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.
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) the Executive will be eligible for pension, unreduced for early
commencement, (iii) 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 (iv) 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. In addition, the
incremental benefit provided in this paragraph shall be paid in lump sum
immediately upon the Executive's Qualifying Termination. Calculation of the
lump sum payment provided for in this paragraph shall be based on the
immediate commencement of the Executive's monthly retirement benefit with no
reduction for early commencement of benefits, using the Applicable Interest
Rate (as defined in the SERP) as of the second month preceding such Qualifying
Termination and the other actuarial assumptions applicable to the SERP.
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:
______________________________________
Name:
Address:
