INDEMNIFICATION
AGREEMENT
This
INDEMNIFICATION AGREEMENT (the “ Agreement ”) is
made and entered into this
day of
, 2009 between Powell Industries, Inc., a Delaware corporation (the
“ Company ”) and
(“ Indemnitee ”).
WHEREAS,
Indemnitee performs a valuable service for the Company;
and
WHEREAS, the Board
of Directors of the Company has adopted bylaws (the
“Bylaws”) providing for the indemnification of the
directors, executive officers and other key employees of the
Company to the maximum extent authorized by Section 145 of the
Delaware General Corporation Law, as amended (the “
DGCL ”); and
WHEREAS, the Board
of Directors has determined that for purposes of indemnification
protection afforded by the Company, including as specifically used
in this Agreement, the term “director” shall refer to
members of the Board of Directors and any advisory director serving
by appointment of the Board; and
WHEREAS, the
Bylaws and the DGCL by their nonexclusive nature, permit contracts
between the Company and the directors and officers of the Company
with respect to indemnification of such directors and officers;
and
WHEREAS, in
accordance with the authorization as provided by the Bylaws and the
DGCL, the Company may purchase and maintain a policy or policies of
director’s and officer’s liability insurance (“
D & O Insurance ”), covering certain
liabilities which may be incurred by its directors and/or officers
in the performance of their obligations as directors and/or
officers of the Company; and
WHEREAS, as a
result of developments affecting the terms, scope and availability
of D & O Insurance, there exists general uncertainty
as to the extent of protection afforded Company directors and
officers by such D & O Insurance and said uncertainty
also exists under statutory and bylaw indemnification provisions;
and
WHEREAS,in
recognition of past services and in order to induce Indemnitee to
continue to serve as a director and/or officer of the Company, the
Company has determined and agreed to enter into this contract with
Indemnitee;
NOW, THEREFORE, in
consideration of Indemnitee’s service as a director and/or
officer after the date hereof, the parties hereto agree as
follows;
1. INDEMNITY OF
INDEMNITEE. The Company hereby agrees to hold harmless and
indemnify Indemnitee to the full extent authorized or permitted by
the provisions of the DGCL, as such may be amended from time to
time, and the Bylaws, as such may be amended; provided that the
parties hereto acknowledge that it is their intent that Indemnitee
shall enjoy the greater of (i) the advancement and
indemnification rights in place for directors and officers as of
the date
hereof or
(ii) the benefits so afforded by such amendments. In
furtherance of the foregoing indemnification, and without limiting
the generality thereof:
(a) Proceedings
Other Than Proceedings by or in the Right of the Company.
Indemnitee shall be entitled to the rights of indemnification
provided in this Section 1(a) if, by reason of his Corporate
Status (as hereinafter defined), he is, or is threatened to be
made, a party to or participant in any Proceeding (as hereinafter
defined) other than a Proceeding by or in the right of the Company.
Pursuant to this Section 1(a), Indemnitee shall be indemnified
against all Expenses (as hereinafter defined), judgments,
penalties, fines and amounts paid in settlement actually and
reasonably incurred by him or on his behalf in connection with such
Proceeding or any claim, issue or matter therein, if he acted in
good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company and, with respect to
any criminal Proceeding, had no reasonable cause to believe his
conduct was unlawful.
(b) Proceedings
by or in the Right of the Company. Indemnitee shall be entitled to
the rights of indemnification provided in this Section 1(b)
if, by reason of his Corporate Status, he is, or is threatened to
be made, a party to or participant in any Proceeding brought by or
in the right of the Company to procure a judgment in its favor.
Pursuant to this Section 1(b), Indemnitee shall be indemnified
against all Expenses actually and reasonably incurred by him or on
his behalf in connection with such Proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company; provided, however,
that, if applicable law so provides, no indemnification against
such Expenses shall be made in respect of any claim, issue or
matter in such Proceeding as to which Indemnitee shall have been
adjudged to be liable to the Company unless and to the extent that
the Court of Chancery of the State of Delaware, or the court in
which such Proceeding shall have been brought or is pending, shall
determine that such indemnification may be made.
(c) Indemnification
for Expenses of a Party Who is Wholly or Partly Successful.
Notwithstanding any other provision of this Agreement, to the
extent that 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 to the maximum extent permitted
by law 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 one or more but less than all claims,
issues or matters in such Proceeding, the Company shall indemnify
Indemnitee against all Expenses actually and reasonably incurred by
him or on his behalf in connection with each successfully resolved
claim, issue or matter. For purposes of this Section 1 and
without limitation, the termination of any claim, issue or matter
in such a Proceeding by dismissal, with or without prejudice, shall
be deemed to be a successful result as to such claim, issue or
matter.
