EXHIBIT 10
Indemnification Agreement
INDEMNIFICATION AGREEMENT dated July 28, 1999, between Denbury Resources
Inc., a corporation incorporated under the Delaware General Corporation Law (the
"Company"), and _______________ ("Indemnitee").
Preliminary Statements
Competent and experienced persons are becoming more reluctant to serve as
directors or officers of corporations unless they are provided with adequate
protection against claims and actions against them for their activities on
behalf or at the request of such corporations, generally through insurance and
indemnification.
Uncertainties in the interpretations of the statutes and regulations, laws
and public policies relating to indemnification of corporate directors and
officers are such as to make adequate, reliable assessment of the risks to which
directors and officers of such corporations may be exposed difficult,
particularly in light of the proliferation of lawsuits against directors and
officers generally.
The Board of Directors of the Company, based upon its business experience,
has concluded that the continuation of present trends in litigation against
corporate directors and officers will inevitably make it more difficult for the
Company to attract and retain directors and officers of the highest degree of
competence committed to the active and effective direction and supervision of
the business and affairs of the Company and its subsidiaries and affiliates and
the operation of its and their facilities, and the Board deems such consequences
to be so detrimental to the best interests of the Company that it has concluded
that the Company should act to provide its directors and officers with enhanced
protection against inordinate risks attendant on their positions in order to
assure that the most capable persons otherwise available will be attracted to,
or will remain in, such positions and, in such connection, such directors have
further concluded that it is not only reasonable and prudent but necessary for
the Company to obligate itself contractually to indemnify to the fullest extent
permitted by applicable law its directors and certain of its officers and
certain persons serving other entities on behalf or at the request of the
Company and to assume, to the maximum extent permitted by applicable law,
financial responsibility for expenses and liabilities which might be incurred by
such individuals in connection with claims lodged against them for their
decisions and actions in such capacities.
Section 145(a) of the Delaware General Corporation Law (the "DGCL"), under
which the Company is incorporated, provides that a corporation shall have power
to indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the corporation) by reason of the fact that the person is
or was a director or officer of the corporation, or is or was serving at the
request of the corporation as a director or officer of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by the person in connection with such action,
suit or proceeding if the person acted in good faith and in a manner the person
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe the person's conduct was unlawful. The termination
of any action, suit, or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the person did not act in good faith and in a manner
which the person reasonably believed to be in or not opposed to the best
interests of the Company and with respect to any criminal action or proceeding,
had reasonable cause to believe that the person's conduct was lawful.
In addition, Section 145(b) of the DGCL provides that a corporation shall
have power to indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or suit by or in the
right of the corporation to procure a judgment in its favor by reason of the
fact that the person is or was a director or officer of the corporation, or is
or was serving at the request of the corporation as a director or officer of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees) actually and reasonably incurred by
the person in connection with the defense or settlement of such action or suit
if the person acted in good faith and in a manner the person reasonably believed
to be in or not opposed to the best
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interests of the corporation and except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
In addition, Section 145(g) of the DGCL empowers a company to purchase and
maintain insurance on behalf of any person who is or was a director or officer
of the corporation, or is or was serving at the request of the corporation as a
director or officer of another corporation, partnership, joint venture, trust or
other enterprise against any liability asserted against such person and incurred
by such person in any such capacity, or arising out of such person's status as
such, whether or not the corporation would have the power to indemnify such
person against such liability under Section 145 of the DGCL.
The Company hereby agrees to hold harmless and indemnify Indemnitee to the
fullest extent permitted or required by the provisions of the DGCL or court
interpretations thereunder as it is presently constituted and as it may be
amended from time to time; provided, however, that in the case of any amendment
to the DGCL, the Company's obligations to hold harmless and indemnify Indemnitee
shall be changed only to the extent that such amendment to the DGCL permits or
requires the Company to provide broader indemnification rights than prior to
such amendment.
The Company desires to have Indemnitee serve or continue to serve as a
director or officer of the Company or at the request of the Company as a
director or officer of another corporation, partnership, joint venture, trust or
other enterprise (each a "Company Affiliate") of which he has been or is
serving, or will serve at the request of the Company, free from undue concern
for unpredictable, inappropriate or unreasonable claims for damages by reason of
his being, or having been, a director or officer of the Company or a director or
officer of a Company Affiliate or by reason of his decisions or actions on their
behalf.
Indemnitee is willing to serve, or to continue to serve, or to take on
additional service for, the Company or the Company's Affiliates in such
aforesaid capacities on the condition that he be indemnified as provided for
herein.
