CHANGE OF CONTROL AGREEMENT
Exhibit 99.1
AGREEMENT by and between Rockwell Automation, Inc., a Delaware corporation (the “Company”),
and Xxxxx X. Xxxxxxxx (the “Executive”), dated as of the 27th day of September, 2010.
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), applying the default rules and percentages set
forth in such regulation under Section 409A of the Internal Revenue Code, 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 October 1, 2010 and
ending on September 30, 2013.
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 shareowners, 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
(d) Approval by the shareowners 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.
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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.
(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.
(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 payable in accordance with normal payroll practices no less frequently than monthly,
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.
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(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 least equal to the Executive’s highest bonus 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) (the “Recent Annual Bonus”). 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 Deferred Compensation
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 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 entitled to participate 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.
(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.
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(vi) Fringe Benefits. During the Protected Period, the Executive shall be entitled to
fringe benefits, including, without limitation, tax and financial planning services, payment of
club dues, and, if applicable, use of an automobile and payment of related expenses, 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.
(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.
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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, including for this purpose a diminution of duties resulting from the Company no
longer being required to file reports under the Exchange Act without any further specific action by
the Company, and 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;
(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.
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For purposes of this Section 5(c), any good faith determination of “Good Reason” made by the
Executive shall be conclusive. The Executive’s rights to terminate employment for “Good Reason”
under this Agreement upon any event giving rise to such right shall not be affected by any
incapacity of the Executive due to physical or mental illness following such event.
(d) Notice of Termination. Any termination of employment 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.
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, Death 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
Executive’s “separation from service” (“Separation from Service”) within the meaning of Section
409A of the Internal Revenue Code of 1986, as amended and the regulations and other guidance issued
thereunder (“Section 409A”) 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, and (2) 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, and any accrued vacation pay, in each case to the extent
not theretofore paid (the sum of the amounts described in clauses (1) and
(2) shall be hereinafter referred to as the “Accrued Obligations”);
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B. subject to Section 6(e) of this Agreement, the product of (x) the
average of the Executive’s annual bonuses paid or payable under the
Company’s annual incentive plan, or any comparable bonus under any
predecessor or successor plan, for the last three full fiscal years prior to
the Date of Termination (annualized in the event that the Executive was not
employed by the Company for the whole of any such fiscal year), and (y) a
fraction, the numerator of which is the number of completed months in the
current fiscal year prior to the Date of Termination, and the denominator of
which is 12; and
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 Executive’s target Annual Bonus payable under the
Company’s annual incentive plan in effect with respect to the fiscal year in
which the Date of Termination occurs.
(ii) subject to Section 6(e) of this Agreement, for three years after the Executive’s Date of
Termination, or such longer period as may be provided by the terms of the appropriate plan,
program, practice or policy (the “Benefits Continuation Period”), the Company shall continue
benefits specified on Exhibit 1 to this Agreement to the Executive and/or the Executive’s family at
least equal to those which would have been provided to them in accordance with the plans, programs,
practices and policies described in Section 4(b)(iv) of this Agreement if the Executive’s
employment had not been terminated 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 and their families, provided, however, that if the Executive becomes
reemployed with another employer and is eligible to receive medical or other welfare benefits under
another employer provided plan, the medical and other welfare benefits described herein shall be
secondary to those provided under such other plan during such applicable period of eligibility.
For purposes of determining eligibility (but not the time of commencement of benefits) of the
Executive for retiree benefits pursuant to such plans, practices, programs and policies, the
Executive shall be considered to have remained employed until three years after the Date of
Termination and to have retired on the last day of such period; and further provided that the
existence of the Benefits Continuation Period shall not in any way offset or otherwise limit the
Executive’s entitlement to coverage under the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended, which will commence at the end of the Benefits Continuation Period.
Notwithstanding the foregoing, to the extent that any benefit is a “deferral of compensation” that
is subject to Section 409A, except as otherwise permitted by Section 409A, (A) to the extent that
any such benefit is provided via reimbursement to the Executive or is an in-kind benefit, such
reimbursement or benefit will be made or provided promptly by the Company and in no event later
than the end of the year following the year in which the underlying expense is incurred, (B) any
such benefit provided by the Company in any year will not be affected by the amount of any such benefit provided in any other year, provided that this subclause (B) shall not be
violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the
Internal Revenue Code of 1986, as amended (the “Code”) solely because such expenses are subject to
a limit related to amounts that may be reimbursed during the period the arrangement is in effect,
and (C) under no circumstances will the Executive be permitted to liquidate or exchange any such
benefit for cash or any other benefits;
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(iii) the Company shall, at its sole expense as incurred, provide the Executive with
reasonable outplacement services the scope and provider of which shall be selected by the Executive
in his sole discretion; and
(iv) 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”).
