Exhibit 10.1
DRIL-QUIP, INC.
INDEMNIFICATION
AGREEMENT
This Indemnification Agreement (this
“Agreement”), made and entered into as of the
day of
by and between Dril-Quip, Inc., a Delaware corporation (the
“Corporation”), and
(“Indemnitee”),
W I T N E S
S E T H :
WHEREAS, Indemnitee is currently
serving or is about to begin serving as a director and/or officer
of the Corporation and/or in another Corporate Status, and
Indemnitee is willing, subject to, among other things, the
Corporation’s execution and performance of this Agreement, to
continue in or assume such capacity or capacities; and
WHEREAS, the Bylaws of the
Corporation provide that the Corporation shall indemnify and
advance expenses to all directors and officers of the Corporation
in the manner set forth therein and to the fullest extent permitted
by applicable law, and to such greater extent as applicable law may
thereafter permit, and the Corporation’s Certificate of
Incorporation provides for limitation of liability for directors;
and
WHEREAS, in order to induce
Indemnitee to provide services as contemplated hereby, the
Corporation has deemed it to be in its best interest to enter into
this Agreement with Indemnitee;
NOW, THEREFORE, in consideration of
Indemnitee’s agreement to provide services to the Corporation
and/or certain of its affiliates as contemplated hereby, the mutual
agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto stipulate and agree as
follows:
ARTICLE I
Certain
Definitions
As used herein, the following words
and terms shall have the following respective meanings (whether
singular or plural):
“Change of Control”
means a change in control of the Corporation after both the date of
the closing of the initial public offering (the “IPO”)
of the Corporation’s Common Stock to the public for cash that
has been registered on a registration statement that has been filed
with and declared effective by the Securities and Exchange
Commission and after the date Indemnitee acquired his Corporate
Status, which shall be deemed to have occurred in any one of the
following circumstances occurring after such date: (i) there
shall have occurred an event required to be reported with respect
to the Corporation in response to Item 6(e) of
Schedule 14A of Regulation 14A (or in response to any
similar item or any similar schedule or form) promulgated under the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”), whether or not the Corporation is then subject to such
reporting requirement; (ii) any “person” (as such
term is
used in Sections 13(d) and 14(d) of the
Exchange Act) other than the Stockholder Group shall have become
the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of
the Corporation representing 30% or more of the combined voting
power of the Corporation’s then outstanding voting
securities; (iii) the Corporation is a party to a merger,
consolidation, sale of assets or other reorganization, or a proxy
contest, as a consequence of which members of the Board of
Directors in office immediately prior to such transaction or event
constitute less than a majority of the Board of Directors
thereafter; or (iv) during any period of two consecutive
years, individuals who at the beginning of such period constituted
the Board of Directors (including, for this purpose, any new
director whose election or nomination for election by the
Corporation’s stockholders was approved by a vote of at least
two-thirds of the directors then still in office who were directors
at the beginning of such period) cease for any reason to constitute
at least a majority of the Board of Directors.
“Corporate Status”
describes the status of Indemnitee as a director, officer,
employee, agent or fiduciary of the Corporation or of any other
corporation, partnership, limited liability company, association,
joint venture, trust, employee benefit plan or other enterprise
that Indemnitee is or was serving at the request of the
Corporation.
“Court” means the Court
of Chancery of the State of Delaware or any other court of
competent jurisdiction.
“DGCL” means the
Delaware General Corporation Law.
“Expenses” shall include
all reasonable attorneys’ fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees, and all other disbursements or
expenses of the types customarily incurred in connection with
prosecuting, defending, preparing to prosecute or defend,
investigating, or being or preparing to be a witness in a
Proceeding.
“Independent Counsel”
means a law firm, or a member of a law firm, that is experienced in
matters of corporation law and neither presently is, nor in the
five years previous to his selection or appointment has been,
retained to represent: (i) the Corporation or Indemnitee in
any matter material to either such party or (ii) any other
party to the Proceeding giving rise to a claim for indemnification
hereunder.
“Matter” is a claim, a
material issue or a substantial request for relief.
“Proceeding” includes
any action, suit, arbitration, alternate dispute resolution
mechanism, investigation, administrative hearing or any other
proceeding, whether civil, criminal, administrative or
investigative, except one initiated by Indemnitee pursuant to
Section 6.1 of this Agreement to enforce his rights under this
Agreement.
“Stockholder Group”
shall mean, to the extent such group is deemed to be a
“person” under Section 13(d) of the Exchange Act,
collectively, but not individually, J. Mike Walker, Larry E.
Reimert, Reimert Family Partners, Ltd., Gary D. Smith and Four
Smith’s Company, Ltd.
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ARTICLE II
Services by
Indemnitee
Section 2.1. Services by
Indemnitee. Indemnitee
agrees to serve or continue to serve in his current capacity or
capacities as a director, officer, employee, agent or fiduciary of
the Corporation. Indemnitee also agrees to serve, as the
Corporation may request from time to time, as a director, officer,
employee, agent or fiduciary of any other corporation, partnership,
limited liability company, association, joint venture, trust or
other enterprise in which the Corporation has an interest.
