SPECIALTY EQUIPMENT COMPANIES INC
FORM OF INDEMNIFICATION AGREEMENT
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>6
<FILENAME>c57973ex10-3.txt
<DESCRIPTION>FORM OF INDEMNIFICATION AGREEMENT
<TEXT>

<PAGE>   1

                                                                    EXHIBIT 10.3

                            INDEMNIFICATION AGREEMENT


         THIS AGREEMENT, dated as of the day of __________, is made by and
between Specialty Equipment Companies, Inc., a Delaware corporation having its
principal place of business in the State of Illinois (the "Company") and
____________ (the "Indemnitee"), a resident of the State of Illinois.

         WHEREAS, it is essential to the Company to retain and attract the most
capable persons available as officers and directors; and

         WHEREAS, Indemnitee is currently serving as the ____________ of the
Company (the "Position"); and

         WHEREAS, both the Company and Indemnitee recognize the increased risk
of litigation and other claims being asserted against directors and officers of
corporations, as a result of which competent and experienced persons have become
more reluctant to serve in such positions, and as a result of which creative
management and decision making has been deterred; and

         WHEREAS, the provision of indemnification will assist the Company in
attracting and retaining the most skilled and competent officers and directors;
and

         WHEREAS, in recognition of Indemnitee's need for substantial protection
against personal liability in order to enable Indemnitee to continue to provide
service to the Company in an effective manner, the Company wishes to provide in
this Agreement for the indemnification of the Indemnitee and for the advancing
of expenses to Indemnitee, in each case to the full extent permitted by law and
as set forth in this Agreement.

         NOW THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee agree as follows:

1. Agreement to Serve. Indemnitee will continue to serve faithfully and to the
best of his ability in the Position, at the will of the Company or pursuant to
the terms of any separate agreement which may exist, so long as he is duly
elected or appointed and qualified or until such time as he tenders his
resignation in writing.

2. Right to Indemnification. In the event Indemnitee was or is made a party or
was or is threatened to be made a party to or was or is involved in or called as
a witness in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, and any appeal therefrom (hereinafter,
collectively a "proceeding"), by reason of the fact that he was, is or had
agreed to become a director, officer, employee, agent, fiduciary or Delegate (as
defined herein) of the Company, Indemnitee shall be indemnified and held
harmless by the Company to the fullest extent permitted under the Delaware
General Corporation Law (the "DGCL"), as the same now exists or may hereafter be
amended (but, in the case of any such amendment, only to the extent that such
amendment permits the Company to provide broader indemnification rights than the
DGCL permitted the corporation to provide prior to such amendment) against all
expenses (including, but not limited to, attorneys' fees and expenses of
litigation) and all liabilities and losses (including,




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but not limited to, judgments; fines; liabilities under ERISA for damages,
excise taxes or penalties; damages, fines or penalties arising out of violation
of any law related to the protection of the public health, welfare or the
environment; and amounts paid or to be paid in settlement) incurred or suffered
by such person in connection therewith; provided, that except as provided in
Section 4 hereof, the Company shall indemnify any such person seeking indemnity
in connection with a proceeding (or part thereof) initiated by such person only
if such proceeding (or part thereof) was authorized by the Board of Directors of
the Company.

         For purposes of this Agreement, a "Delegate" is any person serving at
the request of the corporation as a director, officer, trustee, fiduciary,
partner, employee or agent of an entity or enterprise other than the corporation
(including, but not limited to, service with respect to employee benefit plans
and trusts).

3. Expenses. Expenses, including attorneys' fees, incurred by Indemnitee in
defending or otherwise being involved in a proceeding shall be paid by the
corporation in advance of the final disposition of such proceeding, including
any appeal therefrom, upon receipt of an undertaking (the "Undertaking") by or
on behalf of Indemnitee to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the Company; provided,
that in connection with a proceeding (or part thereof) initiated by Indemnitee,
except as provided in Section 4 hereof, the Company shall pay such expenses in
advance of the final disposition only if such proceeding (or part thereof) was
authorized by the Board of Directors of the Company. The Undertaking shall
provide that if Indemnitee has commenced proceedings in a court of competent
jurisdiction to secure a determination that he should be indemnified by the
Company, he shall not be obligated to repay the Company during the pendency of
such proceeding.

