Exhibit 10(b)
The Beard Company
INDEMNIFICATION AGREEMENT
THIS AGREEMENT is made this 15th day of December, 1995, between THE BEARD
COMPANY, an Oklahoma corporation (the "Corporation") and
__________________________ ("Director").
WITNESSETH THAT:
WHEREAS, Director has agreed to be nominated for election to the Board of
Directors of the Corporation and, if elected, to serve as a director of the
Corporation; and
WHEREAS, if Director becomes a director of the Corporation he will be
performing a valuable service for Corporation; and
WHEREAS, the stockholders of Corporation have adopted By-laws (the
"By-laws") providing for the indemnification of the officers, directors, agents
and employees of Corporation to the maximum extent authorized by Section 1031 of
the Oklahoma General Corporation Act, as amended (the "State Statute"); and
WHEREAS, the By-laws and the State Statute specifically provide that they
are not exclusive, and thereby contemplate that contracts may be entered into
between Corporation and the members of its Board of Directors with respect to
indemnification of such directors; and
WHEREAS, recent developments with respect to the application, amendment and
enforcement of statutory and by-law indemnification provisions generally have
raised questions concerning the adequacy and reliability of the protection
afforded to directors thereby; and
WHEREAS, in order to resolve such questions and thereby induce Director to
serve and to continue to serve as a member of the Board of Directors of the
Corporation, the Corporation has determined and agreed to enter into this
contract with Director;
NOW, THEREFORE, in consideration of Director's continued service as a
Director after the date hereof the parties hereto agree as follows:
1. Indemnity of Director. Corporation hereby agrees to hold harmless and
indemnify Director to the fullest extent authorized or permitted by the
provisions of the State Statute, or by any amendment thereof, or any other
statutory provisions authorizing or permitting such indemnification presently in
existence or which may be adopted after the date hereof. In this regard, the
Corporation agrees to indemnify Director and to hold Director harmless from and
against any and all claims, threats, investigations, actions and other
proceedings, whether civil, criminal, administrative or otherwise, (any such
claim, threat, investigation, action or proceeding hereinafter referred to as an
"Action"), damages, judgments, penalties, fines, losses, liabilities, settlement
amounts, costs and expenses (including, without limitation, reasonable legal
fees, costs and disbursements) (collectively, "Losses") incurred, suffered or
expended by or threatened against Director with respect to any action or
inaction taken in the course of (a) Director's nomination and standing for
election as a Director of Corporation, (b) if elected a Director of Corporation,
Director's duties as a Director of Corporation, including without limitation any
such Action or Loss to which Director may become subject under the Securities
Act of 1933, the Securities Exchange Act of 1934, any state securities, takeover
or corporate law, or any other federal or state law or regulation or at common
law, (c) Director's duties as an officer, employee or agent of the Corporation
(if he serves in such capacities) and (d) Director's duties as a director,
officer, employee, or agent of another corporation, partnership, joint venture,
trust or other enterprise if serving in such capacities at the request of the
Corporation. If Director is entitled under any provision of this Agreement to
indemnification by the Corporation for some or a portion of any losses in
respect of an action but not, however, for all of the total amount thereof, the
Corporation will nevertheless indemnify Director for the portion thereof to
which Director is entitled. Payment of any indemnification pursuant to this
Section 1 shall be made within 30 business days after request by Director
therefor. If requested by Director, payment of indemnification for any such
Losses shall be made as the same are incurred notwithstanding that the Action in
respect of which the same were incurred has not been finally determined.
2. Limitations on Additional Indemnity. No indemnity pursuant to Section 1
hereof shall be paid by Corporation:
2.1. In respect to remuneration paid to Director if it shall be
determined by a final judgment or other final adjudication that such
remuneration was in violation of law;
2.2. On account of any suit in which judgment is rendered against a
Director for an accounting of profits made from the purchase or sale by
Director of securities of Corporation pursuant to the provisions 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;
2.3. On account of Director's conduct which is finally adjudged to
have been knowingly fraudulent, deliberately dishonest or willful
misconduct; or
2.4. If a final decision by a Court having jurisdiction in the matter
shall determine that such indemnification is not lawful;
provided, however, notwithstanding any other provision of this agreement to the
contrary, to the extent Director has been successful on the merits or otherwise
in defense of any or all actions relating in whole or in part to an Action for
which indemnification may be provided under this Agreement or in defense of any
issue or matter therein, including dismissal without prejudice, Director will be
indemnified against all expenses incurred in connection therewith.
