THREE YEAR EXECUTIVE
OFFICER
CHANGE IN CONTROL
AGREEMENT
THIS AGREEMENT,
which was originally effective
(the “Effective Date”) and is hereby amended and
restated effective as of October 3, 2008 (the
“Restatement Date”), is made by and between Visteon
Corporation , a Delaware corporation (the
“Company”), and
(the “Executive”).
WHEREAS, the
Company considers it essential to the best interests of its
stockholders to foster the continued employment of key management
personnel; and
WHEREAS, the
Board recognizes that, as is the case with many publicly held
corporations, the possibility of a Change in Control exists and
that such possibility, and the uncertainty and questions which it
may raise among management, may result in the departure or
distraction of management personnel to the detriment of the Company
and its stockholders; and
WHEREAS, the
Board has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of
members of the Company’s management, including the Executive,
to their assigned duties without distraction in the face of
potentially disturbing circumstances arising from the possibility
of a Change in Control;
NOW, THEREFORE,
in consideration of the premises and the mutual covenants herein
contained, the Company and the Executive hereby agree as
follows:
1.
Defined Terms . The definitions of capitalized terms used in
this Agreement are provided in the last Section hereof.
2.
Term of Agreement . The Term of this Agreement shall
commence on the Effective Date and shall continue in effect through
the fifth anniversary of the Effective Date; provided ,
however , that commencing on the first anniversary of the
Effective Date, and on each anniversary of the Effective Date
thereafter, the Term shall automatically be extended for one
additional year unless, not later than 90 days prior to each
such date, the Company or the Executive shall have given notice not
to extend the Term; and provided , further , that if
a Change in Control shall have occurred during the Term, the Term
shall expire no earlier than 36 months beyond the month in
which such Change in Control occurred.
3.
Company’s Covenants Summarized . In order to induce
the Executive to remain in the employ of the Company and in
consideration of the Executive’s covenants set forth in
Section 4 hereof, the Company agrees, under the conditions
described herein, to pay the Executive the Severance Payments and
the other payments and benefits described herein. Except as
provided in Section 9.1 hereof, no Severance Payments shall be
payable under this Agreement unless there shall have been (or,
under the terms of the second sentence of Section 6.1 hereof,
there shall be deemed to have been) a termination of the
Executive’s employment with the Company following a Change in
Control and during the Term. This Agreement shall not be construed
as creating an express or implied contract of employment and,
except as otherwise agreed in writing between the Executive and the
Company, the Executive shall not have any right to be retained in
the employ of the Company.
4. The
Executive’s Covenants .
4.1 The
Executive agrees that, subject to the terms and conditions of this
Agreement, in the event of a Potential Change in Control during the
Term, the Executive will remain in the employ of the Company until
the earliest of (i) a date which is six months from the date
of such Potential Change of Control, (ii) the date of a Change
in Control, (iii) the date of termination by the Executive of
the Executive’s employment for Good Reason or by reason of
death, Disability or Retirement, or (iv) the termination by
the Company of the Executive’s employment for any
reason.
4.2 The
Executive agrees that, during the Term and for a period ending on
the second anniversary of a termination of the Executive’s
employment following a Change in Control under circumstances
entitling the Executive to payments and benefits under
Section 6 hereof, the Executive will not, without the prior
written consent of the Chairman of the Board or the Chief Executive
Officer of the Company, engage in or perform any services of a
similar nature to those performed by the Executive at the Company
for any other corporation or business which is primarily engaged in
the design, manufacture, development, promotion or sale of climate,
instrument and door panels or electronic components for the
automotive industry within North America, Latin America, Asia,
Australia or Europe in competition with the Company or any of the
Company’s subsidiaries or Affiliates, or any joint ventures
to which the Company or any of the Company’s subsidiaries or
Affiliates are a party.
4.3 During the
Term and thereafter, the Executive will not (other than in the
regular course and in furtherance of the Company’s business)
divulge, furnish or make available to any person any confidential
knowledge, information or materials, whether tangible or
intangible, regarding proprietary matters relating to the Company,
including, without limitation, trade secrets, customer and supplier
lists, pricing policies, operational methods, marketing plans or
strategies, product development techniques or plans, business
acquisition or disposition plans, new personnel employment plans,
methods of manufacture, technical processes, designs and design
projects, inventions and research projects and financial budgets
and forecasts of the Company except (1) information which at the
time is available to others in the business or generally known to
the public other than as a result of disclosure by the Executive
not permitted hereunder, and (2) when required to do so by a
court of competent jurisdiction, by any governmental agency or by
any administrative body or legislative body (including a committee
thereof) with purported or apparent jurisdiction to order the
Executive to divulge, disclose or make accessible such
information.
