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EXHIBIT 8
INDEMNIFICATION AGREEMENT
AGREEMENT dated as of January __, 2001 between Susan Hirt Hagen ("Mrs.
Hagen") and the undersigned nominee (the "Indemnitee").
WHEREAS, Mrs. Hagen has asked and the Indemnitee has agreed that Mrs.
Hagen may nominate the Indemnitee for election to the Board of Directors of Erie
Indemnity Company (the "Company") at the 2001 annual meeting of stockholders of
the Company (the "Annual Meeting"); and
WHEREAS, Mrs. Hagen and/or her affiliates may, in appropriate
circumstances, solicit proxies from the stockholders of the Company in support
of the Indemnitee's election as a director of the Company at the Annual Meeting;
NOW, THEREFORE, in consideration of the foregoing and with the
understanding on the part of Mrs. Hagen that the Indemnitee is relying on this
Agreement in agreeing to be a nominee of Mrs. Hagen as aforesaid and for other
and valuable consideration the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Certain Definitions. As used in this Agreement, the following defined
terms have the meanings indicated below:
"Claim" means any threatened, pending or completed action, suit or
proceeding (whether civil, criminal, administrative, formal or informal
investigative or other), whether instituted by Mrs. Hagen, any stockholder of
the Company, the Company or any other party, or any inquiry or investigation
that the Indemnitee in good faith believes might lead to the institution of any
such action, suit or proceeding.
"Expenses" means all reasonable attorney's fees and all other reasonable
fees, costs, expenses and obligations paid or incurred in connection with the
election of directors at the Annual Meeting or related matters, including
without limitation, investigating, defending or participating (as a party,
witness or otherwise) in (including on appeal), or preparing to defend or
participate in, any Claim relating to any Indemnifiable Event.
"Indemnifiable Event" means any event or occurrence relating to or
directly or indirectly arising out of, or any action taken or omitted to be
taken in connection with the election of directors at the Annual Meeting or
related matters, but not in the Indemnitee's capacity as a director of the
Company if the Indemnitee is so elected.
"Loss" means any and all damages, judgments, fines, penalties, amounts
paid or payable in settlement, deficiencies, losses and Expenses (including all
interest, assessments, and other charges paid or payable in connection with or
respect of such Losses).
2. Indemnification. (a) In the event the Indemnitee in his capacity as a
nominee of Mrs. Hagen for election to the Company's Board of Directors at the
Annual Meeting was, is or becomes a party to or other participant in, or is
threatened to be made a party to or other
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participant in, a Claim by reason of (or arising or allegedly arising in any
manner out of or relating to in whole or in part) an Indemnifiable Event or
Indemnitee's being a nominee of Mrs. Hagen for election to the Company's Board
of Directors at the Annual Meeting, Mrs. Hagen to the fullest extent permitted
by applicable law shall indemnify and hold harmless the Indemnitee from and
against any and all Losses suffered, incurred or sustained by the Indemnitee or
to which the Indemnitee becomes subject, resulting from, arising out of or
relating to such Claim (it being understood that except as provided in Section
2(c) with respect to Expenses, reimbursements of any such Losses shall be made
as soon as practicable but in any event no later than 15 days after written
request (a "Claim Notice") is made to Mrs. Hagen accompanied by supporting
documentation). The Indemnitee shall give Mrs. Hagen written notice of any Claim
(accompanied by such reasonable supporting documentation as may be in the
Indemnitee's possession) as soon as practicable after the Indemnitee becomes
aware thereof; provided that the failure of the Indemnitee give such notice
shall not relieve Mrs. Hagen of her indemnification obligations under this
Agreement, except to the extent that such failure materially prejudices the
rights of Mrs. Hagen.
(b) In the case of the commencement of any action against the Indemnitee
in respect of which the Indemnitee may seek indemnification from Mrs. Hagen
hereunder, Mrs. Hagen will be entitled to participate therein, including,
without limitation, the negotiation and approval of any settlement of such
action and, to the extent that Mrs. Hagen may wish to assume the defense
thereof, with counsel reasonably satisfactory to the Indemnitee, and after
notice from Mrs. Hagen to the Indemnitee of Mrs. Hagen's election so to assume
the defense thereof, together with Mrs. Hagen's written acknowledgement and
agreement that she will fully indemnify the Indemnitee under the terms of this
Agreement with regard to such Claim, Mrs. Hagen will not be liable to the
Indemnitee under this Agreement for any Expenses subsequently incurred by the
Indemnitee in connection with the defense thereof other than reasonable costs of
investigation and preparation therefor (including, without limitation, appearing
as a witness and reasonable fees and expenses of legal counsel in connection
therewith). If in any action for which indemnity may be sought hereunder Mrs.
