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EXHIBIT 10.10
FORM OF CHANGE IN CONTROL AGREEMENT
THIS AGREEMENT, dated , 2000 (the "Effective Date"), is
made by and between Visteon Corporation, a Delaware corporation (the "Company"),
and (the "Executive").
WHEREAS, the Company considers it essential to the best interests
of its stockholders to xxxxxx the continued employment of key management
personnel; and
WHEREAS, the Board recognizes that, as is the case with many
publicly held corporations, the possibility of a Change in Control exists and
that such possibility, and the uncertainty and questions which it may raise
among management, may result in the departure or distraction of management
personnel to the detriment of the Company and its stockholders; and
WHEREAS, the Board has determined that appropriate steps should be
taken to reinforce and encourage the continued attention and dedication of
members of the Company's management, including the Executive, to their assigned
duties without distraction in the face of potentially disturbing circumstances
arising from the possibility of a Change in Control;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Company and the Executive hereby agree as
follows:
1. Defined Terms. The definitions of capitalized terms used in
this Agreement are provided in the last Section hereof.
2. Term of Agreement. The Term of this Agreement shall commence
on the Effective Date and shall continue in effect through the fifth anniversary
of the Effective Date; provided, however, that commencing on the first
anniversary of the Effective Date, and on each anniversary of the Effective Date
thereafter, the Term shall automatically be extended for one additional year
unless, not later than 90 days prior to each such date, the Company or the
Executive shall have given notice not to extend the Term; and provided, further,
that if a Change in Control shall have occurred during the Term, the Term shall
expire no earlier than [36][24] months beyond the month in which such Change in
Control occurred.
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3. Company's Covenants Summarized. In order to induce the
Executive to remain in the employ of the Company and in consideration of the
Executive's covenants set forth in Section 4 hereof, the Company agrees, under
the conditions described herein, to pay the Executive the Severance Payments and
the other payments and benefits described herein. Except as provided in Section
9.1 hereof, no Severance Payments shall be payable under this Agreement unless
there shall have been (or, under the terms of the second sentence of Section 6.1
hereof, there shall be deemed to have been) a termination of the Executive's
employment with the Company following a Change in Control and during the Term.
This Agreement shall not be construed as creating an express or implied contract
of employment and, except as otherwise agreed in writing between the Executive
and the Company, the Executive shall not have any right to be retained in the
employ of the Company.
4. The Executive's Covenants.
4.1 The Executive agrees that, subject to the terms and conditions
of this Agreement, in the event of a Potential Change in Control during the
Term, the Executive will remain in the employ of the Company until the earliest
of (i) a date which is six months from the date of such Potential Change of
Control, (ii) the date of a Change in Control, (iii) the date of termination by
the Executive of the Executive's employment for Good Reason or by reason of
death, Disability or Retirement, or (iv) the termination by the Company of the
Executive's employment for any reason.
4.2 The Executive agrees that, during the Term and for a period
ending on the [second anniversary of] [date 18 months after] a termination of
the Executive's employment following a Change in Control under circumstances
entitling the Executive to payments and benefits under Section 6 hereof, the
Executive will not, without the prior written consent of the Chairman of the
Board or the Chief Executive Officer of the Company, engage in or perform any
services of a similar nature to those performed by the Executive at the Company
for any other corporation or business which is engaged in the design,
manufacture, development, promotion, sale or financing of automobile or truck
components within North America, Latin America, Asia, Australia or Europe in
competition with the Company or any of the Company's subsidiaries or Affiliates,
or any joint ventures to which the Company or any of the Company's subsidiaries
or Affiliates are a party.
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4.3 During the Term and thereafter, the Executive will not (other
than in the regular course and in furtherance of the Company's business)
divulge, furnish or make available to any person any confidential knowledge,
information or materials, whether tangible or intangible, regarding proprietary
matters relating to the Company, including, without limitation, trade secrets,
customer and supplier lists, pricing policies, operational methods, marketing
plans or strategies, product development techniques or plans, business
acquisition or disposition plans, new personnel employment plans, methods of
manufacture, technical processes, designs and design projects, inventions and
research projects and financial budgets and forecasts of the Company except (1)
information which at the time is available to others in the business or
generally known to the public other than as a result of disclosure by the
Executive not permitted hereunder, and (2) when required to do so by a court of
competent jurisdiction, by any governmental agency or by any administrative body
or legislative body (including a committee thereof) with purported or apparent
jurisdiction to order the Executive to divulge, disclose or make accessible such
information.
5. Compensation Other Than Severance Payments.
5.1 Following a Change in Control and during the Term, during any
period that the Executive fails to perform the Executive's full-time duties with
the Company as a result of incapacity due to physical or mental illness, the
Company shall pay the Executive's full salary to the Executive at the rate in
effect at the commencement of any such period, together with all compensation
and benefits payable to the Executive under the terms of any compensation or
benefit plan, program or arrangement maintained by the Company during such
period (other than any disability plan), until the Executive's employment is
terminated by the Company for Disability.
5.2 If the Executive's employment shall be terminated for any
reason following a Change in Control and during the Term, the Company shall pay
the Executive's full salary to the Executive through the Date of Termination at
the rate in effect immediately prior to the Date of Termination or, if higher,
the rate in effect immediately prior to the first occurrence of an event or
circumstance constituting Good Reason, together with all compensation and
benefits payable to the Executive through the Date of Termination under the
terms of the Company's compensation and benefit plans, programs or arrangements
as in effect immediately prior to the Date of Termination or, if more favorable
to the Executive, as in effect immediately prior to the first occurrence of an
event or circumstance constituting Good Reason.
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5.3 If the Executive's employment shall be terminated for any
reason following a Change in Control and during the Term, the Company shall pay
to the Executive the Executive's normal post-termination compensation and
benefits as such payments become due. Such post-termination compensation and
benefits shall be determined under, and paid in accordance with, the Company's
retirement, insurance and other compensation or benefit plans, programs and
arrangements as in effect immediately prior to the Date of Termination or, if
more favorable to the Executive, as in effect immediately prior to the
occurrence of the first event or circumstance constituting Good Reason.
6. Severance Payments.
6.1 If [(i)] the Executive's employment is terminated following a
Change in Control and within [three (3)][two (2)] years after a Change in
Control, other than (A) by the Company for Cause, (B) by reason of death or
Disability, or (C) by the Executive without Good Reason, [or (ii) the Executive
voluntarily terminates his employment for any reason during the 30 day period
commencing on the first anniversary of a Change in Control,] then[, in either
such case,] the Company shall pay the Executive the amounts, and provide the
Executive the benefits, described in this Section 6.1 ("Severance Payments")
[and Section 6.2], in addition to any payments and benefits to which the
Executive is entitled under Section 5 hereof. For purposes of this Agreement,
the Executive's employment shall be deemed to have been terminated following a
Change in Control by the Company without Cause or by the Executive with Good
Reason, if (i) the Executive's employment is terminated by the Company without
Cause prior to a Change in Control (whether or not a Change in Control ever
occurs) and such termination was at the request or direction of a Person who has
entered into an agreement with the Company the consummation of which would
constitute a Change in Control, or (ii) the Executive terminates his employment
for Good Reason prior to a Change in Control (whether or not a Change in Control
ever occurs) and the circumstance or event which constitutes Good Reason occurs
at the request or direction of such Person. For purposes of any determination
regarding the applicability of the immediately preceding sentence, any position
taken
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by the Executive shall be presumed to be correct unless the Company establishes
to the Board by clear and convincing evidence that such position is not correct.
(A) In lieu of any further salary payments to the Executive
for periods subsequent to the Date of Termination, the Company shall pay to the
Executive a lump sum severance payment, in cash, equal to [three (3)] [two (2)]
[one and one half (1 1/2)] times the sum of (i) the Executive's base salary as
in effect immediately prior to the Date of Termination or, if higher, in effect
immediately prior to the first occurrence of an event or circumstance
constituting Good Reason, and (ii) the Executive's target annual bonus pursuant
to any annual bonus or incentive plan maintained by the Company in respect of
the fiscal year in which occurs the Date of Termination or, if higher, the
fiscal year in which occurs the first event or circumstance constituting Good
Reason. The amount payable pursuant to this Section 6.1(A) shall be reduced by
the amount of any cash severance or salary continuation benefit paid or payable
to the Executive under any other plan, policy or program of the Company or any
of its Affiliates or any written employment agreement between the Executive and
the Company or any of its Affiliates.
(B) For the [36] [24] [18] month period immediately following
the Date of Termination, the Company shall arrange to provide the Executive and
his dependents life, disability, accident and health insurance benefits
substantially similar to those provided to the Executive and his dependents
immediately prior to the Date of Termination or, if more favorable to the
Executive, those provided to the Executive and his dependents immediately prior
to the first occurrence of an event or circumstance constituting Good Reason, at
no greater cost to the Executive than the cost to the Executive immediately
prior to such date or occurrence; provided, however, that, unless the Executive
consents to a different method (after taking into account the effect of such
method on the calculation of "parachute payments" pursuant to Section 6.2
hereof), such health insurance benefits shall be provided through a third-party
insurer. Benefits otherwise receivable by the Executive pursuant to this Section
6.1(B) shall be reduced to the extent benefits of the same type are received by
or made available to the Executive during the [36] [24] [18] month period
following the Executive's termination of employment (and any such benefits
received by or made available to the Executive shall be reported to the Company
by the Executive); provided, however, that the Company shall reimburse the
Executive for the excess, if any, of the cost of such benefits to the Executive
over such cost immediately prior to the Date of Termination
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or, if more favorable to the Executive, the first occurrence of an event or
circumstance constituting Good Reason.
(C) Each option to purchase shares of common stock of the
Company outstanding as of the Date of Termination shall become fully vested and
exercisable as of such date and shall remain exercisable during the remaining
term of such option.
(D) Notwithstanding any provision of any annual or long-term
incentive plan to the contrary, the Company shall pay to the Executive a lump
sum amount, in cash, equal to the sum of (i) any unpaid incentive compensation
which has been allocated or awarded to the Executive for a completed fiscal year
or other measuring period preceding the Date of Termination under any such plan
and which, as of the Date of Termination, is contingent only upon the continued
employment of the Executive to a subsequent date, and (ii) a pro rata portion to
the Date of Termination of the aggregate value of all contingent incentive
compensation awards to the Executive for all then uncompleted periods under any
such plan, calculated as to each such award by multiplying the award that the
Executive would have earned on the last day of the performance award period,
assuming the achievement, at the target level (or if higher, at the then
projected actual final level), of the individual and corporate performance goals
established with respect to such award, by the fraction obtained by dividing the
number of full months and any fractional portion of a month during such
performance award period through the Date of Termination by the total number of
months contained in such performance award period.
(E) The Company shall transfer an amount in cash sufficient
to pay all benefits then accrued by the Executive under the Company's
Supplemental Executive Retirement Plan into an irrevocable grantor trust (a
so-called "Rabbi Trust") whose trustee shall be an entity unaffiliated with and
independent of the Company, which trust shall be required to pay such benefits
in accordance with and subject to the terms of the Supplemental Executive
Retirement Plan and the trust instrument.
(F) The Company shall reimburse the Executive for expenses
incurred for outplacement services suitable to the Executive's position for a
period of [three (3)] [two (2)] years following the Date of Termination (or, if
earlier,
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until the first acceptance by the Executive of an offer of employment) in an
amount not exceeding 25% of the sum of the Executive's annual base salary as in
effect immediately prior to the Date of Termination or, if higher, in effect
immediately prior to the first occurrence of an event or circumstances
constituting Good Reason, and target annual bonus pursuant to any annual bonus
or incentive plan maintained by the Company in respect of the fiscal year in
which occurs the Date of Termination or, if higher, the fiscal year in which
occurs the first event or circumstance constituting Good Reason.
(G) For the six (6) month period immediately following the
Date of Termination, the Company shall provide the Executive with the use of any
Company provided automobile and with country club membership fee reimbursements,
in each case on the same terms and conditions that were applicable immediately
prior to the Date of Termination or, if more favorable, immediately prior to the
first occurrence of an event or circumstance constituting Good Reason.
6.2 [(A) Whether or not the Executive becomes entitled to the
Severance Payments, if any of the payments or benefits received or to be
received by the Executive in connection with a Change in Control or the
Executive's termination of employment (whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the Company, any
Person whose actions result in a Change in Control or any Person affiliated with
the Company or such Person) (such payments or benefits, excluding the Gross-Up
Payment, being hereinafter referred to as the "Total Payments") will be subject
to the Excise Tax, the Company shall pay to the Executive an additional amount
(the "Gross-Up Payment") such that the net amount retained by the Executive,
after deduction of any Excise Tax on the Total Payments and any federal, state
and local income and employment taxes and Excise Tax upon the Gross-Up Payment,
shall be equal to the Total Payments.
(B) For purposes of determining whether any of the Total
Payments will be subject to the Excise Tax and the amount of such Excise Tax,
(i) all of the Total Payments shall be treated as "parachute payments" (within
the meaning of section 280G(b)(2) of the Code) unless, in the opinion of tax
counsel ("Tax Counsel") reasonably acceptable to the Executive and selected by
the accounting firm which was, immediately prior to the Change in Control, the
Company's independent auditor (the "Auditor"), such payments or benefits (in
whole or in part) do not constitute parachute payments, including by reason of
section 280G(b)(4)(A) of the Code, (ii) all "excess parachute payments" within
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the meaning of section 280G(b)(l) of the Code shall be treated as subject to the
Excise Tax unless, in the opinion of Tax Counsel, such excess parachute payments
(in whole or in part) represent reasonable compensation for services actually
rendered (within the meaning of section 280G(b)(4)(B) of the Code) in excess of
the Base Amount allocable to such reasonable compensation, or are otherwise not
subject to the Excise Tax, and (iii) the value of any noncash benefits or any
deferred payment or benefit shall be determined by the Auditor in accordance
with the principles of sections 280G(d)(3) and (4) of the Code. For purposes of
determining the amount of the Gross-Up Payment, the Executive shall be deemed to
pay federal income tax at the highest marginal rate of federal income taxation
in the calendar year in which the Gross-Up Payment is to be made and state and
local income taxes at the highest marginal rate of taxation in the state and
locality of the Executive's residence on the Date of Termination (or if there is
no Date of Termination, then the date on which the Gross-Up Payment is
calculated for purposes of this Section 6.2), net of the maximum reduction in
federal income taxes which could be obtained from deduction of such state and
local taxes.
(C) In the event that the Excise Tax is finally determined to
be less than the amount taken into account hereunder in calculating the Gross-Up
Payment, the Executive shall repay to the Company, within five business days
following the time that the amount of such reduction in the Excise Tax is
finally determined, the portion of the Gross-Up Payment attributable to such
reduction (plus that portion of the Gross-Up Payment attributable to the Excise
Tax and federal, state and local income and employment taxes imposed on the
Gross-Up Payment being repaid by the Executive), to the extent that such
repayment results in a reduction in the Excise Tax and a dollar-for-dollar
reduction in the Executive's taxable income and wages for purposes of federal,
state and local income and employment taxes, plus interest on the amount of such
repayment at 120% of the rate provided in section 1274(b)(2)(B) of the Code. In
the event that the Excise Tax is determined to exceed the amount taken into
account hereunder in calculating the Gross-Up Payment (including by reason of
any payment the existence or amount of which cannot be determined at the time of
the Gross-Up Payment), the Company shall make an additional Gross-Up Payment in
respect of such excess (plus any interest, penalties or additions payable by the
Executive with respect to such excess) within five business days following the
time that the amount of such excess is finally determined. The Executive and the
Company shall each reasonably cooperate with the other in connection with any
administrative or judicial proceedings concerning the existence or amount of
liability for Excise Tax with respect to the Total Payments.]
[(A) Notwithstanding any other provisions of this
Agreement, in the event that any payment or benefit received or to be received
by the Executive in connection with a Change in Control or the termination of
the Executive's employment (whether pursuant to the terms of this Agreement or
any other plan, arrangement or agreement with the Company, any Person whose
actions result in a Change in Control or any Person affiliated with the Company
or such Person) (all such payments and benefits, including the Severance
Payments, being hereinafter called "Total Payments") would be subject (in whole
or part), to the Excise Tax, then, after taking into account any reduction in
the Total Payments provided by reason of section 280G of the Code in such other
plan, arrangement or agreement, the cash Severance Payments shall first be
reduced, and the noncash Severance Payments shall thereafter be reduced, to the
extent necessary so that no portion of the Total Payments is subject to the
Excise Tax but only if (A) the net amount of such Total Payments, as so reduced
(and after subtracting the net amount of federal, state and local income taxes
on such reduced Total Payments) is greater than or equal to (B) the net amount
of such Total Payments without such reduction (but after subtracting the net
amount of federal, state and local income taxes on such Total Payments and the
amount of Excise Tax to which the Executive would be subject in respect of such
unreduced Total Payments); provided, however, that the Executive may elect to
have the noncash Severance Payments reduced (or eliminated) prior to any
reduction of the cash Severance Payments.
(B) For purposes of determining whether and the extent to
which the Total Payments will be subject to the Excise Tax, (i) no portion of
the Total Payments the receipt or enjoyment of which the Executive shall have
waived at such time and in such manner as not to constitute a "payment" within
the meaning of section 280G(b) of the Code shall be taken into account, (ii) no
portion of the Total Payments shall be taken into account which, in the opinion
of tax counsel ("Tax Counsel") reasonably acceptable to the Executive and
selected by the accounting firm (the "Auditor") which was, immediately prior to
the Change in Control, the Company's independent auditor, does not constitute a
"parachute payment" within the meaning of section 280G(b)(2) of the Code
(including by reason of section 280G(b)(4)(A) of the Code) and, in calculating
the Excise Tax, no portion of such Total Payments shall be taken into account
which, in the opinion of Tax Counsel, constitutes reasonable compensation for
services actually rendered, within the meaning of section 280G(b)(4)(B) of the
Code, in excess of the Base Amount allocable to such reasonable compensation,
and (iii) the value of any non-cash benefit or any deferred payment or benefit
included in the Total Payments shall be determined by the Auditor in accordance
with the principles of sections 280G(d)(3) and (4) of the Code.
(C) At the time that payments are made under this
Agreement, the Company shall provide the Executive with a written statement
setting forth the manner in which such payments were calculated and the basis
for such calculations including, without limitation, any opinions or other
advice the Company has received from Tax Counsel, the Auditor or other advisors
or consultants (and any such opinions or advice which are in writing shall be
attached to the statement). If the Executive objects to the Company's
calculations, the Company shall pay to the Executive such portion of the
Severance Payments (up to 100% thereof) as the Executive determines is necessary
to result in the proper application of subsection (A) of this Section 6.2.]
6.3 The payments provided in subsections (A), (D) and (E) of
Section 6.1 hereof [and in Section 6.2] hereof shall be made not later than the
fifth
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day following the Date of Termination; provided, however, that if the amounts of
such payments cannot be finally determined on or before such day, the Company
shall pay to the Executive on such day an estimate, as determined in good faith
by the Executive or, in the case of payments under Section 6.2 hereof, in
accordance with Section 6.2 hereof, of the minimum amount of such payments to
which the Executive is clearly entitled and shall pay the remainder of such
payments (together with interest on the unpaid remainder (or on all such
payments to the extent the Company fails to make such payments when due) at 120%
of the rate provided in section 1274(b)(2)(B) of the Code) as soon as the amount
thereof can be determined but in no event later than the 30th day after the Date
of Termination. In the event that the amount of the estimated payments exceeds
the amount subsequently determined to have been due, such excess shall
constitute a loan by the Company to the Executive, payable on the fifth business
day after demand by the Company (together with interest at 120% of the rate
provided in section 1274(b)(2)(B) of the Code). At the time that payments are
made under this Agreement, the Company shall provide the Executive with a
written statement setting forth the manner in which such payments were
calculated and the basis for such calculations including, without limitation,
any opinions or other advice the Company has received from Tax Counsel, the
Auditor or other advisors or consultants (and any such opinions or advice which
are in writing shall be attached to the statement).
6.4 The Company also shall pay to the Executive all legal fees and
expenses incurred by the Executive in disputing in good faith any issue
hereunder relating to the termination of the Executive's employment, in seeking
in good faith to obtain or enforce any benefit or right provided by this
Agreement or in connection with any tax audit or proceeding to the extent
attributable to the application of section 4999 of the Code to any payment or
benefit provided hereunder. Such payments shall be made within five business
days after delivery of the Executive's written requests for payment accompanied
with such evidence of fees and expenses incurred as the Company reasonably may
require.
7. Termination Procedures and Compensation During Dispute.
7.1 Notice of Termination. After a Change in Control and during
the Term, any purported termination of the Executive's employment (other than by
reason of death) shall be communicated by written Notice of Termination from one
party hereto to the other party hereto in accordance with Section 10 hereof. For
purposes of this Agreement, a "Notice of Termination"
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shall mean a notice which shall indicate the specific termination provision in
this Agreement relied upon and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated. Further, a Notice of Termination
for Cause is required to include a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters (3/4) of the entire membership
of the Board at a meeting of the Board which was called and held for the purpose
of considering such termination (after reasonable notice to the Executive and an
opportunity for the Executive, together with the Executive's counsel, to be
heard before the Board) finding that, in the good faith opinion of the Board,
the Executive was guilty of conduct set forth in clause (i) or (ii) of the
definition of Cause herein, and specifying the particulars thereof in detail.
7.2 Date of Termination. "Date of Termination," with respect to
any purported termination of the Executive's employment after a Change in
Control and during the Term, shall mean (i) if the Executive's employment is
terminated for Disability, 30 days after Notice of Termination is given
(provided that the Executive shall not have returned to the full-time
performance of the Executive's duties during such 30 day period), and (ii) if
the Executive's employment is terminated for any other reason, the date
specified in the Notice of Termination (which, in the case of a termination by
the Company, shall not be less than 30 days (except in the case of a termination
for Cause) and, in the case of a termination by the Executive, shall not be less
than 15 days nor more than 60 days, respectively, from the date such Notice of
Termination is given).
7.3 Dispute Concerning Termination. If within 15 days after any
Notice of Termination is given, or, if later, prior to the Date of Termination
(as determined without regard to this Section 7.3), the party receiving such
Notice of Termination notifies the other party that a dispute exists concerning
the termination, the Date of Termination shall be extended until the earlier of
(i) the date on which the Term ends or (ii) the date on which the dispute is
finally resolved, either by mutual written agreement of the parties or by a
final judgment, order or decree of an arbitrator or a court of competent
jurisdiction (which is not appealable or with respect to which the time for
appeal therefrom has expired and no appeal has been perfected); provided,
however, that the Date of Termination shall be extended by a notice of dispute
given by the Executive only if such notice is given in good faith and the
Executive pursues the resolution of such dispute with reasonable diligence.
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7.4 Compensation During Dispute. If a purported termination
occurs following a Change in Control and during the Term and the Date of
Termination is extended in accordance with Section 7.3 hereof, the Company shall
continue to pay the Executive the full compensation in effect when the notice
giving rise to the dispute was given (including, but not limited to, salary) and
continue the Executive as a participant in all compensation, benefit and
insurance plans in which the Executive was participating when the notice giving
rise to the dispute was given, until the Date of Termination, as determined in
accordance with Section 7.3 hereof. Amounts paid under this Section 7.4 are in
addition to all other amounts due under this Agreement (other than those due
under Section 5.2 hereof) and shall not be offset against or reduce any other
amounts due under this Agreement.
8. No Mitigation. The Company agrees that, if the Executive's
employment with the Company terminates during the Term, the Executive is not
required to seek other employment or to attempt in any way to reduce any amounts
payable to the Executive by the Company pursuant to Section 6 hereof or Section
7.4 hereof. Further, the amount of any payment or benefit provided for in this
Agreement (other than Section 6.1(B) hereof) shall not be reduced by any
compensation earned by the Executive as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be
owed by the Executive to the Company, or otherwise.
9. Successors; Binding Agreement.
9.1 In addition to any obligations imposed by law upon any
successor to the Company, 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 expressly
assume 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. Failure of the Company to obtain such assumption and agreement
prior to the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle the Executive to compensation from the Company in
the same amount and on the same terms as the Executive would be entitled to
hereunder if the Executive were to terminate the Executive's employment for Good
Reason after a Change in Control, except that, for purposes of implementing the
foregoing, the date on which any such succession becomes effective shall be
deemed the Date of Termination.
9.2 This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive shall die while any amount would still be payable to the Executive
hereunder (other than amounts which, by their terms, terminate upon the death
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of the Executive) if the Executive had continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to the executors, personal representatives or administrators of
the Executive's estate.
10. Notices. For the purpose of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing and shall
be deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed, if to the
Executive, to the address inserted below the Executive's signature on the final
page hereof and, if to the Company, to the address set forth below, or to such
other address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be effective
only upon actual receipt:
To the Company:
Visteon Corporation
10th Floor
Fairline Plaza North
000 Xxxx Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
11. Miscellaneous. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by the Executive and such officer as may be
specifically designated by the Board. No waiver by either party hereto at any
time of any breach by the other party hereto of, or of any lack of compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. This Agreement supersedes any
other agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof which have been made by either party;
provided, however, that this Agreement shall supersede any agreement setting
forth the terms and conditions of the Executive's employment with the Company
only in the event that the Executive's employment with the Company is terminated
on or following a Change in Control, by the Company other than for Cause or by
the Executive other than for Good Reason. The validity, interpretation,
construction and performance of this Agreement shall be
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governed by the laws of the State of Delaware. All references to sections of the
Exchange Act or the Code shall be deemed also to refer to any successor
provisions to such sections. Any payments provided for hereunder shall be paid
net of any applicable withholding required under federal, state or local law and
any additional withholding to which the Executive has agreed. The obligations of
the Company and the Executive under this Agreement which by their nature may
require either partial or total performance after the expiration of the Term
(including, without limitation, those under Sections 6 and 7 hereof) shall
survive such expiration.
12. Validity. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
13. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
14. Settlement of Disputes. All claims by the Executive for
benefits under this Agreement shall be directed to and determined by the Board
and shall be in writing. Any denial by the Board of a claim for benefits under
this Agreement shall be delivered to the Executive in writing and shall set
forth the specific reasons for the denial and the specific provisions of this
Agreement relied upon. The Board shall afford a reasonable opportunity to the
Executive for a review of the decision denying a claim and shall further allow
the Executive to appeal to the Board a decision of the Board within 60 days
after notification by the Board that the Executive's claim has been denied.
15. Definitions. For purposes of this Agreement, the following
terms shall have the meanings indicated below:
(A) "Affiliate" shall have the meaning set forth in Rule
12b-2 promulgated under Section 12 of the Exchange Act.
(B) "Auditor" shall have the meaning set forth in Section 6.2
hereof.
(C) "Base Amount" shall have the meaning set forth in section
280G(b)(3) of the Code.
(D) "Beneficial Owner" shall have the meaning set forth in
Rule 13d-3 under the Exchange Act.
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(E) "Board" shall mean the Board of Directors of the Company.
(F) "Cause" for termination by the Company of the Executive's
employment shall mean (i) the willful and continued failure by the Executive to
substantially perform the Executive's duties with the Company (other than any
such failure resulting from the Executive's incapacity due to physical or mental
illness or any such actual or anticipated failure after the issuance of a Notice
of Termination for Good Reason by the Executive pursuant to Section 7.1 hereof)
after a written demand for substantial performance is delivered to the Executive
by the Board, which demand specifically identifies the manner in which the Board
believes that the Executive has not substantially performed the Executive's
duties, or (ii) the willful engaging by the Executive in conduct which is
demonstrably and materially injurious to the Company or its subsidiaries,
monetarily or otherwise. For purposes of clauses (i) and (ii) of this
definition, (x) no act, or failure to act, on the Executive's part shall be
deemed "willful" unless done, or omitted to be done, by the Executive not in
good faith and without reasonable belief that the Executive's act, or failure to
act, was in the best interest of the Company and (y) in the event of a dispute
concerning the application of this provision, no claim by the Company that Cause
exists shall be given effect unless the Company establishes to the Board by
clear and convincing evidence that Cause exists.
(G) "Change in Control" shall be deemed to have occurred if
the event set forth in any one of the following paragraphs shall have occurred:
(I) any Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company (not including in the
securities beneficially owned by such Person any securities acquired directly
from the Company or its affiliates) representing 40% or more of the combined
voting power of the Company's then outstanding securities, excluding any Person
who becomes such a Beneficial Owner in connection with a transaction described
in clause (a) of paragraph (III) below;
(II) within any twelve (12) month period, the
following individuals cease for any reason to constitute a majority of the
number of directors then serving: individuals who, on the Effective Date,
constitute the Board and any new director (other than a director whose initial
assumption of office is in connection with an actual or threatened election
contest, including but not limited to a consent solicitation, relating to the
election of directors of the Company) whose appointment or election by the Board
or nomination for
15
election by the Company's shareholders was approved or recommended by a vote of
at least two-thirds (2/3) of the directors then still in office who either were
directors on the date hereof or whose appointment, election or nomination for
election was previously so approved or recommended;
(III) there is consummated a merger or consolidation
of the Company or any direct or indirect subsidiary of the Company with any
other corporation, other than (a) a merger or consolidation which results in the
directors of the Company immediately prior to such merger or consolidation
continuing to constitute at least a majority of the board of directors of the
Company, the surviving entity or any parent thereof or (b) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company (not including in the
securities Beneficially Owned by such Person any securities acquired directly
from the Company or its Affiliates) representing 40% or more of the combined
voting power of the Company's then outstanding securities;
(IV) the shareholders of the Company approve a plan
of complete liquidation or dissolution of the Company or there is consummated an
agreement for the sale or disposition by the Company of more than 50% of the
Company's assets, other than a sale or disposition by the Company of more than
50% of the Company's assets to an entity, at least 50% of the combined voting
power of the voting securities of which are owned by shareholders of the Company
in substantially the same proportions as their ownership of the Company
immediately prior to such sale; or
(V) any other event that the Board, in its
sole discretion, determines to be a Change in Control for purposes of this
Agreement.
Notwithstanding the foregoing, a "Change in Control" shall not be deemed to
have occurred by virtue of the consummation of any transaction or series of
integrated transactions immediately following which the record holders of the
common stock of the Company immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate ownership in
an entity which owns all or substantially all of the assets of the Company
immediately following such transaction or series of transactions.
(H) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
(I) "Company" shall mean Visteon Automotive Systems, Inc., a
Delaware corporation, and, except in determining under Section 15(G) hereof
whether or not any Change in Control of the Company has occurred, shall
16
include any successor to its business and/or assets which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
(J) "Date of Termination" shall have the meaning set forth in
Section 7.2 hereof.
(K) "Disability" shall be deemed the reason for the
termination by the Company of the Executive's employment, if, as a result of the
Executive's incapacity due to physical or mental illness, the Executive shall
have been absent from the full-time performance of the Executive's duties with
the Company for a period of six consecutive months, the Company shall have given
the Executive a Notice of Termination for Disability, and, within 30 days after
such Notice of Termination is given, the Executive shall not have returned to
the full-time performance of the Executive's duties.
(L) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended from time to time.
(M) "Excise Tax" shall mean any excise tax imposed under
section 4999 of the Code.
(N) "Executive" shall mean the individual named in the first
paragraph of this Agreement.
(O) "Good Reason" for termination by the Executive of the
Executive's employment shall mean the occurrence (without the Executive's
express written consent) after any Change in Control, or prior to a Change in
Control under the circumstances described in clauses (ii) and (iii) of the
second sentence of Section 6.1 hereof (treating all references in paragraphs (I)
through (VII) below to a "Change in Control" as references to a "Potential
Change in Control"), of any one of the following acts by the Company, or
failures by the Company to act, unless, in the case of any act or failure to act
described in paragraph (I), (V), or (VI) below, such act or failure to act is
corrected prior to the Date of Termination specified in the Notice of
Termination given in respect thereof:
(I) the assignment to the Executive of any duties
inconsistent with the Executive's status as a senior executive officer of the
Company or a material adverse alteration in the nature or status of the
Executive's responsibilities from those in effect immediately prior to the
Change
17
in Control (including, without limitation, the Executive ceasing to be an
executive officer of a public company);
(II) a reduction by the Company in the Executive's
annual base salary as in effect on the date hereof or as the same may be
increased from time to time, except for across-the-board salary reductions
similarly affecting all senior executives of the Company and all senior
executives of any Person in control of the Company;
(III) the relocation of the Executive's principal
place of employment to a location more than 50 miles from the Executive's
principal place of employment immediately prior to the Change in Control or the
Company's requiring the Executive to be based anywhere other than such principal
place of employment (or permitted relocation thereof) except for required travel
on the Company's business to an extent substantially consistent with the
Executive's present business travel obligations;
(IV) the failure by the Company to pay to the
Executive any portion of the Executive's current compensation, or to pay to the
Executive any portion of an installment of deferred compensation under any
deferred compensation program of the Company, within seven days of the date such
compensation is due; or
(V) the failure by the Company to continue to provide
the Executive with benefits substantially similar to the material benefits
enjoyed by the Executive under any of the Company's executive compensation
(including bonus, equity or incentive compensation), pension, savings, life
insurance, medical, health and accident, or disability plans in which the
Executive was participating immediately prior to the Change in Control (except
for across the board changes similarly affecting all senior executives of the
Company and all senior executives of any Person in control of the Company), the
taking of any other action by the Company which would directly or indirectly
materially reduce any of such benefits or deprive the Executive of any material
fringe benefit enjoyed by the Executive at the time of the Change in Control, or
the failure by the Company to provide the Executive with the number of paid
vacation days to which the Executive is entitled on the basis of years of
service with the Company in accordance with the Company's normal vacation policy
in effect at the time of the Change in Control; or
(VI) any purported termination of the Executive's
employment which is not effected pursuant to a Notice of Termination satisfying
18
the requirements of Section 7.1 hereof; for purposes of this Agreement, no such
purported termination shall be effective.
The Executive's right to terminate the Executive's employment for Good
Reason shall not be affected by the Executive's incapacity due to physical or
mental illness. The Executive's continued employment shall not constitute
consent to, or a waiver of rights with respect to, any act or failure to act
constituting Good Reason hereunder. For purposes of any determination regarding
the existence of Good Reason, any claim by the Executive that Good Reason exists
shall be presumed to be correct unless the Company establishes to the Board by
clear and convincing evidence that Good Reason does not exist.
[(P) "Gross-Up Payment" shall have the meaning set forth in
Section 6.2 hereof.]
(Q) "Notice of Termination" shall have the meaning set forth
in Section 7.1 hereof.
(R) "Pension Plan" shall mean any tax-qualified, supplemental
or excess benefit pension plan maintained by the Company and any other plan or
agreement entered into between the Executive and the Company which is designed
to provide the Executive with supplemental retirement benefits.
(S) "Person" shall have the meaning given in Section 3(a)(9)
of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof,
except that such term shall not include (i) the Company or any of its
subsidiaries, (ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its Affiliates, (iii) an
underwriter temporarily holding securities pursuant to an offering of such
securities, or (iv) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company.
(T) "Potential Change in Control" shall be deemed to have
occurred if the event set forth in any one of the following paragraphs shall
have occurred:
(I) the Company enters into an agreement, the
consummation of which would result in the occurrence of a Change in Control;
(II) the Company or any Person publicly announces an
intention to take or to consider taking actions which, if consummated, would
constitute a Change in Control;
19
(III) any Person becomes the Beneficial Owner,
directly or indirectly, of securities of the Company representing 15% or more of
either the then outstanding shares of common stock of the Company or the
combined voting power of the Company's then outstanding securities (not
including in the securities beneficially owned by such Person any securities
acquired directly from the Company or its affiliates); or
(IV) the Board adopts a resolution to the effect
that, for purposes of this Agreement, a Potential Change in Control has
occurred.
(U) "Retirement" shall be deemed the reason for the
termination by the Executive of the Executive's employment if such employment is
terminated in accordance with the Company's retirement policy, including early
retirement, generally applicable to its salaried employees.
(V) "Severance Payments" shall have the meaning set forth in
Section 6.1 hereof.
(W) "Tax Counsel" shall have the meaning set forth in Section
6.2 hereof.
(X) "Term" shall mean the period of time described in Section
2 hereof (including any extension, continuation or termination described
therein).
(Y) "Total Payments" shall mean those payments so described
in Section 6.2 hereof.
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IN WITNESS WHEREOF, the parties have duly executed this
Agreement to be effective as of the Effective Date.
VISTEON CORPORATION
By:
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Name:
Title:
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EXECUTIVE
Address:
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