Exhibit 10.1

 

 

 

 

 

 

 

 

 

TE  CONNECTIVITY  LTD.

 

ANNUAL  INCENTIVE  PLAN

 

(as amended and restated effective December 12, 2019)

 

 

 

TE Connectivity Ltd.

Annual Incentive Plan

 

 

I.

Purpose.

The purpose of the TE Connectivity Ltd. Annual Incentive Plan (the “Plan”) is to
reward the performance of selected Employees who, individually or as members of
a group, contribute to the success of TE Connectivity Ltd. (the “Company”) and
its subsidiaries, thus providing them a means of sharing in, and an incentive to
contribute further to, that success.  The Plan is intended to strengthen the
commitment of such Employees by making part of their individual pay dependent on
the achievement of corporate financial goals.  The Plan was originally effective
as of June 29, 2007 and has been amended and restated several times since.  The
effective date of this amended and restated Plan is December 12, 2019.

 

II.

Definitions.

The following words and phrases shall have the meanings set forth below:

 

“Annual Plan Description” shall mean the written or unwritten procedures and
guidelines established or employed by the Committee pursuant to Section III
hereof for the purpose of administering the Plan.

 

“Award” or “Annual Incentive Award” shall mean the bonus payable to a
Participant under the Plan for any Plan Year.

 

“Annual Base Salary” shall mean, unless otherwise provided by the Committee, the
annual compensation, excluding bonuses, commissions, overtime, incentive
payments, perquisite allowance, non-monetary awards, directors fees and other
fees, relocation expenses, auto allowances, imputed income from group term life
insurance, and any other non-recurring item, paid to or on behalf of a
Participant for employment services rendered to the Company, before reduction
for compensation deferred pursuant to all qualified, nonqualified and cafeteria
plans of any Company.  The definition of Annual Base Salary may be modified by
the Committee or its designee, as is deemed necessary or appropriate to meet the
particular circumstances or needs of a particular country, locality or
business.  Unless otherwise provided by the Committee, the Award shall be based
on the Annual Base Salary as in effect on  September 30th of the Plan Year.

 

“Board” shall mean the board of directors of TE Connectivity Ltd.  To the extent
permissible under applicable law and the operative corporate documentation of
the Company, the Board may delegate its authority or discretion to a third party
(such as the Company’s Management Development and Compensation Committee or
Chief Human Resources Officer (“CHRO”)) and such third party may in turn
delegate that authority or discretion to the extent permitted in the Board
action.

 

“Business Unit” shall mean each of the companies or businesses within each
Segment.

 

 

“Cause” shall mean an Employee’s (i) refusal to perform duties and
responsibilities of his or her job as required by the Company, (ii) violation of
any fiduciary duty owed to the Company, (iii) conviction of a felony or
misdemeanor (or outside of the United States, conviction of a significant
crime), (iv) dishonesty, (v) theft, (vi) violation of Company rules or policy,
or (vii) other egregious conduct, that has or could have a serious and
detrimental impact on the Company and its Employees. Examples of “Cause” may
include, but are not limited to, excessive absenteeism, misconduct,
insubordination, violation of Company policy (in particular, TE’s Guide to
Ethical Conduct and/or TE Policy Avoiding Conflict of Interest), dishonestly,
and deliberate unsatisfactory performance (e.g., Employee refuses to improve
deficient performance).

 

“Change in Control” means the first to occur of any of the following events:

(a)any “person” (as defined in Section 13(d) and 14(d) of the Exchange Act,
excluding for this purpose, (i) the Company or (ii) any employee benefit plan of
the Company (or any person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan that acquires beneficial
ownership of voting securities of the Company), is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act) directly or indirectly
of securities of the Company representing more than 30 percent of the combined
voting power of the Company’s then outstanding securities; provided, however,
that no Change in Control will be deemed to have occurred as a result of a
change in ownership percentage resulting solely from an acquisition of
securities by the Company; or