4. Protection of Rights. If a claim under Section 2 or any agreement ("Other
Agreement") providing indemnification to Indemnitee is not promptly paid in full
by the Company after a written claim has been received by the Company or if
expenses pursuant to Section 3 or an Other Agreement have not been promptly
advanced after a written request for such advancement accompanied by the
Undertaking has been received by the Company, the claimant may at any time
thereafter bring suit against the Company to recover the unpaid amount of the
claim or the advancement of expenses. If successful, in whole or in part, in
such suit Indemnitee shall also be entitled to be paid the reasonable expense
thereof. It shall be a defense to any such action (other than an action brought
to enforce a claim for expenses incurred in defending any proceeding in advance
of its final disposition where the required Undertaking has been tendered to the
Company) that Indemnitee has not met the standards of conduct which make it
permissible under the DGCL for the Company to indemnify Indemnitee for the
amount claimed, but the burden of proving such defense shall be on the Company.
Neither the failure of the Company (including its Board of Directors,
independent legal counsel, or its stockholders) to have made a determination
that indemnification of Indemnitee is proper in the circumstances because he has
met the applicable standard of conduct required under the DGCL, nor an actual
determination by the Company (including its Board of Directors, independent
legal counsel, or its stockholders) that Indemnitee had not met such applicable
standard of conduct, shall be a defense to the action or create a presumption
that Indemnitee had not met the applicable standard of conduct.



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         If a Change of Control has occurred, Indemnitee upon making a claim
under Section 2 or seeking to avoid repayment to the Company pursuant to an
Undertaking under Section 3 shall have (i) the right, but not the obligation, to
have a determination made by independent legal counsel as to whether
indemnification of the claimant is proper because he or she has met the
applicable standard of conduct required under the DGCL; and (ii) shall have the
right to select as independent legal counsel for such purpose any law firm as
designated (or within a category designated) for such purpose in a resolution
adopted by the Board of Directors of the Company prior to the Change of Control
and in full force and effect immediately prior to the Change of Control. If a
determination has been made in accordance with the preceding sentence, no
determination inconsistent therewith by other legal counsel, by the Board of
Directors, or by stockholders shall be of any force or effect, provided however,
that Indemnitee shall maintain all rights granted hereby to bring an action as
specified in the preceding paragraph.

         A "Change of Control" shall be deemed to have occurred if (i)
individuals who as of ____________, _____ constitute the Board of Directors of
the Company (the "Incumbent Directors") cease for any reason to constitute at
least a majority of the Board of Directors of the Company, or (ii) there is a
merger, consolidation or reorganization ("Merger") of the Company in which the
Company is not the surviving entity (the "Survivor") and at any time following
such Merger, Incumbent Directors do not constitute a majority of the Board of
Directors of the Survivor; provided that any individual who becomes a director
after ____________, _____ whose election, or nomination for election by the
Company's stockholders was approved by a vote or written consent of at least
two-thirds of the directors then comprising the Incumbent Directors shall be
deemed to be an Incumbent Director, but excluding, for this purpose, any such
individual whose initial assumption of office is in connection with an actual or
threatened election contest (as such term is used in Rule 14a-11 under the
Securities Exchange Act of 1934, as amended) relating to the election of the
directors of the Company.

5. No Presumption. For purposes of this Agreement, the termination of any
proceeding, by judgment, order, settlement (whether with or without court
approval) or conviction, or upon a plea of nolo contendere or its equivalent,
shall not create a presumption that Indemnitee did not meet any particular
standard of conduct or have any particular belief or that a court has determined
that indemnification or contribution is not permitted by applicable law.

