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Exhibit
10.10
CHANGE OF
CONTROL
EMPLOYMENT
AGREEMENT
This Agreement, by and
between Electronic Data Systems Corporation, a Delaware
Corporation, its successors and assigns (“Company”),
and Charles S. Feld (“Executive”), which supersedes and
replaces all Change of Control Employment Agreements previously
executed between Company and Executive (which previous Agreements
Executive acknowledges are of no further force or effect), is dated
as of February 1, 2007 (“Agreement”).
The Compensation and Benefit
Committee of the Company’s Board of Directors, on behalf of
the Board of Directors of the Company (“Board”), has
determined it is in the best interests of the Company and its
shareholders to assure the Company will have the continued
dedication of Executive, notwithstanding the possibility, threat or
occurrence of a Change of Control. The Board believes it is
imperative to diminish the inevitable distraction of Executive by
virtue of the personal uncertainties and risks created by a pending
or threatened Change of Control and to encourage Executive’s
full attention and dedication to the Company currently and in the
event of any threatened or pending Change of Control. Therefore, in
order to accomplish these objectives, the Compensation and Benefit
Committee of the Board has caused the Company to enter into this
Agreement.
The parties hereby agree as
follows:
1. Effect of
Agreement.
Unless and until there
occurs, during the Term of this Agreement, a Change of Control or a
termination or resignation of Executive’s employment in
anticipation of a Change of Control as contemplated by
Section 3, this Agreement shall have no effect and shall not
provide any rights or benefits to Executive. Similarly, unless and
until there occurs, during the Term of this Agreement, a Change of
Control or a termination or resignation of Executive’s
employment in anticipation of a Change of Control as contemplated
by Section 3, and unless contrary to applicable law or the
terms of a written contract executed by and/or approved by the
Chief Executive Officer of the Company, employment with the Company
remains of an indefinite term and may be ended, with or without
cause, at any time by either Executive or the Company, with or
without previous notice.
2. Terms of
Employment.
This Section 2 sets
forth the terms and conditions on which the Company agrees to
employ Executive during the period (the “Protected
Period”) beginning on the first day during the Term of this
Agreement on which a Change of Control occurs and ending on the
second anniversary of that date, or such earlier date as
Executive’s employment terminates as contemplated by
Section 3.
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(A) Position and
Duties.
(1) During the Protected
Period, Executive’s services shall be performed at the office
where Executive was employed immediately preceding the date of the
Change of Control or any office or location less than 50 miles from
such office, unless Executive is on international assignment on the
date of the Change of Control and is relocated as a result of
Executive’s being repatriated pursuant to the terms of
Executive’s international assignment agreement as in effect
before the date of the Change of Control.
(2) During the Protected
Period, Executive agrees to devote reasonable attention and time
during normal business hours (except when on authorized vacation,
holidays or sick leave) to the business and affairs of the Company,
and, to the extent necessary to discharge the responsibilities
assigned to Executive, to use Executive’s reasonable best
efforts to perform faithfully and efficiently such
responsibilities; provided, that Executive may (A) contingent
upon obtaining all required approvals, serve on corporate, civic or
charitable boards and committees, (B) fulfill speaking
engagements, and (C) manage personal investments, so long as
such activities do not significantly interfere with the performance
of Executive’s responsibilities as an employee of the
Company; and provided, further, that to the extent that any such
activities have been conducted by Executive before the date of the
Change of Control, the continued conduct of such activities after
the date of the Change of Control shall not be deemed to
significantly interfere with the performance of Executive’s
responsibilities to the Company.
(B) Compensation.
(1) Base Salary. During the
Protected Period, Executive shall continue to receive the same
annual base salary Executive was receiving immediately preceding
the date of the Change of Control. Executive shall be paid at such
intervals as the Company pays executive salaries generally. During
the Protected Period, Executive’s annual base salary shall be
reviewed for possible increase at least annually, beginning no more
than 12 months after the last such annual review prior to the date
of the Change of Control.
(2) Incentive Compensation.
Executive shall remain eligible to receive the same annual target
bonus (as a percentage of base salary) and other forms of
short-term incentive compensation. In addition, during the
Protected Period, Executive shall remain eligible to participate in
all long-term, stock-based and other incentive plans, practices,
policies and programs generally applicable to peer executives of
the Company.
