Exhibit 10.01


FORM OF

DIRECTOR INDEMNIFICATION AGREEMENT


This Director
Indemnification Agreement (this “Agreement”), dated as of this     
day of August, 2006, is made by and between Haynes International, Inc., a
Delaware corporation (the “Company”), and                                  
(“Indemnitee”).


RECITALS:


WHEREAS, Section
141 of the Delaware General Corporation Law provides that a corporation’s business
and affairs shall be managed by or under the direction of its board of
directors;


WHEREAS, by
virtue of the managerial prerogatives vested in the directors of a Delaware
corporation, directors act as fiduciaries of the corporation and its
stockholders;


WHEREAS, it
is critically important to the Company and its stockholders that the Company be
able to attract and retain the most capable persons reasonably available to serve
as directors of the Company;


WHEREAS, in
recognition of the need for corporations to be able to induce capable and
responsible persons to accept positions in corporate management, Delaware law
authorizes (and in some instances requires) corporations to indemnify their
directors and officers, and further authorizes corporations to purchase and
maintain insurance for the benefit of their directors and officers;


WHEREAS, the
number of lawsuits challenging the judgment and actions of directors of corporations,
the costs of defending those lawsuits and the threat to directors’ personal
assets have all materially increased over the past several years, chilling the
willingness of capable persons to undertake the responsibilities imposed on corporate
directors;


WHEREAS, recent
federal legislation and rules adopted by the Securities and Exchange Commission
have imposed additional disclosure and corporate governance obligations on
directors of public companies and have exposed such directors to new and
substantially broadened liabilities;


WHEREAS, Indemnitee
is a director of the Company and his or her willingness to serve in such
capacity is predicated, in substantial part, upon the Company’s willingness to
indemnify him or her in accordance with the principles reflected above, to the
fullest extent permitted by the laws of the state of Delaware, and upon the
other undertakings set forth in this Agreement; and


WHEREAS, in
recognition of the need to provide Indemnitee with substantial protection
against personal liability, in order to procure Indemnitee’s continued service
as a director of the Company and to enhance Indemnitee’s ability to serve the
Company in an effective manner, and in order to provide such protection
pursuant to express contract rights (intended to be enforceable irrespective
of, among other things, any amendment to the Company’s certificate of









 



 


incorporation or
bylaws (collectively, the “Governance Documents”), any change in the composition
of the Company’s Board of Directors (the “Board”) or any
change-in-control or business combination transaction relating to the Company),
the Company desires to provide in this Agreement for the indemnification of and
the advancement of Expenses (as defined in Section 1.01(f)) to
Indemnitee as set forth in this Agreement and for the continued coverage of
Indemnitee under the Company’s directors’ and officers’ liability insurance
policies;


NOW,
THEREFORE, in consideration of the promises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:


AGREEMENT:


ARTICLE I


Section 1.01.        Definitions. In addition to
terms defined elsewhere herein, the terms hereinafter set forth when used
herein shall have the following meanings and the following definitions shall be
equally applicable to both the singular and plural forms of any of the terms
herein defined:


(a)           “Change in
Control” means the occurrence of any of the following events:


(i)               any “person,” as
such term is used in Sections 13(d) and 14(d) of the Exchange Act (other
than the Company, any trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any Subsidiary of the Company, or any
company 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 more than thirty percent (30%) of either the then-outstanding
shares of common stock of the Company (“Outstanding Common Stock”) or the
combined voting power of the Company’s then outstanding securities (“Outstanding
Company Voting Securities”);


(ii)              at any time
during any period of two (2) consecutive years, individuals who at the
beginning of such period constitute the Board and any new director (other than
a director designated by a person who has entered into an agreement with the
Company to effect a transaction described in clauses (i), (iii), or (iv)
of this subsection (a) or whose initial assumption of office occurred as a
result of an actual or threatened election contest (as described in Rule
14a-12(c) of the Exchange Act) with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents by
or on behalf of a person other than the Company) whose election to the Board or
nomination for election by the Company’s stockholders was approved by a vote of
at least two-thirds (2/3) of the directors at the beginning of the period or
whose election or nomination for election was previously so approved, cease for
any reason to constitute at least a majority of the Board;



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(iii)             consummation of
a reorganization, merger, statutory share exchange or consolidation or similar
corporate transaction involving the Company or any of its Subsidiaries, a sale
or other disposition of all or substantially all of the assets of the Company
or an acquisition of assets or stock of another entity by the Company or any of
its Subsidiaries (each a “Business Combination”) unless, in each case,
following such Business Combination (i) all or substantially all of the
individuals and entities that were the beneficial owners of the Outstanding
Common Stock and Outstanding Company Voting Securities immediately prior to
such Business Combination beneficially own, directly or indirectly, more than
fifty percent (50%) of the then-outstanding shares of common stock and the combined
voting power of the then-outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including a corporation that, as a
result of such Business Combination, owns the Company or all or substantially
all of the Company’s assets either directly or through one or more
Subsidiaries) in substantially the same proportions as their ownership
immediately prior to such Business Combination of the Outstanding Company
Common Stock and the Outstanding Company Voting Securities, as the case may be,
(ii) no person or entity (excluding (A) any entity resulting from such Business
Combination or (B) any employee benefit plan (or related trust) of the Company
or corporation resulting from such Business Combination) beneficially owns,
directly or indirectly fifteen (15%) or more of either the then- outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then-outstanding voting
securities of such corporation, except to the extent that such ownership
existed prior to such Business Combination, and (iii) at least a majority of
the members of the board of directors of the corporation resulting from such
Business Combination were Incumbent Directors at the time of the execution of
the initial agreement, or of the action of the Board, providing for such
Business Combination; or


