INTERMEC,INC. EXECUTIVECHANGE OF CONTROL POLICY FOR2008 OMNIBUS INCENTIVE PLAN Effective:January 7, 2009

 

 

 

 

1.           General. The Compensation Committee of the Board of Directors adopted the policy set forth herein (the "Policy") on behalf of the Company. The Policy applies to those executive officers and other key management personnel (the "Executives") who have been designated as participants in the Company's Change of Control Severance Plan effective as of January 7, 2009. The purpose of the Policy is to establish the treatment of equity awards granted under the Company's 2008 Omnibus Incentive Plan (the "2008 Plan") in the event of a Change of Control (as defined herein). Pursuant to Section 14.2 of the 2008 Plan, the Policy shall be incorporated into and shall become a term of the instrument evidencing any Award granted under the 2008 Plan to the Executives, and shall otherwise supersede the provisions of the first paragraph of Section 14.2(a) and Section 14.2(b) of the 2008 Plan.

 

2.           Treatment of Awards Other Than Performance-Vested Awards. If an Award (other than Awards identified in paragraph 3 below) continues after a Change of Control, the Award, including any Award that results from the conversion, assumption or replacement of the Award in connection with the Change of Control, will not become fully and immediately vested and exercisable, and all applicable restriction limitations or forfeiture provisions will not lapse, immediately prior to the Change of Control; provided, however, that such Awards will become fully and immediately vested and exercisable if, in connection with or within two years after the Change of Control, the Executive's employment is terminated by the Company or a successor company without Cause or if the Executive terminates his or her employment for Good Reason.

3.           Treatment of Performance-Vested Awards.  The target payout opportunities attainable under all outstanding Stock Awards and Stock Units with restrictions based on performance criteria, Performance Shares, and Performance Units will be deemed to have been fully earned based on targeted performance being attained as of the effective date of a Change of Control, except that if more than 50% of the applicable performance period has elapsed as of the effective date of a Change of Control, the Award will be deemed to have been earned based on the actual performance attained as of the effective date of the Change of Control, and, in either case, such Awards shall be paid within 60 days following the effective date of the Change of Control.

4.           Definitions.  For purposes of the Policy, the following terms shall have the meanings set forth below:

(a)          "Cause" means:

 

(i) the willful and continued failure of the Executive to perform substantially the Executive's duties with the Company (other than any such failure resulting from incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to the Executive by the Board of Directors or the Chief Executive Officer of the Company that specifically identifies the manner in which the Board or Chief Executive Officer believes that the Executive has not substantially performed the Executive's duties, or

 

(ii) the willful engaging by the Executive in illegal conduct or gross misconduct that is materi­ally and demonstrably injurious to the Company.

 

 

For purposes of this provision, no act or failure to act, on the part of the Executive, shall be considered "willful" unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive's action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or upon the instructions of the Chief Executive Officer or a senior officer of the Company or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company. The cessation of employment of the Executive shall not be deemed to be for Cause unless and until there shall have been delivered to the Executive a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the Board at a meeting of the Board called and held for such purpose (after reasonable notice is provided to the Executive and the Executive is given an opportunity, together with counsel, to be heard before the Board), finding that, in the good faith opinion of the Board, the Executive is guilty of the conduct described in clause (i) or (ii) above, and specifying the particulars thereof in detail.

 

(b)          "Change of Control" of the Company shall be deemed to have occurred as of the first day that any one or more of the following conditions shall have been satisfied:

 

(i) 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 (A) the then outstanding shares of common stock of the Company (the "Outstanding Company Common Stock") or (B) 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: (A) 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, (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company, or (D) any acquisition by any Person pursuant to a transaction that complies with clauses (A), (B) and (C) of Section 4(b)(iii); or

 

(ii) During any consecutive 24-month period, the individuals who, at the beginning of such period, 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 such period 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

 

(iii) 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 (A) all or sub­stantially 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 shall beneficially own, directly or indirectly, more than 50% 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 that 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, (B) 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) shall beneficially own, directly or indirectly, 30% 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 (C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination shall 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

 

(iv) The consummation of a complete liquidation or dissolution of the Company.

 

(c)          "Good Reason" means "good reason" within the meaning of the safe harbor under Section 1.409A-1(n)(2)(ii) of the Treasury Regulations promulgated under Code Section 409A, providing that:

 

(i) Separation from service must occur within two years following the initial existence of one or more of the following conditions arising without the consent of the Executive:

 

(A) A material diminution in the Executive's base compensation.

 

(B) A material diminution in the Executive's authority, duties, or responsibilities.

 

(C) A material diminution in the authority, duties or responsibilities of the supervisor to whom the Executive is required to report, including a requirement that the Executive report to a corporate officer or employee instead of reporting directly to the Board.

 

(D) A material diminution in the budget over which the Executive retains authority.

 

(E) A material change in the geographic location at which the Executive must perform the services.

 

(F) The failure of the Company to obtain a satisfactory agreement from any successor to the Company to assume and agree to perform the Policy.

 

(ii) Notwithstanding the foregoing, termination of the Executive's employment shall not be for Good Reason unless (A) the Executive notifies the Company or any successor in writing of the occurrence or existence of the event or condition that the Executive believes constitutes Good Reason within 90 days of the initial existence of such event or condition (which notice specifically identifies the event or condition), (B) the Company or any successor fails to correct the event or condition so identified in all material respects within 30 days after the date on which it receives such notice (the "Remedial Period"), and (C) the Executive actually terminates employment within 30 days after the expiration of the Remedial Period and before the Company or any successor remedies the event or condition (even if after the end of the Remedial Period). If the Executive terminates employment before the expiration of the Remedial Period or after the Company or any successor remedies the event or condition (even if after the end of the Remedial Period), then the Executive's termination shall not be considered to be for Good Reason.