(b)persons who, as of December12, 2019 , constitute the Board (the “Incumbent
Directors”) cease for any reason (including without limitation, as a result of a
tender offer, proxy contest, merger or similar transaction) to constitute at
least a majority thereof, provided that any person becoming a director of the
Company subsequent to December 12, 2019, shall be considered an Incumbent
Director if such person’s election or nomination for election was approved by a
vote of at least 50 percent of the Incumbent Directors; but provided further,
that any such person whose initial assumption of office is in connection with an
actual or threatened proxy contest relating to the election of members of the
Board or other actual or threatened solicitation of proxies or consents by or on
behalf of a “person” (as defined in Section 13(d) and 14(d) of the Exchange Act)
other than the Board, including by reason of agreement intended to avoid or
settle any such actual or threatened contest or solicitation, shall not be
considered an Incumbent Director; or

(c)consummation of a reorganization, merger or consolidation or sale or other
disposition of at least 80 percent of the assets of the Company (a “Business
Combination”), in each case, unless, following such Business Combination, all or
substantially all of the individuals and entities who were the beneficial owners
of outstanding voting securities of the Company immediately prior to such
Business Combination beneficially own directly or indirectly more than 50
percent of 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 company resulting from such Business Combination (including, without
limitation, a company which, as a result of such transaction, owns the Company
or all or substantially all of the Company’s assets either directly or through
one or more Subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination, of the

 

 

outstanding voting securities of the Company; or

(d)approval by the stockholders of the Company of a complete liquidation or
dissolution of the Company.

“Committee” shall mean the Management Development and Compensation Committee of
the Board or such other persons appointed by the Board to administer the Plan
and which also may act for the Company or the Board in making decisions and
performing specified duties under the Plan.

 

“Company” shall mean TE Connectivity Ltd. and any subsidiary and affiliate whose
Employees have been selected by the Senior Vice President, Chief Human Resource
Officer or his/her delegate to participate in the Plan.  The duties and
obligations of the “Company” as they relate to a particular Participant shall
refer to the specific entity that employs that Participant at such time and not
any other entity, unless otherwise specified.

 

“Disability” shall mean the Participant's permanent and total incapacity
resulting in an inability to engage in any employment for the Company for
physical or mental reasons.  Disability shall be deemed to exist only when the
Participant meets either the requirements for disability benefits under the
Company's long-term disability plan or, if the Company has no such plan
applicable to the Participant, the requirements for disability benefits under
the Social Security law (or similar law outside the United States) then in
effect.

 

“Employee” shall mean any individual employed by the Company on a regular,
full-time basis, other than an individual (a) employed in a casual or temporary
capacity (i.e., those hired for a specific job of limited duration), (b)
characterized as a “leased employee” within the meaning of Section 414 of the
Internal Revenue Code of 1986, as amended, (c) classified by the Company as a
flexible part-time employee, or (d) classified by the Company as a “contractor”
or “consultant”, no matter how characterized by the Internal Revenue Service,
other governmental agency or a court or (e) whose terms of employment are
covered by the terms and conditions of a collective bargaining agreement (“CBA”)
unless participation is provided for under the CBA.  Any change of
characterization of an individual by any court or government agency shall have
no effect upon the classification of an individual as an Employee for purposes
of this Plan, unless the Committee determines otherwise.

 

“Exchange Act” shall mean the United States Securities Exchange Act of 1934, as
amended.

 

“U.S. GAAP” shall mean United States generally accepted accounting principles.

 

“Individual Performance” considers personal work-related factors that the
financial formula does not address.

 

“Participant” shall mean, for any Plan Year, an Employee who satisfies the
eligibility requirements of Section IV.

 

 

 

“Performance Measures” are the annual preestablished organizational or
Individual Performance criteria selected by the Committee or its designee on
which the requirements to earn an Annual Bonus are based.

“Plan” shall mean this TE Connectivity Ltd. Annual Incentive Plan, as from time
to time amended and in effect.

 

“Plan Year” shall mean the fiscal year of the Company or any other period
designated by the Committee.

 

“Retirement” shall mean voluntary termination of employment on or after a
Participant has attained the age and other requirements for retirement described
in the Annual Plan Description.

 

“Schedule” shall mean the Performance Measures established for each Plan Year as
set out for each business and function.

 

“Segment” shall mean each of the major business segments within the Company.  As
of December 12, 2019 , the Segments of the Company are Transportation Solutions,
Industrial Solutions and Communication Solutions.

 

 “Target Award” is the cash bonus that will be paid for target performance,
expressed as a percentage of Annual Base Salary.  A Target Award will be
assigned to each Participant at the beginning of the Plan Year based on job
level or other competitive guidelines; and may change based on job assignment.

