AMENDED AND RESTATED CHANGE OF CONTROL EMPLOYMENT AGREEMENT
AMENDED
AND RESTATED
This
AGREEMENT
is made
in duplicate by and between Intermec,
Inc.,
a
Delaware corporation, and _____________ (the “Executive”)
as of
the ___ day of ________, 20__ (the “Effective Date”).
WHEREAS,
the
Board of Directors of Intermec, Inc. has determined that it is in the best
interests of the Company and its shareholders 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);
WHEREAS,
the
Board of Directors of Intermec, Inc. 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;
WHEREAS,
the
Company and the Executive are parties to a Change of Control Employment
Agreement dated as of __________, ____ (the “Original
Agreement”);
WHEREAS,
the
Company and the Executive desire to amend and restate the Original Agreement
so
that this Agreement will replace the Original Agreement in its
entirety;
NOW,
THEREFORE, THE PARTIES AGREE AS FOLLOWS:
1. Definitions.
1.1
“Accounting Firm” means (i) the independent certified public accounting firm
serving the Company immediately prior to the Change of Control Date or (ii)
an
independent certified public accounting firm selected by the Executive pursuant
to Section 7(c) of this Agreement.
1.2
“Accrued Obligations” has the meaning set forth in Section 6(a)(i) of this
Agreement.
1.3
“Affiliate” means a Person that Controls or is Controlled by or is under common
Control with Intermec, Inc.
1.4
“Agreement” means this Amended and Restated Change of Control and Employment
Agreement.
1.5
“Annual Base Salary” has the meaning set forth in Section 4(b)(i) of this
Agreement.
1.6
“Annual Bonus” has the meaning set forth in Section 4(b)(ii) of this
Agreement.
1.7
“Benefits” means Fringe Benefits, Retirement Benefits, and/or Welfare Benefits.
1.8
“Board” means the Board of Directors of Intermec, Inc. and its
Successors.
1.9
“Business Combination” means a reorganization, merger, or consolidation or sale
or other disposition of all or substantially all of the assets of the
Company.
1.10
“Cause” has the meaning set forth in Section 5(b) of this Agreement.
1.11
“Change of Control” has the meaning set forth in Section 2 of this
Agreement.
1.12
“Change of Control Date” means (i) the effective date of a Change of Control or
(ii) if, the Company terminates the Executive’s employment or reduces
Executive’s Annual Base Salary, Annual Bonus, Opportunities or Benefits without
Cause prior to the effective date of a Change of Control and if it is reasonably
demonstrated by the Executive that such termination or reduction (A) was at
the
request of a third party who had taken steps reasonably calculated to effect
a
Change of Control or (B) otherwise arose in connection with or in anticipation
of a Change of Control, then “Change of Control Date” means the date immediately
prior to the date of such termination or reduction.
1.13
“Company” means Intermec, Inc., its Successors and its Affiliates.
1.14
“Control” means (i) beneficial ownership (within the meaning of Rule 13d-3 of
the Exchange Act), directly or indirectly, of 30% or more of a Person’s then
outstanding voting equity generally entitled to vote in the election of
directors (or other participants of the managing authority) or (ii) acquisition
of actual control of the operations of a Person whether by means of contract
or
otherwise or (iii) acquisition of control of a Person through a merger or
consolidation or (iv) acquisition of all or substantially all of a Person’s
assets.
1.15
"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 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 death of the Executive
or the Disability Effective Date, as the case may be; provided, however, that,
when the event of termination occurs in the fourth calendar quarter of the
year,
the Date of Termination is January 1 of the following year.
1.16
“Disability” means 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.
1.17
“Disability Effective Date” means the 30th day after the Executive’s receipt of
the Company’s notice of intent to terminate the Executive’s employment pursuant
to Section 5(a) of this Agreement.
1.18
“Dispute” means disagreement, dispute, controversy, suit, action, proceeding or
claim arising out of or relating to this Agreement or the interpretation of
this
Agreement.
1.19
"Effective Date" has the meaning set forth in the first sentence of this
Agreement.
1.20
“Employment Period” means the period beginning on the Change of Control Date and
ending on the second anniversary of such Change of Control Date.
1.21
“ERISA Sections 601-608” means Sections 601-608 of the Employee Retirement
Income Security Act of 1974, as amended.
1.22
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
1.23
“Excess Parachute Payment” means an excess parachute payment within the meaning
of IRC Section 280G.
1.24
“Excise Tax” means the excise tax imposed by IRC Section 4999.
1.25
“Executive” has the meaning set forth in the first sentence of this
Agreement.
1.26
“Executive’s Principal Location” means the location where the Executive was
employed on the business day immediately preceding the Change of Control
Date.
1.27
“Fringe Benefit Plan” means any plan, practice, program or policy maintained by
the Company with respect to fringe benefits, including, without limitation,
tax
and financial planning services and payment of related expenses.
1.28
“Good Reason” has the meaning set forth in Section 5(c) of this
Agreement.
1.29
“Incentive Compensation Plans” means incentive (including stock option or
similar incentive plans), savings and retirement plans, practices, policies
and
programs maintained by the Company, including, without limitation, the
Management Incentive Compensation Plan.
1.30
“Incumbent Board” has the meaning set forth in Section 2(b) of this
Agreement.
1.31
“IRC” means the Internal Revenue Code of 1986 as amended.
1.32
“IRC
Section 1274(b)(2)(B)” means Section 1274(b)(2)(B) of the IRC.
1.33
“IRC
Section 1274 (d)” means Section 1274(d) of the IRC.
1.34
“IRC
Section 409A” means Section 409A of the IRC.
1.35
“IRC
Section 4980B means Section 4980B of the IRC.
1.36
“IRC
Section 4999” means Section 4999 of the IRC.
1.37
“IRC
Interest Rate” means the applicable federal interest rate provided for delayed
payment in Section 7872(f)(2)(A) of the IRC.
1.38
“IRS” means the U.S. Internal Revenue Service.
1.39
“Management Incentive Compensation Plan” means the Intermec,
Inc. Management Incentive Compensation Plan (effective for the 1999 fiscal
year
and thereafter) and any predecessor or successor plans which provide for the
grant of annual cash bonuses or other short-term cash incentive awards during
the last three full fiscal years prior to the Change of Control
Date.
1.40
“Net
After-Tax Benefit” has the meaning set forth in Section 7(a) of this
Agreement.
1.41
“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 will be not more than thirty days after the giving of such notice).
1.42
“Opportunities” means the opportunity to (i) obtain regular or special incentive
compensation under the Company’s Incentive Compensation Plans, (ii) obtain
regular or special retirement benefits under the Company’s Retirement Plans,
(iii) save through the Company’s Savings Plans and/or (iv) obtain regular or
special benefits under the Company’s Welfare Benefit Plans.
1.43
“Other Benefits” has the meaning set forth in Section 6(a)(iv) of this
Agreement.
1.44
“Outstanding Company Common Stock” has the meaning set forth in Section 2(a)(i)
of this Agreement.
1.45
“Outstanding Company Voting Securities” has the meaning set forth in Section
2(a)(ii) of this Agreement.
1.46
“Parachute Payment” means “parachute payment” within the meaning of IRC Section
280G.
1.47
“Parachute Value” means the
present value as of the date of the Change of Control of the portion of the
Payment that constitutes a "parachute payment" under IRC Section 280G(b)(2),
as
determined by the Accounting Firm in accordance with IRC Section
280G(b)(2).
1.48
“Payment” has the meaning set forth in Section 7(a) of this Agreement.
1.49
“Person” has the meaning set forth in Section 2(a) of this
Agreement.
1.50
“Plan” means Fringe Benefit Plan, Incentive Compensation Plan, Retirement Plan,
Savings Plan, Severance Plan, Vacation Plan and/or Welfare Benefit
Plan.
1.51
“Reduced Amount” means an amount expressed in present value which maximizes the
aggregate present value of Payments without causing any Payment to be subject
to
Excise Tax.
1.52
“Repayment Amount” has the meaning set forth in Section 7(c) of this
Agreement.
1.53
“Retirement Benefits” means any compensation a retiree is eligible to receive
under a Retirement Plan.
1.54
“Retirement Plan” means any qualified or non-qualified defined benefit
retirement plan maintained by the Company, including but not limited to the
Intermec, Inc. Pension Plan, the Intermec, Inc. Supplemental Executive
Retirement Plan and the Intermec, Inc. Restoration Plan.
1.55
“Safe Harbor Amount” means the maximum dollar amount of Payments in the nature
of compensation that are contingent on a Section 280G Change of Control and
may
be paid or distributed to the Executive without imposition of the Excise
Tax.
