EX-10.A
EXECUTIVE SEVERANCE AGREEMENT
(the "Agreement")
dated October 22, 1997
The Board of Directors ("Board") of AMP Incorporated, a Pennsylvania
corporation (the "Corporation"), and the Compensation and Management Development
Committee ("Committee") of the Board have determined that it is in the best
interests of the Corporation and its shareholders for the Corporation to agree,
as provided herein, to pay you, the undersigned, an executive of the
Corporation, termination compensation in the event you should leave the employ
of the Corporation under the circumstances described below.
The Board and the Committee recognize that as is the case with many
publicly held corporations, the possibility of a change of control of the
Corporation exists and is unsettling to you and other executives of the
Corporation. Therefore, these arrangements are being made to help assure a
continuing dedication by you to your duties to the Corporation notwithstanding
the occurrence of such an event. In particular, the Board believes it important
that you be able to perform your duties under such circumstances without being
influenced by the uncertainties of your own situation, to assess and advise the
Board whether any proposed transaction that would constitute a change of control
would be in the best interests of the Corporation and its shareholders and to
take such other action as the Board might determine to be appropriate. The Board
also wishes to demonstrate to you and other executives of the Corporation that
the Corporation is concerned with the welfare of its executives and intends to
see that the executives are treated fairly.
1.
(a) Severance Payment upon Change of Control. In view of the foregoing and
in further consideration of your continued employment with the
Corporation, the Corporation will promptly pay you as termination
compensation a lump sum amount, determined as provided below, in the
event that any time within two years after a "Change of Control" (as
defined below) of the Corporation your employment with the Corporation
(i) is terminated by the Corporation for any reason, other than death,
disability, or "Cause" (as defined below), or (ii) is terminated by
you for "Good Reason" (also as defined below). For the purpose of this
Section, any good faith determination of Good Reason made by you shall
be conclusive.
The termination compensation so payable in a lump sum amount (the
"Severance Payment") shall be equal to (Year) times the sum of (1)
your highest annual base salary rate in effect during the twelve
months prior to your termination plus (2) the highest amount of annual
cash incentive compensation earned by you in respect of the three
years prior to your termination or the Change of Control, whichever is
greater.
(b) Change of Control. For the purpose of this Agreement, a change of
control of the Corporation ("Change of Control") shall be deemed to
have occurred if the event set forth in any one of the following
paragraphs shall have occurred:
(i) any Person (as defined below) is or becomes the beneficial owner
(as defined in Rule 13d-3 under the Securities Exchange Act of
1934, as amended (the "Exchange Act")), directly or indirectly,
of securities of the Corporation (not including in the securities
beneficially owned by such Person any securities acquired
directly from the Corporation or its affiliates) representing 30%
or more of either the then outstanding shares of common stock of
the Corporation or the combined voting power of the Corporation's
then outstanding securities; or
(ii) the following individuals cease for any reason to constitute a
majority of the number of directors then serving: individuals
who, on the date hereof, constitute the Board and any new
director (other than a director whose initial assumption of
office is in connection with an actual or threatened election
contest, including but not limited to a consent solicitation,
relating to the election of directors of the Corporation) whose
appointment or election by the Board or nomination for election
by the Corporation's stockholders was approved by a vote of at
least two-thirds (2/3) of the directors then still in office who
either were directors on the date hereof or whose appointment,
election or nomination for election was previously so approved;
or
(iii)there is consummated a merger or consolidation of the
Corporation with any other corporation or the issuance of voting
securities of the Corporation in connection with a merger or
consolidation of the Corporation (or any direct or indirect
subsidiary of the Corporation) pursuant to applicable stock
exchange requirements, other than (A) a merger or consolidation
that would result in the voting securities of the Corporation
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 or
any parent thereof) at least 66 2/3% of the combined voting power
of the voting securities of the Corporation, or such surviving
entity or any parent thereof, outstanding immediately after such
merger or consolidation, or (B) a merger or consolidation
effected to implement a recapitalization of the Corporation (or
similar transaction) in which no Person is or becomes the
beneficial owner (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Corporation
(not including in the securities beneficially owned by such
Person any securities acquired directly from the Corporation or
its affiliates) representing 30% or more of either the then
outstanding shares of common stock of the Corporation or the
combined voting power of the Corporation's then outstanding
securities; or
(iv) the stockholders of the Corporation approve a plan of complete
liquidation or dissolution of the Corporation or there is
consummated an agreement for the sale or disposition by the
Corporation of all or substantially all of the Corporation's
assets, other than a sale or disposition by the Corporation of
all or substantially all of the Corporation's assets to an
entity, at least 70% of the combined voting power of the voting
securities of which are owned by Persons in substantially the
same proportions as their ownership of the Corporation
immediately prior to such sale.
