UNIT CORPORATION
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this "Agreement") is made as of the 19th
day of April, 2001, by and between Unit Corporation, a Delaware corporation (the
"Company"), and ___________________________ ("Indemnitee").
WHEREAS, the Company and Indemnitee recognize the increasing difficulty in
obtaining directors' and officers' liability insurance, the significant
increases in the cost of such insurance and the general reduction in the
coverage of such insurance; and
WHEREAS, the Company acknowledges Indemnitee has agreed to serve the
Company as a director, officer, key employee or agent with the assurance that
adequate liability indemnification is and will continue to be provided; and
WHEREAS, the Company desires to attract and retain the services of
Indemnitee and to provide Indemnitee with adequate liability indemnification;
and
WHEREAS, the Company has been advised that it may provide such
indemnification under and in accordance with Delaware law by entering into an
agreement providing for broad indemnification of Indemnitee by the Company; and
WHEREAS, the Company desires to enter into this Agreement with Indemnitee
to provide Indemnitee the maximum protection permitted by such Delaware law;
NOW, THEREFORE, the Company hereby agrees as follows:
ARTICLE 1
Indemnification
Section 1.01 Except as otherwise provided herein, the Company hereby
agrees to hold harmless and indemnify Indemnitee from and against all claims and
all threatened, pending or completed actions, suits or proceedings, whether
civil, criminal, administrative or investigative (including an action by or in
the right of the Company), involving Indemnitee by reason of the fact that he is
or was a director of the Company, including all expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement, to the broadest and
maximum extent permitted by Delaware law.
Section 1.02 Except as otherwise provided herein, the Company agrees to hold
harmless and indemnify Indemnitee from and against all claims and all
threatened, pending or completed actions, suits or proceedings, whether civil,
criminal, administrative or investigative (including an action by or in the
right of the Company), involving Indemnitee by reason of the fact that he is or
was an officer, employee or agent of the Company (or by reason of
the fact that he is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise), including all expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement, to the broadest and
maximum extent permitted by Delaware law and in accordance with Section 145(d)
of the Delaware General Corporation Law.
Section 1.03 Without limiting the generality of Section 1.1 or 1.2 hereof, the
indemnification provided by Section 1.1 or 1.2 shall:
(a) extend to and fully cover any Loss (as hereinafter defined)
arising from any Claim (as hereinafter defined), whether such Claim is made
against Indemnitee individually or jointly with others, by reason of any
Wrongful Act (as hereinafter defined) made in Indemnitee's capacity as a
director, officer, employee or agent of the Company (or by reason of the
fact that he is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust, or other enterprise),
(b) include all rights of indemnification provided to Indemnitee
under the provisions of the Certificate of Incorporation and/or the By-laws
of the Company, and
(c) include all such additional rights of indemnification as might
possibly be provided to Indemnitee under Section 145 of the General
Corporation Law of the State of Delaware, to the extent such rights are not
violative of Section 145 of the Delaware General Corporation Law or
contrary to the public policy of the State of Delaware.
Section 1.04 If the Indemnitee is not wholly successful with respect to
any Claim, but is successful, on the merits or otherwise, as to one or more but
less than all issues under any Claim, the Company shall indemnify the Indemnitee
against all expenses actually and reasonably incurred by him or on his behalf in
connection with each successfully resolved issue. The termination of any issue
under any Claim or of any Claim by dismissal, with or without prejudice,
shall be deemed a successful result as to such issue or Claim.
