Document:

Exhibit 10.1

 

SECOND AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

 

SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT effective as of the 26th day of April, 2011 (“Agreement”) by and between OSHKOSH CORPORATION, a Wisconsin corporation (the “Company”), and CHARLES L. SZEWS (the “Executive”).

 

WITNESSETH:

 

WHEREAS, the Executive and the Company executed an initial Employment Agreement as of March 20, 2007 (“Original Agreement”) and a First Amended and Restated Employment Agreement as of January 1, 2008 (“First Amended Agreement”), and the parties hereto desire to amend and restate the First Amended Agreement to read in its entirety as set forth in this Agreement;

 

WHEREAS, the Executive previously served as President and Chief Operating Officer of the Company and has been serving as its Chief Executive Officer since January 1, 2011, the Company desires to continue to retain the services of the Executive as its Chief Executive Officer, and the Executive desires to continue to be employed by the Company and to serve as its Chief Executive Officer, on the terms and conditions set forth in this Agreement; and

 

WHEREAS, in consideration of the Company’s commitments in this Agreement, the Executive has entered into a Confidentiality and Loyalty Agreement with the Company (the “Loyalty Agreement”).

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements set forth herein, the parties hereto, intending to be legally bound, hereby agree as follows:

 

1.             Employment and Duties.  Subject to the terms and conditions of this Agreement, commencing January 1, 2011, the Company will employ the Executive, and the Executive will be employed by the Company, as the Chief Executive Officer of the Company (“CEO”).  As such officer, he shall be responsible for the supervision, control and conduct of all of the business and affairs of the Company, shall have the authority and duties set forth for his offices in the Company’s bylaws, shall have such additional duties as are normally assigned to a chief executive officer, shall perform his duties in a conscientious, reasonable and competent manner, shall devote his best efforts to his employment by the Company and, except as otherwise set forth herein, shall devote his entire business time and attention to the performance of his duties.  At all times, the Executive shall be subject to the direction of the Board of Directors of the Company.  It shall not be a violation of this Agreement for the Executive to (a)  serve on corporate, civic or charitable boards or committees, (b) participate in other business, community and professional activities, and (c) manage personal investments, so long as in each case and collectively such activities do not significantly interfere with the performance of the Executive’s responsibilities as an employee of the Company in accordance with this Agreement and, in the case of corporate boards or serving as chairman (or in a comparable position) of a

 

 

corporate board, so long as the Executive receives the prior consent of the Human Resources Committee of the Board of Directors of the Company (the “Committee”), subject to review and approval by the full Board of Directors. While he is the Chief Executive Officer, the Company anticipates that the Executive will continue to serve as a member of the Board of Directors of the Company and, if there is an Executive Committee of the Board of Directors, as a member of such committee.

 

2.             Term.  The employment of the Executive under this Agreement will continue until the occurrence of the first of the following events:

 

(a)           December 31, 2012, subject to extension as described below;

 

(b)           The Executive’s death;

 

(c)           The Executive shall have become totally disabled within the meaning of the Oshkosh Corporation Long Term Disability Program for Salaried Employees (the “LTD Program”) such that the Executive is entitled to receive benefits under the LTD Program; or

 

(d)           Termination of this Agreement under Section 6.

 

The provisions of Sections 7 and 10 and the Loyalty Agreement shall survive the expiration of the term of this Agreement.

 

The last date on which the Executive’s employment under this Agreement may terminate pursuant to subsection (a) shall be automatically extended at successive one-year intervals on the date 12 months prior to the date on which the Executive’s employment under this Agreement would otherwise terminate pursuant to subsection (a) (as subsection (a) may have been previously extended by the parties) (the “Extension Date”) unless not less than 30 days prior to the Extension Date the Company or the Executive has provided a written notice of nonrenewal (a “Nonrenewal Notice”) to the other party.  If a party gives a timely Nonrenewal Notice, then the Executive’s employment under this Agreement shall terminate in accordance with the provisions of this Section (as subsection (a) may have been previously extended by the parties), and neither party shall have any other rights or obligations as a result of the delivery of such notice.  However, this Agreement will not be extended automatically (x) beyond the date on which the Executive would attain age 62 or (y) if the Executive is disabled at the time such extension would otherwise automatically become effective.  If the Executive’s employment continues following the date identified in subsection (a) above, then for so long as the Executive is employed by the Company the Executive shall be an at-will employee.

 

3.             Compensation.  The Executive shall be entitled to the following compensation for services rendered to the Company during the term of this Agreement:

 

(a)           Base Salary.  Subject to adjustment in accordance with this subsection (a), the Executive shall receive a base salary at the annual rate of not less than $1,000,000, commencing as of October 1, 2010.  The Committee shall review the Executive’s base salary annually to determine whether such salary should be increased.  Further, if the Executive initiates or agrees to a general reduction of base salaries of executive officers of the Company, then such base salary shall be subject to reduction on the same basis and terms that apply to the other

 

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officers of the Company or, with the prior consent of the Executive, a reasonable larger percentage reduction in light of his position as CEO.  (In this Agreement, the term “Base Salary” shall mean the amount established and adjusted from time to time pursuant to this subsection (a).)

 

(b)           Other Compensation.  The Executive shall be entitled to participate in the bonus plan, qualified retirement plan, supplemental retirement plan, stock-based compensation programs, deferred compensation plan and fringe benefit plans and programs (including without limitation the LTD Program), and receive perquisites, in each case in effect from time to time for other senior executives of the Company, subject to all of the terms and conditions of the respective plans and programs and the discretion and powers of the Committee thereunder.

 

(c)           Vacations and Holidays.  The Executive shall be entitled to receive 20 days of paid vacation per year together with the paid holidays available to all other senior management personnel.  Unused vacation and holidays shall not accrue from year to year, except as may be contemplated by Company policies and practices applicable to other executive officers of the Company at the time in question (which may change from time to time) and except as may be approved by the Committee.

 

4.             Reimbursements.  The Company shall reimburse the Executive for actual out-of-pocket costs he incurs in the course of carrying out his duties, in accordance with Company policies and procedures in effect from time to time. The Executive shall also be entitled to reimbursement for all reasonable fees and expenses of the Executive’s legal counsel in connection with the negotiation and preparation of this Agreement.

