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EXHIBIT 10.2
INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT is made as of____________________, 1997,
and is entered into by and between Integrated Electrical Services, Inc., a
Delaware corporation (the "Company"), and _____________("Indemnitee").
R E C I T A L S:
WHEREAS, the certificate of incorporation and bylaws of the Company
provide for the indemnification of the Company's directors and executive
officers to the maximum extent permitted from time to time under applicable law
and, along with the Delaware General Corporation Law, contemplate that the
Company may enter into agreements with respect to such indemnification; and
WHEREAS, the Board of Directors of the Company has concluded that it
is reasonable, prudent and in the best interests of the Company's stockholders
for the Company to contractually obligate itself to indemnify certain of its
Authorized Representatives (defined below) so that they will serve or continue
to serve with greater certainty that they will be adequately protected.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Indemnitee hereby agree as follows:
1. Definitions. For purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires, the
following terms shall have the following respective meanings:
"Authorized Representative" means (i) a director, officer,
employee, agent or fiduciary of the Company or any Subsidiary and (ii)
a person serving at the request of the Company or any Subsidiary as a
director, officer, employee, fiduciary or other representative of
another Enterprise.
"Enterprise" means any corporation, partnership, limited
liability company, association, joint venture, trust, employee benefit
plan or other entity.
"Expenses" means all expenses, including (without limitation)
reasonable fees and expenses of counsel.
"Liabilities" means all liabilities, including (without
limitation) the amounts of any judgments, fines, penalties, excise
taxes and amounts paid in settlement.
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"Proceeding" means any threatened, pending or completed claim,
action (including any action by or in the right of the Company), suit
or proceeding (whether formal or informal, or civil, criminal,
administrative, legislative, arbitrative or investigative) in respect
of which Indemnitee is, was or at any time becomes, or is threatened
to be made, a party, witness, subject or target, by reason of the fact
that Indemnitee is or was an Authorized Representative or a
prospective Authorized Representative.
"Subsidiary" means, at any time, (i) any corporation of which
at least a majority of the outstanding voting stock is owned by the
Company at such time, directly or indirectly through subsidiaries, and
(ii) any other Enterprise in which the Company, directly or
indirectly, owns more than a 50% equity interest at such time.
2. Interpretation. (a) In this Agreement, unless a clear
contrary intention appears:
(i) the singular number includes the plural number and
vice versa;
(ii) reference to any gender includes each other gender;
(iii) the words "herein," "hereof" and "hereunder" and
other words of similar import refer to this Agreement as a whole and
not to any particular Section or other subdivision;
(iv) unless the context indicates otherwise, reference to
any Section means such Section hereof; and
(v) the words "including" (and with correlative meaning
"include") means including, without limiting the generality of any
description preceding such term.
(b) The Section headings herein are for convenience only
and shall not affect the construction hereof.
(c) No provision of this Agreement shall be interpreted
or construed against any party solely because that party or its legal
representative drafted such provision.
(d) In the event of any ambiguity, vagueness or other
similar matter involving the interpretation or meaning of this Agreement, this
Agreement shall be liberally construed so as to provide to Indemnitee the full
benefits contemplated hereby.
(e) If the indemnification to which Indemnitee is
entitled as respects any aspect of any claim varies between two or more
provisions of this Agreement, that provision providing the most comprehensive
indemnification shall apply.
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3. Limitation on Personal Liability. To the fullest extent
permitted by applicable law, Indemnitee shall not be personally liable to the
Company or its stockholders for monetary damages for breach of fiduciary duty
as a director of the Company, provided that the foregoing shall not eliminate
or limit the liability of Indemnitee (i) for any breach of Indemnitee's duty of
loyalty to the Company or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the Delaware General Corporation Law relating
to unlawful dividend payments and unlawful stock purchases or redemptions or
(iv) for any transaction from which Indemnitee derived an improper personal
benefit.