3. Continuation of Indemnity. All agreements and obligations of Corporation
contained herein shall continue during the period Director is a director,
officer, employee or agent of Corporation or is or was serving at the request of
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, and shall continue
thereafter so long as Director shall be subject to any possible claim or
threatened, pending or completed action, suit or proceeding, whether, civil,
criminal or investigative, by reason of the fact that Director was a director of
Corporation or serving in any other capacity referred to herein.
4. Notification and Defense of Claim. Promptly after receipt by Director of
notice of the commencement of any Action, Director will, if a claim in respect
thereof is to be made against Corporation under this Agreement, notify
Corporation of the commencement thereof; but the omission so to notify
Corporation will not relieve it from any liability which it may have to Director
otherwise than under this Agreement. With respect to any such Action as to which
Director notifies Corporation of the commencement thereof:
4.1. Corporation will be entitled to participate therein at its own
expense; and
4.2. Except as otherwise provided below, to the extent that it may
wish, the Corporation jointly with any other indemnifying party similarly
notified will be entitled to assume the defense thereof, with counsel
satisfactory to Director. After notice from Corporation to Director of its
election so to assume the defense thereof, Corporation will not be liable
to Director under this Agreement for any legal or other expenses
subsequently incurred by Director in connection with the defense thereof
other than reasonable costs of investigation or as otherwise provided
below. Director shall have the right to employ its counsel in such Action
but the fees and expenses of such counsel incurred after notice from
Corporation of its assumption of the defense thereof shall be at the
expense of Director unless (i) the employment of counsel by Director has
been authorized by Corporation, (ii) Director shall have reasonably
concluded that there may be a conflict of interest between Corporation and
Director in the conduct of the defense of such Action or (iii) Corporation
shall not in fact have employed counsel to assume the defense of such
Action, in each of which cases the fees and expenses of counsel shall be at
the expense of Corporation. Corporation shall not be entitled to assume the
defense of any Action brought by or on behalf of Corporation or as to which
Director shall have made the conclusion provided for in (ii) above.
4.3. Corporation shall not be liable to indemnify Director under this
Agreement for any amounts paid in settlement of any Action effected without
its written consent. Corporation shall not settle any Action (wherein
claims are threatened or asserted against Director) without Director's
written consent. Neither the Corporation nor Director will unreasonably
withhold its consent to any proposed settlement.
5. Advance of Expenses. Corporation agrees to reimburse Director within
five business days after request therefor, and in advance of the final
determination of any matter for which a claim for indemnification may be made
pursuant to this Agreement, to the fullest extent permitted by law for any legal
or other expenses incurred by Director either in connection with investigating,
preparing to defend or defending, or providing evidence in or preparing to serve
or serving as a witness with respect to, any Action arising in any manner out of
or in connection with Director's nomination and standing for election as a
Director of Corporation and, if elected a Director of Corporation, Director's
acting as a director of Corporation including, without limitation, in connection
with the enforcement of this Agreement and the indemnification obligations set
forth herein. If requested by Director, Corporation shall, within five (5)
business days after request therefor, advance to Director any such legal or
other expenses which Director reasonably anticipates he will incur.
6. Repayment of Expenses. Director agrees that Director will reimburse
Corporation for all reasonable expenses paid by Corporation in defending any
Action against Director in the event and only to the extent that it shall be
ultimately determined that Director is not entitled to be indemnified by or
receive contribution from Corporation for such expenses under the provisions of
the State Statute, the By-laws, this Agreement or otherwise.
7. Contribution. If indemnification is not available to Director under the
provisions of this Agreement hereof for any reason, Director shall nevertheless
be entitled to contribution toward Losses. Such contribution shall be (i) in
such proportion as is appropriate to reflect the relative benefits received by
Director and Corporation resulting from Director serving as a director of
Corporation or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of Director on the one hand and Corporation on the other in connection
with the Action or other action, event or omission which resulted in such
Losses, as well as any other relevant equitable considerations. Director and
Corporation agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation.