 

5.             Withholding.  All payments under this Agreement shall be subject to withholding or deduction by reason of the Federal Insurance Contributions Act, the federal income tax and state or local income tax and similar laws, to the extent such laws apply to such payments.

 

6.             Termination.

 

(a)           By the Company for Cause.  The Company may terminate this Agreement for Cause at any time.  For the purposes of this Agreement, “Cause” shall mean any of the following: (i) theft, dishonesty, fraudulent misconduct, unauthorized disclosure of trade secrets, gross dereliction of duty or other grave misconduct on the part of the Executive that is substantially injurious to the Company; (ii) the Executive’s willful act or omission that he knew would have the effect of materially injuring the reputation, business or prospects of the Company; (iii) the Executive’s conviction of a felony, as evidenced by a binding and final judgment, order or decree of a court of competent jurisdiction; (iv) the Executive’s consent to an order of the Securities and Exchange Commission for the Executive’s violation of the federal securities laws; (v) the Executive’s repeated and demonstrated failure to perform material duties in a competent and efficient manner which failure is not due to illness or disability of the Executive; (vi) a petition under the federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver was appointed by a court for the property of, the Executive; (vii) the Executive’s failure to file timely (including extensions) federal or state income tax returns that the Executive or his spouse is required by law to file (such as personal returns and returns for

 

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trusts or entities of which the Executive or his spouse is trustee, controlling or general partner or member, or managing member) and to pay related taxes; (viii) the occurrence of improprieties involving the financial statements of the Company in which the Executive was directly or indirectly involved in committing the impropriety; (ix) the Executive’s commission of material violations of codes of conduct of the Company applicable to the Executive; or (x) the Executive’s material breach of his obligations under the Loyalty Agreement.  Notwithstanding the foregoing, the Executive shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to the Executive (A) a copy of a resolution, duly adopted by the affirmative vote of not less than a majority of the entire membership of the Board of Directors of the Company (excluding the Executive) at a meeting of the Board of Directors called and held for the purpose (after reasonable notice to the Executive and an opportunity for him, together with his counsel, to be heard before the Board of Directors), finding that in the good faith opinion of the Board of Directors conduct of the Executive met one of the standards set forth in any of clauses (i) through (x) of the preceding sentence and specifying the particulars thereof and (B) an affidavit sworn to by the Secretary of the Company stating that such resolution was in fact adopted by the affirmative vote of not less than a majority of the entire membership of the Board of Directors (excluding the Executive).  If the Company terminates this Agreement for Cause, then the Executive shall forfeit his right to any and all benefits (other than vested fringe benefits) he would otherwise have been entitled to receive under this Agreement, except that whether the Executive forfeits vested equity compensation benefits will be determined in accordance with the terms of plans and agreements applicable to such equity compensation benefits rather than this Agreement.

 

(b)           By the Company without Cause.  The Company, by action of the Board of Directors, may terminate this Agreement without Cause at any time, subject to the terms of Section 7.

 

(c)           By the Executive.  The Executive may terminate this Agreement at any time upon 90 days’ prior written notice to the Company.  In addition, the Executive may terminate this Agreement for “Good Reason”. For this purpose, “Good Reason” means any substantial breach of this Agreement by the Company that is not remedied by the Company within 30 days after receipt of written notice of termination from the Executive for Good Reason.  A termination of employment by the Executive for Good Reason shall be effected by the Executive giving the Company such written notice of termination within 45 days of the event constituting the substantial breach of this Agreement by the Company, setting forth in reasonable detail the specific conduct of the Company that constitutes the substantial breach and the specific provision(s) of this Agreement that the Company has breached.  The Executive’s termination as a result of Good Reason shall automatically occur on the 31st day following the receipt by the Company of the written notice of termination from the Executive, unless the Company has cured the breach during the 30-day cure period.  If the Company cures the breach during the 30-day cure period, then the Executive’s notice of termination for Good Reason shall be deemed withdrawn.

 

7.             Entitlements and Obligations.  If this Agreement is terminated by the Company pursuant to Section 6(b), by the Company without Cause at any time on or within 90 days following the date determined pursuant to Section 2(a) or by the Executive for Good Reason pursuant to Section 6(c), then:

 

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(a)           Provided that the Executive signs a release of claims in the form attached hereto as Exhibit A (adjusted as necessary to conform to then existing legal requirements in a manner reasonably acceptable to the Company and the Executive) (a “Full Release”) not earlier than the 30th day following the date of the Separation from Service, as that term is defined in the Executive’s Key Executive Employment and Severance Agreement, and not later than the 50th day following the date of the Separation from Service for which any applicable revocation period has expired, the Company shall, subject to the provisions of Section 11(a), pay the Executive as severance pay in a single sum on the 60th day following the date of the Separation from Service, in lieu of Base Salary and bonus for the remaining term of this Agreement, an amount equal to the sum of (i) the product of two times the Annual Cash Compensation and (ii) if the Executive will not receive a bonus with respect to the fiscal year in which such termination occurs under the bonus plan then in effect solely as a result of the Executive’s termination, a pro rata bonus for the fiscal year in which the termination occurs in an amount equal to the bonus (if any) that the Executive would have received had he remained employed through the entire fiscal year multiplied by a fraction representing the portion of the year through the termination date during which the Executive served the Company. However, solely with respect to the portion of such sum consisting of the amount described in clause (ii), if the 60th day following the date of the Separation from Service occurs prior to the date the Committee certifies the bonus amount described in such clause (ii), then payment of such portion shall instead be made as soon as practicable after the bonus amount is so certified, but in no event later than 2-1/2 months after the end of the fiscal year of the Company in which the Executive’s termination occurs.  The term “Annual Cash Compensation” means the sum of (1) the Base Salary (as of the date determined pursuant to Section 2(a) in the case of a termination following such date), plus (2) the Bonus Amount. The term “Bonus Amount” means the higher of (x) an amount equal to the average of the annual bonuses paid or payable to the Executive with respect to the three full fiscal years of the Company preceding the date of termination (it being understood that, if no bonus was paid or payable as to any year during such three-year period, then the bonus for that year will be zero (0) for purposes of this calculation) or (y) until such time as the three full fiscal years of the Company preceding the date of termination to which clause (x) refers do not include a fiscal year of the Company prior to its 2011 fiscal year, the Base Salary (as of the date determined pursuant to Section 2(a) in the case of a termination following such date). In no event will any payment or benefit described herein be paid or provided earlier than the first date that the Company may make such payment or provide such benefit without causing an additional tax to be paid under Section 409A of the Internal Revenue Code and the regulations thereunder (“Section 409A”).

