Document:

EX-10.20

Exhibit 10.20

 

MCJUNKIN RED MAN CORPORATION

DEFERRED COMPENSATION PLAN

(Effective as of December 31, 2007)

 

ARTICLE I

Purpose

     The purpose of the Deferred Compensation Plan of McJunkin Red Man Corporation (the
“Company”) is to provide a select group of the Company’s management and highly compensated
employees (within the meaning of Section 201(2) of ERISA) the opportunity to defer receipt of cash
compensation, including bonuses, to which they may become entitled as employees of the Company,
under terms advantageous to both such employees and the Company, for the periods provided in the
Plan. It is intended that the Plan shall be considered an unfunded plan. The Plan is intended to
comply with Section 409A of the Code and the regulations and guidance issued thereunder.

ARTICLE II

Definitions

     For purposes of the Plan, the following terms shall have the following meanings:

     2.1. “Account” shall have the meaning given to such term in Section 4.1.

     2.2. “Administrator” shall mean the person or committee who shall be responsible for
administering and interpreting the Plan pursuant to Section 6.1.

     2.3. “Annual Bonus Award” shall mean the annual cash bonus compensation payable by the
Company to a Participant but before reduction for amounts deferred pursuant to the Plan.

     2.4. “Base Salary” shall mean a Participant’s regular base salary payable by the
Company to the Participant, but before reduction for amounts deferred pursuant to the Plan.

     2.5. “Beneficiary” shall mean the person or persons designated from time to time in a
writing delivered to the Administrator by a Participant to receive payments under the Plan after
the death of such Participant or, in the absence of any such designation or in the event that such
designated person or persons shall predecease such Participant, the Participant’s estate. A
Participant shall designate a Beneficiary on his initial Deferral Election Form in the form of
Exhibit A and thereafter may change his Beneficiary designation by filing with the Administrator an
Election Form in the form of Exhibit C.

     2.6. “Board” shall mean the Board of Directors of the Company.

     2.7. “Change in Control” shall mean, in a single transaction or a series of related
transactions, the occurrence of the following event: a majority of the outstanding voting power

 

 

of PVF Holdings LLC, McJunkin Red Man Holding Corporation or the Company, or substantially all
of the assets of the Company, shall have been acquired or otherwise become beneficially owned,
directly or indirectly, by any Person (other than any Member (as defined in the PVF Holdings LLC
Agreement) or any of its or their affiliates, or PVF Holdings LLC or any of its affiliates) or any
two or more Persons (other than any Member or any of its or their affiliates, or PVF Holdings LLC
or any of its affiliates) acting as a partnership, limited partnership, syndicate or other group,
entity or association acting in concert for the purpose of voting, acquiring, holding or disposing
of the voting power of PVF Holdings LLC, McJunkin Red Man Holding Corporation or the Company; it
being understood that, for this purpose, the acquisition or beneficial ownership of voting
securities by the public shall not be an acquisition or constitute beneficial ownership by any
Person or Persons acting in concert.

     2.8. “Code” shall mean the Internal Revenue Code of 1986, as amended.

     2.9. “Committee” shall mean the Compensation Committee of the Board, or if there is no
such Committee, the Board.

     2.10. “Company Contribution” shall have the meaning given to such term in Section 3.1.

     2.11. “Deferral Election” shall have the meaning given to such term in Section 3.2.

     2.12. “Deferred Amount” shall mean as of any date (i) the Participant’s Elective
Deferral Amount, plus all gains or losses attributable thereto as of such date which have been
credited to the Account of such Participant, as provided herein, plus (ii) the Company
Contributions to a Participant’s Account, plus all gains or losses attributable thereto as of such
date which have been credited to the Account of such Participant, as provided herein, less (iii)
any distributions made from the Account of such Participant.

     2.13. The “Effective Date” of the Plan shall be December 31, 2007.

     2.14. “Election Date” shall have the meaning given to such term in Section 3.4.

     2.15. “Election Form” shall mean an election form substantially in the form attached
hereto as Exhibit A (Elective Deferral Form), Exhibit B (Investment Choice Election Form) or
Exhibit C (Election Change Form).

     2.16. “Elective Deferral Amount” shall have the meaning given to such term in Section
3.2.

     2.17. “Eligible Employee” shall mean any of the employees set forth on Schedule A
attached hereto, as it may be amended by the Board from time to time.

     2.18. “Employment Agreement” shall mean a written employment agreement, if any,
between the Company (and/or any of its affiliates) and the Participant.

     2.19. “ERISA” shall mean the United States Employee Retirement Income Security Act of
1974, as amended

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     2.20. “Investment Choices” shall have the meaning given to such term in
Section 4.2(b).

     2.21. “LLC Interest” shall have the meaning given to such term in Section 4.2(b)(ii).

     2.22. “McJunkin Red Man Holding Corporation” shall mean McJunkin Red Man Holding
Corporation, a Delaware corporation and direct parent of the Company.

     2.23. “Participant” shall mean any Eligible Employee who receives a Company
Contribution pursuant to Section 3.1 and/or makes a Deferral Election pursuant to Section 3.2.

     2.24. “Permanent Disability” shall mean, with respect to a Participant, that the
Administrator shall have found, upon the basis of medical evidence satisfactory to it, that the
Participant (A) is unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than twelve months, or (B) is, by reason of
any medically determinable physical or mental impairment which can be expected to result in death
or can be expected to last for a continuous period of not less than twelve months, receiving income
replacement benefits for a period of not less than three months under the applicable disability
plan or plans of the Company (or successor plan or plans thereto).

     2.25. “Person” shall mean any individual, corporation (including not-for-profit),
general or limited partnership, limited liability company, joint venture, estate, trust,
association, organization, governmental entity or agency or other entity of any kind or nature.

     2.26. “Plan” shall mean the “McJunkin Red Man Corporation Deferred Compensation Plan”
established hereunder.

     2.27. “Prime Rate” shall mean the prime rate of interest per annum publicly announced
from time to time by The Wall Street Journal; each change in the Prime Rate shall be effective from
and including the date such change is publicly announced as being effective.

     2.28. “Profit Sharing Plan” shall mean the McJunkin Corporation Profit-Sharing and
Savings Plan and Trust, or the Red Man Pipe & Supply Company Retirement Savings Plan, as
applicable, or any successor plan thereto, as they may be amended from time to time.

     2.29. “PVF Holdings LLC” shall mean PVF Holdings LLC, a Delaware limited liability
company and indirect parent of the Company.

     2.30. “PVF Holdings LLC Agreement” shall mean the Amended and Restated Limited
Liability Company Agreement of PVF Holdings LLC, dated as of October 31, 2007 (as amended and
restated from time to time).

     2.31. “Separation from Service” shall mean the Participant dies, retires or otherwise
has a termination of employment with the Company which constitutes a “separation from service” for
purposes of Section 409A of the Code.

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     2.32. “Vested Balance” shall mean the portion of a Participant’s Account which is
vested in accordance with Section 4.3.

ARTICLE III

Deferral of Awards

     3.1. Company Contributions. As of the last day of each calendar year, commencing with
December 31, 2007, and provided the Participant is employed by the Company on the last day of such
year, the Company shall credit to the Account of each Participant the difference between the amount
set forth next to such Participant’s name on Schedule A attached hereto, as it may be amended from
time to time by the Committee, and the amount, if any, the Company contributes or will contribute
to such Participant for such calendar year as a discretionary matching contribution pursuant to the
401(k) provisions of the Profit Sharing Plan (such net amount, the “Company Contribution”).

     3.2. Elective Participant Contributions. For each calendar year commencing on the
Effective Date, each Participant may elect (a “Deferral Election”) to have the payment of a
specified percentage or specified dollar amount of Base Salary and Annual Bonus Award for such
calendar year deferred pursuant to the Plan (such amount, the “Elective Deferral Amount”);
provided, however, that the first Deferral Election shall apply only to
compensation paid for services performed after the Deferral Election is made. Each Deferral
Election shall be made on an Election Form as set forth on Exhibit A, as it may be amended from
time to time by the Committee, and shall specify the percentage or dollar amount of Base Salary and
Annual Bonus Award to be deferred. Such Election Form shall also specify a Beneficiary
designation. Participants must make a separate Deferral Election in respect of Base Salary and
Annual Bonus Award on or before the applicable Election Date as specified in Section 3.4. If a
Participant does not timely complete an Election Form as set forth on Exhibit C for a calendar
year, the Deferral Election most recently completed shall remain in effect.