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5.
Compensation Other Than Severance Payments .
5.1 Following a
Change in Control and during the Term, during any period that the
Executive fails to perform the Executive’s full-time duties
with the Company as a result of incapacity due to physical or
mental illness, the Company shall pay to the Executive an amount
that when added to the amount paid to the Executive under the
Company’s short-term and/or long-term disability plans, will
result in the Executive receiving his full salary at the rate in
effect at the commencement of any such period, together with all
compensation and benefits payable to the Executive under the terms
of any other compensation or benefit plan, program or arrangement
maintained by the Company during such period, until the
Executive’s employment is terminated by the Company for
Disability.
5.2 If the
Executive’s employment shall be terminated for any reason
following a Change in Control and during the Term, the Company
shall pay the Executive’s full salary to the Executive
through the Date of Termination at the rate in effect immediately
prior to the Date of Termination or, if higher, the rate in effect
immediately prior to the first occurrence of an event or
circumstance constituting Good Reason, together with all
compensation and benefits payable to the Executive through the Date
of Termination under the terms of the Company’s compensation
and benefit plans, programs or arrangements as in effect
immediately prior to the Date of Termination or, if more favorable
to the Executive, as in effect immediately prior to the first
occurrence of an event or circumstance constituting Good
Reason.
5.3 If the
Executive’s employment shall be terminated for any reason
following a Change in Control and during the Term, the Company
shall pay to the Executive the Executive’s normal
post-termination compensation and benefits as such payments become
due. Such post-termination compensation and benefits shall be
determined under, and paid in accordance with, the Company’s
retirement, insurance and other compensation or benefit plans,
programs and arrangements as in effect immediately prior to the
Date of Termination or, if more favorable to the Executive, as in
effect immediately prior to the occurrence of the first event or
circumstance constituting Good Reason.
6.1 If
(i) the Executive’s employment is terminated following a
Change in Control and within three (3) years after a Change in
Control, other than (A) by the Company for Cause, (B) by
reason of death or Disability, or (C) by the Executive without
Good Reason, or (ii) the Executive voluntarily terminates his
employment for any reason during the 30 day period commencing
on the first anniversary of a Change in Control, then, in either
such case, the Company shall pay the Executive the amounts, and
provide the Executive the benefits, described in this
Section 6.1 (“Severance Payments”) and
Section 6.2, in addition to any payments and benefits to which
the Executive is entitled under Section 5 hereof. For purposes
of this Agreement, the Executive’s employment shall be deemed
to have been terminated following a Change in Control by the
Company without Cause or by the Executive with Good Reason, if
(i) the Executive’s employment is terminated by the
Company without Cause prior to a Change in Control (whether or not
a Change in Control ever occurs) and such termination was at the
request or direction of a Person who has entered into an agreement
with the Company the consummation of which would constitute a
Change in Control, or (ii) the Executive terminates his employment
for Good Reason prior to a Change in Control (whether or not a
Change in Control ever occurs) and the circumstance or event which
constitutes Good Reason occurs at the request or direction of such
Person. For purposes of any determination regarding the
applicability of the immediately preceding sentence, any position
taken by the Executive shall be presumed to be correct unless the
Company establishes to the Board by clear and convincing evidence
that such position is not correct.
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(A) In
lieu of any further salary payments to the Executive for periods
subsequent to the Date of Termination, the Company shall pay to the
Executive, on the first day of the seventh (7
th ) month following the month in which occurs the
Executive’s Separation from Service, a lump sum severance
payment, in cash, equal to three (3) times the sum of
(i) the Executive’s base salary as in effect immediately
prior to the Date of Termination or, if higher, in effect
immediately prior to the first occurrence of an event or
circumstance constituting Good Reason, and (ii) the
Executive’s target annual bonus pursuant to any annual bonus
or incentive plan maintained by the Company in respect of the
fiscal year in which occurs the Date of Termination or, if higher,
the fiscal year in which occurs the first event or circumstance
constituting Good Reason. The amount payable pursuant to this
Section 6.1(A) shall be reduced by the amount of any cash
severance or salary continuation benefit paid or payable to the
Executive under any other plan, policy or program of the Company or
any of its Affiliates or any written employment agreement between
the Executive and the Company or any of its Affiliates.
