Exhibit 10.6
FORM OF INDEMNIFICATION
AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the
“ Agreement ”) is effective as of, 200
, by and among Chaparral Energy, Inc., a
Delaware corporation (the “ Company ”), and
(the “ Indemnitee ”).
WHEREAS, it is reasonable, prudent
and necessary for the Company contractually to obligate itself to
indemnify certain of its Authorized Representatives (as defined
below) of the Company to the fullest extent permitted by applicable
law so that they will serve or continue to serve as such free from
undue concern that they will not be adequately
protected;
WHEREAS, the Indemnitee is willing
to serve and continue to serve as an Authorized Representative on
the condition that he be so indemnified; and
WHEREAS, to the extent permitted by
law, this Agreement is a supplement to and in furtherance of the
provisions of the certificate of incorporation (the “
Certificate ”) and bylaws of the Company (the “
Bylaws ”), in each case as amended from time to time,
or resolutions adopted pursuant thereto, and shall not be deemed a
substitute therefor, nor to diminish or abrogate any rights of the
Indemnitee thereunder;
NOW THEREFORE, in consideration of
the premises and the covenants contained herein, the Company and
the Indemnitee do hereby covenant and agree as follows:
1. Services by the Indemnitee
. The Indemnitee agrees to continue to serve at the request of the
Company as an Authorized Representative. Notwithstanding the
foregoing, the Indemnitee may at any time and for any reason resign
from any such position.
2. Indemnification - General
. The Company shall indemnify, and advance Expenses (as hereinafter
defined) to, the Indemnitee as provided in this Agreement and to
the fullest extent permitted by applicable law in effect on the
date hereof and to such greater extent as applicable law may
thereafter from time to time permit. The rights of the Indemnitee
provided under the preceding sentence shall include, but shall not
be limited to, the rights set forth in the other Sections of this
Agreement.
3. Proceedings Other Than
Proceedings by or in the Right of the Company . The Indemnitee
shall be entitled to the rights of indemnification provided in this
Section 3 if, by reason of his Corporate Status (as
hereinafter defined), he is, or is threatened to be made, a party
to or participant in any threatened, pending or completed
Proceeding (as hereinafter defined), other than a Proceeding by or
in the right of the Company. Pursuant to this Section 3
, the Company shall indemnify the Indemnitee against Expenses,
judgments, penalties, fines and amounts paid in settlement (as and
to the extent permitted hereunder) actually and reasonably incurred
by him or on his behalf in connection with such Proceeding or any
claim, issue or matter therein, if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal
Proceeding, if he also had no reasonable cause to believe his
conduct was unlawful.
4. Proceedings by or in the Right
of the Company . The Indemnitee shall be entitled to the rights
of indemnification provided in this Section 4 if, by
reason of his Corporate Status, he is, or is threatened to be made,
a party to or participant in any threatened, pending or completed
Proceeding brought by or in the right of the Company to procure a
judgment in its favor. Pursuant to this Section 4 , the
Company shall indemnify the Indemnitee against Expenses actually
and reasonably incurred by him or on his behalf in connection with
such Proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests
of the Company. Notwithstanding the foregoing, no indemnification
against such Expenses shall be made in respect of any claim, issue
or matter in such Proceeding as to which the Indemnitee shall have
been adjudged to be liable to the Company or if applicable law
prohibits such indemnification; provided , however ,
that if applicable law so permits, indemnification against Expenses
shall nevertheless be made by the Company in such event if and to
the extent that the court in which such Proceeding shall have been
brought or is pending determines that in view of all the
circumstances, the Indemnitee is reasonably and fairly entitled to
such indemnification as such court deems proper.
5. Indemnification for Expenses
of a Party Who is Wholly or Partly Successful .
(a) To the extent that the
Indemnitee is, by reason of his Corporate Status, a party to and is
successful, on the merits or otherwise, in any Proceeding, the
Company shall indemnify the Indemnitee against all Expenses
actually and reasonably incurred by him or on his behalf in
connection therewith. If the Indemnitee is not wholly successful in
the defense of any Proceeding but is successful, on the merits or
otherwise, as to one or more but less than all of the claims,
issues or matters in such Proceeding, the Company shall indemnify
the Indemnitee against all Expenses actually and reasonably
incurred by him or on his behalf in connection with each such
claim, issue or matter as to which the Indemnitee is successful, on
the merits or otherwise. For purposes of this
Section 5(a) , the term “successful, on the
merits or otherwise,” shall include, but shall not be limited
to, (i) the termination of any claim, issue or matter in a
Proceeding by withdrawal or dismissal, with or without prejudice,
(ii) the termination of any claim, issue or matter in a
Proceeding by any other means without any express finding of
liability or guilt against the Indemnitee, with or without
prejudice, (iii) the expiration of 120 days after the making
of a claim or threat of a Proceeding without the institution of the
same and without any promise or payment made to induce a settlement
or (iv) the settlement of any claim, issue or matter in a
Proceeding pursuant to which the Indemnitee pays less than
$100,000. The provisions of this Section 5(a) are
subject to Section 5(b) below.
(b) In no event shall the Indemnitee
be entitled to indemnification under Section 5(a) above
with respect to a claim, issue or matter to the extent
(i) applicable law prohibits such indemnification, or
(ii) an admission is made by the Indemnitee in writing to the
Company or in such Proceeding or a final, nonappealable
determination is made in such Proceeding that the standard of
conduct required for indemnification under this Agreement has not
been met with respect to such claim, issue or matter.
6. Indemnification for Expenses
as a Witness . Notwithstanding any provisions herein to the
contrary, to the extent that the Indemnitee is, by reason of his
Corporate Status, a witness in any Proceeding, the Company shall
indemnify the Indemnitee against all Expenses actually and
reasonably incurred by or on behalf of the Indemnitee in connection
therewith.
2
7. Advancement of Expenses .
The Company shall advance all reasonable Expenses incurred by or on
behalf of the Indemnitee in connection with any Proceeding
described herein within 10 days after the receipt by the Company of
a statement or statements from the Indemnitee requesting such
advance or advances from time to time, whether prior to or after
the final disposition of such Proceeding. Such statement or
statements shall reasonably evidence the Expenses incurred by or on
behalf of the Indemnitee. The Indemnitee hereby expressly
undertakes to repay such amounts advanced only if, and to the
extent that, it shall ultimately be determined by a final,
non-appealable adjudication or arbitration decision that the
Indemnitee is not entitled to be indemnified against such Expenses.
All amounts advanced to the Indemnitee by the Company pursuant to
this Section 7 shall be without interest. The Company
shall make all advances pursuant to this Section 7
without regard to the financial ability of the Indemnitee to make
repayment, without bond or other security and without regard to the
prospect of whether the Indemnitee may ultimately be found to be
entitled to indemnification under the provisions of this Agreement.
Any required reimbursement of Expenses by the Indemnitee shall be
made by the Indemnitee to the Company within 10 days following the
entry of the final, non-appealable adjudication or arbitration
decision pursuant to which it is determined that the Indemnitee is
not entitled to be indemnified against such Expenses.
8. Procedure for Determination of
Entitlement to Indemnification.
(a) To obtain indemnification under
this Agreement, the Indemnitee shall submit to the Company a
written request therefor, along with 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 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.
