EXHIBIT
10.2


 


 


TYCO ELECTRONICS
LTD.


 


 


CHANGE IN
CONTROL SEVERANCE PLAN FOR CERTAIN


U.S.
OFFICERS AND EXECUTIVES


 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  BACKGROUND, PURPOSE AND TERM OF PLAN

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 1.01

  	
  Purpose of the Plan

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 1.02

  	
  Term of the Plan

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  DEFINITIONS

  	
  2

  
	
   

  	
   

  	
   

  
	
  Section 2.01

  	
  “Annual Bonus”

  	
  2

  
	
   

  	
   

  	
   

  
	
  Section 2.02

  	
  “Base Salary”

  	
  2

  
	
   

  	
   

  	
   

  
	
  Section 2.03

  	
  “Board”

  	
  2

  
	
   

  	
   

  	
   

  
	
  Section 2.04

  	
  “Cause”

  	
  2

  
	
   

  	
   

  	
   

  
	
  Section 2.05

  	
  “Change in Control”

  	
  2

  
	
   

  	
   

  	
   

  
	
  Section 2.06

  	
  “Change in Control Termination”

  	
  3

  
	
   

  	
   

  	
   

  
	
  Section 2.07

  	
  “COBRA”

  	
  3

  
	
   

  	
   

  	
   

  
	
  Section 2.08

  	
  “Code”

  	
  3

  
	
   

  	
   

  	
   

  
	
  Section 2.09

  	
  “Committee”

  	
  3

  
	
   

  	
   

  	
   

  
	
  Section 2.10

  	
  “Company”

  	
  3

  
	
   

  	
   

  	
   

  
	
  Section 2.11

  	
  “Effective Date”

  	
  3

  
	
   

  	
   

  	
   

  
	
  Section 2.12

  	
  “Eligible Employee”

  	
  3

  
	
   

  	
   

  	
   

  
	
  Section 2.13

  	
  “Employee”

  	
  3

  
	
   

  	
   

  	
   

  
	
  Section 2.14

  	
  “Employer”

  	
  4

  
	
   

  	
   

  	
   

  
	
  Section 2.15

  	
  “ERISA”

  	
  4

  
	
   

  	
   

  	
   

  
	
  Section 2.16

  	
  “Exchange Act”

  	
  4

  
	
   

  	
   

  	
   

  
	
  Section 2.17

  	
  “Executive Severance Plan”

  	
  4

  
	
   

  	
   

  	
   

  
	
  Section 2.18

  	
  “Good Reason Resignation”

  	
  4

  
	
   

  	
   

  	
   

  
	
  Section 2.19

  	
  “Involuntary Termination”

  	
  5

  
	
   

  	
   

  	
   

  
	
  Section 2.20

  	
  “Notice Pay”

  	
  5

  
	
   

  	
   

  	
   

  
	
  Section 2.21

  	
  “Officer”

  	
  5

  
	
   

  	
   

  	
   

  
	
  Section 2.22

  	
  “Participant”

  	
  5

  
	
   

  	
   

  	
   

  
	
  Section 2.23

  	
  “Permanent Disability”

  	
  5

  
	
   

  	
   

  	
   

  
	
  Section 2.24

  	
  “Plan”

  	
  5

  
	
   

  	
   

  	
   

  
	
  Section 2.25

  	
  “Plan Administrator”

  	
  5

  
	
   

  	
   

  	
   

  
	
  Section 2.26

  	
  “Potential Change in Control”

  	
  5

  
				



 


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  Page

  
	
   

  	
   

  	
   

  
	
  Section 2.27

  	
  “Release”

  	
  6

  
	
   

  	
   

  	
   

  
	
  Section 2.28

  	
  “Severance Benefit”

  	
  7

  
	
   

  	
   

  	
   

  
	
  Section 2.29

  	
  “Severance Period”

  	
  7

  
	
   

  	
   

  	
   

  
	
  Section 2.30

  	
  “Subsidiary”

  	
  7

  
	
   

  	
   

  	
   

  
	
  Section 2.31

  	
  “Successor”

  	
  7

  
	
   

  	
   

  	
   

  
	
  Section 2.32

  	
  “Termination Date”

  	
  7

  
	
   

  	
   

  	
   

  
	
  Section 2.33

  	
  “Voluntary Resignation”

  	
  7

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  PARTICIPATION AND ELIGIBILITY FOR BENEFITS

  	
  8

  
	
   

  	
   

  	
   

  
	
  Section 3.01

  	
  Participation

  	
  8

  
	
   

  	
   

  	
   

  
	
  Section 3.02

  	
  Conditions

  	
  8

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  DETERMINATION OF SEVERANCE BENEFITS

  	
  10

  
	
   

  	
   

  	
   

  
	
  Section 4.01

  	
  Amount of Severance Benefits Upon Involuntary
  Termination and Good Reason Resignation

  	
  10

  
	
   

  	
   

  	
   

  
	
  Section 4.02

  	
  Voluntary Resignation; Termination for Death or
  Permanent Disability

  	
  12

  
	
   

  	
   

  	
   

  
	
  Section 4.03

  	
  Termination for Cause

  	
  12

  
	
   

  	
   

  	
   

  
	
  Section 4.04

  	
  Reduction of Severance Benefits

  	
  12

  
	
   

  	
   

  	
   

  
	
  Section 4.05

  	
  Non-Duplication of Benefits

  	
  13

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  METHOD, DURATION AND LIMITATION OF SEVERANCE
  BENEFIT PAYMENTS

  	
  14

  
	
   

  	
   

  	
   

  
	
  Section 5.01

  	
  Method of Payment

  	
  14

  
	
   

  	
   

  	
   

  
	
  Section 5.02

  	
  Other Arrangements

  	
  14

  
	
   

  	
   

  	
   

  
	
  Section 5.03

  	
  Termination of Eligibility for Benefits

  	
  14

  
	
   

  	
   

  	
   

  
	
  Section 5.04

  	
  Limitation on Benefits

  	
  14

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  CONFIDENTIALITY AND NON-DISPARAGEMENT

  	
  16

  
	
   

  	
   

  	
   

  
	
  Section 6.01

  	
  Confidential Information

  	
  16

  
	
   

  	
   

  	
   

  
	
  Section 6.02

  	
  Non-Disparagement

  	
  16

  
	
   

  	
   

  	
   

  
	
  Section 6.03

  	
  Reasonableness

  	
  16

  
	
   

  	
   

  	
   

  
	
  Section 6.04

  	
  Equitable Relief

  	
  16

  
	
   

  	
   

  	
   

  
	
  Section 6.05

  	
  Survival of Provisions

  	
  17

  
				



 


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  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  THE PLAN ADMINISTRATOR

  	
  18

  
	
   

  	
   

  	
   

  
	
  Section 7.01

  	
  Authority and Duties

  	
  18

  
	
   

  	
   

  	
   

  
	
  Section 7.02

  	
  Compensation of the Plan Administrator

  	
  18

  
	
   

  	
   

  	
   

  
	
  Section 7.03

  	
  Records, Reporting and Disclosure

  	
  18

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  AMENDMENT, TERMINATION AND DURATION

  	
  19

  
	
   

  	
   

  	
   

  
	
  Section 8.01

  	
  Amendment, Suspension and Termination

  	
  19

  
	
   

  	
   

  	
   

  
	
  Section 8.02

  	
  Duration

  	
  19

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  DUTIES OF THE COMPANY AND THE COMMITTEE

  	
  20

  
	
   

  	
   

  	
   

  
	
  Section 9.01

  	
  Records

  	
  20

  
	
   

  	
   

  	
   

  
	
  Section 9.02

  	
  Payment

  	
  20

  
	
   

  	
   

  	
   

  
	
  Section 9.03

  	
  Discretion

  	
  20

  
	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
  CLAIMS PROCEDURES

  	
  21

  
	
   

  	
   

  	
   

