Exhibit 10.1

 

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May 18, 2020

Jay Geldmacher

 

Re:

Employment Agreement Letter

Dear Jay:

I’ve enjoyed getting to know you through our search process and look forward to
working together. Your experience and skills are strong complements to Resideo.
And your personal style, directness and integrity will earn the respect of your
team and all of our constituents.

I am pleased to confirm our offer to you to become President and Chief Executive
Officer of Resideo Technologies, Inc. (“Resideo” or the “Company”). This letter
agreement (the “Agreement”) will not become effective and binding until your
execution of this Agreement. You will be appointed to the Board effective upon
commencement of your employment as President and Chief Executive Officer
consistent with the Company’s governing documents. The effective date of your
employment will be May 28, 2020 (“Effective Date”), subject to the terms and
conditions of this letter agreement (the “Agreement”).

In connection with your new role, you will be entitled to the following
compensation and benefits package, which has been approved by the Compensation
Committee of the Board (the “CC”).

COMPENSATION

Base Salary: Your annual base salary will be $900,000. Base salary reviews occur
annually, salary may be increased but not decreased and any increases are
generally at the end of the first quarter of the calendar year. Increases are
based on your performance and other relevant factors. You will next be eligible
for a base salary review in March of 2021.

Annual Incentive Compensation: Your target incentive compensation opportunity
will be 150% of your annual cash base salary earnings during each year, with a
maximum opportunity of no less than 200%. Your 2020 annual incentive will be
paid at no less than your pro-rated target incentive amount. Incentive
compensation awards are paid in the first quarter of the following year (e.g.,
in the first quarter of 2021 for 2020 services).

 

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Annual Long-Term Incentive Awards: For 2020, you will be granted a long term
incentive award on the Effective Date equal to a pro-rata portion of a $5.2M LTI
target based on the number of days you are employed in the year 2020 (“Pro-Rata
2020 LTI Award”). With respect to your Pro-Rata 2020 LTI Award: 10% will be
issued as time-based restricted stock units (“RSUs”), 15% will be issued as
stock options (“Options”) and 25% will be issued as performance-based restricted
stock units (“PRSUs”) with measurements and goals as implemented for the Resideo
executive team, provided that the PRSUs will include a maximum opportunity of
200% of target. The RSUs, Options and PRSUs shall be granted under, and shall be
subject to the terms of, the applicable stock incentive plan, relevant award
agreements, and the terms provided herein, and will vest on the third
anniversary of the grant date, provided that you continue to be employed by
Resideo on such vesting date.

In addition, you shall be eligible for a cash bonus of 50% of Pro-Rata 2020 LTI
Award, which will be earned by and paid to you within thirty (30) days following
the third annual anniversary of the Effective Date so long as you remain
employed; provided that if your employment is terminated without cause (as
defined in the Resideo Technologies, Inc. Severance Plan for Designated
Officers) or you resign for Good Reason, as defined on Addendum B, or if your
employment terminates due to your death or disability, you will receive a
pro-rated amount of such cash bonus based on the number of full months you
worked from the Effective Date through your employment separation date divided
by 36, payable within thirty (30) calendar days following your termination of
employment.

Beginning in 2021 you will be eligible for annual long-term incentive (“LTI”)
awards, consistent with what is delivered to the executive team, consisting of
stock options, time based restricted stock units and performance based
restricted stock units, or some combination thereof, as determined by the CC in
its discretion. The actual size and mix of your annual LTI awards will be
determined by the CC based on your performance and market factors. The terms of
all LTI awards are governed by the terms of the applicable stock plan, the
relevant award agreements and the terms provided herein. Moreover, Resideo and
the CC reserve the right to modify the design or mix of the LTI award program in
the future.

SIGN-ON AWARDS

In recognition of the equity compensation you are leaving at your current
employer, you will receive a cash sign-on bonus of $2,000,000, payable on the
first regularly scheduled payroll date following the commencement of your
employment. By signing this Agreement below, you agree to repay Resideo the
prorated component of the sign-on bonus previously paid to you if you resign
your employment for any reason other than Good Reason, as defined on Addendum B,
or are terminated for cause (as defined in the Resideo Technologies, Inc.
Severance Plan for Designated Officers) before completing twenty-four
(24) months of employment with Resideo. This repayment obligation is reduced
ratably over the first twenty-four (24) months of your employment after the
commencement of your employment, and due within ten (10) calendar days after
your employment separation date. If you do not repay Resideo the sign-on bonus
when due, you authorize Resideo to deduct the repayment owed from your final
paycheck or from any other monies payable to you by Resideo.

 

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You are eligible for a payment equivalent to the amount of forfeited pro-rata Q2
bonus from your current employer, up to $90,000; provided that the amount
actually paid to you shall be no more than the amount you advise Resideo in
writing you would have received from your current employer but for your
departure from your current employer. This amount will be paid within thirty
(30) days after submission of your written advice.

OTHER EXECUTIVE BENEFITS

You will also be entitled to the following Executive Benefits:

 

  •  

Excess Liability Insurance: Resideo will pay the annual premium for an Excess
Liability Insurance policy that provides $5,000,000 of personal liability
umbrella coverage per occurrence.

 

  •  

Executive Physical: You will be eligible for an annual executive physical and
related health concierge program, with such annual executive physical performed
at the Mayo Clinic, Scottsdale, AZ, subject to an annual cap on expenses of
$5,000.

 

  •  

Private Jet Usage for Business Purposes: The Company will pay the cost of
private jet travel for business purposes to the extent necessary for you to
perform the duties of Chief Executive Officer and for business efficiency and
your health, safety and security. Any commercial business travel will be
conducted via first class on commercial airliners and otherwise in compliance
with the Company’s travel and expense policies. The Company will pay the cost
for your reasonable use of private jet travel for purposes of commuting from
your home or other location to and from the Company’s headquarters and other
business locations, and will provide additional payments to you on a fully
grossed up basis to cover resultant federal, state and local income taxes, when
and to the extent, if any, that such taxes are payable by you with respect to
such private jet travel.

 

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Officer Severance: You will be covered under the Resideo Technologies, Inc.
Severance Plan for Designated Officers (the “Officer Severance Plan”); provided
further that for purposes of the Officer Severance Plan, your termination of
employment for Good Reason, as defined on Addendum B, will constitute a Covered
Termination as set forth in the Officer Severance Plan for all periods prior to
a Change in Control (as defined in the Officer Severance Plan). You will be
required to execute a release of claims in favor of Resideo and its affiliates,
and you may be required to agree to certain non-disclosure covenants, as a
condition of receiving officer severance benefits. Your equity award agreements
granted during your employment with the Company shall provide that in the event
of a change in control, awards that are assumed shall be subject to accelerated
vesting in full if, within 24 months following such change in control, your
employment is terminated without cause or you resign for good reason. If the
awards are not assumed following a change in control, they shall vest in full
immediately. In the event the Officer Severance Plan is amended or altered after
the Effective Date of this Agreement, you shall receive the greater of severance
pay and benefits provided under either the Officer Severance Plan then in effect
or the Officer Severance Plan in effect as of the Effective Date of this
Agreement.

 

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  •  

Benefits and Perquisites. You will be entitled to participate in Executive level
benefit and perquisite plans.

 

  •  

Legal Expenses. You will be entitled to reimbursement for your legal expenses
and expenses associated with the negotiation and documentation of this
Agreement, up to a maximum of $37,500.

Details of additional executive benefits are outlined in the attached Addendum
A.

INTELLECTUAL PROPERTY AGREEMENT

As a condition of this employment offer, you are required to execute, in the
form attached hereto, the California version of Resideo’s “Employee Agreement
Relating to Trade Secrets, Proprietary and Confidential Information” (“IP
Agreement”).

RELOCATION

You agree to relocate to the area of the Company’s corporate headquarters within
a time frame that is mutually agreeable to you and the Board following your
commencement of employment. You will be provided temporary housing in the area
of the Company’s corporate headquarters for a period not to exceed twelve
(12) months, and be eligible for additional relocation assistance in accordance
with the Company’s Officer Level relocation guidelines. Your temporary housing
costs for the first twelve (12) months in excess of the amount covered under the
Company’s Officer Level shall be reimbursed up to a maximum of $75,000. You may
contact our relocation vendor at any time after you return this signed Agreement
to initiate the relocation process. You agree that as a condition of and in
consideration of such relocation assistance, you will, following your
relocation, sign a Resideo Technologies, Inc. Noncompete Agreement for Senior
Executives and a non-California version of the Employee Agreement Relating to
Trade Secrets, Proprietary and Confidential Information in the forms
substantially similar to the agreements attached hereto; provided that for
purposes of the list of corporations or entities that constitute Competing
Businesses, the reference to Alphabet shall be limited to the Nest Labs business
and the reference to Amazon shall be limited the Ring business.

INDEMNIFICATION and D&O

You will be indemnified and receive advancement of expenses as available under
the Company’s bylaws currently in effect. You will be covered by the Company’s
directors and officers insurance.

BOARD MEMBERSHIPS

As a condition of employment, you agree to comply with Resideo’s policy
regarding outside board membership; provided that you may continue to serve on
those public company boards of directors on which you are currently a director
until such time as you and the Resideo Board mutually determine that you will
resign from one such board of your choosing to comply with the Company’s
governance guidelines, which require that the CEO serve on no more than two
(2) public company boards, including the Resideo Board.

