CHANGE OF CONTROL AGREEMENT
Exhibit
10-n-1
AGREEMENT
by and between Rockwell Xxxxxxx, Inc., a Delaware corporation (the "Company")
and [executive name] (the "Executive"), dated as of the xx day of yyyyyy,
2009.
The Board
of Directors of the Company (the "Board"), has determined that it is in the best
interests of the Company and its shareowners to assure that the Company will
have the continued dedication of the Executive, notwithstanding the possibility,
threat or occurrence of a Change of Control (as defined below) of the
Company. The Board believes it is imperative to diminish the
inevitable distraction of the Executive by virtue of the personal uncertainties
and risks created by a pending or threatened Change of Control and to encourage
the Executive's full attention and dedication to the Company currently and in
the event of any threatened or pending Change of Control, and to provide the
Executive with compensation and benefits arrangements upon a Change of Control
which ensure that the compensation and benefits expectations of the Executive
will be satisfied and which are competitive with those of other
corporations. Therefore, in order to accomplish these objectives, the
Board has caused the Company to enter into this Agreement.
NOW,
THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1.
Certain
Definitions. (a) The "Effective Date" shall mean
the first date during the Change of Control Period (as defined in Section 1(b))
on which a Change of Control (as defined in Section 2)
occurs. Anything in this Agreement to the contrary notwithstanding,
if a “Change of Control Event" (as defined under Treasury Regulation
Section 1.409A-3(i)(5)(i) and as set forth in Treasury Regulation
Section 1.409A-3(i)(5)(v)-(vii), as amended) ("409A Change of Control")
occurs and if the Executive's employment with the Company is terminated prior to
the date on which the 409A Change of Control occurs, and if it is reasonably
demonstrated by the Executive that such termination of employment (i) was at the
request of a third party who has taken steps reasonably calculated to effect a
409A Change of Control or (ii) otherwise arose in connection with or
anticipation of a 409A Change of Control, then for all purposes of this
Agreement the "Effective Date" shall mean the date immediately prior to the date
of such termination of employment and such termination of employment shall be
hereinafter referred to as “Pre-Change of Control Termination".
(b) The
"Change of Control Period" shall mean the period commencing on the date hereof
and ending on the third anniversary of the date hereof; provided, however, that on
such third anniversary, and on each annual anniversary of such date (such date
and each annual anniversary thereof, the “Renewal Date”), unless previously
terminated, the Change of Control Period shall be automatically extended so as
to terminate one year from such Renewal Date, unless, at least 60 days prior to
the Renewal Date, the Company shall give written notice to the Executive that
the Change of Control Period shall not be so extended.
2.
Change of
Control. For the purpose of this Agreement, a "Change of
Control" shall mean:
(a) The
acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) (a "Person") of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the
then outstanding shares of common stock of the Company (the "Outstanding Company
Common Stock") or (ii) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); provided, however, that
for purposes of this subsection (a), the following acquisitions shall not
constitute a Change of Control: (i) any acquisition directly from the
Company, (ii) any acquisition by the Company, (iii) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any corporation controlled by the Company or (iv) any acquisition by any
corporation pursuant to a transaction which complies with clauses (i), (ii) and
(iii) of subsection (c) of this Section 2; or
(b) Individuals
who, as of the date hereof, constitute the Board (the "Incumbent Board") cease
for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board; or
(c) Consummation
of a reorganization, merger or consolidation or sale or other disposition of all
or substantially all of the assets of the Company or the acquisition of assets
of another corporation (a "Business Combination"), in each case, unless,
following such Business Combination, (i) all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination (including,
without limitation, a corporation which as a result of such transaction owns the
Company or all or substantially all of the Company's assets either directly or
through one or more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination of the Outstanding
Company Common Stock and Outstanding Company Voting Securities, as the case may
be, (ii) no Person (excluding any corporation resulting from such Business
Combination, or any employee benefit plan (or related trust) of the Company or
such corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 20% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed
prior to the Business Combination and (iii) at least a majority of the members
of the board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the execution of
the initial agreement, or of the action of the Board, providing for such
Business Combination; or
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(d) Approval
by the shareholders of the Company of a complete liquidation or dissolution of
the Company.
