EXHIBIT 10.1
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INDEMNITY AGREEMENT
Between
HORIZON OFFSHORE, INC.
and
_____________________
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INDEMNITY AGREEMENT
This Agreement is made by and between HORIZON OFFSHORE, 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 appointment 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 Treasurer of the
Corporation or, if the Treasurer 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 Chairman of the Board to be the Disbursing
Officer with respect to indemnification requests related to the Claim, which
designation shall be made promptly after receipt of the initial request for
indemnification with respect to such Claim.
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(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.
4. MAINTENANCE OF INSURANCE. The Corporation currently intends to
purchase policies of insurance that provide 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. The Corporation may,
but shall not be required to, continue all or part of such insurance in effect.
If such insurance is maintained 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 is not
reimbursed pursuant to such insurance coverage. If such insurance is not
maintained 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 of the Corporation, (ii) as
a director 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.
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(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 Indemnitee 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 Chairman of the
Board of the Corporation, but the failure to promptly notify the Chairman of the
Board shall not relieve the Corporation from any obligation under this
Agreement. Upon receipt of such request, the Chairman of the Board 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 120 calendar days of the date the Chairman of the
Board receives notice of the Claim, the Chairman of the Board 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.
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(f) In the case of any Claim not involving any threatened or pending
criminal proceeding,
(i) if prior to the Determination Date the Determining 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 Corporation 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
Corporation 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 Corporation 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 Indemnitee 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 Corporation has not approved.
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(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 Corporation 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 determined
that he is not entitled to be indemnified by the Corporation 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 enforceable 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 Agreement, Indemnitee shall be
entitled to recover from the Corporation, and shall be indemnified by the
Corporation against, any and all expenses actually and reasonably incurred by
him in connection 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
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amount of his claim. Otherwise, the expenses incurred by Indemnitee in
connection with such judicial adjudication shall be appropriately prorated.
(c) In any judicial proceeding described in this Section 6, the
Corporation shall bear the burden of proving that Indemnitee 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 foregoing, if any portion of this Agreement shall
be invalidated on any ground, the Corporation shall nevertheless indemnify an
Indemnitee 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 Agreement to indemnify
and hold harmless Indemnitee to the fullest extent 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 original.
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 binding upon
Indemnitee and upon the Corporation, its successors and assigns, and shall inure
to the benefit of the Indemnitee's
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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. Notwithstanding 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 cancellation.
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.
HORIZON OFFSHORE, INC.
By:
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INDEMNITEE
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