EX-10.1: FORM OF INDEMNIFICATION AGREEMENT

 

<PAGE>

                                                                    EXHIBIT 10.1

 

                            INDEMNIFICATION AGREEMENT

 

      This Indemnification Agreement ("Agreement") is made as of _______, 20__

by and between GP Strategies Corporation, a Delaware corporation (the

"Company"), and _________ ("Indemnitee").

 

                                    RECITALS

 

      WHEREAS, highly competent persons have become more reluctant to serve

publicly-held corporations as [directors] [officers] or in other capacities

unless they are provided with adequate protection through insurance or adequate

indemnification against inordinate risks of claims and actions against them

arising out of their service to and activities on behalf of the corporation;

 

      WHEREAS, the Board of Directors of the Company (the "Board") has

determined that, in order to attract and retain qualified individuals, the

Company will attempt to maintain on an ongoing basis, at its sole expense,

liability insurance to protect persons serving the Company and its subsidiaries

from certain liabilities. Although the furnishing of such insurance has been a

customary and widespread practice among United States-based corporations and

other business enterprises, the Company believes that, given current market

conditions and trends, such insurance may be available to it in the future only

at higher premiums and with more exclusions. At the same time, directors,

officers, and other persons in service to corporations or business enterprises

are being increasingly subjected to expensive and time-consuming litigation

relating to, among other things, matters that traditionally would have been

brought only against the Company or business enterprise itself. The Company's

Amended and Restated By-Laws ("By-Laws") and Restated Certificate of

Incorporation, as amended, ("Certificate of Incorporation") require

indemnification of the officers and directors of the Company. Indemnitee may

also be entitled to indemnification pursuant to the General Corporation Law of

the State of Delaware ("DGCL"). The By-Laws, Certificate of Incorporation and

the DGCL expressly provide that the indemnification provisions set forth therein

are not exclusive, and thereby contemplate that contracts may be entered into

between the Company and members of the Board, officers and other persons with

respect to indemnification;

 

      WHEREAS, the uncertainties relating to such insurance and to

indemnification have increased the difficulty of attracting and retaining such

persons;

 

       WHEREAS, the Board has determined that the increased difficulty in

attracting and retaining such persons is detrimental to the best interests of

the Company's stockholders and that the Company should act to assure such

persons that there will be increased certainty of such protection in the future;

 

      WHEREAS, it is reasonable, prudent and necessary for the Company to

contractually obligate itself to indemnify, and to advance expenses on behalf

of, such persons to the fullest extent permitted by applicable law so that they

will serve or continue to serve the Company free from undue concern that they

will not be so indemnified;

 

 

<PAGE>

 

      WHEREAS, this Agreement is a supplement to and in furtherance of the

By-Laws, Certificate of Incorporation and any resolutions adopted pursuant

thereto, and shall not be deemed a substitute therefor, nor to diminish or

abrogate any rights of Indemnitee thereunder;

 

      WHEREAS, Indemnitee does not regard the protection available under the

By-laws, Certificate of Incorporation and the Company's insurance as adequate in

the present circumstances, and may not be willing to serve as an officer or

director without adequate protection, and the Company desires Indemnitee to

serve in such capacity. Indemnitee is willing to serve, continue to serve and to

take on additional service for or on behalf of the Company on the condition that

he be so indemnified; and

 

      NOW, THEREFORE, in consideration of the premises and the covenants

contained herein, the Company and Indemnitee do hereby covenant and agree as

follows:

 

      Section 1. Services to the Company. Indemnitee agrees to serve as a

[director] [officer] of the Company. Indemnitee may at any time and for any

reason resign from such position (subject to any other contractual obligation or

any obligation imposed by operation of law), in which event the Company shall

have no obligation under this Agreement to continue Indemnitee in such position.

This Agreement shall not be deemed an employment contract between the Company

(or any of its subsidiaries or any Enterprise) and Indemnitee. Indemnitee

specifically acknowledges that Indemnitee's employment with the Company (or any

of its subsidiaries or any Enterprise), if any, is at will, and the Indemnitee

may be discharged at any time for any reason, with or without cause, except as

may be otherwise provided in any written employment contract between Indemnitee

and the Company (or any of its subsidiaries or any Enterprise), other applicable

formal severance policies duly adopted by the Board, or, with respect to service

as a director or officer of the Company, by the Certificate of Incorporation,

the By-Laws, and the DGCL. The foregoing notwithstanding, this Agreement shall

continue in force after Indemnitee has ceased to serve as an [director]

[officer] of the Company.

