FORM OF
INDEMNIFICATION AGREEMENT
THIS AGREEMENT is effective ______________, 1999, between Ocean Energy,
Inc., a Texas corporation (the "Corporation"), and the undersigned director or
officer of the Corporation ("Indemnitee").
WHEREAS, the Corporation has adopted Articles of Incorporation (the
"Articles") and Bylaws (the "Bylaws") providing for indemnification of the
Corporation's directors and officers to the maximum extent authorized by the
Texas Business Corporation Act, as amended from time to time (the "State
Statute"); and
WHEREAS, such Articles, Bylaws and State Statute contemplate that
contracts and insurance policies may be entered into with respect to
indemnification of directors and officers; and
WHEREAS, recent developments have raised questions concerning the
adequacy and reliability of the protection which might be afforded to directors
and officers from acquisition of policies of Directors and Officers Liability
Insurance ("D&O Insurance"), covering certain liabilities which might be
incurred by directors and officers in the performance of their services to the
Corporation; and
WHEREAS, it is reasonable, prudent and necessary for the Corporation to
obligate itself contractually to indemnify Indemnitee so that he will serve or
continue to serve the Corporation free from undue concern that he will not be
adequately protected; and
WHEREAS, Indemnitee is willing to serve, continue to serve and to take
on additional service for or on behalf of the Corporation on condition that he
be so indemnified;
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Corporation and Indemnitee do hereby covenant and agree as
follows:
1. DEFINITIONS. As used in this Agreement:
(a) The term "Proceeding" shall include any threatened, pending or
completed action, suit, inquiry or proceeding, whether brought by or in the
right of the Corporation or otherwise and whether of a civil, criminal,
administrative, arbitrative or investigative nature, in which Indemnitee is or
will be involved as a party, as a witness or otherwise, by reason of the fact
that Indemnitee is or was a director, officer, employee or agent of the
Corporation, by reason of any action taken by him or of any inaction on his part
while acting as a director, officer, employee or agent or by reason of the fact
that he is or was serving at the request of the Corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust, limited liability company or other enterprise; in each case whether or
not he is acting or serving in any such capacity at the time any liability or
expense is incurred for which indemnification or reimbursement can be provided
under this Agreement; provided that any such action, suit or proceeding which is
brought by Indemnitee against that Corporation or directors or officers of the
Corporation, other than an action brought by Indemnitee to enforce his rights
under this Agreement, shall not be deemed a Proceeding without prior approval by
a majority of the Board of Directors of the Corporation.
(b) The term "Expenses" shall include, without limitation, any
judgments, fines and penalties against Indemnitee in connection with a
Proceeding; amounts paid by Indemnitee in settlement of a 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, or expenses, reasonably incurred by or for Indemnitee in
connection with prosecuting, defending, preparing to prosecute or defend,
investigating, being or preparing to be a witness in a Proceeding or
establishing Indemnitee's right of entitlement to indemnification for any of the
foregoing.
(c) References to "other enterprise" shall include employee benefit
plans; references to "Fines" shall include any excise tax assessed with respect
to any employee benefit plan; references to "serving at the request of the
Corporation" shall include any service as a director, officer, employee or agent
of the Corporation which imposes duties on, or involves services by, such
director, officer, employee or agent with respect to an employee benefit plan,
its participants or beneficiaries; and a person who acted in good faith and in a
manner he reasonably believed to be in the interests of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interest of the Corporation" as referred to in
this Agreement.
(d) The term "substantiating documentation" shall mean copies of bills
or invoices 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,
court or agency orders or decrees or settlement agreements, represent costs or
liabilities meeting the definition of "Expenses" herein.
(e) The terms "he" and "his" have been used for convenience and mean
"she" and "her" if Indemnitee is a female.
2. INDEMNITY OF DIRECTOR OR OFFICER. The Corporation hereby agrees to
hold harmless and indemnify Indemnitee against Expenses to the full extent
authorized or permitted by the provisions of the State Statute, or by any
amendment thereof, or by other statutory provisions authorizing or permitting
such indemnification adopted after the date hereof.
3. ADDITIONAL INDEMNITY. The Corporation hereby further agrees to hold
harmless and indemnify Indemnitee against Expenses incurred by reason of the
fact that Indemnitee is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust, limited liability company or other enterprise, including,
without limitation, any predecessor, subsidiary or affiliated entity of the
Corporation, but only if Indemnitee acted in good faith and, in the case of
conduct in his official capacity, in a manner he reasonably believed to be in
the best interests of the Corporation and, in all other cases, not opposed to
the best interests of the Corporation. Additionally, in the case of a criminal
proceeding, Indemnitee must have had no reasonable cause to believe that his
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
act in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interest of the Corporation, and with respect to any
criminal proceeding, that such person had reasonable cause to believe that his
conduct was unlawful.
4. CHOICE OF COUNSEL. If Indemnitee is not an officer of the
Corporation, he, together with the other directors who are not officers of the
Corporation (the "Outside Directors"), shall be entitled to employ, and be
reimbursed for the fees and disbursements of, counsel separate from that chosen
by Indemnitees who are officers of the Corporation. The principal counsel for
Outside Directors ("Principal Counsel") shall be determined by majority vote of
the Outside Directors, and the Principal Counsel for the Indemnitees who are not
Outside Directors ("Separate Counsel") shall be determined by majority vote of
such Indemnitees. The obligation of the Corporation to reimburse Indemnitee for
the fees and disbursements of counsel hereunder shall not extend to the fees and
disbursements of any counsel employed by Indemnitee other than Principal Counsel
or Separate Counsel, as the case may be, unless, in the opinion of other counsel
for Indemnitee, concurred in by Principal Counsel or Separate Counsel, as the
case may be, Indemnitee may have defenses available to him that are in addition
to or different from those of the other Indemnitees such that there is a
substantial possibility that Principal Counsel of Separate Counsel, as the case
may be, will have a conflict of interest in representing Indemnitee.
5. ADVANCES OF EXPENSES. Expenses (other than judgments, penalties,
fines and settlements) incurred by Indemnitee shall be paid by the Corporation,
in advance of the final disposition of the Proceeding, within 10 days after
receipt of Indemnitee's written request accompanied by substantiating
documentation and Indemnitee's written affirmation that he 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
indemnification. No objections based on or involving the question whether such
charges meet the definition of "Expenses," including any question regarding the
reasonableness of such Expenses, shall be grounds for failure to advance to such
Indemnitee, or to reimburse such Indemnitee for, the amount claimed within such
10-day period, and the undertaking of Indemnitee set forth in Section 7 hereof
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.
6. RIGHT OF INDEMNITEE TO INDEMNIFICATION UPON APPLICATION; PROCEDURE
UPON APPLICATION. Any indemnification under this Agreement, other than pursuant
to Section 5 hereof, shall be made no later than 45 days after receipt by the
Corporation of the written request of Indemnitee, accompanied by substantiating
documentation, unless a determination is made within said 45-day period by (1)
the Board of Directors by a majority vote of a quorum consisting of directors
who are not or were not parties to such Proceeding, or (2) independent legal
counsel in a written opinion (which counsel shall be appointed if such a quorum
is not obtainable), that Indemnitee has not met the relevant standards for
indemnification set forth in Section 3 hereof.
The right to indemnification or advances as provided by this Agreement
shall be enforceable by Indemnitee in any court of competent jurisdiction. The
burden of proving that indemnification is not appropriate shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors or independent legal counsel) to have made a determination prior to
the commencement of such action that indemnification is proper in the
circumstances because Indemnitee has met the applicable standards of conduct,
nor an actual determination by the Corporation (including its Board of Directors
or independent legal counsel) that Indemnitee has not met such applicable
standard of conduct, shall be a defense to the action or create a presumption
that Indemnitee has not met the applicable standard of conduct.
7. UNDERTAKING BY INDEMNITEE. Indemnitee hereby undertakes to repay to
the Corporation any advances of Expenses pursuant to Section 3 hereof to the
extent that it is ultimately determined that Indemnitee is not entitled to
indemnification.
8. INDEMNIFICATION HEREUNDER NOT EXCLUSIVE. The indemnification and
advancement of expenses provided by this Agreement shall not deemed exclusive of
any other rights to which Indemnitee may be entitled under the Articles, the
Bylaws, the State Statute, D&O Insurance, any agreement, or otherwise, both as
to action in his official capacity and as to action in another capacity while
holding such office. However, Indemnitee shall reimburse the Corporation for
amounts paid to him 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
Corporation contained herein shall continue during the period Indemnitee is a
director or officer of the Corporation (or is or was serving at the request of
the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, limited liability company or
other enterprise) and shall continue thereafter so long as Indemnitee shall be
subject to any possible Proceeding.
10. PARTIAL INDEMNIFICATION. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Corporation for some or a
portion of Expenses, but not, however, for the total amount thereof, the
Corporation shall nevertheless indemnify Indemnitee for the portion of such
Expenses to which Indemnitee is entitled.
11. SETTLEMENT OF CLAIMS. The Corporation shall not be liable to
indemnify Indemnitee under this Agreement for any amounts paid in settlement of
any Proceeding effected without the Corporation's written consent. The
Corporation shall not settle any Proceeding in any manner which would impose any
penalty or limitation on Indemnitee without Indemnitee's written consent.
Neither the Corporation nor Indemnitee will unreasonably withhold their consent
to any proposed settlement. The Corporation shall not be liable to indemnify
Indemnitee under this Agreement with regard to any judicial award if the
Corporation was not given a reasonable and timely opportunity, at its expense,
to participate in the defense of such action.
12. ENFORCEMENT.
(a) The Corporation expressly confirms and agrees that it has entered
into this Agreement and assumed the obligations imposed on the Corporation
hereby in order to induce Indemnitee to serve as a director or officer of the
Corporation, and acknowledges that Indemnitee is relying upon this Agreement in
continuing as a director or officer.
(b) In the event Indemnitee is required to bring any action or other
proceeding to enforce rights or to collect moneys due under this Agreement and
is successful in such action, the Corporation shall reimburse Indemnitee for all
of Indemnitee's Expenses in bringing and pursuing such action.
13. GOVERNING LAW; BINDING EFFECT; AMENDMENT AND TERMINATION.
(a) This Agreement shall be interpreted and enforced in accordance with
the laws of the State of Texas.
(b) This Agreement shall be binding upon the Corporation, its
successors and assigns, and shall inure to the benefit of Indemnitee, his heirs,
personal representatives and assigns and to the benefit of the Corporation, its
successors and assigns.
(c) No amendment, modification, termination or cancellation of this
Agreement shall be effective unless in writing signed by the Corporation and
Indemnitee.
14. 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 as respects
any aspect of any claim varies between two or more sections of this Agreement,
that section providing the most comprehensive indemnification shall apply.
15. NOTICE. Notice to the Corporation shall be directed to Ocean
Energy, Inc., 0000 Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000, Attention: General
Counsel. Notice to Indemnitee shall be directed to the address set forth under
his signature hereto. The foregoing addresses may be changed from time to time
by the addressee upon notice to the other parties.
Notice shall be deemed received three days after the date postmarked if
sent by prepaid mail, properly addressed.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
and as of the day and year first above written.
OCEAN ENERGY, INC.
By:
Name:
Title:
INDEMNITEE
Name:
Address:
