INDEMNIFICATION
AGREEMENT
THIS AGREEMENT is
effective April 23, 2007, between Concho Resources Inc., a
Delaware corporation (the “Corporation”), and the
undersigned director or officer of the Corporation
(“Indemnitee”).
WHEREAS, the
Certificate of Incorporation of the Corporation (as the same may be
amended from time to time, the “Certificate of
Incorporation”) provides for indemnification of the
Corporation’s directors and officers; and
WHEREAS, the
Corporation has adopted Bylaws (as the same may be amended from
time to time, the “Bylaws”) providing for
indemnification of the Corporation’s directors and officers;
and
WHEREAS, the
Bylaws and the Delaware General Corporation Law (the
“DGCL”) contemplate that contracts and insurance
policies may be entered into with respect to indemnification of
directors and officers; and
WHEREAS, there are
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;
NOW, THEREFORE, in
consideration of the premises and the covenants contained herein,
the Corporation and Indemnitee do hereby covenant and agree as
follows:
As used in this
Agreement:
(a) The term
“Proceeding” shall include any threatened, pending or
completed action, suit, claim, 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 is reasonably
expected to be involved as a party, as a witness or otherwise, by
reason of the fact that Indemnitee is or was a director or officer
of the Corporation, by reason of any action taken by him or of any
inaction on his part while acting as a director or officer of the
Corporation or by reason of the fact that he is or was serving at
the request of the Corporation as a director, officer, trustee,
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, claim, inquiry or
proceeding which is brought by Indemnitee against the 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 pursuant to this Agreement; 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 Indemnitee’s being or acting as “a director or
officer of the Corporation” or “serving at the request
of the Corporation as a director, officer, trustee, employee or
agent of another corporation, partnership, joint venture, trust,
limited liability company or other enterprise” shall include
in each case service to or actions taken while a director, officer,
trustee, employee or agent of any subsidiary of the Corporation or
while serving as a member of a committee of the Board of Directors
of the Corporation.
(d) 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, trustee, 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.
(e) 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.
(f) 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 fullest extent authorized or permitted by law
(including the applicable provisions of the DGCL). The phrase
“to the fullest extent permitted by law” shall include,
but not be limited to (a) to the fullest extent permitted by
any provision of the DGCL that authorizes or permits additional
indemnification by agreement, or the corresponding provision of any
amendment to or replacement of the DGCL and (b) to the fullest
extent authorized or permitted by any amendments to or replacements
of the DGCL adopted after the date of this Agreement that increase
the extent to which a corporation may indemnify its officers and
directors. Any amendment, alteration or repeal of the DGCL that
adversely affects any right of Indemnitee shall be prospective only
and shall not limit or eliminate any such right with respect to any
Proceeding involving any occurrence or alleged occurrence of any
action or omission to act that took place prior to such amendment
or repeal.
2
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, trustee, employee or agent of another
corporation, partnership, joint venture, trust, limited liability
company or other enterprise, 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 Indemnitee had reasonable cause to
believe that his conduct was unlawful.
4. Contribution. If the indemnification provided under
Section 2 or Section 3 is unavailable by reason of a
court decision finding that Indemnitee is not eligible to receive
indemnification for Expenses incurred by Indemnitee under this
Agreement, based on grounds other than any of those set forth in
Section 15, then, in respect of any Proceeding in which the
Corporation is jointly liable with Indemnitee (or would be if
joined in such Proceeding), the Corporation shall contribute to the
amount of Expenses actually and reasonably incurred and paid or
payable by Indemnitee in such proportion as is appropriate to
reflect (i) the relative benefits received by the Corporation
on one hand and Indemnitee on the other from the transaction from
which such Proceeding arose and (ii) the relative fault of the
Corporation on the one hand and of Indemnitee on the other in
connection with the events that resulted in such Expenses as well
as any other relevant equitable considerations. The relative fault
of the Corporation on the one hand and of Indemnitee on the other
shall be determined by reference to, among other things, the
parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent the circumstances resulting
in such Expenses. The Corporation agrees that it would not be just
and equitable if contribution pursuant to this Section 4 were
determined by pro rata allocation or any other method of allocation
that does not take into account of the foregoing equitable
considerations.
5. Choice
of Counsel. Each Indemnitee that is an Outside Director, Chase
Director or Other Indemnitee, together with the other Indemnitees
who are designated in the same group, shall be entitled to employ,
and be reimbursed for the fees and disbursements of, separate
counsel to represent the Outside Directors, the Chase Directors or
the Other Indemnitees, as the case may be, in connection with any
Proceeding. For purposes of this Agreement, an Indemnitee shall be
designated as (i) an “Outside Director” if such
Indemnitee is a director and not an officer of the Corpo
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