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(3) Savings and Retirement
Plans. During the Protected Period, Executive shall remain eligible
to participate in the savings and retirement plans, practices,
policies and programs generally applicable to peer executives of
the Company. Without limiting the generality of the foregoing,
Executive shall continue to participate in the EDS Supplemental
Executive Retirement Plan.
(4) Welfare Benefit Plans.
During the Protected Period, Executive and/or Executive’s
eligible dependents, as the case may be, shall remain eligible to
participate in and receive benefits under welfare benefit plans,
practices, policies and programs provided by the Company (including
without limitation medical, prescription drug, dental, vision,
disability, life insurance, accidental death and dismemberment, and
travel accident insurance plans and programs) to the extent
generally applicable to peer executives of the Company.
(5) Expenses. During the
Protected Period, Executive shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by Executive in
accordance with the policies, practices and procedures of the
Company to the extent generally applicable to peer executives of
the Company.
(6) Fringe Benefits. During
the Protected Period, Executive shall be entitled to fringe
benefits in accordance with the plans, practices, programs and
policies of the Company to the extent generally applicable to peer
executives of the Company.
(7) Vacation. During the
Protected Period, Executive shall be entitled to paid vacation in
accordance with the plans, policies, programs and practices of the
Company as in effect for Executive immediately preceding the date
of the Change of Control.
3. Termination of
Employment.
(A) By the Company. The
Company may terminate Executive’s employment during the
Protected Period for Cause or without Cause.
(B) By Executive. Executive
may terminate employment during the Protected Period for Good
Reason or without Good Reason.
(C) Termination or
Resignation In Anticipation of a Change of Control.
(1) Termination In
Anticipation of a Change of Control. Despite anything in this
Agreement to the contrary, if (a) a Change of Control occurs,
(b) Executive’s employment with the Company is
terminated by the Company before the Change of Control occurs in a
manner and under circumstances that would be considered a
termination by the
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Company without Cause if it
had occurred during the Protected Period, and (c) the Company
cannot reasonably demonstrate such termination of employment was
not at the request of a third party that had taken steps reasonably
calculated to effect the Change of Control or otherwise did not
arise in connection with or in anticipation of the Change of
Control, then such termination shall be treated for all purposes of
this Agreement as a termination by the Company without Cause during
the Protected Period, which will entitle Executive to receive, on
the later of such Change of Control or such termination, the
unconveyed payments and benefits described in Section 4
(Obligations of the Company upon Termination).
(2) Resignation In
Anticipation of a Change of Control. Despite anything in this
Agreement to the contrary, if: (a) a Change of Control occurs,
(b) Executive resigns for Good Reason either prior to or
within 30 days following a Change of Control on the basis that
events occurring prior to the Change of Control would have enabled
him to terminate his employment for Good Reason had such events
occurred during the Protected Period, and (c) the Company
cannot reasonably demonstrate the events occurring prior to the
Change of Control, that would have enabled him to terminate his
employment for Good Reason had such events occurred during the
Protected Period, were not taken at the request of a third party
that had taken steps reasonably calculated to effect the Change of
Control or otherwise did not arise in connection with or in
anticipation of the Change of Control (e.g., Executive’s role
is reduced three months prior to a Change of Control, but the
Company cannot reasonably demonstrate that such reduction in role
was not at the request of an acquiring entity or was otherwise
unrelated to an anticipated Change of Control), then such
resignation shall be treated for all purposes of this Agreement as
a resignation for Good Reason during the Protected Period, which
will entitle Executive to receive, on the later of such Change of
Control or such resignation, the unconveyed payments and benefits
described in Section 4 (Obligations of the Company upon
Termination).
4. Obligations of the
Company upon Termination.
