EXHIBIT 10.12
INDEMNIFICATION AGREEMENT
THIS AGREEMENT is effective as of August 3, 2005 between Superior Well
Services, Inc., a Delaware corporation (the "CORPORATION"), and the undersigned
director or officer of the Corporation ("INDEMNITEE").
WHEREAS, the Corporation has adopted Amended and Restated Bylaws (as
the same may be amended from time to time, the "Bylaws") providing for
indemnification of the Corporation's directors and officers to the maximum
extent authorized by the Delaware General Corporation Law (the "DGCL"); and
WHEREAS, the Bylaws and the DGCL contemplate that contracts and
insurance policies may be entered into with respect to indemnification of
directors and officers; and
WHEREAS, there are questions concerning the adequacy and reliability of
the protection which might be afforded to directors and officers from
acquisition of policies of Directors and Officers Liability Insurance ("D&O
INSURANCE"), covering certain liabilities which might be incurred by directors
and officers in the performance of their services to the Corporation; and
WHEREAS, it is reasonable, prudent and necessary for the Corporation to
obligate itself contractually to indemnify Indemnitee so that he will serve or
continue to serve the Corporation free from undue concern that he will not be
adequately protected; and
WHEREAS, Indemnitee is willing to serve, continue to serve and to take
on additional service for or on behalf of the Corporation on condition that he
be so indemnified;
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Corporation and Indemnitee do hereby covenant and agree as
follows:
1. DEFINITIONS. As used in this Agreement:
(a) The term "Proceeding" shall include any threatened, pending or
completed action, suit, inquiry or proceeding, whether brought by or in the
right of the Corporation or otherwise and whether of a civil, criminal,
administrative, arbitrative or investigative nature, in which Indemnitee is or
will be involved as a party, as a witness or otherwise, by reason of the fact
that Indemnitee is or was a director or officer of the Corporation, by reason of
any action taken by him or of any inaction on his part while acting as a
director or officer or by reason of the fact that he is or was serving at the
request of the Corporation as a director, officer, trustee, employee or agent of
another corporation, partnership, joint venture, trust, limited liability
company or other enterprise; in each case whether or not he is acting or serving
in any such capacity at the time any liability or expense is incurred for which
indemnification or reimbursement can be provided under this Agreement; provided
that any such action, suit or proceeding that is brought by Indemnitee against
the Corporation or directors or officers of the Corporation, other than an
action brought by Indemnitee to enforce his rights under this Agreement, shall
not be deemed a Proceeding without prior approval by a majority of the Board of
Directors of the Corporation.
(b) The term "Expenses" shall include, without limitation, any
judgments, fines and penalties against Indemnitee in connection with a
Proceeding; amounts paid by Indemnitee in settlement of a Proceeding; and all
attorneys' fees and disbursements, accountants' fees, private investigation fees
and disbursements, retainers, court costs, transcript costs, fees of experts,
fees and expenses of witnesses, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees, and all other
disbursements, or expenses, reasonably incurred by or for Indemnitee in
connection with prosecuting, defending, preparing to prosecute or defend,
investigating, being or preparing to be a witness in a Proceeding or
establishing Indemnitee's right of entitlement to indemnification for any of the
foregoing.
(c) References to Indemnitee's being or acting as "a director or
officer of the Corporation" or "serving at the request of the Corporation as a
director, officer, trustee, employee or agent of another corporation,
partnership, joint venture, trust, limited liability company or other
enterprise" shall include in each case service to or actions taken while a
director, officer, trustee, employee or agent of any subsidiary or predecessor
of the Corporation.
(d) References to "other enterprise" shall include employee benefit
plans; references to "fines" shall include any excise tax assessed with respect
to any employee benefit plan; references to "serving at the request of the
Corporation" shall include any service as a director, officer, employee or agent
of the Corporation which imposes duties on, or involves services by, such
director, officer, trustee, employee or agent with respect to an employee
benefit plan, its participants or beneficiaries; and a person who acted in good
faith and in a manner he reasonably believed to be in the interests of the
participants and beneficiaries of an employee benefit plan shall be deemed to
have acted in a manner "not opposed to the best interest of the Corporation" as
referred to in this Agreement.
(e) The term "substantiating documentation" shall mean copies of
bills or invoices for costs incurred by or for Indemnitee, or copies of court or
agency orders or decrees or settlement agreements, as the case may be,
accompanied by a sworn statement from Indemnitee that such bills, invoices,
court or agency orders or decrees or settlement agreements, represent costs or
liabilities meeting the definition of "Expenses" herein.
(f) The terms "he" and "his" have been used for convenience and mean
"she" and "her" if Indemnitee is a female.