Notwithstanding
any other provision of this Agreement to the contrary, if the Executive incurs a
Pre-Change of Control Termination then, for purposes of determining whether a
Change of Control has occurred for purposes of the Executive’s entitlement to
payments and benefits provided pursuant to Section 6 of this Agreement, the
definition of 409A Change of Control shall be substituted for the definition of
Change of Control set forth in this Section 2.
3.
Protected
Period. The Company hereby agrees to continue the Executive in
its employ, and the Executive hereby agrees to remain in the employ of the
Company subject to the terms and conditions of this Agreement, for the period
commencing on the Effective Date and ending on the second anniversary of such
date (the "Protected Period").
4.
Terms of
Employment. (a) Position and Duties. (i) During
the Protected Period, (A) the Executive's position (including status, offices,
titles and reporting requirements), authority, duties and responsibilities shall
be at least commensurate in all material respects with the most significant of
those held, exercised and assigned at any time during the 120-day period
immediately preceding the Effective Date and (B) the Executive's services shall
be performed at the location where the Executive was employed immediately
preceding the Effective Date or any office or location less than 35 miles from
such location, or the distance from the new location to the Executive’s
residence is less than the distance from the old location to the
residence.
(ii) During
the Protected Period, and excluding any periods of vacation and sick leave to
which the Executive is entitled, the Executive agrees to devote reasonable
attention and time during normal business hours to the business and affairs of
the Company and, to the extent necessary to discharge the responsibilities
assigned to the Executive hereunder, to use the Executive's reasonable best
efforts to perform faithfully and efficiently such
responsibilities. During the Protected Period it shall not be a
violation of this Agreement for the Executive to (A) serve on corporate, civic
or charitable boards or committees, (B) deliver lectures, fulfill speaking
engagements or teach at educational institutions and (C) manage personal
investments, so long as such activities do not significantly interfere with the
performance of the Executive's responsibilities as an employee of the Company in
accordance with this Agreement. It is expressly understood and agreed
that to the extent that any such activities have been conducted by the Executive
prior to the Effective Date, the continued conduct of such activities (or the
conduct of activities similar in nature and scope thereto) subsequent to the
Effective Date shall not thereafter be deemed to interfere with the performance
of the Executive's responsibilities to the Company.
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(b) Compensation. (i) Base
Salary. During the Protected Period, the Executive shall
receive an annual base salary ("Annual Base Salary"), which shall be paid at a
monthly rate, at least equal to twelve times the highest monthly base salary
paid or payable, including any base salary which has been earned but deferred,
to the Executive by the Company and its affiliated companies in respect of the
twelve-month period immediately preceding the month in which the Effective Date
occurs. During the Protected Period, the Annual Base Salary shall be
reviewed no more than 12 months after the last salary increase awarded to the
Executive prior to the Effective Date and thereafter at least
annually. Any increase in Annual Base Salary shall not serve to limit
or reduce any other obligation to the Executive under this
Agreement. Annual Base Salary shall not be reduced after any such
increase and the term Annual Base Salary as utilized in this Agreement shall
refer to Annual Base Salary as so increased. As used in this
Agreement, the term "affiliated companies" shall include any company controlled
by, controlling or under common control with the Company.
(ii) Annual
Bonus. In addition to Annual Base Salary, the Executive shall
be awarded, for each fiscal year ending during the Protected Period, an annual
bonus (the "Annual Bonus") in cash at the Executive's target bonus percentage
under the Company's annual incentive plans, or any comparable bonus under any
predecessor or successor plan, in effect prior to the Change of Control, as
adjusted based on actual Company performance against goals established at the
beginning of each fiscal year. The actual bonus awarded to the
Executive during the Protected Period will be determined using the same criteria
that apply to other peer executives of the Company. Each such Annual
Bonus shall be paid no later than the end of the third month of the fiscal year
next following the fiscal year for which the Annual Bonus is awarded, unless the
Executive shall elect to defer the receipt of such Annual Bonus pursuant to the
terms and conditions of the Company's 2005 Deferred Compensation Plan or any
comparable successor plan.
