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:
1.1 “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.
(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.
(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