     3.3. Irrevocable Election. Each Deferral Election with respect to a calendar year,
once made, shall be irrevocable.

     3.4. Base Salary and Annual Bonus Award Election Date. The Deferral Election for each
calendar year shall be made on a date (the “Election Date”) no later than December 31 of
the calendar year immediately prior to the calendar year during which the Base Salary and Annual
Bonus Award elected to be deferred are earned (for example, the election for the Base Salary and
Annual Bonus Award attributable to 2009 performance must be made no later than December 31, 2008);
provided, however, that in the case of an employee who becomes an Eligible Employee
for the first time after the Effective Date, the “Election Date” shall be thirty days after such
employee receives notice that he or she has become an Eligible Employee, and the Deferral Election
shall apply only to Base Salary and Annual Bonus Awards to be earned by the Participant in the
calendar year immediately following the Election Date.

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ARTICLE IV

Treatment of Deferred Amounts

     4.1. Memorandum Account. The Company shall establish on its books a memorandum
account (the “Account”) for each Participant. The Company contribution shall be credited
as of the time set forth in Section 3.1. For each calendar year, as promptly as practicable (but
in no event more than thirty (30) days) following the date on which any Base Salary and Annual
Bonus Award in respect of a Deferral Election would otherwise be payable to a Participant, the
amount so deferred shall be credited to such Participant’s Account. The Committee shall be
responsible for maintaining the Accounts with subaccounts for Company Contributions and Elective
Deferral Amounts.

     4.2. Investment of Deferred Compensation.

     (a) A Participant’s Deferred Amount shall be deemed to be invested as set forth in Section
4.2(b). Participants’ Accounts shall be adjusted annually if deemed invested in the manner
provided in Section 4.2(b)(ii) and quarterly if deemed invested in the manner provided in Section
4.2(b)(i), in either case to reflect the performance of the Investment Choices of each Participant
as reflected on the Election Form set forth on Exhibit B. Participants may elect (but not more
often than annually in the month of December) to change the manner in which their Accounts are
invested between the Investment Choices (both as to future amounts and as to then existing Deferred
Amounts) by completing the Election Form as set forth on Exhibit C and submitting it to the
Administrator or his or her designated representative. Any such change will become effective on
the immediately succeeding January 1.

     (b) If a Participant’s Account balance as of the beginning of a calendar year is less than
$100,000, then such balance shall be credited quarterly by an amount equal to (x) the amount of
such balance at the beginning of such year, multiplied by (y) the Prime Rate plus 1%. If a
Participant’s Account balance as of the beginning of a calendar year is $100,000 or greater, the
Participant may elect between the following choices (the “Investment Choices”) pursuant to
the Election Form set forth on Exhibit B:

	 	(i)	 	The Participant may elect to have the balance in his or her
Account credited quarterly by an amount equal to (x) the amount of such balance
at the beginning of such quarter, multiplied by (y) the Prime Rate on the last
day of such quarter divided by four plus 0.25%; or
	 
	 	(ii)	 	The Participant may elect to have the balance of his or her
Account deemed converted into a number of common units of PVF Holdings LLC
determined by dividing the portion of the Account not already so converted by
the value of one common unit determined as of the immediately succeeding
December 31 (each, an “LLC Interest”). For example, if a Participant’s
Account balance attributable to Company Contributions is $100,000 on December
31 of a calendar year and the Participant elects on such day the Investment
Choice described in this Section 4.2(b)(ii), on the next succeeding December
31, the Participant’s Account will be credited with a number of LLC Interests
equal to

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	 	 	 	$100,000 divided by the value of one LLC Interest on such succeeding
December 31. Similarly, if the Participant makes the same election with
respect to Elective Deferral Amounts to be credited during the immediately
succeeding year, the Participant’s Account will be credited on the
succeeding December 31 with a number of LLC Interests determined by dividing
the entire amount of such Elective Deferral Amounts for such year by the
value of one LLC Interest on such December 31.

For the avoidance of doubt, a Participant whose Account balance as of the beginning of a calendar
year is $100,000 or greater must choose either 4.2(b)(i) or 4.2(b)(ii) (and not a combination of
the foregoing) for his or her entire account balance, and if no such election is made, the
Participant’s Account shall be invested as described in Section 4.2(b)(i).

     4.3. Vesting.

     (a) All Participants who are Participants on the Effective Date shall be fully vested and have
a one hundred percent (100%) vested interest in their entire Account.

     (b) All Participants at all times shall have an immediate one hundred percent (100%) vested
interest in the portion of their Account which is attributable to Elective Deferral Amounts.

     (c) Subject to Section 4.3(d), a Participant who was not a Participant on the Effective Date
shall have a vested interest in the portion of his or her Account according to such schedule (which
may include immediate vesting) as shall be determined by the Administrator at the time of admission
as a Participant.