2. INDEMNITY OF DIRECTOR OR OFFICER. The Corporation hereby agrees to
hold harmless and indemnify Indemnitee against Expenses to the fullest extent
authorized or permitted by law (including the applicable provisions of the
DGCL). The phrase "to the fullest extent permitted by law" shall include, but
not be limited to (a) to the fullest extent permitted by any provision of the
DGCL that authorizes or permits additional indemnification by agreement, or the
corresponding provision of any amendment to or replacement of the DGCL and (b)
to the fullest extent authorized or permitted by any amendments to or
replacements of the DGCL adopted after the date of this Agreement that increase
the extent to which a corporation may indemnify its officers and directors. Any
amendment, alteration or repeal of the DGCL that adversely affects any right of
Indemnitee shall be prospective only and shall not limit or eliminate any such
right with respect to any Proceeding involving any occurrence or alleged
occurrence of any action or omission to act that took place prior to such
amendment or repeal.
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3. ADDITIONAL INDEMNITY. The Corporation hereby further agrees to hold
harmless and indemnify Indemnitee against Expenses incurred by reason of the
fact that Indemnitee is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, trustee, employee or agent of another corporation,
partnership, joint venture, trust, limited liability company or other
enterprise, including, without limitation, any predecessor, subsidiary or
affiliated entity of the Corporation, but only if Indemnitee acted in good faith
and in a manner he reasonably believed to be in, or not opposed to, the best
interests of the Corporation. Additionally, in the case of a criminal
proceeding, Indemnitee must have had no reasonable cause to believe that his
conduct was unlawful. The termination of any Proceeding by judgment, order of
the court, settlement, conviction or upon a plea of nolo contendere, or its
equivalent, shall not, of itself, create a presumption that Indemnitee did not
act in good faith and in a manner which he reasonably believed to be in, or not
opposed to, the best interest of the Corporation, and with respect to any
criminal Proceeding, that Indemnitee had reasonable cause to believe that his
conduct was unlawful.
4. CHOICE OF COUNSEL. If Indemnitee is not an officer of the
Corporation, he, together with the other directors who are not officers of the
Corporation (the "OUTSIDE DIRECTORS"), shall be entitled to employ, and be
reimbursed for the fees and disbursements of, counsel separate from that chosen
by Indemnitees who are officers of the Corporation. The principal counsel for
Outside Directors ("PRINCIPAL COUNSEL") shall be determined by majority vote of
the Outside Directors, and the Principal Counsel for the Indemnitees who are not
Outside Directors ("SEPARATE COUNSEL") shall be determined by majority vote of
such Indemnitees, in each case subject to the consent of the Corporation (not to
be unreasonably withheld or delayed). The obligation of the Corporation to
reimburse Indemnitee for the fees and disbursements of counsel hereunder shall
not extend to the fees and disbursements of any counsel employed by Indemnitee
other than Principal Counsel or Separate Counsel, as the case may be, unless
Indemnitee has interests that are different from those of the other Indemnitees
or defenses available to him that are in addition to or different from those of
the other Indemnitees such that Principal Counsel or Separate Counsel, as the
case may be, would have an actual or potential conflict of interest in
representing Indemnitee.
5. ADVANCES OF EXPENSES. Expenses (other than judgments, penalties,
fines and settlements) incurred by Indemnitee shall be paid by the Corporation,
in advance of the final disposition of the Proceeding, within 20 calendar days
after receipt of Indemnitee's written request accompanied by substantiating
documentation and Indemnitee's written affirmation that he has met the standard
of conduct for indemnification and a written undertaking to repay such amount to
the extent it is ultimately determined that indemnitee is not entitled to
indemnification. No objections based on or involving the question whether such
charges meet the definition of "Expenses," including any question regarding the
reasonableness of such Expenses, shall be grounds for failure to advance to such
Indemnitee, or to reimburse such Indemnitee for, the amount claimed within such
20-day period, and the undertaking of Indemnitee set forth in Section 7 hereof
to repay any such amount to the extent it is ultimately determined that
Indemnitee is not entitled to indemnification shall be deemed to include an
undertaking to repay any such amounts determined not to have met such
definition.
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6. RIGHT OF INDEMNITEE TO INDEMNIFICATION UPON APPLICATION; PROCEDURE
UPON APPLICATION. Any indemnification under this Agreement, other than pursuant
to Section 5 hereof, shall be made no later than 60 days after receipt by the
Corporation of the written request of Indemnitee, accompanied by substantiating
documentation, unless a determination is made within said 60-day period by (a)
the Board of Directors by a majority vote of a quorum consisting of directors
who are not or were not parties to such Proceeding, (b) a committee of the Board
of Directors designated by majority vote of the Board of Directors, even though
less than a quorum, (c) if there are no such directors, or if such directors so
direct, independent legal counsel in a written opinion or (d) the stockholders,
that Indemnitee has not met the relevant standards for indemnification set forth
in Section 3 hereof.