Indemnitee and the Corporation each acknowledge that they have
entered into this Agreement as a means of inducing Indemnitee to
serve the Corporation in such capacities. Indemnitee may at any
time and for any reason resign from such position or positions
(subject to any other contractual obligation or any obligation
imposed by operation of law). The Corporation shall have no
obligation under this Agreement to continue Indemnitee in any such
position for any period of time and shall not be precluded by the
provisions of this Agreement from removing Indemnitee from any such
position at any time.
ARTICLE III
Indemnification
Section 3.1.
General. The Corporation
shall, to the fullest extent permitted by applicable law in effect
on the date hereof, and to such greater extent as applicable law
may thereafter permit, within 30 days after written demand is
presented to the Corporation, indemnify and hold Indemnitee
harmless from and against any and all losses, liabilities, claims,
damages and, subject to Section 3.2, Expenses, whatsoever
arising out of any event or occurrence related to the fact that
Indemnitee is or was a director or officer of the Corporation or is
or was serving in another Corporate Status.
Section 3.2.
Expenses. If Indemnitee
is, by reason of his Corporate Status, a party to and is
successful, on the merits or otherwise, in any Proceeding, he shall
be indemnified against all Expenses actually and reasonably
incurred by him or on his behalf in connection therewith. If
Indemnitee is not wholly successful in such Proceeding but is
successful, on the merits or otherwise, as to any Matter in such
Proceeding, the Corporation shall indemnify Indemnitee against all
Expenses actually and reasonably incurred by him or on his behalf
relating to such Matter. The termination of any Matter in such a
Proceeding by dismissal, with or without prejudice, shall be deemed
to be a successful result as to such Matter. To the extent that the
Indemnitee is, by reason of his Corporate Status, a witness in any
Proceeding, he shall be indemnified against all Expenses actually
and reasonably incurred by him or on his behalf in connection
therewith.
ARTICLE IV
Advancement of
Expenses
Section 4.1.
Advances. In the event of
any threatened or pending action, suit or proceeding in which
Indemnitee is a party or is involved and that may give rise to a
right of
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indemnification under this Agreement, following
written request to the Corporation by Indemnitee, the Corporation
shall promptly pay to Indemnitee amounts to cover expenses
reasonably incurred by Indemnitee in such proceeding in advance of
its final disposition upon the receipt by the Corporation of
(i) a written undertaking executed by or on behalf of
Indemnitee providing that Indemnitee will repay the advance if it
shall ultimately be determined that Indemnitee is not entitled to
be indemnified by the Corporation as provided in this Agreement and
(ii) satisfactory evidence as to the amount of such
expenses.
Section 4.2. Repayment of
Advances or Other Expenses. Indemnitee agrees that Indemnitee shall
reimburse the Corporation for all expenses paid by the Corporation
in defending any civil, criminal, administrative or investigative
action, suit or proceeding against Indemnitee in the event and only
to the extent that it shall be determined pursuant to the
provisions of this Agreement or by final judgment or other final
adjudication under the provisions of any applicable law that
Indemnitee is not entitled to be indemnified by the Corporation for
such expenses.
ARTICLE V
Procedure for Determination of
Entitlement to Indemnification
Section 5.1. Request for
Indemnification. To
obtain indemnification, Indemnitee shall submit to the Secretary of
the Corporation a written claim or request. Such written claim or
request shall contain sufficient information to reasonably inform
the Corporation about the nature and extent of the indemnification
or advance sought by Indemnitee. The Secretary of the Corporation
shall promptly advise the Board of Directors of such
request.
Section 5.2. Determination
of Entitlement; No Change of Control. If there has been no Change of Control at the
time the request for indemnification is submitted,
Indemnitee’s entitlement to indemnification shall be
determined in accordance with Section 145(d) of the DGCL. If
entitlement to indemnification is to be determined by Independent
Counsel, the Corporation shall furnish written notice to Indemnitee
within 10 days after receipt of the request for
indemnification, specifying the identity and address of Independent
Counsel. The Indemnitee may, within ten days after such written
notice of selection shall have been given, deliver to the
Corporation a written objection to such selection; provided,
however, that such objection may be asserted only on the ground
that the Independent Counsel so selected does not meet the
requirements of “Independent Counsel” as defined in
Article I hereof, and the objection shall set forth with
particularity the factual basis of such assertion. If such written
objection is so made and substantiated, the Independent Counsel so
selected may not serve as Independent Counsel unless and until such
objection is withdrawn or a court has determined that such
objection is without merit. If (i) the determination of
entitlement to indemnification is to be made by Independent Counsel
pursuant to this Section and (ii) within 20 days after
submission by Indemnitee of a written request for indemnification
pursuant to Section 5.1, no Independent Counsel shall have
been selected and not objected to, the Corporation or the
Indemnitee may petition the Court of Chancery or other court of
competent jurisdiction for resolution of any objection which shall
have been made by the Indemnitee to the Corporation’s
selection of Independent Counsel and/or for the appointment as
Independent Counsel of a person selected by
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the petitioned court or by such other person as
the petitioned court shall designate, and the person with respect
to whom all objections are so resolved or the person so appointed
shall act as Independent Counsel under this Section. If
(i) Independent Counsel does not make any determination
respecting Indemnitee’s entitlement to indemnification
hereunder within 90 days after receipt by the Corporation of a
written request therefo