(B) For
the 36 month period immediately following the Date of
Termination, the Company shall arrange to provide the Executive and
his dependents life, accident and health insurance benefits
substantially similar to those provided to the Executive and his
dependents immediately prior to the Date of Termination or, if more
favorable to the Executive, those provided to the Executive and his
dependents immediately prior to the first occurrence of an event or
circumstance constituting Good Reason, at no greater cost to the
Executive than the cost to the Executive immediately prior to such
date or occurrence; provided , however , that, unless
the Executive consents to a different method (after taking into
account the effect of such method on the calculation of
“parachute payments” pursuant to Section 6.2
hereof), such health and life insurance benefits shall be provided
through a third-party insurer. Benefits otherwise receivable by the
Executive pursuant to this Section 6.1(B) shall be reduced to
the extent benefits of the same type are received by or made
available to the Executive during the 36 month period
following the Executive’s termination of employment (and any
such benefits received by or made available to the Executive shall
be reported to the Company by the Executive); provided ,
however , that the Company shall reimburse the Executive for
the excess, if any, of the cost of such benefits to the Executive
over such cost immediately prior to the Date of Termination or, if
more favorable to the Executive, the first occurrence of an event
or circumstance constituting Good Reason.
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(i)
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If
accident and health insurance benefits are provided, with the
Executive’s consent, under a health plan that is subject to
Section 105(h) of the Code, then, for any period of coverage
following the end of the continuation period required under
Sections 601 through 609 of the Employee Retirement Income
Security Act of 1974, as amended, the benefits payable under such
health plan shall comply with the requirements of
Sections 1.409A-3(i)(1)(A) and (B) of the Treasury
regulations and, if and to the extent necessary, the Company shall
amend such health plan to comply therewith;
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(ii)
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Notwithstanding anything in this
Section 6.1(B) to the contrary, with respect to the first six
(6) months following the Executive’s Separation from
Service, if the premiums payable by the Company for group term life
insurance on the Executive’s life exceeds the amount of the
“limited payments” exemption set forth in Section
1.409A-1(b)(9)(v)(B) of the Income Tax Regulations (or any
successor provision thereto), then, to the extent required in order
to comply with Code Section 409A, the Executive, in advance,
shall pay to the Company an amount equal to the premiums for any
such life insurance policy, other than with respect to life
insurance coverage to which the Executive would be entitled
independent of this Agreement. Promptly following the end of such
six (6) month period, the Company will make a cash payment to
the Executive equal to the difference between the aggregate amount
paid by the Executive for such coverage and the amount that the
Executive would have paid for such life insurance coverage if such
cost had been determined pursuant to this Section 6.1(B) other
than this subparagraph (ii).
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(C) Each
option to purchase shares of common stock of the Company
outstanding as of the Date of Termination shall become fully vested
and exercisable as of such date and shall remain exercisable during
the shorter of (i) the remaining term of such option (such
remaining term to be determined as if the Executive were still
actively employed) or (ii) ten (10) years from the date
on which the option originally was granted, and each grant of
restricted stock or similar grant, the award of which is contingent
only upon the continued employment of the Executive to a subsequent
date, shall become fully vested as of the Date of
Termination.
(D) Unless
payable to the Executive under the terms of any annual or long-term
incentive plan, the Company shall pay to the Executive, on the
first day of the seventh (7 th )
month following the month in which occurs the Executive’s
Separation from Service, a lump sum amount, in cash, equal to the
sum of (i) any unpaid incentive compensation (including
performance share awards) which has been allocated or awarded to
the Executive for a completed fiscal year or other measuring period
preceding the Date of Termination under any such plan and which, as
of the Date of Termination, is contingent only upon the continued
employment of the Executive to a subsequent date, and (ii) a
pro rata portion to the Date of Termination of the aggregate value
of all contingent incentive compensation awards (including
performance share awards) to the Executive for all then uncompleted
periods under any such plan, calculated as to each such award by
multiplying the award that the Executive would have earned on the
last day of the performance award period, assuming the achievement,
at the target level (or if higher, at the then projected actual
final level), of the individual and corporate performance goals
established with respect to such award, by the fraction obtained by
dividing the number of full months and any fractional portion of a
month during such performance award period through the Date of
Termination by the total number of months contained in such
performance award period. Notwithstanding the forgoing, if and to
the extent the Executive had elected to defer receipt of any such
award, and if the Executive’s deferral election is
irrevocable as of the Date of Termination for purposes of Code
Section 409A, the amount calculated above shall be credited to
the Executive’s account under the applicable deferred
compensation plan in lieu of being distributed directly to the
Executive.
