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EXHIBIT (10)(e)
INDEMNIFICATION AGREEMENT
AGREEMENT, effective as of [date], between ONEOK, Inc., an Oklahoma
corporation (the "Corporation"), and [name] (the "Indemnitee").
WHEREAS, it is essential to the Corporation to retain and attract as
directors and officers the most capable persons available;
WHEREAS, Indemnitee is a director or officer of the Corporation;
WHEREAS, both the Corporation and Indemnitee recognize the increased
risk of litigation and other claims being asserted against directors and
officers of public companies in today's environment;
WHEREAS, basic protection against undue risk of personal liability of
directors and officers heretofore has been provided through insurance coverage
providing reasonable protection at reasonable cost, and Indemnitee has relied on
the availability of such coverage; but as a result of substantial changes in the
marketplace for such insurance it has become increasingly more difficult to
obtain such insurance on terms providing reasonable protection at reasonable
cost;
WHEREAS, in recognition of Indemnitee's need for substantial protection
against personal liability in order to enhance Indemnitee's continued service to
the Corporation in an effective manner, the Corporation wishes to provide in
this Agreement for the indemnification of and the advancing of expenses to
Indemnitee to the full extent (whether partial or complete) permitted by law and
as set forth in this Agreement, and, to the extent insurance is maintained, for
the continued coverage of Indemnitee under the Corporation's directors' and
officers' liability insurance policies;
NOW, THEREFORE, in consideration of the premises and of Indemnitee
continuing to serve the Corporation directly or, at its request, with another
enterprise, and intending to be legally bound hereby, the parties hereto agree
as follows:
1. Certain Definitions:
(a) Change in Control: Shall be deemed to have occurred if (i)
any "person" (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended), other than a trustee or
other fiduciary holding securities under an employee benefit plan of
the Corporation or a corporation owned directly or indirectly by the
stockholders of the Corporation in substantially the same proportions
as their ownership of stock of the Corporation, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under said Act), directly
or indirectly, of securities of the Corporation representing 20 percent
(20%) or more of the total voting power represented by the
Corporation's then outstanding Voting Securities, or (ii) during any
period of two consecutive years, individuals who at the beginning of
such period constitute the Board of Directors of the Corporation and
any new director whose election by the Board of Directors or nomination
for election by the Corporation's stockholders was approved by a vote
of at least two-thirds (2/3) of the directors then still in office who
either were directors at the beginning of the period or whose election
or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof, or (iii) the stockholders of
the Corporation approve a merger or consolidation of the Corporation
with any other corporation, other than a merger or consolidation which
would result in the Voting Securities of the Corporation outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into Voting Securities of the
surviving entity) at least 80 percent (80%) of the total voting power
represented by the Voting Securities of the Corporation or such
surviving entity outstanding immediately after such merger or
consolidation, or the stockholders of the Corporation approve a plan of
complete liquidation of the
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Corporation or an agreement for the sale or disposition by the
Corporation of all or substantially all the Corporation's assets.
(b) Claim: Any threatened, pending or completed action, suit
or proceeding, or any inquiry or investigation, whether conducted by
the Corporation or any other party, that Indemnitee in good faith
believes might lead to the institution of any such action, suit or
proceeding, whether civil, criminal, administrative, investigative or
other.
(c) Expenses: Include attorney's fees and all other costs,
expenses and obligations paid or incurred in connection with
investigating, defending, being a witness in or participating in
(including on appeal), or preparing to defend, be a witness in or
participate in any Claim relating to any Indemnifiable Event.
(d) Indemnifiable Event: Any event or occurrence related to
the fact that Indemnitee is or was a director, officer, employee, agent
or fiduciary of the Corporation, or is or was serving at the request of
the Corporation as a director, officer, employee, trustee, agent or
fiduciary of another corporation, partnership joint venture, employee
benefit plan, trust or other enterprise, or by reason of anything done
or not done by Indemnitee in any such capacity.
(e) Potential Change in Control: Shall be deemed to have
occurred if (i) the Corporation enters into an agreement, the
consummation of which would result in the occurrence of a Change in
Control; (ii) any person (including the Corporation) publicly announces
an intention to take or to consider taking actions which if consummated
would constitute a Change in Control; (iii) any person, other than a
trustee or other fiduciary holding securities under an employee benefit
plan of the corporation or a corporation owned, directly or indirectly,
by the stockholders of the Corporation in substantially the same
proportions as their ownership of stock in the Corporation, who is or
becomes the beneficial owner, directly or indirectly, of securities of
the Corporation representing 9.5 percent (9.5%) or more of the combined
voting power of the Corporation's then outstanding Voting Securities,
increases his beneficial ownership of such securities by
5 percent (5%) or more over the percentage so owned by such person on
the date hereof; or (iv) the Board adopts a resolution to the effect
that, for the purposes of this Agreement, a Potential Change in Control
has occurred.
(f) Reviewing Party: Any appropriate person or body consisting
of a member or members of the Corporation's Board of Directors or any
other person or body appointed by the Board (including the special,
independent counsel referred to in Section 3) who is not a party to the
particular Claim for which Indemnitee is seeking indemnification.
(g) Voting Securities: Any securities of the Corporation which
vote generally in the election of directors.
2. Basic Indemnification Arrangement.
(a) In the event Indemnitee was, is or becomes a party to or
witness or other participant in, a Claim by reason of (or arising in
part out of) an Indemnifiable Event, the Corporation shall indemnify
Indemnitee to the fullest extent permitted by law as soon as
practicable but in any event no later than thirty (30) days after
written demand is presented to the Corporation, against any and all
expenses, judgments, fines, penalties, and amounts paid in settlement
(including all interest, assessments and other charges paid or payable
in connection or in respect of such expenses, judgments, fines,
penalties or amounts paid in settlement) of such claim. If so requested
by Indemnitee, the Corporation shall advance (within two (2) business
days of such request) any and all Expenses to Indemnitee (an "Expense
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Advance").
(b) Notwithstanding the foregoing, (i) the obligations of the
Corporation under Section 2(a) shall be subject to the condition that
the Reviewing Party shall not have determined (in a written opinion, in
any case in which the special, independent counsel referred to in
Section 3 hereof is involved) that Indemnitee would not be permitted to
be indemnified under applicable law, and (ii) the obligation of the
Corporation to make an Expense Advance pursuant to Section 2(a) shall
be subject to the condition that, if, when and to the extent that the
Reviewing Party determines that Indemnitee would not be permitted to be
so indemnified under applicable law, the Corporation shall be entitled
to be reimbursed by Indemnitee (who hereby agrees to reimburse the
Corporation) for all such amounts theretofore paid; provided, however,
that if Indemnitee has commenced legal proceedings in a court of
competent jurisdiction to secure a determination that Indemnitee should
be indemnified under applicable law, any determination made by the
Reviewing party that Indemnitee would not be permitted to be
indemnified under applicable law shall not be binding and Indemnitee
shall not be required to reimburse the Corporation for any Expense
Advance until a final judicial determination is made with respect
thereto (as to which all rights of appeal therefrom have been exhausted
or lapsed). If there has not been a Change in Control, the Reviewing
Party shall be selected by the Board of Directors, and if there has
been such a Change in Control, the Reviewing Party shall be the
special, independent counsel referred to in Section 3 hereof. If there
has been no determination by the Reviewing Party or if the Reviewing
Party determines that Indemnitee substantively would not be permitted
to be indemnified in whole or in part under applicable law, Indemnitee
shall have the right to commence litigation in any court in the state
or domicile of Oklahoma having subject matter jurisdiction thereof and
in which venue is proper seeking an initial determination by the court
or challenging any such determination by the Reviewing Party or any
aspect thereof, and the Corporation hereby consents to service of
process and to appear in any such proceeding. Any determination by the
Reviewing Party otherwise shall be conclusive and binding on the
Corporation and Indemnitee.
3. Change in Control. The Corporation agrees that if there is a Change
in Control of the Corporation (other than a Change in Control which has
been approved by a majority of the Corporation's Board of Directors who
were directors immediately prior to such Change in Control) then with
respect to all matters thereafter arising concerning the rights of
Indemnitee to indemnity payments and Expense Advances under this
Agreement or any other agreement or Corporate By-law now or hereafter
in effect relating to Claims for Indemnifiable Events, the Corporation
shall seek legal advice only from special, independent counsel selected
by Indemnitee and approved by the Corporation (which approval shall not
be unreasonably withheld), and who has not otherwise performed services
for the Corporation or Indemnitee within the last five (5) years (other
than in connection with such matters). Such counsel, among other
things, shall render its written opinion to the Corporation and
Indemnitee as to whether and to what extent the Indemnitee would be
permitted to be indemnified under applicable law. The Corporation
agrees to pay the reaonable fees of the special, independent counsel
referred to above and fully indemnify such counsel against any and all
expense (including attorneys' fees), claims, liabilities, and damages
arising out of or relating to this Agreement or its engagement pursuant
hereto.
