Exhibit 10.2
INDEMNIFICATION
AGREEMENT
(TGC
Industries, Inc.)
THIS AGREEMENT is made to be effective the 26th
day of August, 2005, between TGC Industries, Inc. , a
Texas corporation (the “ Company ”), and
(“ Indemnitee ”).
Competent and experienced persons are becoming
more reluctant to serve as directors and/or officers of
corporations unless they are provided with adequate protection
against claims and actions against them for their activities on
behalf or at the request of such corporations, generally through
insurance and/or indemnification.
Uncertainties in the interpretations of the
statutes and regulations, laws, and public policies relating to
indemnification of corporate directors and officers are such as to
make adequate, reliable assessment of the risks to which directors
and officers of such corporations may be exposed difficult,
particularly in light of the proliferation of lawsuits against
directors and officers generally.
The Board of Directors of the Company, based
upon its business experience, has concluded that the continuation
of present trends in litigation against corporate directors and
officers will inevitably make it more difficult for the Company to
attract and retain directors and officers of the highest degree of
competence committed to the active and effective direction and
supervision of the business and affairs of the Company and its
subsidiaries and affiliates and the operation of its and their
facilities. In fact, the Board deems such potential adverse
consequences to be so detrimental to the best interests of the
Company that it has concluded that the Company should act to
provide its directors and officers with enhanced protection against
inordinate risks attendant on their positions in order to assure
that the most capable persons otherwise available will be attracted
to, or will remain in, such positions. In such connection, such
directors have further concluded that it is not only reasonable and
prudent but necessary for the Company to obligate itself
contractually to indemnify, to the fullest extent permitted by
applicable law, financial responsibility for expenses and
liabilities which might be incurred by such individuals in
connection with claims lodged against them for their decisions and
actions in such capacities.
Article 2.02-1 of the Texas Business
Corporation Act of the State of Texas, under which law the Company
is organized, empowers a corporation organized in Texas to
indemnify persons who serve as directors and/or officers of the
corporation, or persons who serve at the request of the corporation
as directors and/or officers of an affiliated corporation, and
further empowers a corporation to “purchase and maintain
insurance” on behalf of any such person “against
any liability asserted against him and incurred by him in such a
capacity or arising out of his status as such a person, whether or
not the corporation would have the power to indemnify him against
that liability under this [Article].”
The Articles of Incorporation and Bylaws of the
Company permit indemnification to the fullest extent permitted by
applicable law.
The Company is aware of the fact that it
currently has, and from time to time in the future may have,
directors and officers insurance coverage. However, the
Company is also aware of the fact that, even though such insurance
coverage may be in effect, the current insurance policy has, and
any future insurance policies are likely to have, significant
exclusions and limitations that leave the insureds personally
exposed.
The Company desires to have the Indemnitee serve
or continue to serve as a director and/or officer of the Company,
and/or as a director, officer, employee, partner, trustee, agent,
and/or fiduciary of such other corporations, partnerships, joint
ventures, employee benefit plans, trusts, and/or other enterprises
(herein referred to as “Company Affiliate”) of which he
has been or is serving, or will serve on behalf of or at the
request of or for the convenience of, or to represent the interests
of the Company, free from undue concern for unpredictable,
inappropriate, or unreasonable claims for damages by reason of his
being, or having been, a director and/or officer of the Company,
and/or a director, officer, employee, partner, trustee, agent,
and/or fiduciary of a Company Affiliate, or by reason of his
decisions or actions on their behalf.
The Indemnitee is willing to serve, or to
continue to serve, or to take on additional service for, the
Company and/or the Company Affiliate in such aforesaid capacities
on the condition that he be indemnified as provided for
herein.
Accordingly, in consideration of the premises
and the covenants contained herein, the Company and the Indemnitee
do hereby covenant and agree as follows:
1
Services to the
Company : The
Indemnitee shall serve or continue to serve as a director and/or
officer of the Company (in the case of a Company officer at the
will of the Company or under separate contract, if any such
contract exists or shall hereafter exist), and/or as a director,
and/or officer, or fiduciary of a Company Affiliate, faithfully and
to the best of his ability so long as he is duly elected and
qualified in accordance with the provisions of the Bylaws or other
applicable constitutive documents thereof; provided, however that:
(a) the Indemnitee may at any time and for any reason resign
from such position (subject to any contractual obligations which
the Indemnitee has assumed apart from this Agreement); and
(b) neither the Company nor the Company Affiliate will have
any obligation under this Agreement to continue the Indemnitee in
any such position.