Accordingly, in consideration of the premises and the covenants contained
herein, the Company and Indemnitee do hereby covenant and agree as follows:
1. SERVICES TO THE COMPANY. Indemnitee will serve or continue to serve as a
director or officer of the Company (in the case of a Company officer, at the
will of the Company or under a separate contract, if any such contract exists or
shall hereafter exist) or as a director or officer of a Company Affiliate
faithfully and to the best of his ability so long as he is duly elected and
qualified in accordance with the provisions of the By-laws or other applicable
constitutive documents thereof; provided, however, that (i) Indemnitee may at
any time and for any reason resign from such position (subject to any
contractual obligations which Indemnitee shall have assumed apart from this
Agreement) and (ii) neither the Company nor any Company Affiliate shall have any
obligation under this Agreement to continue the Indemnitee in any such position.
2. RIGHT TO INDEMNIFICATION. The Company shall, to the fullest extent
permitted by applicable law as then in effect, indemnify any Indemnitee who is
or was involved in any manner (including, without limitation, as a party or a
witness) or is threatened to be made so involved in any threatened, pending or
completed investigation, claim, action, suit or proceeding (a "Proceeding"),
whether civil, criminal, administrative or investigative by reason of the fact
that such person is or was a director or officer of the Company, or is or was
serving at the request of the Company as a director or officer of any Company
Affiliate against all costs, charges and expenses (including attorneys' fees),
including an amount paid to settle an action or satisfy a judgment, reasonably
incurred by such person in connection with such Proceeding to which such person
is made a party by reason of being or having been a director
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or officer of the Company or any Company Affiliate, if (a) such person acted in
good faith and in a manner the person reasonably believed to be in and not
opposed to the best interests of the Company; and (b) in the case of a criminal
or administrative action or proceeding had no reasonable cause to believe that
such persons conduct was unlawful; and provided further that, except as provided
in Section 3(d), the foregoing shall not apply to a director or officer of the
Company or any Company Affiliate with respect to any Proceeding which was
commenced by such director or officer. Such indemnification shall include the
right to receive payment in advance of any expenses incurred by Indemnitee in
connection with such Proceeding, consistent with the provisions of applicable
law as then in effect.
3. ADVANCEMENT OF EXPENSES; PROCEDURES; PRESUMPTIONS AND EFFECT OF CERTAIN
PROCEEDINGS; Remedies In furtherance, but not in limitation, of the foregoing
provisions, the following procedures, presumptions and remedies shall apply with
respect to advancement of expenses and the right to indemnification hereunder.
(a) Advancement of Expenses. Expenses (including attorneys' fees) incurred
by an officer or director in defending any civil, criminal, administrative
or investigative action, suit or proceeding may be paid by the Company in
advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such director or officer to
repay such amount if it shall ultimately be determined that such person is
not entitled to be indemnified by the Company as authorized in Section 145
of the DGCL. Such expenses (including attorneys' fees) incurred by former
directors and officers or other employees and agents may be so paid upon
such terms and conditions, if any, as the Company deems appropriate.
(b) Procedure for Determination of Entitlement to Indemnification.
(i) To obtain indemnification under this Article, an Indemnitee shall
submit to the Secretary of the Company a written request, including
such documentation and information as is reasonably available to the
Indemnitee and reasonably necessary to determine whether and to what
extent the Indemnitee is entitled to indemnification (the "Supporting
Documentation"). The determination of the Indemnitee's entitlement to
indemnification shall be made not later than 60 calendar days after
receipt by the Company of the written request for indemnification
together with the Supporting Documentation. The Secretary of the
Company shall, promptly upon receipt of such a request for
indemnification, advise the Board in writing that the Indemnitee has
requested indemnification.
(ii) The Indemnitee's entitlement to indemnification hereunder shall be
determined in one of the following ways (each of which shall give
effect to the presumptions set forth in Section 3(c)): (A) by a
majority vote of the directors who are not parties to such action, suit
or proceeding (the "Disinterested Directors"), even though less than a
quorum, or (B) by a committee of Disinterested Directors designated by
majority vote of Disinterested Directors, even though less than a
quorum, or (C) if there are no Disinterested Directors, or if the
Disinterested Directors so direct, by independent legal counsel in a
written opinion, or (4) by the stockholders.
(iii) If the determination of entitlement to indemnification is to be
made by Independent Counsel pursuant to Section 3(b)(ii), a majority of
the Disinterested Directors, if any, shall select the Independent
Counsel, but only an Independent Counsel to which the Indemnitee does
not reasonably object. If there shall be no Disinterested Directors,
such Independent Counsel shall be selected by a majority of the
Directors, but only an Independent Counsel to which the Indemnitee does
not reasonably object.
