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EXHIBIT 10.8
INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT made and entered into effective
as of February 9, 2001("Agreement"), by and between UNIVERSAL COMPRESSION
HOLDINGS, INC., a Delaware corporation ("Company"), and Xxxxxxx X. Duroc-Xxxxxx
("Indemnitee").
WITNESSETH:
WHEREAS, highly skilled and competent persons are becoming
more reluctant to serve public corporations as directors or officers unless they
are provided with adequate protection through insurance and indemnification
against inordinate risks of claims and actions against them arising out of their
service to and activities on behalf of the corporation; and
WHEREAS, uncertainties relating to indemnification have
increased the difficulty of attracting and retaining such persons; and
WHEREAS, the Board of Directors has determined that the
inability to attract and retain such persons is detrimental to the best
interests of the Company's stockholders and that the Company should act to
assure such persons that there will be increased certainty of such protection in
the future; and
WHEREAS, it is reasonable, prudent and necessary for the
Company contractually to obligate itself to indemnify Indemnitee to the fullest
extent permitted by applicable law so that Indemnitee will serve or continue to
serve the Company free from undue concern that Indemnitee will not be so
indemnified; and
WHEREAS, Indemnitee is willing to serve, continue to serve and
to take on additional service for or on behalf of the Company on the condition
that Indemnitee be so indemnified;
NOW, THEREFORE, in consideration of the premises and the
covenants contained herein, the Company and Indemnitee do hereby covenant and
agree as follows:
Section 1. Services by Indemnitee. Indemnitee agrees to
continue to serve as a director and/or officer of Universal Compression, Inc.
("Universal"), a wholly-owned subsidiary of the Company. This Agreement does not
create or otherwise establish any right on the part of Indemnitee to be and
continue to be nominated to be a director and/or officer of Universal or the
Company and does not create an employment contract between Universal or the
Company and Indemnitee.
Section 2. Indemnification. The Company shall indemnify
Indemnitee to the fullest extent permitted by applicable law in effect on the
date hereof or as such laws may from time to time be amended. Without
diminishing the scope of the indemnification provided by this Section 2, the
rights of indemnification of Indemnitee provided hereunder shall include but
shall not be limited to those rights, except to the extent expressly prohibited
by applicable law.
Section 3. Action or Proceeding Other Than an Action by or in
the Right of the Company. Indemnitee shall be entitled to the indemnification
rights provided in this Section 3 if Indemnitee is a party or is threatened to
be made a party to any threatened, pending or
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completed action, suit or proceeding, whether civil, criminal, administrative or
investigative in nature, other than an action by or in the right of the Company,
by reason of the fact that Indemnitee is or was a director, officer, agent, or
fiduciary of the Company or is or was serving at the request of the Company as a
director, officer, agent, or fiduciary of Universal or any other entity or by
reason of anything done or not done by him or her in any such capacity. Pursuant
to this Section 3, Indemnitee shall be indemnified against expenses (including
attorneys' fees and disbursements), judgments, penalties, fines and amounts paid
in settlement actually and reasonably incurred by Indemnitee in connection with
such action, suit or proceeding (including, but not limited to, the
investigation, defense or appeal thereof), if Indemnitee acted in good faith and
in a manner Indemnitee reasonably believed to be in or not opposed to the best
interests of Universal or the Company, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his or her conduct was
unlawful.
Section 4. Actions by or in the Right of the Company.
Indemnitee shall be entitled to the indemnification rights provided in this
Section 4 if Indemnitee is a person who was or is made a party or is threatened
to be made a party to any threatened, pending or completed action or suit
brought by or in the right of the Company to procure a judgment in its favor by
reason of the fact that Indemnitee is or was a director, officer, agent, or
fiduciary of the Company or is or was serving at the request of the Company as a
director, officer, agent, or fiduciary of Universal or any other entity by
reason of anything done or not done by Indemnitee in any such capacity. Pursuant
to this Section 4 Indemnitee shall be indemnified against expenses (including
attorneys' fees and disbursements) actually and reasonably incurred by
Indemnitee in connection with such action or suit (including, but not limited
to, the investigation, defense, settlement or appeal thereof) if Indemnitee
acted in good faith and in a manner Indemnitee reasonably believed to be in or
not opposed to the best interests of Universal or the Company; provided,
however, that no such indemnification shall be made in respect of any claim,
issue or matter as to which applicable law expressly prohibits such
indemnification by reason of an adjudication of liability of Indemnitee to the
Company, unless, and only to the extent that, the Court of Chancery of the State
of Delaware or the court in which such action or suit was brought shall
determine upon application that, despite such adjudication of liability but in
view of all the circumstances of the case, Indemnitee is fairly and reasonably
entitled to indemnification for such expenses as such court shall deem proper.
