SEVERANCE AND INDEMNIFICATION AGREEMENT
THIS AGREEMENT is made as of April 23, 1998, by and between
ECHLIN INC., a Connecticut corporation (the "Company"), and _______________
("Executive").
WHEREAS, the Executive has been covered under the terms of the
Company's Change In Control Severance Policy (as restated and amended to date,
the "Severance Policy");
WHEREAS, the Board of Directors of the Company (the "Board") has
determined that appropriate steps should be taken to reinforce and encourage
the continued attention and dedication of key management personnel, including
the Executive, to their assigned duties without distraction in the face of
potentially disturbing circumstances arising from any possible change in
control of the Company and to prevent the protection which the Company intends
to provide the Executive under the Severance Policy from being defeated;
WHEREAS, in recognition of the Executive's reliance on his being
indemnified by the Company the Company desires to provide the Executive with
specific contractual assurance that the Executive is indemnified by the
Company to the full extent permitted by applicable law; and
WHEREAS, the Company and the Executive desire to amend and
restate the terms and conditions of the Severance Policy, as applied to the
Executive, as hereinafter set forth;
NOW THEREFORE, the parties hereto agree as follows:
Section 1. Term of Agreement. This Agreement shall be
effective as of the date hereof and shall continue in effect through December
31, 1999; provided that on January 1, 2000 and each January 1 thereafter, the
term of this Agreement shall automatically be extended for an additional year
unless the Company or the Executive shall have given at least ninety (90)
days' prior notice not to extend this Agreement or a Change In Control shall
have occurred prior to such January 1; provided further that if a Change In
Control (as hereinafter defined) shall have occurred during the term of this
Agreement, this Agreement shall continue in effect for a period of not less
than twenty-four (24) months beyond the month in which such Change In Control
occurred.
Section 2. Change In Control. For purposes of this Agreement,
an event constituting a "Change In Control" shall occur when (and only when)
the Company obtains actual knowledge that: (1) any person or group within the
meaning of Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "1934 Act"), other than the Company or any of its subsidiaries,
has become the beneficial owner, within the meaning of Rule 13d-3 under the
1934 Act, of thirty percent (30%) or more of the combined voting power of the
Company's then outstanding voting securities; or (2) a tender offer or
exchange offer, other than an offer by the Company, has expired, pursuant to
which twenty percent (20%) or more of the combined voting power of the
Company's then outstanding shares of common stock have been purchased; or (3)
the stockholders of the Company have approved an agreement to merge or
consolidate with or into another corporation and the Company is not the
surviving corporation or an agreement to sell or otherwise dispose of all or
substantially all of the Company's assets (including a plan of liquidation);
or (4) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board cease for any reason to
constitute at least a majority thereof, unless the election or the nomination
for the election by the Company's stockholders of each new director was
approved by a vote of at least two-thirds (2/3) of the directors then still in
office who were directors at the beginning of the period, but excluding for
this purpose any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the 0000 Xxx) or other
actual or threatened solicitation of proxies or consents by or on behalf of an
individual, corporation, partnership, group, associate or other entity or
"person" other than the Board; provided that, with respect to an event
described in clauses (1), (2) or (3), above, such event shall only constitute a
Change In Control if, and at such time as, the Board declares, in its sole
discretion, that the event qualifies or will qualify as a Change In Control.
Section 3. Termination Following Change In Control. For the
purposes of this Agreement, a "Qualifying Termination," entitling the
Executive to receive the benefits provided in Section 5 hereof, is defined to
mean: layoff or involuntary termination of the Executive's employment other
than for Cause (as hereinafter defined) or termination of employment by the
Executive for Good Reason (as hereinafter defined), all occurring within two
years after the date a Change In Control occurs.
Termination of employment shall be considered to be for "Cause,"
whether it occurred by resignation or discharge, if the reason for the
termination of employment was the Executive's proven in a court of law or
admitted embezzlement, dishonesty, fraud, conviction on a felonious or other
charge involving moral turpitude, all in connection with the Company's
affairs. The Board or, following a Change In Control, the Trust Administration
Committee, shall make the determination as to whether the termination is for
cause and such determination shall be binding, final and conclusive on all
concerned.