(c) Person. For the purpose of this Agreement, "Person" shall have the
meaning given in Section 3(a)(9) of the Exchange Act, as modified and
used in Sections 13(d) and 14(d) thereof, except that such term shall
not include:
(i) the Corporation or any of its subsidiaries;
(ii) a trustee or other fiduciary holding securities under an employee
benefit plan of the Corporation or any of its subsidiaries;
(iii) an underwriter temporarily holding securities pursuant to an
offering of such securities; or
(iv) a corporation owned, directly or indirectly, by the stockholders
of the Corporation in substantially the same proportions as their
ownership of stock of the Corporation.
(d) Good Reason. For the purpose of this Agreement, "Good Reason" shall
mean the occurrence (without your written consent) after any Change of
Control or during any Pending Change of Control (as defined below), as
the case may be, of any one of the following acts by the Corporation,
or failures by the Corporation to act, unless, in the case of any act
or failure to act described in paragraph (i), (v), (vi) or (vii)
below, such act or failure to act is corrected prior to the Date of
Termination specified in the Notice of Termination given in respect
thereof:
(i) the assignment to you of any duties inconsistent in any respect
with your position (including status, offices, titles and
reporting requirements), authority, duties or responsibilities
immediately before the Change of Control or Pending Change of
Control, as the case may be, or any other action by the
Corporation that results in a diminution in such position,
authority, duties or responsibilities, excluding for this purpose
an isolated, insubstantial and inadvertent action not taken in
bad faith and that is remedied by the Corporation promptly after
receipt of notice thereof given by you;
(ii) the Corporation requiring you to be based at any office or
location that is more than 30 miles from your principal place of
employment immediately before the Change of Control or Pending
Change of Control, as the case may be, except for travel
reasonably required in the performance of your responsibilities;
(iii)any diminution in your rate of annual base salary or incentive
compensation opportunity immediately before the Change of Control
or Pending Change of Control, as the case may be;
(iv) the failure by the Corporation, without your consent, to pay to
you any portion of your current compensation, or to pay to you
any portion of an installment of deferred compensation under any
deferred compensation program of the Corporation, within 7 days
of the date such compensation is due;
(v) the failure by the Corporation to continue in effect any
compensation plan in which you participate immediately prior to
the Change of Control or Pending Change of Control, as the case
may be, which is material to your total compensation, including
but not limited to the Corporation's Management Incentive Plan,
1993 Long-Term Equity Incentive Plan, and Deferred Compensation
Plan, or any substitute plans adopted prior to the Change of
Control or Pending Change of Control, as applicable, unless an
equitable arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan, or the
failure by the Corporation to continue your participation therein
(or in such substitute or alternative plan) on a basis not
materially less favorable, both in terms of the amount of
benefits provided and the level of your participation relative to
other participants, as existed at the time of the Change of
Control or Pending Change of Control, as applicable;
(vi) the failure by the Corporation to continue to provide you with
benefits substantially similar to those enjoyed by you under any
of the Corporation's pension, life insurance, medical, health and
accident, or disability plans in which you were participating at
the time of the Change of Control or Pending Change of Control,
as the case may be, the taking of any action by the Corporation
that would directly or indirectly materially reduce any of such
benefits or deprive you of any material fringe benefit enjoyed by
you at the time of the Change of Control or Pending Change of
Control, as applicable, or the failure by the Corporation to
provide you with the number of paid vacation days to which you
are entitled on the basis of years of service with the
Corporation in accordance with the Corporation's normal vacation
policy in effect at the time of the Change of Control or Pending
Change of Control, as applicable; or
(vii)any purported termination of your employment that is not
effected pursuant to a Notice of Termination satisfying the
requirements of Section 5 hereof; for purpose of this Agreement,
no such purported termination shall be effective.