Section 5. Indemnification for Expenses of Successful Party.
Notwithstanding the other provisions of this Agreement, to the extent that
Indemnitee has been successful on the merits or otherwise, including, without
limitation, the dismissal of an action without prejudice, in defense of any
action, suit or proceeding referred to in Section 3 or 4 hereof, or in defense
of any claim, issue or matter therein, Indemnitee shall be indemnified against
all expenses (including attorneys' fees and disbursements) actually and
reasonably incurred by Indemnitee or on Indemnitee's behalf in connection
therewith.
Section 6. Indemnification for Expenses of a Witness. To the
extent that Indemnitee is, by reason of Indemnitee's Corporate Status (as
hereinafter defined), a witness in any proceeding, Indemnitee shall be
indemnified by the Company against all expenses actually and reasonably incurred
by Indemnitee or on Indemnitee's behalf in connection therewith.
Section 7. Partial Indemnification. If Indemnitee is only
partially successful in the defense, investigation, settlement or appeal of any
action, suit, investigation or proceeding described in Section 3 or 4 hereof,
and as a result is not entitled under Section 5 hereof to
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indemnification by the Company for the total amount of the expenses (including
attorneys' fees and disbursements), judgments, penalties, fines, and amounts
paid in settlement actually and reasonably incurred by Indemnitee, the Company
shall nevertheless indemnify Indemnitee, as a matter of right pursuant to
Section 5 hereof, to the extent Indemnitee has been partially successful.
Section 8. Determination of Entitlement to Indemnification.
Upon written request by Indemnitee for indemnification pursuant to Section 3 or
4 hereof, the entitlement of the Indemnitee to indemnification pursuant to the
terms of this Agreement shall be determined by the following person or persons
who shall be empowered to make such determination: (a) the Board of Directors of
the Company by a majority vote of the Disinterested Directors (as hereinafter
defined) even if less than a quorum; or (b) if such vote is not obtainable or,
even if obtainable, if such Disinterested Directors so direct by majority vote,
by Independent Counsel (as hereinafter defined) in a written opinion to the
Board of Directors, a copy of which shall be delivered to Indemnitee; or (c) by
the stockholders. Such Independent Counsel shall be selected by the Board of
Directors and approved by Indemnitee. Upon failure of the Board to so select
such Independent Counsel or upon failure of Indemnitee to so approve, such
Independent Counsel shall be selected by the Chancellor of the State of Delaware
or such other person as such Chancellor shall designate to make such selection.
Such determination of entitlement to indemnification shall be made not later
than 60 days after receipt by the Company of a written request for
indemnification. Such request shall include documentation or information which
is necessary for such determination and which is reasonably available to
Indemnitee. Any expenses (including attorneys' fees) incurred by Indemnitee in
connection with Indemnitee's request for indemnification hereunder shall be
borne by the Company. The Company hereby indemnifies and agrees to hold
Indemnitee harmless therefrom irrespective of the outcome of the determination
of Indemnitee's entitlement to indemnification. If the person making such
determination shall determine that Indemnitee is entitled to indemnification as
to part (but not all) of the application for indemnification, such person shall
reasonably prorate such partial indemnification among such claims, issues or
matters.
Section 9. Presumptions and Effect of Certain Proceedings. The
Secretary of the Company shall, promptly upon receipt of Indemnitee's request
for indemnification, advise in writing the Board of Directors or such other
person or persons empowered to make the determination as provided in Section 8
that Indemnitee has made such request for indemnification. Upon making such
request for indemnification, Indemnitee shall be presumed to be entitled to
indemnification hereunder and the Company shall have the burden of proof in the
making of any determination contrary to such presumption. If the person or
persons so empowered to make such determination shall have failed to make the
requested indemnification within 60 days after receipt by the Company of such
request, the requisite determination of entitlement to indemnification shall be
deemed to have been made and Indemnitee shall be absolutely entitled to such
indemnification, absent actual and material fraud in the request for
indemnification. The termination of any action, suit, investigation or
proceeding described in Section 3 or 4 hereof by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself: (a) 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, and, with respect to any criminal action or
proceeding, that Indemnitee had reasonable cause to believe that his or her
conduct was unlawful; or (b) otherwise adversely affect the rights of Indemnitee
to indemnification except as may be provided herein.