(b) Upon written request by the
Indemnitee for indemnification pursuant to the first sentence of
Section 8(a) hereof, a determination, if required by
applicable law, with respect to the Indemnitee’s entitlement
thereto shall be made in the specific case: (i) by the Board
by a majority vote of a quorum consisting of Disinterested
Directors (as hereinafter defined); or (ii) if a quorum of the
Board consisting of Disinterested Directors is not obtainable or,
even if obtainable, such quorum of Disinterested Directors so
directs, by Independent Counsel (as hereinafter defined), as
selected pursuant to Section 8(d) , in a written
opinion to the Board (which opinion may be a “more likely
than not” opinion), a copy of which shall be delivered to the
Indemnitee. If it is so determined that the Indemnitee is entitled
to indemnification, the Company shall make payment to the
Indemnitee within 10 days after such determination. The Indemnitee
shall cooperate with the Person or Persons making such
determination with respect to the Indemnitee’s entitlement to
indemnification, including providing to such Person or Persons upon
reasonable advance request any documentation or information which
is not privileged or otherwise protected from disclosure and which
is reasonably available to the Indemnitee and reasonably necessary
to such determination. Subject to the provisions of
Section 10 hereof, any costs or expenses (including
reasonable attorneys’ fees and disbursements) incurred by the
Indemnitee in so cooperating with the Person or Persons making such
determination shall be borne by the Company, and the Company hereby
agrees to indemnify and hold the Indemnitee harmless
therefrom.
3
(c) Notwithstanding the foregoing,
if a Change of Control has occurred, the Indemnitee may require a
determination with respect to the Indemnitee’s entitlement to
indemnification to be made by Independent Counsel, as selected
pursuant to Section 8(d) , in a written opinion to the
Board (which opinion may be a “more likely than not”
opinion), a copy of which shall be delivered to the
Indemnitee.
(d) In the event the determination
of entitlement to indemnification is to be made by Independent
Counsel pursuant to Section 8(b) or (c)
hereof, the Independent Counsel shall be selected as provided
in this Section 8(d) . If a Change of Control shall not
have occurred, the Independent Counsel shall be selected by the
Board (including a vote of a majority of the Disinterested
Directors if obtainable), and the Company shall give written notice
to the 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 the Indemnitee (unless
the Indemnitee shall request that such selection be made by the
Board, in which event the preceding sentence shall apply), and
approved by the Company (which approval shall not be unreasonably
withheld). If (i) an Independent Counsel is to make the
determination of entitlement pursuant to Section 8(b)
or (c) hereof, and (ii) within 20 days after
submission by the Indemnitee of a written request for
indemnification pursuant to Section 8(a) hereof, no
Independent Counsel shall have been selected, either the Company or
the Indemnitee may petition the appropriate court of the State (as
hereafter defined) or other court of competent jurisdiction for the
appointment as Independent Counsel of a Person selected by such
court or by such other Person as such court shall designate. The
Company shall pay any and all reasonable fees and expenses of
Independent Counsel incurred by such Independent Counsel in
connection with acting pursuant to Section 8(b) or
(c) hereof, and the Company shall pay all reasonable
fees and expenses incident to the procedures of this
Section 8(d) , 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 10(a)(iv) 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).
9. Presumptions and Effect of
Certain Proceedings; Construction of Certain
Phrases.
(a) In making a determination with
respect to whether the Indemnitee is entitled to indemnification
hereunder, the Reviewing Party making such determination shall
presume that the Indemnitee is entitled to indemnification under
this Agreement if the Indemnitee has submitted a request for
indemnification in accordance with Section 8(a) of this
Agreement, and anyone seeking to overcome this presumption shall
have the burden of proof and the burden of persuasion, by clear and
convincing evidence.
(b) Subject to the terms of
Section 16 below, the termination of any Proceeding 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 (except as otherwise expressly
provided in this Agreement) 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 he
reasonably believed to be in or not opposed to the best interests
of the Company or, with respect to any criminal Proceeding, that
the Indemnitee had reasonable cause to believe that his conduct was
unlawful.
4
(c) For purposes of any
determination of the Indemnitee’s entitlement to
indemnification under this Agreement or otherwise, the Indemnitee
shall be deemed to have acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests
of the Company, and, with respect to a criminal Proceeding, to have
also had no reasonable cause to believe his conduct was unlawful,
if the Indemnitee’s action is based on the records or books
of account of the Company or another enterprise, including
financial statements, or on information supplied to the Indemnitee
by the officers of the Company or another enterprise in the course
of their duties, or on the advice of legal or financial counsel for
the Company or the Board (or any committee thereof) or for another
enterprise or its board of directors (or any committee thereof), or
on information or records given or reports made by an independent
certified public accountant or by an appraiser or other expert
selected by the Company or the Board (or any committee thereof) or
by another enterprise or its board of directors (or any committee
thereof). For purposes of this Section 9(c) , the term
“another enterprise” means any other corporation,
partnership, limited liability company, joint venture, trust,
employee benefit plan or other enterprise of which the Indemnitee
is or was serving at the request of the Company as a director,
officer, employee or agent. The provisions of this
Section 9(c) shall not be deemed to be exclusive or to
limit in any way the other circumstances in which the Indemnitee
may be deemed or found to have met the applicable standard of
conduct set forth in this Agreement. In addition, the knowledge
and/or actions, or failure to act, of any other director, trustee,
partner, managing member, fiduciary, officer, agent or employee of
the Company shall not be imputed to the Indemnitee for purposes of
determining the right to indemnification under this Agreement.
Whether or not the foregoing provisions of this
Section 9(c) are satisfied, it shall in any event be
presumed that the Indemnitee has acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to a criminal
Proceeding, that he also had no reasonable cause to believe his
conduct was unlawful. Anyone seeking to overcome this presumption
shall have the burden of proof and the burden of persuasion, by
clear and convincing evidence.
(d) For purposes of this Agreement,
references to “fines” shall include any excise taxes
assessed on the Indemnitee with respect to an employee benefit
plan; references to “serving at the request of the
Company” shall include, but shall not be limited to, any
service as a director, officer, employee or agent of the Company
which imposes duties on, or involves services by, the Indemnitee
with respect to an employee benefit plan, its participants or its
beneficiaries; and if the Indemnitee has acted in good faith and in
a manner he reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan, he
shall be deemed to have acted in a manner “not opposed to the
best interests of the Company” as used in this Agreement. The
provisions of this Section 9(d) shall not be deemed to
be exclusive or to limit in any way the other circumstances in
which the Indemnitee may be deemed or found to have met the
applicable standard of conduct set forth in this
Agreement.
10. Remedies of the
Indemnitee .
(a) In the event that (i) a
determination is made pursuant to Section 8 of this
Agreement that the Indemnitee is not entitled to indemnification
under this Agreement,
5
(ii) advancement of Expenses is not timely
made pursuant to Section 7 of this Agreement,
(iii) the determination of entitlement to indemnification is
to be made by the Board pursuant to Section 8(b) of
this Agreement and such determination shall not have been made and
delivered to the Indemnitee in writing within twenty (20) days
after receipt by the Company of the request for indemnification,
(iv) the determination of entitlement to indemnification is to
be made by Independent Counsel pursuant to Section 8(b)
or (c) of this Agreement and such determination shall
not have been made in a written opinion to the Board and a copy
delivered to the Indemnitee within forty-five (45) days after
receipt by the Company of the request for indemnification,
(v) payment of indemnification is not made pursuant to
Section 6 of this Agreement within 10 days after
receipt by the Company of a written request therefor or
(vi) payment of indemnification is not made within 10 days
after a determination has been made that the Indemnitee is entitled
to indemnification or such determination is deemed to have been
made pursuant to Section 8 or 9 of this
Agreement, the Indemnitee shall be entitled to an adjudication in
an appropriate court of the State of his entitlement to such
indemnification or advancement of Expenses. Alternatively, the
Indemnitee, at his sole option, may seek an award in arbitration to
be conducted by a single arbitrator pursuant to the rules of the
American Arbitration Association. The Indemnitee shall commence
such Proceeding seeking an adjudication or an award in arbitration
within 180 days following the date on which the Indemnitee first
has the right to commence such Proceeding pursuant to this
Section 10(a) ; provided , however , that
the foregoing clause shall not apply in respect of a Proceeding
brought by the Indemnitee to enforce his rights under
Section 5 of this Agreement.
(b) In the event that a
determination is made pursuant to Section 8 of this
Agree
