Exhibit 10.8
INDEMNIFICATION AGREEMENT
     This Indemnification Agreement (“Agreement”) is made as of                 
                                                  (the “Effective Date”) by and
between The Houston Exploration Company, a Delaware corporation (the “Company”),
and                                                              
(“Indemnitee”).
RECITALS
     WHEREAS, highly competent persons have become more reluctant to serve
publicly-held corporations as directors and officers unless they are provided
with adequate protection through insurance and/or indemnification against the
risks of claims being asserted against them arising out of their service to and
activities on behalf of such corporations; and
     WHEREAS, uncertainties relating to indemnification have increased the
difficulty of attracting and retaining such persons; and
     WHEREAS, the Board of Directors of the Company (the “Board”) has determined
that the increased difficulty in attracting and retaining such persons is
detrimental to the best interests of the Company’s stockholders and that the
Company should act to assure such persons that there will be increased certainty
of such protection in the future; and
     WHEREAS, the Board has determined that, in order to help attract and retain
qualified individuals as directors and officers, the best interests of the
Company and its stockholders will be served by attempting to maintain, on an
ongoing basis, at the Company’s sole expense, insurance to protect persons
serving the Company and its subsidiaries as directors and officers in other
capacities from certain liabilities. Although the furnishing of such insurance
has been a customary and widespread practice among United States-based
corporations and other business enterprises for many years, the Company believes
that, given current market conditions and trends, such insurance may be
available to it in the future only at higher premiums and with more exclusions.
At the same time, directors, officers, and other persons in service to
corporations or business enterprises are being increasingly subjected to
expensive and time-consuming litigation; and
     WHEREAS, the Board has determined that, in order to help attract and retain
qualified individuals as directors and in other capacities, the best interests
of the Company and its stockholders will be served by assuring such individuals
that the Company will indemnify them to the maximum extent permitted by law; and
     WHEREAS, the Amended and Restated Certificate of Incorporation (the
“Certificate of Incorporation”) and the By-Laws (the “By-Laws”) of the Company
require indemnification of the officers and directors of the Company, and
Indemnitee may also be entitled to indemnification pursuant to the Delaware
General Corporation Law (“DGCL”); and
     WHEREAS, the Certificate of Incorporation, the By-Laws and the DGCL
expressly provide that the indemnification provisions set forth therein are not
exclusive, and thereby contemplate that contracts may be entered into between
the Company and members of the Board,

 

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officers and other persons with respect to indemnification and the advancement
of defense costs; and
     WHEREAS, it therefore is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify, and to advance defense costs on
behalf of, such persons to the fullest extent permitted by applicable law so
that they will serve or continue to serve the Company free from undue concern
that they will not be so indemnified; and
     WHEREAS, this Agreement is a supplement to and in furtherance of the
Certificate of Incorporation, By-Laws and any resolutions adopted pursuant
thereto, and shall not be deemed a substitute therefor, nor shall it be deemed
to diminish or abrogate any rights of Indemnitee thereunder; and
     WHEREAS, the Board recognizes that the Indemnitee does not regard the
protection available under the Company’s Certificate of Incorporation, the
By-Laws and insurance program as adequate in the present circumstances, and may
not be willing to serve or continue to serve as a director and/or in such other
capacity as the Company may request without adequate protection, and the Company
desires Indemnitee to serve in such capacity; and
     WHEREAS, Indemnitee is willing to serve, and continue to serve, and take on
additional service as a member of the Board on the condition that he or she be
indemnified as provided for herein.
     NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:
     1. Services to the Company. Indemnitee will serve or continue to serve, at
the will of the Company, as an officer, director or key employee of the Company
for so long as Indemnitee is duly elected or appointed or until Indemnitee
tenders his or her resignation.
     2. Definitions. As used in this Agreement:
          (a) “Change of Control” means:
               (i) the acquisition after the Effective Date, by any individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act (a “Person”) of beneficial ownership of 20% or more of either
(i) the then outstanding shares of common stock of the Company (the “Outstanding
Common Stock”) or (ii) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Voting Securities”), provided that for purposes of
this subsection (i), the following acquisitions shall not constitute a Change of
Control: (A) any acquisition directly from the Company, (B) any acquisition by
the Company, (C) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company, or (D) any acquisition by any corporation pursuant to a transaction
which complies with clauses (A), (B) and (C) of subsection (iii) hereof; or
               (ii) individuals, who, as of the Effective Date, constitute the
Board (the “Incumbent Board”) cease for any reason to constitute at least a
majority of the Board provided