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Section 10. Advancement of Expenses. All reasonable expenses
incurred by Indemnitee (including attorneys' fees, retainers and advances of
disbursements required of Indemnitee) shall be paid by the Company in advance of
the final disposition of such action, suit or proceeding, whether civil,
criminal, administrative or investigative in nature, at the request of
Indemnitee within twenty days after the receipt by the Company of a statement or
statements from Indemnitee requesting such advance or advances from time to
time. Indemnitee's entitlement to such expenses shall include those incurred in
connection with any proceeding by Indemnitee seeking an adjudication or award in
arbitration pursuant to this Agreement. Such statement or statements shall
reasonably evidence the expenses incurred by Indemnitee in connection therewith
and shall include or be accompanied by an undertaking by or on behalf of
Indemnitee to repay such amount if it is ultimately determined that Indemnitee
is not entitled to be indemnified against such expenses and costs by the Company
as provided by this Agreement or otherwise. The Company shall have the burden of
proof in any determination under this Section 10.
Section 11. Remedies of Indemnitee in Cases of Determination
Not to Indemnify or to Advance Expenses. In the event that a determination is
made that Indemnitee is not entitled to indemnification hereunder or if payment
has not been timely made following a determination of entitlement to
indemnification pursuant to Sections 8 and 9, or if expenses are not advanced
pursuant to Section 10, Indemnitee shall be entitled to a final adjudication in
the Delaware Court of Chancery, first, and then in any other court of competent
jurisdiction of Indemnitee's entitlement to such indemnification or advance.
Alternatively, Indemnitee, at Indemnitee's option, may seek an award in
arbitration to be conducted by a single arbitrator pursuant to the rules of the
American Arbitration Association, such award to be made within sixty days
following the filing of the demand for arbitration. The Company shall not oppose
Indemnitee's right to seek any such adjudication or award in arbitration or any
other claim. Such judicial proceeding or arbitration shall be made de novo and
Indemnitee shall not be prejudiced by reason of a determination (if so made)
that Indemnitee is not entitled to indemnification. If a determination is made
or deemed to have been made pursuant to the terms of Section 8 or 9 hereof that
Indemnitee is entitled to indemnification, the Company shall be bound by such
determination and is precluded from asserting that such determination has not
been made or that the procedure by which such determination was made is not
valid, binding and enforceable. The Company further agrees to stipulate in any
such court or before any such arbitrator that the Company is bound by all the
provisions of this Agreement and is precluded from making any assertion to the
contrary. If the court or arbitrator shall determine that Indemnitee is entitled
to any indemnification hereunder, the Company shall pay all reasonable expenses
(including attorneys' fees and disbursements) actually incurred by Indemnitee in
connection with such adjudication or award in arbitration (including, but not
limited to, any appellate proceedings).
Section 12. Other Rights to Indemnification. The
indemnification and advancement of expenses (including attorneys' fees) provided
by this Agreement shall not be deemed exclusive of any other rights to which
Indemnitee may now or in the future be entitled under any provision of the
by-laws, agreement, provision of the Certificate of Incorporation, as amended,
vote of stockholders or Disinterested Directors, provision of law, or otherwise;
provided, however, that this Agreement supersedes any other Agreement that has
been entered into with the Indemnitee which has as its principal purpose the
indemnification of Indemnitee.
Section 13. Attorneys' Fees and Other Expenses To Enforce
Agreement. In the event that Indemnitee is subject to or intervenes in any
proceeding in which the validity or
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enforceability of this Agreement is at issue or seeks an adjudication or award
in arbitration to enforce Indemnitee's rights under, or to recover damages for
breach of, this Agreement, Indemnitee, if Indemnitee prevails in whole or in
part in such action, shall be entitled to recover from the Company and shall be
indemnified by the Company against, any actual expenses for attorneys' fees and
disbursements reasonably incurred by Indemnitee, provided that in bringing the
advancement action, Indemnitee acted in good faith.
Section 14. Duration of Agreement. This Agreement shall apply
with respect to Indemnitee's occupation of any of the position(s) described in
Sections 3 and 4 of this Agreement prior to the date of this Agreement and with
respect to all periods of such service after the date of this Agreement, even
though the Indemnitee may have ceased to occupy such positions(s). This
Agreement shall be binding upon the Company and its successors and assigns
(including any transferee of all or substantially all of its assets and any
successor by merger of operation of law) and shall inure to the benefit
Indemnitee and Indemnitee's spouse, assigns, heirs, devises, executors,
administrators or other legal representatives. This Agreement supersedes any
prior indemnification arrangement between the Company (or its predecessor) and
Indemnitee.
Section 15. Severability. If any provision of provisions of
this Agreement shall be held to be invalid, illegal or unenforceable for any
reason whatsoever: (a) the validity, legality and enforceability of the
remaining provisions of this Agreement (including without limitation, all
portions of any paragraphs of this Agreement containing any such provision held
to be invalid, illegal or unenforceable, that are not themselves invalid,
illegal or unenforceable) shall not in any way be affected or impaired thereby;
and (b) to the fullest extent possible, the provisions of this Agreement
(including, without limitation, all portions of any section of this Agreement
containing any such provision held to be invalid, illegal or unenforceable, that
are not themselves invalid, illegal or unenforceable) shall be construed so as
to give effect to the intent manifested by the provision held invalid, illegal
or unenforceable.