2. Compensation Other Than Severance Payment - Payable upon Change of Control.
In addition to the Severance Payment, in the event of a Change of Control:
(a) All outstanding Stock Bonus Units awarded to you under the Bonus Plan
(Stock plus Cash) ("Bonus Plan"), the 1993 Long-Term Equity Incentive
Plan ("1993 Plan") or any successor plan thereto with respect to which
a Stock and Supplemental Cash Bonus has not been previously computed
and distributed to you, including any 1993 Plan awards granted to you
subsequent to the date of any Change of Control but prior to your
termination, shall fully and irrevocably vest and shall be computed
and distributed to you in cash as if the date of the Change of Control
were a Bonus Computation Date with respect to all of such outstanding
Stock Bonus Units; and the Fair Market Value applicable to such
computation shall be either (i) the highest price paid for a share of
the common stock of the Corporation in a transaction constituting a
Change of Control, if applicable, or (ii) the highest trading price
for a share of common stock of the Corporation during the 30-day
period immediately preceding a Change of Control.
(b) All unvested and unexpired Stock Options awarded to you under the 1993
Plan or any successor plan thereto will automatically become
immediately vested and exercisable for the period of their remaining
terms.
(c) All unvested Performance Restricted Shares awarded to you under the
1993 Plan or any successor plan thereto will automatically become
immediately vested, the designated minimum average annual XXX target
for such Performance Restricted Shares shall be deemed to have been
attained, and the actual average annualized earnings growth rate over
the Performance Vesting Period applicable to each award comprising
such Performance Restricted Shares shall be deemed to be the
respective super- target level, with 200% of each such award
immediately vesting and being paid to you by either the issuance of
the appropriate number of shares of the common stock of the
Corporation or an amount in cash equal to the Fair Market Value of
such shares, calculated as set forth in Section 2(a) above.
(d) All unvested restricted shares, if any, granted to you pursuant to the
terms of a Restricted Stock Agreement with the Corporation shall be
paid in cash in equal installments on the date designated in such
Agreement for the vesting of restricted shares granted thereunder. The
price used to determine the amount of such cash payments for the
unvested restricted shares shall be closing price of the Corporation's
common stock on a nationally-recognized securities exchange on the day
prior to a Change of Control.
(e) Your interest in Matching Amounts, together with the amount of
investment return credited thereto, paid by the Corporation under its
Deferred Compensation Plan or any successor plan thereto immediately
shall be 100% vested.
(f) If you are, immediately prior to a Pending Change of Control, a
participant in the Corporation's Split Dollar Life Insurance Program,
the Corporation shall, upon a Pending Change of Control, create an
irrevocable grantor trust holding an amount of assets sufficient to
pay scheduled annual premiums owed by the Corporation (which trust
will be required to pay such premiums, whether or not employment with
the Corporation is terminated in the interim) for the period extending
until either the policy anniversary date following your 65th birthday
or the 15th anniversary of the policy, whichever occurs last;
provided, however, that if a Pending Change of Control shall occur
prior to a Change of Control and the Corporation has contributed the
required amount pursuant to the foregoing provisions and if a Change
of Control does not occur within the twelve-month period following the
most recent Pending Change of Control, the trustee of such grantor
trust shall, upon receipt of a written request by the Corporation,
return to the Corporation the assets contributed on account of such
Pending Change of Control. The Corporation further agrees to assign
its interest in such policy or policies to said grantor trust.
(g) You shall retain in confidence any confidential information known to
you concerning the Corporation and its business so long as such
information is not publicly disclosed.
3. Compensation Other Than Severance Payment - Payable upon Change of Control
and Termination of Employment. In addition to the Severance Payment and the
additional compensation provided for in Section 2 above in the event of a
Change of Control, in the event of the termination of your employment at
any time within two years after a Change of Control in accordance with
Section 1(a) above:
(a) All pension benefits credited to you under the provisions of the
Corporation's tax-qualified Pension Plan and Pension Restoration Plan
in effect immediately prior to the Change of Control shall thereupon
fully vest, together with the additional pension benefit that results
under the provisions of each such plan in which you are a participant
using (as applicable) your highest annual base salary rate in effect
during the twelve months prior to termination as your high consecutive
three year compensation amount under the Pension Plan formula and the
sum of (1) your highest annual base salary rate in effect during the
twelve months prior to your termination plus (2) the highest amount of
annual cash incentive compensation earned by you in respect of the
three years prior to either your termination or the Change of Control,
whichever is greater, as your high consecutive three year average
compensation amount under the Pension Restoration Plan, and using a
years of service multiplier under the plans' formulas equal to your
actual years of credited pension service at termination plus (Year).
