Exhibit 10.1

 

[NCR Letterhead]

 

July 11, 2005

 

Mr. James M. Ringler

9758 Bent Grass Bend

Naples, FL 34108

 

Dear Jim:

 

Upon execution by you, this letter will constitute your employment agreement
(this “Agreement”) with NCR Corporation (“NCR” or the “Company”) regarding your
temporary service as the President and interim Chief Executive Officer (“CEO”)
of the Company during the period from March 30, 2005, through the arrival of a
new, permanent President and Chief Executive Officer for the Company. This
period is referred to herein as the “Engagement.”

 

Nature of the Engagement - During the Engagement, you will have the normal
duties, responsibilities and authority attendant to the position of CEO of the
Company, subject to the power of NCR’s Board of Directors (the “Board”) to
expand or limit such duties, responsibilities and authority from time to time.
While you will spend sufficient time at the Company’s offices in Dayton, Ohio
and elsewhere, the Company acknowledges that you currently reside in Florida and
will not require you to relocate to Dayton, Ohio.

 

During the Engagement, you may continue to serve as a director of the entities
on whose boards you currently serve, but will not, without the prior approval of
the Board, agree to serve as a director for any other entities.

 

Annual Base Salary – As of your effective start date, March 30, 2005, you will
be paid an annual base salary of $1,000,000, to be prorated based on the length
of time you temporarily serve as interim CEO. Your base salary will be paid in
accordance with the Company’s usual payroll practices, and your paycheck will be
automatically deposited in your Florida bank account via our convenient Easipay
plan.

 

Incentive Award - You will be eligible to participate in the Management
Incentive Plan for Executive Officers (“MIP”), which provides year-end incentive
awards based on the success of NCR in meeting annual performance objectives. For
2005, your MIP award (your “Bonus”) is based on the same performance objectives
as previously established in 2005 by the Compensation and Human Resource
Committee of the Board (the “Committee”) for the Company’s former CEO. Your
targeted incentive opportunity is 100% of your annual base salary ($1,000,000),
and can range from 0% if the target objective is not met to a maximum award of
200% ($2,000,000) of your annual base salary. Your Bonus will be prorated for
the number of months you temporarily serve as interim CEO, and will be paid in
2006 when the Company pays 2005 MIP awards to eligible executives.

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Mr. James M. Ringler

July 11, 2005

Page 2

 

As agreed, your Bonus will be paid in options to purchase shares of NCR common
stock, which options will have a Black Scholes value at the time of grant equal
to the amount of the Bonus and an exercise price equal to the average of the
high and low share price of the Company’s common stock on the NYSE on the date
of payment. For this purpose, the Black Scholes valuation methodology shall be
the same as that used by the Committee in connection with the Company’s 2006
annual long-term incentive awards for executives. The options, if any, awarded
as payment of your Bonus will be issued pursuant to an option agreement approved
by the Committee and will vest immediately upon grant. Upon vesting, the options
will be exercisable over their full ten-year term. The form of option agreement
will be substantially similar to that used in granting options to the Company’s
senior management and will include a non-competition/non-solicitation provision.
In the event that the common stock of the Company is changed into a different
security or property prior to the date of payment, the Committee shall make
appropriate adjustments to your award.

 

Equity Awards – Upon your execution of this Agreement, the Company will grant
you options to purchase 52,610 shares of NCR common stock. These options will be
subject to the standard terms and conditions determined by the Committee, and
will include a non-competition provision/non-solicitation provision, a ten-year
term, and vest as follows: (a) two-thirds of the grant will vest immediately,
and (b) the remainder will vest ratably over a three-month period on the first
day of each month. Once vested, the options will be exercisable over the full
ten-year term. The grant price of these options will be determined by the
average of the high and low share price of the Company’s common stock on the
NYSE on the date of grant.

 

Salomon Smith Barney (“SSB”) is the record-keeper for NCR’s option plan, which
is administered electronically. Your stock option agreement and a record of your
options will be maintained on the SSB website. You will need to accept the stock
option agreement on-line before you can exercise your options.