1.56
“Savings Plan” means any qualified or non-qualified savings program maintained
by the Company, including but not limited to the Intermec, Inc. Financial
Security and Savings Program.
1.57
“Section 280G Change of Control” means a change of control within the meaning of
IRC Section 280G.
1.58
“Section 280G Compensation means compensation within the meaning of IRC Section
280G.
1.59
“SERP” means any excess or supplemental retirement plan maintained by the
Company.
1.60
“Severance Plan” means any plan, practice, policy or program under which the
Company provides benefits to employees following the Company’s termination of
their employment.
1.61
“Successor” means a Person that acquires Control of the Company.
1.62
“Vacation Plan” means any plan, practice, policy or program maintained by the
Company with respect to employee vacations.
1.63
“Welfare Benefit Plan” means any welfare benefit plan, practice, policy or
program provided by the Company to its employees (including, without limitation,
medical, prescription, dental, disability, salary continuance, employee life,
group life, accidental death and travel accident insurance plans and
programs)
1.64
“Willful” has the meaning set forth in Section 5(b) of this
Agreement.
2. Change
of Control.
For the
purpose of this Agreement, the term "Change
of Control"
means:
(a)
An
acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person")
of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 30% 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");
excluding, however, the following acquisitions of Outstanding Company Common
Stock and Outstanding Company Voting Securities: (i) any acquisition directly
from the Company, other than an acquisition by virtue of the exercise of a
conversion privilege unless the security being so converted was itself acquired
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 (iv) any acquisition by any Person 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 Effective Date, constitute the Board (the
"Incumbent
Board")
cease
for any reason to constitute at least a majority of the Board; provided,
however, that any individual who becomes a member of the Board subsequent to
the
Effective Date whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of directors then
comprising the Incumbent Board shall be considered as though such individual
were a member of the Incumbent Board; but, provided further, that any such
individual whose initial assumption of office occurs as a result of either
an
actual or threatened election contest (as such terms are used in Rule 14a-11
of
Regulation 14A promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than
the
Board shall not be so considered as a member of the Incumbent Board;
or
(c)
The
consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Company (“Business
Combination”); excluding, however, such a Business Combination pursuant to which
(i) all or sub-stantially all of the individuals and entities who are the
beneficial owners, respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Business
Combination will beneficially own, directly or indirectly, more than 60 percent
of, respectively, the 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) 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 (other than any employee benefit plan (or
related trust) sponsored or maintained by the Company or any entity controlled
by the Company or such corporation resulting from such Business Combination)
will beneficially own, directly or indirectly, 30 percent or more of,
respectively, the outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting power of the
outstanding voting securities of such corporation entitled to vote generally
in
the election of directors except to the extent that such ownership existed
with
respect to the Company 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 will have been 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)
The
consummation of a complete liquidation or dissolution of the
Company.
3. Employment
Period.
Subject
to the terms and conditions of this Agreement, the Company agrees to continue
the Executive in its employ, and the Executive agrees to remain in the employ
of
the Company for the duration of the Employment Period.
4. Terms
of Employment.
(a)
Position
and Duties.
(i)
During the Employment Period, (A) the Executive's position (including status,
offices, titles, and reporting requirements), authority, duties, and
responsibilities will 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 Change of Control Date and (B) the
Executive's services will be performed at the Executive’s Principal Location or
at any office or location that is 25 miles or less from the Executive’s
Principal Location.
(ii)
During the Employment 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 Employment Period it will not be a xxxxx-tion
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 Change
of
Control Date, the continued conduct of such activities (or the conduct of
activities similar in nature and scope thereto) subsequent to the Change of
Control Date will not thereafter be deemed to interfere with the performance
of
the Executive's responsibilities to the Company.
(b)
Compensation.
(i)
Base
Salary.
During
the Employment Period, the Executive will receive from the Company an annual
base salary ("Annual
Base Salary"),
(which will be paid at a monthly rate) at least equal to twelve times the
highest monthly base salary paid or payable, including any base salary which
has
been earned but deferred, to the Executive by the Company in the 12-month period
immediately preceding the Change of Control Date. During the Employment Period,
the Annual Base Salary will be reviewed by the Company no more than 12 months
after the last salary increase awarded to the Executive prior to the Change
of
Control Date and thereafter at least annually. Any increase in the Executive’s
Annual Base Salary will not limit or reduce any of the Company’s other
obligations to the Executive under this Agreement. The Annual Base Salary will
not be reduced after any such increase and, as used in this Agreement, the
term
“Annual
Base Salary”
means
the Annual Base Salary as so increased.
