Form of Amended and Restated Change of Control Employment Agreement for Executive Officers (effective 2009)

EX-10.28 10 a1028formofamendedcontro.htm EXHIBIT 10.28 a1028formofamendedcontro

Exhibit 10.28 (;FLFDPHQGPHQWKWP&+$1*(,1&21752/ (;+,%,7 $0(1'('$1'5(67$7(' &+$1*(2)&21752/(03/2<0(17$*5((0(17 AGREEMENT by and between BorgWarner Inc., a Delaware corporation (the “Company”) and ____________ (the “Executive”) dated as of the ___ day of _____________, 2009. WHEREAS, the Board of Directors of the Company (the “Board”), has determined t KDWLWLVLQWKH EHVWLQWHUHVWVRIWKH&RPSDQ\DQGLWVVWRFNKROGHUVWRDVVXUHWKDWWKH&RPSDQ\ZLOOKDYHWKHFRQWLQXHGGHGLFDWLRQRI WKH([HFXWLYHQRWZLWKVWDQGLQJWKHSRVVLELOLW\WKUHDWRURFFXUUHQFHRID&KDQJHRI&RQWURODVGHILQHGEHORZRIWKH &RPSDQ\7KH%RDUGEHOLHYHVLWLVLPSHUDWLYHWRGLPLQLVKWKHLQHYLWDEOHGLVWUDFWLRQRIWKH([HFXWLYHE\YLUWXHRIWKH SHUVRQDOXQFHUWDLQWLHVDQGULVNVFUHDWHGE\DSHQGLQJRUWKUHDWHQHG&KDQJHRI&RQWURODQGWRHQFRXUDJHWKH Executive’s full attention and dedi FDWLRQWRWKH&RPSDQ\FXUUHQWO\DQGLQWKHHYHQWRIDQ\WKUHDWHQHGRUSHQGLQJ &KDQJHRI&RQWURODQGWRSURYLGHWKH([HFXWLYHZLWKFRPSHQVDWLRQDQGEHQHILWVDUUDQJHPHQWVXSRQD&KDQJHRI &RQWUROZKLFKHQVXUHWKDWWKHFRPSHQVDWLRQDQGEHQHILWVH[SHFWDWLRQVRIWKH([HFXWLYHZLOOEHVDWLVILHGDQGZKLFK DUHFRPSHWLWLYHZLWKWKRVHRIRWKHUFRUSRUDWLRQV >:+(5($6EHFDXVHWKH([HFXWLYH>KDV@>ZLOOREWDLQ@LQWLPDWHDQGYDOXDEOHNQRZOHGJHDQG experience in the operation of the Company’s business, as well as techn LFDOILQDQFLDOFXVWRPHUDQGRWKHU confidential information related to the Company’s business, as a condition to the Company’s willingness to enter LQWRWKLV$JUHHPHQWWKH&RPSDQ\KDVUHTXLUHGWKDWWKH([HFXWLYHH[HFXWHDQGGHOLYHUWKH>1RQ&RPSHWH $JUHH ment] attached to this Agreement as Exhibit A (the “Non Compete”), pursuant to which Executive has agreed not to compete with the Company or solicit the Company’s employees and customers during [the term of this Agreement] [Executive’s employment with the &RPSDQ\@DQGGXULQJWKH>RQH\HDU@>PRQWK@SHULRGIROORZLQJ Executive’s termination of employment with the Company.] WHEREAS, the Company would not have entered into this Agreement but for Executive’s H[HFXWLRQRIWKH1RQ&RPSHWHDQGDFFRUGLQJO\FRQWHPSRUDQHRXVZLWKWKHH[HFXWLRQRIWKLV$JUHHPHQWWKH ([HFXWLYHDQGWKH&RPSDQ\KDYHHQWHUHGLQWRWKH1RQ&RPSHWH 12:7+(5()25(,7,6+(5(%<$*5(('$6)2//2:6 &HUWDLQ'HILQLWLRQV D The “Effective Date” shall mean the first date during WKH&KDQJHRI &RQWURO3HULRGDVGHILQHGLQ6HFWLRQERQZKLFKD&KDQJHRI&RQWURODVGHILQHGLQ6HFWLRQ RFFXUV Anything in this Agreement to the contrary notwithstanding, if (i) the Executive’s employment with the &RPSDQ\LVWHUPLQDWHGE\WKH&RPSDQ\LLWKH'DWHRI7HUPLQDWLRQLVSULRUWRWKHGDWHRQZKLFKD&KDQJHRI &RQWURORFFXUVDQGLLLLWLVUHDVRQDEO\GHPRQVWUDWHGE\WKH([HFXWLYHWKDWVXFKWHUPLQDWLRQRIHPSOR\PHQW$ ZDVDWWKHUHTXHVWRIDWKLUGSDUW\WKDWKDVWDNHQVWHSVUHDVRQDEO\FDOFXODWHGWRHIIHFWD&KDQJHRI&RQWURORU% RWKHUZLVHDURVHLQFRQQHFWLRQZLWKRUDQWLFLSDWLRQRID&KDQJHRI&RQWUROWKHQIRUDOOSXUSRVHVRIWKLV Agreement the “Effective Date” shall mean the date immediately prior to such Date of 7HUPLQDWLRQ E The “Change of Control Period” shall mean the period commencing on the date hereof and HQGLQJRQWKHWKLUGDQQLYHUVDU\RIWKHGDWHKHUHRISURYLGHG KRZHYHU WKDWFRPPHQFLQJRQWKHGDWHRQH\HDUDIWHU WKHGDWHKHUHRIDQGRQHDFKDQQXDODQQLYHUVDU\RIVXFKGDWHVXFKGDWHDQGHDFKDQQXDODQQLYHUVDU\WKHUHRIVKDOOEH hereinafter referred to as the “Renewal Date”), unless previously terminated, the Change of Control Period shall be DXWRPDWLFDOO\H[WHQGHGVRDVWRWHUPLQDWHWKUHH\HDUVIURPVXFK5HQHZDO'DWHXQOHVVDWOHDVWGD\VSULRUWRWKH 5HQHZDO'DWHWKH&RPSDQ\VKDOOJLYHQRWLFHWRWKH([HFXWLYHWKDWWKH&KDQJHRI&RQWURO3HULRGVKDOOQRWEHVR H[WHQGHG &KDQJHRI&RQWURO For the purpose of this Agreement, a “Change of Control” shall me DQ

D 7KHDFTXLVLWLRQE\DQ\LQGLYLGXDOHQWLW\RUJURXSZLWKLQWKHPHDQLQJRI6HFWLRQGRU 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial RZQHUVKLSZLWKLQWKHPHDQLQJRI5XOHGSURPXOJDWHGXQGHUWKH([FKDQJH$FWRIRUPRUHRIHLWKHULWKH then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (ii) the FRPELQHGYRWLQJSRZHURIWKHWKHQRXWVWDQGLQJYRWLQJVHFXULWLHVRIWKH&RPSDQ\HQWLWOHGWRYRWHJHQHUDOO\LQWKH election of directors (the “Outstanding Company Voting Securities”); SURYLGHG KRZHYHU WKDWIRUSXUSRVHVRIWKLV VXEVHFWLRQDWKHIROORZLQJDFTXLVLWLRQVVKDOOQRWFRQVWLWXWHD&KDQJHRI&RQWURO:DQ\DFTXLVLWLRQGLUHFWO\IURP WKH&RPSDQ\;DQ\DFTXLVLWLRQE\WKH&RPSDQ\<DQ\DFTXLVLWLRQE\DQ\HPSOR\HHEHQHILWSODQRUUHODWHG WUXVWVSRQVRUHGRUPDLQWDLQHGE\WKH&RPSDQ\RUDQ\HQWLW\FRQWUROOHGE\WKH&RPSDQ\=DQ\DFTXLVLWLRQ SXUVXDQWWRDWUDQVDFWLRQZKLFKFRPSOLHVZLWKFODXVHVLLLDQGLLLRIVXEVHFWLRQFRIWKLV6HFWLRQ E Individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease IRUDQ\UHDVRQWRFRQVWLWXWHDWOHDVWDPDMRULW\RIWKH%RDUGSURYLGHG KRZHYHU WKDWDQ\LQGLYLGXDOEHFRPLQJD director subsequent to the date hereof whose election, or nomination for election by the Company’s stockholders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f the foregoing, a “Business Combination”), in each case, unless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such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one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“Employment Period”). The Employment Period shall terminate upon the Executive’s termination of employment IRUDQ\UHDVRQ