 

In addition, in the event that the Engagement is longer than six months from
your effective start date, March 30, 2005, the Committee intends to recommend
that the Board grant you additional equity at the end of the Engagement in
consideration of your temporary service as interim CEO with a value equal to
$100,000 per month of service beyond the six-month period currently contemplated
by the Board. The Committee may, in its discretion, recommend a larger equity
grant to the Board based on your performance during the Engagement.

 

Director Compensation – Due to your temporary status as an employee of the
Company, you will not be eligible to receive any director compensation under the
NCR Director Compensation Program during the Engagement.

 

NCR Benefits – As of your first day of your temporary service as interim CEO,
you are automatically eligible for the Company’s core U.S. benefit coverage for
yourself, including Health Care Coverage (Cigna PPO Plan), Dental Care Coverage
(Cigna Dental PPO Plan), Short-Term and Long-Term Disability Coverage, Life
Insurance Coverage, and Accidental Death and Dismemberment Insurance Coverage.
Additionally, you will be eligible to

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Mr. James M. Ringler

July 11, 2005

Page 3

 

participate in the NCR Savings Plan (401(k)) and the NCR Employee Stock Purchase
Plan. Information about each program will be provided. You may choose to waive
participation in any of these plans.

 

Living Expenses – Because you will need to spend time working at the Company’s
headquarters in Dayton, Ohio, NCR will provide you with the following during the
Engagement: (a) temporary housing at its corporate guest facility in Dayton,
Ohio, including meals at such facility (with an approximate cost to the Company
of $3,000 per month); and (b) a rental vehicle and car service to and from the
airport (with an approximate cost to the Company of $1,500 per month).

 

Travel Expenses and Benefits – During the Engagement, NCR will also permit you
to use the corporate aircraft for business travel and for travel between your
Florida residence or any other residence and the Company’s offices in Dayton,
Ohio, and elsewhere as needed. When you determine in the reasonable exercise of
your judgment that your spouse should accompany you on the corporate aircraft,
then this use shall be permitted and taxable income imputed to you for the value
of her travel.

 

In addition, during the Engagement, you will be able to use the corporate
aircraft for limited additional travel for personal use on an availability
basis; provided, however, that the taxable imputed income to you attributed to
such use in 2005, using the SIFL rates approved by the Internal Revenue Service,
shall not exceed $35,000 without the prior approval of the Committee.

 

The Company shall provide you a sufficient “gross-up” payment to cover all
federal and Ohio state income taxes on your personal use of the corporate
aircraft, payable by the Company upon notice of the payment and amount due, no
later than the day such taxes are due.

 

Other Business Expenses – As a general matter, the Company will reimburse you
for all reasonable expenses that you incur in the course of performing your
duties under this Agreement that are consistent with the Company’s policies with
respect to travel, entertainment and other business expenses. Reimbursement
shall be subject to the Company’s customary requirements imposed upon executive
level employees, with respect to reporting and documentation of such expenses.

 

Vacation - In recognition of your prior work experience, you will be eligible
for four weeks of paid vacation during 2005.

 

Change in Control – Due to the temporary nature of your service as interim CEO
of the Company, you will not be entitled to participate in NCR’s Change in
Control Severance Plan for Executive Officers (the “CIC Plan”), notwithstanding
anything to the contrary in such plan. Further, you hereby agree to waive any
rights you may have under the CIC Plan.