Such pension shall be payable to you in accordance with the provisions
of the plans, including the election, at the time of your retirement
date, of a joint annuity option; provided that the additional amounts
provided for under this Section 2(f) (including vesting of accrued
benefits under the Pension Plan) shall be provided on an unfunded
basis, are not intended to meet the qualification requirements of
Section 401 of the Internal Revenue Code of 1986, as amended ("Code"),
and shall be payable solely from the general assets of the
Corporation.
(b) The principal amount of your group term life insurance, if any, under
the provisions of the Corporation's group contract for such insurance
in effect immediately prior to the Change of Control, will be
immediately converted in a like principal amount to a fully paid-up
permanent life insurance policy incorporating your designation of
owner and beneficiary and remaining in effect for a period of (Months)
months at the sole cost of the Corporation.
(c) You shall be entitled to a continuation of all hospital, major
medical, medical, dental and other insurance or benefits not otherwise
addressed in this Agreement in substantially the same manner and
amount to which you were entitled at the time of your employment with
the Corporation, at the sole cost of the Corporation, until the later
of (i) a period of (Months) months after termination or (ii) your
reaching the age or other circumstances under which such insurance or
benefits, to the extent they are normal post-termination insurance or
benefits afforded by the Corporation, would have been discontinued in
accordance with the terms of the related plan, program or arrangement
as in effect immediately prior to the Change of Control; provided,
that benefits payable under this Section 3(c) shall be reduced to the
extent comparable benefits are actually received by you from a new
employer without cost (and you shall report to the Corporation any
such benefits actually received).
4. Severance Payment Upon Pending Change of Control.
(a) The Corporation will promptly pay you as termination compensation the
Severance Payment in the event that any time during a "Pending Change
of Control" (as defined below) of the Corporation your employment with
the Corporation (i) is terminated by the Corporation for any reason,
other than death, disability, or Cause, or (ii) is terminated by you
for Good Reason; provided, however, that said termination compensation
shall only be paid to you by the Corporation if either (1) a Change of
Control occurs within one year of the last event constituting a
Pending Change of Control, or (2) you reasonably demonstrate that your
termination of employment either occurred at the request of a third
party whose actions gave rise to the Pending Change of Control or
otherwise occurred in connection with or in anticipation of a Change
of Control.
(b) Pending Change of Control. For the purpose of this Agreement, a
"Pending Change of Control" shall be deemed to have occurred if the
event set forth in any one of the following paragraphs shall have
occurred:
(i) the Corporation enters into an agreement, the consummation of
which would result in the occurrence of a Change of Control;
(ii) the Corporation or any Person publicly announces an intention to
take or to consider actions, including but not limited to proxy
contests or consent solicitations, which, if consummated, would
constitute a Change of Control;
(iii)any Person becomes the beneficial owner (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of
securities of the Corporation representing 15% or more of either
the then outstanding shares of common stock of the Corporation or
the combined voting power of the Corporation's then outstanding
securities (not including in the securities beneficially owned by
such Person any securities acquired directly from the Corporation
or its affiliates); or
(iv) the Board adopts a resolution to the effect that, for purposes of
this Agreement, a Pending Change of Control has occurred.
(c) Compensation Other Than Severance Payment. In addition to the lump sum
payment provided in Section 4(a) above, in the event your employment
with the Corporation terminates in accordance with Section 4(a), you
shall receive the additional compensation and benefits described in
Sections 2 and 3 above; provided, however, that with respect to
Section 3, the compensation and benefits provided in that Section
shall not be further conditioned on a termination of your employment
in accordance with Section 1(a) above; and further provided, however,
that all references to "Change of Control" appearing in Sections 2 and
3 shall, for purposes of this Section 4(c), be deemed to mean Pending
Change of Control as defined herein.
5. Excise Tax Gross-Up Payment.
(a) Anything in this Agreement to the contrary notwithstanding, in the
event it shall be determined that any payments or benefits from the
Corporation to you or for your benefit in connection with a Change of
Control or your termination of employment, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement
or otherwise (such payments or benefits, excluding the Gross-up
Payment (as defined below), being hereinafter referred to as the
"Total Payments"), would be subject to the excise tax imposed by
Section 4999 of the Code or any interest or penalties with respect to
such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise
Tax"), then you shall be entitled to receive an additional payment (a
"Gross- up Payment") in an amount such that the net amount retained by
you, after deduction of any Excise Tax on the Total Payments and any
Federal, state and local income and employment taxes and Excise Tax
upon the Gross-up Payment, shall be equal to the Total Payments.
(b) Subject to the Provisions of Section 5(c), all determinations required
to be made under this Section 5, including whether a Gross-up Payment
is required and the amount of such Gross-up Payment, shall be made by
Xxxxxx Xxxxxxxx LLP (the "Accounting Firm"), which shall provide
detailed supporting calculations both to the Corporation and you
within 15 business days after a Change of Control or your Date of
Termination, if applicable, or such earlier time as is requested by
the Corporation. The initial Gross-up Payment, if any, as determined
pursuant to this Section 5(b), shall be paid to you within 5 days of
the receipt of the Accounting Firm's determination. If the Accounting
Firm determines that no Excise Tax is payable by you, it shall furnish
you with an opinion that you have substantial authority not to report
any excise tax on your Federal income tax return. Any determination by
the Accounting Firm shall be binding upon the Corporation and you. As
a result of the uncertainty in the application of Section 4999 of the
Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-up Payments that will not have
been made by the Corporation should have been made ("Underpayment"),
consistent with the calculations required to be made hereunder. In the
event that the Corporation exhausts its remedies pursuant to Section
5(c) and you thereafter are required to make a payment of any excise
tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall be
promptly paid by the Corporation to you or for your benefit.
(c) You shall notify the Corporation in writing of any claim by the
Internal Revenue Service that, if successful, would require the
payment by the Corporation of the Gross-up Payment. Such notification
shall be given as soon as practicable but no later than 10 business
days after you know of such claim and shall apprise the Corporation of
the nature of such claim and the date on which such claim is requested
to be paid. You shall not pay such claim prior to the expiration of
the 30-day period following the date on which you give such notice to
the Corporation (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If the
Corporation notifies you in writing prior to the expiration of such
period that it desires to contest such claim, you shall:
(i) give the Corporation any information reasonably requested by the
Corporation relating to such claim,
(ii) take such action in connection with contesting such claim as the
Corporation shall reasonably request in writing from time to
time, including, without limitation, accepting legal
representation with respect to such claim by an attorney
reasonably selected by the Corporation,
(iii) cooperate with the Corporation in good faith in order
effectively to contest such claim, and
(iv) permit the Corporation to participate in any proceedings relating
to such claim;
provided, however, that the Corporation shall bear and pay
directly all costs and expenses (including additional interest
and penalties) incurred in connection with such contest and shall
indemnify and hold you harmless, on an after-tax basis, for any
Excise Tax or income tax, including interest and penalties with
respect thereto, imposed as a result of such representation and
payment of costs and expenses. Without limitation on the
foregoing provisions of this Section 5(c), the Corporation shall
control all proceedings taken in connection with such contest
and, at its sole option, may pursue or forego any and all
administrative appeals, proceedings, hearings and conferences
with the taxing authority in respect of such claim and may, at
its sole option, either direct you to pay the tax claimed and xxx
for a refund or contest the claim in any permissible manner, and
you agree to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and
in one or more appellate courts, as the Corporation shall
determine; provided further, however, that if the Corporation
directs you to pay such claim and xxx for a refund, the
Corporation shall advance the amount of such payment to you, on
an interest-free basis, and shall indemnify and hold you
harmless, on an after-tax basis, from any Excise Tax or income
tax, including interest or penalties with respect thereto,
imposed with respect to such advance or with respect to any
imputed income with respect to such advance; and provided
further, that any extension of the statute of limitations
relating to payment of taxes for your taxable year with respect
to which such contested amount is claimed to be due is limited
solely to such contested amount. Furthermore, the Corporation's
control of the contest shall be limited to issues with respect to
which a Gross-up Payment would be payable hereunder and you shall
be entitled to settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any other taxing
authority.
(d) If, after the receipt by you of an amount advanced by the Corporation
pursuant to Section 5(c), you become entitled to receive any refund
with respect to such claim, you shall (subject to the Corporation's
complying with the requirements of Section 5(c)) promptly pay to the
Corporation the amount of such refund (together with any interest paid
or credited thereon after taxes applicable thereto). If, after the
receipt by you of an amount advanced by the Corporation pursuant to
Section 5(c), a determination is made that you are not entitled to any
refund with respect to such claim and the Corporation does not notify
you in writing of its intent to contest such denial or refund prior to
the expiration of 30 days after such determination, then such advance
shall be forgiven and shall not be required to be repaid and the
amount of such advance shall offset, to the extent thereof, the amount
of Gross-up Payment required to be paid.
6.
(a) Notice of Termination. Any purported termination of your employment
(other than by reason of death) shall be communicated by written
Notice of Termination from one party hereto to the other party hereto.
For the purpose of this Agreement, a "Notice of Termination" shall
mean a notice that shall indicate the specific termination provision
in this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination
of your employment under the provision so indicated.
(b) Cause. "Cause" for termination by the Corporation of your employment
shall mean (i) your willful and continued failure to substantially
perform your duties with the Corporation (other than any such failure
resulting from your incapacity due to physical or mental illness or
any such actual or anticipated failure after your issuance of a Notice
of Termination for Good Reason pursuant to Section 6(a) hereof) after
a written demand for substantial performance is delivered to you by
the Board, which demand specifically identifies the manner in which
the Board believes that you have not substantially performed your
duties, or (ii) your willful engaging in conduct that is demonstrably
and materially injurious to the Corporation or its subsidiaries,
monetarily or otherwise. For purposes of clauses (i) and (ii) of this
definition, no act, or failure to act, on your part shall be deemed
"willful" unless done, or omitted to be done, by you not in good faith
and without reasonable belief that your act, or failure to act, was in
the best interest of the Corporation. Your employment will not be
deemed to be terminated for Cause under this Section 6 unless there
has been duly adopted by the affirmative vote of not less than
three-quarters (3/4) of the entire membership of the Board at a
meeting of the Board that was called and held for the purpose of
considering such termination (after reasonable notice to you and an
opportunity for you, together with your counsel, to be heard before
the Board) a resolution that finds that you were guilty of conduct
constituting Cause, and specifying the particulars thereof in detail,
a copy of which resolution shall be delivered to you. Notwithstanding
the foregoing, in the event of a dispute concerning the application of
this provision, no claim by the Corporation that Cause exists shall be
given effect unless the Corporation establishes by clear and
convincing evidence that Cause exists.
(c) Date of Termination. "Date of Termination" shall mean (i) if your
employment is terminated for disability, 30 days after Notice of
Termination is given (provided that you shall not have returned to the
full-time performance of your duties during such 30 day period), and
(ii) if your employment is terminated for any other reason, the date
specified in the Notice of Termination (which, in the case of a
termination by the Corporation, shall not be less than 30 days (except
in the case of a termination for Cause) and, in the case of a
termination by you, shall not be less than 15 days nor more than 60
days, respectively, from the date such Notice of Termination is
given).
(d) Extension For Disputes. If within fifteen (15) days after any Notice
of Termination is given, or, if later, prior to the Date of
Termination (as determined without regard to this Section 6(d)), the
party receiving such Notice of Termination notifies the other party
that a dispute exists concerning the termination, the Date of
Termination shall be extended until the date on which the dispute is
finally resolved, either by mutual written agreement of the parties or
by a final judgment, order or decree of a court of competent
jurisdiction (which is not appealable or with respect to which the
time for appeal therefrom has expired and no appeal has been
perfected); provided, however, that the Date of Termination shall be
extended by a notice of dispute given by you only if such notice is
given in good faith and you pursue the resolution of such dispute with
reasonable diligence.