(iv)            the stockholders
of the Company approve a plan of complete liquidation or dissolution of the
Company.


(b)           “Claim” means:
(i) any threatened, asserted, pending or completed claim, demand, action, suit
or proceeding, arbitration, alternate dispute resolution mechanism,
investigation, inquiry, administrative hearing or proceeding, including any and
all appeals, whether civil, criminal, administrative, arbitrative,
investigative or other, whether formal or informal, and whether made pursuant
to federal, state or other law; and (ii) any threatened, pending or completed
inquiry or investigation, whether made, instituted or conducted by the Company
or any other person, including any federal, state or other governmental entity,
that Indemnitee determines might lead to the institution of any such claim,
demand, action, suit or proceeding. For purposes of this definition, the term “threatened”
will be deemed to include Indemnitee’s good faith belief that a claim or other
assertion may lead to a Claim.


(c)           “Controlled
Affiliate” means any corporation, limited liability company, partnership,
joint venture, trust or other entity or enterprise, whether or not for profit,
that



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is directly or
indirectly controlled by the Company. For purposes of this definition, “control”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of an entity or enterprise, whether
through the ownership of voting securities, through other voting rights, by
contract or otherwise; provided  that direct or indirect
beneficial ownership of capital stock or other interests in an entity or
enterprise entitling the holder to cast twenty percent (20%) or more of the
total number of votes generally entitled to be cast in the election of
directors (or persons performing comparable functions) of such entity or
enterprise shall be deemed to constitute control for purposes of this
definition.


(d)           “Disinterested
Director” means a director of the Company who is not and was not a party to
the Claim in respect of which indemnification is sought by Indemnitee.


(e)           “Exchange Act”
shall mean the Securities Exchange Act of 1934, as amended.


(f)            “Expenses”
means all attorney’s fees, disbursements and retainers, court costs, transcript
costs, fees of experts, witness fees, travel expenses, duplicating costs,
printing and binding costs, telephone charges, postage, fax transmission
charges, secretarial services, delivery service fees and all other
disbursements or expenses paid or incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, being or preparing
to be a witness in, or otherwise participating in, an Indemnifiable Claim, or
in connection with seeking indemnification under this Agreement. Expenses will
also include Expenses paid or incurred in connection with any appeal resulting
from any Indemnifiable Claim, including the premium, security for and other
costs relating to any appeal bond or its equivalent. Expenses, however, will
not include amounts paid in settlement by Indemnitee or the amount of judgments
or fines against Indemnitee


(g)           “Incumbent
Directors” means the individuals who, as of the date hereof, are directors
of the Company and any individual becoming a director subsequent to the date
hereof whose election, nomination for election by the Company’s stockholders,
or appointment, was approved by a vote of at least two-thirds (2/3) of the then
Incumbent Directors (either by a specific vote or by approval of the proxy
statement of the Company in which such person is named as a nominee for
director, without objection to such nomination); provided, however,
that an individual shall not be an Incumbent Director if such individual’s
election or appointment to the Board occurs as a result of an actual or
threatened election contest (as described in Rule 14a-12(c) of the Exchange
Act) with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a person
other than the Board.


(h)           “Indemnifiable
Claim” means any Claim based upon, arising out of or resulting from: (i)
any actual, alleged or suspected act or failure to act by Indemnitee in his or
her capacity as a director, officer, employee or agent of the Company or as a
director, officer, employee, member, manager, trustee or agent of any other
corporation, limited liability company, partnership, joint venture, trust or
other entity or enterprise, whether or not for profit, as to which Indemnitee
is or was serving at the request of the



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Company as a
director, officer, employee, member, manager, trustee or agent; (ii) any
actual, alleged or suspected act or failure to act by Indemnitee in respect of
any business, transaction, communication, filing, disclosure or other activity
of the Company or any other entity or enterprise referred to in clause (i) of
this sentence; or (iii) Indemnitee’s status as a current or former director,
officer, employee or agent of the Company or as a current or former director,
officer, employee, member, manager, trustee or agent of the Company or any
other entity or enterprise referred to in clause (i) of this sentence or any
actual, alleged or suspected act or failure to act by Indemnitee in connection
with any obligation or restriction imposed upon Indemnitee by reason of such
status. In addition to any service at the actual request of the Company, for
purposes of this Agreement, Indemnitee shall be deemed to be serving or to have
served at the request of the Company as a director, officer, employee, member,
manager, trustee or agent of another entity or enterprise if Indemnitee is or
was serving as a director, officer, employee, member, manager, trustee or agent
of such entity or enterprise and (a) such entity or enterprise is or at the
time of such service was a Controlled Affiliate, (b) such entity or enterprise
is or at the time of such service was an employee benefit plan (or related
trust) sponsored or maintained by the Company or a Controlled Affiliate or (c)
the Company or a Controlled Affiliate directly or indirectly caused or
authorized Indemnitee to be nominated, elected, appointed, designated,
employed, engaged or selected to serve in such capacity.


(i)            “Indemnifiable
Losses” means any and all Losses relating to, arising out of or resulting
from any Indemnifiable Claim.


(j)            “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 (5)
years has been, retained to represent: (i) the Company (or any Subsidiary), the
Board (or any committee) 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 (ii) any other named (or, as to a threatened matter, reasonably likely to be
named) party to the Indemnifiable Claim giving rise to a claim for
indemnification hereunder. 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.


(k)           “Losses”
means any and all Expenses, damages, losses, liabilities, judgments, fines,
penalties (whether civil, criminal or other) and amounts paid in settlements,
including all interest, assessments and other charges paid or payable in
connection with or in respect of any of the foregoing.


(l)            “Subsidiary”
means an entity in which the Company directly or indirectly beneficially owns
fifty percent (50%) or more of the outstanding voting securities.


Section 1.02.        Indemnification Obligation.
Subject to Section 1.07, the Company shall indemnify, defend and hold
harmless Indemnitee, to the fullest extent permitted or required by the Company’s
Governance Documents and the laws of the State of Delaware in effect on the



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date hereof or as the same may from time to time hereafter be amended,
interpreted or replaced to increase the scope of such permitted indemnification,
against any and all Indemnifiable Claims and Indemnifiable Losses; provided,
however, that, except as provided in Sections 1.04 and 1.23,
Indemnitee shall not be entitled to indemnification pursuant to this Agreement
in connection with any Claim initiated by Indemnitee against the Company or any
director or officer of the Company unless the Company has joined in or
consented to the initiation of such Claim.


Section 1.03.        Advancement of Expenses.
Indemnitee shall have the right to advancement by the Company to the fullest
extent permitted by the laws of the State of Delaware prior to the final
disposition of any Indemnifiable Claim of any and all Expenses relating to,
arising out of or resulting from any Indemnifiable Claim paid or incurred by
Indemnitee or which Indemnitee determines are reasonably likely to be paid or
incurred by Indemnitee. Indemnitee’s right to such advancement is not subject
to the satisfaction of any standard of conduct. Without limiting the generality
or effect of the foregoing, within five (5) business days after any request by
Indemnitee, the Company shall, in accordance with such request (but without
duplication): (a) pay such Expenses on behalf of Indemnitee; (b) advance to
Indemnitee funds in an amount sufficient to pay such Expenses; or (c) reimburse
Indemnitee for such Expenses; provided  that Indemnitee shall
repay, without interest any amounts actually advanced to Indemnitee that, at
the final disposition of the Indemnifiable Claim to which the advance related,
were in excess of amounts paid or payable by Indemnitee in respect of Expenses
relating to, arising out of or resulting from such Indemnifiable Claim. In
connection with any such payment, advancement or reimbursement, Indemnitee
shall execute and deliver to the Company an undertaking, which need not be
secured and shall be accepted without reference to Indemnitee’s ability to
repay the Expenses, by or on behalf of the Indemnitee, to repay any amounts
paid, advanced or reimbursed by the Company of Expenses relating to, arising
out of or resulting from any Indemnifiable Claim of which it shall have been
determined, following the final disposition of such Indemnifiable Claim and in
accordance with Section 1.07, that Indemnitee is not entitled to
indemnification hereunder.


Section 1.04.        Indemnification for Additional
Expenses. Without limiting the generality or effect of the foregoing,
the Company shall indemnify and hold harmless Indemnitee against and, if
requested by Indemnitee, shall reimburse Indemnitee for, or advance to
Indemnitee, within five (5) business days of such request, any and all Expenses
paid or incurred by Indemnitee or which Indemnitee determines are reasonably
likely to be paid or incurred by Indemnitee in connection with any Claim made,
instituted or conducted by Indemnitee for: (a) indemnification or reimbursement
or advance payment of Expenses by the Company under any provision of this
Agreement, or under any other agreement or provision of the Governance
Documents now or hereafter in effect relating to Indemnifiable Claims; and/or
(b) recovery under any directors’ and officers’ liability insurance policies
maintained by the Company, regardless in each case of whether Indemnitee
ultimately is determined to be entitled to such indemnification, reimbursement,
advance or insurance recovery, as the case may be; provided, however,
that Indemnitee shall return, without interest, any such advance of Expenses
(or portion thereof) that remains unspent at the final disposition of the Claim
to which the advance related.