Termination of employment shall be considered to be for "Good
Reason" if (1) without the express written consent of the Executive, the
Executive is assigned material duties substantially inconsistent with the
Executive's positions, duties, responsibilities or status with the Company as
in effect before the Change In Control, or the Executive's titles or offices
as in effect immediately prior to the Change In Control are substantially
diminished or the Executive is removed from or not reelected to any of such
positions, or any other action is taken by the Company or any of its
affiliates which results in a diminution in the Executive's position,
authority, or principal duties or responsibilities other than an insubstantial
and inadvertent act that is remedied by the Company promptly after receipt of
notice given thereof by the Executive, except any such assignment, action or
change resulting from the Executive's termination of employment for Cause, or
from the Executive's Disability (as hereinafter defined) or death; provided,
however, that notwithstanding the foregoing, in no event shall a termination
of employment be considered to be for "Good Reason" if, at the time of the
termination, the Executive shall have had a position with a title, level of
duties and responsibilities substantially similar to the Executive's title,
duties and responsibilities immediately prior to the Change In Control (but
disregarding, except for (i) the Company's Chairman, President and Chief
Executive Officer or (ii) the Corporate Senior Vice Presidents -- General
Counsel, Human Resources, Chief Financial Officer and Corporate Development,
any changes as a result of the Company no longer being publicly traded or
becoming a subsidiary, and any changes to conform titles to those of
equivalent positions in an affiliate of the Company); (2) either the
compensation or benefit entitlement of the Executive as in effect immediately
prior to the Change In Control or as increased following the Change In Control
is substantially reduced; (3) the Company requires the Executive without the
Executive's express written consent to be based anywhere other than the
Company's location where the Executive is principally employed or another
location that is not more than fifty (50) miles from the location where the
Executive is principally employed immediately prior to the Change In Control,
except for required travel on the Company's business to an extent
substantially consistent with the Executive's business travel obligations in
effect immediately prior to the Change In Control; (4) any failure by the
Company to obtain an express written assumption of this Agreement from any
successor to or assign of the Company; or (5) if the Executive is, on the date
the Change In Control occurs, (i) the Company's Chairman, President and Chief
Executive Officer or (ii) a Corporate Senior Vice President, the Executive
elects for any reason to terminate his employment during the thirty-day period
commencing one year after the date of the Change In Control. In the case of
events described in (1) through (4), the Executive shall not be deemed to have
waived a claim of Good Reason as a result of the passage of no more than 180
days between the occurrence of the event and the assertion of such claim.
"Disability" shall have the same meaning as under the Company's
long term disability program immediately prior to the occurrence of the Change
In Control or at the time of the occurrence of the Executive's termination of
employment due to such Disability.
If the Executive incurs a Qualifying Termination, he will be
entitled to a notice period of at least thirty (30) days and will remain
employed and continue to be compensated through such notice period at a rate,
in the case of base salary, equal to the higher of the annual base salary in
effect on the date that the Change In Control occurs or on the date the notice
period begins.
Section 4. Vesting of SERP Benefits Upon Change In Control.
Upon the occurrence of a Change In Control under this Agreement, the
Executive's benefits under the Company's Supplemental Executive Retirement
Plan (the "SERP") shall become vested, without regard to whether a "Change In
Control" has occurred under the definition of that term under the SERP.
Section 5. Compensation Upon a Qualifying Termination.
Following a Change In Control, upon the occurrence of a Qualifying
Termination, in addition to the lump sum payment contemplated by Section 5(b),
the Executive shall be entitled to:
(a) Separation Payment. A separation payment equal to
three times the sum of the Executive's annual base salary (based on the
higher of the annual base salary in effect as of the date that the Change
In Control occurs or the date of the Executive's Qualified Termination)
plus annual bonus (based on the higher of the Executive's (i) most recent
annual incentive bonus paid prior to the Change In Control or (ii) targeted
annual bonus, based on the Executive's grade and the annual incentive plan
in effect as of the date that the Change In Control occurs or, if higher,
as of the date of the Executive's Qualified Termination), to be paid in a
lump sum within thirty (30) days of the Executive's Qualifying Termination.
(b) Additional Pension Credit. For purposes of calculating
the Executive's benefits under the qualified and nonqualified defined
benefit plans in which the Executive participates, (i) the Executive shall
be entitled to three additional years of service credit for all purposes
under such plans, including without limitation vesting, eligibility (for
participation and for any early retirement subsidy or other benefit) and
benefit accrual purposes, (ii) all compensation paid under Section 5(a) of
the Agreement shall be treated as pensionable earnings (as if the Executive
had received such amounts ratably over the three additional credited years)
for purposes of computing his benefits under the plan and (iii) all years
of employment with the Company shall be counted as valid years of service
for all purposes, as described above, under the plans, regardless of when
served. Benefits described in this paragraph, to the extent not provided
under the qualified and nonqualified defined benefit plans in which the
Executive participates, and consistent with the provisions of Section 8,
shall be obligations of the Company arising under this Agreement and may be
satisfied from the general assets of the Company or as provided in Section
9.
