INDEMNITY AGREEMENT
Between
SUPERIOR ENERGY SERVICES, INC.
and
___________________
INDEMNITY AGREEMENT
This Agreement is made as of the ____ day of __________, 1995,
by and between Superior Energy Services, Inc., a Delaware
corporation (the "Corporation"), and _____________ ("Indemnitee").
In consideration of Indemnitee's continued service after the
date hereof, the Corporation and Indemnitee do hereby agree as
follows:
1. Agreement to Serve. Indemnitee shall serve or continue
to serve as a director of the Corporation and any other
corporation, subsidiary, partnership, joint venture or trust or
other enterprise of which he is serving at the request of the
Corporation and agrees to serve in that capacity for so long as
he is duly elected or appointed and qualified or until such
earlier time as he tenders his resignation in writing.
2. Definitions. As used in this Agreement:
(a) The term "Claim" shall mean any threatened,
pending or completed claim, action, suit or proceeding, including
appeals, whether civil, criminal, administrative or investigative
and whether made judicially or extra-judicially, including any
action by or in the right of the Corporation or any separate
issue or matter therein, as the context requires.
(b) The term "Determining Body" shall mean (i) those
members of the Board of Directors who do not have a direct or
indirect interest in the Claim for which indemnification is being
sought ("Impartial Directors"), if there are at least two
Impartial Directors, or (ii) a committee of at least two
directors appointed by the Board or a duly authorized committee
thereof (regardless whether the directors voting on such appoint-
ment are Impartial Directors) and composed of Impartial Directors
or (iii) if there are fewer than two Impartial Directors or if
the Board of Directors or a duly authorized committee thereof so
directs (regardless whether the members thereof are Impartial
Directors), independent legal counsel, which may be the regular
outside counsel of the Corporation, as determined by the
Impartial Directors or, if no such directors exist, the full
Board of Directors.
(c) The term "Disbursing Officer" shall mean the Chief
Financial Officer of the Corporation or, if the Chief Financial
Officer has a direct or indirect interest in the Claim for which
indemnification is being sought, any officer who does not have
such an interest and who is designated by the Chief Executive
Officer to be the Disbursing Officer with respect to in-
demnification requests related to the Claim, which designation
shall be made promptly after receipt of the initial request for
indemnification with respect to such Claim.
(d) The term "Expenses" shall mean any expenses or
costs including, without limitation, attorney's fees, judgments,
punitive or exemplary damages, fines, excise taxes or amounts
paid in settlement. If any of the foregoing amounts paid on
behalf of Indemnitee are not deductible by Indemnitee for federal
or state income tax purposes, the Corporation shall reimburse
Indemnitee for any resulting tax liability with respect thereto
by paying to Indemnitee an amount which, after taking into
account taxes on such amount, equals Indemnitee's incremental tax
liability as a result of such expense or cost.
3. Limitation of Liability. To the fullest extent
permitted by the Certificate of Incorporation and By-laws of the
Corporation (each as in effect on the date hereof and, if and to
the extent such provisions are amended to permit further
limitations, in effect at any time prior to the determination of
liability that would exist but for the provisions of this
Agreement) Indemnitee shall not be liable for breach of his
fiduciary duty as a director or officer.
4. Insurance. The Corporation currently does not have in
effect policies of insurance providing insurance protection to
its directors, officers and employees against some liabilities
which may be incurred by them on account of their services to the
Corporation. If such insurance is purchased by the Corporation,
the insurance, to the extent of the coverage it provides, shall
be primary and indemnification shall be made pursuant to this
Agreement only to the extent that the director or officer is not
reimbursed pursuant to such insurance coverage. If such
insurance is not purchased by the Corporation, the Indemnitee
shall be entitled to indemnification by the Corporation in
accordance with the provisions of this Agreement.