(A) If, during the Protected
Period, the Company involuntarily terminates Executive’s
employment other than for Cause (excluding termination for death or
Disability) or Executive voluntarily terminates employment for Good
Reason and Executive executes a separation agreement substantially
in the form attached hereto as Exhibit “A”
(“Separation Agreement”) (which will include amongst
its other terms an agreement by Executive to release and/or waive
any and all existing claims he/she may have against the Company)
that becomes effective and binding:
(1) the Company shall pay to
Executive, within 30 days after the Date of Termination, or if
later, within 5 days of the Separation Agreement signed by
Executive becoming legally effective, the following:
(a) a lump sum payment equal
to Executive’s accrued, but unpaid base salary through the
date of termination, less all applicable deductions;
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(b) a lump sum payment
equivalent to 2.99 times Executive’s final annual base
salary, less all applicable deductions;
(c) a lump sum payment
equivalent to 2.99 times Executive’s annual performance bonus
target as approved by the Compensation and Benefits Committee of
EDS’ Board of Directors for the year in which he/she is
terminated, less all applicable deductions;
(d) excluding any performance
based deferred stock units as well as any performance based
restricted stock units, all deferred EDS stock units, restricted
stock units, and/or stock options awarded to Executive that remain
unvested on the date of termination shall immediately vest, shall
immediately be freed of any restrictions regarding their sale or
transfer (other than any such restrictions arising by operation of
law or pursuant to the terms of any applicable deferral plan), and
with regard to all stock options, other than those stock options
awarded to Executive on January 9, 2004, as part of the
acquisition of The Feld Group, Inc., they shall be exercisable for
a period of one (1) year from the date of termination. With
respect to those stock options awarded to Executive as part of the
acquisition of The Feld Group, Inc., they shall be exercisable for
the full term of the award as defined in the grant agreement;
and
(e) with regard to any
performance based deferred stock units or performance based
restricted stock units 1 awarded to Executive that remain unvested
on the date of termination, the Target Award of such grants (as
defined in the applicable award agreement(s)) shall immediately
vest and shall immediately be freed of any restrictions regarding
their sale or transfer (other than any such
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It is
expressly acknowledged and agreed that the term “performance
based restricted stock units” referenced in
Section 4(a)(1)(e) above includes any performance based
restricted stock units previously awarded to Executive pursuant to
an agreement containing language indicating that an “existing
change of control agreement” shall have no force or effect on
such stock units. Indeed, it is further acknowledged and agreed
that any language contained in existing performance restricted
stock unit award agreements between the parties indicating that an
“existing change of control agreement” shall have no
force or effect on such stock units is null and void and of no
further force or effect.
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restrictions arising by
operation of law or pursuant to the terms of any applicable
deferral plan). For purposes of this Agreement, the term
performance based deferred stock unit or performance based
restricted stock unit shall mean deferred or restricted stock
units, as applicable, awarded to Executive pursuant to a grant
agreement specifying that the actual number of stock units to
ultimately be awarded at the end of the performance period is
contingent upon specified criteria related to EDS’
performance.
(B) If Executive’s
employment is involuntarily terminated for Cause during the
Protected Period, the Company shall provide to Executive his/her
accrued, but unpaid base salary through the date of termination,
less all applicable deductions, and shall have no other severance
and/or separation obligations to Executive pursuant to the terms of
this Agreement. If Executive voluntarily terminates his/her
employment during the Protected Period other than for Good Reason,
the Company shall pay his/her accrued, but unpaid base salary
through the date of termination, less all applicable deductions,
and shall have no other severance and/or separation obligations to
Executive pursuant to the terms of this Agreement. If
Executive’s employment is terminated due to Executive’s
death or Disability during the Protected Period, the Company shall
provide to Executive his/her accrued, but unpaid base salary
through the date of termination, less all applicable deductions,
and, with respect to any deferred stock units, restricted stock
units or stock options awarded to Executive, the disposition of
such awards upon termination of employment due to death or
Disability shall be determined pursuant to the specific provisions
of each individual award agreement; otherwise, the Company shall
have no other severance and/or separation obligations to Executive
pursuant to the terms of this Agreement.
(C) Notwithstanding any
provision in this Agreement to the contrary, this Agreement will be
interpreted, applied and to the minimum extent necessary,
unilaterally amended by EDS, so that the Agreement does not fail to
meet, and is operated in accordance with, the requirements of
Section 409A of the Internal Revenue Code.
5. Exclusivity of
Benefits.