(c) Benefits. The following Company-paid benefits,
provided for 36 months to the Executive, except when substantially similar
coverage is available to the Executive through other employment. These
benefits shall either be provided to the Executive on a non-taxable basis
or the Executive shall be entitled to an additional payment to offset any
income tax obligations incurred with respect to such benefits according to
the procedures set forth in Section 5(d):
(i) Medical Insurance Plans (including, if applicable for the
Executive, the Executive Medical Plan)
(ii) Prescription Drug Plan
(iii) Dental Insurance Plan
(iv) Basic Life Insurance coverage in the amount in effect at the
time of separation rounded to nearest $1,000 multiple, and
without Accidental Death and Dismemberment coverage.
(v) If eligible at the time of the Change In Control or
Qualified Termination, continuation of the Company provided
automobile benefits.
(vi) In addition, but in lieu of any other Company sponsored
benefit for third party, professional out-placement
services, the sum equal to 15% of the higher of the
Executive's annual base salary in effect on the date of the
Change In Control or on the date of the Qualifying
Termination, payable upon the occurrence of Qualifying
Termination.
(vii) Employee Assistance Program
These provisions are not meant to supersede COBRA rights, which
shall commence from the date that benefits under this Section 5(c) terminate.
(d) Certain Additional Payments by the Company.
(i) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment
or distribution by the Company to or for the benefit of the Executive,
whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise (a "Payment"), would be
subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended (the "Code") or similar section or
any interest or penalties with respect to such excise tax (such excise
tax, together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then the Executive
shall be entitled to receive an additional payment (a "Gross-Up
Payment") in an amount such that after payment by the Executive of all
taxes (including any interest or penalties imposed with respect to
such taxes), including any Excise Tax, imposed upon the Gross-Up
Payment the Executive retains an amount of the Gross-Up Payment equal
to all such taxes imposed upon the Payments.
(ii) Subject to the provisions of subsection 5(d)(iii)
hereof, all determinations required to be made under this subsection
5(d), including whether a Gross-Up Payment is required and the amount
of such Gross-Up Payment, shall be made by Price Waterhouse LLP, or
its successor firm (the "Accounting Firm") which shall provide
detailed supporting calculations both to the Company and the Executive
within 15 business days of termination of employment under this
Agreement, if applicable, or such earlier time as is requested by the
Executive or the Company. When calculating the amount of the Gross-Up
Payment, the Executive shall be deemed to pay:
(A) Federal income taxes at the highest applicable
marginal rate of Federal income taxation for the calendar year in
which the Gross-Up Payment is to be made, and
(B) any applicable state and local income taxes at
the highest applicable marginal rate of taxation for the calendar
year in which the Gross-up Payment is to be made, net of the
maximum reduction in Federal income taxes which could be obtained
from deduction of such state and local taxes if paid in such
year.
If the Accounting Firm has performed services for the person,
entity or group who caused the Change In Control, or affiliate
thereof, the Executive may select an alternative accounting firm
from any nationally recognized firm of certified public
accountants. If the Accounting Firm determines that no Excise
Tax is payable by the Executive, it shall furnish the Executive
with an opinion that he or she has substantial authority not to
report any Excise Tax on his or her federal income tax return.
Any determination by the Accounting Firm shall be binding upon
the Company and the Executive. As a result of the uncertainty in
the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by
the Company should have been made ("Underpayment"), consistent
with the calculations required to be made hereunder. In the
event that the Company exhausts its remedies pursuant to
subsection 5(d)(iii) hereof, and the Executive thereafter is
required to make a payment of any Excise Tax, the Accounting Firm
shall determine the amount of the Underpayment that has occurred
and any such Underpayment shall be promptly paid by the Company
to or for the benefit of the Executive.
