INDEMNIFICATION AGREEMENT
Indemnification Agreement entered into on April 23, 1998
between Echlin Inc., a Connecticut corporation (the "Company"), and
(the "Indemnitee").
WITNESSETH:
WHEREAS, the Indemnitee is currently serving as a director of
the Company;
WHEREAS, Sections 33-770 to 33-778, inclusive, of the
Connecticut Business Corporation Act (as amended from time to time, the "Act")
permit the Company, in its Certificate of Incorporation, By-laws, a resolution
of its shareholders or Board of Directors, or in a contract or otherwise,
subject to certain limitations, to indemnify directors and officers of the
Company in respect of certain losses and liabilities incurred by such persons
in their official capacities, and Section 33-777 of the Act permits the
Company to purchase and maintain insurance for the benefit of directors and
officers of the Company in respect of such losses and liabilities;
WHEREAS, Section Seventh of the Company's Certificate of
Incorporation, as amended to date, provides that a director of the Company
shall have no personal liability to the Company or its shareholders for
monetary damages for any breach of duty in such capacity in excess of the
compensation received by the director for serving the corporation during the
year of violation, to the full extent permitted by applicable law, and the
Indemnitee has been serving and continues to serve as a director of the
Company in part in reliance on the foregoing exculpatory provision;
WHEREAS, Article II, Section 10 and Article III, Section 7 of
the Company's By-laws provide for indemnification by the Company in favor of
every director and other officer of the Company to the full extent permitted
by law, and the Indemnitee has been serving and continues to serve as a
director of the Company in part in reliance on his being indemnified by the
Company; and
WHEREAS, the Company has purchased and maintained insurance for
the benefit of directors and other officers of the Company in respect of
certain losses and liabilities incurred by such persons in their official
capacities;
WHEREAS, in recognition of the Indemnitee's reliance on his
being indemnified by the Company, the Company desires to provide the
Indemnitee with specific contractual assurance that the Indemnitee is
indemnified by the Company to the full extent permitted by applicable law.
NOW, THEREFORE, the parties hereto agree as follows:
1. Indemnification. (a) 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 Indemnitee 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 Indemnitee is or was a director of the Company, or
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.
(b) If the Indemnitee 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 Indemnitee
for the portion of such Expenses to which the Indemnitee is entitled
to indemnification.
(c) In the event that any Proceeding is instituted by the
Indemnitee to enforce or interpret the Indemnitee's right to
indemnification hereunder, the Indemnitee shall be entitled to be paid
all Expenses incurred by the Indemnitee with respect to such
Proceeding, unless as a part of such Proceeding, the court of
competent jurisdiction determines that the material assertions made by
the Indemnitee 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.
(d) The obligation of the Company to pay Expenses of the
Indemnitee in respect of a Proceeding pursuant to Section 1(a) hereof
shall be subject to a determination, made as provided in Section 1(e)
hereof, that, with respect to the subject of such Proceeding, (i) the
Indemnitee conducted himself in good faith, (ii) the Indemnitee
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 (iii) in the case of any
criminal proceeding, the Indemnitee had no reasonable cause to believe
his conduct was unlawful.
(e) The determination required in Section 1(d) hereof
shall be made by the Board of Directors of the Company if, at the time
of a specific Proceeding in respect of which such determination is
required, (i) a majority of the members of the Board of Directors of
the Company consists of persons who are members of the Board of
Directors on the date of this Agreement and (ii) such determination
can be made by the Board of Directors consistently with the provisions
of Section 33-775(b)(1) of the Act. In the event that such
determination cannot so be made by the Board of Directors, then the
determination required in Section 1(d) hereof shall be made by special
legal counsel appointed as provided in Section 33-775(b)(2)(B) of the
Act.
(f) The Company shall appoint special legal counsel for
the purpose indicated in Section 1(e) not later than 30 days following
the date of this Agreement and the Company shall (i) not revoke such
appointment without the consent of the Indemnitee, (ii) comply with
all of the terms and conditions of any agreement with such special
legal counsel entered into by the Company in connection with such
appointment and (iii) in the event of the resignation or other
termination of the appointment of such special legal counsel, promptly
appoint a successor special legal counsel.