 

“Termination of Employment” shall mean the cessation of employment with the
Company, voluntarily or involuntarily, for any reason.

 

III.

Administration.

The Plan shall be administered by the Committee or its designee consistent with
the purpose and the terms of the Plan.  On an annual basis the Committee shall
approve, for the overall company and for each Segment and business unit, the
Performance Measures selected for the Plan Year to the extent not delegated to
the Chief Executive Officer.  The Committee shall have full power and authority
to interpret the Plan, , to approve Awards, to make factual determinations, to
prescribe, amend and rescind any rules, forms, or Annual Plan Description as the
Committee deems necessary or appropriate for the proper administration of the
Plan, and to make any other determinations and take such other actions as it
deems necessary or advisable in carrying out its duties under the Plan,
including the delegation of any such authority or power, where appropriate.  All
decisions and determinations by the Committee or its designee shall be final,
conclusive and binding on the Company, all Employees, Participants, and Plan
beneficiaries, and any other persons having or claiming an interest hereunder.

 

 

 

IV.

Eligibility.

Subject to the limitations contained in this Section IV or the Annual Plan
Description, and also subject to any local requirements imposed by the Company,
including requiring eligible Employees’ acceptance of the terms and conditions
of a restrictive covenant agreement as a condition to participation, all
Employees identified, either individually or by group classification, are
eligible to participate in the Plan.  Employees shall be eligible to receive an
Award calculated under only one Schedule of this Plan for any specific period in
time.  An Employee may, however, participate in more than one Schedule provided
that participation in each such Schedule shall be pro-rated in a manner
consistent with the Annual Plan Description.  During any period in which an
Employee participates in this Plan (including any sub-program hereunder), he or
she may not participate in any other annual incentive compensation program
(including other sub-programs under this Plan) offered by the Company, unless
otherwise provided by the Committee (or its designee) in its sole discretion.

 

V.

Determination of Awards.

The Committee (or its designee) shall have the authority to enact rules
applicable to the payment of awards under the Plan, either for all Participants
or for selected Participants (including without limitation by country, business
unit or other classification, as are deemed necessary and appropriate as
determined by the Committee (or its designee) in its sole and absolute
discretion.  Subject to the Committee’s (or its designee’s) discretion to adjust
any Award individually or by class or as otherwise permitted under the rules of
the Plan described in the Annual Plan Description, the amount of each
Participant’s Award, if any, shall be determined in accordance with the
Performance Measures approved for such Participant.  Award calculations are
generally based on Segment, Business Unit, or overall Company financial results,
or any combination thereof, and are subject to adjustments based on Individual
Performance.

 

VI.

Payment of Awards.

The Committee shall determine the level of achievement attained under the
Performance Measures applicable under each Schedule.  Awards payable to each
Participant under his / her applicable Schedule shall be determined after an
assessment of the Participant’s Individual Performance for the Plan
Year.  Subject to the provisions of Section VII, authorized Awards shall then be
payable in cash in a single sum on the date established by the Committee, or as
soon as administratively feasible thereafter, at the end of the Plan Year or
another time period, if applicable, provided however, that all Awards will be
paid no later than the 15th day of the third month following the later of, a)
the end of the Plan year or b) the last day of the calendar year in which falls
the last day of the Plan year, except to the extent that a Participant has
elected to defer payment under the terms of a duly authorized deferred
compensation arrangement.

 

Unless otherwise prohibited under applicable law, no Award under the Plan shall
be deemed earned until actually paid.  No Participant who commits an act giving
rise to Cause shall be entitled to an Award.  In addition, the Committee shall
have the authority to establish any other terms and conditions applicable to the
Awards (including the mandatory return of all or any portion of an award
previously paid) as are deemed necessary and/or appropriate to comply with

 

 

applicable rules adopted or to be adopted by the Securities Exchange Commission,
New York Stock Exchange or any other governmental agency or stock exchange
having the authority to establish rules affecting the payment of compensation
under this Plan.