 

      Section 2.   Definitions.    As used in this Agreement:

 

            (a) A "Change in Control" shall be deemed to occur upon the earliest

to occur after the date of this Agreement of any of the following events:

 

                  i. Acquisition of Stock by Third Party. Any Person (as defined

below) is or becomes the Beneficial Owner (as defined below), directly or

indirectly, of securities of the Company representing 15% or more of the

combined voting power of the Company's then outstanding securities; provided,

however, that any Person who is a Beneficial Owner, directly or indirectly, of

securities of the Company representing 15% or more of the combined voting power

on the date hereof shall not be deemed to trigger a Change of Control within the

meaning of this definition;

 

                  ii. Change in Board of Directors. During any period of two

consecutive years (not including any period prior to the execution of this

Agreement), individuals who at the beginning of such period constitute the

Board, and any new director (other than a director designated by a person who

has entered into an agreement with the Company to effect a transaction described

in Sections 2(a)(i), 2(a)(iii) or 2(a)(iv)) whose election by the

 

 

                                       2

<PAGE>

 

Board or nomination for election by the Company's stockholders was approved by a

vote of at least two-thirds of the directors then still in office who either

were directors at the beginning of the period or whose election or nomination

for election was previously so approved, cease for any reason to constitute at

least a majority of the members of the Board;

 

                  iii. Corporate Transactions. The effective date of a merger or

consolidation of the Company with any other entity, other than a merger or

consolidation which would result in the voting securities of the Company

outstanding immediately prior to such merger or consolidation continuing to

represent (either by remaining outstanding or by being converted into voting

securities of the surviving entity) more than 51% of the combined voting power

of the voting securities of the surviving entity outstanding immediately after

such merger or consolidation and with the power to elect at least a majority of

the board of directors or other governing body of such surviving entity;

 

                  iv.    Liquidation.   The approval by the stockholders of the

Company of a complete liquidation of the Company or an agreement for the sale

or disposition by the Company of all or substantially all of the Company's

assets; and

 

                  v. Other Events. There occurs any other event of a nature that

would be required to be reported in response to Item 6(e) of Schedule 14A of

Regulation 14A (or a response to any similar item on any similar schedule or

form) promulgated under the Exchange Act (as defined below), whether or not the

Company is then subject to such reporting requirement.

 

For purposes of this Section 2(a), the following terms shall have the following

meanings:

 

                  (A) "Exchange Act" shall mean the Securities Exchange Act of

            1934, as amended.

 

                  (B) "Person" shall have the meaning as set forth in Sections

            13(d) and 14(d) of the Exchange Act; provided, however, that Person

            shall exclude (i) the Company; (ii) any trustee or other fiduciary

            holding securities under an employee benefit plan of the Company;

            and (iii) any corporation owned, directly or indirectly, by the

            stockholders of the Company in substantially the same proportions as

            their ownership of stock of the Company.

 

                  (C) "Beneficial Owner" shall have the meaning given to such

            term in Rule 13d-3 under the Exchange Act; provided, however, that

            Beneficial Owner shall exclude any Person otherwise becoming a

            Beneficial Owner by reason of the stockholders of the Company

            approving a merger of the Company with another entity.

 

            (b) "Corporate Status" describes the status of a person who is or

was a director, officer, employee or agent of the Company or of any other

corporation, limited liability

 

 

                                       3

<PAGE>

 

company, partnership or joint venture, trust, employee benefit plan or other

enterprise which such person is or was serving at the request of the Company.

 

            (c) "Disinterested Director" means a director of the Company who is

not and was not a party to the Proceeding in respect of which indemnification is

sought by Indemnitee.

 

            (d) "Enterprise" shall mean the Company and any other corporation,

limited liability company, partnership, joint venture, trust, employee benefit

plan or other enterprise of which Indemnitee is or was serving at the request of

the Company as a director, officer, employee, agent or fiduciary.