(ii)
Annual
Bonus.
In
addition to Annual Base Salary, the Executive will be awarded, for each fiscal
year ending during the Employment Period, an annual bonus in cash equal to
the
Target Bonus (as that term is defined in the Management Incentive Compensation
Plan) applicable to the Executive for the fiscal year, or if the Management
Incentive Compensation Plan is not in effect for such fiscal year, the target
bonus or award which the Executive would earn for such year under any incentive
plan or arrangement in which the Executive participates or is eligible to
participate pursuant to Section 4(b)(iii) assuming the attainment of any
performance goals or similar criteria to the extent necessary for the Executive
to qualify to receive the target award thereunder. The amount described in
preceding sentence is hereinafter called the "Annual
Bonus."
(iii)
Incentive,
Savings, and Retirement Plans.
During
the Employment Period, the Executive will be entitled to participate in all
Incentive Compensation Plans applicable generally to other peer executives
of
the Company, but in no event will such plans provide the Executive with
Incentive Compensation Plan Opportunities, Savings Plan Opportunities and
Retirement Plan Opportunities, in each case, less favorable, in the aggregate,
than the most favorable of those provided by the Company for the Executive
under
such plans as in effect at any time during the 120-day period immediately
preceding the Change of Control Date or, if more favorable to the Executive,
those provided generally at any time on or after the Change of Control Date
to
other peer executives of the Company.
(iv) Welfare
Benefit Plans.
During
the Employment Period, the Executive and/or the Executive's family, as the
case
may be, will be eligible for participation in and will receive all benefits
under the Company’s Welfare Benefit Plans to the extent applicable generally to
other peer executives of the Company, but in no event will 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 Change of Control Date or, if
more
favorable to the Executive, those provided generally at any time on or after
the
Change of Control Date to other peer executives of the Company.
(v)
Expenses.
During
the Employment Period, the Executive will 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 in effect for the Executive at any time during the 120-day period
immediately preceding the Change of Control Date or, if more favorable to the
Executive, on or after the Change of Control Date with respect to other peer
executives of the Company.
(vi) Fringe
Benefits.
During
the Employment Period, the Executive will be entitled to fringe benefits,
including, without limitation, if applicable, tax and financial planning
services in accordance with the most favorable Plans of the Company in effect
for the Executive at any time during the 120-day period immediately preceding
the Change of Control Date or, if more favorable to the Executive, as in effect
generally at any time on or after the Change of Control Date with respect to
other peer execu-tives of the Company.
(vii)
Office
and Support Staff.
During
the Employment Period, the Executive will 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 at any time during the
120-day period immediately preceding the Change of Control Date or, if more
favorable to the Execu-tive, as provided generally at any time on or after
the
Change of Control Date with respect to other peer executives of the
Company.
(viii)
Vacation.
During
the Employment Period, the Executive will be entitled to paid vacation in
accordance with the most favorable Plan of the Company as in effect for the
Executive at any time during the 120-day period immediately preceding the Change
of Control Date or, if more favorable to the Executive, as in effect generally
at any time on or after the Change of Control Date with respect to other peer
executives of the Company.
5. Termination
of Employment.
(a)
Death
or Disability.
Subject
to Section 5(d) of this Agreement, the Executive's employment will terminate
automatically upon the Executive's death during the Employment Period. If the
Company determines in good faith that the Disability of the Executive has
occurred during the Employment Period, 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 employ-ment
with the Company will terminate effective on the Disability Effective Date,
unless, prior to such date, the Executive has returned to the full-time
performance of his or her duties.
(b)
Cause.
The
Company may terminate the Executive's employment during the Employment Period
for Cause. For purposes of this Agreement, "Cause"
means:
(i)
the
Willful and continued failure of the Executive to perform substantially the
Executive's duties with the Company (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 materi-ally and demonstrably injurious to the Company.
For
purposes of this provision, no act or failure to act, on the part of the
Executive, will be considered "Willful"
unless
it is done, or omitted to be done, by the Executive in bad faith or without
reasonable belief that the Execu-tive'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 will 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 will not be deemed
to
be for Cause unless and until there will 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.