(iii) Incentive, Savings and
Retirement Plans. During the Protected Period, the Executive
shall be entitled to participate in all incentive, savings and retirement plans,
practices, policies and programs applicable generally to other peer executives
of the Company and its affiliated companies, but in no event shall such plans,
practices, policies and programs provide the Executive with annual or long-term
incentive opportunities (measured with respect to both regular and special
incentive opportunities, to the extent, if any, that such distinction is
applicable), savings opportunities and retirement benefit opportunities, in each
case, less favorable, in the aggregate, than the most favorable of those
provided by the Company and its affiliated companies for the Executive under
such plans, practices, policies and programs as in effect at any time during the
120-day period immediately preceding the Effective Date or if more favorable to
the Executive, those provided generally at any time after the Effective Date to
other peer executives of the Company and its affiliated companies.
(iv) Welfare Benefit
Plans. During the Protected Period, the Executive and/or the
Executive's family, as the case may be, shall be eligible for participation in
and shall receive all benefits under welfare benefit plans, practices, policies
and programs provided by the Company and its affiliated companies (including,
without limitation, medical, prescription, dental, disability, employee life,
group life, accidental death and travel accident insurance plans and programs)
to the extent applicable generally to other peer executives of the Company and
its affiliated companies, but in no event shall such plans, practices, policies
and programs provide the Executive with benefits which are less favorable, in
the aggregate, than the most favorable of such plans, practices, policies and
programs in effect for the Executive at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to the Executive,
those provided generally at any time after the Effective Date to other peer
executives of the Company and its affiliated companies.
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(v) Expenses. During
the Protected Period, the Executive shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by the Executive in
accordance with the most favorable policies, practices and procedures of the
Company and its affiliated companies in effect for the Executive at any time
during the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Company and its affiliated
companies.
(vi) Fringe
Benefits. During the Protected Period, the Executive shall be
entitled to fringe benefits, including, without limitation, tax and financial
planning services, and automobile allowance, or in accordance with the most
favorable plans, practices, programs and policies of the Company and its
affiliated companies in effect for the Executive at any time during the 120-day
period immediately preceding the Effective Date or, if more favorable to the
Executive, as in effect generally at any time thereafter with respect to other
peer executives of the Company and its affiliated companies.
(vii) Office and Support
Staff. During the Protected Period, the Executive shall be
entitled to an office or offices of a size and with furnishings and other
appointments, and to exclusive personal secretarial and other assistance, at
least equal to the most favorable of the foregoing provided to the Executive by
the Company and its affiliated companies at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to the Executive,
as provided generally at any time thereafter with respect to other peer
executives of the Company and its affiliated companies.
(viii) Vacation. During
the Protected Period, the Executive shall be entitled to paid vacation in
accordance with the most favorable plans, policies, programs and practices of
the Company and its affiliated companies as in effect for the Executive at any
time during the 120-day period immediately preceding the Effective Date or, if
more favorable to the Executive, as in effect generally at any time thereafter
with respect to other peer executives of the Company and its affiliated
companies.
5.
Termination of
Employment. (a) Death or
Disability. The Executive's employment shall terminate
automatically upon the Executive's death during the Protected
Period. If the Company determines in good faith that the Disability
of the Executive has occurred during the Protected Period (pursuant to the
definition of Disability set forth below), it may give to the Executive written
notice in accordance with Section 12(b) of this Agreement of its intention to
terminate the Executive's employment. In such event, the Executive's
employment with the Company shall terminate effective on the 30th day after
receipt of such notice by the Executive (the "Disability Effective Date"),
provided that, within the 30 days after such receipt, the Executive shall not
have returned to full-time performance of the Executive's duties. For
purposes of this Agreement, "Disability" shall mean the absence of the Executive
from the Executive's duties with the Company on a full-time basis for 180
consecutive business days as a result of incapacity due to mental or physical
illness which is determined to be total and permanent by a physician selected by
the Company or its insurers and acceptable to the Executive or the Executive's
legal representative.
