EXHIBIT 10.20
DIRECTOR’S INDEMNIFICATION AGREEMENT
THIS AGREEMENT is made as of ________________ between Xylem 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 Amended and Restated By-laws (“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 Amended and Restated Articles of
Incorporation (“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, limited liability company, joint venture, trust or
other enterprise, whether for profit or not, and including, without limitation,
any employee benefit plan (a “Designated Director”), if Indemnitee was or is
made or is threatened to be made a party to, or is otherwise involved in, as a
witness or otherwise, any threatened, pending or completed investigation, claim,
action, suit, arbitration, alternate dispute resolution mechanism or proceeding
(brought in the right of the Corporation or otherwise), whether civil, criminal,
administrative, investigative (including, without limitation, any internal
corporate investigation) or otherwise, whether formal or informal, and including
all appeals thereto (a “Proceeding”), the Corporation hereby agrees to hold the
Indemnitee harmless and to indemnify the Indemnitee to the fullest extent now or
hereafter permitted by applicable law from and against any and all expenses
(which term shall be broadly construed and include, without limitation, all
direct and indirect costs of any type or nature whatsoever (including, without
limitation, all attorneys’ fees and related disbursements, appeal bonds, and
other out-of-pocket costs) (“Expenses”), judgments, fines, amounts paid in
settlement (with such judgments, fines or amounts including, without limitation,
all direct and indirect payments of any type or

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nature whatsoever, as well as any penalties or excise taxes assessed on a person
with respect to an employee benefit plan), liabilities or losses actually and
reasonably incurred by the Indemnitee by reason of the fact such person is or
was a Director of the Corporation or a Designated Director, or by reason of any
actual or alleged action or omission to act taken or omitted in any such
capacity. Notwithstanding any other provision of this Agreement, no
indemnification shall be paid to the Indemnitee with respect to a Proceeding, or
part thereof, commenced voluntarily by the Indemnitee (including claims and
counterclaims, whether such counterclaims are asserted by the Indemnitee, or the
Corporation in a Proceeding commenced by the Indemnitee), except a Proceeding
pursuant to Section 9 hereof to enforce or interpret this Agreement or a
Proceeding commencing or continuing after a change in control (as defined in the
By-laws), unless the Board of Directors of the Corporation determines that
indemnification is appropriate.
2.    Maintenance of Insurance. (a)  Subject only to the provisions of Section
2(c) 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 entitled to indemnification hereunder, the Corporation
will provide insurance coverage comparable to that presently provided and at
least as favorable to Indemnitee as the insurance coverage provided to any other
director or officer of the Corporation under the Corporation’s Directors’ and
Officers’ Liability Insurance policies (the “insurance policies”) in effect at
the date hereof.
(b)    At the time the Corporation receives notice from Indemnitee, or is
otherwise aware, of a Proceeding, the Corporation shall give prompt notice to
the insurers in accordance with the procedures set forth in the insurance
policies. The Corporation shall thereafter take all necessary or desirable
action to cause such insurers to pay, on behalf of Indemnitee, all amounts
payable as a result of such proceeding in accordance with the terms of such
insurance policy.
(c)    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.
(d)    In the event of any payment by the Corporation under this Agreement, the
Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of Indemnitee with respect to any insurance policy.
Indemnitee shall execute all papers required and take all action necessary to
secure such rights, including execution of such documents as are necessary to
enable the Corporation to bring suit to enforce such rights in accordance with
the terms of such insurance policy. The Corporation shall pay or reimburse all
expenses actually and reasonably incurred by Indemnitee in connection with such
subrogation.
(e)    The Corporation shall not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable hereunder if and to the extent that
Indemnitee has

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otherwise actually received such payment under this Agreement or any insurance
policy, contract, agreement or otherwise.
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:
(a)    to the fullest extent provided under Article 4 of the Corporation’s
By-laws as in effect at the date hereof; and
(b)    to the extent permitted by applicable law, in the event the Corporation
does not maintain in effect the insurance coverage provided under Section 2
hereof, to the fullest 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.
4.    Limitations on Additional Indemnity. No indemnity pursuant to Section 3
hereof shall be paid by the Corporation:
(a)    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;
(b)    for any conduct that was not in good faith and (i) in the case of conduct
in the Indemnitee’s official capacity with the Corporation, in a manner he or
she reasonably believed to be in the best interests of the Corporation, (ii) in
all other cases, that the Indemnitee reasonably believed his or her conducts
conduct was at least not opposed to the Corporation’s best interests and (iii)
in the case of any criminal proceeding, the Indemnitee had reasonable cause to
believe his or her conduct was lawful or had no reasonable cause to believe that
his or her conduct was unlawful; or
(c)    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 may be made or threatened to be made a party to, or be otherwise
involved in, as a witness or otherwise, any Proceeding, by reason of the fact
that the Indemnitee was a Director of the Corporation or a Designated Director,
or by reason of any action alleged to have been taken or omitted in any such
capacity.
6.    Notification and Defense of Claim.
(a)    Promptly after receipt by the Indemnitee of notice of the commencement of
any Proceeding, the Indemnitee shall, if a claim in respect thereof is to be
made against the Corporation under this Agreement, notify the Secretary of the
Corporation in writing of the commencement thereof and shall provide the
Secretary with such documentation and information as is reasonably available to
Indemnitee and reasonably necessary to determine

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whether and to what extent the Indemnitee is entitled to indemnification; but an
omission to so promptly notify the Corporation will not relieve it from any
liability which it may have to the Indemnitee (i) under this Agreement, except
to the extent the Corporation is actually and materially prejudiced in its
defense of such Proceeding or (ii) otherwise than under this Agreement,
including, without limitation, its liability to indemnify the Indemnitee under
the Corporation’s By-laws.
(b)    With respect to any such 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 reasonably satisfactory to the
Indemnitee. After notice from the Corporation to the Indemnitee of its election
so to assume the defense thereof and approval by the Indemnitee of such counsel
(which approval shall not be unreasonably withheld), the Corporation will not be
liable to the Indemnitee under this Agreement for any legal or other expenses
subsequently incurred by the Indemnitee for separate counsel 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 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 such counsel by the
Indemnitee has been authorized by the Corporation, (ii) the Indemnitee shall
have reasonably concluded (with written notice to the Corporation setting forth
the basis for such conclusion) that there may be a conflict of interest between
the Corporation and the Indemnitee in the conduct of the defense of such
Proceeding, or (iii) the Corporation shall not in fact have employed counsel to
assume the defense of such Proceeding, 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 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 Proceeding effected without
the Corporation’s written consent. The Corporation shall not settle any
Proceeding in any manner that would impose any penalty, obligation 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.

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(c)    Except as otherwise required by applicable law, the determination of the
Indemnitee’s entitlement to indemnification shall be made pursuant to and in
accordance with the procedures set forth in the By-Laws in effect as of the date
hereof, or any such procedures that may be more favorable to the Indemnitee that
are set forth in the By-Laws in effect on the date Indemnitee provides the
Secretary notice of the request for indemnification.
7.    Advancement and Repayment of Expenses. Upon receipt by the Corporation of
a statement from the Indemnitee requesting advancement or repayment of any
Expenses incurred in connection with any Proceeding involving the Indemnitee,
all such Expenses shall be paid promptly (and in any event within twenty (20)
days of receipt of such statement, which statement shall reasonably evidence the
Expenses incurred or to be incurred) by the Corporation in advance of the final
disposition of such Proceeding. The Indemnitee agrees that the Indemnitee will
reimburse (without interest) 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 and finally 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 or 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. Notwithstanding any
other provision of this Agreement, no advancement or repayment of Expenses shall
be made to the Indemnitee with respect to a Proceeding, or part thereof,
commenced voluntarily by the Indemnitee (including claims and counterclaims,
whether such counterclaims are asserted by the Indemnitee, or the Corporation in
a Proceeding commenced by the Indemnitee), except a Proceeding pursuant to
Section 9 hereof to enforce or interpret this Agreement or a Proceeding
commencing or continuing after a change in control (as defined in the By-laws),
unless the Board of Directors of the Corporation determines that advancement or
repayment is appropriate.
8.    Nonexclusivity. The provisions for indemnification and advancement and
reimbursement of expenses set forth in this Agreement shall not be deemed
exclusive of any other rights which Indemnitee may have under any provision of
law, in any court in which a proceeding is brought, the Corporation’s Articles
of Incorporation or By-laws, other agreements or otherwise, and Indemnitee’s
rights hereunder shall inure to the benefit of the heirs, executors and
administrators of Indemnitee. No amendment or alteration of the Corporation’s
Articles of Incorporation or By-laws or another agreement shall adversely affect
the rights provided to Indemnitee under this Agreement. To the extent that a
change in Indiana or other law, whether by statute or judicial decision, permits
greater indemnification or payment than would be afforded currently under the
Corporation’s Articles of Incorporation, By-laws or this Agreement, it is the
intent of the parties hereto that Indemnitee shall enjoy by this Agreement the
greater benefits so afforded by such change.
9.    Enforcement. If a claim under this Agreement is not paid in full by the
Corporation within 60 days after a written request for indemnification has been
received by the Corporation or within 20 days after a written request for
advance for reasonable expenses incurred has been received by the Corporation,
the Indemnitee may at any time thereafter seek an

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adjudication of his or her entitlement to payment in accordance with the
procedures specified in the By-Laws to recover the unpaid amount of the claim
and, if successful in whole or in part, the Indemnitee shall also be entitled to
be indemnified for all expenses actually and reasonably incurred by the
Indemnitee in connection with the prosecution of such claim. Nothing in this
Section 9 is intended to limit the Corporation’s obligations with respect to the
advancement or repayment of expenses to Indemnitee in connection with any such
Proceeding instituted by Indemnitee to enforce or interpret this Agreement.
10.    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.
11.    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)    This Agreement shall supersede and replace any prior indemnification
agreements entered into by and between the Corporation and the Indemnitee and
any such prior agreements shall be terminated upon execution of this Agreement.
(d)    No amendment, modification, termination or cancellation of this Agreement
shall be effective unless in writing signed by both parties hereto.

[Signature Page Follows]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

Corporation

XYLEM INC.

By:     
Name:
Title:

Indemnitee