  
	
  Section 10.01

  	
  Claim

  	
  21

  
	
   

  	
   

  	
   

  
	
  Section 10.02

  	
  Initial Claim

  	
  21

  
	
   

  	
   

  	
   

  
	
  Section 10.03

  	
  Appeals of Denied Administrative Claims

  	
  21

  
	
   

  	
   

  	
   

  
	
  Section 10.04

  	
  Appointment of the Named Appeals Fiduciary

  	
  22

  
	
   

  	
   

  	
   

  
	
  Section 10.05

  	
  Arbitration; Expenses

  	
  22

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
  MISCELLANEOUS

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 11.01

  	
  Nonalienation of Benefits

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 11.02

  	
  Notices

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 11.03

  	
  Successors

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 11.04

  	
  Other Payments

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 11.05

  	
  No Mitigation

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 11.06

  	
  No Contract of Employment

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 11.07

  	
  Severability of Provisions

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 11.08

  	
  Heirs, Assigns, and Personal Representatives

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 11.09

  	
  Headings and Captions

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 11.10

  	
  Gender and Number

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 11.11

  	
  Unfunded Plan

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 11.12

  	
  Compliance with Code Section 409A

  	
  25

  
				



 


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  Page

  
	
   

  	
   

  	
   

  
	
  Section 11.13

  	
  Payments to Incompetent Persons

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 11.14

  	
  Lost Payees

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 11.15

  	
  Controlling Law

  	
  25

  
	
   

  	
   

  	
   

  
	
  SCHEDULE A SEVERANCE BENEFITS

  	
  A-1

  



 


iv

















 


ARTICLE I



BACKGROUND, PURPOSE AND TERM OF PLAN


 


Section 1.01         Purpose of the Plan.  The purpose of the Plan is to provide
Eligible Employees with certain compensation and benefits as set forth in the
Plan in the event the Eligible Employee’s employment with the Company or a
Subsidiary is terminated due to a Change in Control Termination.  The Plan is not intended to be an “employee
pension benefit plan” or “pension plan” within the meaning of Section 3(2) of
ERISA.  Rather, this Plan is intended to
be a “welfare benefit plan” within the meaning of Section 3(1) of ERISA and to
meet the descriptive requirements of a plan constituting a “severance pay plan”
within the meaning of regulations published by the Secretary of Labor at Title
29, Code of Federal Regulations, section 2510.3-2(b).  Accordingly, the benefits paid by the Plan
are not deferred compensation and no employee shall have a vested right to such
benefits. 


 


Section 1.02         Term of the Plan.  The Plan shall generally be effective as of
the Effective Date, but subject to amendment from time to time in accordance
with Section 8.01.  The Plan shall
continue until terminated pursuant to Article VIII of the Plan.


 

















 


ARTICLE II


 


DEFINITIONS


 


Section 2.01         “Annual Bonus”
shall mean 100% of the Participant’s target annual bonus.


 


Section 2.02         “Base Salary”
shall mean the annual base salary in effect as of the Participant’s Termination
Date.


 


Section 2.03         “Board” shall
mean the Board of Directors of the Company or any successor thereto, or a
committee thereof specifically designated for purposes of making determinations
hereunder.


 


Section 2.04         “Cause” shall
mean (i) a material violation of any fiduciary duty owed to the Company, (ii)
conviction of, or entry of a plea of nolo contendere with
respect to, a felony or misdemeanor, (iii) dishonesty, (iv) theft,
or (v) other egregious conduct, that is likely to have a materially detrimental
impact on the Company and its employees. 
Whether an Eligible Employee’s termination is as a result of Cause shall
be determined in the discretion of the Plan Administrator.


 


Section 2.05         “Change in Control”  shall mean any of the following events:


 


(i)            any “person” (as defined in Section
13(d) and 14(d) of the Exchange Act, excluding for this purpose, (i) the
Company or any subsidiary company (wherever incorporated) of the Company as
defined by Section 86 of the Companies Act 1981 of Bermuda, as amended or (ii)
any employee benefit plan of the Company or any such subsidiary 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;


 


(ii)           persons who, as of the Effective
Date, 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 the
Effective Date 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;


 


2

















 


(iii)          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 subsidiary companies (wherever incorporated) of the Company as defined by
Section 86 of the Companies Act 1981 of Bermuda, as amended) in substantially
the same proportions as their ownership, immediately prior to such Business
Combination, of the outstanding voting securities of the Company; or


 


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


 


Section 2.06         “Change in Control
Termination”  shall mean a
Participant’s Involuntary Termination or Good Reason Resignation that occurs
during the period beginning 60 days prior to the date of a Change in Control
and ending two years after the date of such Change in Control.


 


Section 2.07         “COBRA” shall
mean the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.


 


Section 2.08         “Code” shall
mean the Internal Revenue Code of 1986, as amended.


 


Section 2.09         “Committee”
shall mean the Management Development and Compensation Committee of the Board
or such other committee appointed by the Board to assist the Company in making
determinations required under the Plan in accordance with its terms.  The “Committee” may delegate its authority
under the Plan to an individual or another committee.


 


Section 2.10         “Company”
shall mean Tyco Electronics Ltd.  Unless
it is otherwise clear from the context, Company shall generally include
participating Subsidiaries.


 


Section 2.11         “Effective Date”
shall mean July 1, 2007.


 


Section 2.12         “Eligible Employee”
shall mean an Employee who is an Officer or an employee in the Band 1
classification. If there is any question as to whether an Employee is deemed an
Eligible Employee for purposes of the Plan, the Plan Administrator shall make
the determination.


 


Section 2.13         “Employee”
shall mean an individual employed by an Employer as a common law employee on
the United States payroll of Tyco Electronics Ltd. or a Subsidiary, and shall
not include any person working for the Company through a temporary service or
on a leased basis or who is hired by the Company as an independent contractor,
consultant, or otherwise as a person who is not an employee for purposes of withholding
federal employment taxes, as evidenced by payroll records or a written
agreement with the individual, regardless of 


 


3

















 


any
contrary governmental or judicial determination or holding relating to such
status or tax withholding.


 


Section 2.14         “Employer”
shall mean the Company or any Subsidiary with respect to which this Plan has
been adopted.


 


Section 2.15         “ERISA” shall
mean the Employee Retirement Income Security Act of 1974, as amended, and
regulations thereunder.


 


Section 2.16         “Exchange Act”
shall mean the Securities Exchange Act of 1934, as amended.


 


Section 2.17         “Executive
Severance Plan” shall mean the Tyco Electronics Severance Plan for U.S.
Officers and Executives, which plan is superseded by this Plan in the event of
any Participant’s Change in Control Termination.


 


Section 2.18         “Good Reason
Resignation” shall mean any retirement or termination of employment by a
Participant that is not initiated by the Company or any Subsidiary and that is
caused by any one or more of the following events which occurs during the
period beginning 60 days prior to the date of a Change in Control and ending
two years after the date of such Change in Control:


 


(1)  Without the Participant’s written consent,
the Company (a) assigns or causes to be assigned to the Participant any duties
inconsistent in any material respect with his or her position as in effect
immediately prior to the Change in Control, (b) makes or causes to be made any
material adverse change in the Participant’s position (including titles and
reporting relationships and level), authority, duties or responsibilities, or
(c) takes or causes to be taken any other action which, in the reasonable
judgment of the Participant, would cause him or her to violate his or her
ethical or professional obligations (after written notice of such judgment has
been provided by the Participant to the Committee and the Company has been
given a 15-day period within which to cure such action), or which results in a
significant diminution in such position, authority, duties or responsibilities;


 


(2)  Without the Participant’s written consent,
the Participant’s being required to relocate to a principal place of employment
more than sixty (60) miles from his or her existing principal place of
employment;


 


(3)  Without the Participant’s written consent,
the Company (a) reduces the Participant’s Base Salary or Annual Bonus, or (b)
reduces the Participant’s retirement, welfare, stock incentive, perquisite and
other benefits, taken as a whole; or


 


(4)  The Company fails to obtain a satisfactory
agreement from any Successor to assume and agree to perform the Company’s
obligations to the Participant under this Plan, as contemplated in Section
11.03 herein.