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(b) Cause. The
Company may terminate the Executive's employment during the Protected Period for
Cause. For purposes of this Agreement, "Cause" shall
mean:
(i) the
willful and continued failure of the Executive to perform substantially the
Executive's duties with the Company or one of its affiliates (other than any
such failure resulting from incapacity due to physical or mental illness), after
a written demand for substantial performance is delivered to the Executive by
the Board or the Chief Executive Officer of the Company which specifically
identifies the manner in which the Board or Chief Executive Officer believes
that the Executive has not substantially performed the Executive's duties,
or
(ii) the
willful engaging by the Executive in illegal conduct or gross misconduct which
is materially and demonstrably injurious to the Company.
For
purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the
Company. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board or upon the instructions of
the Chief Executive Officer or a senior officer of the Company or based upon the
advice of counsel for the Company shall be conclusively presumed to be done, or
omitted to be done, by the Executive in good faith and in the best interests of
the Company. The cessation of employment of the Executive shall not
be deemed to be for Cause unless and until there shall have been delivered to
the Executive a copy of a resolution duly adopted by the affirmative vote of not
less than three-quarters of the entire membership of the Board at a meeting of
the Board called and held for such purpose (after reasonable notice is provided
to the Executive and the Executive is given an opportunity, together with
counsel, to be heard before the Board), finding that, in the good faith opinion
of the Board, the Executive is guilty of the conduct described in subparagraph
(i) or (ii) above, and specifying the particulars thereof in
detail.
(c) Good
Reason. The Executive's employment may be terminated by the
Executive for Good Reason. For purposes of this Agreement, "Good
Reason" shall mean:
(i)
the assignment to the Executive of any duties inconsistent in any respect with
the Executive's position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as contemplated by Section
4(a) of this Agreement, or any other action by the Company which 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 which is remedied by the Company promptly after receipt of notice
thereof given by the Executive;
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(ii) any
failure by the Company to comply with any of the provisions of Section 4(b) of
this Agreement, other than an isolated, insubstantial and inadvertent failure
not occurring in bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Executive;
(iii) the
Company's requiring the Executive to be based at any office or location other
than as provided in Section 4(a)(i)(B) hereof or the Company's requiring the
Executive to travel on Company business to a substantially greater extent than
required immediately prior to the Effective Date;
(iv) any
purported termination by the Company of the Executive's employment otherwise
than as expressly permitted by this Agreement; or
(v) any
failure by the Company to comply with and satisfy Section 11(c) of this
Agreement.
For
purposes of this Section 5(c), any good faith determination of "Good Reason"
made by the Executive shall be conclusive.
(d) Notice of
Termination. Any termination by the Company for Cause, or by
the Executive for Good Reason, shall be communicated by Notice of Termination to
the other party hereto given in accordance with Section 12(b) of this
Agreement. For purposes of this Agreement, a "Notice of Termination"
means a written notice which (i) indicates the specific termination provision in
this Agreement relied upon, (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated and
(iii) if the Date of Termination (as defined below) is other than the date of
receipt of such notice, specifies the termination date (which date shall be not
more than thirty days after the giving of such notice). The failure
by the Executive or the Company to set forth in the Notice of Termination any
fact or circumstance which contributes to a showing of Good Reason or Cause
shall not waive any right of the Executive or the Company, respectively,
hereunder or preclude the Executive or the Company, respectively, from asserting
such fact or circumstance in enforcing the Executive's or the Company's rights
hereunder.
