Exhibit 10(g)

 

FORM OF INDEMNIFICATION AGREEMENT

 

In accordance with the Instructions to Item 601 of Regulation S-K, the
Registrant has omitted filing the Indemnification Agreements between Equus II
Incorporated and the following directors and officers as exhibits to this Form
10-K because they are substantially identical to the Form of Indemnification
Agreement that follows.

 

1. Sam P. Douglass

2. Gregory J. Flanagan

3. Gary L. Forbes

5. Robert L. Knauss

6. Nolan Lehmann

7. Gary R. Petersen

8. John W. Storms

9. Francis D. Tuggle

10. Edward E. Williams

 

 

--------------------------------------------------------------------------------

FORM OF INDEMNIFICATION AGREEMENT

 

THIS AGREEMENT is made as of             , 1997, by and between Equus II
Incorporated, a Delaware corporation (the “Company”) and             
(“Indemnitee”).

 

WHEREAS, the certificate of incorporation and bylaws of the Company provide for
the indemnification of its 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:

 

“Act” means the Investment Company Act of 1940, as amended.

 

“Authorized Representative” means (i) a director, officer, employee, agent or
fiduciary of the Company and (ii) a person serving at the request of the Company
as a director, officer. employee, fiduciary or other representative of another
Enterprise.

 

“Disabling Conduct” means an Indemnitee’s willful misfeasance, bad faith, or
gross negligence in the performance of his duties or reckless disregard of his
obligations and duties involved in the conduct of his office.

 

“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 an
expenses of counsel.

 

“Liabilities” means all liabilities, including (without limitation) the amounts
of any judgments, fines, penalties, excise taxes and amounts paid in settlement.

 

“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.

 

  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.

 

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, (iv) for any
transaction from which Indemnitee derived an improper personal benefit,

 

2

--------------------------------------------------------------------------------

(v) for any breach of fiduciary duty involving personal misconduct in respect of
the Company, (vi) for any breach of fiduciary duty with respect to the receipt
of compensation for services, or for payments of a material nature, paid by the
Company to the Indemnitee, or (vii) for any liability to the Company or its
security holders to which the Indemnitee is subject by reason of his Disabling
Conduct.

 

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;

 

(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; or

 

(v) on account of any liability, whether or not there is an adjudication of
liability, arising by reason of Indemnitee’s Disabling Conduct.

 

(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 and to the extent permitted under Section 17(h) of the Act, 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

 

3

--------------------------------------------------------------------------------

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, 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

 

4

--------------------------------------------------------------------------------

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 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 paragraph (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; provided, however, as a condition to any advance (a) the Indemnitee
shall provide a security for his undertaking provided in Section 8, (b) the
Company shall be insured against losses arising by reason of any lawful advance,
or (c) a majority of a quorum of the disinterested, non-party directors of the
Company, or an independent legal counsel in a written opinion, shall determine,
based on a review of readily available facts (as opposed to a trial-type
inquiry), that there is reason to believe that the Indemnitee ultimately will be
found entitled to indemnification under Section 4. 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

 

5

--------------------------------------------------------------------------------

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.

 

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
determined by the Company as provided in this Section 8 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. The Indemnitee agrees that the means for
determining whether an Indemnitee is entitled to indemnification under Sections
4, 6, or 7, shall include (1) a final decision on the merits by a court or other
body before whom a Proceeding was brought that the Indemnitee was not liable by
reason of Disabling Conduct or (2) a reasonable determination, based upon a
review of the facts, that the Indemnitee was not liable by reason of Disabling
Conduct, by (a) the vote of a majority of a quorum of directors of the Company
who are neither “interested persons” of the Company as defined in Section
2(a)(19) of the Act nor parties to such action, suit, or proceeding or (b) an
independent legal counsel in a written opinion. The foregoing determination of
whether indemnification should be made may be made by the Company at any time
and shall be made by the Company upon conclusion of any Proceeding.

 

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

 

6

--------------------------------------------------------------------------------

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 or
between Indemnitee and Chambers.

 

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 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 Delaware 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,

 

7

--------------------------------------------------------------------------------

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.

 

ENTERED into on the day and year first above written.

 

THE COMPANY:

 

EQUUS II INCORPORATED

By:    

 

Address:

 

2929 Allen Parkway, Suite 2500

Houston, Texas 77019

 

Telecopier:

 

(713) 529-9545

     

 

INDEMNITEE:

                   

Address:

                               

Telecopier:

                   

 

 

 

8