The right to indemnification or advances as provided by this Agreement
shall be enforceable by Indemnitee in any court of competent jurisdiction. The
burden of proving that indemnification is not appropriate shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors, any committee thereof, independent legal counsel or its stockholders)
to have made a determination prior to the commencement of such action that
indemnification is proper in the circumstances because Indemnitee has met the
applicable standards of conduct, nor an actual determination by the Corporation
(including its Board of Directors, any committee thereof, independent legal
counsel or its stockholders) that Indemnitee has 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.
7. UNDERTAKING BY INDEMNITEE. Indemnitee hereby undertakes to repay to
the Corporation (a) any advances of Expenses pursuant to Section 5 hereof and
(b) any judgments, penalties, fines and settlements paid to or on behalf of
Indemnitee hereunder, in each case to the extent that it is ultimately
determined that Indemnitee is not entitled to indemnification. As a condition to
the advancement of such Expenses or the payment of such judgments, penalties,
fines and settlements, Indemnitee shall, at the request of the Company, execute
an acknowledgment that such Expenses or such judgments, penalties, fines and
settlements, as the case may be, are delivered pursuant and are subject to the
provisions of this Agreement.
8. INDEMNIFICATION HEREUNDER NOT EXCLUSIVE. The indemnification and
advancement of expenses provided by this Agreement shall not be deemed exclusive
of any other rights to which Indemnitee may be entitled under the Company's
Amended and Restated Certificate of Incorporation (as the same may be amended
from time to time), the Bylaws, the DGCL, any D&O Insurance, any agreement, or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office; provided, however, that this
Agreement supersedes all prior written indemnification agreements between the
Corporation (or any predecessor thereof) and Indemnitee with respect to the
subject matter hereof. However, Indemnitee shall reimburse the Corporation for
amounts paid to him pursuant to such other rights to the extent such payments
duplicate any payments received pursuant to this Agreement.
9. CONTINUATION OF INDEMNITY. All agreements and obligations of the
Corporation contained herein shall continue during the period Indemnitee is a
director or officer of the Corporation (or is or was serving at the request of
the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, limited liability company or
other enterprise) and shall continue thereafter so long as Indemnitee shall be
subject
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to any possible Proceeding (notwithstanding the fact that Indemnitee has ceased
to serve the Corporation).
10. PARTIAL INDEMNIFICATION. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Corporation for a portion
of Expenses, but not, however, for the total amount thereof, the Corporation
shall nevertheless indemnify Indemnitee for the portion of such Expenses to
which Indemnitee is entitled.
11. SETTLEMENT OF CLAIMS. The Corporation shall not be liable to
indemnify Indemnitee under this Agreement for any amounts paid in settlement of
any Proceeding effected without the Corporation's written consent. The
Corporation shall not settle any Proceeding in any manner which would impose any
penalty or limitation on Indemnitee without Indemnitee's written consent.
Neither the Corporation nor Indemnitee will unreasonably withhold or
delay their consent to any proposed settlement. The Corporation shall not be
liable to indemnify Indemnitee under this Agreement with regard to any judicial
award if the Corporation was not given a reasonable and timely opportunity, at
its expense, to participate in the defense of such action.
12. ACKNOWLEDGEMENTS.
(a) Corporation Acknowledgement. The Corporation expressly confirms
and agrees that it has entered into this Agreement and assumed the obligations
imposed on the Corporation hereby in order to induce Indemnitee to serve or to
continue to serve as a director or officer of the Corporation, and acknowledges
that Indemnitee is relying upon this Agreement in agreeing to serve or in
continuing to serve as a director or officer of the Corporation.
(b) Mutual Acknowledgment. Both the Corporation and Indemnitee
acknowledge that in certain instances, Federal law or public policy may override
applicable state law and prohibit the Corporation from indemnifying its
directors and officers under this Agreement or otherwise. For example, the
Corporation and Indemnitee acknowledge that the Securities and Exchange
Commission (the "SEC") has taken the position that indemnification is not
permissible for liabilities arising under certain federal securities laws, and
federal legislation prohibits indemnification for certain ERISA violations.
Indemnitee understands and acknowledges that the Corporation has undertaken or
may be required in the future to undertake with the SEC to submit the question
of indemnification to a court in certain circumstances for a determination of
the Corporation's right under public policy to indemnify Indemnitee.
13. ENFORCEMENT. In the event Indemnitee is required to bring any
action or other proceeding to enforce rights or to collect moneys due under this
Agreement and is successful in such action, the Corporation shall reimburse
Indemnitee for all of Indemnitee's Expenses in bringing and pursuing such
action.