7HUPVRI(PSOR\PHQW D3RVLWLRQDQG'XWLHV L'XULQJWKH(PSOR\PHQW3HULRG$WKH Executive’s po VLWLRQLQFOXGLQJVWDWXVRIILFHVWLWOHVDQGUHSRUWLQJUHTXLUHPHQWVDXWKRULW\GXWLHVDQG UHVSRQVLELOLWLHVVKDOOEHDWOHDVWFRPPHQVXUDWHLQDOOPDWHULDOUHVSHFWVZLWKWKHPRVWVLJQLILFDQWRIWKRVHKHOG H[HUFLVHGDQGDVVLJQHGWRWKH([HFXWLYHDWDQ\WLPHGXULQJWKHGD\SHULRGLPPHGLDWHO\SUHFHGLQJWKH(IIHFWLYH Date and (B) the Executive’s services shall be performed at the location where the Executive was employed LPPHGLDWHO\SUHFHGLQJWKH(IIHFWLYH'DWHRUDQ\RIILFHRUORFDWLRQOHVVWKDQPLOHVIURPVXFKORFDWLRQ LL 'XULQJWKH(PSOR\PHQW3HULRGDQGH[FOXGLQJDQ\SHULRGVRIYDFDWLRQDQGVLFN OHDYHWRZKLFKWKH([HFXWLYHLVHQWLWOHGWKH([HFXWLYHDJUHHVWRGHYRWHUHDVRQDEOHDWWHQWLRQDQGWLPHGXULQJQRUPDO EXVLQHVVKRXUVWRWKHEXVLQHVVDQGDIIDLUVRIWKH&RPSDQ\DQGWRWKHH[WHQWQHFHVVDU\WRGLVFKDUJHWKH responsibilities assigned to the Executive hereunder, to use the Executive’s reasonable best efforts to perform IDLWKIXOO\DQGHIILFLHQWO\VXFKUHVSRQVLELOLWLHV'XULQJWKH(PSOR\PHQW3HULRGLWVKDOOQRWEHDYLRODWLRQRIWKLV $JUHHPHQWIRUWKH([HFXWLYHWR$VHUYHRQFRUSRUDWHFLYLFRUFKDULWDEOHERDUGVRUFRPPLWWHHV%GHOLYHU OHFWXUHVIXOILOOVSHDNLQJHQJDJHPHQWVRUWHDFKDWHGXFDWLRQDOLQVWLWXWLRQVDQG&PDQDJHSHUVRQDOLQYHVWPHQWVVR ORQJDVVXFKDFWLYLWLHVGRQRWVLJQLILFDQWO\LQWHUIHUHZLWKWKHSHUIRUPDQFHRIWKH LLL Executive’s responsibilities as an employee of the Company in accordance with WKLV$JUHHPHQW,WLVH[SUHVVO\XQGHUVWRRGDQGDJUHHGWKDWWRWKHH[WHQWWKDWDQ\VXFKDFWLYLWLHVKDYHEHHQFRQGXFWHG E\WKH([HFXWLYHSULRUWRWKH(IIHFWLYH'DWHWKHFRQWLQXHGFRQGXFWRIVXFKDFWLYLWLHVRUWKHFRQGXFWRIDFWLYLWLHV VLPLODULQQDWXUHDQGVFRSHWKHUHWRVXEVHTXHQWWRWKH(IIHFWLYH'DWHVKDOOQRWWKHUHDIWHUEHGHHPHGWRLQWHUIHUHZLWK the performance of the Executive’s responsibilities to the Company. E &RPSHQVDWLRQ L%DVH6DODU\ 'XULQJWKH(PSOR\PHQW3HULRGWKH([HFXWLYHVKDOO UHFHLYHDQDQQXDOEDVHVDODU\ (“Annual Base Salary”), which shall be paid at an annual rate, at least equal to twelve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nt, the term “affiliated companies” shall include any company controlled by, controlling or XQGHUFRPPRQFRQWUROZLWKWKH&RPSDQ\ LL $QQXDO%RQXV ,QDGGLWLRQWR$QQXDO%DVH6DODU\WKH([HFXWLYHVKDOOEHDZDUGHG IRUHDFKILVFDO\HDUHQGLQJGXULQJW he Employment Period, an annual bonus (the “Annual Bonus”) in cash at least equal to the Executive’s average of the bonuses paid or payable under the Company’s Management Incentive Bonus 3ODQRUDQ\FRPSDUDEOHDQQXDOERQXVXQGHUDQ\SUHGHFHVVRURUVXFFHVVRUSODQLQUHVSHFWRIWKHODVWWKUHHIXOOILVFDO \HDUVSULRUWRWKH(IIHFWLYH'DWHRULIWKH([HFXWLYHZDVILUVWHPSOR\HGE\WKH&RPSDQ\DIWHUWKHEHJLQQLQJRIWKH HDUOLHVWRIVXFKWKUHHILVFDO\HDUVWKHDYHUDJHRIWKHERQXVHVSDLGRUSD\DEOHXQGHUVXFKSODQVLQUHVSHFWRIWKH ILVFDO\HDUVHQGLQJEHIRUHWKH(IIHFWLYH'DWHGXULQJZKLFKWKH([HFXWLYHZDVHPSOR\HGE\WKH&RPSDQ\ZLWKVXFK ERQXVEHLQJDQQXDOL]HGZLWKUHVSHFWWRDQ\VXFKILVFDO\HDULIWKH([HFXWLYHZDVQRWHPSOR\HGE\WKH&RPSDQ\IRU WKH whole of such fiscal year) (the “Recent Average Bonus”). ,IWKH([HFXWLYHKDVQRWEHHQHOLJLEOHWRHDUQVXFKD bonus for any period prior to the Effective Date, the “Recent Annual Bonus” shall mean the Executive’s target DQQXDOERQXV IRUWKH\HDULQZKLFKWKH(IIHFWLYH'DWHRFFXUV(DFKVXFK$QQXDO%RQXVVKDOOEHSDLGQRODWHUWKDQ WZRDQGDKDOIPRQWKVDIWHUWKHHQGRIWKHILVFDO\HDUIRUZKLFKWKH$QQXDO%RQXVLVDZDUGHGXQOHVVWKH([HFXWLYH