Section 1.05 Nothing in this Section 1 shall be deemed to provide any
indemnity by the Company to Indemnitee on account of any matter:
(a) with respect to remuneration paid to Indemnitee if it shall be
determined by a final judgment or other final adjudication of any court
having jurisdiction over the
matter that such renumeration was in violation of law; or
(b) for an accounting of profits made from the purchase or sale by
Indemnitee of securities of the Company within the meaning of Section 16(b)
of the Securities Exchange Act of 1934 and amendments thereto or similar
provisions of any federal, state or local statutory law; or
(c) brought about or contributed to by the dishonesty of Indemnitee
if a final judgment or other final adjudication adverse to Indemnitee
establishes that acts of active and deliberate dishonesty were committed or
attempted by Indemnitee with actual dishonest purpose and intent and were
material to the adjudication; or
(d) which is based on or attributable to Indemnitee having gained any
personal profit or advantage to which he was not entitled, if a final
judgment or other final adjudication adverse to Indemnitee establishes that
Indemnitee in fact gained such personal profit or other advantage to which
he was not entitled; or
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(e) for which payment is actually made to Indemnitee under a valid
and collectible insurance policy, except in respect to any excess beyond
the amount of payment under such insurance.
(f) in respect of which any final decision by a court having
jurisdiction of the matter shall determine that indemnification is not
lawful.
Section 1.06 The Company shall pay the expenses incurred by Indemnitee in
defending against all Claims (including Claims by or in the right of the
Company) in advance of the final disposition of such Claims, provided that the
Company receives an undertaking by or on behalf of Indemnitee to repay such
amounts advanced if it is ultimately determined by a court of competent
jurisdiction over the matter that he is not entitled to be indemnified by the
Company as authorized under this Agreement. The Company shall perform
its obligation under this Section 1.6 until such time as it may be determined by
final judgment of a court of competent jurisdiction or by final adjudication of
a governmental agency having jurisdiction that Indemnitee is not entitled
to indemnification by virtue of the exclusions set forth in Section 1.5 hereof.
Section 1.07 Notwithstanding any other provision of this Agreement, to
the extent that Indemnitee is, by reason of his status as a person who is or was
a director, officer, employee or agent of the Company or of any other
corporation, partnership or joint venture, trust, employee benefit plan or other
enterprise which such person is or was serving at the request of the Company, a
witness in any action, suit or proceeding to which Indemnitee is not a
party, he shall be indemnified against all expenses (including attorneys' fees)
actually and reasonably incurred by him or on his behalf in connection
therewith.
Section 1.08 The reference in Section 1 hereof to Delaware law is to
Delaware law as the same exists from time to time but, in the case of any
amendments to or change in Delaware law, only to the extent that such amendment
or change permits the Company to provide broader or greater rights of
indemnification than is permitted to the Company prior to such amendment or
change.
ARTICLE 2
Procedure for Determination of Entitlement to Indemnification.
Section 2.01 To obtain indemnification under this Agreement, Indemnitee
shall submit to the Company a written request, including therein or therewith
such documentation and information as is reasonably available to Indemnitee and
is reasonably necessary to determine whether and to what extent Indemnitee is
entitled to indemnification. The Secretary of the Company shall, promptly upon
receipt of such a request for indemnification, advise the Board of
Directors in writing that Indemnitee has requested indemnification.
Section 2.02 Upon written request by Indemnitee for indemnification
pursuant to the first sentence of Section 2.1 hereof, a determination, if
required by applicable law, with respect to Indemnitee's entitlement thereto
shall be made in the specific case: (i) if a Change in Control (as hereinafter
defined) shall have occurred, by Independent Counsel (as hereinafter defined) in
a written opinion to the Board of Directors, a copy of which shall be delivered
to Indemnitee; or (ii) if a Change of Control shall not have occurred,
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(A) by a majority vote of Disinterested Directors (as hereinafter defined), even
though less than a quorum, or (B) by a committee of Disinterested Directors
designated by majority vote of the Disinterested Directors, even though
less than a quorum, or (C) if there are no such Disinterested Directors or is
such Disinterested Directors so direct, by Independent Counsel in a written
opinion to the Board of Directors, a copy of which shall be delivered
to Indemnitee or (D) if so directed by the Board of Directors, by the
stockholders of the Company; and, if it is so determined that Indemnitee is
entitled to indemnification, payment to Indemnitee shall be made within
ten (10) days after such determination. Indemnitee shall cooperate with the
person, persons or entity making such determination with respect to Indemnitee's
entitlement to indemnification, including providing to such person, persons
or entity upon reasonable advance request any documentation or information which
is not privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination. Any
costs or expenses (including attorneys' fees and disbursements) incurred by
Indemnitee in so cooperating with the person, persons or entity making such
determination shall be borne by the Company (irrespective of the determination
as to Indemnitee's entitlement to indemnification) and the Company hereby
indemnifies and agrees to hold Indemnitee harmless therefrom.
