for Indemnitee,
or copies of court or agency orders or decrees or settlement agreements, as
the
case may be, accompanied by a sworn statement from Indemnitee that such bills,
invoices, receipts, court or agency orders or decrees or settlement agreements
represent costs or liabilities meeting the definition of
“Expenses.”
2. Indemnity of Director or Officer.
The
Company hereby agrees to hold harmless and indemnify Indemnitee against Expenses
to the fullest extent permitted by law. The meaning of the phrase “to the
fullest extent permitted by law” includes (a) to the fullest extent permitted by
any 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 (b) 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. Any amendment, alteration or repeal of the DGCL that
adversely affects any right of Indemnitee shall be prospective only and shall
not limit or eliminate any such right with respect to any Proceeding involving
any occurrence or alleged occurrence of any action or omission to act that
took
place prior to such amendment or repeal.
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3. Additional
Indemnity.
The
Company hereby further agrees to hold harmless and indemnify Indemnitee against
Expenses provided that Indemnitee (a) acted in good faith, (b) acted in a manner
he or she reasonably believed to be in or not opposed to the best interests
of
(i) in the case of an employee benefit plan, the participants or beneficiaries
of such plan and (ii) in all other cases, the Company and (c) in the case of
a
criminal Proceeding, had no reasonable cause to believe that his or her conduct
was unlawful. The termination of any Proceeding by judgment, order of the court,
settlement, conviction or upon a plea of nolo contendere, or its equivalent,
shall not, of itself, create a presumption that Indemnitee did not (x) act
in
good faith, (y) act in a manner that he or she reasonably believed to be in
or
not opposed to the best interests of the participants or beneficiaries of an
employee benefit plan or the Company, as applicable, or (z) have reasonable
cause to believe that his or her conduct was unlawful. The Company shall not
be
required to indemnify Indemnitee under this Agreement with regard to any
judicial award if the Company was not given a reasonable and timely opportunity,
at its expense, to participate in the defense of the underlying Covered
Proceeding.
4. Selection
of Counsel.
If the
Company is obligated to indemnify Indemnitee for Expenses with respect to a
Covered Proceeding (other than a Proceeding that is brought by Indemnitee (x)
against the Company or any of its directors or officers or (y) to enforce
Indemnitee’s rights under this Agreement), the Company shall be entitled to
assume the defense of such Covered Proceeding, with counsel approved by
Indemnitee (whose approval shall not be unreasonably withheld or delayed),
upon
the delivery to Indemnitee of written notice of its election so to do. After
delivery of such notice, approval of such counsel by Indemnitee and the
retention of such counsel by the Company, the Company will not be liable to
Indemnitee under this Agreement for any fees of counsel subsequently incurred
by
Indemnitee with respect to the same Covered Proceeding; provided
that (a)
Indemnitee shall have the right to employ his or her own separate counsel in
any
such Covered Proceeding at Indemnitee’s expense and (b) if (i) the employment of
separate counsel by Indemnitee has been previously authorized by the Company,
(ii) Indemnitee has reasonably concluded that there may be a conflict of
interest between the Company and Indemnitee in the conduct of any such defense
or (iii) the Company does not, in fact, employ counsel to assume the defense
of
such Covered Proceeding, then, in each such case, the Expenses of Indemnitee’s
separate counsel shall be subject to indemnification under this
Agreement.
5. Advancement
of Expenses.
Expenses
(other than judgments, penalties, fines and settlements) incurred by Indemnitee
shall be paid by the Company, in advance of the final disposition of a Covered
Proceeding, within 20 days after receipt of Indemnitee’s written request
accompanied by Substantiating Documentation and Indemnitee’s written affirmation
that he or she has met the standard of conduct for indemnification and a written
undertaking to repay such amount to the extent it is ultimately determined
that
Indemnitee is not entitled to such indemnification. No objections based on
or
involving the question whether any amount for which payment has been requested
meets the definition of “Expenses,” including any question regarding the
reasonableness of any such amount, shall be grounds for failure to advance
to
Indemnitee, or to reimburse Indemnitee for, the amount requested within such
20-day period, and the undertaking of Indemnitee set forth in Section 7 to
repay
any such amount to the extent it is ultimately determined that Indemnitee is
not
entitled to indemnification shall be deemed to include an undertaking to repay
any such amounts determined not to have met such definition.
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6. Right
to Indemnification Upon Application; Procedures.
Subject
to Section 5, any indemnification under this Agreement shall be made no later
than 30 days after receipt by the Company of the written request of Indemnitee,
accompanied by Substantiating Documentation, unless a determination is made
within such 30-day period by (a) the Board by a majority vote of a quorum
consisting of directors who are not or were not parties to the Covered
Proceeding, (b) a committee of the Board designated by majority vote
of the
Board, even though less than a quorum, (c) if there are no such directors,
or if
such directors so direct, independent legal counsel in a written opinion or
(d)
the stockholders of the Company, that Indemnitee has not met the relevant
standards for indemnification set forth in this Agreement.