(a) Subject
only to the exclusions set forth in Section 2(b) hereof, the
Company hereby further agrees to hold harmless and indemnify
Indemnitee against any and all expenses, judgments, fines and
amounts paid in settlement actually and reasonably incurred by
Indemnitee in connection with any Proceeding (including an action
by or on behalf of the Company) to which Indemnitee is, was or at
any time becomes a party, or is threatened to be made a party,
by
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reason of his
Corporate Status; provided, however, that with respect to actions
by or on behalf of the Company, indemnification of Indemnitee
against any judgments shall be made by the Company only as
authorized in the specific case upon a determination that
Indemnitee acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the
Company; and
(b) No
indemnity pursuant to this Section 2 shall be paid by the
Company:
(i) In
respect to remuneration paid to Indemnitee if it shall be
determined by a final judgment or other final adjudication that
such remuneration was in violation of law;
(ii) On
account of any suit in which judgment is rendered against
Indemnitee for an accounting of profits made from the purchase or
sale by Indemnitee of securities of the Company pursuant to the
provisions of Section 16(b) of the Securities Exchange Act of
1934 and amendments thereto or similar provisions of any federal,
state or local statutory law;
(iii) On
account of Indemnitee’s conduct which is finally adjudged to
have been knowingly fraudulent or deliberately dishonest, or to
constitute willful misconduct; or
(iv) If
a final decision by a court having jurisdiction in the matter shall
determine that such indemnification is not lawful.
3.
CONTRIBUTION. If the indemnification provided in Sections 1
and 2 is unavailable and may not be paid to Indemnitee for any
reason other than those set forth in paragraphs (i), (ii),
(iii) and (iv) of Section 2(b), then in respect to
any Proceeding in which the Company is jointly liable with
Indemnitee (or would be if joined in such Proceeding), the Company
shall contribute to the amount of Expenses, judgments, fines and
amounts paid in settlement actually and reasonably incurred and
paid or payable by Indemnitee in such proportion as is appropriate
to reflect (i) the relative benefits received by the Company
on the one hand and by the Indemnitee on the other hand from the
transaction from which such Proceeding arose, and (ii) the
relative fault of the Company on the one hand and of the Indemnitee
on the other hand in connection with the events which resulted in
such Expenses, judgments, fines or settlement amounts, as well as
any other relevant equitable considerations. The relative fault of
the Company on the one hand and of the Indemnitee on the other hand
shall be determined by reference to, among other things, the
parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent the circumstances resulting
in such Expenses, judgments, fines or settlement amounts. The
Company agrees that it would not be just and equitable if
contribution pursuant to this Section 3 were determined by pro
rata allocation or any other method of allocation which does not
take account of the foregoing equitable considerations.
4.
INDEMNIFICATION FOR EXPENSES OF A WITNESS. Notwithstanding any
other provision of this Agreement, to the extent that Indemnitee
is, by reason of his Corporate Status, a witness in any Proceeding
to which Indemnitee is not a party, he shall be indemnified against
all Expenses actually and reasonably incurred by him or on his
behalf in connection therewith.
5. ADVANCEMENT
OF EXPENSES. The Company shall advance all reasonable Expenses
incurred by or on behalf of Indemnitee in connection with any
Proceeding by reason of Indemnitee’s Corporate Status within
ten (10) days after the receipt by the Company of a
3
statement or
statements from 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 Indemnitee and shall include or be
preceded or accompanied by an undertaking by or on behalf of
Indemnitee to repay any Expenses advanced if it shall ultimately be
determined that Indemnitee is not entitled to be indemnified
against such Expenses. Any advances and undertakings to repay
pursuant to this Section 5 shall be unsecured and interest
free. Notwithstanding the foregoing, the obligation of the Company
to advance Expenses pursuant to this Section 5 shall be
subject to the condition that, if, when and to the extent that the
Company determines that Indemnitee would not be permitted to be
indemnified under applicable law, the Company shall be entitled to
be reimbursed, within thirty (30) days of such determination,
by Indemnitee (who hereby agrees to reimburse the Company) for all
such amounts theretofore paid; provided, however, that if
Indemnitee has commenced or thereafter commences legal proceedings
in a court of competent jurisdiction to secure a determination that
Indemnitee should be indemnified under applicable law, any
determination made by the Company that Indemnitee would not be
permitted to be indemnified under applicable law shall not be
binding and Indemnitee shall not be required to reimburse the
Company for any advance of Expenses until a final judicial
determination is made with respect thereto (as to which all rights
of appeal therefrom have been exhausted or lapsed).
6. PROCEDURE
FOR DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION.
(a) To
obtain indemnification (including, but not limited to, the
advancement of Expenses and contribution by the Company) under this
Agreement, Indemnitee shall submit to the Company a written
request, including therein or therewith such documentation and
information as is reasonably available to Indemnitee and is
reasonably necessary to determine whether and to what extent
Indemnitee is entitled to indemnification. The Secretary of the
Company shall, promptly upon receipt of such a request for
indemnification, advise the Board of Directors in writing that
Indemnitee has requested indemnification.
(b) Upon
written request by Indemnitee for indemnification pursuant to the
first sentence of Section 6(a) hereof, a determination, if
required by applicable law, with respect to Indemnitee’s
entitlement thereto shall be made in the specific case: (i) if
a Change in Control (as hereinafter defined) shall have occurred,
by Independent Counsel (as hereinafter defined) in a written
opinion to the Board of Directors, a copy of which shall be
delivered to Indemnitee (unless Indemnitee shall request that such
determination be made by the Board of Directors or the
stockholders, in which case the determination shall be made in the
manner provided in Clause (ii) below), or (ii) if a
Change in Control shall not have occurred, (A) by the Board of
Directors by a majority vote of a quorum consisting of
Disinterested Directors (as hereinafter defined), or (B) if a
quorum of the Board of Directors consisting of Disinterested
Directors is not obtainable or, even if obtainable, said
Disinterested Directors so direct, by Independent Counsel in a
written opinion to the Board of Directors, a copy of which shall be
delivered to Indemnitee, or (C) if so directed by said
Disinterested Directors, by the stockholders of the Company; and,
if it is determined that Indemnitee is entitled to indemnification,
payment to Indemnitee shall be made within ten (10) days after
such determination. Indemnitee shall cooperate with the person,
persons or entity making such determination with respect to
Indemnitee’s entitlement to indemnification, including
providing to such person, persons or entity upon reasonable
advance
4
request any
documentation or information which is not privileged or otherwise
protected from disclosure and which is reasonably available to
Indemnitee and reasonably necessary to such determination. Any
Independent Counsel, member of the Board of Directors, or
stockholder of the Company shall act reasonably and in good faith
in making a determination under the Agreement of the
Indemnitee’s entitlement to indemnification. Any costs or
expenses (including attorneys’ fees and disbursements)
incurred by Indemnitee in so cooperating with the person, persons
or entity making such determination shall be borne by the Company
(irrespective of the determination as to Indemnitee’s
entitlement to indemnification) and the Company hereby indemnifies
and agrees to hold Indemnitee harmless therefrom.
(c) If
the determination of entitlement to indemnification is to be made
by Independent Counsel pursuant to Section 6(b) hereof, the
Independent Counsel shall be selected as provided in this
Section 6(c). If a Change in Control shall not have occurred,
the Independent Counsel shall be selected by the Board of
Directors, and the Company shall give written notice to Indemnitee
advising him of the identity of the Independent Counsel so
selected. If a Change in Control shall have occurred, the
Independent Counsel shall be selected by Indemnitee (unless
Indemnitee shall request that such selection be made by the Board
of Directors, in which event the preceding sentence shall apply),
and Indemnitee shall give written notice to the Company advising it
of the identity of the Independent Counsel so selected. In either
event, Indemnitee or the Company, as the case may be, may, within
ten (10) days after such written notice of selection shall
have been given, deliver to the Company or to Indemnitee, as the
case may be, 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
Section 14(f) of this Agreement, and the objection shall set
forth with particularity the factual basis of such assertion.
Absent a proper and timely objection, the person so selected shall
act as Independent Counsel. If a written objection is made and
substantiated, the Independent Counsel 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,
within twenty (20) days after submission by Indemnitee of a
written request for indemnification pursuant to Section 6(a)
hereof, no Independent Counsel shall have been selected, or
Independent Counsel has been selected and objected to, and such
objection has not been resolved, either the Company or Indemnitee
may petition the Court of Chancery of the State of Delaware or
other court of competent jurisdiction for resolution of any
objection which shall have been made by the Company or Indemnitee
to the other’s selection of Independent Counsel and/or for
the appointment as Independent Counsel of a person selected by the
court or by such other person as the 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
Section 6(b) hereof. The Company shall pay any and all
reasonable fees and expenses of Independent Counsel incurred by
such Independent Counsel in connection with acting pursuant to
Section 6(b) hereof, and the Company shall pay all reasonable
fees and expenses incident to the procedures of this
Section 6(c), regardless of the manner in which such
Independent Counsel was selected o
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