 

(b)           The Company shall have continuing liability to the Executive for the fringe benefits provided in this Agreement for the remaining term of this Agreement as if this Agreement had not been terminated pursuant to Section 6(b).

 

(c)           If the Executive does not deliver a Full Release to the Company not earlier than the 30th day following the date of the Separation from Service and not later than the 50th day following the date of the Separation from Service, or if the Executive delivers a Full Release but revokes it prior to the 60th day following the date of the Separation from Service (to the extent he is able to do so), then the Executive shall not be entitled to the payment that Section 7(a) contemplates or to the fringe benefits that Section 7(b) contemplates.

 

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(d)           If the Executive is entitled to the severance described in Section 7(a), then during the two-year period after the date of the Separation from Service, for no additional consideration, the Executive will make himself available to consult with, otherwise assist or provide general advice to the then CEO and to the Board of Directors as they may reasonably request, consistent with the Executive’s other commitments (which may include full-time employment), for a nominal amount of time in each instance. In no event shall the Executive be obligated to provide such services to an extent that would involve a material amount of his time in the aggregate.  During such period and thereafter, the Executive will also cooperate fully with the Company in any investigation, negotiation, litigation or other action arising out of transactions or other matters in which he was involved or of which he had knowledge during his employment with the Company.  In the event such a matter arises, the Company will pay the Executive a reasonable per diem amount for the time that he must devote to such cooperation, which the Company and the Executive will negotiate in good faith, and fully reimburse the Executive for any reasonable expenses incurred by him in the course of his cooperation.

 

8.             Annual Physical.  At the Company’s expense, during the term of this Agreement, the Executive shall have an annual physical examination performed by a physician whom the Executive reasonably chooses.

 

9.             Successors.

 

(a)           This Agreement is personal to the Executive and without the prior written consent of the Company shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution.  This Agreement shall inure to the benefit of and be enforceable by the Executive’s legal representatives.

 

(b)           This Agreement shall inure to the benefit of and be binding upon the Company and its successors.

 

10.           Miscellaneous.

 

(a)           Severability.  This Agreement is to be governed by and construed according to the laws of the State of Wisconsin.  If any provision of this Agreement shall be held invalid and unenforceable for any reason whatsoever, such provision shall be deemed deleted and the remainder of the Agreement shall be valid and enforceable without such provision.

 

(b)           Notices.  All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by reputable overnight courier or registered or certified mail, return receipt requested, postage prepaid, addressed as follows:  (i) if to the Executive, to his home address as it appears on the personnel records of the Company; and (ii) if to the Company, to the General Counsel of the Company at the Company’s principal executive offices, in each case or to such other address as either party shall have furnished to the other in writing in accordance herewith.  Notices and communications shall be effective when personally delivered, the date of delivery by overnight courier or on the second business day following the day on which such item was mailed.

 

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(c)           Entire Agreement; Amendments.  This Agreement and the Loyalty Agreement contain the entire understanding between the Company and the Executive with respect to the subject matter hereof, except for the following additional agreements between the Company and the Executive:

 

(i)            Key Executive Employment and Severance Agreement (the “KEESA”); and

 

(ii)           Any stock option, restricted stock or other award agreement under the Company’s stock and incentive plans.

 

Anything in this Agreement to the contrary notwithstanding, if there is a Change in Control of the Company (as defined in the KEESA) at a time that the KEESA is in effect, then the rights and obligations of the Company and the Executive in respect of the Executive’s employment shall be determined in accordance with the KEESA rather than under this Agreement.  Nothing contained in this Agreement shall be deemed to supersede any of the obligations, agreements, provisions or covenants of the Company or the Executive contained in the KEESA.  At the request of the Company prior to a Change in Control of the Company, the Executive will execute a revised form of the KEESA so long as such revised form is substantially the same as the form then in effect for other senior executives of the Company, including without limitation a revised form that reflects changes that the Company determines are appropriate to comply with regulations under Section 409A.  This Agreement may be modified only in writing signed by the parties hereto.

 

(d)           Dispute Resolution.  All controversies between the Executive and the Company arising under this Agreement shall be determined by arbitration.  Any arbitration under this Section 10(d) shall be conducted in Appleton, Wisconsin, before the American Arbitration Association, and in accordance with the rules of such organization.  The arbitration award may allocate attorneys’ fees and expenses attributable to the arbitration as determined by the arbitrator.  The award of the arbitrators, or the majority of them, shall be final, and judgment upon the award rendered may be entered into any court, state or federal, having jurisdiction.

 

11.           Limitations on Entitlements.  Section 7 is subject to this Section 11.  If this Agreement is terminated by the Company pursuant to Section 6(b) or by the Executive for Good Reason pursuant to Section 6(c), the Company shall satisfy its obligations under Section 7 only after the Executive has incurred a Separation from Service.  The requirements of (a) and (b) below shall apply to the payment or provision of compensation and benefits pursuant to Section 7:

 

(a)           Six-Month Delay.  Notwithstanding any contrary provision of this Agreement, to extent the Executive would otherwise be entitled to any severance pay described in Section 7(a), or other payment or benefit under this Agreement or any plan or arrangement of the Company or its affiliates, that constitutes “deferred compensation” subject to Section 409A, and that if paid during the six months beginning on the Separation from Service would be subject to additional tax under Section 409A because the Executive is a “specified employee” (within the meaning of Section 409A as determined by the Company), such payment or benefit shall not be made until the first day of the seventh month following the Separation from Service for reasons

 

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other than death (the “Authorized Payment Date”).  The amount delayed for payment pursuant to this Section 11 shall be paid to the Executive on the Authorized Payment Date in a cash payment, accompanied by an interest payment calculated at the rate of interest announced by U.S. Bank, National Association, Milwaukee, Wisconsin, from time to time as its prime or base lending rate (“Prime”), determined on the date the Separation from Service occurred and compounded quarterly.

 

(b)           Fringe Benefit Restrictions.  During the period beginning on the date of the Separation from Service and ending on the Authorized Payment Date, the Executive shall pay to the Company the cost of any life insurance coverage that provides a benefit in excess of $50,000 under a group term life insurance policy and any other taxable fringe benefit that would otherwise require imputing income to the Executive.  On the Authorized Payment Date, the Company shall make a cash payment to the Executive, accompanied by an interest payment at Prime, determined on the date of the Separation from Service and compounded quarterly, equal to the aggregate amount paid by the Executive to the Company for such taxable fringe benefits, and thereafter such coverage and benefits shall be provided at the expense of the Company for the remainder of the period required by this Agreement.

 

(c)           Limitations on Reimbursements and In-Kind Benefits.  Notwithstanding anything to the contrary in this Agreement or elsewhere, any reimbursement or benefit under this Agreement or otherwise that is exempt from Section 409A pursuant to Treas. Reg. 1.409A-1(b)(9)(v)(A) or (C) shall be paid or provided to the Executive only to the extent that the expenses are not incurred, or the benefits are not provided, beyond the last day of the Executive’s second taxable year following the Executive’s taxable year in which the Separation from Service occurs.  Further, such expenses shall be reimbursed no later than the last day of the Executive’s third taxable year following the taxable year in which the Separation from Service occurs.  Except as otherwise expressly provided herein, to the extent any expense reimbursement or the provision of any in-kind benefit under this Agreement is determined to be subject to Section 409A, the amount of any such expenses eligible for reimbursement, or the provision of any in-kind benefit, in one calendar year shall not affect the expenses eligible for reimbursement in any other calendar year (except for any life-time or other aggregate limitation applicable to medical expenses), in no event shall any expenses be reimbursed after the last day of the calendar year following the calendar year in which the Executive incurred such expenses, and in no event shall any right to reimbursement or the provision of any in-kind benefit be subject to liquidation or exchange for another benefit.

 

12.           Compliance with Internal Revenue Code Section 409A.  The Company and the Executive intend the terms of this Agreement to be in compliance with Section 409A.  The Company does not guarantee the tax treatment or tax consequences associated with any payment or benefit, including but not limited to consequences related to Section 409A.  To the maximum extent permissible, any ambiguous terms of this Agreement shall be interpreted in a manner which avoids a violation of Section 409A.  The Executive acknowledges that to avoid an additional tax on payments that may be payable or benefits that may be provided under this Agreement and that constitute deferred compensation that is not exempt from Section 409A, the Executive must make a reasonable, good faith effort to collect any payment or benefit to which the Executive believes the Executive is entitled hereunder no later than 90 days after the latest date upon which the payment could have been made or benefit provided under this Agreement,

 

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and if the payment or benefit is not paid or provided, then the Executive must take further enforcement measures within 180 days after such latest date.

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the day and year first above written.

 

 

	
 
    	
OSHKOSH   CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Richard M. Donnelly
    
	
 
    	
 
    	
Name:
    	
Richard   M. Donnelly
    
	
 
    	
 
    	
Title:
    	
Chairman-Board   of Directors
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Attest:
    	
/s/   Michael K. Rohrkaste
    
	
 
    	
 
    	
Name:
    	
Michael   K. Rohrkaste
    
	
 
    	
 
    	
Title:
    	
EVP,   CAHRO
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
EXECUTIVE
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/   Charles L. Szews
    	
 (SEAL)
    
	
 
    	
Charles   L. Szews
    
					

 

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EXHIBIT A

 

RELEASE

 

1.             In exchange for the promises and payments provided for in the Second Amended and Restated Employment Agreement (the “Agreement”) effective as April       , 2011 between Oshkosh Corporation, a Wisconsin corporation (the “Company”), and Charles L. Szews (the “Executive”), the Executive hereby releases and forever discharges the Released Parties (defined below) from any and all claims, demands, rights, liabilities and causes of action of any kind or nature, known or unknown, arising prior to or through the date the Executive executes this Release, including, but not limited to, any claims, demands, rights, liabilities and causes of action arising or having arisen out of or in connection with the Executive’s employment or termination of employment with the Company.  “Released Parties” includes the Company, its parent companies, subsidiaries, related and affiliated companies, and its and their past and present employees, directors, officers, agents, shareholders, insurers, attorneys, executors, assigns and other representatives of any kind.  The Executive also releases and waives any claim or right to further compensation, benefits, damages, penalties, attorneys’ fees, costs or expenses of any kind from the Company or any of the other Released Parties except as provided in the Agreement.  This release specifically includes, but is not limited to, a release of any and all claims pursuant to state and local fair employment law(s); Title VII of the Civil Rights Act of 1964; the Rehabilitation Act of 1973; the Reconstruction Era Civil Rights Acts, 42 U.S.C. §§1981-1988; the Civil Rights Act of 1991; the Age Discrimination in Employment Act (“ADEA”); the Americans with Disabilities Act; state and federal family and/or medical leave acts; state and federal wage payment laws to the extent such claims can legally be waived; and any other federal, state or local laws or regulations of any kind, whether statutory or decisional.  This release also includes, but is not limited to, a release of any claims for wrongful termination, retaliation, tort, breach of contract, defamation, misrepresentation, violation of public policy or invasion of privacy.  This release does not include a waiver of any claim that cannot legally be waived.  This release does not apply to any right the Executive may have to indemnification by the Company by virtue of his status as a director, officer or employee of the Company under applicable law and/or the Company’s bylaws.

 

2.             The Executive states that he has not filed or joined in any complaints, lawsuits, or proceedings of any kind against the Company or any of the other Released Parties, and the Executive promises never to file, pursue, participate in, or join in any lawsuits or proceedings asserting any claims that are released in this Release.  However, nothing in this Release prevents the Executive from (a) challenging the enforceability of this Release under the ADEA; or (b) filing a charge with the EEOC or otherwise cooperating with the EEOC; however, this Release does prohibit the Executive from obtaining any personal or monetary relief from the Released Parties based upon such cooperation or charge, whether filed by the Executive or anyone else on behalf of the Executive.

 

3.             The Executive agrees and understands that this Release does not supersede any confidentiality or noncompete agreements or obligations to which the Executive was subject while employed by the Company or reduce the Executive’s obligations to comply with applicable laws relating to trade secrets, confidential information or unfair competition.

 

 

4.             The Executive hereby acknowledges that the benefits provided in the Agreement are greater than those to which the Executive is entitled by any contract, employment policy, or otherwise.  The Executive has up to twenty-one (21) days to consider whether to accept this Release and the Executive enters into it voluntarily.  The Executive may revoke this Release, in writing, within seven (7) days after signing it, and this Release will not become enforceable or effective until the revocation period has expired.  The Company advises the Executive to consult with an attorney prior to signing this Release.

 

5.             Neither the Company’s signing of this Release nor any actions taken by the Company toward compliance with the terms of this Release or the Agreement constitute an admission by the Company that it has acted improperly or unlawfully with regard to the Executive or that it has violated any state or federal law.

 

6.             If any portion of this Release is found to be unenforceable, the parties desire that all other portions that can be separated from it, or appropriately limited in scope, shall remain fully valid and enforceable.  The Executive enters into this Release knowingly and voluntarily and without any coercion.

 

AGREED TO AND ACCEPTED BY:

 

EXECUTIVE

 

 

	
 
    	
 
    	
Date:
    	
 
    
	
Charles   L. Szews
    	
 
    	
 
    

 

11Exhibit 10.2

 

KEY EXECUTIVE EMPLOYMENT AND SEVERANCE AGREEMENT

 

THIS AGREEMENT, made and entered into as of the [      ] day of [                    ], 20[    ], by and between Oshkosh Corporation, a Wisconsin corporation (hereinafter referred to as the “Company”), and [                    ] (hereinafter referred to as the “Executive”).

 

W I T N E S S E T H :

 

WHEREAS, the Executive is employed by the Company and/or a subsidiary of the Company in a key executive capacity, and the Executive’s services are valuable to the conduct of the business of the Company;

 

WHEREAS, the Board of Directors of the Company (the “Board”) recognizes that circumstances may arise in which a change in control of the Company occurs, through acquisition or otherwise, thereby causing uncertainty about the Executive’s future employment with the Company and/or any such subsidiary without regard to the Executive’s competence or past contributions, which uncertainty may result in the loss of valuable services of the Executive to the detriment of the Company and its shareholders, and the Company and the Executive wish to provide reasonable security to the Executive against changes in the Executive’s relationship with the Company in the event of any such change in control;

 

WHEREAS, the Company and the Executive are desirous that any proposal for a change in control or acquisition of the Company will be considered by the Executive objectively and with reference only to the best interests of the Company and its shareholders; and

 

WHEREAS, the Executive will be in a better position to consider the Company’s best interests if the Executive is afforded reasonable security, as provided in this Agreement, against altered conditions of employment that could result from any such change in control or acquisition.

 

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements hereinafter set forth, the parties hereto mutually covenant and agree as follows:

 

1.             Definitions.  The following terms are used in this Agreement as defined in Exhibit A:

 

	
409A   Affiliate
    	
 
    	
Confidential   Information
    	
 
    	
Person
    
	
Act
    	
 
    	
Covered   Termination
    	
 
    	
Prime
    
	
Accrued   Benefits
    	
 
    	
Effective   Date
    	
 
    	
Section 409A   Indemnification
    
	
Affiliate   and Associate
    	
 
    	
Employer
    	
 
    	
Section 409A   Tax
    
	
Annual   Cash Compensation
    	
 
    	
Good   Reason
    	
 
    	
Separation   from Service
    
	
Cause
    	
 
    	
Indemnified   Section 409A Violation
    	
 
    	
Termination   Date
    
	
Change   in Control
    	
 
    	
Normal   Retirement Date
    	
 
    	
Termination   of Employment
    
	
Code
    	
 
    	
Notice   of Termination
    	
 
    	
Trade   Secrets
    
	
Competitive   Activity
    	
 
    	
Perquisite   Amount
    	
 
    	
 
    

 

 

2.             Termination or Cancellation Prior to the Effective Date.  The Company and the Executive shall each retain the right to terminate the employment of the Executive at any time prior to the Effective Date.  If the Executive’s employment is terminated prior to the Effective Date, then this Agreement shall be terminated and cancelled and of no further force or effect, and any and all rights and obligations of the parties hereunder shall cease.  In addition, this Agreement shall terminate upon the Executive ceasing to be an officer of the Company and its Affiliates prior to a Change in Control unless the Executive can reasonably demonstrate that such change in status occurred under circumstances described in clause (iii)(B)(1) or (iii)(B)(2) of the definition of “Effective Date” in Exhibit A.

 

3.             Employment Period.  If the Executive is employed by the Employer on the Effective Date, then the Company will, or will cause the Employer to, continue thereafter to employ the Executive during the Employment Period (as hereinafter defined), and the Executive will remain in the employ of the Employer, in accordance with and subject to the terms and provisions of this Agreement.  For purposes of this Agreement, the term “Employment Period” means a period (i) commencing on the Effective Date, and (ii) ending at 11:59 p.m. Oshkosh Time on the earlier of the third anniversary of such date or the Executive’s Normal Retirement Date.

 

4.             Duties.  During the Employment Period, the Executive shall, in the most significant capacities and positions held by the Executive at any time during the 180-day period preceding the Effective Date or in such other capacities and positions as may be agreed to by the Company and the Executive in writing, devote the Executive’s best efforts and all of the Executive’s business time, attention and skill to the business and affairs of the Employer, as such business and affairs now exist and as they may hereafter be conducted.