Section 2.03 In the event the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to Section 2.2
hereof, the Independent Counsel shall be selected as provided in this Section
2.3. If a Change of Control shall not have occurred, the Independent Counsel
shall be selected by the Board of Directors, and the Company shall give written
notice to Indemnitee advising him of the identity of the Independent Counsel so
selected. If a Change of Control shall have occurred, the Independent
Counsel shall be selected by Indemnitee (unless Indemnitee shall request that
such selection be made by the Board of Directors, in which event the preceding
sentence shall apply), and Indemnitee shall give written notice to the
Company advising it of the identity of the Independent Counsel so selected. In
either event, Indemnitee or the Company, as the case may be, may, within 10 days
after such written notice of selection shall have been given, deliver
to the Company or to Indemnitee, as the case may be, a written objection to such
selection; provided, however, that such objection may be asserted only on the
ground that the Independent Counsel so selected does not meet the requirements
of "Independent Counsel" as defined in Section 5.7 of this Agreement, and the
objection shall set forth with particularity the factual basis of such
assertion. If such written objection is so made and substantiated, the
Independent Counsel so selected may not serve as Independent Counsel unless and
until such objection is withdrawn or a court has determined that such objection
is without merit. If, within 20 days after submission by Indemnitee of a
written request for indemnification pursuant to Section 2.1 hereof, no
Independent Counsel shall have been selected and unobjected to, either the
Company or Indemnitee may petition the Court of Chancery of the State of
Delaware or other court of competent jurisdiction for resolution of any
objection which shall have been made by the Company or Indemnitee to the other's
selection of Independent Counsel and/or for the appointment as Independent
Counsel of a person selected by the Court or by such other person as the
Court shall designate, and the person with respect to whom all objections are so
resolved or the person so appointed shall act as Independent Counsel under
Section 2.2 hereof. The Company shall pay any and all reasonable fees and
expenses of
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Independent Counsel incurred by such Independent Counsel in connection with
acting pursuant to Section 2.2 hereof, and the Company shall pay all reasonable
fees and expenses incident to the procedures of this Section 2.3, regardless of
the manner in which such Independent Counsel was selected or appointed. Upon the
due commencement of any judicial proceeding or arbitration pursuant to Section
4.1(iii) of this Agreement, Independent Counsel shall be discharged and relieved
of any further responsibility in such capacity (subject to the applicable
standards of professional conduct then prevailing).
ARTICLE 3
Presumptions and Effect of Certain Proceedings.
Section 3.01 If a Change of Control shall have occurred, in making a
determination with respect to entitlement to indemnification hereunder, the
person or persons or entity making such determination shall presume that
Indemnitee is entitled to indemnification under this Agreement if Indemnitee has
submitted a request of indemnification in accordance with Section 2.1 of this
Agreement, and the Company shall have the burden of proof to overcome that
presumption in connection with the making by any person, persons or entity of
any determination contrary to that presumption.
Section 3.02 The termination of any Claim or of any issue therein, by
judgment, order, settlement or conviction, or upon a plea of nolo contendere or
its equivalent, shall not (except as otherwise expressly provided in this
Agreement) of itself adversely affect the right of Indemnitee to indemnification
or 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
interests of the Company or, with respect to any criminal Claim, that
Indemnitee had reasonable cause to believe that his conduct was unlawful.
ARTICLE 4
Remedies of Indemnitee.