Hagen shall not have timely assumed the defense thereof with counsel reasonably
satisfactory to the Indemnitee, or the Indemnitee shall have been advised by
counsel that it would constitute a conflict of interest for the same counsel to
represent both the Indemnitee and Mrs. Hagen in such action, or if the
Indemnitee may have separate or additional defenses with regard to such action,
the Indemnitee shall have the right to employ counsel for the Indemnitee
reasonably satisfactory to Mrs. Hagen in such action, in which event Mrs. Hagen
shall reimburse the Indemnitee for all reasonable legal fees and expenses
incurred by the Indemnitee in connection with the defense thereof. Mrs. Hagen
shall in no event be liable for any settlement of any action effected without
her prior written consent (which consent shall not be unreasonably withheld).
Mrs. Hagen shall not settle any Claim in any manner that would impose any
expense, penalty, obligation or limitation on the Indemnitee, or would contain
language other than a recitation of any amounts to be paid in settlement, that
could reasonably be viewed as an acknowledgement of wrongdoing on the part of
the Indemnitee or as materially detrimental to the reputation of the Indemnitee,
without the Indemnitee's prior written consent (which consent shall not be
unreasonably withheld).
(c) The Indemnitee's right to indemnification under this Section 2 of this
Agreement shall include the right of the Indemnitee to be advanced by Mrs. Hagen
any Expenses incurred in connection with any Indemnifiable Event as such
Expenses are incurred by the Indemnitee; provided, however, that all amounts
advanced in respect of such Expenses shall be repaid to Mrs. Hagen by the
Indemnitee if it shall ultimately be determined in a final judgment without
further
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right to appeal by a court of appropriate jurisdiction that the Indemnitee is
not entitled to be indemnified for such Expenses because their Loss arose as a
result of the Indemnitee's gross negligence or willful misconduct.
3. Partial Indemnity, etc. If the Indemnitee is entitled under any
provision of this Agreement to indemnification by Mrs. Hagen for some or a
portion of any Loss, but not for all of the total amount thereof, Mrs. Hagen
shall nevertheless indemnify the Indemnitee for the portion thereof to which the
Indemnitee is entitled. Moreover, notwithstanding any other provision of this
Agreement, to the extent that the Indemnitee has been successful on the merits
or otherwise in defense of any or all Claims relating in whole or in part to an
Indemnifiable Event or in defense of any issue or matter therein, including
dismissal without prejudice, the Indemnitee shall be indemnified against all
Expenses incurred in connection therewith.
4. No Presumptions. For purposes of this Agreement, the termination of any
claim, action, suit or proceeding, by judgment, order, settlement (whether with
or without court approval), or upon a plea of nolo contendere, or its
equivalent, shall not create a presumption that the Indemnitee did not meet any
particular standard of conduct or have any particular belief or that a court has
determined that indemnification is not permitted by applicable law.
5. Nonexclusivity, etc. The rights of the Indemnitee hereunder shall be in
addition to any other rights the Indemnitee may have under any bylaw, insurance
policy, Pennsylvania corporate law or otherwise. To the extent that a change in
applicable law (whether by statute or judicial decision) would permit greater
indemnification by agreement than would be afforded currently under this
Agreement, it is the intent of the parties hereto that the Indemnitee shall
enjoy by this Agreement the greater benefits so afforded by such change.
6. Amendment, etc. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both of the parties
hereto. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provisions hereof (whether or not
similar) nor shall such waiver constitute a continuing waiver.
7. Subrogation. In the event of any payment under this Agreement, Mrs.
Hagen shall be subrogated to the extent of such payment to all of the rights of
recovery of the Indemnitee, and the Indemnitee shall execute all papers
reasonably required and shall take such action that may be reasonably necessary
to secure such rights, including the execution of such documents necessary to
enable Mrs. Hagen effectively to bring suit to enforce such rights.
8. No Duplication of Payments. Mrs. Hagen shall not be liable under this
Agreement to make any payment in connection with a Claim made against the
Indemnitee to the extent the Indemnitee has otherwise actually received payment
(under any insurance policy, bylaw or otherwise) of the amounts otherwise
indemnifiable hereunder; provided that, if the Indemnitee for any reason is
required to disgorge any payment actually received, Mrs. Hagen shall be
obligated to pay such amount to the Indemnitee in accordance with the other
terms of this Agreement (i.e., disregarding the terms of this Section 8).
9. Termination. This Agreement shall terminate and will become null and
void upon the nomination of the Indemnitee by the Nominating Committee of the
Board of Directors of the Company to stand for election as a director at the
Annual Meeting, and there will be no liability or obligation on the part of Mrs.
Hagen under this Agreement.
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10. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania, without giving
effect to principles of conflicts of laws.
11. Counterparts. This Agreement may be executed in one or more
counterparts for the convenience of the parties hereto, all of which together
shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
/s/ Susan Hirt Hagen
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Susan Hirt Hagen
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Indemnitee
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