(iii) The Executive shall notify the Company in
writing of any claim by the Internal Revenue Service that, if
successful, would require the payment by the Company of the Gross-Up
Payment. Such notification shall be given as soon as practicable but
no later than ten business days after the Executive knows of such
claim and shall apprise the Company of the nature of such claim and
the date on which such claim is requested to be paid. The Executive
shall not pay such claim prior to the expiration of the thirty day
period following the date on which it gives such notice to the Company
(or such shorter period ending on the date that any payment of taxes
with respect to such claim is due). If the Company notifies the
Executive in writing prior to the expiration of such period that it
desires to contest such claim, the Executive shall:
(A) give the Company any information reasonably
requested by the Company relating to such claim,
(B) take such action in connection with contesting
such claim as the Company shall reasonably request in writing
from time to time including, without limitation, accepting legal
representation with respect to such claim by an attorney
reasonably selected by the Company,
(C) cooperate with the Company in good faith in
order effectively to contest such claim, and
(D) permit the Company to participate in any
proceedings relating to such claim;
provided, however, that the Company shall bear and pay directly
all costs and expenses (including additional interest and
penalties) incurred in connection with such contest and shall
indemnify and hold the Executive harmless, on an after-tax basis,
for any Excise Tax or income tax, including interest and
penalties with respect thereto, imposed as a result of such
representation and payment of costs and expenses. Without
limitation on the foregoing provisions of this subsection
5(d)(iii), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue
or forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect of
such claim and may, at its sole option, either direct the
Executive to pay the tax claimed and xxx for a refund or contest
the claim in any permissible manner, and the Executive agrees to
prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and
in one or more appellate courts, as the Company shall determine;
provided, however, that if the Company directs the Executive to
pay such claim and xxx for a refund, the Company shall advance
the amount of such payment to the Executive, on an interest-free
basis and shall indemnify and hold the Executive harmless, on an
after-tax basis, from any Excise Tax or income tax, including
interest or penalties with respect thereto, imposed with respect
to such advance or with respect to any imputed income with
respect to such advance; and further provided that any extension
of the statue of limitations relating to payment of taxes for the
taxable year of the Executive with respect to which such
contested amount is claimed to be due is limited solely to such
contested amount. Furthermore, the Company's control of the
contest shall be limited to issues with respect to which a Gross-
Up Payment would be payable hereunder and the Executive shall be
entitled to settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any other taxing
authority.
(iv) If after the receipt by the Executive of an
amount advanced by the Company pursuant to subsection 5(d)(iii), the
Executive becomes entitled to receive any refund with respect to such
claim, the Executive shall (subject to the Company's complying with
the requirements of subsection 5(d)(iii)) promptly pay to the Company
the amount of such refund (together with any interest paid or credited
thereon by the taxing authority after deducting any taxes applicable
thereto). If, after the receipt by the Executive of an amount
advanced by the Company pursuant to subsection 5(d)(iii), a
determination is made that the Executive shall not be entitled to any
refund with respect to such claim and the Company does not notify the
Executive in writing of its intent to contest such denial of refund
prior to the expiration of thirty days after such determination, then
such advance shall be forgiven and shall not be required to be repaid
and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid under subsection
5(d)(iii). The forgiveness of such advance shall be considered part
of the Gross-Up Payment and subject to gross-up for any taxes
(including interest or penalties) associated therewith.
Section 6. Mitigation. Except as specifically provided in
Section 5, the Executive shall not be required to mitigate the amount of any
payment provided for in Section 5 by seeking other employment or otherwise,
nor shall the amount of any payment or benefit provided for in Section 5 be
reduced by any compensation earned by the Executive as the result of
employment by another employer or by retirement benefits after a Qualifying
Termination, or otherwise.
Section 7. Indemnification. (a) Right to Indemnification.
(i) The Company shall pay all costs, losses and expenses (including
without limitation, attorneys' and other fees and expenses, judgments,
fines, penalties and amounts paid in settlement) (collectively,
"Expenses") which the Executive may incur or become liable for in
connection with any threatened, pending or completed action, suit,
proceeding or inquiry (whether civil, criminal, administrative, arbitrative
or investigative and whether formal or informal) (collectively,
"Proceedings") by reason of the fact that the Executive is or was serving
or had agreed to serve at the request of the Company as a director,
officer, employee or agent of the Company or another corporation,
partnership, joint venture, trust or other enterprise, including without
limitation any subsidiary of the Company.
(ii) If the Executive is entitled under this Agreement
to indemnification by the Company for some, but not the total amount,
of any Expenses, the Company shall nevertheless indemnify the
Executive for the portion of such Expenses to which the Executive is
entitled to indemnification.
