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Exhibit
10.1
INDEMNIFICATION
AGREEMENT
This Indemnification
Agreement (this “Agreement”) is entered into as of
, 2007, by and between Pioneer Drilling Company, a Texas
corporation (the “Company”), and the undersigned
individual (“Indemnitee”).
RECITALS
The Company and Indemnitee
recognize the continued difficulty in obtaining liability insurance
for directors and officers, the significant increases in the cost
of such insurance and the general reductions in the coverage of
such insurance.
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.
The Company desires that
Indemnitee resist and defend against what Indemnitee may consider
to be unjustified investigations, claims, actions, suits and
proceedings which have arisen or may arise in the future as a
result of Indemnitee’s service to the Company and its
subsidiaries and affiliates.
The Company desires to
attract and retain the involvement of highly qualified persons,
such as Indemnitee, to serve and be associated with the Company,
and accordingly wishes to provide for the indemnification and
advancement of expenses to Indemnitee to the maximum extent
permitted by law.
AGREEMENT
In consideration of the
premises and the covenants contained herein, the Company and
Indemnitee agree as follows:
A. DEFINITIONS
The following terms shall have the
meanings defined below in this Agreement:
1. “Board” means
the Board of Directors of the Company.
2. “Change in
Control” means a change in control of the Company occurring
after the date of this Agreement of a nature that would be required
to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A (or in response to any similar item on any
similar schedule or form) under the Securities Exchange Act of
1934, as amended (the “Exchange Act”), whether or not
the Company is then subject to such reporting requirement;
provided, however, that, without limitation, a Change in Control
shall be deemed to have occurred if at any time after the date of
this Agreement (1) any “person” (as Sections 13(d)
and 14(d) under the Exchange Act use that term) is or becomes
the
“beneficial owner” (as Rule
13d-3 under the Exchange Act defines that term), directly or
indirectly, of securities of the Company representing 40% or more
of the combined voting power of the Company’s then
outstanding Voting Stock without the prior approval of at least
two-thirds of the members of the Board in office immediately prior
to that person’s attaining that percentage interest;
(2) the Company is a party to a merger, consolidation, share
exchange, sale of assets or other reorganization, or a proxy
contest, as a consequence of which members of the Board in office
immediately prior to that transaction or event constitute less than
a majority of the Board thereafter, or (3) during any 15-month
period, individuals who at the beginning of that period constituted
the Board (including for this purpose any new director whose
election or nomination for election by the shareholders of the
Company was approved by a vote of at least a majority of the
directors then still in office who were directors at the beginning
of that period) cease for any reason to constitute at least a
majority of the Board.
3. “Corporate
Status” means the status of a person who is or was a
director, officer, partner, employee, agent or fiduciary of the
Company or of any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise which such person
is or was serving at the written request of the Company.
4. “Disinterested
Director” means a director of the Company who is not a named
defendant or respondent to the Proceeding in respect of which
indemnification is sought by Indemnitee.
5. “Independent
Counsel” means, with respect to any determination involving
Indemnitee’s rights to indemnification under this Agreement,
a law firm, or a member of a law firm, that is experienced in
matters of corporation law and neither contemporaneously is, nor in
the five years theretofore has been, retained to
represent: (a) the Company or Indemnitee in any matter
material to either such party, (b) any other party to the
Proceeding giving rise to a claim for indemnification hereunder or
(c) the beneficial owner, directly or indirectly, of
securities of the Company representing 40% or more of the combined
voting power of the Company’s then outstanding Voting
Stock. 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 to indemnification under this
Agreement.
6. “other
enterprise” shall include, but shall not be limited to, an
“other entity” as Section 1.01 of the TBCA defines
that term.
7. “Proceeding”
means any threatened, pending or completed action, suit, proceeding
or claim, or any inquiry, hearing or investigation, whether civil,
criminal, administrative, investigative or other, in which
Indemnitee may be or may have been involved as a party or otherwise
by reason of an indemnifiable event.
8. “TBCA” means
the Texas Business Corporation Act, as from time to time
amended.
9. “Voting Stock”
means all outstanding shares of all classes and series of capital
stock of the Company entitled to vote generally in the election of
directors, considered as one class; and, if the Company shall have
shares of Voting Stock entitled to more or less than one vote for
any such share, any reference in this Agreement to a percentage in
voting power of Voting Stock shall be calculated by reference to
the percentage of votes the holders of those shares are entitled to
cast generally in the election of directors.
B. AGREEMENT TO INDEMNIFY
1. General Agreement .
The Company shall indemnify Indemnitee as and to the fullest extent
Article 2.02-1 of the TBCA permits, as in effect on the date
hereof and to such greater extent as such provision (or any
successor provision) may thereafter from time to time permit,
without regard to when the event, circumstance, action or claim
giving rise to a right of indemnification hereunder arose, whether
before or after the date of this Agreement. The foregoing
right of indemnification shall not be deemed exclusive of any other
rights to which Indemnitee may be entitled as a matter of law or
under the Company’s Articles of Incorporation or Bylaws, any
other agreement, vote of shareholders or directors, or other
arrangement. The provisions set forth in this Agreement are
provided in addition to and as a means of furtherance and
implementation of, and not in limitation of, the obligations
expressed in this Section B.1.
2. Advancement or
Reimbursement of Expenses . The rights of Indemnitee
provided under Section B.1 shall include, but not be limited to,
the right to be indemnified and to have expenses advanced by the
Company in all Proceedings to the fullest extent
Article 2.02-1 of the TBCA permits, as in effect on the date
hereof and to such greater extent as such provision (or any
successor provision) may thereafter from time to time permit. In
addition, to the extent Indemnitee is, by reason of his Corporate
Status, a witness or otherwise participates in any Proceeding at a
time when he is not named a defendant or respondent in the
Proceeding, the Company shall indemnify him against all expenses
actually and reasonably incurred by him or on his behalf in
connection therewith. The Company shall pay all reasonable
expenses incurred by or on behalf of Indemnitee in connection with
any Proceeding, whether brought by the Company or otherwise, in
advance of any determination respecting entitlement to
indemnification pursuant to this Agreement within 10 days after the
receipt by the Company of a written request from Indemnitee
accompanied by documentation reasonably evidencing such expenses
and requesting such payment or payments from time to time, whether
prior to or after final disposition of such Proceeding; provided
that Indemnitee undertakes and agrees in writing that he will
reimburse and repay the Company for any expenses so advanced to the
extent that it shall ultimately be determined, in accordance with
the provisions of Article 2.02-1 of the TBCA, that he is not
entitled to be indemnified against such expenses. For purposes of
this Agreement, “expenses” of Indemnitee shall be
deemed to include, without limitation, damages, judgments, fines,
penalties, in
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