VKDOOHOHFWWRGHIHUWKHUHFHLSWRIVXFK$QQXDO%RQXVSXUVXDQWWRDQDUUDQJHPHQWWKDWPHHWVWKHUHTXLUHPHQWVRI Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”). LLL ,QFHQWLYH6DYLQJVDQG5HWLUHPHQW3ODQV 'XULQJWKH(PSOR\PHQW3HULRGWKH ([HFXWLYHVKDOOEHHQWLWOHGWRSDUWLFLSDWHLQDOOLQFHQWLYHVDYLQJVDQGUHWLUHPHQWSODQVSUDFWLFHVSROLFLHVDQG SURJUDPVDSSOLFDEOHJHQHUDOO\WRRWKHUSHHUH[HFXWLYHVRIWKH&RPSDQ\DQGLWVDIILOLDWHGFRPSDQLHVEXWLQQRHYHQW

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$ the sum of (1) the Executive’s Annual Base Salary through the Date of Termination to the extent not theretofore paid, (2) the Executive’s business expenses that are reimbursable pursuant WR6HFWLRQE )(v) but have not been reimbursed by the Company as of the Date of Termination; (3) the Executive’s $QQXDO%RQXVIRUWKHILVFDO\HDULPPHGLDWHO\SUHFHGLQJWKHILVFDO\HDULQZKLFKWKH'DWHRI7HUPLQDWLRQRFFXUVLI VXFKERQXVKDVEHHQGHWHUPLQHGEXWQRWSDLGDVRIWKH'DWHRI7HUPLQDWLRQDQ\DFFUXHGYDFDWLRQSD\WRWKH extent not theretofore paid (the sum of the amounts described in subclauses (1), (2), (3) and (4), the “Accrued Obligations”) and (5) an amount equal to the product of (x) the Recent Ave UDJH%RQXVDQG\DIUDFWLRQWKH QXPHUDWRURIZKLFKLVWKHQXPEHURIGD\VLQWKHFXUUHQWILVFDO\HDUWKURXJKWKH'DWHRI7HUPLQDWLRQDQGWKH denominator of which is 365 (the “Pro Rata Bonus”); SURYLGHG WKDWQRWZLWKVWDQGLQJWKHIRUHJRLQJLIWKH([HFXWLYH KDVPDGHDQLUUHYRFDEOHHOHFWLRQXQGHUDQ\GHIHUUHGFRPSHQVDWLRQDUUDQJHPHQWVXEMHFWWR6HFWLRQ$RIWKH&RGH WRGHIHUDQ\SRUWLRQRIWKH$QQXDO%DVH6DODU\RUWKH$QQXDO%RQXVGHVFULEHGLQFODXVHVRUDERYHWKHQIRU DOOSXUSRVHVRIWKLV6HFWLRQLQFOXGLQJZLWKRXWOLPLWDWLRQ6HFWLRQVEWKURXJKGVXFKGHIHUUDOHOHFWLRQDQG WKHWHUPVRIWKHDSSOLFDEOHDUUDQJHPHQWVKDOODSSO\WRWKHVDPHSRUWLRQRIWKHDPRXQWGHVFULEHGLQVXFKFODXVHRU FODXVHDQGVXFKSRUWLRQVKDOOQRWEHF onsidered as part of the “Accrued Obligations” but shall instead be an “Other Benefit” (as defined below); and % WKHDPRXQWHTXDOWRWKHSURGXFWRI>WZR@>WKUHH@DQGWKHVXPRI[ the Executive’s Annual Base Salary and (y) the Recent Average B RQXVDQG & DQDPRXQWHTXDOWRWKHSURGXFWRI>WZR@>WKUHH@DQGWKHVXPRID the Company Retirement Contributions (as defined in the BorgWarner Inc. Retirement Savings Plan (“RSP”)) that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ection 4(b)(i) and Section 4(b)(ii) of this Agreement (“Limitations” meaning limitations contained in the RSP, the Employee Retirement Income Security Act (“ERISA”) or the Code (including without l LPLWDWLRQWKHFDS RQ&RPSHQVDWLRQ ' for [two] [three] years following the Date of Termination (the “Benefits Period”), the Company shall provide the Executive and his eligible dependents with medical and dental insurance coverage (the “Health Care Benefits”) and life insurance benefits no less favorable to those which the Executive and