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Exhibit 10.1
FORM OF DIRECTOR AND OFFICER INDEMNIFICATION
AGREEMENT
This Director and Officer
Indemnification Agreement, dated as of
, 2006 (this " Agreement "), is made by and between
The Lamson & Sessions Co., an Ohio corporation (the "
Company "), and [Name of the Indemnitee] (the
" Indemnitee "), a director and/or officer of the
Company.
RECITALS:
A. The Indemnitee is
currently serving as a director and/or officer of the Company, and
the Company desires that the Indemnitee continue serving in such
capacity. The Indemnitee is willing, subject to certain conditions,
including the execution and performance of this Agreement by the
Company, to continue serving in such capacity.
B. In addition to the
indemnification to which the Indemnitee is entitled under the
Amended Code of Regulations of the Company (the "
Regulations "), the Company has obtained, at its sole
expense, insurance protecting the Company and its officers and
directors, including the Indemnitee, against certain losses arising
out of any threatened, pending or completed action, suit,
proceeding or claim to which such persons may be made or are
threatened to be made parties.
AGREEMENT:
NOW, THEREFORE, in order to induce
the Indemnitee to continue to serve in [his/her] current
capacity with the Company, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Indemnitee agree as follows:
1. Certain
Definitions . In addition to terms defined elsewhere in this
Agreement, the following terms have the following meanings when
used in this Agreement with initial capital letters:
(a) " Board " means
the Board of Directors of the Company.
(b) A " Change in
Control " shall have occurred if any of the following
events occur:
(i) The acquisition by any
individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "
Person ") of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 15% or
more of either: (A) the then-outstanding shares of common
stock of the Company (the " Company Common Stock ")
or (B) the combined voting power of the then-outstanding
voting securities of the Company entitled to vote generally in the
election of directors (" Voting Stock ");
provided , however , that for purposes of this
subsection (i), the following acquisitions shall not constitute a
Change in Control: (1) any acquisition directly from the
Company, (2) any acquisition by the Company, (3) any
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any subsidiary of the
Company, or (4) any acquisition by any Person pursuant to a
transaction which complies with clauses (A), (B) and
(C) of subsection (iii) of this !Section 1(b) ;
or
(ii) Individuals who, as of the
date of this Agreement, constitute the Board of Directors of the
Company (the " Incumbent Board ") cease for any
reason (other than death or disability) to constitute at least a
majority of the Board of Directors of the Company; provided
, however , that any individual becoming a director
subsequent to the date of this Agreement whose election, or
nomination for election by the Company’s shareholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board (either by a specific vote or by
approval of the proxy statement of the Company in which such person
is named as a nominee for director, without objection to such
nomination) shall be considered as though such individual were a
member of the Incumbent Board, but excluding for this purpose, any
such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest (within the
meaning of Rule 14a-11 promulgated under the Exchange Act)
with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board of Directors of the
Company; or
(iii) Consummation of a
reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the
Company (a " Business Combination "), in each case,
unless, following such Business Combination, (A) all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Company Common Stock and
Voting Stock immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of,
respectively, the then-outstanding shares of common stock and the
combined voting power of the then-outstanding voting securities
entitled to vote generally in the election of directors, as the
case may be, of the entity resulting from such Business Combination
(including an entity which as a result of such transaction owns the
Company or all or substantially all of the Company’s assets
either directly or through one or more subsidiaries) in
substantially the same proportions relative to each other as their
ownership, immediately prior to such Business Combination, of the
Company Common Stock and Voting Stock of the Company, as the case
may be, (B) no Person (excluding any entity resulting from
such Business Combination or any employee benefit plan (or related
trust) sponsored or maintained by the Company or such entity
resulting from such Business Combination) beneficially owns,
directly or indirectly, 15% or more of, respectively, the
then-outstanding shares of common stock of the entity resulting
from such Business Combination, or the combined voting power of the
then-outstanding voting securities of such corporation except to
the extent that such ownership existed prior to the Business
Combination and (C) at least a majority of the members of the
board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board
of Directors of the Company, providing for such Business
Combination; or
(iv) Approval by the shareholders
of the Company of a complete liquidation or dissolution of the
Company.
(c)
" Exchange Act " means the Securities Exchange Act of
1934.