 

            (e) "Expenses" shall include all reasonable attorneys' fees,

retainers, court costs, transcript costs, fees of experts, witness fees, travel

expenses, duplicating costs, printing and binding costs, telephone charges,

postage, delivery service fees, and all other disbursements or expenses of the

types customarily incurred in connection with prosecuting, defending, preparing

to prosecute or defend, investigating, being or preparing to be a witness in, or

otherwise participating in, a Proceeding. Expenses also shall include (i)

Expenses incurred in connection with any appeal resulting from any Proceeding,

including without limitation the premium, security for, and other costs relating

to any cost bond, supersedeas bond, or other appeal bond or its equivalent; and

(ii) for purposes of Section 13(d) only, Expenses incurred by Indemnitee in

connection with the interpretation, enforcement or defense of Indemnitee's

rights under this Agreement, by litigation or otherwise. Expenses, however,

shall not include amounts paid in settlement by Indemnitee or the amount of

judgments or fines against Indemnitee.

 

            (f) "Independent Counsel" means a law firm, or a member of a law

firm, that is experienced in matters of corporation law and neither presently

is, nor in the past five years has been, retained to represent: (i) the Company

or Indemnitee in any matter material to either such party (other than with

respect to matters concerning the Indemnitee under this Agreement, or of other

indemnitees under similar indemnification agreements); or (ii) any other party

to the Proceeding giving rise to a claim for indemnification hereunder.

Notwithstanding the foregoing, the term "Independent Counsel" shall not include

any person who, under the applicable standards of professional conduct then

prevailing, would have a conflict of interest in representing either the Company

or Indemnitee in an action to determine Indemnitee's rights under this

Agreement. The Company agrees to pay the reasonable fees and expenses of the

Independent Counsel referred to above and to fully indemnify such counsel

against any and all Expenses, claims, liabilities and damages arising out of or

relating to this Agreement or its engagement pursuant hereto.

 

            (g) The term "Proceeding" shall include any threatened, pending or

completed action, suit, arbitration, alternate dispute resolution mechanism,

investigation, inquiry, administrative hearing or any other actual, threatened

or completed proceeding, whether brought in the right of the Company or

otherwise and whether of a civil, criminal, administrative or investigative

nature, in which Indemnitee was, is or will be involved as a party or otherwise

by reason of the fact that Indemnitee is or was a director or officer of the

Company, by reason of any action taken by him or of any action on his part while

acting as director or officer of the Company, or by reason of the fact that he

is or was serving at the request of the Company as a director, officer, employee

or agent of another corporation, limited liability company,

 

 

                                       4

<PAGE>

 

partnership, joint venture, trust or other enterprise, in each case whether or

not serving in such capacity at the time any liability or expense is incurred

for which indemnification, reimbursement, or advancement of expenses can be

provided under this Agreement; except one initiated by an Indemnitee to enforce

his rights under this Agreement.

 

            (h) Reference to "other enterprise" shall include employee benefit

plans References to "fines" shall include any excise tax assessed with respect

to any employee benefit plan. References to "serving at the request of the

Company" shall include any service as a director, officer, employee or agent of

the Company which imposes duties on, or involves services by, such director,

officer, employee or agent with respect to an employee benefit plan, its

participants or beneficiaries. A person who acted in good faith and in a manner

he reasonably believed to be in the best interests of the participants and

beneficiaries of an employee benefit plan shall be deemed to have acted in

manner "not opposed to the best interests of the Company."

 

      Section 3. Indemnity in Third-Party Proceedings. The Company shall

indemnify Indemnitee in accordance with the provisions of this Section 3 if

Indemnitee is, or is threatened to be made, a party to or a participant in any

Proceeding, other than a Proceeding by or in the right of the Company to procure

a judgment in its favor. Pursuant to this Section 3, Indemnitee shall be

indemnified to the fullest extent permitted by applicable law against all

Expenses, judgments, fines and amounts paid in settlement actually and

reasonably incurred by Indemnitee or on his behalf in connection with such

Proceeding or any claim, issue or matter therein, if Indemnitee acted in good

faith and in a manner he reasonably believed to be in or not opposed to the best

interests of the Company and, in the case of a criminal proceeding had no

reasonable cause to believe that his conduct was unlawful.

