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EXHIBIT 10(h)
DIRECTOR'S INDEMNIFICATION AGREEMENT
THIS AGREEMENT is made as of , 19 between ITT Industries, Inc., an
Indiana corporation (the "Corporation"), and (the "Indemnitee").
WITNESSETH THAT:
WHEREAS, it is in the Corporation's best interest to attract and retain
capable directors;
WHEREAS, both the Corporation and the Indemnitee recognize the increased
risk of litigation and other claims being asserted against directors of public
corporations in today's environment;
WHEREAS, it is now and has always been the policy of the Corporation to
indemnify the members of its Board of Directors so as to provide them with the
maximum possible protection available in accordance with applicable law;
WHEREAS, Article 4 of the Corporation's By-laws and applicable law
expressly recognize that the right of indemnification provided therein shall not
be exclusive of any other rights to which any indemnified person may otherwise
be entitled; and
WHEREAS, the Corporation's By-laws, its Articles of Incorporation and
applicable law permit contracts between the Corporation and the members of its
Board of Directors covering indemnification;
NOW THEREFORE, the parties hereto agree as follows:
1. Indemnity. In consideration of the Indemnitee's agreement to
serve or continue to serve as a Director of the Corporation, or, at the
request of the Corporation, as a director, officer, employee, fiduciary or
agent of another corporation, partnership, joint venture, trust or other
enterprise (including, without limitation, any employee benefit plan) (a
"Designated Director"), for so long as he or she is duly elected and
continues to serve in accordance with the Corporation's By-laws, the
Corporation hereby agrees to hold the Indemnitee harmless and to indemnify
the Indemnitee to the fullest extent permitted by applicable law from and
against any and all expenses, liabilities or losses asserted against or
incurred by the Indemnitee in his or her capacity as a Director of the
Corporation or a Designated Director or arising out of his or her status in
either such capacity.
2. Maintenance of Insurance. (a) Subject only to the provisions of
Section 2(b) hereof, the Corporation hereby agrees that, so long as the
Indemnitee shall continue to serve as a Director of the Corporation, and
thereafter so long as the Indemnitee shall be subject to any possible claim
or threatened, pending or completed action, suit or proceeding, whether
civil, criminal or investigative, by reason of the fact that the Indemnitee
was a Director of the Corporation, the Corporation will provide insurance
coverage comparable to that presently provided under the Corporation's
Directors' and Officers' Liability Insurance policies (the "insurance
policies") in effect at the date hereof. (b) However, the Corporation shall
not be required to maintain all or any of such insurance policies or
comparable insurance coverage if, in the business judgment of the Board of
Directors of the Corporation, (i) the premium cost for such insurance is
substantially disproportionate to the amount of coverage, or (ii) the
coverage provided by such insurance is so limited by exclusions that there
is insufficient benefit from such insurance or (iii) such insurance is
otherwise not reasonably available.
3. Additional Indemnity. Subject only to the exclusions set forth in
Section 4 hereof, the Corporation hereby further agrees to hold harmless
and indemnify the Indemnitee:
(1) to the fullest extent provided under Article 4 of the
Corporation's By-laws as in effect at the date hereof; and
(2) in the event the Corporation does not maintain in effect the
insurance coverage provided under Section 2 hereof, to the full extent
of the coverage which would otherwise have been provided for the benefit
of the indemnitee pursuant to the insurance policies in effect at the
date hereof.
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4. Limitations on Additional Indemnity. No indemnity pursuant to
Section 3 hereof shall be paid by the Corporation:
(1) except to the extent the aggregate of losses to be indemnified
thereunder exceed the amount of such losses for which the Indemnitee is
indemnified or insured pursuant to either Section 1 or 2 hereof;
(2) in respect of remuneration paid to, or indemnification of, the
Indemnitee, if it shall be determined by a final judgment or other final
adjudication that such remuneration or indemnification was or is
prohibited by applicable law;
(3) for any transaction from which the Indemnitee derived an
improper personal benefit;
(4) for any breach of the Indemnitee's duty to act in good faith
and in a manner he or she reasonably believed to be in or not opposed to
the best interest of the Corporation; or
(5) in respect of acts or omissions which involve intentional
misconduct or a knowing violation of law by the Indemnitee.
5. Continuation of Indemnity. All agreements and obligations of the
Corporation contained herein shall continue during the period the
Indemnitee is a Director of the Corporation and shall continue thereafter
so long as the Indemnitee shall be subject to any possible claim or
threatened, pending or completed action, suit or proceeding, whether civil,
criminal or investigative, by reason of the fact that the Indemnitee was a
Director of the Corporation or a Designated Director.