4. Establishment of Trust. In the event of a Potential Change in
Control, the Corporation shall, upon written request by Indemnitee,
create a Trust for the benefit of the Indemnitee and from time to time
upon written request of Indemnitee shall fund such 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 relating to an
Indemnifiable Event, and any and all judgments, fines, penalties and
settlement amounts of any and all Claims relating to an Indemnifiable
Event from time to time actually paid or claimed, reasonably
anticipated or proposed to be paid. The amount or amounts to be
deposited in the Trust pursuant to the foregoing funding obligation
shall be determined by the Reviewing Party, in any case in which the
special, independent counsel referred to above is involved. The terms
of the Trust shall provide that upon a Change in Control (i) the Trust
shall
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not be revoked or the principal thereof invaded, without the written
consent of the Indemnitee, (ii) the Trustee shall advance, within two
(2) business days of a request by the Indemnitee, any and all Expenses
to the Indemnitee (and the Indemnitee hereby agrees to reimburse the
Trust under the circumstances under which the Indemnitee would be
required to reimburse the Corporation under Section 2(b) of this
Agreement), (iii) the Trust shall continue to be funded by the
Corporation in accordance with the funding obligation set forth above,
(iv) the Trustee shall promptly pay to the Indemnitee all amounts for
which the Indemnitee shall be entitled to indemnification pursuant to
this Agreement or otherwise, and (v) all unexpended funds in such Trust
shall revert to the Corporation upon a final determination by the
Reviewing Party or a court of competent jurisdiction, as the case may
be, that the Indemnitee has been fully indemnified under the terms of
this Agreement, or that it is no longer anticipated that expenses will
be incurred or amounts will be paid in connection with the
Indemnifiable Event. The Trustee shall be chosen by the Indemnitee.
Nothing in this Section 4 shall relieve the Corporation of any of its
obligations under this Agreement.
5. Indemnification for Additional Expenses. The Corporation shall
indemnify Indemnitee against any and all expenses (including attorneys'
fees) and, if requested by Indemnitee, shall within two (2) business
days of such request advance such expenses to Indemnitee which are
incurred by Indemnitee in connection with any claim asserted against or
action brought by Indemnitee for (i) indemnification or advance payment
of Expenses by the Corporation under this Agreement or any other
agreement or Corporate Bylaw now or hereafter in effect relating to
Claims for Indemnifiable Events and/or (ii) recovery under any
directors' and officers' liability insurance policies maintained by the
Corporation, regardless of whether Indemnitee ultimately is determined
to be entitled to such indemnification, advance expense payment or
insurance recovery as the case may be.
6. Partial Indemnity, Etc. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Corporation for
some or a portion of the Expenses, judgments, fines, penalties and
amounts paid in settlement of a Claim but not, however, for all of the
total amount thereof, the Corporation 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 relating in whole or in part to an
Indemnifiable Event or in defense of any issue or matter therein,
including dismissal without prejudice, Indemnitee shall be indemnified
against all Expenses incurred in connection therewith. In connection
with any determination by the Reviewing Party or otherwise as to
whether Indemnitee is entitled to be indemnified hereunder the burden
of proof shall be on the Corporation to establish that Indemnitee is
not so entitled.
7. Notice by Indemnitee and Defense of Claim. Indemnitee shall promptly
notify the Corporation in writing upon being served with any summons,
citation, subpoena, complaint, indictment, information or other
document relating to any matter, whether civil, criminal,
administrative, or investigative, but the omission so to notify the
Corporation will not relieve it from any liability which it may have to
Indemnitee if such omission does not prejudice the Corporation's
rights. If such omission does prejudice the Corporation's rights, the
Corporation will be relieved from any liability only to the extent of
such prejudice; nor will such omission relieve the Corporation from any
liability which it may have to Indemnitee otherwise than under this
Agreement. With respect to any Indemnifiable Event as to which
Indemnitee notifies the Corporation of the commencement thereof:
(a) The Corporation will be entitled to participate therein at
its own expense; and
(b) The Corporation jointly with any other indemnifying party
similarly notified will be entitled to assume the defense thereof, with
counsel reasonably satisfactory to Indemnitee; provided, however, that
the Corporation shall not be entitled to assume the defense of any
Indemnifiable event if there has been a Change in Control or if
Indemnitee shall have reasonably concluded that there may be a conflict
of
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interest between the Corporation and Indemnitee with respect to such
Indemnifiable Event. After notice from the Corporation to Indemnitee of
its election to assume the defense thereof, the Corporation will not be
liable to Indemnitee under this Agreement for any Expenses subsequently
incurred by Indemnitee in connection with the defense thereof, other
than reasonable costs of investigation or as otherwise provided below.