 

      Section 4. Indemnity in Proceedings by or in the Right of the Company. The

Company shall indemnify Indemnitee in accordance with the provisions of this

Section 4 if Indemnitee is, or is threatened to be made, a party to or a

participant in any Proceeding by or in the right of the Company to procure a

judgment in its favor. Pursuant to this Section 4, Indemnitee shall be

indemnified to the fullest extent permitted by applicable law against all

Expenses actually and reasonably incurred by him or on his behalf in connection

with such Proceeding or any claim, issue or matter therein, if Indemnitee acted

in good faith and in a manner he reasonably believed to be in or not opposed to

the best interests of the Company. No indemnification for Expenses shall be made

under this Section 4 in respect of any claim, issue or matter as to which

Indemnitee shall have been finally adjudged by a court to be liable to the

Company, unless and only to the extent that the Delaware Court of Chancery or

any court in which the Proceeding was brought shall determine upon application

that, despite the adjudication of liability but in view of all the circumstances

of the case, Indemnitee is fairly and reasonably entitled to indemnification.

 

      Section 5. Indemnification for Expenses of a Party Who is Wholly or Partly

Successful. Notwithstanding any other provisions of this Agreement, to the

fullest extent permitted by applicable law and to the extent that Indemnitee is

a party to (or a participant in) and is successful, on the merits or otherwise,

in any Proceeding or in defense of any claim, issue or matter therein, in whole

or in part, the Company shall indemnify Indemnitee against all Expenses actually

and reasonably incurred by him in connection therewith. If Indemnitee is not

 

                                       5

<PAGE>

 

wholly successful in such Proceeding but is successful, on the merits or

otherwise, as to one or more but less than all claims, issues or matters in such

Proceeding, the Company shall indemnify Indemnitee against all Expenses actually

and reasonably incurred by him or on his behalf in connection with each

successfully resolved claim, issue or matter. If the Indemnitee is not wholly

successful in such Proceeding, the Company also shall indemnify Indemnitee

against all Expenses reasonably incurred in connection with a claim, issue or

matter related to any claim, issue, or matter on which the Indemnitee was

successful. For purposes of this Section and without limitation, the termination

of any claim, issue or matter in such a Proceeding by dismissal, with or without

prejudice, shall be deemed to be a successful result as to such claim, issue or

matter.

 

      Section 6. Indemnification For Expenses of a Witness. Notwithstanding any

other provision of this Agreement, to the fullest extent permitted by applicable

law and to the extent that Indemnitee is, by reason of his Corporate Status, a

witness in any Proceeding to which Indemnitee is not a party, he shall be

indemnified against all Expenses actually and reasonably incurred by him or on

his behalf in connection therewith.

 

      Section 7.   Additional Indemnification.

 

            (a) Notwithstanding any limitation in Sections 3, 4, or 5, the

Company shall indemnify Indemnitee to the fullest extent permitted by applicable

law if Indemnitee is a party to or threatened to be made a party to any

Proceeding (including a Proceeding by or in the right of the Company to procure

a judgment in its favor) against all Expenses, judgments, fines and amounts paid

in settlement actually and reasonably incurred by Indemnitee in connection with

the Proceeding.

 

             (b) For purposes of Section 7(a), the meaning of the phrase "to the

fullest extent permitted by applicable law" shall include, but not be limited

to:

 

                  i.     to the fullest extent permitted by the provision of

the DGCL that authorizes or contemplates additional indemnification by

agreement, or the corresponding provision of any amendment to or replacement

of the DGCL; and

 

                  ii. to the fullest extent authorized or permitted by any

amendments to or replacements of the DGCL adopted after the date of this

Agreement that increase the extent to which a corporation may indemnify its

officers and directors.

 

      Section 8.   Exclusions.    Notwithstanding any provision in this

Agreement, the Company shall not be obligated under this Agreement to make

any indemnity in connection with any claim made against Indemnitee:

 

            (a) for which payment has actually been made to or on behalf of

Indemnitee under any insurance policy or other indemnity provision, except with

respect to any excess beyond the amount paid under any insurance policy or other

indemnity provision;

 

            (b) for (i) an accounting of profits made from the purchase and sale

(or sale and purchase) by Indemnitee of securities of the Company within the

meaning of Section 16(b) of the Exchange Act (as de