14. EXCEPTIONS. Any other provision herein to the contrary
notwithstanding, the Corporation shall not be obligated pursuant to the terms of
this Agreement:
(a) No Entitlement to Indemnification. To indemnify Indemnitee for
any expenses incurred by Indemnitee with respect to any proceeding instituted by
Indemnitee to
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enforce or interpret this Agreement, if a court of competent jurisdiction
determines that Indemnitee was not entitled to indemnification hereunder;
(b) Insured Claims. To indemnify Indemnitee for Expenses or
liabilities of any type whatsoever (including, but not limited to, judgments,
fines, ERISA excise taxes or penalties, and amounts paid in settlement) to the
extent such Expenses or liabilities have been paid directly to Indemnitee by an
insurance carrier under a D&O Insurance policy maintained by the Corporation;
(c) Remuneration in Violation of Law. To indemnify Indemnitee in
respect of remuneration paid to Indemnitee if it shall be determined by a final
judgment or other final adjudication that such remuneration was in violation of
law;
(d) Indemnification Unlawful. To indemnify Indemnitee if a final
decision by a court having jurisdiction in the matter shall determine that such
indemnification is not lawful;
(e) Misconduct, Etc. To indemnify Indemnitee on account of
Indemnitee's conduct which is finally adjudged to have been knowingly fraudulent
or deliberately dishonest or to constitute intentional misconduct, a knowing
violation of law, a violation of Section 174 of the DGCL or a transaction from
which Indemnitee derived an improper personal benefit;
(f) Breach of Duty. To indemnify Indemnitee on account of
Indemnitee's conduct which is the subject of any Proceeding brought by the
Corporation and approved by a majority of the Board of Directors which alleges
willful misappropriation of corporate assets by Indemnitee, disclosure of
confidential information in violation of Indemnitee's fiduciary or contractual
obligations to the Corporation, or any other willful and deliberate breach in
bad faith of Indemnitee's duty to the Corporation or its stockholders; or
(g) Claims Under Section 16(b). To indemnify Indemnitee 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 any similar successor statute.
15. SEVERABILITY. If any provision of this Agreement shall be held to
be invalid, illegal or unenforceable (a) the validity, legality and
enforceability of the remaining provisions of this Agreement shall not be in any
way affected or impaired thereby, and (b) to the fullest extent possible, the
provisions of this Agreement shall be construed so as to give effect to the
intent manifested by the provision held invalid, illegal or unenforceable. Each
section of this Agreement is a separate and independent portion of this
Agreement. If the indemnification to which Indemnitee is entitled with respect
to any aspect of any claim varies between two or more sections of this
Agreement, that section providing the most comprehensive indemnification shall
apply.
16. MISCELLANEOUS.
(a) 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
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interpreted in accordance with the laws of the State of Delaware, without giving
effect to principles of conflict of law.
(b) Entire Agreement; Enforcement of Rights. This Agreement sets
forth the entire agreement and understanding of the parties relating to the
subject matter herein and merges all prior discussions between them. No
modification of or amendment to this Agreement, nor any waiver of any rights
under this Agreement, shall be effective unless in writing signed by the parties
to this Agreement. The failure by either party to enforce any rights under this
Agreement shall not be construed as a waiver of any rights of such party.
(c) Construction. This Agreement is the result of negotiations
between and has been reviewed by each of the parties hereto and their respective
counsel, if any; accordingly, this Agreement shall be deemed to be the product
of all of the parties hereto, and no ambiguity shall be construed in favor of or
against any one of the parties hereto.
(d) Notices. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be deemed to have been given (i) when delivered
personally to the recipient, (ii) when sent to the recipient by telecopy
(receipt electronically confirmed by sender's telecopy machine) if during normal
business hours of the recipient, otherwise on the next business day, (iii) one
business day after the date when sent to the recipient by reputable overnight
courier service (charges prepaid), or (iv) five business days after the date
when mailed to the recipient by certified or registered mail, return receipt
requested and postage prepaid. Such notices, demands and other communications
shall be sent to the parties at the addresses indicated on the signature page
hereto, or to such other address as any party hereto may, from time to time,
designate in writing delivered pursuant to the terms of this Section 16(d).
(e) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
(f) Successors and Assigns. This Agreement shall be binding upon the
Corporation and its successors and assigns and shall inure to the benefit of
Indemnitee and Indemnitee's heirs, legal representatives and assigns.
(g) Subrogation. In the event of payment under this Agreement, the
Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of Indemnitee, who shall execute all documents required and
shall do all acts that may be necessary to secure such rights and to enable the
Corporation to effectively bring suit to enforce such rights.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
and as of the day and year first above written.
SUPERIOR WELL SERVICES, INC.
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
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Title: CEO
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Address: 0000 Xx. 000 Xxxx, Xxxxx #000
Xxxxxxx, Xxxxxxxxxxxx 00000
Facsimile: (000) 000-0000
INDEMNITEE:
/s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
Address: XX Xxx 0000
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Xxxxxxxxxx, XX 00000
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Facsimile: (000) 000-0000
