UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (Date of earliest event reported): February 27, 2009
POWELL INDUSTRIES, INC.
(Exact Name of Registrant as Specified in Its Charter)
| Delaware | 001-12488 | 88-0106100 | ||
| (State or other jurisdiction of | (Commission File Number) | (I.R.S. Employer | ||
| incorporation or organization) | Identification Number) |
| 8550 Mosley Drive | 77075-1180 | |
| Houston, Texas | ||
| (Address of Principal | (Zip Code) | |
| Executive Offices) |
(713) 944-6900
(Registrant’s Telephone Number, Including Area Code)
(Registrant’s Telephone Number, Including Area Code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
| o | Written communications pursuant to Rule 425 under the Securities Act (17CFR230.425) | |
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17CFR240.14a-12) | |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Action (17CFR240.14D-2(b)) | |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17CFR240.13e-4(c)) |
Item 1.01 — Entry into a Material Definitive Agreement.
On February 27, 2009, Powell Industries, Inc. (the “Company”) entered into an indemnification
agreement with each member of its Board of Directors and each of its named executive officers as
set forth in its most recent proxy statement (the “Named Executive Officers”). These agreements
provide, among other things, that the Company will indemnify each Director and Named Executive
Officer (each, an “Indemnitee”) in the event that the Indemnitee becomes a party or otherwise a
participant in any action or proceeding on account of the Indemnitee’s service as a Director of the
Company (or service for another corporation or entity in any capacity at the request of the
Company) to the fullest extent permitted by applicable law. Under the indemnification agreement,
the Company will pay, in advance of the final disposition of any such action or proceeding,
expenses (including attorneys’ fees) incurred by the Indemnitee in defending or otherwise
responding to such action or proceeding upon receipt of a written undertaking from the Indemnitee
to repay the amount advanced consistent with applicable law in the event that a court shall
ultimately determine that he or she is not entitled to be indemnified
for such expenses. The advancement of such expenses shall not be
required if it is determined by certain governmental authorities that
such advancement is a personal loan in contravention of the Sarbanes-Oxley Act.
The contractual rights to indemnification provided by the indemnification agreements are subject to the
limitations and conditions specified in the agreements, and are in addition to any other rights
each Indemnitee may have under the Company’s Certificate of Incorporation and By-Laws, each as
amended from time to time, and applicable law.
The foregoing summary of the indemnification agreements is qualified in its entirety by
reference to the form of indemnification agreement, which is attached hereto as Exhibit 10.1 and is
incorporated herein by reference.
Item 9.01(d) — Exhibits.
| Exhibit | ||
| Number | Description | |
10.1
|
Form of Indemnification Agreement for Directors and Named Executive Officers. |
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto duly authorized.
| POWELL INDUSTRIES, INC. | ||||||
Date: March 3, 2009 |
||||||
| By: | /s/ DON R. MADISON
|
|||||
| Executive Vice President | ||||||
| Chief Financial and Administrative Officer | ||||||
| (Principal Accounting and Financial Officer) | ||||||
3
Exhibit Index
| Exhibit | ||
| Number | Description | |
10.1
|
Form of Indemnification Agreement for Directors and Named Executive Officers. |
4
Exhibit 10.1
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”).
WITNESSETH THAT:
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.
2. ADDITIONAL INDEMNITY.
(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
2
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 or appointed. Upon the due commencement of any
judicial proceeding or arbitration pursuant to Section 8 of this Agreement, Independent Counsel
shall be discharged and relieved of any further
responsibility in such capacity (subject to the applicable standards of professional conduct
then prevailing).
5
(d) The Company shall not be required to obtain the consent of the Indemnitee to the
settlement of any Proceeding which the Company has undertaken to defend if the Company assumes full
and sole responsibility for such settlement and the settlement grants the Indemnitee a complete and
unqualified release in respect of the potential liability.
7. PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS.
(a) In making a determination with respect to entitlement to indemnification hereunder, the
person or persons or entity making such determination shall presume that Indemnitee is entitled to
indemnification under this Agreement if Indemnitee has submitted a request for indemnification in
accordance with Section 6(a) of this Agreement, and the Company shall have the burden of proof to
overcome that presumption in connection with the making by any person, persons or entity of any
determination contrary to that presumption.
(b) If the person, persons or entity empowered or selected under Section 6 of this Agreement
to determine whether Indemnitee is entitled to indemnification shall not have made a determination
within thirty (30) days after receipt by the Company of the request therefore, the requisite
determination of entitlement to indemnification shall be deemed to have been made and Indemnitee
shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material
fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially
misleading, in connection with the request for indemnification, or (ii) a prohibition of such
indemnification under applicable law; provided, however, that such 30-day period may be extended
for a reasonable time, not to exceed an additional fifteen (15) days, if the person, persons or
entity making the determination with respect to entitlement to indemnification in good faith
requires such additional time for obtaining or evaluating documentation and/or information relating
thereto; and provided, further, that the foregoing provisions of this Section 7(b) shall not apply
(i) if the determination of entitlement to indemnification is to be made by the stockholders
pursuant to Section 6(b) of this Agreement and if (A) within fifteen (15) days after receipt by the
Company of the request for such determination the Board of Directors or the Disinterested
Directors, if appropriate, resolve to submit such determination to the stockholders for their
consideration at an annual meeting thereof to be held within seventy-five (75) days after such
receipt and such determination is made thereat, or (B) a special meeting of stockholders is called
within fifteen (15) days after such receipt for the purpose of making such determination, such
meeting is held for such purpose within sixty (60) days after having been so called and such
determination is made thereat, or (ii) if the determination of entitlement to indemnification is to
be made by Independent Counsel pursuant to Section 6(b) of this Agreement.
(c) The termination of any Proceeding or of any claim, issue or matter therein, by judgment,
order, settlement (with or without court approval), conviction, or upon a plea of nolo contendere
or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself
adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee
did not act in good faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had
reasonable cause to believe that his conduct was unlawful.
6
(d) For purposes of any determination of good faith, Indemnitee shall be deemed to have acted
in good faith if a majority of Disinterested Directors, the stockholders, or Independent Counsel
through a written opinion determines that such person 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 in the case
of a criminal proceeding, such person had no reasonable cause to believe his conduct was unlawful.
In addition, the knowledge and/or actions, or failure to act, of any director, officer, agent or
employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right
to indemnification under this Agreement. The provisions of this Section 7(d) shall not be deemed
to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be
deemed to have met the applicable standard of conduct set forth in this Agreement.
8. REMEDIES OF INDEMNITEE.
(a) In the event that (i) a determination is made pursuant to Section 6 of this Agreement that
Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is
not timely made pursuant to Section 5 of this Agreement, (iii) no determination of entitlement to
indemnification shall have been made pursuant to Section 6(b) of this Agreement within ninety (90)
days after receipt by the Company of the request for indemnification, (iv) payment of
indemnification is not made pursuant to Section 3 or 4 of this Agreement within ten (10) days after
receipt by the Company of a written request therefore, or (v) payment of indemnification is not
made within ten (10) days after a determination has been made that Indemnitee is entitled to
indemnification or such determination is deemed to have been made pursuant to Section 6 or 7 of
this Agreement, Indemnitee shall be entitled to an adjudication in an appropriate court of the
State of Delaware, or in any other court of competent jurisdiction, of his entitlement to such
indemnification. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be
conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American
Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or an
award in arbitration within 180 days following the date on which Indemnitee first has the right to
commence such proceeding pursuant to this Section 8(a). The Company shall not oppose Indemnitee’s
right to seek any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made pursuant to Section 6(b) of this
Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or
arbitration commenced pursuant to this Section 8 shall be conducted in all respects as a de novo
trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that
adverse determination.
(c) If a determination shall have been made pursuant to Section 6(b) of this Agreement that
Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any
judicial proceeding or arbitration commenced pursuant to this Section 8, absent (i) a misstatement
by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s
statement not materially misleading, in connection with the request for indemnification, or (ii) a
prohibition of such indemnification under applicable law.