 


provided,
that if the Participant remains in employment for more than one hundred and
eighty (180) days following the occurrence of (or, if later, the Participant’s
gaining knowledge of) any event set forth above, any subsequent retirement or
termination of employment by a Participant 


 


4

















 


that
is not initiated by the Company or any Subsidiary shall not constitute a Good
Reason Resignation. Whether a Participant’s termination is as a result of a
Good Reason Resignation shall be determined in the discretion of the Plan
Administrator.


 


Section 2.19         “Involuntary
Termination” shall mean a termination of the Participant initiated by the
Company or a Subsidiary for any reason other than Cause, Permanent Disability
or death, as provided under and subject to the conditions of Article III.


 


Section 2.20         “Notice Pay”
shall mean the amounts that a Participant is eligible to receive pursuant to
Article IV of the Plan.


 


Section 2.21         “Officer”
shall mean any individual who is an officer of an Employer, and who is
considered an officer for purposes of Rule 16a-1(f) as promulgated under the
Exchange Act immediately before the Change in Control. 


 


Section 2.22         “Participant”
shall mean any Eligible Employee who meets the requirements of Article III and
thereby becomes eligible for salary continuation and other benefits under the
Plan.


 


Section 2.23         “Permanent
Disability” shall mean that an Employee has a permanent and total
incapacity from engaging in any employment for the Employer for physical or
mental reasons.  A “Permanent Disability”
shall be deemed to exist if the Employee meets the requirements for disability
benefits under the Employer’s long-term disability plan or under the
requirements for disability benefits under the Social Security law (or similar
law outside the United States, if the Employee is employed in that
jurisdiction) then in effect, or if the Employee is designated with an inactive
employment status at the end of a disability or medical leave.


 


Section 2.24         “Plan” means
the Tyco Electronics Ltd.   Change in Control Severance Plan for Certain
U.S. Officers and Executives as set forth herein, and as the same may from time
to time be amended.


 


Section 2.25         “Plan
Administrator” shall mean, for the period prior to a Potential Change in
Control, the individual(s) appointed by the Committee to administer the terms
of the Plan as set forth herein and if no individual is appointed by the
Committee to serve as the Plan Administrator for the Plan, the Plan
Administrator shall be the Senior Vice President – Human Resources for Tyco Electronics
(or the equivalent).  In the event of the
occurrence of a Potential Change in Control, the Senior Vice-President, Human
Resources for Tyco Electronics (or the equivalent) shall appoint a person or
entity independent of the Company and any person operating under the Company’s
control or on its behalf to serve as Plan Administrator (and such person or
entity shall be the Plan Administrator for all purposes after such
appointment), and such appointment shall take effect and become irrevocable as
of the date of said appointment (provided that such appointment shall be
revocable if a Change in Control does not occur and the Potential Change in
Control expires in accordance with Section 2.26(y)).  For periods prior to a Potential Change in
Control, the Plan Administrator may delegate all or any portion of its
authority under the Plan to any other person(s).


 


Section 2.26         “Potential Change in Control” shall
mean the occurrence and continuation of any of the following: (a)  any “person” (as defined in Section 13(d) and 14(d) of the
Exchange 


 


5

















 


Act),
excluding for this purpose, (i) the Company or any subsidiary company (wherever
incorporated) of the Company as defined by Section 86 of the Companies Act 1981
of Bermuda, as amended or (ii) any employee benefit plan of the Company or any
such subsidiary 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
5 percent of the combined voting power of the Company’s then outstanding securities unless such Person has reported or
is required to report such ownership on Schedule 13G under the Exchange Act (or
any comparable or successor report) or on Schedule 13D under the Exchange Act (or
any comparable or successor report), which Schedule 13D does not state any
intention to or reserve the right to control or influence the management or
policies of the Company or engage in any of the actions specified in Item 4 of
such Schedule (other than the disposition of the common stock) so long as such
Person neither reports nor is required to report such ownership other than as
described in this paragraph; provided, however, that a Potential Change
in Control will not be deemed to have occurred as a result of a change in
ownership percentage resulting solely from an acquisition of securities by the
Company, (b) the Company enters into an agreement, the consummation of which
would result in the occurrence  of a Change in Control, (c) any “person” (as
defined in subsection(a)) publicly announces an intention to take or to
consider taking actions which, if consummated, would constitute or result in a
Change in Control, (d) any person ( as defined in subsection (a)) commences a
solicitation (as defined in Rule 14a-1 of the Exchange Act) of proxies or
consents that has the purpose of effecting or would (if successful) result in a
Change in Control, (e) a tender or exchange offer for at least 30% of the
outstanding voting securities of the Company, made by a “person” (as defined in
subsection (a)), is first published or sent or given (within the meaning of
Rule 14d-2(a) of the Exchange Act), or (f) the Board adopts a resolution to the
effect that, for purposes of the Plan, a Potential Change in Control has occurred.  The Potential Change in Control shall be
deemed in effect until the earlier of (x) the occurrence of a Change in
Control, or (y) the adoption by the Board of a resolution stating that, for
purposes of the Plan, the Potential Change in Control has expired.


 


Section 2.27         “Release”
shall mean the Separation of Employment Agreement and General Release, as
provided by the Company. 


 


Section 2.28         “Severance Benefit”
shall mean the salary and bonus replacement amounts and other benefits that a
Participant is eligible to receive pursuant to Article IV of the Plan.


 


Section 2.29         “Severance Period”
shall mean the period for which a Participant is entitled to receive Severance
Benefits under this Plan, as follows:  Chief
Executive Officer – 36 months; Officers who are direct reports to the Chief
Executive Officer – 24 months; and other Officer and Band 1 employees – 18
months.


 


Section 2.30         “Subsidiary”
shall mean (i) a subsidiary company (wherever incorporated) as defined by
section 86 of the Companies Act 1981 of Bermuda (as amended), (ii) any
separately organized business unit, whether or not incorporated, of the
Company, and (iii) any employer that is required to be aggregated with the
Company pursuant to section 414 of the Internal Revenue Code of 1986, as
amended, and regulations issued thereunder.


 


6

















 


Section 2.31         “Successor”
shall mean any other corporation or unincorporated entity or group of
corporations or unincorporated entities which acquires ownership, directly or
indirectly, through merger, consolidation, purchase or otherwise, of all or
substantially all of the assets of the Company.


 


Section 2.32         “Termination Date”
shall mean the date on which the active employment of the Participant by the
Company or a Subsidiary is severed by reason of an Involuntary Termination or a
Good Reason Resignation.


 


Section 2.33         “Voluntary
Resignation” shall mean any retirement or termination of employment that is
not initiated by the Company or any Subsidiary other than a Good Reason
Resignation.


 


7

















 


ARTICLE III



PARTICIPATION AND ELIGIBILITY FOR BENEFITS


 


Section 3.01         Participation.  Each Eligible Employee in the Plan who incurs
a Change in Control Termination and who satisfies the conditions of Section
3.02 shall be eligible to receive the Severance Benefits described in the Plan,
subject however, to the application of the non-duplication provisions of
Section 4.05.  


 


Section 3.02         Conditions.