(e) Compensation During Extension. If a purported termination occurs and
the Date of Termination is extended in accordance with Section 6(d)
hereof, the Corporation shall continue to pay you the full
compensation in effect when the notice giving rise to the dispute was
given (including, but not limited to, salary) and continue you as a
participant in all compensation, benefit and insurance plans in which
you were participating when the notice giving rise to the dispute was
given, until the Date of Termination, as determined in accordance with
Section 6(d) hereof. Amounts paid under this Section 6(e) are in
addition to all other amounts due under this Agreement and shall not
be offset against or reduce any other amounts due under this
Agreement.
7. Term of Agreement. This Agreement shall commence on the date hereof and
shall continue in effect through December 31, 1997; provided, however, that
commencing January 1, 1998 and each January 1 thereafter, the term of this
Agreement shall automatically be extended for one additional year unless,
not later than October 31 of the preceding year, the Corporation or you
shall have given notice not to extend this Agreement or a Change of Control
shall have occurred prior to such January 1; and further provided, however,
that if a Pending Change of Control or a Change of Control shall have
occurred during the term of this Agreement, this Agreement shall continue
in effect for a period of not less than one year beyond the month in which
such Pending Change of Control occurred and for a period of not less than
two years beyond the month in which such Change of Control occurred.
8. Reimbursement of Legal Fees to Enforce Agreement. The Corporation shall
indemnify and hold you harmless against any loss or damage, and shall
reimburse you for all legal fees and expenses, incurred by you in disputing
in good faith any issue hereunder relating to the termination of your
employment or in seeking in good faith to enforce any provision of this
Agreement or to receive any benefit or distribution or right under this
Agreement (including in connection with the application of the provisions
of Section 5 hereof) or any other Agreement or arrangement contemplated by
this Agreement. The Corporation further agrees to pay interest on any
amounts unpaid to you from 7 days after the date of your demand for
payment, calculated at the prime rate of The Chase Manhattan Bank N.A. for
its most credit-worthy customers in effect from time to time.
9. Absolute Right; No Mitigation. The Corporation agrees that, if your
employment with the Corporation terminates pursuant to the terms of this
Agreement, you are not required to seek other employment or to attempt in
any way to reduce any amounts payable to you by the Corporation pursuant to
Section 1(a), 2 or 3 hereof or Section 6(e) hereof. Further, except as set
forth herein, the amount of any payment or benefit provided for in this
Agreement shall not be reduced by any compensation earned by you as the
result of employment by another employer, by retirement benefits, by offset
against any amount claimed to be owed by you to the Corporation, or
otherwise. The Corporation's obligation to pay you under this Agreement
shall be absolute and unconditional and shall not be affected by any
circumstances, including without limitation any set-off, counterclaim,
defense or other rights the Corporation may have against you or anyone
else.
10. Funding of Obligations. The Severance Payment and other compensation
payable to you pursuant to the terms of this Agreement shall be payable to
you from the general assets of the Corporation or, to the extent not so
paid, from the assets of an irrevocable grantor trust (or comparable asset
repository) established by the Corporation for the purpose of securing
payment of such liabilities. The Corporation shall, as soon as practicable
but in no event later than 30 days after the occurrence of a Change of
Control or Pending Change of Control giving rise to your entitlement to the
Severance Payment or other compensation hereunder, transfer sufficient
assets to such grantor trust (or comparable repository) to provide for
payment to you in full of all unpaid amounts due hereunder.
11. Entire Obligation. In the event of termination of employment under the
circumstances described above, the arrangements provided for by this
Agreement, or any other agreement between the Corporation and you in effect
at the time, and by any other applicable plan of the Corporation shall
constitute the entire obligation of the Corporation to you and performance
thereof shall constitute full settlement of any claim that you might
otherwise assert against the Corporation on account of such termination.
12. Successors; No Assignment. This Agreement shall be binding upon and inure
to the benefit of you and your estate, and the Corporation and any
successor of the Corporation, but neither this Agreement nor any rights
arising hereunder may be assigned or pledged by you.