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that any individual becoming a director subsequent to the Effective Date whose
election, or nomination for election by the Company’s stockholders, was approved
by a vote of at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual was a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board; or
               (iii) consummation after the Effective Date, of a reorganization,
merger or consolidation or sale or other disposition of all or substantially all
of the assets of the Company (a “Corporate Transaction”) unless, in each case,
following such Corporate Transaction, (A) (1) all or substantially all of the
persons who were the beneficial owners of the Outstanding Common Stock
immediately prior to such Corporate Transaction beneficially own, directly or
indirectly, more than 60% of the then outstanding shares of common stock of the
corporation resulting from such Corporate Transaction, and (2) all or
substantially all of the persons who were the beneficial owners of the
Outstanding Voting Securities immediately prior to such Corporate Transaction
beneficially own directly or indirectly, more than 60% of the combined voting
power of the then outstanding voting securities entitled to vote generally in
the election of directors of the corporation resulting from such Corporate
Transaction (including, without limitation, a corporation which as a result of
such transaction owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in substantially the
same proportions as their ownership of the Outstanding Common Stock and the
Outstanding Voting Securities immediately prior to such Corporate Transaction,
as the case may be, (B) no Person (excluding (1) any corporation resulting from
such Corporate Transaction or any employee benefit plan (or related trust) of
the Company or such corporation resulting from such Corporate Transaction and
(2) any Person approved by the Incumbent Board) beneficially owns, directly or
indirectly, 20% or more of the then outstanding shares of common stock of the
corporation resulting from such Corporate Transaction or the combined voting
power of the then outstanding voting securities of such corporation except to
the extent that such ownership existed prior to such Corporate Transaction and
(C) at least a majority of the members of the board of directors of the
corporation resulting from such Corporate Transaction were members of the
Incumbent Board at the time of the execution of the initial agreement or of the
action of the Board providing for such Corporate Transaction.
          (b) “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended.
          (c) “Corporate Status” shall describe the status of a person who is or
was a director, officer, trustee, partner, member, fiduciary, employee or agent
of the Company or of any other Enterprise (as defined below), which such person
is or was serving at the request of the Company.
          (d) “Disinterested Director” shall mean a director of the Company who
is not and was not a party to the Proceeding (as defined below) in respect of
which indemnification is sought by Indemnitee.

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          (e) “Enterprise” shall mean any corporation, limited liability
company, partnership, joint venture, trust, employee benefit plan or other
enterprise of which Indemnitee is or was serving at the request of the Company
as a director, officer, trustee, partner, member, fiduciary, employee or agent.
          (f) “Expenses” shall include all reasonable attorneys’ fees,
retainers, court costs, transcript costs, fees of experts, witness fees, travel
expenses, duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees, and all other disbursements or expenses of the
types and amounts customarily incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, being or preparing
to be a witness in, or otherwise participating in, a Proceeding (as defined
below). Expenses also shall include costs incurred in connection with any appeal
resulting from any Proceeding (as defined below), including, without limitation,
the premium, security for, and other costs relating to any bond, supersedeas
bond, or other appeal bond or its equivalent. Expenses, however, shall not
include amounts paid in settlement by Indemnitee or the amount of judgments or
fines against Indemnitee.
          (g) References to “fines” shall include any excise tax assessed on a
person with respect to any employee benefit plan pursuant to applicable law.
          (h) References to “serving at the request of the Company” shall
include any service provided at the request of the Company as a director,
officer, trustee, partner, member, fiduciary, employee or agent of the Company
which imposes duties on, or involves services by, such director, officer,
trustee, partner, member, fiduciary, employee or agent with respect to an
employee benefit plan, its participants or beneficiaries.
          (i) Any action taken or omitted to be taken by a person for a purpose
which he or she reasonably believed to be in the interests of the participants
and beneficiaries of an employee benefit plan shall be deemed to have been taken
in “good faith” and for a purpose which is “not opposed to the best interests of
the Company”, as such terms are referred to in this Agreement and used in the
DGCL.
          (j) The term “Proceeding” shall include any threatened, pending or
completed action, suit, arbitration, alternate dispute resolution mechanism,
investigation, inquiry, administrative hearing or any other actual, threatened
or completed proceeding, whether brought in the right of the Company or
otherwise and whether of a civil, criminal, administrative or investigative
nature, including any related appeal, in which Indemnitee was, is or will be
involved as a party or witness or otherwise by reason of the fact that
Indemnitee is or was a director, officer, trustee, partner, member, fiduciary,
employee or agent of the Company, by reason of any action taken or not taken by
him or her while acting as director, officer, trustee, partner, member,
fiduciary, employee or agent of the Company, or by reason of the fact that he or
she is or was serving at the request of the Company as a director, officer,
trustee, partner, member, fiduciary, employee or agent of any other Enterprise,
in each case whether or not serving in such capacity at the time any liability
or expense is incurred for which indemnification, reimbursement, or advancement
of expenses can be provided under this Agreement.

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          (k) “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 (5) years has been, retained to represent: (i) the Company or
Indemnitee in any matter material to either such party (other than with respect
to matters concerning the Indemnitee under this Agreement, or other indemnitees
under similar indemnification agreements), or (ii) any other party to the
Proceeding 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.
     3. Indemnity in Third-Party Proceedings. The Company shall indemnify
Indemnitee in accordance with the provisions of this Section 3 if Indemnitee is
made, or is threatened to be made, a party to or a participant in (as a witness
or otherwise) any Proceeding, other than a Proceeding by or in the right of the
Company to procure a judgment in its favor. Pursuant to this Section 3,
Indemnitee shall be indemnified against all judgments, fines, penalties, amounts
paid in settlement (if such settlement is approved in writing in advance by the
Company, which approval shall not be unreasonably withheld) (including, without
limitation, all interest, assessments and other charges paid or payable in
connection with or in respect of any of the foregoing) (collectively, “Losses”)
and Expenses actually and reasonably incurred by Indemnitee or on his or her
behalf in connection with such Proceeding or any action, discovery event, claim,
issue or matter therein or related thereto, if Indemnitee acted in good faith,
for a purpose which he or she reasonably believed to be in or not opposed to the
best interests of the Company and, in the case of a criminal Proceeding, in
addition, had no reasonable cause to believe that his or her conduct was
unlawful.
     4. Indemnity in Proceedings by or in the Right of the Company. The Company
shall indemnify Indemnitee in accordance with the provisions of this Section 4
if Indemnitee is made, or is threatened to be made, a party to or a participant
in (as a witness or otherwise) any Proceeding by or in the right of the Company
to procure a judgment in its favor. Pursuant to this Section 4, Indemnitee shall
be indemnified against all Expenses actually and reasonably incurred by him or
her or on his or her behalf in connection with the defense or settlement of such
Proceeding or any action, discovery event, claim, issue or matter therein or
related thereto, if Indemnitee acted in good faith, for a purpose which he or
she reasonably believed to be in or not opposed to the best interests of the
Company. No indemnification, however, shall be made under this Section 4 in
respect of any claim, issue or matter as to which Indemnitee shall have been
adjudged to be liable to the Company, unless and only to the extent that the
court in which the Proceeding was brought or, if no Proceeding was brought in a
court, any court of competent jurisdiction, determines upon application that, in
view of all the circumstances of the case, Indemnitee fairly and reasonably is
entitled to indemnification for such portion of the Expenses as the court deems
proper.
     5. Indemnification for Expenses Where Indemnitee is Wholly or Partly
Successful. Notwithstanding and in addition to any other provisions of this
Agreement, to the extent that Indemnitee is a party to a Proceeding and is
successful, on the merits or otherwise, in the defense of any claim, issue or
matter therein, the Company shall indemnify Indemnitee against all Expenses
actually and reasonably incurred by him or her or on his or her behalf in
connection with such successful defense. For the avoidance of doubt, if
Indemnitee is not wholly successful

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in such Proceeding but is successful, on the merits or otherwise, as to one or
more but less than all claims, issues or matters in such Proceeding, the Company
shall indemnify Indemnitee against all Expenses actually and reasonably incurred
by him or her or on his or her behalf in connection with each successfully
resolved claim, issue or matter. For purposes of this Section 5 and, without
limitation, the termination of any claim, issue or matter in such a Proceeding
by withdrawal or dismissal, with or without prejudice, shall be deemed to be a
successful result as to such claim, issue or matter.
     6. Indemnification for Expenses of a Witness. Notwithstanding and in
addition to any other provision of this Agreement, to the extent that Indemnitee
is, by reason of his or her Corporate Status, a witness in or otherwise incurs
Expenses in connection with any Proceeding to which Indemnitee is not a party,
he or she shall be indemnified against all Expenses actually and reasonably
incurred by him or her or on his or her behalf in connection therewith.
     7. Additional Indemnification.
          (a) Notwithstanding any limitation in Sections 3, 4, or 5 hereof or in
Section 145 of the DGCL, the Company shall indemnify Indemnitee to the fullest
extent permitted by law if Indemnitee is made, or is threatened to be made, a
party to any Proceeding (including a Proceeding by or in the right of the
Company to procure a judgment in its favor) against all Losses and Expenses
actually and reasonably incurred by Indemnitee in connection with the
Proceeding. No indemnification shall be made under this Section 7(a) on account
of Indemnitee’s conduct which constitutes a breach of Indemnitee’s duty of
loyalty to the Company or its stockholders or is an act or omission not in good
faith or which involves intentional misconduct or a knowing violation of the
law.
          (b) For purposes of Sections 7(a), the meaning of the phrase “to the
fullest extent permitted by law” shall include, but not be limited to:
               (i) to the fullest extent authorized or permitted by the
then-applicable provisions of the DGCL that authorize or contemplate
indemnification by agreement, or the corresponding provision of any amendment to
or replacement of the DGCL, and
               (ii) 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.
          (c) Indemnitee shall be entitled to the prompt payment of all Expenses
reasonably incurred in enforcing successfully (fully or partially) this
Agreement.
     8. Exclusions. Notwithstanding any provision in this Agreement, the Company
shall not be obligated under this Agreement to make any indemnity in connection
with any claim made against Indemnitee:
          (a) for which payment actually has been received by or on behalf of
Indemnitee under any insurance policy or other indemnity provision, except with
respect to any excess beyond the amount actually received under such insurance
policy or other indemnity provision; or

