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CHANGE OF CONTROL EMPLOYMENT AGREEMENT

Employment Agreement

CHANGE OF CONTROL EMPLOYMENT AGREEMENT | Document Parties: Intermec, Inc You are currently viewing:
This Employment Agreement involves

Intermec, Inc

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Title: CHANGE OF CONTROL EMPLOYMENT AGREEMENT
Governing Law: Delaware     Date: 5/8/2007
Industry: Misc. Capital Goods     Sector: Capital Goods

CHANGE OF CONTROL EMPLOYMENT AGREEMENT, Parties: intermec  inc
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AMENDED AND RESTATED

 

CHANGE OF CONTROL EMPLOYMENT AGREEMENT

 

 

This AGREEMENT is made in duplication 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 viola-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 which described in the 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 Opportunitie


 
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