(b) Advancement of Expenses. (i) The Company shall pay
all Expenses incurred by the Executive in participating in or preparing to
participate in any Proceeding in advance of the final disposition of such
Proceeding upon request by the Executive that the Company pay such
Expenses, subject only to delivery to the Company of: (A) a written
affirmation that, with respect to the subject of such Proceeding, (1) the
Executive conducted himself in good faith, (2) the Executive reasonably
believed (a) in the case of conduct in his official capacity, that his
conduct was in the best interests of the Company, and (b) in all other
cases, that his conduct was at least not opposed to the best interests of
the Company and (3) in the case of any criminal proceeding, the Executive
had no reasonable cause to believe his conduct was unlawful; and (B) the
Executive's unsecured written undertaking to repay any funds advanced if
and to the extent that it is ultimately determined that the Executive is
not entitled under applicable law to be indemnified as provided hereby.
(ii) The written undertaking referred to in Section
7(b)(i)(B) shall be accepted without reference to the ability of the
Executive to make repayment.
(c) Procedures. (i) The Executive shall promptly notify
the Company in writing of any Proceeding brought, threatened, commenced or
asserted against the Executive in respect of which indemnification may or
could be sought under this Agreement.
(ii) The Company shall have the right to assume the
defense of any such Proceeding, including the employment of counsel
reasonably satisfactory to the Executive and the payment of all
Expenses. The Executive shall have the right to employ separate
counsel in any such Proceeding and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the
expense of the Executive unless (A) the Company agrees to pay such
fees and expenses, (B) the Company shall have failed promptly to
assume the defense of such Proceeding or (C) the Executive shall have
reasonably concluded, upon the advice of counsel, that there is a
conflict of interest between the Executive and the Company. If the
Executive has made the conclusion referred to in clause (C), the
Company shall not have the right to assume the defense of such
Proceeding on behalf of the Executive.
(iii) Neither the Company nor the Executive may settle
or compromise any Proceeding covered by the indemnification set forth
herein without the prior written consent of the other, which such
consent shall not to be unreasonably withheld or delayed.
(iv) The Company shall make payment of any amount due
by it under this Agreement against delivery to the Company of
appropriate invoices or receipts or such other evidence of Expenses as
the Company reasonably requires.
(d) Insurance. (i) The Company hereby agrees to obtain
and maintain in effect for the benefit of the Executive a policy or
policies of insurance with reputable insurance companies providing for
customary directors and officers liability insurance in appropriate
amounts.
(ii) Nothing herein is intended to replace, preempt or
otherwise affect the obligation of any insurer to make any payment
under any policy of insurance, whether or not existing on the date
hereof.
(e) Non-Exclusivity; No Duplication. The rights of the
Executive to indemnification under this Agreement shall not be exclusive of
any other rights the Executive may have under the Company's Certificate of
Incorporation or By-laws, the Connecticut Business Corporation Act (as
amended from time to time, the "Act"), any insurance or otherwise; provided
that the Company shall not be liable under this Agreement to make any
payment in connection with any claim to the extent the Executive has
otherwise received payment (under the Certificate of Incorporation or By-
laws, the Act, any insurance policy or otherwise) of Expenses otherwise
indemnifiable hereunder; and provided further that the Executive shall
reimburse the Company for amounts paid to the Executive pursuant to such
other rights to the extent such payments duplicate any payments received
pursuant to this Agreement.
(f) Subrogation. In the event of payment of any Expenses,
the Company shall be subrogated to the extent of such payment to all of the
rights of recovery of the Executive, who shall execute all papers required
and shall do everything that may be necessary to secure such rights,
including the execution of such documents necessary to enable the Company
effectively to bring suit to enforce such rights.
Section 8. No Duplication of Payments or Benefits. To the
extent that payments or benefits contemplated by this Agreement are also
contemplated by other plans or arrangements of the Company, such payments or
benefits shall first be provided under such other plans or arrangements, with
only the excess provided under this Agreement. This Agreement shall also
provide any payments or benefits contemplated to be provided under such other
plans or arrangements, which for any reason are not or cannot be provided
under such other plans or arrangements.
Section 9. Trust and Obligation Funding. The Company may
establish a trust, which is intended to be treated as and interpreted as a
"grantor trust" under the Code, and which, to the extent funded in respect of
this Agreement, shall not be intended to cause the Executive to realize income
on amounts contributed thereto (the "Trust"), with a trustee (the "Trustee"),
pursuant to such terms and conditions as may be set forth in a Trust Agreement
to be entered into between the Company and the Trustee. At the discretion of
the Company prior to a Change In Control, and in all cases following a Change
In Control, any amounts that become payable to any person under this
Agreement, shall first be paid from the Trust and then, to the extent not paid
from the Trust, shall be paid out of the general assets of the Company. To
the extent that any payments are made from the Trust, the Company shall be
relieved of its obligation to pay such amounts.