 

5.             Compensation.  During the Employment Period, the Executive shall be compensated as follows:

 

(a)           The Executive shall receive, at reasonable intervals (but not less often than monthly) and in accordance with such standard policies as may be in effect immediately prior to the Effective Date, an annual base salary in cash equivalent of not less than twelve times the Executive’s highest monthly base salary for the twelve-month period immediately preceding the month in which the Effective Date occurs or, if higher, an annual base salary at the rate in effect immediately prior to the Effective Date (determined prior to any reduction for amounts deferred under Section 401(k) of the Code or otherwise, or deducted pursuant to a cafeteria plan or qualified transportation fringe benefit under Sections 125 and 132(f) of the Code), subject to upward adjustment as provided in Section 6 (such salary amount as adjusted upward from time to time is hereafter referred to as the “Annual Base Salary”).

 

(b)           The Executive shall receive perquisites at least equal in value to those provided for the Executive at any time during the 180-day period immediately preceding the Effective Date or, if more favorable to the Executive, those provided generally at any time after the Effective Date to any executives of the Company and its Affiliates of comparable status and position to the Executive.  The Executive shall be reimbursed, at such intervals and in accordance with such standard policies that are most favorable to the Executive that were in effect at any time during the 180-day period immediately preceding the Effective Date or, if

 

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more favorable to the Executive, those provided generally at any time after the Effective Date to any executives of the Company and its Affiliates of comparable status and position to the Executive, for any and all monies advanced in connection with the Executive’s employment for reasonable and necessary expenses incurred by the Executive on behalf of the Company, including travel expenses.

 

(c)           The Executive and/or the Executive’s family, as the case may be, shall be included, to the extent eligible thereunder (which eligibility shall not be conditioned on the Executive’s salary grade or on any other requirement that excludes executives of the Company and its Affiliates of comparable status and position to the Executive unless such exclusion was in effect for such plan or an equivalent plan on the date 180 days prior to the Effective Date), in any and all welfare benefit plans, practices, policies and programs providing benefits for the Company’s salaried employees in general or, if more favorable to the Executive, to any executives of the Company and its Affiliates of comparable status and position to the Executive, including but not limited to group life insurance, hospitalization, medical and dental plans; provided, that, (i) in no event shall the aggregate level of benefits under such plans, practices, policies and programs in which the Executive is included be less than the aggregate level of benefits under plans, practices, policies and programs of the type referred to in this Section 5(c) in which the Executive was participating at any time during the 180-day period immediately preceding the Effective Date and (ii) in no event shall the aggregate level of benefits under such plans, practices, policies and programs be less than the aggregate level of benefits under plans, practices, policies and programs of the type referred to in this Section 5(c) provided at any time after the Effective Date to any executive of the Company and its Affiliates of comparable status and position to the Executive.

 

(d)           The Executive shall annually be entitled to not less than the amount of paid vacation and not fewer than the number of paid holidays to which the Executive was entitled annually at any time during the 180-day period immediately preceding the Effective Date or such greater amount of paid vacation and number of paid holidays as may be made available annually to the Executive or any other executive of the Company and its Affiliates of comparable status and position to the Executive at any time after the Effective Date.

 

(e)           The Executive shall be included in all plans providing additional benefits to any executives of the Company and its Affiliates of comparable status and position to the Executive, including but not limited to deferred compensation, split-dollar life insurance, retirement, supplemental retirement, stock option, stock appreciation, stock bonus and similar or comparable plans; provided, that, (i) in no event shall the aggregate level of benefits under such plans be less than the aggregate level of benefits under plans of the type referred to in this Section 5(e) in which the Executive was participating at any time during the 180-day period immediately preceding the Effective Date; (ii) in no event shall the aggregate level of benefits under such plans be less than the aggregate level of benefits under plans of the type referred to in this Section 5(e) provided at any time after the Effective Date to the Executive or any executive of the Company and its Affiliates of comparable status and position to the Executive; and (iii) the Company’s obligation to include the Executive in bonus or incentive compensation plans shall be determined by Section 5(f).

 

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(f)            To assure that the Executive will have an opportunity to earn incentive compensation after the Effective Date, the Executive shall be included in a bonus plan of the Company that shall satisfy the standards described below (the “Bonus Plan”).  Bonuses under the Bonus Plan shall be payable with respect to achieving such financial or other goals reasonably related to the business of the Company, including the Employer, as the Company shall establish (the “Goals”), all of which Goals shall be attainable, prior to the end of the Employment Period, with approximately the same degree of probability as the goals under the Company’s bonus plan or plans in the form most favorable to the Executive that was in effect at any time during the 180-day period prior to the Effective Date (the “Existing Plan”) and in view of the Company’s existing and projected financial and business circumstances applicable at the time.  The amount of the bonus (the “Bonus Amount”) that the Executive is eligible to earn under the Bonus Plan shall be no less than the amount of the Executive’s highest maximum potential award under the Existing Plan at any time during the 180-day period prior to the Effective Date or, if higher, any maximum potential award under the Bonus Plan or any other bonus or incentive compensation plan in effect after the Effective Date for the Executive or for any executive of the Company and its Affiliates of comparable status and position to the Executive (such bonus amount herein referred to as the “Maximum Bonus”), and if the Goals are not achieved (and, therefore, the entire Maximum Bonus is not payable), then the Bonus Plan shall provide for a payment of a Bonus Amount not less than a portion of the Maximum Bonus reasonably related to that portion of the Goals that were achieved.  Payment of the Bonus Amount (i) shall be in cash, unless otherwise agreed by the Executive, and (ii) shall not be affected by any circumstance occurring subsequent to the end of the Employment Period, including termination of the Executive’s employment.

 

6.             Annual Compensation Adjustments.  During the Employment Period, the Board of Directors of the Company (or an appropriate committee thereof) will consider and appraise, at least annually, the contributions of the Executive to the Company, and in accordance with the Company’s practice prior to the Effective Date, due consideration shall be given, at least annually, to the upward adjustment of the Executive’s Annual Base Salary (i) commensurate with increases generally given to other executives of the Company and its Affiliates of comparable status and position to the Executive, and (ii) as the scope of the Company’s operations or the Executive’s duties expand.