 


(a)           Eligibility for any Severance
Benefits is expressly conditioned on (i) execution by the Participant of a
Release in the form provided by the Company; (ii) compliance by the Participant
with all the terms and conditions of such Release; (iii) the Participant’s
written agreement to the confidentiality and non-disparagement provisions in
Article VI during and after the Participant’s employment with the Company; and
(iv) execution of a written agreement that authorizes the deduction of amounts
owed to the Company prior to the payment of any Severance Benefit (or in
accordance with any other schedule as is agreed between the Participant and the
Company).  If the Plan Administrator
determines that the Participant has not fully complied with any of the terms of
the Release, the Plan Administrator may withhold Severance Benefits not yet in
pay status or discontinue the payment of the Participant’s Severance Benefit
and may require the Participant, by providing written notice of such repayment
obligation to the Participant, to repay any portion of the Severance Benefit
already received under the Plan.  If the
Plan Administrator notifies a Participant that repayment of all or any portion
of the Severance Benefit received under the Plan is required, such amounts
shall be repaid within thirty (30) calendar days of the date the written notice
is sent, provided, however, that if the Participant files an appeal of such
determination under the claims procedures described in Article X, then such
repayment obligation shall be suspended pending the outcome of the appeals
procedure.  Any remedy under this
subsection (a) shall be in addition to, and not in place of, any other remedy,
including injunctive relief, that the Company may have.


 


(b)           An Eligible Employee will not be
eligible to receive severance benefits under any of the following
circumstances: 


 


(i)            The Eligible Employee’s Voluntary
Resignation;  


 


(ii)           The Eligible Employee resigns
employment (other than a Good Reason Resignation) before the job-end date
mutually agreed to in writing between the Participant and the Employer,
including any extension thereto as is mutually agreed to in writing between the
parties;  


 


(iii)          The Eligible Employee’s employment is
terminated for Cause;  


 


8

















 


(iv)          The Eligible Employee’s employment is
terminated due to the Eligible Employee’s death or Permanent Disability;  


 


(v)           The Eligible Employee does not return
to work within the period prescribed by law (or if there is no such period
prescribed by law, then within a reasonable period as is determined by the Plan
Administrator) following an approved leave of absence,  unless such period is extended by mutual
written agreement of the parties; or


 


(vi)          The Eligible Employee’s employment
with the Employer terminates as a result of a Change in Control and the
Eligible Employee accepts employment, or has the opportunity to continue
employment, with a Successor (other than under terms and conditions which would
permit a Good Reason Resignation).  .


 


(c)           The Plan Administrator has the
discretion to make initial determinations regarding an Eligible Employee’s
eligibility to receive Severance Benefits hereunder.  


 


(d)           An Eligible Employee returning from
approved military leave during the period beginning 60 days before a Change in
Control and ending two years after a Change in Control will be eligible for
Severance Benefits if: (i) he/she is eligible for reemployment under the
provisions of the Uniformed Services Employment and Reemployment Rights Act
(USERRA); (ii) his/her pre-military leave job is eliminated; and (iii) the
Employer’s circumstances are changed so as to make reemployment in another
position impossible or unreasonable, or re-employment would create an undue
hardship for the Employer.  If the
Eligible Employee returning from military leave qualifies for Severance
Benefits, his/her severance benefits will be calculated as if he/she had
remained continuously employed from the date he/she began his/her military
leave.  The Eligible Employee must also
satisfy any other relevant conditions for payment, including execution of a
Release.


 


9

















 


ARTICLE IV



DETERMINATION OF SEVERANCE BENEFITS


 


Section 4.01         Amount of Severance Benefits Upon
Involuntary Termination and Good Reason Resignation. The
Severance Benefits to be provided to an Eligible Employee who incurs a Change
in Control Termination and is determined to be eligible for Severance Benefits
shall be as follows:


 


(a)           Notice Pay.  Except for Officers, each Eligible Employee who
meets the eligibility requirements for a Severance Benefit under Section 3.01
shall receive 30 calendar days notice as a Notice Period.  In the event that the Company determines that
a Participant’s last day of work shall be prior to the end of his or her Notice
Period, such Employee shall be entitled to pay in lieu of notice for the
balance of such Notice Period.  Notice
Pay paid to an Eligible Employee shall be in addition to, and not offset
against, the Severance Benefits the Participant may be entitled to receive
under this Article IV.  An Eligible
Employee who does not sign, or who revokes his or her signature on, a Release
shall only be eligible for Notice Pay. 
Unless otherwise permitted by the applicable plan documents or laws, an
Eligible Employee will not be eligible to apply for short-term disability,
long-term disability and/or workers’ compensation anytime after the Eligible
Employee’s last active day at work.


 


(b)           Salary Replacement Benefits.  Salary Replacement Benefits shall be provided
to the Participant in an amount as set forth in Schedule A appended to the
Plan.


 


(c)           Bonus.


 


(i)            The Participant shall receive a cash
payment equal to his or her pro rated annual bonus (based on the number of full
months completed from the beginning of the fiscal year through the Termination
Date) for the year in which Participant’s Termination Date occurs, pursuant to
the terms set forth in the applicable incentive plans; provided, however, that
to the extent that a bonus payment for such period is paid as a result of a
Change in Control under the terms of such other incentive plan, then the amount
otherwise payable under this Section 4(c) will be offset by the payment made
under such other incentive plan . 


 


(ii)           The Participant shall also receive a
cash payment equal to his or her Annual Bonus in an amount as set forth in Schedule
A appended to the Plan.


 


(d)           Medical and Dental Benefits.  The Participant shall continue to be eligible
to participate in the medical and dental coverage in effect at the date of his
or her termination (or generally comparable coverage) for himself or herself
and, where applicable, his or her spouse or domestic partner and dependents, as
the same may be changed from time to time for employees of the Company
generally, as if Participant had continued in employment during the Severance
Period (the “COBRA Continuation Coverage Period”).  The Participant shall be responsible for the
payment of the employee portion of the medical and dental contributions that
are required during the Severance Period and such contributions shall be made
within the time period and in the amounts that other employees are required to
pay to the Company for similar coverage. 
The Participant’s failure to pay the applicable contributions shall
result in the cessation of the 


 


10

















 


applicable
medical and dental coverage for the Participant and his or her spouse or
domestic partner and dependents. 
Notwithstanding any other provision of this Plan to the contrary, in the
event that a Participant commences employment with another company at any time
during the Severance Period, the Participant may cease receiving coverage under
the Company’s medical and dental plans. 
Within thirty (30) days of Participant’s commencement of employment with
another company, Participant shall provide the Company written notice of such
employment and provide information to the Company regarding the medical and
dental benefits provided to Participant by his or her new employer.  The COBRA Continuation Coverage Period under
section 4980B of the Code shall run concurrently with the Severance Period.


 


(e)           Stock Options.  All stock options held by the Participant as
of his or her Termination Date that were granted prior to the Change in Control
and that are not already vested and exercisable as of such date shall become
vested and exercisable on the Termination Date. 
All outstanding stock options held by Participant that were granted
prior to the Change in Control and that are vested and exercisable as of the
Termination Date and all stock options held by the Participant that become
vested and exercisable under the preceding sentence shall be exercisable for
the greater of (i) the period set forth in Participant’s option agreement
covering such options, or (ii) twelve (12) months from the Termination
Date.  In no event, however, shall an
option be exercisable beyond its original expiration date.


 


(f)            Restricted Stock.  All unvested restricted stock and restricted
stock units held by the Participant as of his or her Termination Date that were
granted prior to the Change in Control and that are subject solely to
time-vesting requirements shall accelerate and become immediately vested as of
the Termination Date.  All unvested
restricted stock and restricted stock units held by the Participant as of his
or her Termination Date that were granted prior to the Change in Control and
that are subject to performance-based vesting provisions shall accelerate and
become vested if and to the extent that the plan administrator responsible for
the administration of such awards determines in its sole discretion that the
applicable performance vesting requirements have been or will be attained, or
would have been attained during the Severance Period in the ordinary course but
for the Change in Control and the Participant’s Change in Control Termination.