(d)
" Independent Counsel " means nationally recognized
legal counsel designated for such purpose by the Indemnitee and
reasonably acceptable to a majority of the members of the Incumbent
Board, even if less than a quorum, which shall not be an attorney,
or a firm having associated with it an attorney, who has been
retained by or who has performed services (in each case in the past
five years) for (x) the Company, (y) any Person who may
be indemnified in such action, suit, proceeding or
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claim, or (z) any holder of 5% or more of the
then-outstanding shares of any class of the Company Common Stock or
Voting Stock.
(e)
" ORC " means the Ohio Revised Code.
2. Continued Service
. The Indemnitee shall serve or continue to serve as a director
and/or officer of the Company so long as [he/she] is duly
elected in accordance with the Regulations or until [he/she]
resigns in writing or is removed from office in accordance with
applicable law.
3. Initial Indemnity
. (a) The Company shall indemnify the Indemnitee if or when
[he/she] is a party or is threatened to be made a party to
any threatened, pending or completed action, suit, proceeding or
claim, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Company), by reason
of the fact that [he/she] is or was a director and/or
officer of the Company or is or was serving at the request of the
Company as a director, trustee, officer, employee, member, manager
or agent of another corporation, domestic or foreign, nonprofit or
for profit, a limited liability company, or a partnership, joint
venture, trust or other enterprise, or by reason of any action
alleged to have been taken or omitted in any such capacity, against
any and all costs, charges, expenses (including fees and expenses
of attorneys or others; all such costs, charges and expenses being
jointly referred to in this Agreement as " Expenses
"), judgments, fines and amounts paid in settlement actually
incurred by the Indemnitee in connection therewith, including any
appeal of or from any judgment or decision, (i) in the case of an
Indemnitee that is a director of the Company, unless it is proved
by clear and convincing evidence in a court of competent
jurisdiction that the Indemnitee’s action or failure to act
involved an act or omission undertaken with deliberate intent to
cause injury to the Company or undertaken with reckless disregard
for the best interests of the Company and (ii) in the case of
an Indemnitee that is an officer of the Company but not a director
of the Company, if the Indemnitee acted in good faith and in a
manner which [he/she] reasonably believed to be in or not
opposed to the best interests of the Company. In addition, with
respect to any criminal action or proceeding, indemnification under
this Agreement shall be made only if the Indemnitee had no
reasonable cause to believe [his/her] conduct was unlawful.
The termination of any action, suit, proceeding or claim by
judgment, order, settlement or conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a
presumption that the Indemnitee did not satisfy the foregoing
applicable standard of conduct.
(b) The
Company shall indemnify the Indemnitee if or when [he/she]
is a party or is threatened to be made a party, to any threatened,
pending or completed action, suit, proceeding or claim by or in the
right of the Company to procure a judgment in its favor, by reason
of the fact that the Indemnitee is or was a director and/or officer
of the Company or is or was serving at the request of the Company
as a director, trustee, officer, employee, member, manager or agent
of another corporation, domestic or foreign, nonprofit or for
profit, a limited liability company, or a partnership, joint
venture, trust or other enterprise, or by reason of any action
alleged to have been taken or omitted in any such capacity, against
any and all Expenses, judgments, fines and amounts paid in
settlement actually incurred by the Indemnitee in connection
therewith, including any appeal of or from any judgment or
decision, (i) in the case of an Indemnitee that is a director
of the Company, unless it is proved by clear and convincing
evidence in a court of competent jurisdiction that the
Indemnitee’s action or failure to act involved an act or
omission undertaken with deliberate intent to cause injury to the
Company or undertaken with reckless disregard for the best
interests of the Company and (ii) in the case of an Indemnitee
that is an officer of the Company but not a director of the
Company, if the Indemnitee acted in good faith and in a manner
which [he/she] reasonably believed to be in or not opposed
to the best interests of the Company. Notwithstanding the foregoing
provisions of this Section 3(b) , no indemnification
pursuant to this Section 3(b) shall be made (A) in
the case of an Indemnitee that is an officer but not a director of
the Company, in respect of any claim, issue or matter as to which
the Indemnitee is adjudged to be liable for negligence or
misconduct in the performance of ›[his/her] duty
to
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the Company unless, and only to the extent that, the court of
common pleas or other court in which such action, suit, proceeding
or claim was brought determines, notwithstanding any adjudication
of liability, that in view of all the circumstances of the case the
Indemnitee is fairly and reasonably entitled to indemnity for such
Expenses, judgments, fines and amounts paid in settlement as such
court of common pleas or other court shall deem proper, or
(B) in the case of an Indemnitee that is a director of the
Company, in respect of any action, suit, proceeding or claim in
which the only liability asserted against the Indemnitee is
pursuant to Section 1701.95 of the ORC.