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(E) The
benefits then accrued by or payable to the Executive under the
Company’s Supplemental Executive Retirement Plan, Executive
Separation Allowance Plan, Deferred Compensation Plan, Pension
Parity Plan, or any successor to any such plan, and the benefits
then accrued by or payable to the Executive under any other
nonqualified plan providing supplemental retirement or deferred
compensation benefits shall become fully vested notwithstanding any
eligibility conditions that would otherwise apply with respect to
such benefits and the benefit, as so vested, will be paid in
accordance with the terms of the applicable plan or program;
provided that if the Executive has not attained fifty-five
(55) years of age, the Executive’s benefit under the
Executive Separation Allowance Plan will commence to be paid upon
the Executive’s attainment of age fifty-five (55). With
respect to the Supplemental Executive Retirement Plan, Executive
Separation Allowance Plan, and any other nonqualified nonaccount
balance plan or portion of a plan providing supplemental retirement
or deferred compensation benefits, the Company shall transfer an
amount in cash sufficient to pay all benefits then accrued by or
payable to the Executive under the terms of such plans into an
irrevocable grantor trust (a so-called “Rabbi Trust”)
whose trustee shall be an entity unaffiliated with and independent
of the Company, which trust shall be required to pay such benefits
in accordance with and subject to the applicable terms of each plan
(as modified by this Agreement) and the trust instrument; provided
that if such transfer to the Rabbi Trust would be treated, under
Code Sections 83 and 409A(b), as a taxable transfer to the
Executive, such transfer to the Rabbi Trust shall not be made until
such time as the transfer will not be treated as a taxable event
under Code Sections 83 and 409A; and provided further, that
any amendment or termination of any such plan on or after the
Change in Control date the effect of which would be to reduce or
eliminate the benefit payable to the Executive shall be
disregarded.
(F) The
Company shall reimburse the Executive for expenses incurred for
outplacement services suitable to the Executive’s position,
until December 31 of the second calendar year following the
calendar year in which occurs the Executive’s Separation from
Service (or, if earlier, until the first acceptance by the
Executive of an offer of employment) in an amount not exceeding 25%
of the sum of the Executive’s annual base salary as in effect
immediately prior to the Date of Termination or, if higher, in
effect immediately prior to the first occurrence of an event or
circumstances constituting Good Reason, and target annual bonus
pursuant to any annual bonus or incentive plan maintained by the
Company in respect of the fiscal year in which occurs the Date of
Termination or, if higher, the fiscal year in which occurs the
first event or circumstance constituting Good Reason.
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(G) For
the six (6) month period immediately following the Date of
Termination, the Company shall provide the Executive with the use
of any Company provided automobile on the same terms and conditions
that were applicable immediately prior to the Date of Termination
or, if more favorable, immediately prior to the first occurrence of
an event or circumstance constituting Good Reason. The
Executive’s right to use a Company provided automobile cannot
be exchanged for cash or another benefit.
6.2
(A) Whether or not the Executive becomes entitled to the
Severance Payments, if any of the payments or benefits received or
to be received by the Executive in connection with a Change in
Control or the Executive’s termination of employment (whether
pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with the Company, any Person whose actions
result in a Change in Control or any Person affiliated with the
Company or such Person) (such payments or benefits, excluding the
Gross-Up Payment, being hereinafter referred to as the “Total
Payments”) will be subject to the Excise Tax, the Company
shall pay to the Executive an additional amount (the
“Gross-Up Payment”) such that the net amount retained
by the Executive, after deduction of any Excise Tax on the Total
Payments and any federal, state and local income and employment
taxes and Excise Tax upon the Gross-Up Payment, shall be equal to
the Total Payments.
(B) For
purposes of determining whether any of the Total Payments will be
subject to the Excise Tax and the amount of such Excise Tax,
(i) all of the Total Payments shall be treated as
“parachute payments” (within the meaning of section
280G(b)(2) of the Code) unless, in the opinion of tax counsel
(“Tax Counsel”) reasonably acceptable to the Executive
and selected by the accounting firm which was, immediately prior to
the Change in Control, the Company’s independent auditor (the
“Auditor”), such payments or benefits (in whole or in
part) do not constitute parachute payments, including by reason of
section 280G(b)(4)(A) of the Code, (ii) all “excess
parachute payments” within the meaning of section 280G(b)(l)
of the Code shall be treated as subject to the Excise Tax unless,
in the opinion of Tax Counsel, such excess parachute payments (in
whole or in part) represent reasonable compensation for
services
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