 


(g)           Outplacement Services.  The Company will pay the cost of outplacement
services for the Participant for a period of twelve (12) months from
Participant’s Termination Date.  The
Company shall pay the cost of outplacement services at either (i) the
outplacement agency that the Company regularly uses for such purpose, or
(ii)  the outplacement agency selected by
the Participant, provided that the Company will be responsible to pay no more
than the cost that would have been incurred had the Participant used the
outplacement agency that the Company regularly uses for such purpose.


 


(h)           Cash in Lieu of Benefit.  In the event that provision of any of the
benefits in (d) above would adversely affect the tax status of the applicable
plan or benefits, the Company, in its sole discretion, may elect to pay to the
Participant cash in lieu of such coverage in an amount equal to the Company’s
premium or average cost of providing such coverage.


 


(i)            Application of Other Plan
Provisions.  If any applicable equity
compensation or incentive plan or grant instrument, without regard to (c), (e)
or (f) above, provides the Participant the right to accelerated vesting or
payment of cash incentive awards, 


 


11

















 


stock
options, restricted stock, restricted stock units or incentive awards, and/or
an extension of the otherwise applicable option exercise period, in the case of
termination of employment following a Change in Control, then the Participant’s
right to accelerated payment, vesting or extension of the option exercise
period shall be determined by whichever of the plan, grant instrument or the
provisions of (c), (e) or (f) above provides the most favorable vesting or
exercise rights for the Participant in such event.


 


Section 4.02         Voluntary Resignation; Termination Due
to Death or Permanent Disability.  If the Eligible Employee’s employment
terminates on account of (i) the Eligible Employee’s Voluntary Resignation,
(ii) death, or (iii) Permanent Disability, then the Eligible Employee shall not
be entitled to receive Severance Benefits under this Plan and shall be entitled
only to those benefits (if any) as may be available under the Company’s then-existing
benefit plans and policies at the time of such termination.


 


Section 4.03         Termination for Cause.  (a)  If
any Eligible Employee’s employment terminates on account of termination by the
Company for Cause, the Eligible Employee shall not be entitled to receive
Severance Benefits under this Plan and shall be entitled only to those benefits
that are legally required to be provided to the Eligible Employee.  Notwithstanding any other provision of the
Plan to the contrary, if the Committee or the Plan Administrator determines
that an Eligible Employee has engaged in conduct that constitutes Cause at any
time prior to the Eligible Employee’s Termination Date, any Severance Benefit
payable to the Eligible Employee under Section 4.01 of the Plan shall immediately
cease, and the Eligible Employee shall be required to return any Severance
Benefits paid to the Eligible Employee prior to such determination.  The Company may withhold paying Severance
Benefits under the Plan pending resolution of any good faith inquiry that is
likely to lead to a finding resulting in Cause. 
If the Company has offset other payments owed to the Eligible Employee
under any other plan or program, it may, in its sole discretion, waive its
repayment right solely with respect to the amount of the offset so credited. 


 


(b)            Any dispute regarding a termination
for Cause will be resolved by the Plan Administrator.  Such determination will be based
on all of the facts and circumstances presented to the Plan Administrator by
the Company.  If the Plan Administrator
determines that the Eligible Employee’s termination of employment is for Cause,
then the Plan Administrator will notify the Eligible Employee in writing of
such determination, describing in detail the reason for such determination, including
without limitation the specific conduct that constituted the basis for the
determination.  The Eligible Employee
shall have the right to contest the determination of the Plan Administrator in
accordance with the Appeals Procedure described in Section 10.03.


 


Section 4.04         Reduction of Severance Benefits.  The Plan Administrator reserves the right to
make deductions in accordance with applicable law for any monies owed to the
Company by the Participant or the value of Company property that the Participant
has retained in his/her possession.


 


Section 4.05         Non-Duplication of Benefits.  The Plan is intended to
supersede, and not to duplicate, the provisions of the Tyco Electronics
Severance Plan for U.S. Officers and Executives (“Executive Severance Plan”) in
any case in which an Eligible Employee would otherwise be entitled to severance
or related benefits under both this Plan and the Executive 


 


12

















 


Severance
Plan arising out of the Eligible Employee’s Change in Control Termination.
However, the Plan is not intended to supersede any other plan, program,
arrangement or agreement providing an Eligible Employee with severance or
related benefits in the case of an Eligible Employee’s Change in Control
Termination.  In the event that an
Eligible Employee becomes entitled to receive benefits under this Plan and any
such benefit duplicates a benefit that would otherwise be provided under any
other plan, program, arrangement or agreement as a result of the Eligible Employee’s
Change in Control Termination, then the Eligible Employee shall be entitled to
receive the greater of the benefit available under the Plan, on the one hand,
and the benefit available under such other plan, program, arrangement or
agreement, on the other.


 


13

















 


ARTICLE V



METHOD, DURATION AND LIMITATION OF SEVERANCE BENEFIT PAYMENTS


 


Section 5.01         Method of Payment.  The cash Severance Benefits to which a
Participant is entitled, as determined pursuant to Section 4.01, shall be paid
in a single lump sum payment.  In no
event will interest be credited on the unpaid balance for which a Participant
may become eligible.  Payment shall be
made by mailing to the last address provided by the Participant to the Company
or such other reasonable method as determined by the Plan Administrator.  In general, the payment shall be made as
promptly as practicable after the Participant’s Termination Date, the execution
of the Release required under Section 3.02, and the expiration of the required
revocation period specified in the Release. 
In no event will the payment be made later than the date that is two and
one-half (2-1/2) months following the end of the calendar year in which occurs
the Termination Date, unless (a) the Participant has failed to deliver the
Release required under Section 3.02 or (b) such date is prior to the expiration
of the required revocation period specified in the Release.  All payments of Severance Benefits are
subject to applicable federal, state and local taxes and withholdings.  In the event of the Participant’s death prior
to payment being made, the amount of such payment shall be paid to the
Participant’s estate.


 


Section 5.02         Other Arrangements.  The provisions of this Plan may provide for payments
to the Eligible Employee under certain compensation or bonus plans under
circumstances where such plans would not otherwise provide for payment
thereof.  It is the specific intention of
the Company that the provisions of this Plan shall supersede any provisions to
the contrary in such plans, to the extent permitted by applicable law, and such
plans shall be deemed to be have been amended to correspond with this Plan
without further action by the Company or the Board.


 


Section 5.03         Termination of Eligibility for
Benefits.  


 


(a)           All Eligible Employees shall cease to
be eligible to participate in the Plan, and all Severance Benefit payments
shall cease upon the occurrence of the earlier of:


 


(i)            Subject to Article VIII, termination
or modification of the Plan; or


 


(ii)           Completion of payment to the
Participant of the Severance Benefit for which the Participant is eligible
under Article IV.


 


(b)           Notwithstanding anything herein to
the contrary, the Company shall have the right to cease all Severance Benefit
payments and to recover payments previously made to the Participant should the
Participant at any time breach the Participant’s undertakings under the terms
of the Plan, the Release the Participant executed to obtain the Severance
Benefits under the Plan or the confidentiality and non-disparagement provisions
of Article VI.


 


Section 5.04         Limitation on Benefits


 


(a)           Subject to Section 5.04(b), in the
event it shall be determined that any payment or distribution by the Company or
its Subsidiaries to or for the benefit of a Participant (whether paid or
provided pursuant to the terms of this Plan or otherwise) (a “Payment”) would 


 


14

















 


be
nondeductible by the Company for Federal income tax purposes because of Section
280G of the Code, then the aggregate present value of the benefits provided to
the Participant pursuant to the rights granted under this Plan (such benefits
are hereinafter referred to as “Plan Payments”) shall be reduced to the Reduced
Amount.  The “Reduced Amount” shall be an
amount expressed in present value which maximizes the aggregate present value
of Plan Payments without causing any Payment to be nondeductible by the Company
because of Section 280G of the Code.  For
purposes of this Section 5.04, present value shall be determined in accordance
with Section 280G(d)(4) of the Code.


 


(b)           If the Firm (as defined in Section
5.04(c)) determines that the payments to the Participant (before any reductions
as described in Section 5.04(a)) on an after-tax basis (i.e., after federal,
state and local income and excise taxes and federal employment taxes) would
exceed the Reduced Amount on an after-tax basis (i.e., after federal, state and
local income and federal employment taxes) then such payments will not be
reduced as is described in Section 5.04(a). 


 


(c)           All determinations required to be
made under this Section 5.04 shall be made by a nationally recognized
accounting or consulting firm selected by the Senior Vice-President, Human
Resources of Tyco Electronics (or the equivalent)  upon the occurrence of a Potential Change in
Control (the “ Firm”), which shall provide detailed supporting calculations
both to the Company and the Participant within fifteen (15) business days of
the Termination Date or such earlier time as is requested by the Company.  Any such determination by the Firm shall be
binding upon the Company, its successors and the Participant (subject to (e)
below).  Within five (5) business days of
the determination by the Firm as to the Reduced Amount, the Company shall
provide to the Participant such Payments as are then due to the Participant in
accordance with the rights afforded under this Plan or any other applicable
plan.  If Plan Payments are to be reduced,
the Participant shall determine which Plan Payments shall be reduced to comply
with this Section 5.04.


 


(d)           The Company shall reimburse the
Participant for any costs or expenses of tax counsel incurred by the
Participant in connection with any audit or investigation by the Internal Revenue
Service, or any state or local tax authorities, concerning the application of
Code Section 280G to any Payments (provided, that the Participant retains tax
counsel acceptable to the Company).   In the event that as a result of any such
audit or investigation, the reduction in Plan Payments under (a) above is
finally determined not to be sufficient in amount to permit the deduction by
the Company of all Payments under Code Section 280G, then the Company shall pay
the Participant an additional amount which shall be sufficient to put the
Participant, after payment of any additional income, employment and excise
taxes, interest and penalties, in substantially the same economic position as
if the reduction had been sufficient.


 


(e)           In the event that the Firm determines
that a reduction effected pursuant to (a) above was excessive in amount due to
changes in relevant data or information following its original determination
under (c) above (including, without limitation, any recalculation regarding the
value of stock options as contemplated under Rev. Proc. 2003-68, Section 3.04),
and that additional Plan Payments could have been made thereunder, the Company
shall promptly make such additional payments to the Participant.


 


15














 


ARTICLE VI


 


CONFIDENTIALITY AND
NON-DISPARAGEMENT


 


Section 6.01         Confidential
Information.  The Eligible Employee agrees that he or she
shall not, directly or indirectly, use, make available, sell, disclose or
otherwise communicate to any person, other than in the course of the Eligible
Employee’s assigned duties and for the benefit of the Company, either during
the period of the Eligible Employee’s employment or at any time thereafter, any
nonpublic, proprietary or confidential information, knowledge or data relating
to the Company, any of its Subsidiaries, affiliated companies or businesses,
which shall have been obtained by the Eligible Employee during the Eligible
Employee’s employment by the Company or a Subsidiary.  The foregoing shall not apply to information
that (i) was known to the public prior to its disclosure to the Eligible
Employee; (ii) becomes known to the public subsequent to disclosure to the
Eligible Employee through no wrongful act of the Eligible Employee or any
representative of the Eligible Employee; or (iii) the Eligible Employee is
required to disclose by applicable law, regulation or legal process (provided
that the Eligible Employee provides the Company with prior notice of the
contemplated disclosure and reasonably cooperates with the Company at its
expense in seeking a protective order or other appropriate protection of such
information).  Notwithstanding clauses
(i) and (ii) of the preceding sentence, the Eligible Employee’s obligation to
maintain such disclosed information in confidence shall not terminate where
only portions of the information are in the public domain.


 


Section 6.02         Non-Disparagement.  Each of the Eligible Employee and the Company
(for purposes hereof, the Company shall mean only the executive officers and
directors thereof and not any other employees) agrees not to make any
statements that disparage the other party, or in the case of the Company or its
Subsidiaries, their respective affiliates, employees, officers, directors,
products or services.  Notwithstanding
the foregoing, statements made in the course of sworn testimony in
administrative, judicial or arbitral proceedings (including, without
limitation, depositions in connection with such proceedings) shall not be
subject to this Section 6.02.


 


Section 6.03         Reasonableness.  In the event the provisions of this Article
VI shall ever be deemed to exceed the time, scope or geographic limitations
permitted by applicable laws, then such provisions shall be reformed to the
maximum time, scope or geographic limitations, as the case may be, permitted by
applicable laws.


 


Section 6.04         Equitable Relief.


 


(a)           By participating in the Plan, the
Eligible Employee acknowledges that the restrictions contained in this Article
VI are reasonable and necessary to protect the legitimate interests of the
Company, its Subsidiaries and its affiliates, that the Company would not have
established this Plan in the absence of such restrictions, and that any
violation of any provision of this Article will result in irreparable injury to
the Company.  By agreeing to participate
in the Plan, the Eligible Employee represents that his or her experience and
capabilities are such that the restrictions contained in this Article VI will
not prevent the Eligible Employee from obtaining employment or otherwise
earning a living at the same general level of economic benefit as is currently
the case.  The Eligible Employee further
represents and acknowledges that (i) he or she has been advised by the Company
to consult his or her own legal counsel in respect 


 


16

















 


of
this Plan, and (ii) that he or she has had full opportunity, prior to agreeing
to participate in this Plan, to review thoroughly this Plan with his or her
counsel.  The Company likewise acknowledges
that the restrictions contained in Section 6.02 are necessary to protect the
legitimate interests of the Participant, and that any violation of Section 6.02
by the Company will result in irreparable injury to the Participant.  


 


(b)           Each party agrees that the other
party shall be entitled to preliminary and permanent injunctive relief, without
the necessity of proving actual damages, as well as an equitable accounting of
all earnings, profits and other benefits arising from any violation of this Article
VI, which rights shall be cumulative and in addition to any other rights or
remedies to which such aggrieved party may be entitled.  In the event that any of the provisions of
this Article VI should ever be adjudicated to exceed the time, geographic, service,
or other limitations permitted by applicable law in any jurisdiction, then such
provisions shall be deemed reformed in such jurisdiction to the maximum time,
geographic, service, or other limitations permitted by applicable law.


 


(c)           The Eligible Employee irrevocably and
unconditionally (i) agrees that any suit, action or other legal proceeding
arising out of this Article VI, including without limitation, any action
commenced by the Company for preliminary and permanent injunctive relief or
other equitable relief, may be brought in the United States District Court for
the District of New York, or if such court does not have jurisdiction or will
not accept jurisdiction, in any court of general jurisdiction in New York, (ii)
consents to the non-exclusive jurisdiction of any such court in any such suit,
action or proceeding, and (iii) waives any objection which Participant may have
to the laying of venue of any such suit, action or proceeding in any such
court.  Participant also irrevocably and
unconditionally consents to the service of any process, pleadings, notices or
other papers in a manner permitted by the notice provisions of Section 11.02.


 


Section 6.05         Survival of Provisions.  The obligations contained in this Article VI
shall survive the termination of Eligible Employee’s employment with the
Company or a Subsidiary and shall be fully enforceable thereafter.


 


17

















 


ARTICLE VII


 


THE PLAN ADMINISTRATOR


 


Section 7.01         Authority and Duties.  It shall be the duty of the Plan
Administrator, on the basis of information supplied to it by the Company and
the Committee, to properly administer the Plan. 
The Plan Administrator shall have the full power, authority and discretion
to construe, interpret and administer the Plan, to make factual determinations,
to correct deficiencies therein, and to supply omissions.  All decisions, actions and interpretations of
the Plan Administrator shall be final, binding and conclusive upon the parties
with respect to denied claims for Severance Benefits, except in those cases
where such determination is subject to review by the Named Appeals Fiduciary
(as defined in Section 10.04).  The Plan
Administrator may adopt such rules and regulations and may make such decisions
as it deems necessary or desirable for the proper administration of the Plan.