5. Additional Indemnity.
(a) To the extent any Expenses incurred by Indemnitee
are in excess of the amounts reimbursed or indemnified pursuant
to the provisions of Section 4 hereof, the Corporation shall
indemnify, defend and hold harmless Indemnitee against any
Expenses actually and reasonably incurred by Indemnitee (as they
are incurred) in connection with any Claim against Indemnitee
(whether as a subject of or party to, or a proposed or threatened
subject of or party to, the Claim), or involving Indemnitee
solely as a witness or person required to give evidence, by
reason of Indemnitee's position (i) as a director or officer of
the Corporation, (ii) as a director or officer of any subsidiary
of the Corporation or as a fiduciary with respect to any employee
benefit plan of the Corporation, or (iii) as a director, officer,
partner, employee or agent of another corporation, partnership,
joint venture, trust or other for profit or not for profit entity
or enterprise, if such position is or was held at the request of
the Corporation, whether relating to service in such position
before or after the effective date of this Agreement, if (A) the
Indemnitee is successful in his defense of the Claim on the
merits or otherwise or (B) the Indemnitee has been found by the
Determining Body to have met the Standard of Conduct (as
hereinafter defined); provided that no indemnification shall be
made in respect of any Claim as to which Indemnitee shall have
been adjudicated in a final judgment to be liable for willful or
intentional misconduct in the performance of his duty to the
Corporation or to have obtained an improper personal benefit,
unless, and only to the extent that, a court shall determine upon
application that, despite the adjudication of liability but in
view of all the circumstances of the case, Indemnitee is fairly
and reasonably entitled to indemnity for such Expenses which the
court shall deem proper.
(b) For purposes of this Agreement, the "Standard of
Conduct" is met when conduct by an Indemnitee with respect to
which a Claim is asserted was conduct performed in good faith
which he reasonably believed to be in, or not opposed to, the
best interest of the Corporation, and, in the case of a Claim
which is a criminal action or proceeding, conduct that the
Indemnitee had no reasonable cause to believe was unlawful. The
termination of any Claim 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 meet the Standard of Conduct.
(c) Promptly upon becoming aware of the existence of
any Claim as to which Indemnitee may be indemnified for Expenses
and as to which Indemnitee desires to obtain indemnification,
Indemnitee shall notify the Chief Executive Officer of the Corpo-
ration, but the failure to promptly notify the Chief Executive
Officer shall not relieve the Corporation from any obligation
under this Agreement. Upon receipt of such request, the Chief
Executive Officer shall promptly advise the members of the Board
of Directors of the request and that the establishment of a
Determining Body with respect to Indemnitee's request for
indemnification as to the Claim will be presented at the next
regularly scheduled meeting of the Board. If a meeting of the
Board of Directors is not regularly scheduled within 90 calendar
days of the date the Chief Executive Officer receives notice of
the Claim, the Chief Executive Officer shall cause a special
meeting of the Board of Directors to be called within such period
in accordance with the provisions of the Corporation's By-laws.
After the Determining Body has been established, the Determining
Body shall inform the Indemnitee of the constitution of the
Determining Body and Indemnitee shall provide the Determining
Body with all facts relevant to the Claim known to such
Indemnitee, and deliver to the Determining Body all documents
relevant to the Claim in Indemnitee's possession. Before the
60th day after its receipt from the Indemnitee of such
information (the "Determination Date"), together with such
additional information as the Determining Body may reasonably
request of Indemnitee prior to such date (the receipt of which
shall not begin a new 60-day period) the Determining Body shall
determine whether or not Indemnitee has met the Standard of
Conduct and shall advise Indemnitee of its determination. If
Indemnitee shall have supplied the Determining Body with all
relevant information, including all additional information
reasonably requested by the Determining Body, any failure of the
Determining Body to make a determination by or on the
Determination Date as to whether the Standard of Conduct was met
shall be deemed to be a determination that the Standard of
Conduct was met by Indemnitee.
(d) If at any time during the 60-day period ending on
the Determination Date, Indemnitee becomes aware of any relevant
facts not theretofore provided by him to the Determining Body,
Indemnitee shall inform the Determining Body of such facts,
unless the Determining Body has obtained such facts from another
source. The provision of such facts to the Determining Body
shall not begin a new 60 day period.
(e) The Determining Body shall have no power to revoke
a determination that Indemnitee met the Standard of Conduct
unless Indemnitee (i) submits to the Determining Body at any time
during the 60 days prior to the Determination Date fraudulent
information, (ii) fails to comply with the provisions of Section
4(d) hereof, or (iii) intentionally fails to submit information
or documents relevant to the Claim reasonably requested by the
Determining Body prior to the Determination Date.