If Executive receives pay or
benefits pursuant to this Agreement, Executive understands and
acknowledges he/she shall not be eligible to receive any additional
pay or benefits pursuant to his/her Executive Severance benefit
Agreement or any other form of severance and/or separation pay or
benefits from the Company, except as may otherwise expressly and
specifically be provided for pursuant to the terms of a
subsequently entered into agreement between the Company and
Executive. Further, if Executive receives pay or benefits pursuant
to this Agreement, Executive understands and acknowledges the
compensation, benefits and other consideration provided hereunder
shall constitute his/her sole
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and exclusive rights to any
payments or benefits from EDS, and Executive shall receive no
consideration or benefits other than those expressly granted
herein, except for benefits to which he/she may be entitled, if
any: (i) under any EDS plan qualified under
Section 401(a) of the Internal Revenue Code, including the EDS
Retirement Plan and EDS 401(k) Plan; (ii) under the EDS
Benefit Restoration Plan or EDS Supplemental Executive Retirement
Plan (“SERP”); (iii) under the EDS Executive
Deferral Plan; (iv) pursuant to any indemnification agreements
between Executive and EDS; or (v) under any applicable
directors and officers or other liability insurance
policies.
6. Certain Additional
Payments by the Company.
(A) If any Payment is subject
to the Excise Tax, then the Company shall pay the Executive a
Gross-Up Payment (regardless of whether the Executive’s
employment has terminated). Notwithstanding the foregoing, if the
Parachute Value of all Payments does not exceed 110% of the Safe
Harbor Amount, then the Company shall not pay the Executive a
Gross-Up Payment, and the Payments due under this Agreement shall
be reduced so that the Parachute Value of all Payments, in the
aggregate, equals the Safe Harbor Amount; provided, that if even
after all Payments due hereunder are reduced to zero, the Parachute
Value of all Payments would still exceed the Safe Harbor Amount,
then no reduction of any Payments shall be made. The reduction of
the Payments due hereunder, if applicable, shall be made by first
reducing the payments under Section 4(A)(1)(b), (c),
(d) and/or (e), in that order, unless an alternative method of
reduction is elected by the Executive, subject to approval by the
Company, and in any event shall be made in such a manner as to
maximize the economic present value of all Payments actually made
to the Executive, determined by the Accounting Firm as of the date
of the Change of Control for purposes of Section 280G of the
Code using the discount rate required by Section 280G(d)(4) of
the Code.
(B) All determinations
required to be made under this Section 6, including whether
and when Gross-Up Payments are required and the amount of such
Gross-Up Payments, whether and in what manner any Payments are to
be reduced pursuant to the second sentence of Section 6(A),
and the assumptions to be utilized in arriving at such
determinations, shall be made by the Accounting Firm, and shall be
binding upon the Company and the Executive, except to the extent
the Internal Revenue Service or a court of competent jurisdiction
makes an inconsistent final and binding determination. The
Accounting Firm shall provide detailed supporting calculations both
to the Company and the Executive within 15 business days after
receiving notice from the Executive that there has been a Payment
or such earlier time as may be requested by the Company. All fees
and expenses of the Accounting Firm shall be borne solely by the
Company. Any Gross-Up Payment that becomes due pursuant to this
Section 6 shall be paid by the Company to the Executive within
five days
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of the receipt of the
Accounting Firm’s determination, or, if later, at least 20
business days before the Executive is obligated to pay the related
Excise Tax. As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments that will not have been made by the Company
should have been made (an “Underpayment”). In the event
the Accounting Firm determines that there has been an Underpayment
or the Executive is required to make a payment of any Excise Tax as
a result of a claim described in Section 6(C), then the
Accounting Firm shall determine the amount of the Underpayment that
has occurred and any such Underpayment shall be promptly paid by
the Company to or for the benefit of the Executive.
