INDEMNIFICATION AGREEMENT
Exhibit
10.1
This
Indemnification Agreement (this “Agreement”) is entered into as of __________________,
2005,
by and between Maverick Tube Corporation, a Delaware corporation (the
“Company”), and the undersigned, a director and/or officer of the Company
(“Indemnitee”).
RECITALS
The
Company and Indemnitee recognize the continued difficulty in obtaining liability
insurance for directors and officers, the significant increases in the cost
of
such insurance and the general reductions in the coverage of such
insurance.
The
Company and Indemnitee further recognize the substantial increase in corporate
litigation in general, subjecting directors and officers to expensive litigation
risks at the same time as the availability and coverage of liability insurance
has been severely limited.
The
Company desires that Indemnitee resist and defend against what Indemnitee may
consider to be unjustified investigations, claims, actions, suits and
proceedings which have arisen or may arise in the future as a result of
Indemnitee’s service to the Company.
The
Company desires to attract and retain the involvement of highly qualified
persons, such as Indemnitee, to serve and be associated with the Company and
accordingly, wishes to provide for the indemnification and advancement of
expenses to the Indemnitee to the maximum extent permitted by law.
AGREEMENT
In
consideration of the premises and the covenants contained herein, the Company
and Indemnitee agree as follows:
A. DEFINITIONS
The
following terms shall have the meanings defined below in this
Agreement:
1. “Board”
means the Board of Directors of the Company.
2. “Change
in Control” with respect to the Company, means, and shall be deemed to have
occurred on the date upon which (i) the Board (or, if approval of the Board
is
not required as a matter of law, the stockholders of the Company) shall approve
(a) any consolidation or merger of the Company in which the Company is not
the
continuing or surviving corporation or pursuant to which shares of Common Stock
would be converted into cash, securities or other property, other than a merger
of the Company in which the holders of Common Stock immediately prior to the
merger have the same proportionate ownership of common stock of the surviving
corporation immediately after the merger, or (b) any sale, lease, exchange
or
other transfer (in one transaction or a series of related transactions) of
all,
or substantially all, of the assets of the Company, or (c) the adoption of
any
plan or proposal for the liquidation or dissolution of the Company, or (ii)
any
person (as such term is defined in Section 13(d)(3) and 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)), corporation
or other entity shall purchase any Common Stock of the Company (or securities
convertible into Common Stock) for cash, securities or any other consideration
pursuant to a tender offer or exchange offer, without the prior consent of
the
Board, or any such person, corporation or other entity (other than the Company
or any benefit plan sponsored by the Company or any subsidiary) shall become
the
“beneficial owner” (as such term is defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing 35
percent or more of the combined voting power of the then outstanding securities
of the Company ordinarily (and apart from rights accruing under special
circumstances) having the right to vote in the election of directors (calculated
as provided in paragraph (d) of such Rule 13d-3 in the case of rights to acquire
the Company’s securities), or (iii) during any period of two consecutive years,
individuals who at the beginning of such period constitute the entire Board
shall cease for any reason to constitute a majority thereof unless the election,
or the nomination for election by the Company’s stockholders, of each new
director was approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of the period.
3. “Disinterested
Director” means a director of the Company who is not and was not a party to the
Proceeding in respect of which indemnification is sought by
Indemnitee.
4. “Expenses”
shall include damages, judgments, fines, penalties, including ERISA excise
taxes
and penalties, settlements and costs, attorneys’ fees and disbursements and
costs of attachment or similar bond, investigations and any expenses actually
paid or reasonably incurred by Indemnitee in connection with investigating,
defending, being a witness in, participating in (including on appeal), or
preparing for any of the foregoing in, any Proceeding relating to an
Indemnifiable Event, and any federal, state, local or foreign taxes (increased
by any taxes imposed by such payments) actually and reasonably incurred or
suffered by Indemnitee as a result of the actual or deemed receipt of any
payments under this Agreement.