Notwithstanding the foregoing, 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.
(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. Notwithstanding
the foregoing, 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.
(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 Executive’s Separation from Service. 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. Notwithstanding the foregoing, 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.
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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
Executive’s Separation from Service. Notwithstanding the foregoing, any compensation previously
deferred by the Executive that is subject to the rules of Section 409A will be payable in
accordance with the terms of the plan or arrangement under which the compensation was deferred.
(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, 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 incurs a Separation from Service due
to death or if he dies before the six-month period has elapsed.
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. If the Executive voluntarily terminates employment or terminates employment for Good
Reason during the Protected Period, nothing in this Agreement shall prevent or limit any rights the
Executive may have to any retirement benefits under any plans, programs or policies of the Company. 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 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 promptly by the Company and in
no event later than the end of the year following the year in which the underlying expense is
incurred. This Section 8 shall apply only to expenses incurred during the lifetime of the
Executive.
9. “Best Net” Provision. In the event that the benefits provided for in the
Agreement, when aggregated with any other payments or benefits received by Executive (the
“Aggregate Benefits”), would (i) constitute “parachute payments” within the meaning of Section 280G
of the Code, and (ii) would be subject to the excise tax imposed by Section 4999 of the Code (the
“Excise Tax”), then Executive’s Aggregate Benefits will be either: (a) delivered in full, or
(b) delivered as to such lesser extent as would result in no portion of such Aggregate Benefits
being subject to the Excise Tax, whichever of the foregoing amounts, taking into account the
applicable federal, state and local income taxes and the Excise Tax, results in the receipt by
Executive on an after-tax basis of the greatest amount of Aggregate Benefits, notwithstanding that
all or some portion of such Aggregate Benefits may be taxable under Section 4999 of the Code.
Unless the Company and Executive otherwise agree in writing, any determination required under this
paragraph will be made in writing by an independent certified public accounting firm mutually
agreeable to the Company and Executive (the “Accounting Firm”) whose determination will be
conclusive and binding upon Executive and the Company for all purposes. For purposes of making the
calculations required by this paragraph, the Accounting Firm may make reasonable assumptions and
approximations concerning applicable taxes and may rely on reasonable, good faith interpretations
concerning the application of Sections 280G and 4999 of the Code. The Company and Executive will
furnish to the Accounting Firm such information and documents as the Accounting Firm may reasonably request in order to make a determination under this paragraph. To the extent any reduction in
Aggregate Benefits is required by this paragraph, Aggregate Benefits shall be reduced or eliminated
in reverse order of time of payment (that is, Aggregate Benefits payable later shall be reduced or
eliminated before any reduction or elimination of Aggregate Benefits payable sooner), Aggregate
Benefits payable at the same time shall be reduced or eliminated in accordance with the Executive’s
instructions provided the Company has no reasonable objection thereto, and all reductions or
eliminations shall be based on the value of the Aggregate Benefits established for purposes of the
determination required under this paragraph. All fees and expenses of the Accounting Firm shall be
borne solely by the Company.
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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.
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:
If to the Executive:
Xxxxx X. Xxxxxxxx
Xxxxxxxx Automation, Inc.
0000 X. Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Xxxxxxxx Automation, Inc.
0000 X. Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
If to the Company:
Rockwell Automation, Inc.
0000 X. Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
0000 X. Xxxxxx Xxxxxx
Xxxxxxxxx, 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.
12
(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.
13. Section 409A. The parties hereto acknowledge that the requirements of the Section
409A are still being 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. This Agreement shall be interpreted in a manner that is consistent
with compliance with the requirements of Section 409A, or where applicable, an exemption from
Section 409A. With respect to any amount or benefit that is a “deferral of compensation” that is
subject to Section 409A, any reference in this Agreement to “termination of employment,”
“employment termination” or a similar term of phrase shall be deemed to be a reference to
Separation from Service. 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 and in no event will the Company, any of its
affiliates, any of its agents, or any member of the Board have any liability for any taxes imposed
in connection with a failure of this Agreement to comply with or be exempt from Section 409A.
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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.
| Executive | ||||||
| Xxxxx X. Xxxxxxxx | ||||||
| ROCKWELL AUTOMATION, INC. | ||||||
| By | ||||||
14
EXHIBIT 1
The Company shall continue to provide benefits to the Executive under the following plans, programs
or arrangements, or any comparable benefits under any successor plans, programs or arrangements, as
provided in Section 6(a)(ii) of this Agreement:
Rockwell Automation Employee Health Plan
Rockwell Automation Disability Plan
Group Insurance Plan
Excess Liability Insurance
Executive Physical
Rockwell Automation Disability Plan
Group Insurance Plan
Excess Liability Insurance
Executive Physical
15