During
the Employment Period, the Executive may terminate his or her employment with
the Company (by resignation or retirement) for Good Reason. For purposes of
this
Agreement, "Good
Reason"
means:
(i)
the
assignment to the Executive of any duties inconsistent in any respect with
the
Executive's position (including status, offices, titles, and reporting
requirements), authority, duties, or responsibilities as contemplated by Section
4(a) of this Agreement, or any other action by the Company which results in
a
diminution in such position, authority, duties, or responsibilities, excluding
for this purpose an isolated, insubstantial and inadvertent action not taken
in
bad faith and which is remedied by the Company promptly after receipt of notice
thereof given by the Executive;
(ii)
the
Company’s failure 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 reduction of the Executive’s Annual Base Salary, Annual Bonus,
Opportunities, Retirement Benefits or Welfare Benefits without
Cause;
(iv)
the
Company’s failure to continue in effect any Incentive Compensation Plan (other
than equity-based plans), Retirement Plan or Savings Plan in which Executive
was
eligible to participate on the Change of Control Date, unless an equitable
on-going substitute or alternative plan applicable to the Executive was
previously adopted by the Company;
(v)
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 Change of Control Date;
(vi)
any
purported termination by the Com-pany of the Executive's employment otherwise
than as expressly permitted by this Agreement; or
(vii)
any
failure by the Company to comply with and satisfy Section 14(c) of this
Agreement.
For
purposes of this Section 5(c), any good faith determination of Good Reason
made
by the Executive will be conclusive.
The
Executive’s continued employment during the Employment Period will not
constitute and will not deemed to be consent to or a waiver of rights with
respect to any fact or circumstance constituting grounds for the Executive’s
termination of his or her employment pursuant to this Section 5(c).
(d)
Executive’s
Right To Terminate During Disability.
The
Executive’s Disability during the Employment Period will not end or otherwise
impair his or her right to terminate his or her employment with the Company
based on any fact or circumstance constituting grounds for such termination
pursuant to Section 5(c).
(e)
Notice
of Termination.
Any
termination by the Company for Cause, or by the Executive for Good Reason,
will
be communicated by Notice of Termination to the other party hereto given in
accordance with Section 12(b) of this Agreement. 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 will 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
circum-stance in enforcing the Executive's or the Company's rights hereunder.
6. Obligations
of the Company Upon Termination.
(a)
Good
Reason; Other Than for Cause, Death or Disability.
If,
during the Employment Period, the Company termi-nates the Executive's employment
other than for Cause or Disability or the Executive terminates employment for
Good Reason:
(i)
the
Company will pay to the Executive the sum of the following amounts:
A.
the
sum of (1) the Executive's Annual Base Salary through the Date of Termination
to
the extent not theretofore paid, (2) the product of (x) the Annual Bonus, and
(y) a fraction, the numerator of which is the number of days in the current
fiscal year through the Date of Termination, and the denominator of which is
365, in each case to the extent not theretofore paid and (3) any compensation
previously deferred by the Executive (together with any accrued interest or
earnings thereon), any awards under the Management Incentive Compensation Plan
or any comparable or successor plan and any accrued vacation pay, in each case
to the extent not theretofore paid (the sum of the amounts described in clauses
(1), (2), and (3) shall be hereinafter referred to as the "Accrued
Obligations"); and
B.
The
lump sum cash amount equal to the product of (1) two and (2) the sum of (x)
the
Executive's Annual Base Salary and (y) the Annual Bonus, or if higher, any
bonus
paid with respect to any fiscal year during the Employment Period;
and
C.
Utilizing actuarial assumptions no less favorable to the Executive than those
in
effect immediately prior to the Change of Control Date, a lump sum cash amount
equal to the excess of (a) the actuarial equivalent of the benefit under the
Company's Retirement Plan and SERP which the Executive would receive if the
Executive's employment continued for two years after the Date of Termination
assuming for this purpose that all accrued benefits are fully vested, and,
assuming that the Executive's compensation in each of the two years is that
required by Section 4(b)(i) and Section 4(b)(ii), over (b) the actuarial
equivalent of the Executive's actual benefit (paid or payable), if any, under
the Retirement Plan and the SERP as of the Date of Termination;
(ii)
for
two years after the Executive's Date of Termination, or such longer period
as
may be provided by the terms of the appropriate Welfare Benefit Plan, the
Company will continue benefits 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 Welfare Benefit Plans 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 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’s plan, the
Welfare Benefits described in this Section 6(c)(ii) will 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 Retirement Benefits, the Executive will be
considered to have remained employed by the Company until two years after the
Date of Termination and to have retired on the last day of such period. At
the
termination of the medical and dental benefits described in this Section
4.2(b)(ii), the Executive and his or her family will be entitled to continuation
coverage pursuant to IRC Section 4980B, ERISA Sections 601-608 and under any
other applicable law as if the Termination Date was the date on which such
medical and dental benefits expired. In the event you are ineligible under
the
terms of such benefit plans or programs to continue to be so covered, the
Company will provide you with substantially equivalent coverage through other
sources or will provide you with a lump-sum payment in such amount that, after
all income taxes on that amount, will be equal to the cost of providing yourself
such benefit coverage. The lump sum will be determined on a present value basis
using the interest rate provided in IRC Section 1274(b)(2)(B) as of the Date
of
Termination.
(iii)
the
Company will, at its sole expense and up to the end of the second calendar
year
after the calendar year containing the Date of Termination, provide the
Executive with reasonable outplacement services the scope and provider of which
will be selected by the Executive in his or her sole discretion;
and
(iv)
subject to Section 9(b), the Company will 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 (such other amounts and benefits will be hereinafter
referred to as the "Other
Benefits").
(b)
Death.
If the
Executive's employment is terminated by reason of the Executive's death during
the Employment Period, this Agreement will 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 will be paid to the Executive's estate or
beneficiary, as applicable, in a lump sum in cash. With respect to the provision
of Other Benefits, the term Other Benefits as utilized in this Section 6(b)
will
include, without limitation, and the Executive's estate and/or beneficiaries
will be entitled to receive, benefits at least equal to the most favorable
benefits provided by the Company 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 Change of Control 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 their beneficiaries.
(c)
Disability.
If the
Executive's employment is terminated by reason of the Executive's Disability
during the Employment Period, this Agreement will terminate with-out further
obligations to the Executive, other than for payment of Accrued Obligations
and
the timely payment or provision of Other Benefits. Accrued Obligations will
be
paid to the Executive in a lump sum in cash. With respect to the provision
of
Other Benefits, the term Other Benefits as utilized in this Section 6(c) will
include, and the Executive will 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 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 Change of Control 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 their
families.
(d)
Cause;
Other than for Good Reason.
If the
Executive's employment is terminated for Cause during the Employment Period
or
if the Executive volun-tarily terminates employment during the Employment
Period, excluding a termination for Good Reason, this Agreement will terminate
without further obligations to the Executive other than the obligation to pay
to
the Executive the sum of (x) his or her 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. In such case, all Accrued Obligations will be paid to the Executive
in a
lump sum in cash
7. Conditional
Cap On Payments.
(a)
Subject to Section 7(b), if it is determined that any payment or distribution
in
the nature of Section 280G Compensation by the Company to or for the benefit
of
the Executive (whether paid or payable or distributed or distributable pursuant
to the terms of this Agreement or otherwise, but determined without regard
to
any additional payments required under this Section 7) (a "Payment")
would
constitute an Excess
Parachute Payment and,
but
for this Section 7, would be subject to Excise Tax, then such Payments will
be
reduced to the Reduced Amount but only if, by reason of such reduction, the
net
after-tax benefit to the Executive exceeds the net after-tax benefit which
would
be received by the Executive if no such reduction was made. For the purposes
of
this Section 7, the term “net
after-tax benefit” means
(i)
the total Payments the Executive receives or is entitled to receive that would
constitute Parachute Payments less (ii) the amount of all federal, state and
local income and employment taxes payable by the Executive with respect to
the
total Payments calculated at the highest marginal income tax rate for each
year
in which the Payments will be paid to the Executive (based on the rate in effect
for such year as set forth in the IRC as in effect at the time of the first
Payment), less (iii) the Excise Taxes imposed by IRC Section 4999 with respect
to the Payments. Unless the Executive elects another reduction method by giving
written notice thereof to the Company prior to the Change of Control Date,
the
Company will reduce the Payments to the Reduced Amount by first reducing
Payments that are not payable in cash and then by reducing cash Payments. Only
amounts payable under this Agreement that are Section 280G Compensation and
are
contingent on a Section 280G Change of Control will be reduced pursuant to
this
Section 7(a).
(b)
All
determinations required to be made under this Section 7, including whether
and
when Payments will be reduced to the Reduced Amount and the amount of such
reduction and the assumptions to be utilized in arriving at such determination,
will be made by the Accounting Firm which will provide detailed supporting
calculations both to the Company and the Executive within 15 business days
of
the receipt of notice from the Company that there will be a Payment, or at
such
earlier time as the Company may request. In the event that the Accounting Firm
is serving as accountant or auditor for the individual, entity, or group
effecting the Change of Control, the Executive will appoint another independent
certified accounting firm to make the determinations required hereunder. All
fees and expenses of the Accounting Firm will be borne solely by the Company.
Subject to Section 7(c), the Accounting Firm’s determination will be conclusive
and binding upon the Company and the Executive.
(c)
If
the IRS determines that Executive is liable for Excise Tax as a result of
receipt of a Payment, Executive will be obligated to pay to the Company the
smallest such amount, if any, as is required to be paid to the Company so that
the Executive’s net proceeds with respect to any Payments (after taking the
payment of the Excise Tax on such Payments) is maximized (the “Repayment
Amount”);
provided, however, that the Repayment Amount will be zero if a Repayment Amount
greater than zero would not eliminate the Excise Tax imposed on such Payment.
If
the Repayment Amount is greater than zero, the Executive will pay that amount
within 30 days of the date that the Executive enters into a binding agreement
with the IRS as to the amount of the Executive’s Excise Tax liability or within
30 days of receiving a final determination by the IRS or a court of competent
jurisdiction requiring the Executive to pay the Excise Tax with respect to
a
Payment from which no appeal is available or is timely taken. If the Excise
Tax
is not eliminated through the payment of the Repayment Amount, the Executive
will pay the Excise Tax.
8.
Timing
of Payments Due To Executive; Taxes.
(a)
Subject to Section 8(b) of this Agreement, payments to be made by the Company
to
the Executive or his or her legal representative, estate or beneficiary under
Section 6(a)(i) of this Agreement will be made not later than 30 days after
the
Date of Termination. All other payments to be made by the Company to the
Executive or his or her legal representative, estate or beneficiary pursuant
to
this Agreement will be made at the time and in the manner specified herein
or in
the applicable Plan.
(b)
Notwithstanding anything to the contrary in this Agreement, any cash payments
(other than Accrued Obligations) due to the Executive under this Agreement
on or
within the 6-month period following the Executive’s termination will accrue
during such 6-month period and will become payable in a lump sum cash payment
on
the date 6 months and 1 business day following the Date of Termination,
provided, however, that such payments will be made earlier (at the times and
in
the manner specified in Section 8(a)) if the Executive advises the Company
in
writing that, after consulting with his or her legal and tax advisers, the
Executive has determined that such earlier payment will not result in the
imposition of the tax described in IRC Section 409A. In addition, this Agreement
will be deemed amended to the extent necessary to avoid imposition of any tax
or
income recognition under IRC Section 409A prior to actual payment.
(c)
If,
for any reason, the taxes described in IRC Section 409A are imposed with respect
to payments due to the Executive or his or her legal representative, estate
or
beneficiaries, the Executive and his or her legal representative, estate and
beneficiary are solely responsible for payment of such taxes and any interest
or
penalties related thereto. Subject to Section 7, all federal, state, local
and
foreign taxes are the sole responsibility of the Executive and his or her legal
representative, estate or beneficiaries.
(d)
The
Company may withhold from any amounts payable under this Agreement such federal,
state, local or foreign taxes as are required to be withheld pursuant to
applicable laws and regulations.
9. Non-exclusivity
of Rights; No Double Benefits.
(a)
Subject to Section 9(b), nothing in this Agreement prevents or limits the
Executive's continuing or future participation in any Plan maintained by the
Company and for which the Executive may qualify, nor will anything herein limit
or otherwise affect such rights as the Executive may have under any contract
or
agreement with the Company. Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any the Company at or
subsequent to the Date of Termination will be payable in accordance with the
applicable Plan unless this Agreement provides otherwise.
(b)
If,
in addition to this Agreement, another agreement requires the Company to make
payments or provide other benefits to the Executive as a result of a Change
of
Control or, if a Severance Plan requires the Company to make payments or provide
other benefits to the Executive on termination of the Executive’s employment for
reasons other than Cause, the Executive will receive the benefits of this
Agreement if and only the Executive waives in writing all rights to the benefits
of such other agreement or Severance Plan. The Company shall also have the
right
to offset the benefits of this Agreement in the absence of such a waiver.
10. No
Offsets.
Excepted as provided under Section 9(b), the Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its obligations
hereunder will 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.
11. Mitigation
Not Required.
In no
event will 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 will not be reduced whether
or
not the Executive obtains other employment.
12. Compensation
During Dispute; Legal Fees.
(a)
Subject to Section 8(b), in the event of a Dispute, the Company will pay the
Executive fifty percent (50%) of the amounts payable under Section 6 and will
provide the Executive with all of the benefits specified in Section 6 if, but
only if, the Executive agrees in writing that, if the Dispute is resolved in
the
Company’s favor, the Executive will promptly reimburse the Company for the
excess payments and benefits together with interest thereon at the rate
specified in IRC Section 1274(d). If the Dispute is resolved in the Executive’s
favor, the Company will promptly pay the Executive the amount that was withheld
during the Dispute together with interest thereon at the rate specified in
IRC
Section 1274(d).
(b)
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 pay-ment at the applicable
rate set forth in IRC Section 7872(f)(2)(A).
13.
At
Will Employment; Termination.
The
Executive and the Company acknowledge and agree that the employment of the
Executive by the Company is "at will" and the Executive's employment and/or
this
Agreement may be terminated by either the Executive or the Company at any time
prior to the Change of Control Date, in which case the Execu-tive will have
no
further rights under this Agreement.
14. Successors.
(a)
This
Agreement is personal to the Executive and without the prior written consent
of
the Company cannot be assigned or otherwise transferred by the Executive except
by will or the laws of descent and distribution. This Agreement will inure
to
the benefit of and be enforceable by the Executive's legal representatives,
estate and beneficiaries.
(b)
This
Agreement will inure to the benefit of and be binding upon the Company, its
Successors and assigns.
(c)
The
Company will require any Successor 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 Change of Control had occurred.
15.
Confidential
Information.
The
Executive will hold in a fiduciary capacity for the benefit of the Company
all
secret or confidential information, knowledge, or data relating to the Company,
and their respective businesses, which will have been obtained by the Executive
during the Executive's employment by the Company and which will 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 will 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 will an asserted
violation of the provisions of this Section 15 constitute a basis for deferring
or withholding any amounts otherwise payable to the Executive under this
Agreement.
16. Miscellaneous.
(a)
This
Agreement will be governed by and construed in accordance with the laws of
the
State of Delaware, without reference to principles of conflict of
laws.
(b)
No
suit, action, proceeding or claim arising under or by reason of this Agreement
may be brought by any party or any third party in any place other than the
state
or federal courts located in Seattle, Washington. The parties irrevocably
consent to the jurisdiction and venue of such courts in connection with any
such
suit, action, proceeding or claim.
(c)
The
captions of this Agreement are not part of the provisions hereof and will 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.
(d)
All
notices and other communications hereunder will be in writing and will 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: ________________
If
to the
Company: Intermec,
Inc.
Attention:
SVP and Chief Financial Officer
0000
00xx
Xxxxxx
Xxxx
Xxxxxxx,
XX 00000-0000
With
a
copy to: Intermec,
Inc.
Attention:
SVP, General Counsel and Secretary
0000
00xx
Xxxxxx
Xxxx
Xxxxxxx,
XX 00000-0000
or
to
such other address as either party will have furnished to the other in writing
in accordance herewith. Notice and communications will be effective when
actually received by the addressee.
(e)
The
invalidity or unenforceability of any provision of this Agreement will not
affect the validity or enforceability of any other provision of this
Agreement.
(f)
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)-(vii) of this Agreement, will not be deemed to be a waiver of such
provision or right or any other provision or right of this
Agreement.
(g)
This
Agreement supercedes the Original Agreement in its entirety. Furthermore, this
Agreement constitutes a single, integrated contract expressing the entire
agreement of the parties with respect to the subject matter hereof and
supercedes all prior or contemporaneous oral and written agreements and
discussions with respect to the subject matter hereof and, except as explicitly
set forth herein, there are no other agreements, written or oral, express or
implied between the parties with respect to the subject matter of this
Agreement.
IN
WITNESS WHEREOF,
the
Executive has hereunto set the Executive's hand and, pursuant to the
authorization from its Board of Directors, the Company has caused these presents
to be executed in its name on its behalf, all as of the day and year first
above
written.
[Executive]
Intermec,
Inc.
By
Xxxxx
X.
Xxxxxxx
Senior
Vice President and
Chief
Financial Officer
