INDEMNIFICATION
AGREEMENT
This
Indemnification Agreement (“Agreement”) is effective as
of
, 20 , by and between Encore
Wire Corporation, a Delaware corporation (the
“Company”), and the indemnitee listed on the signature
page hereto (“Indemnitee”).
WHEREAS, the
Company desires to attract and retain the services of highly
qualified individuals, such as Indemnitee, to serve the Company and
its related entities;
WHEREAS, in order
to induce Indemnitee to continue to provide services to the
Company, the Company wishes to provide for the indemnification of,
and the advancement of expenses to, Indemnitee to the maximum
extent permitted by law;
WHEREAS, the
Company and Indemnitee recognize the difficulty in obtaining
liability insurance for the Company’s directors and officers,
the significant increases in the cost of such insurance and the
general reductions in the coverage of such insurance;
WHEREAS, the
Company and Indemnitee further recognize the substantial increase
in corporate litigation in general, subjecting directors and
officers to expensive litigation risks at the same time as the
availability and coverage of liability insurance has been severely
limited;
WHEREAS, the
Company’s Bylaws expressly provide that the indemnification
provisions set forth therein are not exclusive, and contemplate
that contracts may be entered into between the Company and its
directors or officers with respect to indemnification;
WHEREAS, the
Company and Indemnitee desire to continue to have in place the
additional protection provided by an indemnification agreement and
to provide indemnification and advancement of expenses to the
Indemnitee to the maximum extent permitted by Delaware
law;
NOW, THEREFORE,
the Company and Indemnitee hereby agree as follows:
(a)
“Change in Control” shall mean, and shall be deemed to
have occurred if, on or after the date of this Agreement,
(i) any “person” (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)), other than a trustee or other
fiduciary holding securities under an employee benefit plan of the
Company acting in such capacity or a corporation owned directly or
indirectly by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company,
becomes the “beneficial owner” (as defined in
Rule 13d-3 under said Act),
directly or
indirectly, of securities of the Company representing at least 50%
of the total voting power represented by the Company’s then
outstanding Voting Securities, (ii) during any period of two
consecutive years, individuals who at the beginning of such period
constitute the Board of Directors of the Company and any new
director whose election by the Board of Directors or nomination for
election by the Company’s stockholders was approved by a vote
of at least two thirds (2/3) of the directors then still in office
who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved,
cease for any reason to constitute a majority thereof,
(iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation other than
a merger or consolidation which would result in the Voting
Securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by
being converted into Voting Securities of the surviving entity) at
least 50% of the total voting power represented by the Voting
Securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, (iv) the
stockholders of the Company approve a plan of complete liquidation
of the Company or an agreement for the sale or disposition by the
Company of (in one transaction or a series of related transactions)
all or substantially all of the Company’s assets; or
(v) there occurs any other event of a nature that would be
required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A (or a response to any
similar item on any similar schedule or form) promulgated under the
Exchange Act, whether or not the Company is then subject to such
reporting requirement.
(b)
“Claim” shall mean any threatened, pending or completed
action, suit, proceeding or alternative dispute resolution
mechanism, whether instituted by or in the right of the Company or
by any other party, or any hearing, inquiry or investigation that
Indemnitee in good faith believes might lead to the institution of
any such action, suit, proceeding or alternative dispute resolution
mechanism, whether civil, criminal, administrative, investigative
or other.
(c) References
to the “Company” shall include, in addition to Encore
Wire Corporation, any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or merger
to which Encore Wire Corporation (or any of its wholly owned
subsidiaries) is a party which, if its separate existence had
continued, would have had power and authority to indemnify its
directors, officers, employees, agents or fiduciaries, so that if
Indemnitee is or was a director, officer, employee, agent or
fiduciary of such constituent corporation, or is or was serving at
the request of such constituent corporation as a director, officer,
employee, agent or fiduciary of another corporation, partnership,
joint venture, employee benefit plan, trust or other enterprise,
Indemnitee shall stand in the same position under the provisions of
this Agreement with respect to the resulting or surviving
corporation as Indemnitee would have with respect to such
constituent corporation if its separate existence had
continued.
(d)
“Covered Event” shall mean any event or occurrence
related to the fact that Indemnitee is or was a director or officer
of the Company, or any subsidiary of the Company, or is or was
serving at the request of the Company as a director, officer,
employee, agent or fiduciary of another corporation, partnership,
joint venture, trust or other enterprise, or by reason of any
action or inaction on the part of Indemnitee while serving in such
capacity.
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(e)
“Expenses” shall mean any and all expenses (including
attorneys’ fees) and all other costs, expenses and
obligations actually incurred by Indemnitee in connection with
investigating, defending, being a witness in or participating in
(including on appeal), or preparing to defend, to be a witness in
or to participate in, any Claim.
(f)
“Independent Counsel” shall mean a law firm, or a
member of a law firm, that is experienced in matters of corporate
law and neither presently is, nor in the past five years has been,
retained to represent: (i) the Company or Indemnitee in any
matter material to either such party (other than with respect to
matters concerning the rights of Indemnitee under this Agreement,
or of other indemnitees under similar indemnity agreements), or
(ii) any other party to any Claim giving rise to
indemnification hereunder. Notwithstanding the foregoing, the term
“Independent Counsel” shall not include any person 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 rights under this Agreement.
(g) References
to “other enterprises” shall include employee benefit
plans; references to “fines” shall include any excise
taxes assessed on Indemnitee with respect to an employee benefit
plan; and references to “serving at the request of the
Company” shall include any service as a director, officer,
employee, agent or fiduciary of the Company which imposes duties
on, or involves services by, such director, officer, employee,
agent or fiduciary with respect to an employee benefit plan, its
participants or its beneficiaries; and if Indemnitee acted in good
faith and in a manner Indemnitee reasonably believed to be in the
interest of the participants and beneficiaries of an employee
benefit plan, Indemnitee shall be deemed to have acted in a manner
“not opposed to the best interests of the Company” as
referred to in this Agreement.
(h)
“Reviewing Party” shall mean the (i) member or
members of the Company’s Board of Directors who is not a
party to the particular Claim, issue or matter for which Indemnitee
is seeking indemnification, or (ii) Independent Legal
Counsel.
(i)
“Voting Securities” shall mean any securities of the
Company that vote generally in the election of
directors.
(a) In the event
Indemnitee was, is or becomes a party to or witness or other
participant in, or is threatened to be made a party to or witness
or other participant in, a Claim by reason of (or arising in part
out of) a Covered Event, the Company shall indemnify Indemnitee to
the fullest extent permitted by law as soon as practicable but in
any event no later than thirty days after written demand is
presented to the Company, against any and all Expenses,
liabilities, losses, judgments, fines, excise taxes, penalties and
amounts paid in settlement (including all interest, assessments and
other charges paid or payable in connection with or in respect of
such Expenses, liabilities, losses, judgments, fines, excise taxes,
penalties or amounts paid in settlement) of such Claim. The Company
shall advance any and all Expenses actually incurred by Indemnitee
(an “Expense Advance”), and such advancement shall be
made within ten (10) days after the
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receipt by the
Company of a statement or statem
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