KLVVSRXVHDQGHOLJLEOHGHSHQGHQWVZHUHUHFHLYLQJLPPHGLDWHO\SULRUWRWKH'DWHRI7HUPLQDWLRQRULIPRUH IDYRUDEOHWRVXFKSHUVRQVDVLQHIIHFWJHQHUDOO\DWDQ\WLPHWKHUHDIWHUZLWKUHVSHFWWRRWKHUSHHUH[HFXWLYHVRIWKH &RPSDQ\DQGWKH$IILOLDWHG&RPSDQLHVSURYLGHG KRZHYHU WKDWWKH+HDOWK&DUH%HQHILWVVKDOOEHSURYLGHGGXULQJ WKH%HQHILWV3HULRGLQVXFKDPDQQHUWKDWVXFKEHQHILWVDUHH[FOXGHGIURPWKH( xecutive’s income for federal income WD[SXUSRVHVSURYLGHG IXUWKHU KRZHYHU WKDWLIWKH([HFXWLYHEHFRPHVUHHPSOR\HGZLWKDQRWKHUHPSOR\HUDQGLV HOLJLEOHWRUHFHLYHKHDOWKFDUHEHQHILWVXQGHUDQRWKHUHPSOR\HUSURYLGHGSODQWKHKHDOWKFDUHEHQHILWVSURYLGHG KHUHXQGHUVKDOOEHVHFRQGDU\WRWKRVHSURYLGHGXQGHUVXFKRWKHUSODQGXULQJVXFKDSSOLFDEOHSHULRGRI HOLJLELOLW\7KHUHFHLSWRIWKH+HDOWK&DUH%HQHILWVVKDOOEHFRQGLWLRQHGXSRQWKH([HFXWLYHFRQWLQXLQJWRSD\WKH $SSOLFDEOH&2%5$3UHPLXPZLWKUHVSHFWWRWKHOHYHORIFRYHUDJHWKDWWKH([HFXWLYHKDVHOHFWHGIRUWKH([HFXWLYH and the Executive’s spouse and eligible dependents ( e.g. VLQJOHVLQJOHSOXVRQHRUIDPLO\'XULQJWKHSRUWLRQRI WKH%HQHILWV3HULRGLQZKLFKWKH([HFXWLYHDQGKLVHOLJLEOHGHSHQGHQWVFRQWLQXHWRUHFHLYHFRYHUDJHXQGHUWKH Company’s Health Care Benefits plans, the Company shall pay to the Executive a monthly amount equal to the $SSOLFDEOH&2%5$3UHPLXPLQUHVSHFWRIWKHPD[LPXPOHYHORIFRYHUDJHWKDWWKH([HFXWLYHFRXOGKDYHHOHFWHGWR receive for the Executive and the Executive’s spouse and eligible dependents if the Executive were still an employee RIWKH&RPSDQ\GXULQJWKH%HQHILWV3HULRG e.g. VLQJOHVLQJOHSOXVRQHRUIDPLO\UHJDUGOHVVRIZKDWOHYHORI FRYHUDJHLVDFWXDOO\HOHFWHGZKLFKSD\PHQWVKDOOEHSDLGLQDGYDQFHRQWKHILUVWSD\UROOGD\RIHDFKPRQWK commencing with the month immediately following the Executive’s Date of Termination. 7KH&RPSDQ\VKDOOXVH LWVUHDVRQDEOHEHVWHIIRUWVWRHQVXUHWKDWIROORZLng the end of the Benefit Period, the Executive and the Executive’s VSRXVHDQGHOLJLEOHGHSHQGHQWVVKDOOEHHOLJLEOHWRHOHFWFRQWLQXHGKHDOWKFRYHUDJHSXUVXDQWWR6HFWLRQ%RIWKH

Code or other applicable law (“COBRA Coverage”), as if the Executive’s HPSOR\PHQWZLWKWKH&RPSDQ\KDG WHUPLQDWHGDVRIWKHHQGRIVXFKSHULRG)RUSXUSRVHVRIGHWHUPLQLQJHOLJLELOLW\EXWQRWWKHWLPHRIFRPPHQFHPHQW of benefits) of the Executive for retiree welfare benefits pursuant to the Company’s retiree welfare benefit SODQVLI DQ\WKH([HFXWLYHVKDOOEHFRQVLGHUHGWRKDYHUHPDLQHGHPSOR\HGXQWLOWKHHQGRIWKH%HQHILW3HULRGDQGWRKDYH retired on the last day of such period. For purposes of this Provision, “Applicable COBRA Premium” means the PRQWKO\SUHPLXPLQHIIHFWIURPWLPHWRWLPHIRUFRYHUDJHSURYLGHGWRIRUPHUHPSOR\HHVXQGHU6HFWLRQ%RI WKH&RGHDQGWKHUHJXODWLRQVWKHUHXQGHUZLWKUHVSHFWWRDSDUWLFXODUOHYHORIFRYHUDJH e.g. VLQJOHVLQJOHSOXVRQHRU IDPLO\ LL WKH&RPSDQ\VKDOODWLWVVROHH[SHQVHDVLQFXUUHGSURYLGHWKH([HFXWLYHZLWK outplacement services the scope and provider of which shall be selected by the Executive in the Executive’s sole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shall be