 


Section 7.02         Compensation of the Plan
Administrator.  The
Plan Administrator appointed for periods prior to a Potential Change in Control
shall receive no compensation for services as such .  The Plan Administrator appointed for periods
on and after a Potential Change in Control will be entitled to receive
reasonable compensation as is mutually agreed upon between the parties.  All reasonable expenses of the Plan
Administrator shall be paid or reimbursed by the Company upon proper
documentation.  The Plan Administrator
shall be indemnified by the Company against personal liability for actions
taken in good faith in the discharge of the Plan Administrator’s duties.


 


Section 7.03         Records, Reporting and Disclosure.  The Plan Administrator shall keep a copy of
all records relating to the payment of Severance Benefits to Participants and
former Participants and all other records necessary for the proper operation of
the Plan.  All Plan records shall be made
available to the Committee, the Company and to each Participant for examination
during business hours except that a Participant shall examine only such records
as pertain exclusively to the examining Participant and to the Plan.  The Plan Administrator shall prepare and
shall file as required by law or regulation all reports, forms, documents and
other items required by ERISA, the Code, and every other relevant statute, each
as amended, and all regulations thereunder (except that the Company, as payor
of the Severance Benefits, shall prepare and distribute to the proper
recipients all forms relating to withholding of income or wage taxes, Social
Security taxes, and other amounts that may be similarly reportable).


 


18

















 


ARTICLE VIII


 


AMENDMENT, TERMINATION AND
DURATION


 


Section 8.01         Amendment, Suspension and
Termination. 
Except as otherwise provided in this Section 8.01, the Board or its
delegee shall have the right, at any time and from time to time prior to the
occurrence of a Potential Change in Control (and after the Potential Change in
Control has expired in accordance with Section 2.26(y)), to amend, suspend or
terminate the Plan in whole or in part, for any reason or without reason, and
without either the consent of or the prior notification to any Participant, by
a formal written action.  After the
occurrence of a Potential Change in Control, the Board or its delegee shall
have the right to amend the Plan, provided however, that (a) in no event shall
any amendment give the Company the right to recover any amount paid to a
Participant prior to the date of such amendment or to cause the cessation of
Severance Benefits already approved for a Participant who has executed a
Release as required under Section 3.02 and (b) the Plan may not be amended in
any manner that adversely affects any right of a Participant or Eligible
Employee without the written consent of such Participant or Eligible
Employee.  


 


Section 8.02         Duration.  The Plan shall continue in full force and
effect until termination of the Plan pursuant to Section 8.01; provided,
however, that after the termination of the Plan, if any Participants terminated
employment on account of an Involuntary Termination prior to the termination of
the Plan and are still receiving Severance Benefits under the Plan, the Plan
shall remain in effect until all of the obligations of the Company are
satisfied with respect to such Participants.


 


19

















 


ARTICLE IX


 


DUTIES OF THE COMPANY AND THE
COMMITTEE


 


Section 9.01         Records.  The Company or a Subsidiary thereof shall
supply to the Committee all records and information necessary to the
performance of the Committee’s duties.


 


Section 9.02         Payment.
Payments of Severance Benefits to Participants shall be made in such amount as
determined by the Committee under Article IV, from the Company’s general assets
or from a supplemental unemployment benefits trust, in accordance with the
terms of the Plan, as directed by the Committee.


 


Section 9.03         Discretion.  Any decisions, actions or interpretations to
be made under the Plan by the Board, the Committee and the Plan Administrator,
acting on behalf of either, shall be made in each of their respective sole
discretion, not in any fiduciary capacity and need not be uniformly applied to
similarly situated individuals and such decisions, actions or interpretations
shall be final, binding and conclusive upon all parties.  As a condition of participating in the Plan,
the Eligible Employee acknowledges that all decisions and determinations of the
Board, the Committee and the Plan Administrator taken in good faith shall be
final and binding on the Eligible Employee, his or her beneficiaries and any
other person having or claiming an interest under the Plan on his or her
behalf.


 


20

















 


ARTICLE X


 


CLAIMS PROCEDURES


 


Section 10.01       Claim.  Each Participant under this Plan may contest
any action taken or determination made by the Company, the Board, the Committee
or the Plan Administrator that affects the rights of such Participant hereunder
by completing and filing with the Plan Administrator a written request for
review in the manner specified by the Plan Administrator.  No person may bring an action for any alleged
wrongful denial of Plan benefits in a court of law unless the claims procedures
described in this Article X are exhausted and a final determination is made by
the Plan Administrator and/or the Named Appeals Fiduciary, except in
circumstances where the Participant has a reasonable basis to conclude that the
pursuit of his/her claim through the claims procedure would be futile.  If the terminated Participant or interested
person challenges a decision by the Plan Administrator and/or Named Appeals
Fiduciary, a review by the court of law will be limited to the facts, evidence
and issues presented to the Plan Administrator during the claims procedure set
forth in this Article X.  Facts and
evidence that become known to the terminated Participant or other interested
person after having exhausted the claims procedure must be brought to the
attention of the Plan Administrator for reconsideration of the claims
administrator.  Issues not raised with
the Plan Administrator and/or Named Appeals Fiduciary will be deemed waived.


 


Section 10.02       Initial Claim.  Before the date on which payment of a
Severance Benefit commences, each application for benefits must be supported by
such information as the Plan Administrator deems relevant and appropriate.  In the event that any claim relating to the
administration of Severance Benefits is denied in whole or in part, the
terminated Participant or his or her beneficiary (“claimant”) whose claim has
been so denied shall be notified of such denial in writing by the Plan Administrator
within thirty (30) days after the receipt of the claim for benefits.  This period may be extended an additional
thirty (30) days if the Plan Administrator determines such extension is
necessary and the Plan Administrator provides notice of extension to the
claimant prior to the end of the initial thirty (30) day period.  The notice advising of the denial shall
specify the following: (i) the reason or reasons for denial, (ii) make specific
reference to the Plan provisions on which the determination was based, (iii)
describe any additional material or information necessary for the claimant to
perfect the claim (explaining why such material or information is needed), and
(iv) describe the Plan’s review procedures and the time limits applicable to such
procedures, including a statement of the claimant’s right to bring a civil
action under section 502(a) of ERISA following an adverse benefit determination
on review.


 


Section 10.03       Appeals of Denied Administrative
Claims.  All
appeals shall be made by the following procedure:


 


(a)           A claimant whose claim has been
denied shall file with the Plan Administrator a notice of appeal of the
denial.  Such notice shall be filed
within sixty (60) calendar days of notification by the Plan Administrator of
the denial of a claim, shall be made in writing, and shall set forth all of the
facts upon which the appeal is based. 


 


(b)           The Named Appeals Fiduciary shall
consider the merits of the claimant’s written presentations, the merits of any
facts or evidence in support of the denial of benefits, and such other facts
and circumstances as the Named Appeals Fiduciary shall deem relevant.


 


21

















 


(c)           The Named Appeals Fiduciary shall
render a determination upon the appealed claim which determination shall be
accompanied by a written statement as to the reasons therefor.  The determination shall be made to the
claimant within thirty (30) days of the claimant’s request for review, unless
the Names Appeals Fiduciary determines that special circumstances requires an
extension of time for processing the claim. 
In such case, the Named Appeals Fiduciary shall notify the claimant of
the need for an extension of time to render its decision prior to the end of
the initial thirty (30) day period, and the Named Appeals Fiduciary shall have
an additional thirty (30) day period to make its determination.  The determination so rendered shall be
binding upon all parties as long as it is made in good faith.  If the determination is adverse to the claimant,
the notice shall provide (i) the reason or reasons for denial, (ii) make
specific reference to the Plan provisions on which the determination was based,
(iii) a statement that the claimant is entitled to receive, upon request and
free of charge, reasonable access to, and copies of, all documents, records and
other information relevant to a the claimant’s claim for benefits, and (iv)
state that the claimant has the right to bring an action under section 502(a)
of ERISA.