(g) Any special legal counsel appointed pursuant to this
Agreement shall be (i) highly qualified in matters of Connecticut
corporate law and applicable standards of conduct of directors and
officers of Connecticut corporations and (ii) independent of any
professional or other relationship with the Indemnitee, any member of
the Board of Directors of the Company, or the Company itself.
2. Advancement of Expenses. (a) The Company shall pay all
Expenses incurred by the Indemnitee in participating in or preparing to
participate in any Proceeding in advance of the final disposition of such
Proceeding upon request by the Indemnitee that the Company pay such Expenses,
subject only to delivery to the Company of: (1) a written affirmation of the
Indemnitee's good faith belief that the Indemnitee has met the relevant
standard of conduct described in section 1(d) hereof; and (2) the Indemnitee's
unsecured written undertaking to repay any funds advanced if and to the extent
that it is ultimately determined that the Indemnitee is not entitled under
applicable law to be indemnified as provided hereby.
(b) The written undertaking referred to in Section 2(a)
(2) shall be accepted without reference to the ability of the
Indemnitee to make repayment.
3. Procedures. (a) The Indemnitee shall promptly notify
the Company in writing of any Proceeding brought, threatened, commenced or
asserted against the Indemnitee in respect of which indemnification may or
could be sought under this Agreement.
(b) The Company shall have the right to assume the defense
of any such Proceeding, including the employment of counsel reasonably
satisfactory to the Indemnitee and the payment of all Expenses. The
Indemnitee 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 Indemnitee
unless (i) the Company agrees to pay such fees and expenses, (ii) the
Company shall have failed promptly to assume the defense of such
Proceeding or (iii) the Indemnitee shall have reasonably concluded,
upon the advice of counsel, that there is a conflict of interest
between the Indemnitee and the Company. If the Indemnitee has made
the conclusion referred to in clause (iii), the Company shall not have
the right to assume the defense of such Proceeding on behalf of the
Indemnitee.
(c) Neither the Company nor the Indemnitee 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.
(d) 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.
4. Insurance. (a) The Company hereby agrees to obtain and
maintain in effect for the benefit of the Indemnitee a policy or policies
of insurance with reputable insurance companies providing for customary
directors and officers liability insurance in appropriate amounts.
(b) 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.
5. Non-Exclusivity; No Duplication. The rights of the
Indemnitee under this Agreement shall not be exclusive of any other rights
the Indemnitee may have under the Company's Certificate of Incorporation or
By-laws, 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 Indemnitee 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 Indemnitee shall reimburse the Company for
amounts paid to the Indemnitee pursuant to such other rights to the extent
such payments duplicate any payments received pursuant to this Agreement.
6. 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 Indemnitee, 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.
7. 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 Indemnitee). Notice to the Indemnitee
shall be given at the address set forth on the signature page hereof (or
such other address as the Indemnitee subsequently shall designate in
writing to the Company).
8. Binding Effect; Successors and Assigns. This Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
parties hereto and their respective successors (including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all
or substantially all of the business or assets of the Company), permitted
assigns, heirs and legal representatives; provided that this Agreement and
the rights and obligations hereunder may not be assigned (in whole or in
part) by any party hereto without the prior written consent of the other
party hereto.
9. Severability. If any provision of this Agreement or the
application of any provision hereof to any person or circumstances is held
invalid, unenforceable or otherwise illegal, the remainder of this
Agreement and the application of such provision to other persons or
circumstances shall not be affected, and the provision so held to be
invalid, unenforceable or otherwise illegal shall be modified to the extent
(but only to the extent) necessary to make it enforceable, valid and legal.
10. Amendment. No supplement, modification or amendment of
this Agreement shall be valid or binding unless executed in writing by both
of the parties hereto.
11. Applicable Law. (a) The provisions of this Agreement
shall apply subject to, but to the full extent permitted by, the Act and
any other applicable law.
(b) This Agreement shall be governed by the laws of Connecticut,
without regard to the principles of conflicts of laws thereof.
IN WITNESS WHEREOF, this Agreement has been executed on the
date first above written.
ECHLIN INC.
By:
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Name:
Title:
Indemnitee
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