(e) Date of
Termination. "Date of Termination" means (i) if the
Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein, as the case may be, (ii) if the Executive's
employment is terminated by the Company other than for Cause or Disability, the
Date of Termination shall be the date on which the Company notifies the
Executive of such termination and (iii) if the Executive's employment is
terminated by reason of death or Disability, the Date of Termination shall be
the date of death of the Executive or the Disability Effective Date, as the case
may be.
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6.
Obligations of the Company
upon Termination. (a) Good Reason; Other Than for
Cause, Death or Disability. If, during the Protected Period,
the Company shall terminate the Executive's employment other than for Cause or
Disability or the Executive shall terminate employment for Good
Reason:
(i)
the Company
shall pay to the Executive in a lump sum in cash within 30 days after the Date
of Termination the aggregate of the following amounts:
A. the
sum of (1) the Executive's Annual Base Salary through the Date of Termination to
the extent not theretofore paid, (2) the amount of any compensation previously
deferred by the Executive (together with any accrued interest or earnings
thereon) but only to the extent that such deferred compensation is
“grandfathered” under and not subject to the rules of Section 409A of the
Internal Revenue Code of 1986, as amended and any regulations and other guidance
issued thereunder (“409A”), (3) any unpaid Annual Bonus from the prior fiscal
year (typically paid in December, and in any event by March 15, of the current
fiscal year) and (4) any accrued vacation pay, in each case to the extent not
theretofore paid (the sum of the amounts described in subclauses (1), (2), (3)
and (4) shall be hereinafter referred to as the “Accrued
Obligations”);
B. subject
to Section 6(e) of this Agreement, the product of (x) the Executive’s average
Annual Bonus percentage payout under the Company’s annual incentive plans or any
comparable bonus under any predecessor or successor plan, for the last three
full fiscal years prior to the Effective Date (annualized in the event that the
Executive was not employed by the Company for the whole of such fiscal year) and
(y) the Executive’s Annual Base Salary (the product of (x) and (y) is hereafter
referred to as the “Average Annual Bonus”) and (z) a fraction, the numerator of
which is the number of days in the current fiscal year through the Date of
Termination, and the denominator of which is 365;
C. subject
to Section 6(e) of this Agreement, the amount equal to the product of (1) three
and (2) the sum of (x) the Executive's Annual Base Salary and (y) the Average
Annual Bonus;
D. subject
to Section 6(e) of this Agreement, the amount equal to the equivalent of the
benefit under the Company's qualified defined contribution retirement plan and
any excess or non-qualified retirement savings plan in which the Executive
participates which the Executive would receive if the Executive's employment
continued for three years after the Date of Termination assuming for this
purpose that (i) all accrued benefits are fully vested, (ii) the Executive's
compensation in each of the three years is that required by Section 4(b)(i) and
Section 4(b)(ii), (iii) the Executive’s age and years of service continued to
accumulate for such period, and (iv) the Executive was fully eligible for the
maximum Company match on employee contributions during such period;
and
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E. subject
to Section 6(e) of this Agreement, an amount equal to the total projected cost
to the Company of providing welfare benefits referred to in Section 4(b)(iv) of
this Agreement that would otherwise have been provided had the Executive’s
employment continued for three years after the Date of Termination, determined
as of the Date of Termination, after “gross up” for all applicable income and
payroll taxes, to the extent the underlying benefits would have otherwise been
tax-free, payable by the Executive.
(ii) the
Company shall, at its sole expense as incurred, but limited to total expense of
$50,000, provide the Executive with reasonable outplacement services for a
period of two years, the scope and provider of which shall be selected by the
Executive in his sole discretion; and
(iii) subject
to Section 6(e) of this Agreement, to the extent not theretofore paid or
provided, the Company shall timely pay or provide to the Executive any other
amounts or benefits required to be paid or provided or which the Executive is
eligible to receive under any plan, program, policy or practice or contract or
agreement of the Company and its affiliated companies (such other amounts and
benefits shall be hereinafter referred to as the "Other Benefits").