 

7.             Termination During Employment Period.

 

(a)           Right to Terminate.  During the Employment Period, (i) the Company shall be entitled to terminate the Executive’s employment (A) for Cause, (B) by reason of the Executive’s disability pursuant to Section 11, or (C) for any other reason, and (ii) the Executive shall be entitled to terminate the Executive’s employment for any reason.  Any such termination shall be subject to the procedures set forth in Section 12 and shall be subject to any consequences of such termination set forth in this Agreement.  Any termination of the Executive’s employment during the Employment Period by the Employer shall be deemed a termination by the Company for purposes of this Agreement.

 

(b)           Termination for Cause or Without Good Reason.  If there is a Covered Termination for Cause or due to the Executive’s voluntarily terminating the Executive’s employment other than for Good Reason, then the Executive shall be entitled to receive only Accrued Benefits.

 

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(c)           Termination Giving Rise to a Termination Payment.  If there is a Covered Termination by the Executive for Good Reason, or by the Company other than by reason of (i) death, (ii) disability pursuant to Section 11, or (iii) Cause, then the Executive shall be entitled to receive, and the Company shall promptly pay, Accrued Benefits and, in lieu of further base salary for periods following the Termination Date, as liquidated damages and severance pay and in consideration of the covenant of the Executive set forth in Section 13(a), the Termination Payment pursuant to Section 8(a).

 

8.             Payments Upon Termination.

 

(a)           Termination Payment. The “Termination Payment” shall be an amount equal to the sum of the amounts described in paragraphs (i), (ii), and (iii) below:

 

(i)            Annual Cash Compensation multiplied by the number of years or fractional portion thereof remaining in the Employment Period determined as of the Termination Date, except that the amount under this paragraph (i) shall not be less than the amount of Annual Cash Compensation;

 

(ii)           an amount equal to the present value of pension benefits that would have accrued under the Retirement Plans (as defined below), in addition to the most favorable benefits provided for the Executive under any version of the Oshkosh Corporation Salaried and Clerical Employees Retirement Plan and any supplemental nonqualified defined benefit retirement plan or agreement of the Company providing benefits for the Executive (or any successors to such plans or agreements) in effect at any time during the 180-day period prior to the Effective Date (the “Retirement Plans”), if the Executive’s benefits under the Retirement Plans had been fully vested on the Termination Date and the Executive had continued to work from the Termination Date until the end of the Employment Period at a compensation rate equal to the Executive’s Annual Base Salary and received annual bonus or incentive compensation awards for each fiscal year of the Company (or portion thereof in the Employment Period) in an amount equal to the target amount of the Executive’s annual bonus or incentive compensation award for the fiscal year of the Company in which the Termination Date occurred or, if greater, the target amount of the Executive’s award for the immediately preceding fiscal year of the Company (or the actual amount if greater); and

 

(iii)          an amount equal to the present value of monthly payments in the amount of the Executive’s estimated unreduced Social Security benefit at the end of the Employment Period paid from the first day of the month immediately following the Employment Period through the first day of the month immediately preceding the month in which the Executive attains the age when the Executive is eligible for unreduced Social Security benefits.

 

The values described in paragraphs (ii) and (iii) above shall be determined using the interest rates and mortality table used in the Oshkosh Corporation Salaried and Clerical Employees Retirement Plan to determine lump sum payments as of the Effective Date.  The Termination Payment shall be paid to the Executive in cash equivalent on the first day of the seventh month following the month in which the Executive’s Separation from Service occurs (the “Termination Payment Date”) and shall be accompanied by an interest payment calculated at Prime, such rate to be

 

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determined on the Termination Date, compounded quarterly.  Such lump sum payment shall not be reduced by any present value or similar factor, and the Executive shall not be required to mitigate the amount of the Termination Payment by securing other employment or otherwise, nor will such Termination Payment be reduced by reason of the Executive securing other employment or for any other reason.  The Termination Payment shall be in lieu of any other severance payments to which the Executive is entitled under the severance policies and practices of the Company and/or any subsidiary of the Company.

 

(b)           Certain Additional Payments by the Company.

 

(i)            Notwithstanding any other provision of this Agreement, if any portion of the Termination Payment or any other payment under this Agreement (including any Section 409A Indemnification under Section 8(b)(v)), or under any other agreement with or plan of the Company or the Employer, including, without limitation, the Oshkosh Corporation 1990 Incentive Stock Plan, the Oshkosh Corporation 2004 Incentive Stock and Awards Plan, and any subsequently adopted equity incentive plan (the “Incentive Stock Plans”) or any stock option agreement (the “Stock Option Agreements”) between the Company and the Executive entered into pursuant to an Incentive Stock Plan (in the aggregate “Total Payments”), would constitute an “excess parachute payment,” then the Company shall pay the Executive an additional amount (the “Gross-Up Payment”) such that the net amount retained by the Executive after deduction of any excise tax imposed by Section 4999 of the Code (or any successor provision), and any interest charges or penalties in respect of the imposition of such excise tax (but not any federal, state or local income tax, or employment tax) on the Total Payments, and any federal, state or local income tax, or employment tax, and excise tax upon the payment provided for by this Section 8(b)(i) shall be equal to the Total Payments.  Any provisions of any Incentive Stock Plan or the Stock Option Agreements that provide for a reduction in payments to the Executive relating to acceleration of vesting of stock options upon a “Change of Control” (as such term is defined in the Incentive Stock Plan) if such payments would result in the payment by the Executive of any excise tax provided for in Section 280G and Section 4999 of the Code are null and void and of no further force and effect as they apply to the Executive.  For purposes of determining the amount of the Gross-Up Payment, the Executive shall be deemed to pay federal income tax and employment taxes at the highest marginal rate of federal income and employment taxation in the calendar year in which the Gross-Up Payment is to be made and state and local income taxes at the highest marginal rate of taxation in the state and locality of the Executive’s domicile for income tax purposes on the date the Gross-Up Payment is made, net of the maximum reduction in federal income taxes that may be obtained from the deduction of such state and local taxes.