     (d) Upon termination of a Participant’s employment, the portion of his or her Account which
has not vested in accordance with Section 4.3(c) shall be forfeited in its entirety for no
consideration.

     4.4. Assets. The Plan and the crediting of Accounts hereunder shall not constitute a
trust and shall be merely for the purpose of recording an unsecured contractual obligation of the
Company.

     4.5. Reports. Until the aggregate of all Deferred Amounts in a Participant’s Account
shall have been paid in full, the Company will furnish to the Participant a report, on an annual
basis, setting forth the amount of his or her Account, the value of the subaccounts and the vested
percentage of the Company Contributions.

ARTICLE V

Payment of Deferred Amounts

     5.1. Form of Payment. All payments of Deferred Amounts under the Plan shall be made
in cash.

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     5.2. Payment of Deferred Amount.

     (a) Upon termination of a Participant’s employment that qualifies as a Separation from Service
(other than due to the Participant’s death or Permanent Disability), the Vested Balance of a
Participant’s Account shall be determined as of the date of such separation from service. For this
purpose, with respect to a Participant’s Account for which the Investment Choice set forth in
Section 4.2(b)(ii) has been made, the value of the Vested Balance shall be based on the value of an
LLC Interest on the immediately preceding December 31.

     (b) The Vested Balance of a Participant’s Account, plus interest at the Applicable Federal
Rate in effect on the date that the Vested Balance is determined, shall be paid to the Participant
in three (3) annual installments commencing on the January 1 of the second calendar year following
the calendar year in which the Separation from Service occurs. Each payment shall include interest
accrued through the applicable payment date.

     5.3. Effect of Death or Permanent Disability. Notwithstanding any other provision of
the Plan to the contrary, upon a Participant’s death or Permanent Disability, the full amount of
such Participant’s Account, vested and unvested, shall be his or her Vested Balance and shall be
paid within thirty (30) days to the Participant’s Beneficiary in the case of death, or to the
Participant in the case of Permanent Disability. For this purpose, with respect to a Participant’s
Account for which the Investment Choice set forth in Section 4.2(b)(ii) has been made, the amount
of the Vested Balance shall be based on the value of an LLC Interest on the immediately preceding
December 31.

     5.4. Effect of a Change in Control of the Company. Notwithstanding any other
provision of the Plan to the contrary, upon a Change in Control of the Company, the full amount of
such Participant’s Account, vested and unvested, shall be his or her Vested Balance and shall be
distributed within thirty (30) days following the date of consummation of the Change of Control.
For this purpose, with respect to a Participant’s Account for which the Investment Choice set forth
in Section 4.2(b)(ii) has been made, the amount of the Vested Balance shall be based on the value
of an LLC Interest or the value of the assets of PVF Holdings LLC as determined in connection with
the Change in Control.

     5.5. Six-Month Delay. Notwithstanding anything to the contrary contained herein, if
the Participant is a “specified employee” for purposes of Section 409A of the Code and the
regulations thereunder, to the extent required to comply with Section 409A of the Code, any
distribution hereunder which is subject to Section 409A of the Code shall not commence until one
day after the day which is six (6) months from the date of termination, with the first payment
equaling the amount of distribution that would have been paid had Section 409A of the Code not
applied.

ARTICLE VI

Administration

     6.1. Eligibility. Participants are limited to certain of the Company’s management and
highly compensated employees.

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     6.2. Administrator. The Administrator of the Plan shall be comprised of the
Committee, except as otherwise determined by the Board. The Administrator shall have full
authority to construe and interpret the terms and provisions of the Plan, to adopt, alter and
repeal such administrative rules, guidelines and practices governing the Plan and to perform all
acts, including the delegation of its administrative responsibilities, as it shall, from time to
time, deem advisable, and to otherwise supervise the administration of the Plan. The Administrator
may correct any defect, supply any omission or reconcile any inconsistency in the Plan, or in any
election hereunder, in the manner and to the extent it shall deem necessary to carry the Plan into
effect. Any decision, interpretation or other action made or taken in good faith by or at the
direction of the Administrator in connection with the Plan shall be within the absolute discretion
of the Administrator and shall be final, binding and conclusive on the Company and all Participants
and their respective heirs, executors, administrators, successors and assigns. A Participant who
is also the Administrator, a member of a committee that is the Administrator or a person to whom
the Administrator has delegated responsibility pursuant to this Section 6.2 shall not participate
in any decision involving a request made by him or her or relating in any way to his or her rights,
duties, and obligations as a Participant (unless such decision relates to all Participants
generally and in a similar manner).