(f) In the case of any Claim not involving any
threatened or pending criminal proceeding,
(i) if prior to the Determination Date the Deter-
mining Body has affirmatively made a determination that the
Indemnitee met the Standard of Conduct (not including a
determination deemed to have been made by inaction), the Corpo-
ration may, except as otherwise provided below, individually or
jointly with any other indemnifying party similarly notified,
assume the defense thereof with counsel reasonably satisfactory
to the Indemnitee (who shall not, except with the written consent
of Indemnitee, be counsel to the Corporation). If the Corpora-
tion assumes the defense of the Claim, it shall notify Indemnitee
of such action and keep Indemnitee informed as to the progress of
such defense, including any proposed settlements, so that
Indemnitee may make an informed decision as to the need for
separate counsel. After notice from the Corporation that it is
assuming the defense of the Claim, it will not be liable to
Indemnitee under this Agreement for any legal or other expenses
subsequently incurred by Indemnitee in connection with the
defense other than reasonable costs of investigation or as
otherwise provided below. Indemnitee shall have the right to
employ its own counsel in such action, suit or proceeding but the
fees and expenses of such counsel incurred after such notice from
the Corporation of its assumption of the defense shall be at the
expense of Indemnitee unless (A) the employment of counsel by
Indemnitee has been authorized by the Corporation, (B) Indemnitee
shall have concluded reasonably that there may be a conflict of
interest between the Corporation and Indemnitee in the conduct of
the defense of such action or (C) the 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 the Corporation. The Corporation shall not be
entitled to assume the defense of any action, suit or proceeding
brought by or in the right of the Company or as to which
Indemnitee shall have made the conclusion provided for in (B)
above; and
(ii) the Corporation shall fairly consider any
proposals by Indemnitee for settlement of the Claim. If the Cor-
poration proposes a settlement of the Claim and such settlement
is acceptable to the person asserting the Claim, or the
Corporation believes a settlement proposed by the person
asserting the Claim should be accepted, it shall inform
Indemnitee of the terms of such proposed settlement and shall fix
a reasonable date by which Indemnitee shall respond. If In-
demnitee agrees to such terms, he shall execute such documents as
shall be necessary to make final the settlement. If Indemnitee
does not agree with such terms, Indemnitee may proceed with the
defense of the Claim in any manner he chooses, provided that if
Indemnitee is not successful on the merits or otherwise, the
Corporation's obligation to indemnify such Indemnitee as to any
Expenses incurred following his disagreement shall be limited to
the lesser of (A) the total Expenses incurred by Indemnitee
following his decision not to agree to such proposed settlement
or (B) the amount that the Corporation would have paid pursuant
to the terms of the proposed settlement. If, however, the
proposed settlement would impose upon Indemnitee any requirement
to act or refrain from acting that would materially interfere
with the conduct of Indemnitee's affairs, Indemnitee may refuse
such settlement and continue his defense of the Claim, if he so
desires, at the Corporation's expense in accordance with the
terms and conditions of this Agreement without regard to the
limitations imposed by the immediately preceding sentence. In
any event, the Corporation shall not be obligated to indemnify
Indemnitee for any amount paid in a settlement that the Corpora-
tion has not approved.
(g) In the case of any Claim involving a proposed,
threatened or pending criminal proceeding, Indemnitee shall be
entitled to conduct the defense of the Claim with counsel of his
choice and to make all decisions with respect thereto; provided
that the Corporation shall not be obliged to indemnify Indemnitee
for any amount paid in settlement of such a Claim unless the
Corporation has approved such settlement.
(h) After notifying the Corporation of the existence
of a Claim, Indemnitee may from time to time request the Corpora-
tion to pay the Expenses (other than judgments, fines, penalties
or amounts paid in settlement) that he incurs in pursuing a
defense of the Claim prior to the time that the Determining Body
determines whether the Standard of Conduct has been met. The
Disbursing Officer shall pay to Indemnitee the amount requested
(regardless of Indemnitee's apparent ability to repay such
amount) upon receipt of an undertaking by or on behalf of
Indemnitee to repay such amount if it shall ultimately be de-
termined that he is not entitled to be indemnified by the Corpo-
ration under the circumstances.
(i) After it has been determined that the Standard of
Conduct has been met, for so long as and to the extent that the
Corporation is required to indemnify Indemnitee under this
Agreement, the provisions of Section 5(h) shall continue to apply
with respect to Expenses incurred after such time except that (i)
no undertaking shall be required of Indemnitee and (ii) the
Disbursing Officer shall pay to Indemnitee the amount of any
fines, penalties or judgments against him which have become final
and for which he is entitled to indemnification hereunder, and
any amount of indemnification ordered to be paid to him by a
court.
(j) Any determination by the Corporation with respect
to settlement of a Claim shall be made by the Determining Body.
(k) All determinations and judgments made by the
Determining Body hereunder shall be made in good faith.
(l) The Corporation and Indemnitee shall keep
confidential to the extent permitted by law and their fiduciary
obligations all facts and determinations provided pursuant to or
arising out of the operation of this Agreement and the
Corporation and Indemnitee shall instruct its or his agents and
employees to do likewise.
6. Enforcement.
(a) The rights provided by this Agreement shall be en-
forceable by Indemnitee in any court of competent jurisdiction.
(b) If Indemnitee seeks a judicial adjudication of his
rights under, or to recover damages for breach of, this Agree-
ment, Indemnitee shall be entitled to recover from the Corpora-
tion, and shall be indemnified by the Corporation against, any
and all expenses actually and reasonably incurred by him in con-
nection with such proceeding, but only if he prevails therein.
If it shall be determined that Indemnitee is entitled to receive
part but not all of the relief sought, then the Indemnitee shall
be entitled to be reimbursed for all expenses incurred by him in
connection with such judicial adjudication if the amount to which
he is determined to be entitled exceeds 50% of the amount of his
claim. Otherwise, the expenses incurred by Indemnitee in connec-
tion with such judicial adjudication shall be appropriately
prorated.
(c) In any judicial proceeding described in this Sec-
tion 6, the Corporation shall bear the burden of proving that In-
demnitee is not entitled to the relief sought, even if the
Determining Body prior to the Determination Date determined that
Indemnitee failed to meet the Standard of Conduct. If prior to
the Determination Date the Determining Body failed to make a
determination that Indemnitee did not meet the Standard of
Conduct, it shall not be a defense to such suit that Indemnitee
did not meet the Standard of Conduct.
7. Saving Clause. If any provision of this Agreement is
determined by a court having jurisdiction over the matter to
violate or conflict with applicable law, the court shall be
empowered to modify or reform such provision so that, as modified
or reformed, such provision provides the maximum indemnification
permitted by law and such provision, as so modified or reformed,
and the balance of this Agreement, shall be applied in accordance
with their terms. Without limiting the generality of the forego-
ing, if any portion of this Agreement shall be invalidated on any
ground, the Corporation shall nevertheless indemnify an Indemni-
tee to the full extent permitted by any applicable portion of
this Agreement that shall not have been invalidated and to the
full extent permitted by law with respect to that portion that
has been invalidated.
8. Non-Exclusivity. (a) The indemnification and
advancement of Expenses provided by or granted pursuant to this
Agreement shall not be deemed exclusive of any other rights to
which Indemnitee is or may become entitled under any statute,
certificate of incorporation, by-law, authorization of
stockholders or directors, agreement, or otherwise.
(b) It is the intent of the Corporation by this Agree-
ment to indemnify and hold harmless Indemnitee to the fullest ex-
tent permitted by law, so that if applicable law would permit the
Corporation to provide broader indemnification rights than are
currently permitted, the Corporation shall indemnify and hold
harmless Indemnitee to the fullest extent permitted by applicable
law notwithstanding that the other terms of this Agreement would
provide for lesser indemnification.
9. Confidentiality. The Corporation and Indemnitee shall
keep confidential to the extent permitted by law and their
fiduciary obligations all information and determinations provided
pursuant to or arising out of the operations of this Agreement
and the Corporation and Indemnitee shall instruct its or his
agents and employees to do likewise.
10. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall constitute the origi-
nal.
11. Applicable Law. This Agreement shall be governed by
and construed in accordance with the substantive laws of the
State of Delaware.
12. Successors and Assigns. This Agreement shall be bind-
ing upon Indemnitee and upon the Corporation, its successors and
assigns, and shall inure to the benefit of the Indemnitee's
heirs, personal representatives, and assigns and to the benefit
of the Corporation, its successors and assigns.
13. Amendment. No amendment, modification, termination or
cancellation of this Agreement shall be effective unless made in
writing signed by the Corporation and Indemnitee. Notwithstand-
ing any amendment, modification, termination or cancellation of
this Agreement or any portion hereof, Indemnitee shall be
entitled to indemnification in accordance with the provisions
hereof with respect to any acts or omissions of Indemnitee which
occur prior to such amendment, modification, termination or can-
cellation.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and signed as of the date and year
first above written.
SUPERIOR ENERGY SERVICES, INC.
By:
Name:
Title:
INDEMNITEE