Section 1.05.        Partial Indemnity. If
Indemnitee is entitled under any provision of this Agreement to indemnification
by the Company for some or a portion of any Indemnifiable Loss,



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but not for all of the total amount thereof, the Company shall
nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee
is entitled.


Section 1.06.        Procedure for Notification.
To obtain indemnification under this Agreement in respect of an Indemnifiable
Claim or Indemnifiable Loss, Indemnitee shall submit to the Company a written
request therefor, including a brief description (based upon information then
available to Indemnitee) of such Indemnifiable Claim or Indemnifiable Loss. If,
at the time of the receipt of such request, the Company has directors’ and
officers’ liability insurance in effect under which coverage for such
Indemnifiable Claim or Indemnifiable Loss is potentially available, the Company
shall give prompt written notice of such Indemnifiable Claim or Indemnifiable
Loss to the applicable insurers in accordance with the procedures set forth in
the applicable policies. The Company shall provide to Indemnitee a copy of such
notice delivered to the applicable insurers, and copies of all subsequent
correspondence between the Company and such insurers regarding the
Indemnifiable Claim or Indemnifiable Loss, in each case substantially
concurrently with the delivery or receipt thereof by the Company. The failure
by Indemnitee to timely notify the Company of any Indemnifiable Claim or Indemnifiable
Loss shall not relieve the Company from any liability hereunder unless, and
only to the extent that, the Company did not otherwise learn of such
Indemnifiable Claim or Indemnifiable Loss and such failure results in
forfeiture by the Company of substantial defenses, rights or insurance
coverage.


Section 1.07.        Determination of Right to
Indemnification.


(a)           To the extent that
Indemnitee shall have been successful on the merits or otherwise in defense of
any Indemnifiable Claim or any portion thereof or in defense of any issue or
matter therein, including dismissal without prejudice, Indemnitee shall be
indemnified against all Indemnifiable Losses relating to, arising out of or
resulting from such Indemnifiable Claim in accordance with Section 1.02
and no Standard of Conduct Determination (as defined in Section 1.07(b))
shall be required.


(b)           To the extent that
the provisions of Section 1.07(a) are inapplicable to an Indemnifiable
Claim that shall have been finally disposed of, any determination of whether
Indemnitee has satisfied any applicable standard of conduct under Delaware law
that is a legally required condition precedent to indemnification of Indemnitee
hereunder against Indemnifiable Losses relating to, arising out of or resulting
from such Indemnifiable Claim (a “Standard of Conduct Determination”)
shall be made as follows: (i) if a Change in Control shall not have occurred,
or if a Change in Control shall have occurred but Indemnitee shall have
requested that the Standard of Conduct Determination be made pursuant to this
clause (i), (A) by a majority vote of the Disinterested Directors, even if less
than a quorum of the Board, (B) if such Disinterested Directors so direct, by a
majority vote of a committee of Disinterested Directors designated by a
majority vote of all Disinterested Directors, or (C) if there are no such
Disinterested Directors, by Independent Counsel in a written opinion addressed
to the Board, a copy of which shall be delivered to Indemnitee; and (ii) if a
Change in Control shall have occurred and Indemnitee shall not have requested
that the Standard of Conduct Determination be made pursuant to clause (i), by
Independent Counsel in a written opinion addressed to the Board, a copy of
which shall be delivered to Indemnitee. Indemnitee will cooperate with the
person or persons making such Standard of Conduct Determination, including



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providing to
such person or persons, upon reasonable advance 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. The Company shall indemnify and hold harmless Indemnitee against
and, if requested by Indemnitee, shall reimburse Indemnitee for, or advance to Indemnitee,
within five (5) business days of such request, any and all costs and expenses
(including attorneys’ and experts’ fees and expenses) incurred by Indemnitee in
so cooperating with the person or persons making such Standard of Conduct
Determination. The person, persons or entity chosen to make the Standard of
Conduct Determination will act reasonably and in good faith in making such
determination.


(c)           The Company shall
use its reasonable best efforts to cause any Standard of Conduct Determination
required under Section 1.07(b) to be made as promptly as practicable. If
(i) the person or persons empowered or selected under Section 1.07 to
make the Standard of Conduct Determination shall not have made a determination
within thirty (30) days after the later of (A) receipt by the Company of
written notice from Indemnitee advising the Company of the final disposition of
the applicable Indemnifiable Claim (the date of such receipt being the “Notification
Date”) and (B) the selection of an Independent Counsel, if such
determination is to be made by Independent Counsel, that is permitted under the
provisions of Section 1.07(e) to make such determination and (ii) Indemnitee
shall have fulfilled his or her obligations set forth in the second sentence of
Section 1.07(b), then Indemnitee shall be deemed to have satisfied the
applicable standard of conduct; provided  that such 30-day period
may be extended for a reasonable time, not to exceed an additional thirty (30)
days, if the person or persons making such determination in good faith requires
such additional time for the obtaining or evaluation or documentation and/or
information relating thereto.