2
Right to
Indemnification : The
Company shall, except to the extent prohibited by applicable law as
then in effect, indemnify any Indemnitee who is or was involved in
any manner (including, without limitation, as a party or witness),
or is threatened to be made so involved, in any threatened,
pending, or completed investigation, claim, action, suit, or
proceeding whether civil, criminal, administrative, or
investigative (including, without limitation, any action, suit, or
proceeding by or in the right of the Company to procure a judgment
in its favor) (herein referred to as a “ Proceeding
”) by reason of the fact that such person is or was a
director or officer of the Company, and/or is or was serving at the
request of the Company as a director or officer of any Company
affiliate, against all expenses (including attorneys’ fees),
judgments, fines, and amounts paid in
2
settlement actually and reasonably
incurred by such person in connection with such Proceeding;
provided, however, that (except as provided in Paragraph
3.4) the foregoing shall not apply to a director or officer of the
Company with respect to a Proceeding that was commenced by such
director or officer. Such indemnification shall include the right
to receive payment in advance of any expenses incurred by the
Indemnitee in connection with such Proceeding, consistent with the
provisions of applicable law as then in effect.
3
Advancement of Expenses;
Procedures; Presumptions, and Effect of Certain Proceedings;
Remedies : In
furtherance, but not in limitation, of the foregoing provisions,
the following procedures, presumptions, and remedies shall apply
with respect to advancement of expenses and the right to
indemnification hereunder:
3.1
Advancement of
Expenses : All
reasonable expenses incurred by or on behalf of the Indemnitee in
connection with any Proceeding shall, after initial approval in
accordance with Paragraph 3.2, be advanced to the Indemnitee by the
Company within twenty (20) calendar days after the receipt by the
Company of a statement or statements from the Indemnitee requesting
such advance or advances from time to time, whether prior to or
after final disposition of such Proceeding. Such statement or
statements shall reasonably evidence the expenses incurred by the
Indemnitee and, if required by law at the time of such advance,
shall include or be accompanied by an undertaking by or on behalf
of the Indemnitee to repay the amounts advanced if it should
ultimately be determined that the Indemnitee is not entitled to be
indemnified against such expenses hereunder.
3.2
Procurement for Determination
of Entitlement to Indemnification :
3.2.1
To obtain indemnification as herein
provided, an Indemnitee shall submit to the President or Secretary
of the Company a written request, including such documentation and
information as is reasonably available to the Indemnitee and
reasonably necessary to determine whether and to what extent the
Indemnitee is entitled to indemnification (herein referred to as
the “ Supporting Documentation ”). The
determination of the Indemnitee’s entitlement to
indemnification shall be made not later than sixty (60) calendar
days after receipt by the Company of the written request for
Indemnification together with the Supporting Documentation. The
Secretary or President of the Company shall, promptly upon receipt
of such a request for indemnification, advise the Board of
Directors in writing that the Indemnitee has requested
indemnification.
3.2.2
The Indemnitee’s entitlement
to indemnification hereunder shall (except as provided in
Subparagraph 3.2.3 below) be determined in
3
one of the following ways (each of
which shall give effect to the presumptions set forth in Paragraph
3.3): (a) by a majority vote of the Disinterested Directors
(as hereinafter defined) if they constitute a quorum of the Board
of Directors; (b) by a written opinion of Independent Counsel
(as hereinafter defined) if a quorum of the Board of Directors
consisting of Disinterested Directors is not obtainable or, even if
obtainable, a majority of such Disinterested Directors so directs:
(c) by the stockholders of the Company (but only if a majority
of the Disinterested Directors, if they constitute a quorum of the
Board of Directors, presents the issue of entitlement to
indemnification to the stockholders for their determination); or
(d) as provided in Paragraph 3.3. In the event that this
Subparagraph 3.2.2 applies, stockholder approval will be deemed to
have been received if the holders of a majority of the
Company’s total common stock outstanding vote in favor of
such approval.
3.2.3
Notwithstanding what is stated
above, in the event of a Change in Control (as hereinafter defined)
the Indemnitee’s entitlement to indemnification shall be
determined by a written opinion of Independent Counsel in a written
opinion to the Board of Directors, a copy of which shall be
delivered to the Indemnitee. The Independent Counsel shall be
selected by the Indemnitee. In the event the Company objects to the
Independent Counsel so selected, within seven days after written
notice of the selection has been given by the Indemnitee to the
Company, the Company may object to such selection by written
notification given to the Indemnitee. Such objection may be
asserted only on the ground that the Independent Counsel so
selected does not meet the requirement of “ Independent
Counsel ” as hereafter defined, and the objection shall
set forth with particularity the factual basis of such assertion.
If such written objection is made, the Independent Counsel so
selected may not serve as Independent Counsel unless and until a
court has determined that such objection is without merit. The
Company shall pay any and all reasonable fees and expenses of
Independent Counsel incurred by such Independent Counsel in
connection with the performance of his responsibilities hereunder,
and the Company shall pay all reasonable fees and expenses instant
to the implementation of the procedures referred to above. Upon the
due commencement of any judicial proceeding or arbitration pursuant
to Subparagraph 3.4.1 hereof, the Independent Counsel shall be
discharged and reliev