     6.3. Liability. No member of the Board, nor the Administrator or an employee or agent
of the Company or any of its affiliates, shall be liable for any act or action hereunder, whether
of omission or commission, by any other member or employee or by any agent to whom duties in
connection with the administration of the Plan have been delegated or, except in circumstances
involving his or her bad faith, gross negligence or fraud, for anything done or omitted to be done
by himself. The Company or the Administrator may consult with legal counsel, who may be counsel
for the Company or other counsel, with respect to its obligations or duties hereunder, or with
respect to any action or proceeding or any question of law, and shall not be liable with respect to
any action taken or omitted by it in good faith pursuant to the advice of such counsel.

ARTICLE VII

Unsecured Creditor

     Notwithstanding the establishment of the grantor trust, each Participant and Beneficiary shall
have only the rights of a general, unsecured creditor of the Company.

ARTICLE VIII

Miscellaneous

     8.1. Amendment or Termination. Notwithstanding any other provision of the Plan, the
Company by action of the Board may at any time, and from time to time, amend, in whole or in part,
any or all of the provisions of the Plan, or suspend or terminate it entirely; provided,
however, that any such amendment, suspension or termination may not, without a
Participant’s prior, written consent, adversely affect any Deferred Amount credited to his or her
Account prior to such amendment, suspension or termination. The preceding sentence shall not be
construed to prohibit the Company from changing or eliminating any or all of the then available
Investment Choices provided that if all Investment Choices are eliminated, any remaining Deferred
Amounts shall be credited with a money market rate of interest as determined by the Administrator
from

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time to time. The Plan shall remain in effect until terminated pursuant to this Section 8.1.
Upon termination of the Plan, all deferrals under the Plan shall cease, Participants shall be fully
vested in their Accounts and Participants shall be paid the Vested Balance (determined as of the
date of such termination) pursuant to their Payment Elections then effect. For this purpose, with
respect to a Participant’s Account for which the Investment Choice set forth in Section 4.2(b)(ii)
has been made, the amount of the Vested Balance shall be based on the value of an LLC Interest on
the immediately preceding December 31.

     8.2. Expenses. The Company will bear all expenses incurred in administering the Plan
and no part thereof shall be charged against any Participant’s Account or any amounts distributable
hereunder.

     8.3. Withholding. The Company shall withhold from Participants’ compensation, or from
amounts payable hereunder, any federal, state or local taxes required by law to be so withheld.

     8.4. No Obligation. Neither the Plan nor any elections hereunder shall create any
obligation of the Company to establish or continue any other programs, plans or policies of any
kind. Neither the Plan nor any election made pursuant to the Plan shall give any Participant or
other employee the right to receive benefits not specifically provided for by the Plan, nor any
right with respect to continuance of employment by the Company, nor shall there be a limitation in
any way on the right of the Company to terminate an employee’s employment with the Company at any
time.

     8.5. No Assignment. Except by will or the laws of descent and distribution, no right
or interest in any Account or Deferred Amount under the Plan may be assigned, transferred, pledged
or hypothecated, and no right or interest of any Participant in any Account hereunder or to any
Deferred Amount shall be subject to any lien, pledge, encumbrance, charge, garnishment, execution,
alienation, obligation or liability of such Participant, whether voluntary or involuntary,
including, but not limited to, any liability that is for alimony or other payments for the support
of a spouse or former spouse, or for any other relative of a Participant.

     8.6. Facility of Payment. Any amounts payable hereunder to any person who is under
legal disability or who, in the judgment of the Administrator, is unable to manage his or her
financial affairs, may be paid to the legal representative of such person or may be applied for the
benefit of such person in any manner that the Company may select. Any such payment shall be deemed
to be payment for such person’s Account and shall be a complete discharge of all liability of the
Company with respect to the amount so paid.

     8.7. Applicable Law. The Plan and the obligations of the Company hereunder shall be
subject to all applicable federal and state laws, rules and regulations and to such approvals by
any governmental or regulatory agency as may from time to time be required.

     8.8. Governing Law. The Plan and actions taken in connection herewith shall be
governed and construed in accordance with the laws of the State of New York (regardless of the law
that might otherwise govern under applicable New York principles of conflict of laws). Any

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provision of the Plan prohibited by the law of any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition without invalidating the remaining
provisions hereof.