(b) Death. If
the Executive's employment is terminated by reason of the Executive's death
during the Protected Period, this Agreement shall terminate without further
obligations to the Executive's legal representatives under this Agreement, other
than for payment of Accrued Obligations and the timely payment or provision of
Other Benefits. Accrued Obligations shall be paid to the Executive's
estate or beneficiary, as applicable, in a lump sum in cash within 30 days of
the Date of Termination. With respect to the provision of Other
Benefits, the term Other Benefits as utilized in this Section 6(b) shall
include, without limitation, and the Executive's estate and/or beneficiaries
shall be entitled to receive, benefits at least equal to the most favorable
benefits provided by the Company and affiliated companies to the estates and
beneficiaries of peer executives of the Company and such affiliated companies
under such plans, programs, practices and policies relating to death benefits,
if any, as in effect with respect to other peer executives and their
beneficiaries at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive's estate and/or the
Executive's beneficiaries, as in effect on the date of the Executive's death
with respect to other peer executives of the Company and its affiliated
companies and their beneficiaries.
(c) Disability. If
the Executive's employment is terminated by reason of the Executive's Disability
during the Protected Period, this Agreement shall terminate without further
obligations to the Executive, other than for payment of Accrued Obligations and
the timely payment or provision of Other Benefits. Accrued
Obligations shall be paid to the Executive in a lump sum in cash within 30 days
of the Date of Termination. With respect to the provision of Other
Benefits, the term Other Benefits as utilized in this Section 6(c) shall
include, and the Executive shall be entitled after the Disability Effective Date
to receive, disability and other benefits at least equal to the most favorable
of those generally provided by the Company and its affiliated companies to
disabled executives and/or their families in accordance with such plans,
programs, practices and policies relating to disability, if any, as in effect
generally with respect to other peer executives and their families at any time
during the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive and/or the Executive's family, as in effect at any
time thereafter generally with respect to other peer executives of the Company
and its affiliated companies and their families.
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(d) Cause; Other than for Good
Reason. If the Executive's employment shall be terminated for
Cause during the Protected Period, this Agreement shall terminate without
further obligations to the Executive other than the obligation to pay to the
Executive (x) his Annual Base Salary through the Date of Termination, (y) the
amount of any compensation previously deferred by the Executive, and (z) Other
Benefits, in each case to the extent theretofore unpaid. If the
Executive voluntarily terminates employment during the Protected Period,
excluding a termination for Good Reason, this Agreement shall terminate without
further obligations to the Executive, other than for Accrued Obligations and the
timely payment or provision of Other Benefits. In such case, all
Accrued Obligations shall be paid to the Executive in a lump sum in cash within
30 days of the Date of Termination.
(e) Six-Month Wait for Specified
Employees. To the extent that any amount payable or benefit to
be provided under this Agreement constitutes an amount payable or benefit to be
provided under a "nonqualified deferred compensation plan" (as defined in
Section 409A) following a "separation from service" (as defined in Section
409A), including any amount payable or benefit to be provided under this
Section 6, and to the extent that the Executive is deemed to be a
"specified employee" (as that term is defined in Section 409A and pursuant to
procedures established by the Company) on the "separation from service" date,
then, notwithstanding any other provision in this Agreement to the contrary,
such payment or benefit provision will not be made to the Executive during the
six-month period immediately following his "separation from service"
date. Instead, on the first day of the seventh month following such
"separation from service" date, all amounts that otherwise would have been paid
or provided to the Executive during that six-month period, but were not due to
this Section 6(e), will be paid or provided to the Executive at such time, with
any cash payment to be made in a single lump sum (without any interest with
respect to that six-month period). This six-month delay will cease to
be applicable if the Executive "separates from service" due to death or if he
dies before the six-month period has elapsed.
(f) Deferral
Arrangements. Notwithstanding any provisions of Sections
6(a)(iii), 6(b), 6(c) or 6(d) to the contrary, any compensation previously
deferred by the Executive that is subject to Section 409A will be payable in
accordance with the terms of the plan or arrangement under which the
compensation was deferred.