4. Indemnity. (a) Subject to the following provisions of this
Agreement, the Company shall hold harmless and indemnify Indemnitee against all
Expenses and Liabilities actually incurred by Indemnitee in connection with any
Proceeding; provided, however, that no indemnity shall be paid by the Company
pursuant to this Agreement:
(i) for amounts actually paid to Indemnitee pursuant to
one or more policies of directors and officers liability insurance
maintained by the Company or pursuant to a trust fund, letter of
credit or other security or funding arrangement provided by the
Company; provided, however, that if it should subsequently be
determined that Indemnitee is not entitled to retain any such amount,
this clause (i) shall no longer apply to such amount;
(ii) in respect of remuneration paid to Indemnitee if it
shall be determined by a final judgment or other final adjudication
that payment of such remuneration was in violation of applicable law;
(iii) on account of Indemnitee's conduct which is finally
adjudged to constitute willful misconduct or to have been knowingly
fraudulent, deliberately dishonest or from which the Indemnitee
derives an improper personal benefit; or
(iv) on account of any suit in which final judgment is
rendered against Indemnitee for an accounting of profits made from the
sale or purchase by Indemnitee of securities of the Company pursuant
to the provisions of Section 16(b) of the Securities Exchange Act of
1934, as amended.
(b) If Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for only a portion (but not,
however, for the total amount) of any Expenses or Liabilities actually incurred
by Indemnitee in connection with any Proceeding, the Company shall nevertheless
indemnify Indemnitee for the portion of such Expenses and Liabilities to which
Indemnitee is entitled. If the indemnification provided for herein in respect
of any Expenses or Liabilities actually incurred by Indemnitee in connection
with any Proceeding is finally determined by a court of competent jurisdiction
to be prohibited by applicable law, then the Company, in lieu of indemnifying
Indemnitee, shall contribute to the amount paid or payable by Indemnitee as a
result of such Expenses and Liabilities in such proportion as is appropriate to
reflect (i) the relative benefits received by the Company on the one hand and
Indemnitee on the other hand from the events, circumstances, conditions,
happenings, actions or transactions from which such Proceeding arose, (ii) the
relative fault of the Company (including its other Authorized Representatives)
on the one hand and of Indemnitee on the other hand in connection with the
events,
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circumstances and happenings which resulted in such Expenses and Liabilities,
such relative fault to be determined by reference to, among other things, the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent the events, circumstances and/or happenings resulting in
such Expenses and Liabilities, and (iii) any other relevant equitable
considerations, it being agreed that it would not be just and equitable if such
contribution were determined by pro rata or other method of allocation which
does not take into account the foregoing equitable considerations.
(c) The indemnification provided herein shall be applicable only
to Proceedings commenced after the date hereof, regardless, however, of whether
they arise from acts, omissions, facts or circumstances occurring before or
after the date hereof.
(d) The indemnification provided herein shall be applicable
whether or not negligence of Indemnitee is alleged or proved, and regardless of
whether such negligence be contributory or sole.
(e) Amounts paid by the Company to Indemnitee under this Section 4
are subject to refund by Indemnitee as provided in Section 8.
5. Notification and Defense of Claims. (a) Promptly after the
receipt by Indemnitee of notice of the commencement of any Proceeding,
Indemnitee will, if a claim in respect thereof is to be made against the
Company under this Agreement, notify the Company of the commencement of such
Proceeding; provided, however, that the omission to so notify the Company will
not relieve the Company (i) from any liability which it may have to Indemnitee
under this Agreement unless, and then only to the extent that, such omission
results in insufficient time being available to permit the Company or its
counsel to effectively defend against or make timely response to any loss,
claim, damage, liability or expense resulting from such Proceeding or otherwise
has a material adverse effect on the Company's ability to promptly deal with
such loss, claim, damage, liability or expense or (ii) from any liability which
it may have to Indemnitee otherwise than under this Agreement.