     8.9. Savings Clause. The Plan is intended to be administered, operated and construed
in compliance with Section 409A of the Code and any regulations and guidance thereunder.
Notwithstanding this or any other provision of the Plan to the contrary, the Company may amend the
Plan in any manner, or take any other action, that it determines, in its sole discretion, is
necessary, appropriate or advisable to cause the Plan to comply with Section 409A and any
regulations and guidance issued thereunder, including, without limitation, amendments or other
actions that reduce the accruals of Participants hereunder or otherwise impair the rights of
Participants hereunder. Any such action, once taken, shall be deemed to be effective from the
earliest date necessary to avoid a violation of Section 409A and shall be final, binding and
conclusive on all Participants and other individuals having or claiming any right or interest under
the Plan.

     8.10. Construction. Wherever any words are used herein in the singular form they
shall be construed as though they were also used in the plural form in all cases where they would
so apply. The titles to sections of the Plan are intended solely as a convenience and shall not be
used as an aid in construction of any provisions hereof.

     8.11. Effective Date. The Plan shall be effective as of the Effective Date.

10EX-10.21

Exhibit 10.21

Execution Version

INDEMNITY AGREEMENT

     This Agreement is made and entered into as of this 4th day of December, 2006 by and
among McJ Holding Corporation, a Delaware corporation (“Parent”), Hg Acquisition Corp., a
West Virginia corporation (“Merger Sub”), McJunkin Corporation, a West Virginia corporation
(the “Company”) and the persons listed on Annex 1 attached hereto (each such person
an “Indemnifying Shareholder” and together the “Indemnifying Shareholders”).
Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the
Merger Agreement (as defined below).

     WHEREAS, concurrently with the execution of this Agreement, Parent, Merger Sub and the
Company, are entering into an Agreement and Plan of Merger, dated as of the date hereof (as
amended, restated or supplemented from time to time, the “Merger Agreement”), pursuant to
which, upon the terms and subject to the conditions thereof, Merger Sub will be merged with and
into the Company (the “Merger”);

     WHEREAS, pursuant to Section 6.13 of the Merger Agreement, the Surviving Corporation has
agreed to use commercially reasonable efforts to sell the Non-Core Assets following consummation of
the Merger;

     WHEREAS, the Company has agreed to make payments to certain employees of the Company or its
Subsidiaries as a result of the signing of the Merger Agreement, the agreements and documents
referenced therein, and the transactions contemplated thereby; and

     WHEREAS, each of the Indemnifying Shareholders agrees to provide the indemnity as set forth
below.

     NOW THEREFORE, in consideration for and to induce the Surviving Corporation to enter into and
perform the covenants set forth in Section 6.13 of the Merger Agreement, the parties hereby agree
that:

	1.	 	Indemnification. From and after the Effective Time, the Indemnifying Shareholders
shall, jointly and severally, defend, indemnify and hold harmless Parent, Merger Sub, the
Company, and their respective shareholders, members, partners, officers, directors, employees,
attorneys, accountants, Affiliates, agents, other advisors and successors (each an
“Indemnified Party” and together the “Indemnified Parties”) (i) from and
against any and all costs, charges, fees, expenses, losses, liabilities, obligations, claims,
fines, penalties or interest paid or payable with respect thereto (including, without
limitation, attorneys’, accountants’, consultants’ and appraisers’ fees and amounts paid or
payable with respect to any investigation or remediation in connection with any Hazardous
Substances at, on, under or migrating to or from any property being sold) (“Costs”)
incurred by any such Indemnified Parties in connection with, arising out of, or relating in
any way to any Non-Core Asset listed on Part B of Annex G of the Merger Agreement, including,
without limitation, the holding and disposition thereof and distribution of the Net Proceeds
with respect thereto, as provided in Section 6.13 of the Merger Agreement to the extent the
Costs for such Non-Core Asset exceed the Net