(C) The Executive shall
notify the Company in writing of any claim by the Internal Revenue
Service that, if successful, would require the payment by the
Company of a Gross-Up Payment. Such notification shall be given as
soon as practicable, but no later than 10 business days after the
Executive is informed in writing of such claim. The Executive shall
apprise the Company of the nature of such claim and the date on
which such claim is requested to be paid. The Executive shall not
pay such claim prior to the expiration of the 30-day period
following the date on which the Executive gives such notice to the
Company (or such shorter period ending on the date that any payment
of taxes with respect to such claim is due). If the Company
notifies the Executive in writing prior to the expiration of such
period that the Company desires to contest such claim, the
Executive shall:
(1) give the Company any
information reasonably requested by the Company relating to such
claim,
(2) take such action in
connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including without
limitation accepting legal representation with respect to such
claim by an attorney reasonably selected by the Company,
(3) cooperate with the
Company in good faith in order effectively to contest such claim,
and
(4) permit the Company to
participate in any proceedings relating to such claim; provided,
however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in
connection with such contest, and shall indemnify and hold the
Executive harmless, on an After-Tax basis, for any Excise Tax or
Taxes imposed as a result of such representation and payment of
costs and expenses. Without limitation on the foregoing provisions
of this Section 6(C), the Company shall control
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all proceedings taken in
connection with such contest, and, at its sole discretion, may
pursue or forgo any and all administrative appeals, proceedings,
hearings and conferences with the applicable taxing authority in
respect of such claim and may, at its sole discretion, either
direct the Executive to pay the Taxes claimed and sue for a refund
or contest the claim in any permissible manner, and the Executive
agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in
one or more appellate courts, as the Company shall determine;
provided, however, that, if the Company directs the Executive to
pay such claim and sue for a refund, the Company shall advance the
amount of such payment to the Executive, on an interest-free basis,
and shall indemnify and hold the Executive harmless, on an
After-Tax basis, from any Excise Tax or Taxes imposed with respect
to such advance or with respect to any imputed income in connection
with such advance; and provided, further, that any extension of the
relevant statute of limitations is limited solely to such contested
amount. Furthermore, the Company’s control of the contest
shall be limited to issues with respect to which the Gross-Up
Payment would be payable hereunder, and the Executive shall be
entitled to settle or contest, as the case may be, any other issue
raised by the Internal Revenue Service or any other taxing
authority.
(D) If, at any time after
receiving a Gross-Up Payment or an advance pursuant to
Section 6(C), the Executive receives any refund of the
associated Excise Tax, the Executive shall (subject to the
Company’s having complied with the requirements of
Section 6(C), if applicable) promptly pay to the Company the
amount of such refund, together with any interest paid or credited
thereon net of all Taxes applicable thereto. If, after the
Executive receives an advance pursuant to Section 6(C), a
determination is made that the Executive is not entitled to any
refund with respect to such claim and the Company does not notify
the Executive in writing of its intent to contest such denial of
refund prior to the expiration of 30 days after such determination,
then such advance shall be forgiven and shall not be required to be
repaid, and the amount of any Gross-Up Payment owed to the
Executive shall be reduced (but not below zero) by the amount of
such advance.
(E) Notwithstanding any other
provision of this Section 6, the Company may, in its sole
discretion, withhold and pay over to the Internal Revenue Service
or any other applicable taxing authority, for the benefit of the
Executive, all or any portion of any Gross-Up Payment, and the
Executive hereby consents to such withholding.
(F) Any other liability for
unpaid or unwithheld Excise Taxes, other than those described
above, is borne exclusively by the Company, in accordance with Code
Section 3403. The assumption of such liability by
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the Company shall not in any
manner relieve the Company of any of its obligations under
Section 6 of the Agreement.
7.
Successors.
(A) This Agreement is
personal to Executive and shall not be assignable by Executive
other than by will or the laws of descent and
distribution.
(B) This Agreement shall
inure to the benefit of and be binding upon the Company and its
successors and assigns. Except as provided in Section 7(C),
without the prior written consent of Executive, this Agreement
shall not be assignable by the Company.
(C) The Company shall require
any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to assume expressly and agree
to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such
succession had taken place.
8.
Miscellaneous.
(A) This Agreement shall be
governed by and construed in accordance with the laws of the State
of Delaware, without reference to principles of conflict of laws.
The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect. Except as provided in
Paragraph 4(c) above, this Agreement may not be amended or modified
other than by a written agreement that is specifically identified
as an amendment of this Agreement an
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