(d)           If (i) Indemnitee
shall be entitled to indemnification hereunder against any Indemnifiable Losses
pursuant to Section 1.07(a), (ii) no determination of whether Indemnitee
has satisfied any applicable standard of conduct under Delaware law is a
legally required condition precedent to indemnification of Indemnitee hereunder
against any Indemnifiable Losses, or (iii) Indemnitee has been determined or
deemed pursuant to Section 1.07(b) or (c) to have satisfied any
applicable standard of conduct under Delaware law which is a legally required
condition precedent to indemnification of Indemnitee hereunder against any
Indemnifiable Losses, then the Company shall pay to Indemnitee, within five (5)
business days after the later of (x) the Notification Date in respect of the
Indemnifiable Claim or portion thereof to which such Indemnifiable Losses are
related, out of which such Indemnifiable Losses arose or from which such
Indemnifiable Losses resulted and (y) the earliest date on which the applicable
criterion specified in clause (i), (ii) or (iii) above shall have been
satisfied, an amount equal to the amount of such Indemnifiable Losses.


(e)           If a Standard of
Conduct Determination is to be made by Independent Counsel pursuant to Section
1.07(b)(i), the Independent Counsel shall be selected by the Board, and the
Company shall give written notice to Indemnitee advising him or her of the
identity of the Independent Counsel so selected. If a Standard of Conduct
Determination is to be made by Independent Counsel pursuant to Section 1.07(b)(ii),
the



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Independent
Counsel shall be selected by Indemnitee, and Indemnitee shall give written notice
to the Company advising it of the identity of the Independent Counsel so
selected. In either case, Indemnitee or the Company, as applicable, may, within
ten (10) business days after receiving written notice of selection from the
other, deliver to the other 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 satisfy the criteria set forth in the
definition of “Independent Counsel” in Section 1.01(j), and the objection
shall set forth with particularity the factual basis of such assertion. Absent
a proper and timely objection, the person or firm so selected shall act as
Independent Counsel. If such written objection is properly and timely made and
substantiated, (i) the Independent Counsel so 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 and (ii) the non-objecting
party may, at its option, select an alternative Independent Counsel and give
written notice to the other party advising such other party of the identity of
the alternative Independent Counsel so selected, in which case the provisions
of the two immediately preceding sentences and clause (i) of this sentence
shall apply to such subsequent selection and notice. If applicable, the
provisions of clause (ii) of the immediately preceding sentence shall apply to
successive alternative selections. If no Independent Counsel that is permitted under
the foregoing provisions of this Section 1.07(e) to make the Standard of
Conduct Determination shall have been selected within thirty (30) days after
the Company gives its initial notice pursuant to the first sentence of this Section
1.07(e) or Indemnitee gives its initial notice pursuant to the second
sentence of this Section 1.07(e), as the case may be, 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 or firm selected by the Court or by such other person as the Court shall
designate, and the person or firm with respect to whom all objections are so
resolved or the person or firm so appointed will act as Independent Counsel. In
all events, the Company shall pay all of the reasonable fees and expenses of
the Independent Counsel incurred in connection with the Independent Counsel’s
determination pursuant to Section 1.07(b).


Section 1.08.        Presumption of Entitlement.
In making any Standard of Conduct Determination, the person or persons making
such determination shall presume that Indemnitee has satisfied the applicable
standard of conduct, and the Company may overcome such presumption only by its
obtaining clear and convincing evidence to the contrary. Any Standard of
Conduct Determination that is adverse to Indemnitee may be challenged by the
Indemnitee in the Court of Chancery of the State of Delaware or other court of
competent jurisdiction. Neither the failure of any person, persons or entity
chosen to make a determination as to whether Indemnitee has met any particular
standard of conduct or had any particular belief to make such determination,
nor an actual determination by such person, persons or entity that Indemnitee
has not met such standard of conduct or did not have such belief, prior to or
after the commencement of legal proceedings by Indemnitee to secure a judicial
determination that Indemnitee should be indemnified under this Agreement under
applicable law, will be a defense to Indemnitee’s claim or create a presumption
that Indemnitee has not met any particular standard of conduct or did not have
any particular belief.



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Section 1.09.        No Other Presumption. For
purposes of this Agreement, the termination of any Claim by judgment, order,
settlement (whether with or without court approval) or conviction, or upon a
plea of nolo contendere or its equivalent, will not create a presumption that
Indemnitee did not meet any applicable standard of conduct or that
indemnification hereunder is otherwise not permitted. In the event that any
Indemnifiable Claim to which Indemnitee is a party is resolved in any manner
other than by final adverse judgment (as to which all rights of appeal
therefrom have been exhausted or lapsed) against Indemnitee (including, without
limitation, settlement of such Indemnifiable Claim with or without payment of
money or other consideration) it will be presumed that Indemnitee has been
successful on the merits or otherwise in such Indemnifiable Claim. Anyone
seeking to overcome this presumption will have the burden of proof and the
burden of persuasion, by clear and convincing evidence.