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          (b) for an accounting of profits made from the purchase and sale (or
sale and purchase) by Indemnitee of securities of the Company within the meaning
of Section 16(b) of the Exchange Act, as amended, or similar provisions of state
blue sky law, state statutory law or common law; or
          (c) prior to a Change of Control, in connection with any Proceeding
(or any part of any Proceeding) initiated by Indemnitee, including any
Proceeding (or any part of any Proceeding) initiated by Indemnitee against the
Company (other than any Proceeding referred to in Sections 13(d) or (e) below or
any other Proceeding commenced to recover any Expenses referred to in Section
7(c) above) or its directors, officers, employees or other indemnitees, unless
(i) the Board authorized the Proceeding (or any part of any Proceeding) prior to
its initiation or (ii) the Company provides the indemnification, in its sole
discretion, pursuant to the powers vested in the Company under applicable law;
or
          (d) if the funds at issue were paid pursuant to a settlement approved
by a court and indemnification would be inconsistent with any condition with
respect to indemnification expressly imposed by the court in approving the
settlement.
     9. Advances of Expenses; Defense of Claim (a) Notwithstanding any provision
of this Agreement to the contrary, the Indemnitee shall be entitled to advances
of Expenses incurred by him or her or on his or her behalf in connection with a
Proceeding that Indemnitee claims is covered by Sections 3 and 4 hereof, prior
to a final determination of eligibility for indemnification and prior to the
final disposition of the Proceeding, upon the execution and delivery to the
Company of an undertaking by or on behalf of the Indemnitee providing that the
Indemnitee will repay such advances to the extent that it ultimately is
determined that Indemnitee is not entitled to be indemnified by the Company.
This Section 9(a) shall not apply to any claim made by Indemnitee for which
indemnity is excluded pursuant to Section 8.
          (b) The Company shall advance pursuant to Section 9(a) the Expenses
incurred by Indemnitee in connection with any Proceeding within thirty (30) days
after the receipt by the Company of a written statement or statements requesting
such advances from time to time, whether prior to or after final disposition of
any Proceeding. Advances shall be unsecured and interest free. Advances shall be
made without regard to Indemnitee’s ability to repay such advances. Advances
shall include any and all reasonable Expenses incurred pursuing an action to
enforce such right to receive advances.
          (c) The Company will be entitled to participate in the Proceeding at
its own expense.
          (d) The Company shall not settle any action, claim or Proceeding (in
whole or in part) which would impose any Expense, judgment, fine, penalty or
limitation on the Indemnitee without the Indemnitee’s prior written consent,
which consent shall not be unreasonably withheld.
     10. Procedure for Notification and Application for Indemnification
(a) Within sixty (60) days after the actual receipt by Indemnitee of notice that
he or she is a party to or is requested to be a participant in (as a witness or
otherwise) any Proceeding, Indemnitee shall submit to the