7
(d) In the event that Indemnitee, pursuant to this Section 8, seeks a judicial adjudication of
or an award in arbitration to enforce his rights under, or to recover damages for breach of, this
Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by
the Company against, any and all expenses (of the types described in the definition of “Expenses”
in Section 14(e) of this Agreement) actually and reasonably incurred by him in such judicial
adjudication or arbitration, but only if he prevails therein. If it shall be determined in said
judicial adjudication or arbitration that Indemnitee is entitled to receive part but not all of the
indemnification sought, the expenses incurred by Indemnitee in connection with such judicial
adjudication or arbitration shall be appropriately prorated. The Company shall indemnify
Indemnitee against any and all expenses and, if requested by Indemnitee, shall (within ten (10)
days after receipt by the Company of a written request therefore) advance such expenses to
Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee to
recover under any directors’ and officers’ liability insurance policies maintained by the Company,
regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification,
advancement of expenses or insurance recovery, as the case may be.
(e) The Company shall be precluded from asserting in any judicial proceeding or arbitration
commenced pursuant to this Section 8 that the procedures and presumptions of this Agreement are not
valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator
that the Company is bound by all the provisions of this Agreement.
9. NON-EXCLUSIVITY; SURVIVAL OF RIGHTS; INSURANCE; SUBROGATION.
(a) The rights of indemnification as provided by this Agreement shall not be deemed exclusive
of any other rights to which Indemnitee may at any time be entitled under applicable law, the
certificate of incorporation of the Company, the Bylaws, any agreement, a vote of stockholders or a
resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement, the
certificate of incorporation of the Company, the Bylaws or of any respective provision thereof
shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken
or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or
repeal. To the extent that a change in the DGCL, whether by statute or judicial decision, permits
greater indemnification than would be afforded currently under the Bylaws and this Agreement, it is
the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits
so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any
other right or remedy, and every other right and remedy shall be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not
prevent the concurrent assertion or employment of any other right or remedy.
(b) To the extent that the Company maintains an insurance policy or policies providing
liability insurance for directors, officers, employees, or agents or fiduciaries of the Company or
of any other Enterprise which such person serves at the request of the Company, Indemnitee shall be
covered by such policy or policies in accordance with its or their terms to the maximum extent of
the coverage available for any such director, officer, employee or agent under such policy or
policies.
8
(c) In the event of any payment under this Agreement, the Company shall be subrogated to the
extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers
required and take all action necessary to secure such rights, including execution of such documents
as are necessary to enable the Company to bring suit to enforce such rights.
(d) The Company shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually
received such payment under any insurance policy, contract, agreement or otherwise.
10. EXCEPTION TO RIGHT OF INDEMNIFICATION AND EXPENSE ADVANCEMENT. Notwithstanding any other
provision of this Agreement, Indemnitee shall only be entitled to indemnification or advancement of
expenses under this Agreement with respect to any Proceeding brought by Indemnitee, or any claim
therein, if (a) the bringing of such Proceeding or making of such claim shall have been approved by
the Board of Directors; or (b) such Proceeding is being brought by the Indemnitee to assert his
rights under this Agreement; provided, however, that Indemnitee shall in no event be entitled to
the advancement of expenses under the Agreement if a determination has been made by a judicial
authority or governmental entity or agency or, absent such determination, any such authority,
entity or agency has taken a postion or issued any guidance stating, that the advancement of
expenses to an Indemnitee in a manner similar to that contemplated in Section 5 of the Agreement
constitutes a personal loan in contravention of Section 402 of the United States Sarbanes-Oxley Act
of 2002, to the extent then applicable, or any similar law or regulation.
11. DURATION OF AGREEMENT. All agreements and obligations of the Company contained herein shall
apply to the period Indemnitee is or was a director or officer of the Company, including any such
period prior to this Agreement, (or the period Indemnitee is or was serving at the request of the
Company as a director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other Enterprise) and shall continue thereafter so long as Indemnitee shall be
subject to any Proceeding (or any proceeding commenced under Section 8 hereof) by reason of his
Corporate Status, whether or not he is acting or serving in any such capacity at the time any
liability or expense is incurred for which indemnification can be provided under this Agreement.
This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors (including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business or assets of the
Company), assigns, spouses, heirs, executors and personal and legal representatives. This
Agreement shall continue in effect regardless of whether Indemnitee continues to serve as a
director or officer of the Company or any other Enterprise at the Company’s request.
12. SECURITY. To the extent requested by the Indemnitee and approved by the Board of Directors,
the Company may at any time and from time to time provide security to the Indennitee for the
Company’s obligations hereunder through an irrevocable bank line of credit, funded trust or other
collateral. Any such security, once provided to the Indemnitee, may not be revoked or released
without the prior written consent of the Indemnitee.
9
13. ENFORCEMENT.
(a) The Company expressly confirms and agrees that it has entered into this Agreement and
assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director
or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this
Agreement in serving as a director or officer of the Company.
(b) This Agreement constitutes the entire agreement between the parties hereto with respect to
the subject matter hereof and supersedes all prior agreements and understandings, oral, written and
implied, between the parties hereto with respect to the subject matter hereof.
14. DEFINITIONS. For purposes of this Agreement:
(a) “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 promulgated under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”) or in response to any similar item on any similar schedule or form under the
equivalent laws of another jurisdiction, whether or not the Company is then subject to such
reporting requirement; provided, however, that, without limitation, such a Change in Control shall
be deemed to have occurred if after the date of this Agreement (i) any “person” (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act) other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company or a corporation owned directly or
indirectly by the stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company, is or becomes the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company representing 20% or
more of the combined voting power of the Company’s then outstanding securities (other than any such
person or any affiliate thereof that is such a 20% beneficial owner as of the date hereof) without
the prior approval of at least two-thirds of the members of the Board of Directors in office
immediately prior to such person attaining such percentage interest; (ii) there occurs a proxy
contest, or the Company is a party to a merger, consolidation, sale of assets, plan of liquidation
or other reorganization, as a consequence of which members of the Board of Directors in office
immediately prior to such transaction or event constitute less than a majority of the Board of
Directors thereafter; or (iii) during any period of two consecutive years, other than as a result
of an event described in clause (a)(ii) of this Section 14, individuals who at the beginning of
such period constituted the Board of Directors (including for this purpose any new director whose
election or nomination for election by the Company’s stockholders was approved by a vote of at
least two-thirds of the directors then still in office who were directors at the beginning of such
period) cease for any reason to constitute at least a majority of the Board of Directors. A Change
in Control shall not be deemed to have occurred under item (i) above if the “person” described
under item (i) is entitled to report its ownership on Schedule 13G promulgated under the Exchange
Act and such person is able to represent that it acquired such securities in the ordinary course of
its business and not with the purpose nor with the effect of changing or influencing the control of
the Company, nor in connection with or as a participant in any transaction having such purpose or
effect. If the “person” referred to in the previous sentence would at any time not be entitled to
continue to report such ownership on Schedule 13G pursuant to Rule 13d-1(b)(3)(i)(B) of the Exchange Act,
then a Change in Control shall be deemed to have occurred at such time.
10
(b) “Corporate Status” describes the status of a person who is or was a director, officer,
employee or 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 express written request of the Company, provided that the approval by the Board of Directors of
such person to such position in a resolution adopted by the Board of Directors shall for all
purposes qualify as such a written requirement.
(c) “Disinterested Director” means a director of the Company who is not and was not a party to
the Proceeding in respect of which indemnification is sought by Indemnitee.
(d) “Enterprise” shall mean the Company and any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise of which Indemnitee is or was serving at the
express written request of the Company as a director, officer, employee, agent or fiduciary
provided that the approval by the Board of Directors of such position in a resolution adopted by
the Board of Directors shall for all purposes qualify as such a written requirement.
(e) “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees, and all other disbursements or
expenses of the types customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, participating, or being or preparing to be a witness in a
Proceeding.
(f) “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in
matters of corporation law and neither presently is, nor in the past five years has been, retained
to represent the Company or Indemnitee in any matter material to either such party (other than with
respect to matters concerning the Indemnitee under this Agreement, or of other indemnitees under
similar indemnification agreements) or any other party to the Proceeding giving rise to a claim for
indemnification hereunder, or otherwise has any substantial business or personal relationship with
the Company or Indemnitee or any other party to the Proceeding giving rise to a claim for
indemnification hereunder that could reasonably be considered to influence the independent judgment
of the Independent Counsel. 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 under this Agreement. The Company agrees to pay the reasonable fees
of the Independent Counsel referred to above and to fully indemnify such counsel against any and
all expenses, claims, liabilities and damages arising out of or relating to this Agreement or its
engagement pursuant hereto.
(g) “Proceeding” includes any threatened, pending or completed action, suit, arbitration,
alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other
actual, threatened or completed proceeding, whether brought by or in the right of the Company or
otherwise and whether civil, criminal, administrative or investigative, in which Indemnitee was, is
or will be involved as a party or otherwise, by reason of Indemnitee’s
Corporate Status, by reason of any action taken by him or of any inaction on his part while
acting as a director or officer of the Company, or by reason of the fact that he is or was serving
11
as a director, officer, employee or agent of another Enterprise at the request of the Company, in
each case whether or not he is acting or serving in any such capacity at the time any liability or
expense is incurred for which indemnification can be provided under this Agreement; including one
pending on or before the date of this Agreement and excluding one initiated by an Indemnitee
pursuant to Section 8 of this Agreement to enforce his rights under this Agreement.
15. SEVERABILITY. If any provision or provisions of this Agreement shall be held by a court of
competent jurisdiction to be invalid, void, illegal or otherwise unenforceable for any reason
whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this
Agreement (including without limitation, each portion of any section of this Agreement containing
any such provision held to be invalid, illegal or unenforceable, that is not itself invalid,
illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain
enforceable to the fullest extent permitted by law; and (b) to the fullest extent possible, the
provisions of this Agreement (including, without limitation, each portion of any section of this
Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not
itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent
manifested thereby.
16. MODIFICATION AND WAIVER. No supplement, modification, termination, waiver or amendment of this
Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of
any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other
provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.
17. NOTICE BY INDEMNITEE. Indemnitee agrees promptly to notify the company in writing upon being
served with any summons, citation, subpoena, complaint, indictment, information or other document
relating to any Proceeding or matter which may be subject to indemnification covered hereunder.
The failure to so notify the Company shall not relieve the Company of any obligation which it may
have to the Indemnitee under this Agreement or otherwise.
18. NOTICES. All notices, requests, demands and other communications hereunder shall be in writing
and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party
to whom said notice or other communication shall have been directed, or (ii) mailed by certified or
registered mail with postage prepaid, on the third business day after the date on which it is so
mailed:
(a) If to Indemnitee, to:
| At the last address of Indemnitee in the records of the Company. |
(b) If to the Company, to:
| Powell Industries, Inc. | |||
| 8550 Mosley Drive | |||
| Houston, TX 77075-1180 | |||
| Attention: President and Chief Executive Officer |
or to such other address as may have been furnished to Indemnitee by the Company or to the Company
by Indemnitee, as the case may be.
12
19. IDENTICAL COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of
which shall for all purposes be deemed to be an original but all of which together shall constitute
one and the same Agreement. Only one such counterpart signed by the party against whom
enforceability is sought needs to be produced to evidence the existence of this Agreement.
20. HEADINGS. The headings of the paragraphs of this Agreement are inserted for convenience only
and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
21. GOVERNING LAW. The parties agree that this Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of Delaware, without application of the conflict
of laws principles thereof.
22. GENDER. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun
where appropriate.
[Signature page follows.]
13
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the day and
year first above written.
| POWELL INDUSTRIES, INC. | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | Director, Chief Executive Officer and President | |||||
| INDEMNITEE | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
Signature Page — Indemnification Agreement