 

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INCOME TAXES

You are liable for any federal and state income taxes applicable to this
Agreement, except for the tax gross-up payments associated with private jet
usage as provided above, and you acknowledge that you should consult with your
own tax advisor regarding the applicable tax consequences.

ACCEPTANCE OF OFFER

Please indicate your acceptance of this offer by electronically signing this
Agreement and the IP Agreement via DocuSign.

Our employees are at the core of everything we do. We have a diversified global
workforce of almost 13,000 talented professionals. Each of them is dedicated and
committed to delivering for our customers, continuing to innovate and pushing
this industry forward.

Jay, we very much look forward to working with you. Your experience and
background will be assets to our Company and we sincerely hope that you will
accept this Agreement and join us.

If you have any questions or need any further information about our offer,
please contact me directly.

Congratulations,

Sharon Wienbar

Chairman of the Compensation Committee

Resideo Board of Directors

Read and Accepted:

 

/s/ Jay Geldmacher

   

May 18, 2020

JAY GELDMACHER     Date

All businesses experience changing conditions. Accordingly, your employment with
Resideo will be on an “at will” basis. This means that there is no guarantee of
employment for any specific period, and either you or Resideo may terminate your
employment at any time.

The descriptions of benefits and perquisites described in this Agreement
(including Addendums A and B) are for general information purposes only and are
not intended to modify any plan document, summary plan description (“SPD”) or
prospectus. For a complete description of any benefit or perquisite, you may
request a copy of the applicable plan document, SPD or prospectus. The Company
reserves the right to modify, amend or terminate any benefit plan or perquisite
in its sole and absolute discretion.

 

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ADDENDUM A

EMPLOYEE BENEFITS

401(k) Plan: Upon employment, you are eligible to participate in the Resideo
401(k) Plan (“401(k) Plan”). Please refer to the 401(k) Plan’s SPD for further
details about your contributions and the Company’s match.

The Company’s matching contribution is fully vested after three (3) years of
service at Resideo.

You will be able to direct the investment of your contributions to the 401(k)
Plan among a number of attractive investment opportunities.

Medical, Dental and Vision Plans: Resideo’s medical, dental and vision plans
provide competitive and comprehensive coverage.

Short-Term Disability (STD): A benefit of up to 6 months base salary will be
provided.

Long-Term Disability (LTD): The Company will provide a fully contributory
long-term disability plan that replaces 60% of your base salary (up to a monthly
cap).

Life Insurance:

 

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Group Life will be provided on a non-contributory basis in an amount equal to
one and one-half (1-1/2) times your base salary. Additional life insurance is
available on a contributory basis.

 

  •  

Accidental Death and Dismemberment insurance will be provided on a
non-contributory basis in an amount equal to one and one-half (1-1/2) times your
base salary. Additionally, Accidental Death and Dismemberment insurance is
available on a contributory basis.

 

  •  

Business Travel Accident insurance is provided on a non-contributory basis, and
provides a death benefit in the case of a business-related accident.

Executive perquisites and employee benefits will terminate as of your last day
of active employment except to the extent otherwise provided in the applicable
plan document or as required by law.

Vacation and Holidays:

 

  •  

Vacation time can be scheduled with manager approval based on business
priorities and personal needs, without pre-set maximums

 

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All U.S. sites will have 12 days off for holidays (7 fixed holidays and 5
designated floating holidays)

 

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ADDENDUM B

GOOD REASON DEFINITION

For purposes of this Agreement, “Good Reason” means for any termination of your
employment due to any of the follow reasons:

(1) your failure to serve as the most senior executive of the Company and its
affiliates, the assignment to you of any duties inconsistent in any material
respect with your position, any material diminution in your position, authority,
duties, or responsibilities, or your ceasing to report directly and exclusively
to the Board or, if the Board is not the board of the ultimate parent company of
the Company and its affiliates, the ultimate parent company of the Company and
its affiliates;

(2) a reduction in your annual base salary or target annual incentive
compensation opportunity from the amounts set forth in this Agreement;

(3) the Company’s requiring you to be based at any office or location that is
greater than 25 miles away from the Company’s headquarters; or

(4) any other material breach of this Agreement by the Company.

Notwithstanding the foregoing, no resignation shall be for “Good Reason” unless
you shall have delivered to the Company notice of the event(s) or
circumstance(s) alleged to constitute “Good Reason” within 90 days of your
knowledge of such event or circumstance and the Company shall have failed to
cure such event or circumstance within 30 days following its receipt of such
notice.

 

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