(c)Presumptions and Effect of Certain Proceedings. Except as otherwise
expressly provided herein, the Indemnitee shall be presumed to be entitled
to indemnification hereunder upon submission of a request for
indemnification together with the Supporting Documentation in accordance
with Section 3(b)(i), and thereafter the Company shall have the burden of
proof to overcome that presumption in reaching a contrary determination.
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In any event, if the person or persons empowered under Section 3(b) to determine
entitlement to indemnification shall not have been appointed or shall not have
made a determination within 60 calendar days after receipt by the Company of the
request therefor together with the Supporting Documentation, the Indemnitee
shall be deemed to be entitled to indemnification and the Indemnitee shall be
entitled to such indemnification unless the Company establishes as provided in
the final sentence or Section 3(d)(ii) or by written opinion of Independent
Counsel that (A) the Indemnitee misrepresented or failed to disclose a material
fact in making the request for indemnification or in the Supporting
Documentation or (B) such indemnification is prohibited by law. The termination
of any Proceeding described in Section 2, or of any claim, issue or matter
therein, by judgment, order, settlement or conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, adversely affect the right
of the Indemnitee to indemnification or create a presumption that the Indemnitee
did not act in good faith and in a manner which the Indemnitee reasonably
believed to be in or not opposed to the best interests of the Company and, with
respect to any criminal Proceeding, that the Indemnitee had reasonable cause to
believe that his conduct was unlawful.
(d) Remedies of Indemnitee.
(i) In the event that a determination is made pursuant to Section 3(b)
that the Indemnitee is not entitled to indemnification hereunder, the
Indemnitee shall be entitled, on five days' written notice to the
Secretary of the Company, to receive the written report of the persons
making such determination, which report shall include the reasons and
factual findings, if any, upon which such determination was based. At
his sole option, the Indemnitee shall be entitled to seek an
adjudication of his entitlement to such indemnification in the Court of
Chancery.
(ii) If a determination shall have been made or deemed to have been
made, pursuant to Section 3(b) or (c), that the Indemnitee is entitled
to indemnification, the Company shall be obligated to pay the amount
constituting such indemnification within five days after such
determination has been made or deemed to have been made and shall be
conclusively bound by such determination unless the Company establishes
as provided in the final sentence of this paragraph that (A) the
Indemnitee misrepresented or failed to disclose a material fact in
making the request for indemnification or in the Supporting
Documentation or (B) such indemnification is prohibited by law. If (x)
advancement of expenses is not timely made pursuant to Section 3(a) or
(y) payment of indemnification is not made within five calendar days
after a determination of entitlement to indemnification has been made
or deemed to have been made pursuant to Section 3(b) or (c), the
Indemnitee shall be entitled to seek judicial enforcement of the
Company's obligation to pay to the Indemnitee such advancement of
expenses or indemnification. Notwithstanding the foregoing, the Company
may bring an action, in the Court of Chancery, contesting the right of
the Indemnitee to receive indemnification hereunder due to the
occurrence of an event described in subclause (A) or (B) of this
paragraph (ii) (a "Disqualifying Event"); provided however, that in any
such action the Company shall have the burden of proving the occurrence
of such Disqualifying Event.
(iii) The Company shall be precluded from asserting in any judicial
proceeding commenced pursuant to this Section 3(d) that the procedures
and presumptions of this Section 3 are not valid, binding and
enforceable and shall stipulate in any such court that the Company is
bound by all the provisions of this Agreement.
(iv) If the Indemnitee, pursuant to this Section 3(d), seeks a judicial
adjudication to enforce his rights under, or to recover damages for
breach of, this Agreement, the Indemnitee shall be entitled to recover
from the Company, and shall be indemnified by the Company against, any
expenses actually and reasonably incurred by the Indemnitee if the
Indemnitee prevails in such judicial adjudication. If it shall be
determined in such judicial adjudication that the Indemnitee is
entitled to receive part but not all of the indemnification or
advancement of expenses sought, the expenses incurred by the Indemnitee
in connection with such judicial adjudication shall be prorated
accordingly.
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(e) Definitions. For purposes of this Section 3:
"Disinterested Director" means a director of the Company who is not or
was not a party to the Proceeding in respect of which indemnification is
sought by the Indemnitee.
"Independent Counsel" means a law firm or a member of a law firm that
neither presently is, nor in the past five years has been, retained to
represent (a) the Company, its officers, directors or holders of more than
10% of the Company's issued and outstanding equity securities, or the
Indemnitee in any matter material to either such party or (b) any other
party to the Proceeding giving rise to a claim for indemnification
hereunder. Notwithstanding the foregoing, the term "Independent Counsel"
shall not include any person who, under the applicable standards of
professional conduct then prevailing under the law of Delaware, would have
a conflict of interest in representing either the Company or the Indemnitee
in an action to determine the Indemnitee's rights hereunder.