(b) The following provisions shall apply with respect to any such
Proceeding as to which Indemnitee notifies the Company of the commencement
thereof:
(i) The Company shall be entitled to participate therein
at its own expense.
(ii) Except as otherwise provided below, to the extent it
may elect to do so, the Company (jointly with any other indemnifying
party similarly notified) will be entitled to assume the defense
thereof, with counsel of its own selection reasonably satisfactory to
Indemnitee. After notice from the Company to Indemnitee of its
election so to assume the defense thereof, the Company will not be
liable to Indemnitee under this Agreement for any Expenses
subsequently incurred by Indemnitee in connection with the defense of
such Proceeding other than reasonable costs of investigation or as
otherwise provided below. Indemnitee shall have the right to employ
separate counsel in such
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Proceeding but the fees and expenses of such counsel incurred after
notice from the Company of its assumption of the defense thereof shall
be at the expense of Indemnitee unless (1) the employment of separate
counsel by Indemnitee has been authorized by the Company; (2)
Indemnitee shall have reasonably concluded that there may be a
conflict of interest between the Company and Indemnitee in the conduct
of the defense of such Proceeding; or (3) the Company shall not in
fact have employed counsel to assume the defense of such Proceeding,
in each of which cases the reasonable fees and expenses of
Indemnitee's counsel shall be borne by the Company. The Company shall
not be entitled to assume the defense of any Proceeding brought by or
on behalf of the Company or as to which Indemnitee shall have made the
conclusion provided for in (2) above. Nothing in this subparagraph
(ii) shall affect the obligation of the Company to indemnify
Indemnitee against Expenses and Liabilities paid in settlement for
which it is otherwise obligated hereunder.
(iii) The Company shall not be liable to indemnify
Indemnitee under this Agreement for any amounts paid in settlement of
any Proceedings or claims effected without its prior written consent.
The Company shall not settle any Proceeding or claim in any manner
which would impose any penalty or limitation on Indemnitee without
Indemnitee's prior written consent. Neither the Company nor
Indemnitee will unreasonably withhold or delay its consent to any
proposed settlement.
6. Advancement of Expenses, etc. If requested to do so by
Indemnitee with respect to any Proceeding, the Company shall advance to or for
the benefit of Indemnitee, prior to the final disposition of such Proceeding,
the Expenses actually incurred by Indemnitee in investigating, defending or
appealing such Proceeding. Any judgments, fines or amounts to be paid in
settlement of any Proceeding shall also be advanced by the Company upon request
by Indemnitee. Advances made by the Company under this Section 6 are subject
to refund by Indemnitee as provided in Section 8.
7. Right of Indemnitee to Bring Suit. (a) If a claim for
indemnification or a claim for an advance under this Agreement is not paid in
full by the Company within 30 days after receipt by the Company from Indemnitee
of a written request or demand therefor, Indemnitee may bring suit against the
Company to recover the unpaid amount of the claim. If, in any such action,
Indemnitee makes a prima facie showing of entitlement to indemnification under
this Agreement, the Company shall have the burden of proving that
indemnification is not required under this Agreement. The only defense to any
such action shall be that indemnification is not required by this Agreement.
(b) In the event that any action is instituted by Indemnitee to
enforce Indemnitee's rights or to collect monies due to Indemnitee under this
Agreement and if Indemnitee is successful in such action, the Company shall
reimburse Indemnitee for all Expenses incurred by Indemnitee with respect to
such action.
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8. Repayment Obligation of Indemnitee. If the Company advances
or pays any amount to Indemnitee under Section 4, 6 or 7 and if it shall
thereafter be finally adjudicated that Indemnitee was not entitled to be
indemnified hereunder for all or any portion of such amount, Indemnitee shall
promptly repay such amount or such portion thereof, as the case may be, to the
Company. If the Company advances or pays any amount to Indemnitee under
Section 4, 6 or 7 and if Indemnitee shall thereafter receive all or a portion
of such amount under one or more policies of directors and officers liability
insurance maintained by the Company or pursuant to a trust fund, letter of
credit or other security or funding arrangement provided by the Company,
Indemnitee shall promptly repay such amount or such portion thereof, as the
case may be, to the Company.