Section 4.01 In the event that (i) a determination is made pursuant to
Section 2 of this Agreement that Indemnitee is not entitled to indemnification
under this Agreement, (ii) advancement of expenses is not timely made pursuant
to this Agreement, (iii) no determination of entitlement to indemnification
shall have been made pursuant to Section 2.2 of this Agreement within 90 days
after receipt by the Company of the request for indemnification, (iv) payment of
indemnification is not made pursuant to this Agreement within ten (10) days
after receipt by the Company of a written request therefor, or (v) payment of
indemnification is not made within ten (10) days after a determination has
been made that Indemnitee is entitled to indemnification, Indemnitee shall be
entitled to an adjudication in an appropriate court of the State of Delaware, or
in any other court of competent jurisdiction, of his entitlement to such
indemnification or advancement of expenses. Alternatively, Indemnitee, at his
option, may seek an award in arbitration to be conducted by a single arbitrator
pursuant to the Commercial Arbitration Rules of the American Arbitration
Association. Indemnitee shall commence such proceeding seeking an adjudication
or an award in arbitration within 180 days following the date on which
Indemnitee first has the right to commence such proceeding pursuant to
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this Section 4.1; provided, however, that the foregoing clause shall not apply
in respect of a proceeding brought by Indemnitee to enforce his rights under
Section 1.4 of this Agreement.
Section 4.02 In the event that a determination shall have been made
pursuant to Section 2.2 of this Agreement that Indemnitee is not entitled to
indemnification, any judicial proceeding or arbitration commenced pursuant to
this Section 4 shall be conducted in all respects as a de novo trial, or
arbitration, on the merits and Indemnitee shall not be prejudiced by reason of
that adverse determination. If a Change of Control shall have occurred, in any
judicial proceeding or arbitration commenced pursuant to Section 4 the Company
shall have the burden of proving that Indemnitee is not entitled to
indemnification or advancement of expenses, as the case may be.
Section 4.03 If a determination shall have been made pursuant to Section
2.2 of this Agreement that Indemnitee is entitled to indemnification, the
Company shall be bound by such determination in any judicial proceeding or
arbitration commenced pursuant to this Section 4, absent (i) a misstatement by
Indemnitee of a material fact, or an omission of a material fact necessary to
make Indemnitee's statement not materially misleading, in connection with the
request for indemnification, or (ii) a prohibition of such indemnification under
applicable law.
Section 4.04 In the event that Indemnitee, pursuant to this Section 4,
seeks a judicial adjudication of or an award in arbitration to enforce his
rights under, or to recover damages for breach of, this Agreement, Indemnitee
shall be entitled to recover from the Company, and shall be indemnified by the
Company against, any and all expenses actually and reasonably incurred by him in
such judicial adjudication or arbitration in accordance with Section 14.1 of
this Agreement. If it shall be determined in said judicial adjudication or
arbitration that Indemnitee is entitled to receive part but not all of the
indemnification or advancement of expenses sought, the expenses incurred by
Indemnitee in connection with such judicial adjudication or arbitration shall be
appropriately prorated.
ARTICLE 5
Definitions.
Section 5.01 The term "Loss" shall mean any amount Indemnitee is
obligated or asserted to be obligated to pay in respect of his legal liability,
whether actual or asserted, for a Wrongful Act, and shall include damages,
judgments, settlements and costs, attorneys' fees, charges and expenses incurred
in the defense of Claims.
Section 5.02 Wrongful Act. The term "Wrongful Act" shall mean any breach
of duty, neglect, error, misstatement, misleading statement, omission or other
act done or wrongfully attempted by Indemnitee as alleged by any claimant or any
other matter claimed against Indemnitee by reason of Indemnitee being a
director, officer, consultant, employee or agent of the Company (or by reason of
the fact that he is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise).
Section 5.03 Subsidiary. The term "Subsidiary" shall mean
any corporation of which at least 50% of the stock is owned by the Company or by
another Subsidiary.
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Section 5.04 Claim. The term "Claim" shall mean any suit, action,
proceeding, investigation or claim, asserted or threatened, pending or
completed, whether civil, criminal, administrative or investigative, made or
instituted against or with respect to Indemnitee and/or the property of
Indemnitee either by or in the right of the Company or by or in the right of a
party other than the Company.
Section 5.05 Change in Control. The term "Change in Control" means a
change in control of the Company occurring after August 23, 1994 of a nature
that would be required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A (or in response to any similar item on any similar schedule or
form) promulgated under the Securities Exchange Act of 1934 (the "Act"), whether
or not the Company is then subject to such reporting requirement; provided,
however, that, without limitation, such a Change in Control shall be deemed to
have occurred if after August 23, 1994 (i) any "person" (as such term is used in
Section 13(d) and 14(d) of the Act) becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Act), directly or indirectly, of securities of the
Company representing 15% or more of the combined voting power of the Company's
then outstanding securities without the prior approval of at least three-
fourths of the members of the Board of Directors in office immediately prior to
such person attaining such percentage interest; (ii) there occurs a proxy
contest, or the Company is a party to a merger, consolidation, sale of assets,
plan of liquidation or other reorganization not approved by at least three-
fourths of the members of the Board of Directors then in office, as a
consequence of which members of the Board of Directors in office immediately
prior to such transaction or event constitute less than a majority of the
Board of Directors thereafter; or (iii) during any period of two consecutive
years, other than as a result of an event described in clause (ii) of Section
5.2 hereof, individuals who at the beginning of such period constituted the
Board of Directors (including for this purpose any new director whose election
or nomination for election by the Company's stockholders was approved by a vote
of at least two-thirds of the directors then still in office who were directors
at the beginning of such period) cease for any reason to constitute at least a
majority of the Board of Directors. Section 5.06 Disinterested Director. The
term "Disinterested Director" means a director of the Company who is not and was
not a party to the Claim in respect of which indemnification is sought by
Indemnitee.
Section 5.07 Independent Counsel. The term "Independent Counsel" means a
law firm, or a member of a law firm, that is experienced in matters of
corporation law and neither presently is, nor in the past five years has been,
retained to represent: (i) the Company or Indemnitee in any matter material to
either such party, or (ii) any other party to the Claim 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, would have a conflict of
interest in representing either the Company or Indemnitee in an action to
determine Indemnitee's rights under this Agreement.
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ARTICLE 6
Scope of Indemnification.
This Agreement and the indemnification provided herein:
Section 6.01 Shall apply to Indemnitee in his capacity as a director,
officer, employee or agent, or the like, of (i) the Company, (ii) any Subsidiary
or former Subsidiary, or any Subsidiary which is hereafter acquired or created
by the Company and (iii) corporations, partnerships, associations and entities
other than the Company and its Subsidiaries where Indemnitee is directed or
requested to serve by the Company;
Section 6.02 Shall be irrevocable and perpetual and, subject to Section
1.4 hereof, shall apply to any Claim arising or Loss incurred after the date
hereof, whether made or incurred prior to or after the termination of
Indemnitee's services to the Company as a director, officer, employee or agent;
and
Section 6.03 Subject to Section 1.4 hereof, shall cover Losses arising
from any Claims made against the estate, heirs or legal representatives of
Indemnitee.
ARTICLE 7
Agreement to be Construed Liberally.
Section 7.01 The purpose of this Agreement is to induce Indemnitee either
to serve the Company in one or more of the capacities described in Section 6.1
hereof, or to induce Indemnitee to continue to serve in one or more such
capacities. The Company acknowledges that but for this Agreement and the
expectation by Indemnitee that the Company will perform each of its obligations
hereunder, Indemnitee may not consent to serve or to continue to serve the
Company in such capacities. Therefore, it is the intention of the Company and
Indemnitee that this Agreement be construed liberally so as to achieve its
purpose, subject to Section 1.4 hereof, of protecting Indemnitee from and
against Losses arising from Wrongful Acts. The Company agrees that it will not
do or fail to do any act which would or might prevent or hinder the performance
by the Company of its obligations under this Agreement.