Section 1.10.        Non-Exclusivity. The rights
of Indemnitee hereunder will be in addition to any other rights Indemnitee may
have under the Governance Documents, or the substantive laws of the Company’s
jurisdiction of incorporation, any other contract or otherwise (collectively, “Other
Indemnity Provisions”); provided, however, that (a) to the
extent that Indemnitee otherwise would have any greater right to
indemnification under any Other Indemnity Provision, Indemnitee will be deemed
to have such greater right hereunder and (b) to the extent that any change is
made to any Other Indemnity Provision which permits any greater right to
indemnification than that provided under this Agreement as of the date hereof,
Indemnitee will be deemed to have such greater right hereunder. The Company
will not adopt any amendment to any of the Governance Documents the effect of
which would be to deny, diminish or encumber Indemnitee’s right to
indemnification under this Agreement or any Other Indemnity Provision.


Section 1.11.        Liability Insurance and Funding.
For the duration of Indemnitee’s service as a director and/or officer of the
Company, and thereafter for so long as Indemnitee shall be subject to any
pending or possible Indemnifiable Claim, the Company shall use commercially
reasonable efforts (taking into account the scope and amount of coverage
available relative to the cost thereof) to cause to be maintained in effect
policies of directors’ and officers’ liability insurance providing coverage for
directors and/or officers of the Company that is at least substantially
comparable in scope and amount to that provided by the Company’s current
policies of directors’ and officers’ liability insurance. The Company shall
provide Indemnitee with a copy of all directors’ and officers’ liability
insurance applications, binders, policies, declarations, endorsements and other
related materials, and shall provide Indemnitee with a reasonable opportunity
to review and comment on the same. Without limiting the generality or effect of
the two immediately preceding sentences, the Company shall not discontinue or
significantly reduce the scope or amount of coverage from one policy period to
the next: (i) without the prior approval thereof by a majority vote of the
Incumbent Directors, even if less than a quorum; or (ii) if at the time that
any such discontinuation or significant reduction in the scope or amount of
coverage is proposed there are no Incumbent Directors, without the prior
written consent of Indemnitee (which consent shall not be unreasonably withheld
or delayed). In all policies of directors’ and officers’ liability insurance
obtained by the Company, Indemnitee shall be named as an insured in such a
manner as to provide Indemnitee the same rights and benefits, subject to the
same limitations, as are accorded to the Company’s directors and officers most
favorably insured by such policy. The Company may, but shall not be required
to, create a trust fund, grant a security interest or use other means, including
without limitation a letter of credit, to ensure the



 10
 






 



 


payment of such amounts as may be necessary to satisfy its obligations
to indemnify and advance expenses pursuant to this Agreement.


Section 1.12.        Subrogation. In the event of
payment under this Agreement, the Company shall be subrogated to the extent of
such payment to all of the related rights of recovery of Indemnitee against
other persons or entities (other than Indemnitee’s successors), including any
entity or enterprise referred to in clause (i) of the definition of “Indemnifiable
Claim” in Section 1.01(h). Indemnitee shall execute all papers
reasonably required to evidence such rights (all of Indemnitee’s reasonable
Expenses, including attorneys’ fees and charges, related thereto to be reimbursed
by or, at the option of Indemnitee, advanced by the Company).


Section 1.13.        No Duplication of Payments.
The Company shall not be liable under this Agreement to make any payment to
Indemnitee in respect of any Indemnifiable Losses to the extent Indemnitee has
otherwise actually received payment (net of any unreimbursed Expenses of the
Indemnitee incurred in connection therewith) under any insurance policy, the Governance
Documents and Other Indemnity Provisions or otherwise (including from any entity
or enterprise referred to in clause (i) of the definition of “Indemnifiable
Claim” in Section 1.01(h)) in respect of such Indemnifiable Losses
otherwise indemnifiable hereunder.


Section 1.14.        Defense of Claims. The
Company shall be entitled to participate in the defense of any Indemnifiable
Claim or to assume the defense thereof, with counsel reasonably satisfactory to
the Indemnitee; provided  that if Indemnitee believes, after
consultation with counsel selected by Indemnitee, that: (a) the use of counsel
chosen by the Company to represent Indemnitee would present such counsel with an
actual or potential conflict; (b) the named parties in any such Indemnifiable
Claim (including any impleaded parties) include both the Company and Indemnitee
and Indemnitee shall conclude that there may be one or more legal defenses
available to him or her that are different from or in addition to those
available to the Company; or (c) any such representation by such counsel would
be precluded under the applicable standards of professional conduct then
prevailing, then Indemnitee shall be entitled to retain separate counsel (but
not more than one law firm plus, if applicable, local counsel in respect of any
particular Indemnifiable Claim) at the Company’s expense. The Company shall not
be liable to Indemnitee under this Agreement for any amounts paid in settlement
of any threatened or pending Indemnifiable Claim effected without the Company’s
prior written consent. The Company shall not, without the prior written consent
of the Indemnitee, effect any settlement of any threatened or pending
Indemnifiable Claim to which the Indemnitee is, or could have been, a party
unless such settlement solely involves the payment of money and includes a
complete and unconditional release of the Indemnitee from all liability on any
claims that are the subject matter of such Indemnifiable Claim. Neither the
Company nor Indemnitee shall unreasonably withhold its consent to any proposed
settlement; provided  that Indemnitee may withhold consent to any
settlement that does not provide a complete and unconditional release of
Indemnitee. Notwithstanding the foregoing, the Company will not be entitled to
assume the defense of any Indemnifiable Claim as to which Indemnitee has
reasonably made the conclusion provided for in Section 1.14(b).


Section 1.15.        Action by Indemnitee. In the
event that (i) a determination is made pursuant to this Agreement that
Indemnitee is not entitled to indemnification under this Agreement, (ii) an
advancement of Expenses is not timely made pursuant to this Agreement, (iii)



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no determination of entitlement to indemnification is made within the
applicable time periods specified in this Agreement or (iv) payment of
indemnified amounts is not made within the applicable time periods specified
herein, Indemnitee will be entitled to an adjudication in an appropriate court
of the State of Delaware, or in any other court of competent jurisdiction, of
his or her entitlement to such indemnification or payment of the advancement of
Expenses. Alternatively, Indemnitee, at Indemnitee’s 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. The
provisions of Delaware law (without regard to its conflict of laws rules) will
apply to any such arbitration. The Company will not oppose Indemnitee’s right
to seek any such adjudication or award in arbitration.


Section 1.16.        Company Bears Expenses if Indemnitee
Seeks Adjudication. In the event that Indemnitee, pursuant to Section
1.15, seeks a judicial adjudication or arbitration of his or her rights to
indemnification under, or to recover damages for breach of, this Agreement, any
other agreement for indemnification, the indemnification or advancement of
expenses provisions in the Governance Documents, payment of Expenses in advance
or contribution hereunder or to recover under any director and officer
liability insurance policies maintained by the Company, the Company will, if
Indemnitee ultimately is determined to be entitled to such indemnification,
payment of Expenses in advance or contribution or insurance recovery to the
fullest extent permitted by law, indemnify and hold harmless Indemnitee against
any and all Expenses that are paid or incurred by Indemnitee in connection with
such judicial adjudication or arbitration.


Section 1.17.        Company Bound by Provisions of this
Agreement. The Company will be precluded from asserting in any judicial
or arbitration proceeding commenced pursuant to Section 1.15 that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and will stipulate in any such judicial or arbitration proceeding
that the Company is bound by all the provisions of this Agreement.


Section 1.18.        Successors and Binding Agreement.


(a)           The Company shall
require any successor (whether direct or indirect, by purchase, merger,
consolidation, reorganization or otherwise) to all or substantially all of the
business or assets of the Company, by agreement in form and substance
satisfactory to Indemnitee and his or her counsel, expressly to assume and
agree to perform this Agreement in the same manner and to the same extent the
Company would be required to perform if no such succession had taken place.
This Agreement shall be binding upon and inure to the benefit of the Company
and any successor to the Company, including without limitation any person
acquiring directly or indirectly all or substantially all of the business or
assets of the Company whether by purchase, merger, consolidation,
reorganization or otherwise (and such successor will thereafter be deemed the “Company”
for purposes of this Agreement), but shall not otherwise be assignable or
delegatable by the Company.


(b)           This Agreement shall
inure to the benefit of and be enforceable by the Indemnitee’s personal or
legal representatives, executors, administrators, heirs, distributees, legatees
and other successors.



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(c)           This Agreement is
personal in nature and neither of the parties hereto shall, without the consent
of the other, assign or delegate this Agreement or any rights or obligations
hereunder except as expressly provided in Sections 1.18(a) and (b).
Without limiting the generality or effect of the foregoing, Indemnitee’s right
to receive payments hereunder shall not be assignable, whether by pledge,
creation of a security interest or otherwise, other than by a transfer by the
Indemnitee’s will or by the laws of descent and distribution, and, in the event
of any attempted assignment or transfer contrary to this Section 1.18(c),
the Company shall have no liability to pay any amount so attempted to be
assigned or transferred.


Section 1.19.        Notices. For all purposes of
this Agreement, all communications, including without limitation notices,
consents, requests or approvals, required or permitted to be given hereunder
shall be in writing and shall be deemed to have been duly given when hand
delivered or dispatched by electronic facsimile transmission (with receipt
thereof orally confirmed), or five (5) business days after having been mailed
by United States registered or certified mail, return receipt requested,
postage prepaid or one (1) business day after having been sent for next-day
delivery by a nationally recognized overnight courier service, addressed to the
Company (to the attention of the Secretary of the Company) and to Indemnitee at
the applicable address shown below, or to such other address as any party may
have furnished to the other in writing and in accordance herewith, except that
notices of changes of address will be effective only upon receipt.




	
  If to the Company:

  	
  Haynes International, Inc.

  
	
   

  	
  1020 West Park Avenue

  
	
   

  	
  P.O. Box 9013

  
	
   

  	
  Kokomo, Indiana 46904-9015

  
	
   

  	
  Attn.: V.P.-General Counsel/Corporate Secretary

  
	
   

  	
  Tel.: (765) 456-6012

  
	
   

  	
  Fax: (765) 456-6905

  
	
   

  	
   

  
	
  If to
  Indemnitee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Tel.:

  	
   

  	
   

  
	
   

  	
  Fax:

  	
   

  	
   

  






 


Section 1.20.        Governing Law. The validity,
interpretation, construction and performance of this Agreement shall be
governed by and construed in accordance with the substantive laws of the State
of Delaware, without giving effect to the principles of conflict of laws of
such State. The Company and Indemnitee each hereby irrevocably consent to the
jurisdiction of the Chancery Court of the State of Delaware for all purposes in
connection with any action or proceeding which arises out of or relates to this
Agreement and agree that any action instituted under this Agreement shall be
brought only in the Chancery Court of the State of Delaware.


Section 1.21.        Validity. If any provision of
this Agreement or the application of any provision hereof to any person or
circumstance is held invalid, unenforceable or otherwise



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illegal, the remainder of this Agreement and the application of such
provision to any other person or circumstance shall not be affected, and the
provision so held to be invalid, unenforceable or otherwise illegal shall be
reformed to the extent, and only to the extent, necessary to make it
enforceable, valid or legal. In the event that any court or other adjudicative
body shall decline to reform any provision of this Agreement held to be
invalid, unenforceable or otherwise illegal as contemplated by the immediately
preceding sentence, the parties hereto shall take all such action as may be necessary
or appropriate to replace the provision so held to be invalid, unenforceable or
otherwise illegal with one or more alternative provisions that effectuate the
purpose and intent of the original provisions of this Agreement as fully as
possible without being invalid, unenforceable or otherwise illegal.


Section 1.22.        Miscellaneous. No provision
of this Agreement may be waived, modified, amended or discharged unless such
waiver, modification, amendment or discharge is agreed to in writing signed by
Indemnitee and the Company. No waiver by either party hereto at any time of any
breach by the other party hereto or compliance with any condition or provision
of this Agreement to be performed by such other party shall be deemed a waiver
of similar or dissimilar provisions or conditions at the same or at any prior
or subsequent time. No agreements or representations, oral or otherwise,
expressed or implied with respect to the subject matter hereof have been made
by either party that are not set forth expressly in this Agreement.


Section 1.23.        Legal Fees and Expenses. It
is the intent of the Company that Indemnitee not be required to incur legal
fees and or other Expenses associated with the interpretation, exercise,
enforcement or defense of Indemnitee’s rights under this Agreement by
litigation or otherwise because the cost and expense thereof would
substantially detract from the benefits intended to be extended to Indemnitee
hereunder. Accordingly, without limiting the generality or effect of any other
provision hereof, the Company irrevocably authorizes the Indemnitee from time
to time to retain counsel of Indemnitee’s choice, at the expense of the Company
as hereafter provided, to advise and represent Indemnitee in connection with
any such interpretation, exercise, enforcement or defense, including without
limitation the initiation or defense of any litigation or other legal action,
whether by or against the Company or any director, officer, stockholder or other
person affiliated with the Company. Notwithstanding any existing or prior
attorney-client relationship between the Company and such counsel, the Company
irrevocably consents to Indemnitee’s entering into an attorney-client
relationship with such counsel, and in that connection the Company and
Indemnitee agree that a confidential relationship shall exist between
Indemnitee and such counsel. Without respect to whether Indemnitee prevails, in
whole or in part, in connection with any of the foregoing, the Company will pay
and be solely financially responsible for any and all attorneys’ and related
fees and expenses incurred by Indemnitee in connection with any of the
foregoing.


Section 1.24.        Construction. The parties
have participated jointly in the negotiation and drafting of this Agreement. In
the event an ambiguity or question on intent or interpretation arises, this
Agreement must be construed as if drafted jointly by the parties and no
presumption or burden of proof must arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement. The word “including”
shall mean including without limitation. Any reference to the singular in this
Agreement shall also include the plural and vice versa. The word “knowledge”
shall mean knowledge obtained or obtainable after due inquiry and reasonable
investigation.



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Section 1.25.        Headings. The headings of the
sections of this Agreement are inserted solely for convenience of reference and
shall not be deemed to affect the meaning or interpretation of this Agreement.


Section 1.26.        Counterparts. This Agreement
may be executed in two counterparts, each of which will be deemed to be an
original but both of which together shall constitute one and the same
agreement.


[SIGNATURES APPEAR ON
FOLLOWING PAGE]



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IN
WITNESS WHEREOF, Indemnitee has executed and the Company has
caused its duly authorized representative to execute this Agreement as of the
date first above written.


	
  

  	
  HAYNES INTERNATIONAL, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  “INDEMNITEE”

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  



 



 16
 






 



SCHEDULE
OF DIRECTORS PARTY TO THE DIRECTOR

INDEMNIFICATION AGREEMENT


Bohan, Paul J.

Campion, Donald C.

Corey, John C.

Getz, Robert H.

McCarthy, Timothy J.

Petro, Francis J.

Wall, William P.

Zabel, Ronald W.



 17