6. Notification and Defense of Claim. Promptly after receipt by the
Indemnitee of notice of the commencement of any action, suit or proceeding,
the Indemnitee shall, if a claim in respect thereof is to be made against
the Corporation under this Agreement, notify the Corporation of the
commencement thereof; but an omission so to notify the Corporation will not
relieve it from any liability which it may have to the Indemnitee otherwise
than under this Agreement, including without limitation, its liability
under the Corporation's Articles of Incorporation and By-laws. With respect
to any such action, suit or proceeding:
(1) the Corporation shall be entitled to participate therein at its
own expense;
(2) except as otherwise provided below, to the extent that it may
wish, the Corporation jointly with any other indemnifying party shall be
entitled to assume the defense thereof, with counsel satisfactory to the
Indemnitee. After notice from the Corporation to the Indemnitee of its
election so to assume the defense thereof, the Corporation will not be
liable to the Indemnitee under this Agreement for any legal or other
expenses subsequently incurred by the Indemnitee in connection with the
defense thereof other than reasonable costs of investigation or as
otherwise provided below. The Indemnitee shall have the right to employ
its counsel in such action, suit or proceeding but the fees and expenses
of such counsel incurred after notice from the Corporation of its
assumption of the defense thereof shall be at the expense of the
indemnitee unless (i) the employment of counsel by the Indemnitee has
been authorized by the Corporation, (ii) the Indemnitee shall have
reasonably concluded that there may be a conflict of interest between
the Corporation and the Indemnitee in the conduct of the defense of such
action, or (iii) the Corporation shall not in fact have employed counsel
to assume the defense of such action, in each of which cases the fees
and expenses of counsel shall be at the expense of the Corporation. The
Corporation shall not be entitled to assume the defense of any action,
suit or proceeding brought by or on behalf of the Corporation or as to
which the Indemnitee shall have made the conclusion provided for in (ii)
above; and
(3) the Corporation shall not be liable to indemnify the Indemnitee
under this Agreement for any amounts paid in settlement of any action or
claim effected without its written consent. The Corporation shall not
settle any action or claim in any manner that would impose any penalty
or limitation on the Indemnitee without the Indemnitee's written
consent. Neither the Corporation nor the Indemnitee will unreasonably
withhold their consent to any proposed settlement.
7. Advancement and Repayment of Expenses. Expenses incurred in
connection with any action, suit or proceeding involving the Indemnitee and
in respect of which a claim is made against
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the Corporation under this Agreement shall be paid promptly by the
Corporation in advance of the final disposition of such action, suit or
proceeding upon written request of the Indemnitee. The Indemnitee agrees
that the Indemnitee will reimburse the Corporation for all reasonable
expenses advanced, paid or incurred by the Corporation on behalf of the
Indemnitee in respect of a claim against the Corporation under this
Agreement in the event and only to the extent that it shall be ultimately
determined that the Indemnitee is not entitled to be indemnified by the
Corporation for such expenses under the provisions of applicable law, the
Corporation's Articles of Incorporation, the Corporation's By-laws, this
Agreement or otherwise. The Corporation's obligations to advance expenses
under this Section 7 shall not be subject to any conditions or requirements
not contained in this Section.
8. Enforcement. If a claim under this Agreement is not paid in full
by the Corporation within ninety days after a written request has been
received by the Corporation, the Indemnitee may at any time thereafter
bring suit against the Corporation to recover the unpaid amount of the
claim and, if successful in whole or in part, the Indemnitee shall also be
entitled to be reimbursed for all expenses actually and reasonably incurred
by the Indemnitee in connection with the prosecution of such claim.
9. Severability. If any provision of this Agreement shall be held to
be or shall, in fact, be invalid, inoperative or unenforceable as applied
to any particular case or in any particular jurisdiction, for any reason,
such circumstances shall not have the effect of rendering the provision in
question invalid, inoperative or unenforceable in any other distinguishable
case or jurisdiction, or of rendering any other provision or provisions
herein contained invalid, inoperative or unenforceable to any extent
whatsoever. The invalidity, inoperability or unenforceability of any one or
more phrases, sentences, clauses or Sections contained in this Agreement
shall not affect any other remaining part of this Agreement.
10. Governing Law; Binding Effect; Amendment or Termination. (a)
This Agreement shall be governed by and interpreted in accordance with the
laws of the State of Indiana.
(b) This Agreement shall be binding upon the Indemnitee and upon the
Corporation and its successors and assigns, and shall inure to the benefit
of the Indemnitee and his or her heirs, personal representatives, executors
and administrators, and to the benefit of the Corporation and its
successors and assigns.
(c) No amendment, modification, termination or cancellation of this
Agreement shall be effective unless in writing signed by both parties
hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
ITT INDUSTRIES, INC.
By
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Senior Vice President
and General Counsel
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Indemnitee
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