ARTICLE 8
Agreement Not Exclusive.
Section 8.01 The rights and benefits of Indemnitee and the obligations of
the Company under this Agreement shall be in addition to, and shall not
supersede or be in lieu of, the provisions (if any) relating to the
indemnification of Indemnitee by the Company in the Certificate of
Incorporation, By-laws or resolutions of the Board of Directors of the Company;
the provisions of policies of insurance or indemnification arrangements provided
by persons or entities other than the Company; or applicable law.
Notwithstanding anything to the contrary in this Agreement, the Company agrees
to defend (subject to Indemnitee's right to retain his own legal counsel
independent of any legal counsel retained by the Company with respect to any
Claim), indemnify and hold harmless Indemnitee to the fullest extent permitted
from time to time
by applicable law.
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ARTICLE 9
Severability.
Section 9.01 Nothing in this Agreement is intended to require or shall be
construed as requiring the Company to do or fail to do any act in violation of
applicable law. In the event any provision of this Agreement is finally
determined by the courts to require the Company to do or fail to do such an act,
such provision shall be limited or modified in its application to the minimum
extent necessary to avoid a violation of law, and as so limited or modified such
provision and the balance of this Agreement shall be enforceable in accordance
with their terms.
ARTICLE 10
CHOICE OF LAW.
Section 10.01 THIS AGREEMENT IS MADE AND ENTERED INTO PURSUANT TO SECTION
145(f) OF THE DELAWARE GENERAL CORPORATION LAW, AND THIS AGREEMENT SHALL BE
GOVERNED BY, AND ITS PROVISIONS CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF DELAWARE.
ARTICLE 11
Choice of Forum.
Section 11.01 The Company agrees (i) that any action instituted by or on
behalf of the Company under this Agreement or to enforce or interpret any
provision of this Agreement shall be brought only in the state courts of the
State of Delaware and in no other court and (ii) that if any action is
instituted in any court by Indemnitee under this Agreement or to enforce or
interpret any of its terms, the Company hereby agrees, and will at such time
agree, to the exclusive jurisdiction and exclusive venue of such court and
to personal service upon the Company by such court for the purpose of such
action, and will not attempt to transfer or remove such action to another court.
ARTICLE 12
Limitations.
Section 12.01 To the extent that a cause of action asserted against the
Indemnitee is not explicitly governed by applicable law with regard to a statute
of limitations, no legal action can be brought by or on behalf of the Company
against the Indemnitee unless the action is asserted by the timely filing of
legal action within two (2) years from the date of accrual of such cause of
action.
ARTICLE 13
Successors and Assigns.
Section 13.01 This Agreement shall be binding upon the Company and its
successors and assigns, and shall inure to the benefit of Indemnitee and
Indemnitee's estate, heirs and legal representatives.
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ARTICLE 14
Attorneys' Fees.
Section 14.01 In the event that any action is instituted by Indemnitee
under this Agreement or to enforce or interpret any of the terms of this
Agreement, Indemnitee shall be entitled to be paid all court costs and expenses,
including attorneys' fees, incurred by Indemnitee with respect to such action,
unless as a part of such action the court determines that each of the material
assertions made by Indemnitee as a basis for such action was not made in good
faith or was frivolous. In the event any action is instituted by or in
the name of the Company under this Agreement or to enforce or interpret any of
the terms of this Agreement, Indemnitee shall be entitled to be paid all court
costs and expenses, including reasonable attorneys' fees, incurred by Indemnitee
in defense of such action (including with respect to Indemnitee's counterclaims
and crossclaims made in such action), unless as a part of such action the court
determines that each of Indemnitee's material defenses to such action was made
in bad faith or was frivolous.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.
UNIT CORPORATION
By:
________________________________
Xxxx X. Xxxxxx, President
AGREED TO AND ACCEPTED
BY INDEMNITEE:
____________________________
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