The
right
to indemnification or advances as provided in this Agreement may be enforced
by
Indemnitee in any court of competent jurisdiction. The burden of proving that
indemnification or advancement is not required shall be on the Company. Neither
the failure of the Company (including the Board, any committee thereof,
independent legal counsel or the Company’s stockholders) to make a determination
prior to the commencement of a Proceeding as to whether Indemnitee has met
any
applicable standards of conduct and is entitled to indemnification nor an actual
determination by the Company (including the Board, any committee thereof,
independent legal counsel or the Company’s stockholders) that Indemnitee has not
met any applicable standards of conduct and is not entitled to indemnification,
shall be a defense to the Proceeding or create a presumption that Indemnitee
has
not met any applicable standard of conduct or is not entitled to
indemnification.
7. Undertaking
by Indemnitee.
Indemnitee hereby undertakes to repay to the Company (a) any advances of
Expenses pursuant to Section 5 and (b) any other Expenses paid to or on behalf
of Indemnitee hereunder, in each case to the extent that it is ultimately
determined that Indemnitee is not entitled to indemnification. As a condition
to
the advancement or payment of Expenses, Indemnitee shall, at the request of
the
Company, execute an acknowledgment that such advancement or payment is being
made pursuant to and is subject to the provisions of this
Agreement.
8. Indemnification
Hereunder Not Exclusive.
The
indemnification and advancement of Expenses as provided by this Agreement shall
not be deemed exclusive of any other rights to which Indemnitee may be entitled
under the Charter, the Bylaws, the DGCL, any D&O Insurance, any other
agreement or otherwise; provided,
however,
that
this Agreement supersedes all prior written indemnification agreements between
the Company (or any predecessor thereof) and Indemnitee with respect to the
subject matter hereof; and provided
further
that
Indemnitee shall reimburse the Company for amounts paid to him or her pursuant
to such other rights to the extent such payments duplicate any payments received
pursuant to this Agreement.
9. Continuation
of Indemnity.
All
agreements and obligations of the Company contained herein shall continue during
the period Indemnitee is a director or officer of the Company (or is or was
serving, at the request of the Company, another Enterprise in any Capacity)
and
shall continue thereafter indefinitely notwithstanding the fact that Indemnitee
has ceased to serve as a director or officer of the Company or to serve such
other Enterprise.
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10. Partial
Indemnification.
If
Indemnitee is entitled under any provision of this Agreement to indemnification
by the Company for a portion, but not the total amount, of Expenses, the Company
shall nevertheless indemnify Indemnitee for the portion of such Expenses with
respect to which Indemnitee is entitled to indemnification.
11. Settlement
of Claims; Opportunity to Defend.
The
Company shall not be required to indemnify Indemnitee under this Agreement
for
any amounts paid in settlement of any Covered Proceeding effected without the
Company’s written consent. The Company shall not settle any Covered Proceeding
in any manner that would impose any penalty or limitation on Indemnitee without
Indemnitee’s prior written consent. Neither the Company nor Indemnitee shall
unreasonably withhold or delay its or his or her consent to any such proposed
settlement. The Company shall not be required to indemnify Indemnitee under
this
Agreement with regard to any judicial award if the Company was not given a
reasonable and timely opportunity, at its expense, to participate in the defense
of the underlying Covered Proceeding.
12. Acknowledgements.
(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 or to continue to serve as a director or officer of the Company, and
acknowledges that Indemnitee is relying upon this Agreement in agreeing to
serve
or in continuing to serve as a director or officer of the Company.
(b) Both
the
Company and Indemnitee acknowledge that, in certain instances, federal law
or
public policy may override applicable state law and prohibit the Company from
indemnifying its directors and officers under this Agreement or otherwise.
For
example, the Company and Indemnitee acknowledge that (i) the Securities and
Exchange Commission (the “SEC”)
has
taken the position that indemnification is not permissible for liabilities
arising under certain federal securities laws and (ii) federal law prohibits
indemnification for certain ERISA violations. Indemnitee understands and
acknowledges that the Company has undertaken or may be required in the future
to
undertake with the SEC to submit in certain circumstances the question of
indemnification to a court for a determination of the Company’s right under
public policy to indemnify Indemnitee.
13. Enforcement. If
Indemnitee is required to commence a Proceeding to enforce rights or to collect
moneys due under this Agreement and is successful, such Proceeding shall be
a
“Covered Proceeding” and the Company shall indemnify Indemnitee for all of
Indemnitee’s Expenses in bringing and pursuing such Proceeding.