 


Section 10.04       Appointment of the Named Appeals
Fiduciary.  The
Named Appeals Fiduciary shall be the person or persons named as such by the
Board or Committee, or, if no such person or persons be named, then the person
or persons named by the Plan Administrator as the Named Appeals Fiduciary,
provided however, that effective on the date of a Change in Control, the Plan
Administrator shall also serve as the Named Appeals Fiduciary.  For periods before the date of a Change in
Control, Named Appeals Fiduciaries may at any time be removed by the Board or
Committee, and any Named Appeals Fiduciary named by the Plan Administrator may
be removed by the Plan Administrator. 
All such removals may be with or without cause and shall be effective on
the date stated in the notice of removal. 
The Named Appeals Fiduciary shall be a “Named Fiduciary” within the
meaning of ERISA, and unless appointed to other fiduciary responsibilities,
shall have no authority, responsibility, or liability with respect to any
matter other than the proper discharge of the functions of the Named Appeals
Fiduciary as set forth herein.


 


Section 10.05       Arbitration; Expenses.  In the event of any dispute under the
provisions of this Plan, other than a dispute in which the primary relief
sought is an equitable remedy such as an injunction, the parties shall have the
dispute, controversy or claim settled by arbitration in New York, New York (or
such other location as may be mutually agreed upon by the Employer and the
Participant) in accordance with the National Rules for the Resolution of
Employment Disputes then in effect of the American Arbitration Association,
before a panel of three arbitrators, two of whom shall be selected by the
Company and the Participant, respectively, and the third of whom shall be
selected by the other two arbitrators. 
Any award entered by the arbitrators shall be final, binding and
nonappealable and judgment may be entered thereon by either party in accordance
with applicable law in any court of competent jurisdiction.  This arbitration provision shall be
specifically enforceable.  The
arbitrators shall have no authority to modify any provision of this Plan or to
award a remedy for a dispute involving this Plan other than a benefit
specifically provided under or by virtue of the Plan.  If the Participant substantially prevails on
any material issue, which is the subject of such arbitration or lawsuit, the
Company shall be responsible for all of the fees of the American Arbitration
Association and the arbitrators and any expenses relating to the conduct of the
arbitration (including the Company’s and Participant’s reasonable attorneys’
fees and expenses).  Otherwise, each
party shall be 


 


22

















 


responsible
for its own expenses relating to the conduct of the arbitration (including
reasonable attorneys’ fees and expenses) and shall share the fees of the
American Arbitration Association.


 


23

















 


ARTICLE XI



MISCELLANEOUS


 


Section 11.01       Nonalienation of Benefits.  None of the payments, benefits or rights of
any Participant shall be subject to any claim of any creditor of any
Participant, and, in particular, to the fullest extent permitted by law, all
such payments, benefits and rights shall be free from attachment, garnishment
(if permitted under applicable law), trustee’s process, or any other legal or
equitable process available to any creditor of such Participant.  No Participant shall have the right to
alienate, anticipate, commute, plead, encumber or assign any of the benefits or
payments that he may expect to receive, continently or otherwise, under this
Plan, except for the designation of a beneficiary as set forth in Section 5.01.


 


Section 11.02       Notices.  All notices and other communications required
hereunder shall be in writing and shall be delivered personally or mailed by
registered or certified mail, return receipt requested, or by overnight express
courier service.  In the case of the
Participant, mailed notices shall be addressed to him or her at the home address
which he or she most recently communicated to the Company in writing.  In the case of the Company, mailed notices
shall be addressed to the Plan Administrator.


 


Section 11.03       Successors.  Any Successor shall assume the obligations
under this Plan and expressly agree to perform the obligations under this Plan.


 


Section 11.04       Other Payments.  Except as otherwise provided in this Plan, no
Participant shall be entitled to any cash payments or other severance benefits
under any of the Company’s then current severance pay policies for a
termination that is covered by this Plan for the Participant, including,
without limitation, the Executive Severance Plan.


 


Section 11.05       No Mitigation.  Except as otherwise provided in Section
4.01(d) and Section 4.04, Participants shall not be required to mitigate the
amount of any Severance Benefit provided for in this Plan by seeking other
employment or otherwise, nor shall the amount of any Severance Benefit provided
for herein be reduced by any compensation earned by other employment or
otherwise, except if the Participant is re-employed by Company, in which case
Severance Benefits shall cease.


 


Section 11.06       No Contract of Employment.  Neither the establishment of the Plan, nor
any modification thereof, nor the creation of any fund, trust or account, nor
the payment of any benefits shall be construed as giving any Eligible Employee
or any person whosoever, the right to be retained in the service of the
Company, and all Eligible Employees shall remain subject to discharge to the
same extent as if the Plan had never been adopted.


 


Section 11.07       Severability of Provisions.  If any provision of this Plan shall be held
invalid or unenforceable by a court of competent jurisdiction, such invalidity
or unenforceability shall not affect any other provisions hereof, and this Plan
shall be construed and enforced as if such provisions had not been included.


 


24

















 


Section 11.08       Heirs, Assigns, and Personal
Representatives. 
This Plan shall be binding upon the heirs, executors, administrators,
successors and assigns of the parties, including each Participant, present and
future.


 


Section 11.09       Headings and Captions.  The headings and captions herein are provided
for reference and convenience only, shall not be considered part of the Plan,
and shall not be employed in the construction of the Plan.


 


Section 11.10       Gender and Number.  Where the context admits: words in any gender
shall include any other gender, and, except where otherwise clearly indicated
by context, the singular shall include the plural, and vice-versa.


 


Section 11.11       Unfunded Plan.  The Plan shall not be funded.  No Participant shall have any right to, or
interest in, any assets of the Company that may be applied by the Company to the
payment of Severance Benefits.


 


Section 11.12       Compliance with Code Section 409A.  The terms of this Plan are intended to, and
shall be interpreted and applied so as to, comply in all respects with the
provisions of Code Section 409A and regulations and rulings thereunder.  Any provision of this Plan governing the
timing or form of payment of benefits hereunder may be modified by the Plan
Administrator if and to the extent required in order to ensure such compliance
(by way of example and not limitation, to delay commencement of any benefits
payable hereunder that are subject to Code Section 409A until at least six
months following a Participant’s termination of employment).  Nothing in this provision shall be construed
as an admission that any of the benefits payable hereunder constitute “deferred
compensation” subject to the provisions of Code Section 409A.


 


Section 11.13       Payments to Incompetent Persons.  Any benefit payable to or for the benefit of
a minor, an incompetent person or other person incapable of receipting therefor
shall be deemed paid when paid to such person’s guardian or to the party
providing or reasonably appearing to provide for the care of such person, and
such payment shall fully discharge the Company, the Committee and all other
parties with respect thereto.


 


Section 11.14       Lost Payees.  A benefit shall be deemed forfeited if the
Committee is unable to locate a Participant to whom a Severance Benefit is
due.  Such Severance Benefit shall be
reinstated if application is made by the Participant for the forfeited
Severance Benefit while this Plan is in operation.


 


Section 11.15       Controlling Law.  This Plan shall be construed and enforced
according to the laws of the State of New York to the extent not superseded by
Federal law.


 


25

















 


SCHEDULE
A


 


SEVERANCE
BENEFITS


SALARY
REPLACEMENT AND ANNUAL BONUS


 


	
  Chief Executive Officer

  	
   

  	
  3 times annual base salary and annual bonus

  
	
  Officers who are direct reports to the CEO

  	
   

  	
  2 times annual base salary and annual bonus

  
	
  Other Officers and Band 1 employees

  	
   

  	
  1.5 times annual base salary and annual bonus

  



 


A-1