 

Unless otherwise prohibited under applicable law, a Participant must be employed
by the Company as a regular, full-time Employee on the Award payment date in
order to receive an Award, or on such other date as may be determined by the
Committee for any Plan Year.  A Participant who incurs a Termination of
Employment prior to the end of the Plan Year shall not be entitled to an Award
except to the extent otherwise required under applicable law.  Notwithstanding
the foregoing, in the event of a termination of employment on account of death,
Disability, Retirement or divestiture during the Plan Year, or as otherwise
provided under the TE Connectivity Corporation Officer or Broad-based Severance
Plans, or as otherwise provided by the Committee or its designee, the Company
may make a pro rata payment of the Award that would otherwise have been paid to
the Participant.  Subject to the provisions of Section VII, authorized Awards
shall then be payable in cash in a single sum on the date established by the
Committee, or as soon as administratively feasible thereafter.

 

If a Participant was (a) on an unpaid approved leave of absence during the Plan
Year; or (b) not employed by the Company at the beginning of the Plan Year,
payment of any Award may be pro-rated.

 

Notwithstanding any provision herein to the contrary, the Committee shall have
full power and authority to decide, in its sole discretion, exercised consistent
with the Company’s best interest, that no Awards or lesser Award amounts shall
be paid under the Plan for a given Plan Year or that no Award shall be paid to
any one or more Participants.  The Committee shall also have the full power and
authority to decide, in its sole discretion, exercised consistent with the
Company’s best interest, that greater amounts shall be paid to designated
businesses under the Plan for a given year or to any one or more participants.
Any such decision by the Committee shall be final, conclusive and binding on the
Company, all Employees, Participants, and Plan beneficiaries, and any other
persons having or claiming an interest hereunder.

 

VII.

Change in Control.

In the event of a Change in Control, the performance targets established by the
Committee for the Plan Year in which the Change in Control occurs shall be
deemed to be satisfied at a level of 100% of each Participant’s target amount,
and each Participant will be entitled to receive a pro-rated payment of the
Award through the date of the Change in Control, unless otherwise provided by
the Committee.  In addition, no later than 90 days after the date of Change in
Control, the Committee (as constituted prior to the date of Change in Control)
shall provide, in its discretion, for any of the following actions to apply to
each Award that is outstanding as of the date of Change in Control:  (i) the
assumption of such Award by the acquiring or surviving corporation after such
Change in Control; or (ii) the payment of such Award by the acquiring or
surviving corporation, at the Participant’s request, in cash.  The Committee may
specify how an Award will be treated in the event of a Change in Control either
when the Award is granted or at any time thereafter.

 

 

 

VIII.

Deferred Awards.

Any Participant who is eligible to participate in the TE Connectivity
Corporation Supplemental Savings and Retirement Plan, or any successor plan (the
“DCP”) and who makes a deferral election in the manner prescribed by the DCP
shall have that portion of his/her Award deferred under the DCP.  The Committee
shall also have the authority to approve deferral of Awards under any other
deferred compensation plan or arrangement sponsored by the company.

 

IX.

Amendment and Termination.

The Plan may be amended, suspended, discontinued or terminated at any time by
the Board; provided, however, that no such amendment, suspension, discontinuance
or termination shall reduce, or in any manner adversely affect the rights of any
Participant with respect to, Awards determined by the Committee to be
outstanding as of the effective date of such amendment, suspension,
discontinuance or termination.

 

X.

Designation of Beneficiary.

Any payments under the Plan payable to a Participant following the Participant’s
death shall be payable to the beneficiary designated on the Participant’s
Company-provided life insurance policy or, if none or if there are conflicting
beneficiaries, to the Participant’s estate or as otherwise provided by will or
under the applicable lows of descent and distribution.

 

XI.

No Implied Rights.

The establishment and operation of the Plan, including the eligibility of a
Participant to participate in the Plan shall not be construed as conferring any
legal or other right upon any Employee for the continuation of employment
through the end of the Plan Year or other period.  The Company expressly
reserves the right, which may be exercised at any time and in the Company’s sole
discretion, to discharge any individual or treat him or her without regard to
the effect that discharge might have upon him or her as a Participant in the
Plan.

 

XII.

Adjustment for Non-Recurring Items.

Notwithstanding anything herein to the contrary, the Committee in applying
Performance Measures, may, in its discretion, exclude unusual or infrequently
occurring items and the cumulative effect of changes in the law, regulations or
accounting rules, and may determine to exclude other items, each determined in
accordance with U.S. GAAP (to the extent applicable).

 

 

 

XIII.

Obligations to Company.