 

Arbitration – Any controversy or claim related in any way to this Agreement
(including, but not limited to, any claim of fraud or misrepresentation), shall
be resolved by arbitration pursuant to this paragraph and the then current rules
of the American Arbitration

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Mr. James M. Ringler

July 11, 2005

Page 4

 

Association. The arbitration shall be held in Dayton, Ohio, before an arbitrator
who is an attorney knowledgeable of employment law. The arbitrator’s decision
and award shall be final and binding and may be entered in any court having
jurisdiction thereof. The arbitrator shall not have the power to award punitive
or exemplary damages. Issues of arbitrability shall be determined in accordance
with the federal substantive and procedural laws relating to arbitration; all
other aspects shall be interpreted in accordance with the laws of the State of
Ohio. Each party shall bear its own attorneys’ fees associated with the
arbitration and other costs and expenses of the arbitration shall be borne as
provided by the rules of the American Arbitration Association. If any portion of
this paragraph is held to be unenforceable, it shall be severed and shall not
affect either the duty to arbitrate or any other part of this paragraph.

 

Indemnification – In addition to the Company’s indemnification obligations to
you as an officer and director, and assuming your compliance with the directions
of the Company with respect to the time you spend in Ohio, the Company agrees
that it will indemnify, hold harmless and defend you to the fullest extent
lawful, on an after-tax basis, from and against any Ohio state and local income
taxes, including interest and penalties payable by you net of any applicable
deductions and credits, arising solely as a result of your interim employment in
Ohio hereunder imposed with respect to the amounts set forth in Schedule A;
provided, however, that you give NCR (a) prompt written notice of any claim
against you for any taxes, interest or penalties (“Claims”); (b) all reasonably
requested information concerning the Claims; (c) reasonable cooperation and
assistance, including granting powers of attorney and allowing reasonable access
to your relevant personal expense records and advisors; and (d) sole authority
to defend or settle the Claims in any related tax examination, audit or
litigation in Ohio.

 

Legal Expenses – The Company will reimburse you up to $5,000 for the reasonable
legal advice expenses you incur in connection with the completion of this
Agreement.

 

Miscellaneous – This Agreement is personal to you and without the prior written
consent of the Company shall not be assignable by you other than by will or the
laws of descent and distribution. You may designate one or more beneficiaries to
whom any payments earned by and due to you will be made in the event of your
death by completing such form as the Committee authorizes for that purpose. In
the absence of any such designation, any such payments will be made to your
estate or personal representative. This Agreement shall inure to the benefit of
and be enforceable by your legal representatives, and shall inure to the benefit
of and be binding upon the Company and its successors. This Agreement may be
amended, modified or changed only by a written instrument executed by you and
the Company.

 

Notwithstanding any other provision of this Agreement, the Company may withhold
from any amounts payable hereunder, or any other benefits received pursuant
hereto, such minimum federal, state and/or local taxes as shall be required to
be withheld under any applicable law or regulation. You agree that you will use
your best efforts so that you will not be considered domiciled in Ohio,
including following the reasonable direction of the Company to accomplish this
objective.

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Mr. James M. Ringler

July 11, 2005

Page 5

 

This letter reflects the entire agreement regarding the terms and conditions of
your employment. Accordingly, it supersedes and completely replaces any prior
oral or written communication on this subject. This letter is not an employment
contract and should not be construed or interpreted as containing any guarantee
of continued employment. The employment relationship at NCR is by mutual consent
(employment-at-will), and the Board may discontinue your employment with or
without cause at any time and for any reason.

 

Jim, if you will please countersign a copy of this letter agreement, it will
constitute the terms of your temporary service as President and interim CEO of
the Company upon the terms and conditions described above.

 

Sincerely,

 

/s/ Linda Fayne Levinson

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Linda Fayne Levinson

Chair, NCR Compensation and Human Resource Committee

 

Agreed and accepted this 11th day of July, 2005.

 

/s/ James M. Ringler

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James M. Ringler

 

pc:    Lars Nyberg      Jon Hoak

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Mr. James M. Ringler

July 11, 2005

Page 6

 

Schedule A

 

1.  

Deferred compensation payable to Mr. Ringler by his former employer, Illinois
Tool Works Inc. (“ITW”) after January 1, 2005.

 

2.  

Options to purchase ITW stock owned by Mr. Ringler as of January 1, 2005.

 

3.   Shares of ITW common stock owned by Mr. Ringler as of January 1, 2005.