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Company a written notice identifying the Proceeding. The failure by the
Indemnitee to notify the Company within such 60-day period will not relieve the
Company from any liability which it may have to Indemnitee (i) otherwise than
under this Agreement, and (ii) under this Agreement, provided that if the
Company can establish that such failure to notify the Company in a timely manner
resulted in actual prejudice to the Company, then the Company will be relieved
from liability only to the extent of such actual prejudice.
          (b) Indemnitee shall at the time of giving such notice pursuant to
Section 10(a) or thereafter deliver to the Company a written application for
indemnification. Such application may be delivered at such time as Indemnitee
deems appropriate in his or her sole discretion. Following delivery of such a
written application for indemnification by Indemnitee, the Indemnitee’s
entitlement to indemnification shall be determined promptly according to Section
11(a) of this Agreement and the outcome of such determination shall be reported
to Indemnitee in writing within forty-five (45) days of the submission of such
application.
     11. Procedure Upon Application for Indemnification.
          (a) Upon written application by Indemnitee for indemnification
pursuant to Section 10(b) or written statement by Indemnitee for advances of
Expenses pursuant to Section 9(b), a determination with respect to Indemnitee’s
entitlement thereto pursuant to the mandatory terms of this Agreement, pursuant
to statute, or pursuant to other sources of right to indemnity, and pursuant to
Section 12 of this Agreement shall be made in the specific case: (i) by a
majority vote of the Disinterested Directors, whether or not such directors
otherwise would constitute a quorum of the Board; (ii) by a committee of
Disinterested Directors designated by a majority vote of such directors, whether
or not such directors would otherwise constitute a quorum of the Board, (iii) if
there are no Disinterested Directors or if so requested by (x) the Indemnitee in
his or her sole discretion or (y) the Disinterested Directors, by Independent
Counsel in a written opinion to the Board, a copy of which shall be delivered to
Indemnitee or (iv) by the stockholders of the Company. Indemnitee shall
reasonably cooperate with the person, persons or entity making the 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 from any such costs and expenses.
          (b) If it is determined that Indemnitee is entitled to indemnification
requested by the Indemnitee in a written application submitted to the Company
pursuant to Section 10(b), payment to Indemnitee shall be made within ten
(10) days after such determination. All advances of Expenses requested in a
written statement by Indemnitee pursuant to Section 9(b) prior to a final
determination of eligibility for indemnification shall be paid in accordance
with Section 9.

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          (c) In the event the determination of entitlement to indemnification
is to be made by Independent Counsel pursuant to Section 11(a) hereof, the
Independent Counsel shall be selected as provided in this Section 11(c). If a
Change of Control shall not have occurred, the Independent Counsel shall be
selected by the Board, and the Company shall give written notice to Indemnitee
advising him or her 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, 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 ten (10) days after such written notice of
selection shall have been received, 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 2 of this Agreement, and the objection shall set forth with
particularity the factual basis of such assertion. Absent a proper and timely
objection, the person so selected shall act as Independent Counsel. If a written
objection is made and substantiated, the Independent Counsel so selected may not
serve as Independent Counsel unless and until such objection is withdrawn or a
court of competent jurisdiction has determined that such objection is without
merit.
          (d) If, within twenty (20) days after submission by Indemnitee of a
written request for indemnification pursuant to Section 9(b) or 10(b) hereof, no
Independent Counsel shall have been selected and not objected to, either the
Company or Indemnitee may petition a 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 11(a) hereof.
          (e) The Company agrees to pay the reasonable fees and expenses of the
Independent Counsel and to fully indemnify such Independent Counsel against any
and all Expenses, claims, liabilities and damages arising out of or relating to
this Agreement or its engagement pursuant hereto.
          (f) Upon the due commencement of any judicial proceeding or
arbitration pursuant to Section 13(a) of this Agreement, any Independent Counsel
shall be discharged and relieved of any further responsibility in such capacity
(subject to the applicable standards of professional conduct then prevailing).
          12. Presumptions and Effect of Certain Proceedings.
     (a) Presumption in Favor of Indemnitee. 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 an application
for indemnification in accordance with Section 10(a) of this Agreement, and the
Company shall have the burden of proof to overcome that presumption.

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          (b) No Presumption Against Indemnitee. Neither the failure of the
Company (including by its directors or Independent Counsel) to have made a
determination prior to the commencement of any action pursuant to this Agreement
nor an actual determination by the Company (including by its directors or
Independent Counsel) that Indemnitee has not met the applicable standard of
conduct for indemnification shall be a defense to the action or create a
presumption that Indemnitee has not met the applicable standard of conduct.
          (c) Sixty Day Period for Determination. If the person, persons or
entity empowered or selected under Section 11 of this Agreement to determine
whether Indemnitee is entitled to indemnification shall not have made a
determination within sixty (60) days after receipt by the Company of an
application therefor, a determination of entitlement to indemnification shall be
deemed to have been made and Indemnitee shall be entitled to such
indemnification, 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 application for indemnification,
or (ii) a prohibition of such indemnification under applicable law; provided,
however, that such 60-day period may be extended for a reasonable time, not to
exceed an additional thirty (30) days, if the person, persons or entity making
the determination with respect to entitlement to indemnification in good faith
requires such additional time for the obtaining or evaluating of documentation
and/or information relating thereto.
          (d) No Presumption from Termination of a Proceeding. 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 of itself adversely affect the right of Indemnitee to indemnification
or create a presumption that Indemnitee did not act in good faith and for a
purpose which he or she reasonably believed to be in or not opposed to the best
interests of the Company or, with respect to any criminal Proceeding, that
Indemnitee had reasonable cause to believe that his or her conduct was unlawful.
          (e) Reliance as Safe Harbor. For purposes of any determination of good
faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s
action or failure to act is based on the records or books of account of the
Company or any Enterprise other than the Company, including financial
statements, or on information supplied to Indemnitee by the officers of the
Company or any Enterprise other than the Company in the course of their duties,
or on the advice of legal counsel for the Company or any Enterprise other than
the Company or on information or records given or reports made to the Company or
any Enterprise other than the Company by an independent certified public
accountant or by an appraiser or other expert selected by the Company or any
Enterprise other than the Company, except if the Indemnitee knew or had reason
to know that such records or books of account of the Company, information
supplied by the officers of the Company, advice of legal counsel or information
or records given or reports made by an independent certified public accountant
or by an appraiser or other expert were materially false or inaccurate. The
provisions of this Section 12(e) 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 any applicable standard of conduct.
          (f) Actions of Others. The knowledge and/or actions, or failure to
act, of any other director, officer, trustee, partner, member, fiduciary,
employee or agent of the Company or

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any Enterprise other than the Company shall not be imputed to Indemnitee for
purposes of determining the right to indemnification under this Agreement.
     13. Remedies of Indemnitee.
          (a) Adjudication/Arbitration. In the event that (i) a determination is
made pursuant to Section 11 of this Agreement that Indemnitee is not entitled to
indemnification under this Agreement, (ii) advancement of Expenses is not timely
made pursuant to Section 9 of this Agreement, (iii) subject to Section 12(c), no
determination of entitlement to indemnification shall have been made pursuant to
Section 11(a) of this Agreement within 60 days after receipt by the Company of
the application for indemnification, or (iv) payment of indemnification is not
made pursuant to Sections 3, 4, 5, 6, 7 and 11(b) of this Agreement within ten
(10) days after a determination has been made that Indemnitee is entitled to
indemnification, or after receipt by the Company of a written request for any
additional monies owed with respect to a Proceeding as to which it already has
been determined that Indemnitee is entitled to indemnification, Indemnitee shall
be entitled to an adjudication by a court of his or her entitlement to such
indemnification or advancement of Expenses. Alternatively, Indemnitee, at his or
her 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. The Company shall not oppose Indemnitee’s right to seek
any such adjudication or award in arbitration.
          (b) Indemnitee Not Prejudiced by Prior Adverse Determination. In the
event that a determination shall have been made pursuant to Section 11(a) of
this Agreement that Indemnitee is not entitled to indemnification, any judicial
proceeding or arbitration commenced pursuant to this Section 13 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 the prior adverse determination.
In any judicial proceeding or arbitration commenced pursuant to this Section 13,
the Company shall have the burden of proving Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be.
          (c) Company Bound by Prior Determination. If a determination shall
have been made pursuant to Section 11(a) 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 13,
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 application for indemnification, or (ii) a
prohibition of such indemnification under applicable law.
          (d) Expenses. In the event that Indemnitee, pursuant to this
Section 13, seeks a judicial adjudication of or an award in arbitration to
enforce his or her 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 or her in such judicial adjudication or arbitration
if it shall be determined in such judicial adjudication or arbitration that
Indemnitee is entitled to receive all or part of the indemnification or
advancement of Expenses sought which the Company had disputed prior to the
commencement of the judicial proceeding or arbitration.

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          (e) Advances of Expenses. If requested by Indemnitee, the Company
shall (within ten (10) days after receipt by the Company of a written request
therefore) advance to Indemnitee the Expenses which are incurred by Indemnitee
in connection with any judicial proceeding or arbitration brought by Indemnitee
for indemnification or advance of Expenses from the Company under this Agreement
or under any directors’ and officers’ liability insurance policies maintained by
the Company, if the Indemnitee has submitted an undertaking to repay such
Expenses if Indemnitee ultimately is determined to not be entitled to such
indemnification, advancement of Expenses or insurance recovery, as the case may
be. The Indemnitee’s financial ability to repay any such advances shall not be a
basis for the Company to decline to make such advances.
          (f) Precluded Assertions by the Company. The Company shall be
precluded from asserting in any judicial proceeding or arbitration commenced
pursuant to this Section 13 that the procedures and presumptions of this
Agreement are not valid, binding and enforceable and shall stipulate in any such
court or before any such arbitrator that the Company is bound by all the
provisions of this Agreement.
     14. Non-exclusivity; Survival of Rights; Insurance; Subrogation.
          (a) Rights of Indemnitee Not Exclusive. The rights of indemnification
and to receive advancement of Expenses as provided by this Agreement shall not
be deemed exclusive of any other rights to which Indemnitee may at any time be
entitled under applicable law, the Certificate of Incorporation, the By Laws,
any agreement, vote of stockholders or a resolution of directors, or otherwise.
No right or remedy herein conferred by this Agreement is intended to be
exclusive of any other right or remedy, and every other right and remedy shall
be cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent or subsequent assertion or employment of any other right or remedy.
          (b) Survival of Rights. No amendment, alteration or repeal of this
Agreement or of any provision hereof shall limit or restrict any right of
Indemnitee under this Agreement in respect of any action taken or omitted by
such Indemnitee in his or her Corporate Status prior to such amendment,
alteration or repeal.
          (c) Change of Law. To the extent that a change in Delaware law,
whether by statute or judicial decision, permits greater indemnification or
advancement of Expenses than would be afforded currently under the Certificate
of Incorporation, the By-Laws and this Agreement, it is the intent of the
parties hereto that Indemnitee shall enjoy by this Agreement the greater
benefits so afforded by such change.
          (d) Insurance. To the extent that the Company maintains an insurance
policy or policies providing liability insurance for directors, officers,
trustees, partners, members, fiduciaries, employees, or agents of the Company or
of any other Enterprise which such person serves at the request of the Company,
Indemnitee shall be covered by such policy or policies in accordance with its or
their terms to the maximum extent of the coverage available for any such
director, trustee, partner, member, fiduciary, officer, employee or agent under
such policy or

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policies. If, at the time the Company receives notice from any source of a
Proceeding as to which Indemnitee is a party or a participant (as a witness or
otherwise) the Company has director and officer liability insurance in effect
that covers Indemnitee, the Company shall give prompt notice of such Proceeding
to the insurers in accordance with the procedures set forth in the respective
policies. The Company shall thereafter take all necessary or desirable action to
cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as
a result of such Proceeding in accordance with the terms of such policies.
(e) Subrogation. In the event of any payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee, who shall execute all papers required and take all
action necessary to secure such rights, including execution of such documents as
are necessary to enable the Company to bring suit to enforce such rights.
(f) Other Payments. The Company shall not be liable under this Agreement to make
any payment of amounts otherwise indemnifiable (or for which advancement is
provided hereunder) if and to the extent that Indemnitee has otherwise actually
received such payment under any insurance policy, contract, agreement or
otherwise.
(g) Other Indemnification. The Company’s obligation to indemnify or advance
Expenses hereunder to Indemnitee who is or was serving at the request of the
Company as a director, officer, trustee, partner, member, fiduciary, employee or
agent of any other Enterprise shall be reduced by any amount Indemnitee has
actually received as indemnification or advancement of expenses from such
Enterprise.
     15. Duration of Agreement. This Agreement shall continue until and
terminate upon the later of: (a) ten (10) years after the date that Indemnitee
shall have ceased to serve as any of the following: a director, officer, agent
or employee of the Company or as a director, officer, trustee, partner, member,
fiduciary, employee or agent of any other corporation, partnership, joint
venture, trust, employee benefit plan or other Enterprise which Indemnitee
served at the request of the Company; or (b) one (1) year after the final
termination of any Proceeding (including after the expiration of any rights of
appeal) then pending in respect of which Indemnitee is granted rights of
indemnification or advancement of Expenses hereunder and of any proceeding
commenced by Indemnitee pursuant to Section 13 of this Agreement (including any
rights of appeal of any Proceeding commenced pursuant to Section 13). This
Agreement shall be binding upon the Company and its successors and assigns and
shall inure to the benefit of Indemnitee and his or her heirs, executors and
administrators.
     16. Severability. If any provision or provisions of this Agreement shall be
held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the
validity, legality and enforceability of the remaining provisions of this
Agreement (including, without limitation, each portion of any Section of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall not
in any way be affected or impaired thereby and shall remain enforceable to the
fullest extent permitted by law; (b) such provision or provisions shall be
deemed reformed to the extent necessary to conform to applicable law and to give
the maximum effect to the intent of the parties hereto; and (c) to the fullest
extent possible, the provisions of this Agreement (including, without
limitation, each

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portion of any Section of this Agreement containing any such provision held to
be invalid, illegal or unenforceable, that is not itself invalid, illegal or
unenforceable) shall be construed so as to give effect to the intent manifested
thereby.
     17. Enforcement.
          (a) The Company expressly confirms and agrees that it has entered into
this Agreement and assumed the obligations imposed on it hereby in order to
induce Indemnitee to serve, or to continue to serve, as a director, officer,
employee and/or agent of the Company, and the Company acknowledges that
Indemnitee is relying upon this Agreement in serving or continuing to serve as a
director, officer, employee and/or agent of the Company.
          (b) This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral, written and implied, between the
parties hereto with respect to the subject matter hereof.
     18. Modification and Waiver. No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by each of the
parties hereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions of this Agreement
nor shall any waiver constitute a continuing waiver.
     19. Successors and Binding Agreement.
          (a) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation, reorganization or otherwise) and
any acquiror of all or substantially all of the business or assets of the
Company, by agreement in form and substance reasonably satisfactory to
Indemnitee and/or his or her counsel, expressly to assume and agree to perform
this Agreement in the same manner and to the same extent the Company would be
required to perform it if no such succession had taken place.
          (b) This Agreement will be binding upon and inure to the benefit of
the Company and any successor to the Company, including, without limitation, any
person acquiring directly or indirectly all or substantially all of the business
or assets of the Company whether by purchase, merger, consolidation,
reorganization or otherwise (and such successor will thereafter be deemed the
“Company” for purposes of this Agreement), but will not otherwise be assignable
or delegatable by the Company.
          (c) This Agreement will inure to the benefit of and be enforceable by
the Indemnitee’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, legatees and other successors.
          (d) This Agreement is personal in nature and neither of the parties
hereto will, without the consent of the other, assign or delegate this Agreement
or any rights or obligations hereunder except as expressly provided in
Sections 19(a), (b) and (c). Without limiting the generality or effect of the
foregoing, Indemnitee’s right to receive payments hereunder will not be
assignable, whether by pledge, creation of a security interest or otherwise,
other than by a transfer by the Indemnitee’s will or by the laws of descent and
distribution, and, in the event of

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any attempted assignment or transfer contrary to this Section 19(d), the Company
will have no liability to pay any amount so attempted to be assigned or
transferred.
     20. Notices. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given
if: (i) delivered by hand and receipted for by the party to whom said notice or
other communication shall have been directed, on the date of such receipt, or
(ii) mailed by certified or registered mail with postage prepaid, on the third
business day after the date on which it is so mailed:
          (a) If to Indemnitee, at the address indicated on the signature page
of this Agreement, or such other address as Indemnitee subsequently shall
provide in writing to the Company.
          (b)  If to the Company to:
The Houston Exploration Company
1100 Louisiana Street, Suite 2000
Houston, Texas 77002
Attention: Chief Financial Officer
or to any other address as may have been furnished to Indemnitee in writing by
the Company.
     21. Contribution. To the fullest extent permissible under applicable law,
if the indemnification provided for in this Agreement is unavailable to
Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying
Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for
judgments, fines, penalties, excise taxes, amounts paid or to be paid in
settlement and/or for Expenses, in connection with any claim relating to an
indemnifiable event under this Agreement, in such proportion as is deemed fair
and reasonable in light of all of the circumstances of such Proceeding in order
to reflect (i) the relative benefits received by the Company and Indemnitee as a
result of the event(s) and/or transaction(s) giving cause to such Proceeding;
and/or (ii) the relative fault of the Company (and its directors, officers,
employees and agents) and Indemnitee in connection with such event(s) and/or
transaction(s).
     22. Applicable Law and Consent to Jurisdiction. This Agreement and the
legal relations among the parties shall be governed by, and construed and
enforced in accordance with, the laws of the State of Delaware, without regard
to its conflict of laws, principles or rules. Except with respect to any
arbitration commenced by Indemnitee pursuant to Section 13 of this Agreement,
the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that
any action or proceeding arising out of or in connection with this Agreement
shall be brought only in the Chancery Court of the State of Delaware (the
“Delaware Court”), and not in any other state or federal court in the United
States of America or any court in any other country, (ii) consent to submit to
the exclusive jurisdiction of the Delaware Court for purposes of any action or
proceeding arising out of or in connection with this Agreement,
(iii) irrevocably appoint, to the extent such party is not a resident of the
State of Delaware, [Corporation Service Company; 2711 Centerville Road,
Suite 400; Wilmington; New Castle County; Delaware 19808] as its agent in the
State of Delaware as such party’s agent for acceptance of legal process in
connection with any such action or proceeding against such party with the same
legal force

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and validity as if served upon such party personally within the State of
Delaware, (iv) waive any objection to the laying of venue of any such action or
proceeding in the Delaware Court, and (v) waive, and agree not to plead or to
make, any claim that any such action or proceeding brought in the Delaware Court
has been brought in an improper or inconvenient forum.
     23. Identical Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
but all of which together shall constitute one and the same Agreement. Only one
such counterpart signed by the party against whom enforceability is sought needs
to be produced to evidence the existence of this Agreement.
     24. Miscellaneous. Use of the masculine pronoun shall be deemed to include
usage of the feminine pronoun where appropriate. The headings of the paragraphs
of this Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction thereof.
[The remainder of this page is intentionally left blank.]

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     IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as
of the day and year first above written.

                      THE HOUSTON EXPLORATION COMPANY       INDEMNITEE    
 
                   
Name:
          Name        
 
 
 
         
 
   
Title:
          Address:        
 
                   
 
                   
 
                   
 
                   
 
                   

Address for Notices:
The Houston Exploration Company
1100 Louisiana Street, Suite 2000
Houston, Texas 77002
Attention: Corporate Secretary

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