hereinafter referred to as the “Other Benefits”) in accordance with the terms of the underlying plans or DJUHHPHQWV 1RWZLWKVWDQGLQJWKHIRUHJRLQJSURYLVLRQVRI6HFWLRQDLDQG6HFWLRQDLLLQWKHHYHQWWKDWWKH([HFXWLYHLVD “specified employee” within the meaning of Section 409A of the Code (as determined in accordance with the methodology established by the Company as in effect on the Date of Termination) (a “Specified Employee” amounts that constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code that ZRXOGRWKHUZLVHEHSD\DEOHDQGEHQHILWVWKDWZRXOGRWKHUZLVHEHSURYLGHGXQGHU6HFWLRQDLRU6HFWLRQDLL GXULQJWKHVL[PRQWKSHULRGLPPHGLDWHO\IROORZLQJWKH'DWHRI7HUPLQDWLRQRWKHUWKDQWKH$FFUXHG2EOLJDWLRQV VKDOOLQVWHDGEHSDLGZLWKLQWHUHVWRQDQ\GHOD\HGSD\PHQWDWWKHDSSOLFDEOHIHGHUDOUDWHSURYLGHGIRULQ6HFWLRQ 7872(f)(2)(A) of the Code (“Interest”) determined as of WKH'DWHRI7HUPLQDWLRQRUSURYLGHGRQWKHILUVWEXVLQHVV day after the date that is six months following the Executive’s Date of Termination (the “Delayed Payment Date”); E 'HDWK If the Executive’s employment is terminated by reason of the Executive’s death during the Employment Period, the Company shall provide the Executive’s estate or beneficiaries with the Accrued 2EOLJDWLRQVDQGWKH3UR5DWD%RQXVDQGWKHWLPHO\SD\PHQWRUGHOLYHU\RIWKH2WKHU%HQHILWVDQGVKDOOKDYHQR RWKHUVHYHUDQFHREOLJDWLRQVXQGHUWKLV$JUHHPHQW7KH$FFUXHG2EOLJDWLRQVVXEMHFWWRWKHSURYLVRVHWIRUWKLQ Section 6(a)(1)(A) to the extent applicable) and the Pro Rata Bonus shall be paid to the Executive’s estate or EHQHILFLDU\DVDSSOLFDEOHLQDOXPSVXPLQFDVKZLWKLQGD\VRIWKH'DWHRI7HUPLQDWLRQ:LWKUHVSHFWWRWKH provision of the Other Benefits, the term “Other Benefits” as utilized in this Section 6(b) shall include, without limitation, and the Executive’s estate and/or beneficiaries shall be entitled to UHFHLYHEHQHILWVHLWKHUSXUVXDQWWRD SODQSURJUDPSUDFWLFHRUSROLF\RUDQLQGLYLGXDODUUDQJHPHQWDWOHDVWHTXDOWRWKHPRVWIDYRUDEOHEHQHILWVSURYLGHG E\WKH&RPSDQ\DQGWKHDIILOLDWHGFRPSDQLHVWRWKHHVWDWHVDQGEHQHILFLDULHVRISHHUH[HFXWLYHVRIWKH&RPSDQ\DQG VXFKDIILOLDWHGFRPSDQLHVXQGHUVXFKSODQVSURJUDPVSUDFWLFHVDQGSROLFLHVUHODWLQJWRGHDWKEHQHILWVLIDQ\DVLQ HIIHFWZLWKUHVSHFWWRRWKHUSHHUH[HFXWLYHVDQGWKHLUEHQHILFLDULHVDWDQ\WLPHGXULQJWKHGD\SHULRG LPPHGLDWHO\ preceding the Effective Date or, if more favorable to the Executive’s estate and/or the Executive’s beneficiaries, as in effect on the date of the Executive’s death with respect to other peer executives of the Company DQGLWVDIILOLDWHGFRPSDQLHVDQGWKHLUEHQHILFLDULHV F 'LVDELOLW\ If the Executive’s employment is terminated by reason of the Executive’s 'LVDELOLW\GXULQJWKH(PSOR\PHQW3HULRGWKH&RPSDQ\VKDOOSURYLGHWKH([HFXWLYHZLWKWKH$FFUXHG2EOLJDWLRQV DQG3UR5DWD%RQXVDQGWKHWLPHO\SD\PHQWRUGHOLYHU\RIWKH2WKHU%HQHILWVLQDFFRUGDQFHZLWKWKHWHUPVRIWKH XQGHUO\LQJSODQVRUDJUHHPHQWVDQGVKDOOKDYHQRRWKHUVHYHUDQFHREOLJDWLRQVXQGHUWKLV$JUHHPHQW7KH$FFUXHG 2EOLJDWLRQVVXEMHFWWRWKHSURYLVRVHWIRUWKLQ6HFWLRQD$WRWKHH[WHQWDSSOLFDEOHDQGWKH3UR5DWD%RQXV

VKDOOEHSDLGWRWKH([HFXWLYHLQDOXPSVXPLQFDVKZLWKLQGD\VRIWKH'DWHRI7HUPLQDWLRQSURYLGHG WKDWLQWKH HYHQWWKDWWKH([HFXWLYHLVD6SHFLILHG(PSOR\HHWKH3UR5DWD%RQXVVKDOOEHSDLGZLWK,QWHUHVWWRWKH([HFXWLYH RQWKH'HOD\HG3D\PHQW'DWH With respect to the provision of the Other Benefits, the term “Other Benefits” as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and/or the Executive’s family, as in effect at any time thereafter generally with respect to other peer executives of WKH&RPSDQ\DQGWKHDIILOLDWHGFRPSDQLHVDQGWKHLUIDPLOLHV G &DXVH2WKHUWKDQIRU*RRG5HDVRQ If the Executive’s employment is terminated for Cause during the Employment Period, the Company shall provide the Executive with the Executive’s Annual Base Salary VXEMHFWWRWKHSURYLVRVHWIRUWKLQ6HFWLRQD$WRWKHH[WHQWDSSOLFDEOHWKURXJKWKH'DWHRI7HUPLQDWLRQDQG WKHWLPHO\SD\PHQWRUGHOLYHU\RIWKH2WKHU%HQHILWVDQGVKDOOKDYHQRRWKHUVHYHUDQFHREOLJDWLRQVXQGHUWKLV $JUHHPHQW,IWKH([HFXWLYHYROXQWDULO\WHUPLQDWHVHPSOR\PHQWGXULQJWKH(PSOR\PHQW3HULRGH[FOXGLQJD WHUPLQDWLRQIRU*RRG5HDVRQWKH&RPSDQ\VKDOOSURYLGHWRWKH([HFXWLYHWKH$FFUXHG2EOLJDWLRQVDQGWKH3UR5DWD %RQXVDQGWKHWLPHO\SD\PHQWRUGHOLYHU\RIWKH2WKHU%HQHILWVDQGVKDOOKDYHQRRWKHUVHYHUDQFHREOLJDWLRQVXQGHU WKLV$JUHHPHQW,QVXFKFDVHDOOWKH$FFUXHG2EOLJDWLRQVVXEMHFWWRWKHSURYLVRVHWIRUWKLQ6HFWLRQD$WR WKHH[WHQWDSSOLFDEOHDQGWKH3UR5DWD%RQXVVKDOOEHSDLGWRWKH([HFXWLYHLQDOXPSVXPLQFDVKZLWKLQGD\VRI WKH'DWHRI7HUPLQDWLRQSURYLGHG WKDWLQWKHHYHQWWKDWWKH([HFXWLYHLVD6SHFLILHG(PSOR\HHWKH3UR5DWD%RQXV VKDOOEHSDLGZLWK,QWHUHVWWRWKH([HFXWLYHRQWKH'HOD\HG3D\PHQW'DWH 1RQH[FOXVLYLW\RI5LJKWV Nothing in this Agreement shall prevent or limit the Executive’s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limiting the generality of the foregoing, the Executive’s resignation under this Agreement with or without Good 5HDVRQVKDOOLQQRZD\DIIHFWWKH([HF utive’s ability to terminate employment by reason of the Executive’s “retirement” under any compensation and benefits plans, programs or arrangements of the affiliated companies, LQFOXGLQJZLWKRXWOLPLWDWLRQDQ\UHWLUHPHQWRUSHQVLRQSODQVRUDUUDQJHPHQWVRUWREHHOLJLEOHWRUHFHLYHEHQHILWV XQGHUDQ\FRPSHQVDWLRQRUEHQHILWSODQVSURJUDPVRUDUUDQJHPHQWVRIWKH&RPSDQ\RUDQ\RILWVDIILOLDWHG FRPSDQLHVLQFOXGLQJZLWKRXWOLPLWDWLRQDQ\UHWLUHPHQWRUSHQVLRQSODQRUDUUDQJHPHQWRIWKH&RPSDQ\RUDQ\RILWV DIILOLDWHGFRPSDQLHVRUVXEVWLWXWHSODQVDGRSWHGE\WKH&RPSDQ\RULWVVXFFHVVRUVDQGDQ\WHUPLQDWLRQZKLFK otherwise qualifies as Good Reason shall be treated as such even if it is also a “retirement” for purposes of any such SODQ1RWZLWKVWDQGLQJWKHIRUHJRLQJLIWKH([HFXWLYHUHFHLYHVSD\PHQWVDQGEHQHILWVSXUVXDQWWR6HFWLRQDRI WKLV$JUHHPHQWWKH([HFXWLYHVKDOOQRWEHHQWLWOHGWRDQ\VHYHUDQFHSD\RUEHQHILWVXQGHUDQ\VHYHUDQFHSODQ SURJUDPRUSROLF\RIWKH&RPSDQ\DQGWKHDIILOLDWHGFRPSDQLHVXQOHVVRWKHUZLVHVSHFLILFDOO\SURYLGHGWKHUHLQLQD VSHFLILFUHIHUHQFHWRWKLV$JUHHPHQW )XOO6HWWOHPHQW/HJDO)HHV The Company’s obligation to make the payments provided for LQWKLV$JUHHPHQWDQGRWKHUZLVHWRSHUIRUPLWVREOLJDWLRQVKHUHXQGHUVKDOOQRWEHDIIHFWHGE\DQ\VHWRII FRXQWHUFODLPUHFRXSPHQWGHIHQVHRURWKHUFODLPULJKWRUDFWLRQZKLFKWKH&RPSDQ\PD\KDYHDJDLQVWWKH ([HFXWLYHRURWKHUV,QQRHYHQWVKDOOWKH([HFXWLYHEHREOLJDWHGWRVHHNRWKHUHPSOR\PHQWRUWDNHDQ\RWKHUDFWLRQ E\ZD\RIPLWLJDWLRQRIWKHDPRXQWVSD\DEOHWRWKH([HFXWLYHXQGHUDQ\RIWKHSURYLVLRQVRIWKLV$JUHHPHQWDQG H[FHSWDVVSHFLILFDOO\SURYLGHGLQ6HFWLRQDLLVXFKDPRXQWVVKDOOQRWEHUHGXFHGZKHWKHURUQRWWKH([HFXWLYH REWDLQVRWKHUHPSOR\PHQW The Company agrees to pay as incurred (within 10 days following the Company’s receipt of an invoice from the Executive), at any time from the Effective Date through the Executive’s remaining OLIHWLPHRULIORQJHUWKURXJKWKHWKDQQLYHUVDU\RIWKH(IIHFWLYH'DWHWRWKHIXOOH[WHQWSHUPLWWHGE\ODZDOO OHJDOIHHVDQGH[SHQVHVZKLFKWKH([HFXWLYHPD\UHDVRQDEO\LQFXUDVDUHVXOWRIDQ\FRQWHVWUHJDUGOHVVRIWKH RXWFRPHWKHUHRIE\WKH&RPSDQ\WKH([HFXWLYHRURWKHUVRIWKHYDOLGLW\RUHQIRUFHDELOLW\RIRUOLDELOLW\XQGHUDQ\

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L “Reduced Amount” shall mean the greatest amount of Agreement Payments that FDQEHSDLGWKDWZRXOGQRWUHVXOWLQWKHLPSRVLWLRQRIWKHH[FLVHWD[XQGHU6HFWLRQRIWKH&RGHLIWKH $FFRXQWLQJ)LUPGHWHUPLQHVWRUHGXFH$JUHHPHQW3D\PHQWVSXUVXDQWWR6HFWLRQD LL “Net After Tax Receipt” shall mean the present value (as determined in accordance ZLWK6HFWLRQV*E$LLDQG*GRIWKH&RGHRID3D\PHQWQHWRIDOOWD[HVLPSRVHGRQWKH ([HFXWLYHZLWKUHVSHFWWKHUHWRXQGHU6HFWLRQVDQGRIWKH&RGHDQGXQGHUDSSOLFDEOHVWDWHDQGORFDOODZV GHWHUPLQHGE\DSSO\LQJWKHKLJKHVWPDUJLQDOUDWHXQGHU6HFWLRQRIWKH&RGHDQGXQGHUVWDWHDQGORFDOODZVZKLFK applied to the Executive’s taxable income for t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definition of the term “parachute payment” within the meaning of Q&A DRI6HFWLRQ*RIWKH&RGHLQ DFFRUGDQFHZLWK4 $DRI6HFWLRQ*RIWKH&RGH@ &RQILGHQWLDO,QIRUPDWLRQ 7KH([HFXWLYHVKDOOKROGLQDILGXFLDU\FDSDFLW\IRUWKHEHQHILWRI WKH&RPSDQ\DOOVHFUHWRUFRQILGHQWLDOLQIRUPDWLRQNQRZOHGJHRUGDWDUHODWLQJWRWKH&RPSDQ\RUDQ\RILWV DIILOLDWHGFRPSDQLHVDQGWKHLUUHVSHFWLYHEXVLQHVVHVZKLFKVKDOOKDYHEHHQREWDLQHGE\WKH([HFXWLYHGXULQJWKH Executive’s employment by the Company or any of its affiliated companies and which shall not be or become public NQRZOHGJHRWKHUWKDQE\DFWVE\WKH([HFXWLYHRUUHSUHVHQWDWLYHVRIWKH([HFXWLYHLQYLRODWLRQRIWKLV $JUHHPHQW After termination of the Executive’s employment with the Company, the Executive shall not, without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e by the Executive’s legal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s used in this Agreement, “Company” shall mean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