Indemnitee shall have the right to employ its own counsel in such
Indemnifiable Event but the fees and expenses of such counsel incurred
after notice from the Corporation of its assumption of the defense
thereof shall be at the expense of Indemnitee unless:
(i) The employment of counsel by Indemnitee has been
authorized by the Corporation;
(ii) The Indemnitee shall have reasonably concluded that
counsel employed by the Corporation may not adequately
represent Indemnitee;
(iii) The Corporation shall not in fact have employed counsel
to assume the defense in such Indemnifiable Event or shall not
in fact have assumed such defense and be acting in connection
therewith with reasonable diligence; in each of which cases
the fees and expenses of such counsel shall be at the expense
of the Corporation.
(c) The Corporation shall not settle any Indemnifiable Event
in any manner which would impose any penalty or limitation on
Indemnitee without Indemnitee's written consent; provided, however,
that Indemnitee will not unreasonably withhold his consent to any
proposed settlement.
8. No Presumption. For purposes of this Agreement, the termination of
any claim, action, suit, or proceeding, by judgment, order, settlement
(whether with or without court approval) or conviction, or upon a plea
of nolo contendere, or its equivalent, shall not create a presumption
that Indemnitee did not 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.
9. Nonexclusivity, Etc. The rights of the Indemnitee hereunder shall be
in addition to any other rights Indemnitee may have under the
Corporation's Bylaws or the Oklahoma General Corporation Act or
otherwise. To the extent that a change in the Oklahoma General
Corporation Act (whether by statute or judicial decision) permits
greater indemnification by agreement than would be afforded currently
under the Corporation's Bylaws and this Agreement, it is the intent of
the parties hereto that Indemnitee shall enjoy this Agreement or the
greater benefits so afforded by such change.
10. Liability Insurance. To the extent the Corporation maintains an
insurance policy or policies providing directors' and officers'
liability insurance, Indemnitee shall be covered by such policy or
policies, in accordance with its or their terms to the maximum extent
of the coverage under such policy or policies in effect for any other
Corporation director or officer.
11. Amendments, Etc. 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 provision
hereof (whether or not similar) nor shall such waiver constitute a
continuing waiver.
12. Subrogation. In the event of payment under this Agreement, the
Corporation shall be subrogated to the extent of such payment to all of
the rights of recover of Indemnitee, who shall execute all papers
required and shall do everything that may be necessary to secure such
rights, including the execution of such documents necessary to enable
the Corporation effectively to bring suit to enforce such rights.
13. No Duplication of Payments. The Corporation shall not be liable
under this Agreement to make any
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payment in connection with any claim made against Indemnitee to the
extent Indemnitee has otherwise actually received payment (under any
insurance policy, Bylaw or otherwise) of the amounts otherwise
indemnifiable hereunder.
14. Binding Effect, Etc. This Agreement shall be binding upon and inure
to the benefit of and be enforceable by the parties hereto and their
respective successors, assigns, including any direct or indirect
successor by purchase, merger, consolidation, or otherwise to all or
substantially all of the business and/or assets of the Corporation,
spouses, heirs, and personal and legal representatives. This Agreement
shall continue in effect regardless of whether Indemnitee continues to
serve as an officer or director of the Corporation or of any other
enterprise at the Corporation's request.
15. Severability. The provisions of this Agreement shall be severable
in the event that any of the provisions hereof (including any provision
within a single section, paragraph or sentence) are held by a court of
competent jurisdiction to be invalid, void, or otherwise unenforceable,
and the remaining provisions shall remain enforceable to the fullest
extent permitted by law.
16. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Oklahoma
applicable to contracts made and to be performed in such state without
giving effect to the principles of conflicts of laws.
ONEOK, Inc.
By
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Xxxxx X. Xxxxxxxx, Chairman and
Chief Executive Officer
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(Indemnitee)
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