Exhibit 10-n-1
CHANGE OF CONTROL
AGREEMENT
AGREEMENT by and between Rockwell Collins, Inc.,
a Delaware corporation (the "Company") and [executive name] (the
"Executive"), dated as of the xx day of yyyyyy, 2009.
The Board of Directors of the Company (the
"Board"), has determined that it is in the best interests of the
Company and its shareowners to assure that the Company will have
the continued dedication of the Executive, notwithstanding the
possibility, threat or occurrence of a Change of Control (as
defined below) of the Company. The Board believes it is
imperative to diminish the inevitable distraction of the Executive
by virtue of the personal uncertainties and risks created by a
pending or threatened Change of Control and to encourage the
Executive's full attention and dedication to the Company currently
and in the event of any threatened or pending Change of Control,
and to provide the Executive with compensation and benefits
arrangements upon a Change of Control which ensure that the
compensation and benefits expectations of the Executive will be
satisfied and which are competitive with those of other
corporations. Therefore, in order to accomplish these
objectives, the Board has caused the Company to enter into this
Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS
FOLLOWS:
1.
Certain Definitions
. (a) The "Effective Date" shall mean the
first date during the Change of Control Period (as defined in
Section 1(b)) on which a Change of Control (as defined in Section
2) occurs. Anything in this Agreement to the contrary
notwithstanding, if a “Change of Control Event" (as defined
under Treasury Regulation Section 1.409A-3(i)(5)(i) and as set
forth in Treasury Regulation Section 1.409A-3(i)(5)(v)-(vii),
as amended) ("409A Change of Control") occurs and if the
Executive's employment with the Company is terminated prior to the
date on which the 409A Change of Control occurs, and if it is
reasonably demonstrated by the Executive that such termination of
employment (i) was at the request of a third party who has taken
steps reasonably calculated to effect a 409A Change of Control or
(ii) otherwise arose in connection with or anticipation of a 409A
Change of Control, then for all purposes of this Agreement the
"Effective Date" shall mean the date immediately prior to the date
of such termination of employment and such termination of
employment shall be hereinafter referred to as “Pre-Change of
Control Termination".
(b) The
"Change of Control Period" shall mean the period commencing on the
date hereof and ending on the third anniversary of the date hereof;
provided, however, that on such third anniversary, and on
each annual anniversary of such date (such date and each annual
anniversary thereof, the “Renewal Date”), unless
previously terminated, the Change of Control Period shall be
automatically extended so as to terminate one year from such
Renewal Date, unless, at least 60 days prior to the Renewal Date,
the Company shall give written notice to the Executive that the
Change of Control Period shall not be so extended.
2.
Change of Control
. For the purpose of this Agreement, a "Change of
Control" shall mean:
(a) The
acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) (a "Person") of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of either (i) the then outstanding
shares of common stock of the Company (the "Outstanding Company
Common Stock") or (ii) the combined voting power of the then
outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Company
Voting Securities"); provided, however, that for purposes of this
subsection (a), the following acquisitions shall not constitute a
Change of Control: (i) any acquisition directly from the
Company, (ii) any acquisition by the Company, (iii) any acquisition
by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the
Company or (iv) any acquisition by any corporation pursuant to a
transaction which complies with clauses (i), (ii) and (iii) of
subsection (c) of this Section 2; or
(b) Individuals
who, as of the date hereof, constitute the Board (the "Incumbent
Board") cease for any reason to constitute at least a majority of
the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or
nomination for election by the Company's shareholders, was approved
by a vote of at least a majority of the directors then comprising
the Incumbent Board shall be considered as though such individual
were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board; or
(c) Consummation
of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the
Company or the acquisition of assets of another corporation (a
"Business Combination"), in each case, unless, following such
Business Combination, (i) all or substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more
than 50% of, respectively, the then outstanding shares of common
stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors,
as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as
a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or
through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business
Combination of the Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be, (ii) no Person
(excluding any corporation resulting from such Business
Combination, or any employee benefit plan (or related trust) of the
Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 20% or more
of, respectively, the then outstanding shares of common stock of
the corporation resulting from such Business Combination or the
combined voting power of the then outstanding voting securities of
such corporation except to the extent that such ownership existed
prior to the Business Combination and (iii) at least a majority of
the members of the board of directors of the corporation resulting
from such Business Combination were members of the Incumbent Board
at the time of the execution of the initial agreement, or of the
action of the Board, providing for such Business Combination;
or
(d) Approval
by the shareholders of the Company of a complete liquidation or
dissolution of the Company.
Notwithstanding
any other provision of this Agreement to the contrary, if the
Executive incurs a Pre-Change of Control Termination then, for
purposes of determining whether a Change of Control has occurred
for purposes of the Executive’s entitlement to payments and
benefits provided pursuant to Section 6 of this Agreement, the
definition of 409A Change of Control shall be substituted for the
definition of Change of Control set forth in this Section
2.
3.
Protected Period . The Company
hereby agrees to continue the Executive in its employ, and the
Executive hereby agrees to remain in the employ of the Company
subject to the terms and conditions of this Agreement, for the
period commencing on the Effective Date and ending on the second
anniversary of such date (the "Protected Period").
4.
Terms of Employment
. (a) Position and Duties
. (i) During the Protected Period, (A) the
Executive's position (including status, offices, titles and
reporting requirements), authority, duties and responsibilities
shall be at least commensurate in all material respects with the
most significant of those held, exercised and assigned at any time
during the 120-day period immediately preceding the Effective Date
and (B) the Executive's services shall be performed at the location
where the Executive was employed immediately preceding the
Effective Date or any office or location less than 35 miles from
such location, or the distance from the new location to the
Executive’s residence is less than the distance from the old
location to the residence.
(ii) During
the Protected Period, and excluding any periods of vacation and
sick leave to which the Executive is entitled, the Executive agrees
to devote reasonable attention and time during normal business
hours to the business and affairs of the Company and, to the extent
necessary to discharge the responsibilities assigned to the
Executive hereunder, to use the Executive's reasonable best efforts
to perform faithfully and efficiently such
responsibilities. During the Protected Period it shall
not be a violation of this Agreement for the Executive to (A) serve
on corporate, civic or charitable boards or committees, (B) deliver
lectures, fulfill speaking engagements or teach at educational
institutions and (C) manage personal investments, so long as such
activities do not significantly interfere with the performance of
the Executive's responsibilities as an employee of the Company in
accordance with this Agreement. It is expressly
understood and agreed that to the extent that any such activities
have been conducted by the Executive prior to the Effective Date,
the continued conduct of such activities (or the conduct of
activities similar in nature and scope thereto) subsequent to the
Effective Date shall not thereafter be deemed to interfere with the
performance of the Executive's responsibilities to the
Company.
(b)
Compensation . (i) Base Salary
. During the Protected Period, the Executive shall
receive an annual base salary ("Annual Base Salary"), which shall
be paid at a monthly rate, at least equal to twelve times the
highest monthly base salary paid or payable, including any base
salary which has been earned but deferred, to the Executive by the
Company and its affiliated companies in respect of the twelve-month
period immediately preceding the month in which the Effective Date
occurs. During the Protected Period, the Annual Base
Salary shall be reviewed no more than 12 months after the last
salary increase awarded to the Executive prior to the Effective
Date and thereafter at least annually. Any increase in
Annual Base Salary shall not serve to limit or reduce any other
obligation to the Executive under this Agreement. Annual
Base Salary shall not be reduced after any such increase and the
term Annual Base Salary as utilized in this Agreement shall refer
to Annual Base Salary as so increased. As used in this
Agreement, the term "affiliated companies" shall include any
company controlled by, controlling or under common control with the
Company.
(ii)
Annual Bonus . In addition to Annual Base Salary,
the Executive shall be awarded, for each fiscal year ending during
the Protected Period, an annual bonus (the "Annual Bonus") in cash
at the Executive's target bonus percentage under the Company's
annual incentive plans, or any comparable bonus under any
predecessor or successor plan, in effect prior to the Change of
Control, as adjusted based on actual Company performance against
goals established at the beginning of each fiscal
year. The actual bonus awarded to the Executive during
the Protected Period will be determined using the same criteria
that apply to other peer executives of the Company. Each
such Annual Bonus shall be paid no later than the end of the third
month of the fiscal year next following the fiscal year for which
the Annual Bonus is awarded, unless the Executive shall elect to
defer the receipt of such Annual Bonus pursuant to the terms and
conditions of the Company's 2005 Deferred Compensation Plan or any
comparable successor plan.
(iii)
Incentive, Savings and Retirement Plans . During
the Protected Period, the Executive shall be entitled to
participate in all incentive, savings and retirement plans,
practices, policies and programs applicable generally to other peer
executives of the Company and its affiliated companies, but in no
event shall such plans, practices, policies and programs provide
the Executive with annual or long-term incentive opportunities
(measured with respect to both regular and special incentive
opportunities, to the extent, if any, that such distinction is
applicable), savings opportunities and retirement benefit
opportunities, in each case, less favorable, in the aggregate, than
the most favorable of those provided by the Company and its
affiliated companies for the Executive under such plans, practices,
policies and programs as in effect at any time during the 120-day
period immediately preceding the Effective Date or if more
favorable to the Executive, those provided generally at any time
after the Effective Date to other peer executives of the Company
and its affiliated companies.
(iv)
Welfare Benefit Plans . During the Protected
Period, the Executive and/or the Executive's family, as the case
may be, shall be eligible for participation in and shall receive
all benefits under welfare benefit plans, practices, policies and
programs provided by the Company and its affiliated companies
(including, without limitation, medical, prescription, dental,
disability, employee life, group life, accidental death and travel
accident insurance plans and programs) to the extent applicable
generally to other peer executives of the Company and its
affiliated companies, but in no event shall such plans, practices,
policies and programs provide the Executive with benefits which are
less favorable, in the aggregate, than the most favorable of such
plans, practices, policies and programs in effect for the Executive
at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, those
provided generally at any time after the Effective Date to other
peer executives of the Company and its affiliated
companies.
(v)
Expenses . During the Protected Period, the
Executive shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by the Executive in accordance with
the most favorable policies, practices and procedures of the
Company and its affiliated companies in effect for the Executive at
any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer
executives of the Company and its affiliated companies.
(vi)
Fringe Benefits . During the Protected Period,
the Executive shall be entitled to fringe benefits, including,
without limitation, tax and financial planning services, and
automobile allowance, or in accordance with the most favorable
plans, practices, programs and policies of the Company and its
affiliated companies in effect for the Executive at any time during
the 120-day period immediately preceding the Effective Date or, if
more favorable to the Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Company and
its affiliated companies.
(vii)
Office and Support Staff . During the Protected
Period, the Executive shall be entitled to an office or offices of
a size and with furnishings and other appointments, and to
exclusive personal secretarial and other assistance, at least equal
to the most favorable of the foregoing provided to the Executive by
the Company and its affiliated companies at any time during the
120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as provided generally at any time
thereafter with respect to other peer executives of the Company and
its affiliated companies.
(viii)
Vacation . During the Protected Period, the
Executive shall be entitled to paid vacation in accordance with the
most favorable plans, policies, programs and practices of the
Company and its affiliated companies as in effect for the Executive
at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer
executives of the Company and its affiliated companies.
5.
Termination of Employment
. (a) Death or Disability
. The Executive's employment shall terminate
automatically upon the Executive's death during the Protected
Period. If the Company determines in good faith that the
Disability of the Executive has occurred during the Protected
Period (pursuant to the definition of Disability set forth below),
it may give to the Executive written notice in accordance with
Section 12(b) of this Agreement of its intention to terminate the
Executive's employment. In such event, the Executive's
employment with the Company shall terminate effective on the 30th
day after receipt of such notice by the Executive (the "Disability
Effective Date"), provided that, within the 30 days after such
receipt, the Executive shall not have returned to full-time
performance of the Executive's duties. For purposes of
this Agreement, "Disability" shall mean the absence of the
Executive from the Executive's duties with the Company on a
full-time basis for 180 consecutive business days as a result of
incapacity due to mental or physical illness which is determined to
be total and permanent by a physician selected by the Co