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	 	 	Proceeds with respect to such Non-Core Asset and (ii) for any amounts paid or payable by the
Company or any of its Subsidiaries to any of its or their officers, directors or employees
in excess of $965,000 in the aggregate in the nature of any “change in control”, closing or
signing bonus or similar payment as a result of the signing of the Merger Agreement, the
agreements and documents referenced therein, or the transactions contemplated thereby (but
excluding any severance payments made as a result of a termination of employment occurring
after the Closing), other than the payments to the employees and in the amounts set forth on
Schedule I to this Agreement. In addition, from and after the Effective Time, the
Indemnifying Shareholders shall, jointly and severally, defend, indemnify and hold harmless
the Indemnified Parties from and against payments by the Company or any of its Subsidiaries
to the employees in the amounts set forth on Schedule I to this Agreement net of any tax
benefit to the Company and its Subsidiaries as result of such payment less the amounts
contributed by the Major Stockholders and M. Chilton Mueller after the date hereof and prior
to the Effective Time. Notwithstanding anything herein to the contrary, from and after the
Effective Time, the Indemnifying Shareholders shall, jointly and severally, defend,
indemnify and hold harmless the Indemnified Parties from and against any liability of the
Company and each of its Subsidiaries for any failure to properly withhold any amounts
required to be deducted and withheld by the Company or any of its Subsidiaries and paid to
the applicable taxing authorities under the Code or any applicable state, local or foreign
Tax law with respect to any “change in control”, closing or signing bonus or similar payment
(including, without limitation, payments to the employees and in the amounts set forth on
Schedule 1 to this Agreement) made by the Company or any of its Subsidiaries as a result of
the signing of the Merger Agreement, the agreements and documents referenced therein, or the
transactions contemplated thereby, provided that the indemnity provided in this sentence
shall not apply to any withholding obligations that arise after the Effective Time.

	2.	 	Notices. Any notice, request, instruction or other document to be given hereunder by
any party hereto to the others shall be in writing and delivered personally or sent by
registered or certified mail, postage prepaid, or by facsimile:

If to Parent or Merger Sub:

c/o GS Capital Partners V Fund, L.P.

85 Broad Street, 10th Floor

New York, NY 10004

Attention: Henry Cornell

Fax: (212) 357-5505

with a copy (which shall not constitute notice) to:

Fried, Frank, Harris, Shriver & Jacobson LLP

One New York Plaza

New York, NY 10004

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Attention: Robert C. Schwenkel, Esq.

                  Fax: (212) 859-4000

If to the Indemnifying Shareholders or the Company:

McJunkin Corporation

835 Hillcrest Drive

Charleston, WV 25311

Attention: H.B. Wehrle III

Fax: (304) 348-1557

with a copy (which shall not constitute notice) to:

Sullivan & Cromwell LLP

125 Broad Street

New York, NY 10004

Attention: Benjamin F. Stapleton III

Fax: (212) 558-3588

or to such other persons or addresses as may be designated in writing by the party to receive such
notice as provided above. Any notice, request, instruction or other document given as provided
above shall be deemed given to the receiving party upon actual receipt, if delivered personally;
three business days after deposit in the mail, if sent by registered or certified mail; upon
confirmation of successful transmission if sent by facsimile (provided that if given by
facsimile such notice, request, instruction or other document shall be followed up within one
business day by dispatch pursuant to one of the other methods described herein); or on the next
business day after deposit with an overnight courier, if sent by an overnight courier.

	3.	 	Interpretation, Construction.

	 	a.	 	The headings herein are for convenience of reference only, do not constitute
part of this Agreement and shall not be deemed to limit or otherwise affect any of the
provisions hereof. Where a reference in this Agreement is made to a Section or Annex,
such reference shall be to a Section or Annex, of this Agreement unless otherwise
indicated. Whenever the words “include,” “includes” or “including” are used in this
Agreement, they shall be deemed to be followed by the words “without limitation.”
	 
	 	b.	 	The parties have participated jointly in negotiating and drafting this
Agreement. In the event that an ambiguity or a question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the parties, and no
presumption or burden of proof shall arise favoring or disfavoring any party by virtue
of the authorship of any provision of this Agreement.

	4.	 	Entire Agreement; Binding Effect; Assignment. This Agreement constitutes the entire
agreement, and supersedes all other prior agreements, understandings, representations and
warranties both written and oral, among the parties, with respect to

3

 

	 	 	the subject matter hereof and thereof. This Agreement shall be binding upon, inure to the
benefit of and be enforceable only by the parties hereto and their respective successors and
permitted assigns. No party may assign its rights or obligations under this Agreement to
any other person or entity without the prior written consent of the other parties and any
purported assignment without such consent is void.

	5.	 	Modification or Amendment; Waiver. This Agreement may only be amended, modified,
supplemented or waived with the written approval of each party hereto. No failure or delay on
the part of any party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof or of any other or future exercise of any such right, power or privilege.

	6.	 	Counterparts. This Agreement may be executed in any number of counterparts, each
such counterpart being deemed to be an original instrument, and all such counterparts shall
together constitute the same agreement.

	7.	 	Governing Law and Venue; Waiver of Jury Trial; Specific Performance.

	 	a.	 	THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN ALL RESPECTS SHALL
BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH THE LAW OF THE
STATE OF DELAWARE WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES THEREOF. The
parties hereby irrevocably submit to the personal jurisdiction of the courts of the
State of Delaware located in the County of New Castle and the Federal courts of the
United States of America located in the County of New Castle solely in respect of
the interpretation and enforcement of the provisions of this Agreement and of the
documents referred to in this Agreement, and in respect of the transactions
contemplated hereby, and hereby waive, and agree not to assert, as a defense in any
action, suit or proceeding for the interpretation or enforcement hereof or of any
such document, that it is not subject thereto or that such action, suit or
proceeding may not be brought or is not maintainable in said courts or that the
venue thereof may not be appropriate or that this Agreement or any such document
may not be enforced in or by such courts, and the parties hereto irrevocably agree
that all claims with respect to such action or proceeding shall be heard and
determined in such a Delaware State or Federal court located in the County of New
Castle. The parties hereby consent to and grant any such court jurisdiction over
the person of such parties and, to the extent permitted by law, over the subject
matter of such dispute and agree that mailing of process or other papers in
connection with any such action or proceeding in the manner provided in Section 2
or in such other manner as may be permitted by law shall be valid and sufficient
service thereof.
	 
	 	b.	 	EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND

4

 

	 	 	 	UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES
AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY
MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO
THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 7.
	 
	 	c.	 	The parties agree that irreparable damage would occur in the event that
any of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions of this
Agreement in Delaware State or Federal court in the County of New Castle, this
being in addition to any other remedy to which such party is entitled at law or in
equity.

	8.	 	Further Assurances. At any time or from time to time after the date hereof, the
parties hereto agree to cooperate with each other, and at the request of any other party, to
execute and deliver any further instruments or documents and to take all such further action
as the other party may reasonably request in order to evidence or effectuate the provisions of
this Agreement and to otherwise carry out the intent of the parties hereunder.

	9.	 	Expenses. Except as otherwise provided in the Merger Agreement, each party hereto
shall pay its own expenses incurred in connection with the preparation, execution, and
performance of this Agreement and the transactions contemplated by this Agreement, including
all fees and expenses of agents, representatives, counsel and accountants.

	10.	 	Severability. The provisions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof. If any provision of this Agreement, or the
application thereof to any person or any circumstance, is invalid or unenforceable, (a) a
suitable and equitable provision shall be substituted therefor in order to carry out, so far
as may be valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such provision to
other persons or circumstances shall not be affected by such invalidity or unenforceability,
nor shall such invalidity or unenforceability affect the validity or enforceability of such
provision, or the application thereof, in any other jurisdiction.

5

 

[signature pages follow]

6

 

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.

	 	 	 	 	 	 	 
	 	 	McJ HOLDING CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Christine Vollersten	 	 
	 

	 	 	 	 

Name: Christine Vollersten
	 	 
	 

	 	 	 	Title: Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	Hg ACQUISITION CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Christine Vollersten 	 	 
	 

	 	 	 	 

Name: Christine Vollersten
	 	 
	 

	 	 	 	Title: Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	MCJUNKIN CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ H.B. Wehrle III	 	 
	 

	 	 	 	 

Name: H.B. Wehrle III
	 	 
	 

	 	 	 	Title: President and Chief
Executive Officer	 	 

[Indemnity Agreement Signature Page]

 

 

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	H.B. WEHRLE III	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ H.B. Wehrle III	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	KATHERINE SCHILLING
WEHRLE	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ H.B. Wehrle III	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	HELEN LYNNE
WEHRLE-ZANDE	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ H.B. Wehrle III	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	STEPHEN D. WEHRLE	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Stephen D. Wehrle	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	ELIZABETH M. WEHRLE	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ H.B. Wehrle III	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	H.B. WEHRLE JR.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ H.B. Wehrle Jr.	 	 
	 

	 	 	 	 

	 	 

[Indemnity Agreement Signature Page]

 

 

Annex 1

Indemnifying Shareholders

H. B. Wehrle, III

Katherine Schilling Wehrle

Helen Lynne Wehrle-Zande

Stephen D. Wehrle

Eizabeth M. Wehrle

H.B. Wehrle, Jr.

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