5. “Indemnifiable
Event” means any event or occurrence that takes place either before or after the
execution of this Agreement, related to the fact that Indemnitee is or was
a
director and/or officer of the Company, or is or was serving at the request
of
the Company as a director and/or officer of another corporation, partnership,
joint venture or other entity, or was a director and/or officer of an entity
that was a predecessor of the Company or another entity at the request of such
predecessor entity, or related to anything done or not done by Indemnitee in
any
such capacity.
6. “Participant”
means a person who is a party to, a witness in or a participant (including
on
appeal) in a Proceeding.
7. “Proceeding”
means any threatened, pending or completed action, suit or proceeding, or any
inquiry, hearing or investigation, whether civil, criminal, administrative,
investigative or other, in which Indemnitee may be or may have been involved
as
a party or otherwise by reason of an Indemnifiable Event.
8. “Reviewing
Party” means:
(a) Prior
to
any Change in Control, the person, persons or entity who shall determine whether
Indemnitee is entitled to indemnification in the first instance shall be (i)
the
Board acting by a majority vote of Disinterested Directors, whether or not
such
majority constitutes a quorum of the Board; (ii) a committee of Disinterested
Directors designated by a majority vote of such directors, whether or not such
majority constitutes a quorum; or (iii) if there are no Disinterested Directors,
or if the Disinterested Directors so direct, by Independent Counsel (as
described in Section A.8(b) hereof) in a written determination to the Board,
a
copy of which shall be delivered to Indemnitee.
(b) After
a
Change in Control, the Reviewing Party shall be the Independent Counsel referred
to below. With respect to all matters arising from a Change in Control (other
than a Change in Control approved by a majority of the directors on the Board
who were directors immediately prior to such Change in Control) concerning
the
rights of Indemnitee to indemnity payments and Advancements of Expenses under
this Agreement or any other agreement or under applicable law or the Company’s
certificate of incorporation or by-laws now or hereafter in effect relating
to
indemnification for Indemnifiable Events, the Company shall seek legal advice
only from Independent Counsel selected by the Company and approved by Indemnitee
(which approval shall not be unreasonably withheld), and who has not otherwise
performed services for the Company or the Indemnitee (other than in connection
with indemnification matters) within the last five years. The 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. Such counsel, among other things,
shall render its written opinion to the Company and Indemnitee as to whether
and
to what extent the Indemnitee should be permitted to be indemnified under
applicable law. The Company agrees to pay the reasonable fees of the Independent
Counsel and to indemnify fully such counsel against any and all expenses
(including attorneys’ fees), claims, liabilities, losses and damages arising out
of or relating to this Agreement or the engagement of Independent Counsel
pursuant hereto.
B. AGREEMENT
TO INDEMNIFY
1. General
Agreement.
To the
fullest extent permitted by applicable law, the Company shall indemnify
Indemnitee if:
(a) Indemnitee
is or becomes a Participant in, or is threatened to be made a Participant in,
a
Proceeding (other than an action by or in the right of the Company) if
Indemnitee acted in good faith and in a manner Indemnitee reasonably believed
to
be in or not opposed to the best interests of the Company, and, with respect
to
any criminal action or proceeding, had no reasonable cause to believe
Indemnitee’s conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, 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 Indemnitee reasonably
believed to be in or not opposed to the best interests of the Company, or,
with
respect to any criminal action or proceeding, that Indemnitee had reasonable
cause to believe that Indemnitee’s conduct was unlawful; or
(b) Indemnitee
was or is a Participant or is threatened to be made a Participant to any
Proceeding by or in the right of the Company to procure a judgment in its favor,
against Expenses and amounts paid in settlement (if such settlement is approved
in advance by the Company, which approval shall not be unreasonably withheld),
to the extent actually and reasonably incurred by Indemnitee in connection
with
the defense or settlement of such action or suit if Indemnitee acted in good
faith and in a manner Indemnitee reasonably believed to be in or not opposed
to
the best interests of the Company and its stockholders.
2. Indemnification
of Expenses of Successful Party.
Notwithstanding any other provision of this Agreement, to the extent that
Indemnitee has been successful on the merits in defense of any Proceeding or
in
defense of any claim, issue or matter in such Proceeding, Indemnitee shall
be
indemnified against all Expenses incurred in connection with such Proceeding
or
such claim, issue or matter, as the case may be.
3. Partial
Indemnification.
If
Indemnitee is entitled under any provision of this Agreement to indemnification
by the Company for a portion of Expenses, but not for the total amount of
Expenses, the Company shall indemnify the Indemnitee for the portion of such
Expenses to which Indemnitee is entitled.
4. Exclusions.
Notwithstanding anything in this Agreement to the contrary, Indemnitee shall
not
be entitled to indemnification under this Agreement:
(a) to
the
extent that payment is actually made to Indemnitee under a valid, enforceable
and collectible insurance policy;
(b) in
connection with any Proceeding initiated by Indemnitee against the Company
or
any director or officer of the Company, and not by way of defense, unless
(i) the Company has joined in or the Board has consented to the initiation
of such Proceeding; or (ii) the Proceeding is one to enforce indemnification
rights under this Agreement, under any directors’ and/or officers’ liability
insurance policy or policies maintained by the Company or any applicable
law;
(c) if
it is
determined by final judgment (i.e., not subject to any further rights of appeal)
in a court of law or other final adjudication to have been based upon or
attributable to the Indemnitee’s having gained any personal profit or advantage
to which he or she was not legally entitled;
(d) for
expenses or the payment of profits arising from the purchase and sale by
Indemnitee of securities in violation of Section 16(b) of the Securities
Exchange Act of 1934, as amended, or similar provisions of any applicable U.S.
state statutory law or common law;
(e) brought
about or contributed to by the dishonesty of the Indemnitee seeking payment
hereunder; provided, however, that the Indemnitee shall be protected under
this
Agreement as to any claims upon which suit may be brought against him or her
by
reason of any alleged dishonesty on his or her part, unless a judgment or other
final adjudication thereof adverse to the Indemnitee establishes that he or
she
committed (i) acts of active and deliberate dishonesty, (ii) with actual
dishonest purpose and intent, and (iii) which acts were material to the cause
of
action so adjudicated; or
(f) for
any
judgment, fine or penalty which the Company is prohibited by applicable law
from
paying as indemnity.
5. No
Employment Rights.
Nothing
in this Agreement is intended to create in Indemnitee any right to continued
service as a director and/or officer with the Company.
C. INDEMNIFICATION
PROCESS
1. Notice
and Cooperation By Indemnitee.
Indemnitee shall, as a condition precedent to his or her right to be indemnified
under this Agreement, give the Company notice in writing as soon as practicable
of any claim made against Indemnitee for which indemnification will or could
be
sought under this Agreement. Notice to the Company shall be given in accordance
with Section F.7 below; but the omission to so notify the Company will not
relieve it from any liability that it may have to Indemnitee, unless the delay
in notification prejudiced the Company in the underlying proceeding. In
addition, Indemnitee shall give the Company such information and cooperation
regarding the subject of the indemnification as the Company may reasonably
request.
2. Advancement
of Expenses.
The
Company shall, within ten (10) business days of a written request by Indemnitee,
advance to Indemnitee all Expenses incurred by or on behalf of Indemnitee in
connection with any Proceeding as reasonably evidenced by a statement or
statements submitted with such written request, such reasonableness to be
determined and approved by the Reviewing Party. To the extent that the Reviewing
Party determines that Indemnitee would not be permitted to be so indemnified
under applicable law, the Company shall be entitled to be reimbursed by
Indemnitee for all such Expenses, and Indemnitee hereby agrees to reimburse
the
Company promptly for all such Expenses.
3. Indemnification
Payment.
Indemnitee shall receive payment for the Expenses incurred in connection with
a
Proceeding from the Company in accordance with this Agreement within ten (10)
days after Indemnitee has made written demand on the Company for
indemnification. At any time, the Company shall be entitled to decline such
payment if the Reviewing Party has informed the Company that Indemnitee is
not
entitled to indemnification under this Agreement or applicable law.
4. Assumption
of Defense.
In the
event the Company is obligated under this Agreement to advance any Expenses
for
any Proceeding against Indemnitee, the Company shall be entitled to assume
the
defense of such Proceeding, with counsel approved by Indemnitee (such approval
not to be unreasonably withheld), upon delivery to Indemnitee of written notice
of its election to do so. After delivery of such notice, approval of such
counsel by Indemnitee and the retention of such counsel by the Company, the
Company will not be liable to Indemnitee under this Agreement for any fees
of
counsel subsequently incurred by Indemnitee with respect to the same Proceeding,
unless (i) the employment of counsel by Indemnitee has been previously
authorized by the Company, (ii) Indemnitee shall have reasonably concluded,
based on written advice of counsel, that there may be a conflict of interest
of
such counsel retained by the Company between the Company and Indemnitee in
the
conduct of any such defense, or (iii) the Company ceases or terminates the
employment of such counsel with respect to the defense of such Proceeding,
in
any of which events the fees and expenses of Indemnitee’s counsel shall be at
the expense of the Company. At all times, Indemnitee shall have the right to
employ counsel in any Proceeding at Indemnitee’s expense.
5. Defense
to Indemnification, Burden of Proof and Presumptions.
It shall
be a defense to any action brought by Indemnitee against the Company to enforce
this Agreement that it is not permitted under this Agreement or applicable
law
for the Company to indemnify the Indemnitee with respect to the Proceeding
or
for the amount claimed. In connection with any such action or any determination
by the Reviewing Party or otherwise as to whether Indemnitee is entitled to
be
indemnified under this Agreement, the burden of proving such a defense or
determination shall be on the Company. Neither the failure of the Reviewing
Party or the Company to have made a determination prior to the commencement
of
such action by Indemnitee that indemnification is proper under the circumstances
because Indemnitee has met the standard of conduct set forth in applicable
law,
nor an actual determination by the Reviewing Party or the Company that
Indemnitee had not met such applicable standard of conduct, shall be a defense
to the action or create a presumption that Indemnitee has not met the applicable
standard of conduct.
6. No
Settlement Without Consent.
The
Company shall not settle any Proceeding in any manner that would impose any
penalty or limitation on Indemnitee without Indemnitee’s written consent.
Neither the Company nor Indemnitee shall unreasonably withhold its consent
to
any proposed settlement.
D. DIRECTOR
AND OFFICER LIABILITY INSURANCE
1. Good
Faith Determination.
The
Company shall from time to time make the good faith determination whether or
not
it is practicable for the Company to obtain and maintain a policy or policies
of
insurance with reputable insurance companies providing the directors and
officers of the Company with coverage for losses incurred in connection with
their services to the Company or to ensure the Company’s performance of its
indemnification obligations under this Agreement. Among other considerations,
the Company will weigh the costs of obtaining such insurance coverage against
the protection afforded by such coverage.
2. Coverage
of Indemnitee.
To the
extent the Company maintains an insurance policy or policies providing
directors’ and/or officers’ liability insurance, 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 of the Company’s directors and/or
officers.
E. NON-EXCLUSIVITY;
FEDERAL PREEMPTION
1. Scope.
Notwithstanding any other provision of this Agreement, the Company hereby agrees
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, any other agreement between Indemnitee
and
the Company, the Company’s Certificate of Incorporation, the Company’s Bylaws or
by statute. In the event of any change, after the date of this Agreement, in
any
applicable law, statute or rule that expands the right of a Delaware corporation
to indemnify an officer or a member of its board of directors, such changes
shall be deemed to be within the purview of Indemnitee’s rights and the
Company’s obligations under this Agreement. In the event of any change after the
date of this Agreement, in any applicable law, statute or rule that narrows
the
right of a Delaware corporation to indemnify an officer or a member of its
board
of directors, such changes, 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.
2. Non-Exclusivity.
The
indemnification provided by this Agreement shall not be deemed exclusive of
any
rights to which Indemnitee may be entitled under any other agreement between
Indemnitee and the Company, the Company’s Certificate of Incorporation, the
Company’s Bylaws or applicable law. The indemnification provided under this
Agreement shall continue to be available to Indemnitee for any action taken
or
not taken while serving in an indemnified capacity even though he may have
ceased to serve in any such capacity at the time of any Proceeding.
3. Federal
Preemption.
Notwithstanding the foregoing, both the Company and Indemnitee acknowledge
that
in certain instances, U.S. federal law or public policy may override applicable
law and prohibit the Company from indemnifying its directors and/or officers
under this Agreement or otherwise. Such instances include, but are not limited
to, the U.S. Securities and Exchange Commission’s prohibition on indemnification
for liabilities arising under certain U.S. federal securities laws. Indemnitee
understands and acknowledges that the Company has undertaken or may be required
in the future to undertake with the U.S. Securities and Exchange Commission
to
submit the question of indemnification to a court in certain circumstances
for a
determination of the Company’s right under public policy to indemnify
Indemnitee.
4. Limitation
of Actions and Release of Claims.
Following a Change in Control, no claim shall be brought and no cause of action
shall be asserted by or on behalf of the Company against the Indemnitee, the
Indemnitee’s spouse, heirs, estate, executors or administrators after the
expiration of one year from the act or omission of the Indemnitee upon which
such proceeding is based; provided, however, that in a case where the Indemnitee
fraudulently conceals the facts underlying such cause of action, no proceeding
shall be brought and no cause of action shall be asserted after the expiration
of one year from the earlier of (i) the date the Company discovers such facts,
or (ii) the date the Company could have discovered such facts by the exercise
of
reasonable diligence.
F. MISCELLANEOUS
1. Amendment
of this Agreement.
No
supplement, modification or amendment of this Agreement shall be binding unless
executed in writing by the parties hereto. No waiver of any of the provisions
of
this Agreement shall operate as a waiver of any other provisions (whether or
not
similar), nor shall such waiver constitute a continuing waiver. Except as
specifically provided in this Agreement, no failure to exercise or any delay
in
exercising any right or remedy shall constitute a waiver.
2. Subrogation.
In the
event of 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 shall do everything that may be necessary to
secure such rights, including the execution of such documents necessary to
enable the Company to bring suit to enforce such rights.
3. Binding
Effect.
This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the parties hereto and the Company’s successors (including any direct or
indirect successor by purchase, merger, consolidation, or otherwise to all
or
substantially all of the business and/or assets of the Company) and assigns,
as
well as Indemnitee’s spouses, heirs, and personal and legal
representatives.
4. Severability
and Construction.
Nothing
in this Agreement is intended to require or shall be construed as requiring
the
Company to do or fail to do any act in violation of applicable law. The
Company’s inability, pursuant to a court order, to perform its obligations under
this Agreement shall not constitute a breach of this Agreement. In addition,
if
any portion of this Agreement shall be held by a court of competent jurisdiction
to be invalid, void or otherwise unenforceable, the remaining provisions shall
remain enforceable to the fullest extent permitted by applicable law. The
parties hereto acknowledge that they each have opportunities to have their
respective counsels review this Agreement. Accordingly, this Agreement shall
be
deemed to be the product of both of the parties hereto, and no ambiguity shall
be construed in favor of or against either of the parties hereto.
5. Counterparts.
This
Agreement may be executed in two counterparts, both of which taken together
shall constitute one instrument.
6. Governing
Law.
This
agreement and all acts and transactions pursuant hereto and the rights and
obligations of the parties hereto shall be governed, construed and interpreted
in accordance with the laws of the State of Delaware, without giving effect
to
conflicts of law provisions thereof.
7. Notices.
All
notices, demands and other communications required or permitted under this
Agreement shall be made in writing and shall be deemed to have been duly given
if delivered by hand, against receipt, or mailed, postage prepaid, certified
or
registered mail, return receipt requested, and addressed to the Company
at:
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00000
Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxxxx,
XX 00000
Attention:
___________________
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and
to Indemnitee at the address set forth on the signature page attached
hereto.
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(Signature
page follows)
IN
WITNESS WHEREOF, the parties hereto execute this Agreement as of the date first
written above.
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Name:
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Title:
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INDEMNITEE
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Name:
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Address:
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