9. Changes in Law. If any change after the date of this
Agreement in any applicable law, statute or rule expands the power of the
Company to indemnify Authorized Representatives, such change shall be within
the purview of Indemnitee's rights and the Company's obligations under this
Agreement. If any change after the date of this Agreement in any applicable
law, statute or rule narrows the right of the Company to indemnify an
Authorized Representative, such change shall, to the fullest extent permitted
by applicable law, leave this Agreement and the parties' rights and obligations
hereunder unaffected.
10. Continuation of Indemnity. All agreements and obligations of
the Company hereunder shall continue during the period Indemnitee is an
Authorized Representative, and shall continue after Indemnitee has ceased to
occupy such position or have such relationship so long as Indemnitee shall be
subject to any possible Proceeding.
11. Nonexclusivity. The indemnification and other rights provided
by any provision of this Agreement shall not be deemed exclusive of any other
rights to which Indemnitee may be entitled under (i) any statutory or common
law, (ii) the Company's certificate of incorporation, (iii) the Company's
bylaws, (iv) any other agreement or (v) any vote of stockholders or
disinterested directors or otherwise, both as to action in Indemnitee's
official capacity and as to action in another capacity while occupying any of
the positions or having any of the relationships referred to in this Agreement.
Nothing in this Agreement shall in any manner affect, impair or compromise any
indemnification Indemnitee has or may have by virtue of any agreement
previously entered into between Indemnitee and the Company.
12. Severability. If any provision of this Agreement shall be
held to be invalid, illegal or unenforceable (i) the validity, legality or
enforceability of the remaining provisions of this Agreement shall not be in
any way affected or impaired thereby and (ii) to the fullest extent possible,
the provisions of this Agreement shall be construed so as to give effect to the
intent manifested by the provision held invalid, illegal or unenforceable.
Each provision of this Agreement is a separate and independent portion of this
Agreement.
13. Modification and Waiver. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by both
of the parties. No waiver of any of
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the provisions of this Agreement shall be binding unless executed in writing by
the person making the waiver nor shall such waiver constitute a continuing
waiver.
14. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be addressed (i) if to
the Company, at its principal office address as shown on the signature page
hereof or such other address as it may have designated by written notice to
Indemnitee for purposes hereof, directed to the attention of the Secretary and
(ii) if to Indemnitee, at Indemnitee's address as shown on the signature page
hereof or to such other address as Indemnitee may have designated by written
notice to the Company for purposes hereof. Each such notice or other
communication shall be deemed to have been duly given if (a) delivered by hand
and receipted for by the party to whom said notice or other communication shall
have been directed, (b) transmitted by facsimile transmission, at the time that
receipt of such transmission is confirmed, or (c) mailed by certified or
registered mail with postage prepaid, on the third business day after the date
on which it is so mailed.
15. Governing Law. THIS AGREEMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER, AND SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.
16. Heirs, Successors and Assigns. (a) This Agreement shall be
binding upon, inure to the benefit of and be enforceable by (i) Indemnitee and
Indemnitee's personal or legal representatives, executors, administrators,
heirs, devisees and legatees and (ii) the Company and its successors and
assigns. This Agreement shall not inure to the benefit of any other person or
Enterprise.
(b) The Company agrees to require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used herein, the term "Company" shall include any
successor to its business and/or assets as aforesaid which executes and
delivers the assumption and agreement provided for in this Section 16 or which
otherwise becomes bound by all terms and provisions of this Agreement by
operation of law.
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ENTERED into on the day and year first above written.
THE COMPANY:
INTEGRATED ELECTRICAL SERVICES, INC.
By:
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Name:
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Title:
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Address:
Telecopier:
INDEMNITEE:
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Address:
Telecopier:
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