7.
Non-exclusivity of
Rights. Nothing in this Agreement shall prevent or limit the
Executive's continuing or future participation in any plan, program, policy or
practice provided by the Company or any of its affiliated companies and for
which the Executive may qualify, nor, subject to Section 12(f), shall anything
herein limit or otherwise affect such rights as the Executive may have under any
contract or agreement with the Company or any of its affiliated
companies. Amounts which are vested benefits or which the Executive
is otherwise entitled to receive under any plan, policy, practice or program of
or any contract or agreement with the Company or any of its affiliated companies
at or subsequent to the Date of Termination shall be payable in accordance with
such plan, policy, practice or program or contract or agreement except as
explicitly modified by this Agreement.
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8.
Full
Settlement. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others. In no event shall the Executive be obligated to
seek other employment or take any other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of this Agreement
and such amounts shall not be reduced whether or not the Executive obtains other
employment. The Company agrees to pay as incurred, to the full extent
permitted by law, all legal fees and expenses which the Executive may reasonably
incur as a result of any contest (regardless of the outcome thereof) by the
Company, the Executive or others of the validity or enforceability of, or
liability under, any provision of this Agreement or any guarantee of performance
thereof (including as a result of any contest by the Executive about the amount
of any payment pursuant to this Agreement), plus in each case interest on any
delayed payment at the applicable Federal rate provided for in Section
7872(f)(2)(A) of the Internal Revenue Code of 1986, as amended (the
"Code"). Any amount payable by the Company in any year pursuant to
the prior sentence will not be affected by the amount of any payment made by the
Company pursuant to the prior sentence in any other year, and under no
circumstances will the Executive by permitted to liquidate or exchange the
benefit afforded him in the prior sentence for cash or any other
benefit. To the extent any such payment is made via reimbursement to
the Executive, no such reimbursement will be made by the Company later than the
end of the year following the year in which the underlying expense is
incurred.
9.
Code Section
4999. (a) Notwithstanding any other provision of
this Agreement, in the event it shall be determined that any payment or
distribution by the Company or its affiliates to or for the benefit of the
Executive (whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise (a "Payment") would be subject to the
excise tax imposed by Section 4999 of the Code or any interest or penalties are
incurred by the Executive 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 the Executive shall be entitled to elect
to reduce the Payment by an amount that would reduce or eliminate the Excise
Tax. The Executive shall, in his sole discretion, determine the
amount of such reduced Payment and the Payment that is to be reduced; provided,
however, that no Payment may reduced in any manner that would result in a
violation of Section 409A. Any such election and determinations of
reduced Payments by the Executive shall be irrevocable and shall be communicated
in writing to the Company no later than thirty (30) days after the Accounting
Firm notifies the Executive that an Excise Tax will be due and payable upon a
Payment absent an election by the Executive.
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(b) All
determinations required to be made under this Section 9, including whether and
when an Excise Tax would otherwise be imposed upon a Payment and the assumptions
to be utilized in arriving at such determination, shall be made by
PricewaterhouseCoopers LLP or such other certified public accounting firm as may
be designated by the Executive (the "Accounting Firm"), which shall provide
detailed supporting calculations both to the Company and the Executive within
thirty (30) business days of the Executive’s date of Separation from Service
(within the meaning of Section 409A). In the event that the
Accounting Firm is serving as accountant or auditor for the individual, entity
or group effecting the Change of Control, the Executive shall appoint another
nationally recognized accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder). All fees and expenses of the Accounting Firm shall
be borne solely by the Company.
(c) In
no event will the Company or any of its affiliates provide any additional
payments to the Executive to compensate the Executive for the payment of any
Excise Tax.
10. Confidential
Information. The Executive shall hold in a fiduciary capacity
for the benefit of the Company all secret or confidential information, knowledge
or data relating to the Company or any of its affiliated companies, and their
respective businesses, which shall have been obtained by the Executive during
the Executive's employment by the Company or any of its affiliated companies and
which shall not be or become public knowledge (other than by acts by the
Executive or representatives of the Executive in violation of this
Agreement). After termination of the Executive's employment with the
Company, the Executive shall not, without the prior written consent of the
Company or as may otherwise be required by law or legal process, communicate or
divulge any such information, knowledge or data to anyone other than the Company
and those designated by it. In no event shall an asserted violation
of the provisions of this Section 10 constitute a basis for deferring or
withholding any amounts otherwise payable to the Executive under this
Agreement.
11. Successors. (a) This
Agreement is personal to the Executive and without the prior written consent of
the Company shall not be assignable by the Executive otherwise than by will or
the laws of descent and distribution. This Agreement shall inure to
the benefit of and be enforceable by the Executive's legal
representatives.
(b) This
Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns.
(c) The
Company 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 Company to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. As used
in this Agreement, "Company" shall mean the Company as hereinbefore defined and
any successor to its business and/or assets as aforesaid which assumes and
agrees to perform this Agreement by operation of law, or
otherwise.
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12. Miscellaneous. (a) This
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware, without reference to principles of conflict of
laws. The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect. This Agreement may not be
amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal
representatives.
(b) All
notices and other communications hereunder shall be in writing and shall be
given by hand delivery to the other party or by registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:
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If to the
Executive:
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[name and
address of executive]
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If to the
Company:
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Rockwell
Xxxxxxx, Inc.
000
Xxxxxxx Xxxx, X.X.
Xxxxx
Xxxxxx, XX 00000
Attention: General
Counsel
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.
(c) The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this
Agreement.
(d) The
Company may withhold from any amounts payable under this Agreement such Federal,
state, local or foreign taxes as shall be required to be withheld pursuant to
any applicable law or regulation.
(e) The
Executive's or the Company's failure to insist upon strict compliance with any
provision of this Agreement or the failure to assert any right the Executive or
the Company may have hereunder, including, without limitation, the right of the
Executive to terminate employment for Good Reason pursuant to
Section 5(c)(i)-(v) of this Agreement, shall not be deemed to be a waiver
of such provision or right or any other provision or right of this
Agreement.
(f)
The Executive and the Company acknowledge
that, except as may otherwise be provided under any other written agreement
between the Executive and the Company, the employment of the Executive by the
Company is "at will" and, subject to Section 1(a) hereof, prior to the Effective
Date, the Executive's employment may be terminated by either the Executive or
the Company at any time prior to the Effective Date, in which case the Executive
shall have no further rights under this Agreement. From and after the
Effective Date this Agreement shall supersede any other agreement between the
parties with respect to the subject matter hereof.
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13. Section
409A. The parties hereto acknowledge that the requirements of
the Section 409A are still being developed and interpreted by government
agencies, that certain issues under Section 409A remain unclear at this time,
and that the parties hereto have made a good faith effort to comply with current
guidance under Section 409A. Notwithstanding anything in this Agreement to
the contrary, in the event that amendments to this Agreement are necessary in
order to comply with future guidance or interpretations under Section 409A,
including amendments necessary to ensure that compensation will not be subject
to Section 409A, the Executive agrees that the Company shall be permitted to
make such amendments, on a prospective and/or retroactive basis, in its sole
discretion, provided that the parties have made a good faith effort to discuss
the solutions and alternatives. Notwithstanding any other provision of
this Agreement to the contrary, the Company makes no representation that this
Agreement or any amounts payable or benefits provided under this Agreement will
be exempt from or comply with Section 409A and makes no undertaking to preclude
Section 409A from applying to this Agreement.
IN
WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and,
pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.
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[Name
and address of executive]
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ROCKWELL
XXXXXXX, INC.
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By
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Xxxx
X. Xxxxxxx
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Senior
Vice President
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General
Counsel &
Secretary
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14