(c) Any
indemnification under Section 3(a) or
Section 3(b) (unless ordered by the court in which such
action, suit, proceeding or claim was brought) shall be made by the
Company only upon a determination relating to the specific case
that indemnification of the Indemnitee is proper in the
circumstances because [he/she] has met the applicable
standard of conduct set forth in Section 3(a) or
Section 3(b) . Prior to a Change in Control, such
determination shall be made (i) by a majority vote or consent
of a quorum consisting of directors [who are members of the
Incumbent Board and] who were not and are not parties to or
threatened with such action, suit, proceeding or claim ("
Disinterested Directors ") or (ii) if such a
quorum of Disinterested Directors is not available or if a majority
of such quorum so directs, by Independent Counsel in a written
opinion to the Board (with a copy to the Indemnitee);
provided , however , that if the Indemnitee is no
longer serving as a director of the Company or as an officer of the
Company at the time that such action, suit, proceeding or claim is
initiated, then such determination shall be made by Independent
Counsel in a written opinion to the Board (with a copy to the
Indemnitee), unless the Indemnitee shall have elected in writing to
have such determination made by a majority vote or consent of a
quorum of Disinterested Directors, in which case such determination
shall be made by such quorum of Disinterested Directors. Following
a Change in Control, such determination shall be made by
Independent Counsel in a written opinion to the Board (with a copy
to the Indemnitee), unless the Indemnitee shall have elected in
writing to have such determination made by a majority vote or
consent of a quorum consisting of Disinterested Directors, in which
case such determination shall be made by such quorum of
Disinterested Directors.
(d) To
the extent that the Indemnitee has been successful on the merits or
otherwise, including the dismissal of an action without prejudice,
in defense of any action, suit, proceeding or claim referred to in
Section 3(a) or Section 3(b) , or in
defense of any claim, issue or matter therein, [he/she]
shall be indemnified against Expenses actually incurred by
[him/her] in connection therewith.
(e) Expenses
actually incurred by the Indemnitee in defending any action, suit,
proceeding or claim referred to in Section 3(a) or
Section 3(b) , or in defense of any claim, issue or
matter therein, shall be paid by the Company as they are incurred
in advance of the final disposition of such action, suit,
proceeding or claim under the procedure set forth in
Section 5(b) .
(f) For
purposes of this Agreement, references to " other
enterprises " shall include employee benefit plans;
references to " fines " shall include any excise
taxes assessed on the Indemnitee with respect to any employee
benefit plan; and references to " serving at the request of
the Company " shall include any service as a director,
officer, employee, member, manager or agent of the Company which
imposes duties on, or involves services by, the Indemnitee with
respect to an employee benefit plan, its participants or
beneficiaries.
(g) No
amendment to the Articles of Incorporation of the Company (the "
Articles ") or the Regulations may deny, diminish or
encumber the Indemnitee’s rights to indemnity pursuant to the
Articles, the Regulations, the ORC or any other applicable law as
applied to any act or failure to act occurring in whole or in part
prior to the date (the " Effective Date ") upon which
the amendment was approved by the shareholders of the Company. In
the event that the Company shall purport to adopt any amendment to
its Articles or Regulations or take any other action the effect of
which is to deny, diminish
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or encumber the Indemnitee’s rights to indemnity pursuant
to the Articles, the Regulations, the ORC or any such other law,
such amendment shall apply only to acts or failures to act
occurring entirely after the Effective Date.
4. Additional
Indemnification . (a) Pursuant to
Section 1701.13(E)(6) of the ORC, without limiting any right
which the Indemnitee may have pursuant to Section 3 or
any other provision of this Agreement or the Articles, the
Regulations, the ORC, any policy of insurance or otherwise, but
subject to any limitation on the maximum permissible indemnity
which may exist under applicable law at the time of any request for
indemnity under this Agreement and subject to the following
provisions of this Section 4 , the Company shall
indemnify the Indemnitee against any amount which [he/she]
is or becomes obligated to pay relating to or arising out of any
claim made against [him/her] because of any act, failure to
act or neglect or breach of duty, including any actual or alleged
error, misstatement or misleading statement, that [he/she]
commits, suffers, permits or acquiesces in while acting in
[his/her] capacity as a director and/or an officer of the
Company or at the request of the Company as a director, trustee,
officer, employee, member, manager or agent of another corporation,
domestic or
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