14. Exceptions.
Any
other
provision herein to the contrary notwithstanding, the Company shall not be
obligated pursuant to the terms of this Agreement to indemnify
Indemnitee:
(a) for
Expenses incurred by Indemnitee with respect to any Proceeding instituted by
Indemnitee to enforce or interpret this Agreement if it is determined by a
final
judgment or other final adjudication by a court of competent jurisdiction that
each of the material assertions made by Indemnitee in such Proceeding was not
made in good faith or was frivolous;
(b) for
Expenses to the extent paid directly to Indemnitee by an insurance carrier
pursuant to D&O Insurance maintained by the Company; or
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(c) for
profits recovered from Indemnitee under section 16(b) of the Exchange Act
arising from the purchase and sale (or the sale and purchase) by Indemnitee
of
securities of the Company or for any Expenses in connection
therewith.
15. Severability.
If
any
provision of this Agreement shall be held to be invalid, illegal or
unenforceable (a) the validity, legality and enforceability of the
remaining provisions of this Agreement shall not be in any way affected or
impaired thereby and (b) to the fullest extent possible, the provisions
of
this Agreement shall be construed so as to give effect to the intent manifested
by the provision held invalid, illegal or unenforceable. Each Section of this
Agreement is a separate and independent portion of this Agreement. If the
indemnification to which Indemnitee is entitled with respect to any aspect
of
any claim varies between two or more Sections of this Agreement, that Section
providing the most comprehensive indemnification shall apply.
16. Miscellaneous.
(a) Governing
Law.
This
Agreement and all acts and transactions pursuant hereto and the rights and
obligations of the parties hereto shall be governed, construed and interpreted
in accordance with the laws of the State of Delaware, without giving effect
to
principles of conflict of law.
(b) Entire
Agreement.
This
Agreement sets forth the entire agreement and understanding of the parties
relating to the subject matter hereof and merges all prior discussions between
them.
(c) Amendment;
Modification; Waiver.
No
amendment or modification of this Agreement, nor any waiver of any rights under
this Agreement, shall be effective unless in writing signed by the parties
to
this Agreement. No single waiver of any of the provisions of this Agreement
shall be deemed to or shall constitute, absent an express statement otherwise,
a
continuous waiver of such provision or a waiver of any other provision hereof
(whether or not similar).
(d) Failure
or Indulgence Not Waiver; Remedies Cumulative.
No
failure or delay on the part of any party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of this Agreement, nor shall any single or partial
exercise of any such right preclude other or further exercise thereof or of
any
other right.
(e) Rules
of Construction.
Unless
the context otherwise requires, as used in this Agreement (i) a term has the
meaning ascribed to it, (ii) “or” is not exclusive, (iii) “including” means
“including without limitation,” (iv) words in the singular include the plural
and vice versa, (v) words applicable to one gender shall be construed to apply
to each gender, (vi) the terms “hereof,”“herein,”“hereby,”“hereto” and
derivative or similar words refer to this entire Agreement, (vii) the term
“Section” refers to the specified Section of this Agreement and (viii) the
descriptive headings contained in this Agreement are included for convenience
of
reference only and shall not affect in any way the meaning or interpretation
of
this Agreement.
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(f) Notices.
All
notices, demands or other communications to be given or delivered under or
by
reason of the provisions of this Agreement shall be in writing and shall be
deemed to have been given (i) when delivered personally to the recipient, (ii)
when sent to the recipient by facsimile (receipt electronically confirmed by
sender’s facsimile machine) if during normal business hours of the recipient,
otherwise on the next business day, (iii) one business day after the date when
sent to the recipient by reputable overnight courier service (charges prepaid),
or (iv) five business days after the date when mailed to the recipient by
certified or registered mail, return receipt requested and postage prepaid.
Such
notices, demands and other communications shall be sent to the parties at the
addresses indicated on the signature page hereto, or to such other address
as
any party hereto may, from time to time, designate in writing delivered pursuant
to the terms of this Section 16(f).
(g) Counterparts.
This
Agreement may be executed in two counterparts, each of which shall be deemed
an
original and both of which together shall constitute one
instrument.
(h) Successors
and Assigns.
This
Agreement shall be binding upon the Company and its successors and assigns
and
shall inure to the benefit of Indemnitee and Indemnitee’s heirs, legal
representatives and assigns.
(i) Subrogation.
If
payment is made 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 documents required and shall do all acts
that
may be necessary to secure such rights and to enable the Company to effectively
enforce such rights by suit or otherwise.
[Signature
page follows.]
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IN
WITNESS WHEREOF,
the
parties hereto have executed this Agreement effective as of the day and year
first above written.
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NEWFIELD
EXPLORATION COMPANY
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By:
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Xxxxx
X. Xxxxx
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President
and Chief Executive Officer
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Address:
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000
X. Xxx Xxxxxxx Xxxx. X.
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Xxxxx
0000
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Xxxxxxx,
Xxxxx 00000
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Facsimile:
(000) 000-0000
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INDEMNITEE:
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[Name]
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Address:
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Facsimile:
(___) ___-____
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