FORM OF SECOND AMENDED AND RESTATED INDEMNITY
AGREEMENT
This Second
Amended and Restated Indemnity Agreement (this
“Agreement”) dated June 30, 2006 among Southwestern
Energy Company (the “Company”) and each of its
wholly-owned Subsidiaries that are identified on the signature page
hereof (collectively, the “Subsidiaries”), with offices
located in Houston, Texas and Fayetteville, Arkansas, and
____________ (the “Indemnitee”).
WITNESSETH:
WHEREAS,
Indemnitee is currently serving as a director, officer, employee,
trustee or agent (including a fiduciary) of the Company and/or one
or more of the Subsidiaries and in such capacity has performed and
is performing valuable services for the Company and/or the
Subsidiaries; and
WHEREAS, the
Company's and each Subsidiary's bylaws (the “Bylaws”)
provide for the indemnification of directors, officers, employees
and agents (including fiduciaries) and the advancement of certain
litigation expenses for directors, officers, employees and agents
(including fiduciaries) to the maximum extent authorized by the
Delaware General Corporation Law [and, to the extent applicable to
a Subsidiary, the Arkansas Business Corporation Act of 1987, the
Arkansas Small Business Entity Pass Through Act and the Texas
Limited Liability Company Act] (as amended from time to time and
including any successor acts thereto, collectively, the
“State Statutes”); and
WHEREAS, the State
Statutes provide that the rights to indemnification and advancement
of expenses authorized thereunder are not exclusive; and
WHEREAS, under the
State Statutes, the Company and each Subsidiary has the power to
purchase and maintain insurance on behalf of any person who (i) is
or was a director, officer,
employee, trustee
or agent (including a fiduciary) of the Company or such Subsidiary,
or (ii) is or was serving, at the request of such corporation, as a
director, officer, employee, trustee or agent (including a
fiduciary) of another corporation, partnership, joint venture,
trust, or other enterprise against any liability asserted against
him or her and incurred by him or her in any such capacity, or
arising out of his or her status as such, whether or not the
Company or such Subsidiary would have the power to indemnify
him or her against such liability under the provisions of the State
Statutes; and
WHEREAS,
developments with respect to the terms and availability of a policy
of Directors’ and Officers’ Liability Insurance
(“D&O Insurance”) and with respect to the terms and
enforcement of statutory and by-law provisions concerning
indemnification and the advancement of expenses generally have
raised questions concerning the adequacy and reliability of the
protection that these provisions provide; and
WHEREAS, in order
to resolve these questions and induce Indemnitee to continue to
serve as an officer, director, employee, trustee or agent
(including a fiduciary) of the Company and/or the Subsidiaries, the
Company and each Subsidiary have determined that it is in the best
interest of the Company and each Subsidiary and their stockholders
to enter into this Agreement with Indemnitee;
NOW, THEREFORE, in
consideration of the Indemnitee's continued service as a director,
officer, employee, trustee or agent (including a fiduciary) of the
Company and/or one or more of the Subsidiaries the parties hereto
agree as follows:
1.
Indemnification
and Payment of Expenses . Subject to the
limitations, terms and conditions of this Agreement, including, but
not limited to the limitations in Section 4, the Company and each
Subsidiary hereby agree to:
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(a)
hold harmless and
indemnify the Indemnitee against all liabilities and losses
incurred in connection with any threatened, pending, or completed
action, suit or proceeding, whether civil, criminal,
administrative, investigative or other (including, but not limited
to, any action by or in the right of the Company), to which the
Indemnitee is, was or at any time becomes a party, is threatened to
be made a party, or is involved (as a witness or otherwise), by
reason of the fact that the Indemnitee is, was or at any time
becomes a director, officer, employee, trustee or agent (including
a fiduciary) of the Company or any Subsidiary or is or was serving
at the request of the Company as a director, officer, employee,
trustee or agent (including a fiduciary) of another corporation or
of a partnership, joint venture, trust or other enterprise, whether
the basis of such proceeding is alleged action in an official
capacity, or in any other capacity while serving as a director,
officer, employee, trustee or agent; and
(b)
pay on behalf of
the Indemnitee, and his or her executors, administrators, heirs or
assigns, any amount which he or she is or becomes legally obligated
to pay because of any claim or claims made against the Indemnitee
because of any act or omission or neglect or breach of duty,
including any actual or alleged error or misstatement or misleading
statement, which Indemnitee commits or suffers while acting in his
or her capacity as a director, officer, employee, trustee or agent
(including a fiduciary) of the Company and/or any of the
Subsidiaries. The payments which the Company and/or the
Subsidiaries will be obligated to make hereunder shall include,
inter alia, compensatory and punitive damages, judgments, fines,
ERISA excise taxes, penalties, settlements and costs, costs of
investigation, (excluding salaries as officers or employees of the
Company and/or the Subsidiaries), attorneys’ fees, costs of
appearance, attachment and similar bonds
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and other legal
costs of actions, claims, proceedings, investigations and
alternative dispute mechanisms, (including actions, claims,
proceedings, investigations or alternative dispute mechanisms by or
on behalf of the Company and/or any Subsidiary and appeals
therefrom), whether civil, criminal, administrative, investigative
or other.
2.
Additional
Indemnification; Nonexclusivity . (a) The Company
and each Subsidiary hereby agree to indemnify the Indemnitee to the
fullest extent permitted by law, notwithstanding that such
indemnification is not specifically authorized by the other
provisions of this Agreement, the Company’s or such
Subsidiary’s Certificate of Incorporation or Articles of
Incorporation (as the case may be), Bylaws or other organizational
documents (collectively, the “Organizational
Documents”), or by statute. In the event of any change
after the date of this Agreement in any applicable law, statute or
rule which expands the right of a Delaware corporation[, an
Arkansas corporation, an Arkansas limited liability company or a
Texas limited liability company] to indemnify its directors,
officers, employees or agents (including fiduciaries), it is the
intent of the parties hereto that Indemnitee shall enjoy by this
Agreement the greater benefits afforded by such change. In
the event of any change in any applicable law, statute or rule
which narrows the right of a Delaware corporation[, an Arkansas
corporation, an Arkansas limited liability company or a Texas
limited liability company] to indemnify its directors, officers,
employees or agents (including fiduciaries), such change, to the
extent not otherwise required by such law, statute or rule to be
applied to this Agreement, shall have no effect on this Agreement
or the parties’ rights and obligations hereunder except as
set forth in Section 4(d).
(b)
The
indemnification provided by this Agreement shall be in addition to
any rights to which Indemnitee may be entitled under the
Company’s or any Subsidiary’s Organizational Documents,
any agreement, any vote of stockholders or disinterested directors,
the State Statutes,
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or otherwise.
The indemnification provided under this Agreement shall
continue as to Indemnitee for any action Indemnitee took or did not
take while serving in an indemnified capacity even though
Indemnitee may have ceased to serve in such capacity.
3.
Notice of
Claim; Subrogation; No Duplication of Payments
. (a)
If the Company has D&O Insurance in effect at the time
the Company receives from Indemnitee any notice of commencement of
an action, suit or proceeding, the Company shall give prompt notice
of such commencement to the insurers in accordance with the
procedures set forth in the policy. The Company shall
thereafter take all necessary and desirable action to cause such
insurers to pay, on behalf of Indemnitee, all amounts payable as a
result of such action, suit or proceeding in accordance with
the terms of such policy.
(b)
In the event of
any payment under this Agreement, the Company and/or each relevant
Subsidiary, as the case may be, shall be subrogated to the extent
of such payment to all of the rights of recovery of the Indemnitee,
who hereby agrees to execute all documents required and to do
everything that may be necessary to secure such subrogation rights,
including the execution of such documents necessary or desirable to
enable the Company and/or each relevant Subsidiary effectively to
bring suit to enforce such rights.
(c)
The Company shall
not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable hereunder (including, but not limited to,
judgments, fines, ERISA excise taxes or penalties, and amounts paid
in settlement) if and to the extent that Indemnitee has otherwise
actually received such payment under this Agreement or any
insurance policy, contract, agreement or otherwise.
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4.
Exceptions to
Indemnification . Notwithstanding the
provision of Section 1 or any other provision of this Agreement,
neither the Company nor any Subsidiary shall be liable under this
Agreement to make any payment in connection with any claim made
against the Indemnitee:
(a)
in respect of
remuneration paid to the Indemnitee if it shall be determined by a
final judgment or other final adjudication that such remuneration
was in violation of law; or
(b)
for an accounting
or profits made from the purchase or sale by the Indemnitee of
securities of the Company or any Subsidiary pursuant to or within
the meaning of Section 16(b) of the Securities Exchange Act of 1934
and amendments thereto or similar provisions of any federal or
state statutory law or common law; or
(c)
on account of the
Indemnitee's conduct which is finally adjudged to have been
knowingly fraudulent, deliberately dishonest, grossly negligent, or
willful and wanton misconduct in the performance of his or her
duties, which such conduct is material to the establishment of
liability for which indemnification is sought pursuant to the terms
of this Agreement; or
(d)
if a final
decision by a court shall determine that such indemnification is
not lawful or is against public policy.
5.
Continuation
. All
agreements and obligations of the Company and/or its Subsidiaries
required pursuant to the terms of this Agreement shall continue
during the period the Indemnitee is a director, officer, employee,
trustee or agent (including a fiduciary) of the Company and/or any
Subsidiary (or is or was serving at the request of the Company
and/or any Subsidiary as a director, officer, employee or agent
(including a fiduciary) of another corporation, partnership, joint
venture, trust or other enterprise) and shall continue thereafter
so long as the
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Indemnitee shall
be subject to any possible claim or threatened, pending or
completed action, suit or proceeding, by reason of the fact that
the Indemnitee was serving as a director, officer, employee,
trustee or agent (including a fiduciary) of the Company and/or any
Subsidiary or serving in any other capacity referred to in this
Section.
6.
Notice and
Defense . Promptly after receipt
by the Indemnitee of notice of the commencement of any action, suit
or proceedings, the Indemnitee is hereby required, if a claim in
respect thereof is to be made against the Company and/or any
Subsidiary under this Agreement to notify the Company and each
relevant Subsidiary of the commencement thereof; but the omission
so to notify the Company and each relevant Subsidiary will not
relieve the Company nor any relevant Subsidiary from any liability
which they may have to the Indemnitee otherwise than under this
Agreement except to the extent that such lack of prompt
notification shall cause the Company and/or any relevant Subsidiary
to be denied coverage under any insurance policy that may then be
in effect. With respect to any such action, suit or
proceedings as to which the Indemnitee notifies the Company and or
any Subsidiary of the commencement thereof:
(a)
the Company and/or
each relevant Subsidiary will be entitled to participate therein at
their own expense;
(b)
except as
otherwise provided below to the extent that they may wish, the
Company and/or any relevant Subsidiary jointly with any other
indemnifying party similarly notified will be entitled to assume
the defense thereof, with counsel satisfactory to the Indemnitee.
After notice from the Company and/or each relevant Subsidiary
to the Indemnitee of its election to so assume the defense thereof,
neither the Company nor any Subsidiary will be liable to the
Indemnitee under this Agreement for any legal or other expenses
subsequently incurred by the Indemnitee in connection with the
defense thereof
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other than
reasonable costs of investigation or as otherwise provided below.
The Indemnitee shall have the right to employ separate
counsel in such action, suit or proceedings but the fees and
expenses of such counsel incurred after notice from the Company
and/or each relevant Subsidiary of its assumption of the defense
thereof shall be at the expense of the Indemnitee unless (i) the
employment of counsel by the Indemnitee has been authorized in
writing by an executive office