4. OTHER RIGHTS TO INDEMNIFICATION. The indemnification and advancement of
costs and expenses (including attorneys' fees and disbursements) provided by
this Agreement shall not be deemed exclusive of any other rights to which
Indemnitee may now or in the future be entitled under any provision of
applicable law, the Certificate of Incorporation or any By-law of the Company or
any other agreement or any vote of directors or shareholders or otherwise,
whether as to action in his official capacity or in another capacity while
occupying any of the positions or having any of the relationships referred to in
Section 1 of this Agreement.
5. DURATION OF AGREEMENT.
(a) This Agreement shall be effective from and after April 22, 1999 and
shall continue until and terminate upon the later of (i) the tenth
anniversary after Indemnitee has ceased to occupy any of the positions or
have any of the relationships described in Section 1 of this Agreement or
(ii) (A) the final termination or resolution of all Proceedings with
respect to Indemnitee commenced during such 10-year period and (B) either
(x) receipt by Indemnitee of the indemnification to which he is entitled
hereunder with respect thereto or (y) a final adjudication or binding
arbitration that Indemnitee is not entitled to any further indemnification
with respect thereto, as the case may be.
(b) This Agreement shall be binding upon the Company and its successors and
assigns and shall inure to the benefit of Indemnitee and his heirs,
devisees, executors, administrators or other legal representatives.
6. SEVERABILITY. If any provision or provisions of this Agreement shall be
held to be invalid, illegal or unenforceable under any particular circumstances
or for any reason whatsoever (a) the validity, legality and enforceability of
the remaining provisions of this Agreement (including, without limitation, all
other portions of any Section, paragraph or clause of this Agreement that
contains any provision that has been found to be invalid, illegal or
unenforceable), or the validity, legality or enforceability under any other
circumstances shall not in any way be affected or impaired thereby and (b) to
the fullest extent possible consistent with applicable law, the provisions of
this Agreement (including, without limitation, all other portions of any
Section, paragraph or clause of this Agreement that contains any such provision
that has been found to be invalid, illegal or unenforceable, that are not
themselves invalid, illegal or unenforceable) shall be deemed revised and shall
be construed so as to give effect to the intent manifested by this Agreement
(including the provision held invalid, illegal or unenforceable).
7. IDENTICAL COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
but all of which together shall constitute one and the same Agreement. Only one
such counterpart signed by the party against whom enforceability is sought needs
to be produced to evidence
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the existence of this Agreement.
8. GENDER NEUTRAL. Whenever the context requires herein, the gender of all
words used herein shall include the masculine, feminine, and neuter, and the
number of all words shall include the singular and plural. Specifically, for
convenience herein the masculine pronoun "his" has been used throughout but is
intended to mean "her" where appropriate.
9. HEADINGS. The headings of the paragraphs of this Agreement are inserted
for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.
10. MODIFICATION AND WAIVER. No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by both of the
parties hereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.
11. NOTIFICATION AND DEFENSE OF CLAIM. Indemnitee agrees to notify the
Company promptly in writing upon being served with any summons, citation,
subpoena, complaint, indictment, information or other document relating to any
matter which may be subject to indemnification hereunder, whether civil,
criminal, administrative or investigative; provided, however, that the failure
of Indemnitee to give such notice to the Company shall not adversely affect
Indemnitee's rights under this Agreement except to the extent the Company shall
have been materially prejudiced as a direct result of such failure. Nothing in
this Agreement shall constitute a waiver of the Company's right to seek
participation at its own expense in any Proceeding which may give rise to
indemnification hereunder.
12. NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if (i)
delivered by hand and receipted for by the party to whom said notice or other
communication shall have been directed or (ii) mailed by certified or registered
mail with postage prepaid, on the third business day after the date on which it
is so mailed, in either case:
(a) if to Indemnitee, at the address indicated on the signature page
hereof,
(b) if to the Company:
Denbury Resources Inc.
0000 Xxxxxxxx Xxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Secretary
or to such other address as may have been furnished to either party by the other
party.
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13. GOVERNING LAW. The parties hereto agree that this Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
State of Delaware.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
Denbury Resources Inc.
By:
--------------------------------
Name: Xxxxxx Xxxxxxx
Title: President and CEO
Indemnitee:
By:
--------------------------------
Name:
--------------------------------
Address:
--------------------------------
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