If a Participant has outstanding any debt, obligation, or other liability
representing an amount owing to the Company, such Participant’s future Awards
under the Plan may be offset, at the Committee’s discretion, to the extent
necessary to cover the amounts owing to the Company.  If a Participant receives
an Award and such Participant has engaged in acts that the Committee, in its
sole discretion, determines to constitute Cause, the amount of such Award shall
be treated as a liability of the Participant to the Company that the Company may
offset against any amounts otherwise payable to the Participant.

If the Committee or its designee reasonably suspects the Participant has an
outstanding debt, obligation, or other liability to the Company, any Award
otherwise distributable shall be placed by the Company in escrow but shall earn
interest at market rate pending the conclusion of the Committee’s (or its
designee’s) investigation.  Following the end of such an investigation, the
amount in escrow, reduced by the amount the Participant owes the Company, if
any, shall be distributed to the Participant.  All determinations under this
Article XIII shall be made by the Committee (or its designee) in its sole
discretion.

 

XIV.

Nonalienation of Benefits.

Except as expressly provided herein, no Participant or beneficiary shall have
the power or right to transfer other than by will or the laws of descent and
distribution, alienate, or otherwise encumber the Participant’s interest under
the Plan.  The Company’s obligations under this Plan are not assignable or
transferable except to (a) any corporation or partnership which acquires all or
substantially all of the Company’s assets or (b) any corporation or partnership
into which the Company may be merged or consolidated.  The provisions of the
Plan shall inure to the benefit of each Participant and the Participant’s
beneficiaries, heirs, executors, administrators or successors in interest.

 

XV.

Withholding Taxes.

The Company may make such provisions and take such action as it may deem
necessary or appropriate for the withholding of any taxes which the Company is
required by any law or regulation of any governmental authority, whether
Federal, state or local, to withhold in connection with any Award under the
Plan, including, but not limited to, the withholding of appropriate sums from
any amount otherwise payable to the Participant (or his estate).  Each
Participant, however, shall be responsible for the payment of all individual tax
liabilities relating to any such Awards.

 

 

 

XVI.

Unfunded Status of Plan.

The Plan is intended to constitute an “unfunded” plan of incentive compensation
for Participants.  Awards payable hereunder shall be payable out of the general
assets of the Company, and no segregation of any assets whatsoever for such
Awards shall be made.  Notwithstanding any segregation of assets or transfer to
a grantor trust, with respect to any payments not yet made to a Participant,
nothing contained herein shall give any such Participant any rights to assets
that are greater than the rights of an unsecured general creditor of the
Company.

 

XVII.

Governing Law; Severability.

The Plan and all determinations made and actions taken under the Plan shall be
governed by the law of Pennsylvania (excluding the choice of law provisions
thereof) and construed accordingly.  If any provision of the Plan is held
unlawful or otherwise invalid or unenforceable in whole or in part,
unlawfulness, invalidity or unenforceability shall not affect any other parts of
the Plan, which parts shall remain in full force and effect.

 

XVIII.

Headings.

Headings are inserted in this Plan for convenience of reference only and are to
be ignored in the construction of the provisions of the Plan.

 

XIX.

Gender, Singular and Plural.

All pronouns and any variations thereof shall be deemed to refer to the
masculine, feminine, or neuter, as the identity of the person or persons may
require.  As the context may require, the singular may read as the plural and
the plural as the singular.

 

XX.

Notice.

Any notice or filing required or permitted to be given to the Committee (or its
designee) under the Plan shall be sufficient if in writing and mailed to the
Senior Vice President, Chief Human Resources Officer  at TE Connectivity Ltd.,
1050 Westlakes Drive, Berwyn, Pa. 19312, or to such other entity as the
Committee (or its designee) may designate from time to time.  Such notice shall
be deemed given as to the date of delivery, or, if delivery is made by mail, as
of the date shown on the postmark on the receipt for registration or
certification.

 

 

 

XXI.

Overpayments.

In the event that a Participant receives payment for an Award under this Plan
that exceeds the amount that the Participant should have received under this
Plan (as determined by the Committee or its designee), the Participant shall be
required immediately to repay to the Company the excess amount, provided that
the Committee or its designee may instead offset such Participant’s future
Awards or other forms of compensation including but not limited to base pay,
under the Plan to the extent necessary to recoup the amount owed.