13. Mandatory Assumption by Successor. In addition to any obligations imposed
by law upon any successor to the Corporation, the Corporation will require
any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business
and/or assets of the Corporation to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the
Corporation would be required to perform it if no such succession had taken
place. Failure of the Corporation to obtain such assumption and agreement
prior to the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle you to compensation from the Corporation in the
same amount and on the same terms as you would be entitled to hereunder if
you were to terminate your employment for Good Reason after a Change of
Control, except that, for purposes of implementing the foregoing, the date
on which any such succession becomes effective shall be deemed the Date of
Termination.
14. Continuance of Employment. This Agreement shall not be construed as
creating an express or implied contract of employment or continued
employment in any position or at any compensation and, except as otherwise
agreed in writing between you and the Corporation, nothing herein contained
shall in any way restrict the right of the Corporation or any subsidiary
thereof to terminate your employment at any time.
15. Waiver. The failure of either party to enforce the provisions hereof or to
exercise the rights granted hereunder, or the agreement of the parties to
waive enforcement thereof, at any time or for any period of time shall not
constitute or be construed to be a waiver of any other failure or breach of
such provisions or rights, or any other provision of this Agreement, or of
the right of such party thereafter to enforce each and every such provision
or right, nor shall such failure or agreement be deemed to be an amendment
to this Agreement. Each waiver under this Agreement must be in writing and
signed by the party against whom enforcement is sought.
16. Entire Agreement. This Agreement represents the entire understanding and
agreement between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings either
written or oral. This Agreement may be modified or amended only by an
instrument in writing duly executed by you and an authorized representative
of the Corporation.
17. Severability. Any provision in this Agreement that is prohibited or
unenforceable in any jurisdiction where it is sought to be enforced, shall
be ineffective only to the extent of such prohibition or unenforceability,
without invalidating or affecting the remaining provisions of this
Agreement or invalidating or rendering unenforceable such provision in any
other jurisdiction. 18. Governing Law. This Agreement shall be governed and
construed in accordance with the laws of Pennsylvania.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have caused this Agreement to be duly executed as of the date first
above written.
AMP Incorporated
By:______________________________________
Signature
Name:____________________________________
Title:___________________________________
APPENDIX
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Name Year Months Signature Title
Xxxxxxx X. Xxxx two twenty-four Xxxxxxx X. Xxxxxx Chief Executive Officer and President
Xxxxx X. Xxxxxxxxx one twelve Xxxxxxx X. Xxxxxx Chief Executive Officer and President
Xxxxxx X. XxXxxxxxxx two twenty-four Xxxxxxx X. Xxxxxx Chief Executive Officer and President
Xxxxxx Xxxxxxx two twenty-four Xxxxxxx X. Xxxxxx Chief Executive Officer and President
Xxxxxxx X. Xxxxxxx one twelve Xxxxx X. Xxxxxx Chairman
Xxxxxxx X. Xxxxxx two twenty-four Xxxxxxx X. Xxxxxx Chief Executive Officer and President
Xxxx X. Xxxxxx two twenty-four Xxxxxxx X. Xxxxxx Chief Executive Officer and President
Xxxxx X. Xxxxxx two twenty-four Xxxxxxx X. Xxxxxx Chief Executive Officer and President
Xxxxx X. Xxxxxxxx one twelve Xxxxx X. Xxxxxx Chairman
Xxxxxxx X. Xxxxxx three thirty-six Xxxxx X. Xxxxxx Chairman
Xxxxxxxx Xxxxxxxx two twenty-four Xxxxxxx X. Xxxxxx Chief Executive Officer and President
Xxxx Xxxxx two twenty-four Xxxxxxx X. Xxxxxx Chief Executive Officer and President
Xxxxx X. Xxxxxx three thirty-six Xxxxxxx X. Xxxxxx Chief Executive Officer and President
Xxxxxx X. Xxxxxxxxx one twelve Xxxxxxx X. Xxxxxx Chief Executive Officer and President
Xxxxxxx Xxxxxxxx two twenty-four Xxxxxxx X. Xxxxxx Chief Executive Officer and President
Xxxxxx Xxxx two twenty-four Xxxxxxx X. Xxxxxx Chief Executive Officer and President
Xxxxxxx X. Xxxxxx two twenty-four Xxxxxxx X. Xxxxxx Chief Executive Officer and President
Xxxxxxx X. Xxxx one twelve Xxxxxxx X. Xxxxxx Chief Executive Officer and President