6. Non-Exclusivity of Rights. The rights conferred on Indemnitee by this
Agreement shall not be exclusive of any other right which Indemnitee may have or
hereafter acquire under any statute, provision of the Company's Certificate of
Incorporation or By-Laws, as amended and/or restated, other agreement, vote of
stockholders or directors or otherwise.

7. Subrogation. In the event of any payment under this Agreement to Indemnitee,
the Company shall be subrogated to the extent of such payment to all of the
rights of recovery of Indemnitee, who shall execute all papers required and
shall do everything that may be necessary to secure such rights, including
execution of such documents as are necessary to enable the Company to bring suit
to enforce such rights.

8. Amendment; Waiver. No provision of this Agreement may be amended or modified
except with the consent in writing of Indemnitee and the Company, nor may any
provision of this Agreement



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be waived except in writing by the party granting such waiver. A waiver of any
provision hereof shall not be deemed a waiver of any other provision hereof.
Failure of either of the parties hereto to insist upon strict compliance with
any provision hereof shall not be deemed to be a waiver of such provision or any
other provision hereof.

9. No Duplication of Payments. The Company shall not be liable under this
Agreement to make any payment in connection with any proceeding to the extent
Indemnitee has otherwise actually received payment under any insurance policy,
statute, provision of the Company's Certificate of Incorporation or By-Laws, as
amended and/or restated, other agreement, vote of stockholders or directors or
otherwise of the amounts otherwise indemnifiable.

10. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective
successors and assigns (including, without limitation, any successor by
purchase, merger, consolidation, reorganization or otherwise to all or
substantially all of the business and/or assets of the Company) and their
spouses, heirs, and personal and legal representatives.

11. Term. The provisions of this Agreement shall be applicable to all
proceedings, regardless of when commenced and regardless of whether relating to
events, acts or omissions occurring before, on or after the date on which this
Agreement becomes effective. This Agreement shall continue in effect regardless
of whether Indemnitee continues to serve in the Position; provided, however,
that notwithstanding any other provision hereof, the Company shall have no
obligations hereunder with respect to liability, losses and expenses of any
proceeding to the extent that such liability, losses and expenses relate to
conduct of the Indemnitee which occurs after the earliest date on which
Indemnitee no longer holds the Positions nor a position of a corporate officer
or director of the Company or a President of any of the Wells/Bloomfield,
Taylor, Beverage Air and World Dryer divisions of the Company.

12. Severability. If this Agreement or any portion hereof shall be invalidated
or held to be unenforceable, such invalidity or unenforceability shall not
affect the other provisions hereof, and this Agreement shall be deemed to be
modified to the minimum extent necessary to avoid such invalidity or
unenforceability, and as so modified this Agreement and the remaining provisions
hereof shall remain valid and enforceable in accordance with their terms to the
fullest extent permitted by law.

13. Notice. All notices and other communications hereunder shall be in writing
and delivered by hand or by first class registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:

                If to the Indemnitee:
                --------------------

                [Name]
                [Address]
                [Address]

                If to the Company:
                -----------------



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                Specialty Equipment Companies, Inc.
                1245 Corporate Boulevard, Suite 401
                Aurora, Illinois  60504
                Attention:  Jeffrey P. Rhodenbaugh


or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

14. Governing Law. This agreement shall be governed by and construed and
enforced in accordance with the laws of the state of Delaware, without regard to
its choice of law principles.

15. Captions. The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect.

16. Counterparts. This agreement may be executed in multiple counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument originals.

         IN WITNESS WHEREOF, Indemnitee and the Company, pursuant to the
authorization of its Board of Directors, execute and approve this Agreement in
all respects as to form and substance and make it fully effective as of the date
first above written.






                                   ------------------------------------
                                   Indemnitee



                                   SPECIALTY EQUIPMENT COMPANIES, INC.



                                   By:
                                      ---------------------------------
                                   Its:
                                      ---------------------------------



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