8. Enforcement.
8.1. Corporation expressly confirms and agrees that it has entered
into this Agreement and assumed the obligations imposed on Corporation
hereby in order to induce Director to stand for election as a director of
Corporation and, if elected, to serve as a director of Corporation, and
acknowledges that Director is relying upon this Agreement. In connection
with any determination as to whether Director is entitled to be indemnified
under this Agreement, the burden of proof will be on the Corporation to
establish that Director is not so entitled.
8.2. In the event Director is required to bring any action to enforce
rights or to collect moneys due under this Agreement and is successful in
such action, Corporation shall reimburse Director for all of Director's
reasonable fees and expenses in bringing and pursuing such action.
9. Separability. Each of the provisions of this Agreement is a separate and
distinct agreement and independent of the others, so that if any provision
hereof shall be held to be invalid or unenforceable for any reason, such
invalidity or unenforceability shall not affect the validity or enforceability
of the other provisions hereof.
10. Governing Law; Binding Effect; Amendment and Termination.
10.1. This Agreement shall be interpreted and enforced in accordance
with the laws of the State of Oklahoma.
10.2. This Agreement shall be binding upon Director and upon
Corporation, its successors and assigns, and shall inure to the benefit of
Director, his heirs, personal representatives and assigns and to the
benefit of Corporation, its successors and assigns.
10.3. No amendment, modification, termination or cancellation of this
Agreement shall be effective unless in writing signed by both parties
hereto.
11. No Presumption. For purposes of this Agreement, the termination of any
Action by judgment, order, settlement (whether with or without court approval),
or conviction, or upon a plea of nolo contendere or its equivalent, will not
create a presumption that Director 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.
12. Liability Insurance. To the extent Corporation maintains an insurance
policy or policies providing directors' liability insurance, Corporation will
use its best efforts to cause Director to be covered by such policy or policies,
in accordance with its or their terms, to the maximum extent of the coverage
available for any Corporation director.
13. Reservation of Right. The indemnification provided by this Agreement
shall not be deemed exclusive of any other rights to indemnification to which
Director may be entitled under any statute, certificate or articles of
incorporation, by-law, agreement, vote of stockholders or disinterested
directors or otherwise, and shall continue after Director has ceased to be a
director or failed to be elected a director.
14. Notices. For all purposes of this Agreement, all communications,
including without limitation notices, consents, requests, or approvals, required
or permitted to be given hereunder will be in writing and will be deemed to have
been duly given when hand delivered or dispatched by electronic facsimile
transmission (with receipt thereof orally confirmed), or five (5) calendar days
after having been mailed by United States registered or certified mail, return
receipt requested, postage prepaid, or one business day after having been sent
for next-day delivery by a nationally recognized overnight courier service such
as Federal Express, UPS, DHL or Airborne, addressed to Corporation (to the
attention of the President or the Secretary of the Corporation) at its address
set forth below and to Director at his address set forth below, or to such other
address as either party may have furnished to the other in writing and in
accordance herewith, except that notices of changes of address will be effective
only upon receipt.
15. Amendment. The terms of this Agreement may be amended or modified only
by an instrument in writing by the parties hereto.
16. Waiver, Etc. No waiver or discharge of any pro vision of this Agreement
or a breach of any provision of this Agreement shall be effective unless such
waiver or discharge is agreed to in writing and signed by the party to be
charged. Any waiver on the part of any party hereto of any right or interest
under this agreement shall not constitute the waiver of any other right or
interest or any subsequent waiver of such right or inter est. The failure of any
party at any time to require performance of any provision of this Agreement
shall not affect the right of such party to require full performance thereof at
any time there after. Any waiver of any party of a breach of any provision of
this Agreement shall not constitute a waiver of any subsequent breach thereof
and shall not nullify the effectiveness of such provision. The failure by any
party to give notice of a breach of any provision of this Agreement shall not
constitute a waiver of such breach.
17. Captions; References. The captions throughout this Agreement are for
convenience only and are not intended to limit or be used in the interpretation
of the provisions of this Agreement. References in this Agreement to Sections
are references to Sections of this Agreement.
19. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original but all of which
together will constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and
as of the day and year first above written.
CORPORATION: THE BEARD COMPANY
By_________________________________
Title
Enterprise Plaza
5600 N. May Avenue, Suite 290
Oklahoma City, Oklahoma 73112
Telephone: (405) 842-2333
FAX (405) 842-9901
DIRECTOR:
_________________________________
Director
_______________________________
Address
_______________________________
Address