Section 16. Identical Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall for all purposes be
deemed to be an original but all of which together shall constitute one and the
same Agreement. Only one such counterpart signed by the party against whom
enforceability is sought needs to be produced to evidence the existence of this
Agreement.
Section 17. Headings. The headings of the sections of this
Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction thereof.
Section 18. Definitions. For purposes of this Agreement:
(a) "Disinterested Director" shall mean a director
of the Company who is not or was not a party to the action, suit, investigation
or proceeding in respect of which indemnification is being sought by Indemnitee.
(b) "Independent Counsel" shall mean a law firm or
a member of a law firm that neither is presently nor in the past five years has
been retained to represent: (i) the Company or Indemnitee in any matter material
to either such party, or (ii) any other party to the action, suit, investigation
or proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term "Independent Counsel" shall not include
any person
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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 right to indemnification under
this Agreement.
(c) "Corporate Status" shall mean the status of a
person who is or was a director, officer, employee, agent or fiduciary of the
Company or any majority-owned subsidiary or of any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
that such person is or was serving at the request of the Company.
Section 19. Modification and Waiver. No supplement,
modification or amendment of this Agreement shall be binding unless executed in
writing by both of the parties hereto. No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of any other
provisions hereof (whether or not similar) nor shall such waiver constitute a
continuing waiver.
Section 20. Notice by Indemnitee. (a) Indemnitee agrees
promptly to notify the Company in writing upon being served with any summons,
citation, subpoena, complaint, indictment, information or other document
relating to any matter which may be subject to indemnification covered
hereunder, either civil, criminal, administrative, investigative or otherwise,
provided, however, that the failure to so notify the Company will not relieve
the Company from any liability it may have to Indemnitee except to the extent
that such failure materially prejudices the Company's ability to defend such
claim. With respect to any such action, suit, proceeding, inquiry or
investigation as to which Indemnitee notifies the Company of the commencement
thereof:
(i) The Company will be entitled to participate
therein at its own expense; and
(ii) Except as otherwise provided below, to the
extent that it may wish, the Company jointly with any other indemnifying party
similarly notified will be entitled to assume the defense thereof, with counsel
reasonably satisfactory to Indemnitee. After notice from the Company to
Indemnitee of its election so to assume the defense thereof, the Company will
not be liable to Indemnitee under this Agreement for any legal or other expenses
subsequently incurred by Indemnitee in connection with the defense thereof other
than reasonable costs of investigation or as otherwise provided below.
Indemnitee shall have the right to employ Indemnitee's own counsel in such
action, suit, proceeding, inquiry or investigation, but the fees and expenses of
such counsel incurred after notice from the Company of its assumption of the
defense thereof shall be at the expense of Indemnitee and not subject to
indemnification hereunder unless (x) the employment of counsel by Indemnitee has
been authorized by the Company; (y) in the reasonable opinion of counsel to
Indemnitee there is or may be a conflict of interest between the Company and
Indemnitee in the conduct of the defense of such action; or (z) the Company
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 Company.
(b) Neither the Company nor the Indemnitee shall
settle any claim without the prior written consent of the other (which shall not
be unreasonably withheld).
Section 21. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if (a) delivered by hand and receipted for by the party to whom said
notice or other communication shall have been
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directed or if (b) mailed by certified or registered mail with postage prepaid,
on the third business day after the date on which it is so mailed:
(i) If to Indemnitee, to the address set forth
below his or her signature.
(ii) If to the Company to:
Universal Compression Holdings, Inc.
0000 Xxxxxxxxxx Xxxx
Xxxxxxx, Xxxxx 00000-0000
Attn: Chief Executive Officer
or to such other address as may have been furnished to Indemnitee by the Company
or to the Company by Indemnitee, as the case may be.
Section 22. Governing Law. The parties agree that this
Agreement shall be governed by, and construed and enforced in accordance with,
the laws of the State of Delaware.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement effective as of the day and year first above written.
UNIVERSAL COMPRESSION HOLDINGS, INC.
By: /s/ XXXXXXX X. XXXXXX
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Name: Xxxxxxx X. Xxxxxx
Title: President and Chief Executive Officer
Name: /s/ XXXXXXX X. DUROC-XXXXXX
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Address: 000 Xxxx Xxx Xxxx.
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Xxxxxxx, Xxxxx 00000
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