Section 10. Notices. All notices or other communications that
are required or permitted hereunder shall be in writing and sufficient if
delivered personally or sent by certified or registered mail, overnight
delivery or by facsimile transmission. Notice to the Company shall be given
at its then-existing corporate headquarters and shall be directed to the
Secretary (or such other location or person as the Company subsequently shall
designate in writing to the Executive). Notice to the Executive shall be
given at the address set forth on the signature page hereof (or such other
address as the Executive subsequently shall designate in writing to the
Company).
Section 11. Waiver. Failure to insist upon strict compliance
with any of the terms, covenants, or conditions hereof shall not be deemed a
waiver of such term, covenant, or condition, nor shall any waiver or
relinquishment of any right or power hereunder at any one or more times be
deemed a waiver or relinquishment of such right or power at any other time or
times.
Section 12. Severability. The invalidity or unenforceability
of any provision hereof shall in no way affect the validity or enforceability
of any other provision. In the event that any part of a covenant contained
herein is determined by a court of law to be invalid, a judicially enforceable
provision shall be substituted in its place. Any covenant so modified shall
be binding upon the parties and shall have the same force and effect as if
originally set forth in this Agreement.
Section 13. Modification. This Agreement may be amended only
in writing, signed by both parties hereto.
Section 14. Headings. The headings in this Agreement are
inserted for convenience only and are not to be considered a construction of
the provisions thereof.
Section 15. Successors; Binding Agreement. (a) The Company
will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to expressly assume and agree to perform this Agreement
in the same manner and to the same extent that the Company would be required
to perform it if no such succession had taken place. As used in this
Agreement, "Company" shall mean the Company as herein before defined and any
successor to its business and/or assets as aforesaid which assumes and agrees
to perform this Agreement by operation of law, or otherwise. Prior to a
Change In Control, the term "Company" shall also mean any affiliate of the
Company to which the Executive may be transferred and the Company shall cause
such successor employer to be considered the "Company" bound by the terms of
this Agreement and this Agreement shall be amended to so provide. Following a
Change In Control the term "Company" shall not mean any affiliate of the
Company to which the Executive may be transferred unless the Executive shall
have previously approved of such transfer in writing, in which case the
Company shall cause such successor employer to be considered the "Company"
bound by the terms of this Agreement and this Agreement shall be amended to so
provide.
(b) This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
the Executive should die while any amount would still be payable to the
Executive hereunder if the Executive had continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms
of this Agreement to the Executive's devisee, legatee or other designee or, if
there is no such designee, to the Executive's estate.
Section 16. Resolution of Disputes; Choice of Forum. The
parties agree that any dispute, controversy or claim arising out of or
relating to this Agreement shall, at the election of the Executive, be
resolved by final and binding arbitration, enforceable under the Federal
Arbitration Act, administered by the American Arbitration Association under
its Commercial Arbitration Rules, and judgment on the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof. All such
disputes, controversies or claims shall be determined by a panel of three
arbitrators selected in accordance with the rules of the American Arbitration
Association and the arbitration shall be conducted in the City of New Haven,
State of Connecticut. In the event that within 60 days after the Company
commences litigation in connection with this Agreement the Executive commences
an arbitration proceeding concerning the same issue or issues, the Company
shall promptly terminate such litigation and submit to the jurisdiction of the
arbitration proceeding to the extent that it involves such issue or issues.
This Section shall survive the termination of this Agreement for any reason.
Section 17. Payment of Expenses. In the event that any
Proceeding is instituted by the Executive to enforce or interpret the
Executive's rights hereunder, the Executive shall be entitled to be paid all
Expenses incurred by the Executive with respect to such Proceeding, unless as
a part of such Proceeding, the arbitration panel or court of competent
jurisdiction determines that the material assertions made by the Executive as
a basis for such Proceeding were not made in good faith or were frivolous, in
which case each party to the Proceeding shall bear its own costs. The
Executive may claim payment for such Expenses from the Trust described in
Section 9 of this Agreement, and shall be paid from the general assets of the
Company to the extent not paid from the Trust.
Section 18. Governing Law. This Agreement shall be construed
and enforced in accordance with the laws of the State of Connecticut.
Section 19. Counterparts. This Agreement may be signed in any
number of counterparts, each of which shall be deemed an original, with the
same effect as if the signatures thereto and hereto were upon a single
instrument.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement the day and year first above written.
ECHLIN INC.
By:
-------------------------------------
Name:
Title:
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Name:
Address:
