CHANGE OF CONTROL AGREEMENT
for
David R. Samyn
THIS AGREEMENT is
made effective as of the 1st day of January, 2009, by and between
LITTELFUSE, INC., a Delaware corporation (hereinafter referred to
as the “ Company ”), and the executive named
above (hereinafter referred to as the “ Executive
”);
WHEREAS, the Board
of Directors of the Company (hereinafter referred to as the “
Board ”) has determined that it is in the best
interests of the Company and its stockholders to provide the
Executive with certain protections against the uncertainties
usually created by a Change of Control (as such term is hereinafter
defined); and
WHEREAS, the Board
wishes to better enable the Executive to devote his full time,
attention and energy to the business of the Company prior to and
after a Change of Control, thereby benefiting the Company and its
stockholders;
NOW, THEREFORE, in
consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged and confessed, the Company and the Executive hereby
agree as follows:
Section 1. Certain Definitions . (a) The “
Effective Date ” shall mean the first date during the
Change of Control Period (as defined in Section 1(b) hereof) on
which a Change of Control (as defined in Section 2 hereof)
occurs. Notwithstanding anything to the contrary contained in this
Agreement, if a Change of Control occurs and if the Executive
separates from service with the Company prior to the date on which
the Change of Control occurs, and if it is reasonably demonstrated
by the Executive that such separation from service (i) was at
the direct or indirect request of a third party who theretofore had
taken any steps intended to effect a Change of Control or
(ii) otherwise arose in connection with or in anticipation of
a Change of Control, then for all purposes of this Agreement the
“ Effective Date ” shall mean the date
immediately prior to the date of such separation from
service.
(b) The
“ Change of Control Period ” shall mean the
period commencing on January 1, 2009 and ending on
December 31, 2011.
Section 2. Change of Control. For the purpose of this
Agreement, a “ Change of Control ” shall
mean:
(a) The
acquisition by any one person or more than one person acting as a
group (within the meaning of Treasury
Regulation Section 1.409A-3(i)(5)(v)(B)), other than the
Company or any employee benefit plan (or related trust) sponsored
or maintained by the Company or any affiliated company (as defined
in Section 4), (a “Person”) of any of stock of the
Company that, together with stock held by such Person, constitutes
more than 40% of the total fair market value or total voting power
of the stock of the Company. For purposes of this subsection (a),
the following acquisitions shall not constitute a Change of
Control: (i) the acquisition of additional stock by a Person
who is considered to own more than 50% of the total
fair market
value or total voting power of the stock of the Company,
(ii) any acquisition in which the Company does not remain
outstanding thereafter and (iii) any acquisition pursuant to a
transaction which complies with subsection (c) of this
Section 2. An increase in the percentage of stock owned by any
one Person as a result of a transaction in which the Company
acquires its stock in exchange for property will be treated as an
acquisition of stock for purposes of this subsection;
(b) The
replacement of individuals who, as of the date hereof, constitute a
majority of the Board, during any twelve (12) month period by
directors whose appointment or election is not endorsed by a
majority of the Board before the date of the appointment or
election, provided that, if the Company is not the relevant
corporation for which no other corporation is a majority
shareholder for purposes of Treasury
Regulation Section 1.409A-3(i)(5)(iv)(A)(2), this
subsection (b) shall be applied instead with respect to the
members of the board of the directors of such relevant corporation
for which no other corporation is a majority
shareholder;
(c) The
acquisition by any one person or more than one person acting as a
group (within the meaning of Treasury Regulation Section
1.409A-3(i)(5)(vi)(D)), other than the Company or any employee
benefit plan (or related trust) sponsored or maintained by the
Company or any affiliated company (as defined in Section 4),
during the 12-month period ending on the date of the most recent
acquisition by such person or persons, of ownership of stock of the
Company possessing 30% or more of the total voting power of the
stock of the Company. For purposes of this subsection (c), the
following acquisitions shall not constitute a Change of Control:
(i) the acquisition of additional control by a person or more
than one person acting as a group who are considered to effectively
control the Company within the meaning of Treasury
Regulation Section 1.409A-3(i)(5)(vi) and (ii) any
acquisition pursuant to a transaction which complies with
subsection (a) of this Section 2; or
(d) The
acquisition by any individual person or more than one person acting
as a group (within the meaning of Treasury Regulation Section
1.409A-3(i)(5)(vii)(C)), other than a transfer to a related person
within the meaning of Treasury
Regulation Section 1.409A-3(i)(5)(vii)(B), during the
12-month period ending on the date of the most recent acquisition
by such person or persons, of assets from the Company that have a
total gross fair market value equal to or more than 40% of the
total gross fair market value of all of the assets of the Company
immediately prior to such acquisition(s). For purposes of this
subsection (d), “gross fair market value” means the
value of the assets of the Company, or the value of the assets
being disposed of, determined without regard to any liabilities
associated with such assets.
The above
definition of “ Change of Control ” shall be
interpreted by the Board, in good faith, to apply in a similar
manner to transactions involving partnerships and partnership
interests, and to comply with Section 409A of the Internal
Revenue Code and Treasury Regulations and official guidance issued
thereunder from time to time
(“Section 409A”).
Section 3. Service Period. The Company hereby agrees to
continue to retain the services of the Executive, and the Executive
hereby agrees to provide services to the Company and its
successors, 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 “Service
Period”).
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Section 4. Terms of Service.
(a)
Position and Duties. (i) During the Service 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
providing services to the Company or its affiliated companies
immediately preceding the Effective Date or any office or location
less than 20 miles from such location.
(ii) During the
Service 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 Service 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 or service
provider of the Company in accordance with this
Agreement.
(b)
Compensation. (i) Base Salary. During the Service
Period, the Executive shall receive an annual base salary
(hereinafter referred to as the “ Annual Base Salary
”), which shall be paid at a monthly rate, equal to at least
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 Service 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 used 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 the Annual Base Salary, the Executive
shall be awarded, for each fiscal year ending during the Service
Period, an annual bonus (hereinafter referred to as the “
Annual Bonus ”) in cash at least equal to the
Executive’s highest bonus under the Company’s incentive
bonus program or any comparable bonus under any predecessor or
successor plan, for the last three full fiscal years prior to the
Effective Date (annualized in the event that the Executive was not
employed by the Company for the whole of such fiscal year)
(hereinafter referred to as the “ Recent Annual Bonus
”). Each such Annual Bonus shall be paid no later than the
fifteenth day 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.
Any such deferral election shall be made not later than the first
day of the fiscal year for
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which the
Annual Bonus is paid, and shall be made in accordance with policies
adopted by the Company in compliance with
Section 409A.
(iii)
Incentive, Savings and Retirement Plans. During the Service
Period, the Executive shall be entitled to participate in all
incentive, savings and retirement plans, practices, policies and
programs applicable generally to other peer executives of the
Company and its affiliated companies, but in no event shall such
plans, practices, policies and programs provide the Executive with
incentive opportunities (measured with respect to both regular and
special incentive opportunities, to the extent, if any, that such
distinction is applicable), savings opportunities and retirement
benefit opportunities, in each case, less favorable, in the
aggregate, than the most favorable of those provided by the Company
and its affiliated companies for the Executive under such plans,
practices, policies and programs as in effect at any time during
the 120-day period immediately preceding the Effective Date or if
more favorable to the Executive, those provided generally at any
time after the Effective Date to other peer executives of the
Company and its affiliated companies.
(iv) Welfare
Benefit Plans. During the Service 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. In the
event 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, then the Company shall provide
individual insurance policies or reimburse the Executive, on at
least a monthly basis, to cover any difference in the benefits
received by the Executive.
(v)
Expenses . During the Service 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 and to the extent that any
resulting change in reimbursement or payment dates would comply
with Section 409A, 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 Service Period, the Executive shall be
entitled to fringe benefits, including, without limitation, tax and
financial planning services, payment of club dues, and, if
applicable, use of an automobile and payment of related expenses,
in accordance with the most favorable plans, practices, programs
and policies of the Company and its affiliated companies in effect
for the Executive at any time during
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the 120-day
period immediately preceding the Effective Date or, if more
favorable to the Executive and to the extent that any resulting
change in reimbursement or payment dates would comply with
Section 409A, 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 Service 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 and to the extent that any resulting change in
reimbursement or payment dates would comply with Section 409A,
as provided generally at any time thereafter with respect to other
peer executives of the Company and its affiliated
companies.
(viii)
Vacation. During the Service 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.
The
requirements of paragraphs 4(b)(iii) through (viii) shall not
apply to the extent prohibited by applicable law or to the extent
such participation would cause the applicable plan, practice,
policy, or program to fail nondiscrimination or coverage tests
imposed thereon by applicable law.
Section 5. Separation from Service.
(a)
Disability. If the Company determines in good faith that the
Disability of the Executive has occurred during the Service Period
(pursuant to the definition of Disability set forth below), it may
terminate Executive’s service effective upon the date the
Company provides written notice to the Executive. For purposes of
this Agreement, “ Disability ” shall mean the
Executive is unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than
12 months; or, by reason of any medically determinable
physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not
less than 12 months, receiving income replacement benefits for
a period of not less than 3 months under an accident and
health plan covering employees of the Company.
(b)
Cause. The Company may terminate the Executive’s
service during the Service Period for Cause. For purposes of this
Agreement, “ Cause ” shall mean:
(i) the willful
and continued failure of the Executive to perform substantially the
Executive’s duties with the Company (other than any such
failure resulting from incapacity due to physical or mental
illness), after a written demand for substantial
5
performance is
delivered to the Executive by the Board which specifically
identifies the manner in which the Board believes that the
Executive has not substantially performed the Executive’s
duties and such failure is not cured within sixty
(60) calendar days after receipt of such written demand;
or
(ii) the willful
engaging by the Executive in illegal conduct or gross misconduct
which is materially and demonstrably injurious to the
Company.
For purposes of
this provision, any act or failure to act on the part of the
Executive in violation or contravention of any order, resolution or
directive of the Board shall be considered “willful”
unless such order, resolution or directive is illegal or in
violation of the certificate of incorporation or by-laws of the
Company; provided, however, that no other act or failure to act on
the part of the Executive, shall be considered
“willful,” unless it is done, or omitted to be done, by
the Executive in bad faith or without reasonable belief that the
Executive’s action or omission was in the best interests of
the Company. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board or upon the
instructions of the Chief Executive Officer or General Counsel of
the Company or based upon the advice of outside counsel for the
Company shall be conclusively presumed to be done, or omitted to be
done, by the Executive in good faith and in the best interests of
the Company. The cessation of employment of the Executive shall not
be deemed to be for Cause unless and until there shall have been
delivered to the Executive a copy of a resolution duly adopted by
the affirmative vote of not less than three-quarters of the entire
membership of the Board at a meeting of the Board called and held
for such purpose (after reasonable notice is provided to the
Executive and the Executive is given an opportunity, together with
counsel, to be heard before the Board), finding that, in the good
faith opinion of the Board, the Executive is guilty of the conduct
described in subparagraph (i) or (ii) above, and specifying
the particulars thereof in detail.
(c) Good
Reason. The Executive’s service may be terminated by the
Executive for Good Reason. For purposes of this Agreement, “
Good Reason ” shall mean:
(i) the Executive
is not elected to, or is removed from, any elected office of the
Company which the Executive held immediately prior to the Effective
Date;
(ii) the
assignment to the Executive of any duties materially inconsistent
in any respect with the Executive’s position, authority,
duties or responsibilities as contemplated by Section 4(a) hereof,
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;
(iii) any failure
by the Company to comply with any of the provisions 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;
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(iv) the
Company’s requiring the Executive to travel on Company
business to a substantially greater extent than required
immediately prior to the Effective Date; or
(v) any purported
termination by the Company of the Executive’s employment
otherwise than as expressly permitted by this Agreement.
For purposes of
this Section 5(c), a good faith determination of “Good
Reason” made by the Executive shall be conclusive.
(d)
Notice of Termination. Any termination by the Company for
Cause, or by the Executive for Good Reason, shall be communicated
by Notice of Termination to the other party hereto given in
accordance with Section 13(b) hereof. For purposes of this
Agreement, a “ Notice of Termination ” means a
written notice which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) to the extent
applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Executive’s service under the provision so indicated, and
(iii) specifi
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