 

(ii)           For purposes of this Agreement, the terms “excess parachute payment” and “parachute payments” shall have the meanings assigned to them in Section 280G of the Code (or any successor provision) and such “parachute payments” shall be valued as provided therein.  Present value for purposes of this Agreement shall be calculated in accordance with Section 1274(b)(2) of the Code (or any successor provision).  Within 40 days following a Covered Termination or notice by one party to the other of its belief that there is a payment or benefit due the Executive that will result in an “excess parachute payment” as defined in Section 280G of the Code (or any

 

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successor provision), the Executive and the Company, at the Company’s expense, shall obtain the opinion (which need not be unqualified) of nationally recognized tax counsel (the “National Tax Counsel”) selected by the Company’s independent auditors and acceptable to the Executive in the Executive’s sole discretion (which may be regular outside counsel to the Company), which opinion sets forth (A) the amount of the Base Period Income, (B) the amount and present value of Total Payments, (C) the amount and present value of any excess parachute payments, and (D) the amount of any Gross-Up Payment.  As used in this Section 8(b)(ii), the term “Base Period Income” means an amount equal to the Executive’s “annualized includible compensation for the base period” as defined in Section 280G(d)(1) of the Code (or any successor provision).  For purposes of such opinion, the value of any noncash benefits or any deferred payment or benefit shall be determined by the Company’s independent auditors in accordance with the principles of Sections 280G(d)(3) and (4) of the Code (or any successor provisions), which determination shall be evidenced in a certificate of such auditors addressed to the Company and the Executive.  The opinion of the National Tax Counsel shall be dated as of the Termination Date and addressed to the Company and the Executive and shall be binding upon the Company and the Executive.  If  the National Tax Counsel so requests in connection with the opinion required by this Section 8(b), the Executive and the Company shall obtain, at the Company’s expense, and the National Tax Counsel may rely on in providing the opinion, the advice of a firm of recognized executive compensation consultants as to the reasonableness of any item of compensation to be received by the Executive.  Notwithstanding the foregoing, the provisions of this Section 8(b), including the calculations, notices and opinions provided for herein, shall be based upon the conclusive presumption that the following are reasonable: (1) the compensation and benefits provided for in Section 5 and (2) any other compensation, including but not limited to the Accrued Benefits, earned prior to the Termination Date by the Executive pursuant to the Company’s compensation programs if such payments would have been made in the future in any event, even though the timing of such payment is triggered by the Change in Control or the Termination Date.  The Company shall pay (or cause to be paid) or distribute (or cause to be distributed) to or for the benefit of the Executive such Gross-Up Payment as is then due to Executive under this Agreement within five days after the National Tax Counsel’s opinion is received by the Company and the Executive, but in no event prior to the date the Termination Payment is initially payable to the Executive; provided, however, that if prior to such date the Executive is required to remit the excise tax under Section 4999 of the Code to the Internal Revenue Service, then upon written notice by the Executive to the Company, the Company shall promptly pay the Gross-Up Payment (but based on the Executive’s actual rate of taxation) to the Executive. In all events, the Gross-Up Payment shall be paid no later than the end of the calendar year following the calendar year in which the Executive remits the excise tax under Section 4999 of the Code to the Internal Revenue Service.

 

(iii)          In the event that, upon any audit by the Internal Revenue Service, or by a state or local taxing authority, of the Total Payments or Gross-Up Payment, a change is finally determined to be required in the amount of taxes paid by the Executive, appropriate adjustments shall be made under this Agreement such that the net amount that is payable to the Executive after taking into account the provisions of Section 4999 of the Code shall reflect the intent of the parties as expressed in this Section 8(b), in the manner determined by the National Tax Counsel.  If the Company is required to make a

 

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payment to the Executive, then such payment shall be paid following the date of the final determination by a court or the Internal Revenue Service and within 30 days after the date the Executive provides the Company a written request for reimbursement thereof (accompanied by proof of taxes paid), but in no event shall the reimbursement be made later than the end of the calendar year following the year in which the Executive remits the excise tax to the Internal Revenue Service.

 

(iv)          The Company will bear all costs associated with the National Tax Counsel and will indemnify and hold harmless the National Tax Counsel of and from any and all claims, damages, and expenses resulting from or relating to the National Tax Counsel’s determinations pursuant to this Section 8(b), except for claims, damages or expenses resulting from the gross negligence or willful misconduct of such firm.

 

(v)           The Company shall pay the Executive any Section 409A Indemnification within 30 days after the later of the date on which the Executive provides the Company with a written request for reimbursement thereof (accompanied by proof of payment of the Section 409A Tax upon which such request is based) or the date that is the first day of the seventh month following the month in which the Separation from Service occurs, but in no event later than the end of the calendar year following the year in which the Executive remits the Section 409A Tax to the Internal Revenue Service.  The Company and the Executive shall reasonably cooperate with each other in connection with any administrative or judicial proceedings concerning the existence or amount of liability for Section 409A Tax, and the Executive shall, if reasonably requested by the Company, contest any obligation to pay a Section 409A Tax.  If, as a result thereof, the Executive receives a tax refund or credit for any Section 409A Tax previously paid, the Executive shall return to the Company an amount equal to such refund or credit.  Notwithstanding the above, no Section 409A Indemnification will be made if the Executive fails to timely consent to any amendment of this Agreement reasonably proposed by the Company for the purpose of avoiding the need to pay the Section 409A Tax.

 

(c)           Additional Benefits.  If there is a Covered Termination and the Executive is entitled to Accrued Benefits and the Termination Payment, then the Executive shall be entitled to the following additional benefits:

 

(i)            Until the earlier of the end of the Employment Period or such time as the Executive has obtained new employment and is covered by benefits that in the aggregate are at least equal in value to the following benefits, the Executive shall continue to be covered, at the expense of the Company, by the most favorable life insurance, hospitalization, medical and dental coverage and other welfare benefits provided to the Executive and the Executive’s family during the 180-day period immediately preceding the Effective Date or at any time thereafter or, if more favorable to the Executive, coverage as was required hereunder with respect to the Executive immediately prior to the date Notice of Termination is given, subject to the following:

 

(A)                              If applicable, following the end of the COBRA continuation period, if such hospitalization, medical or dental coverage is provided under a health plan that is subject to Section 105(h) of the Code, benefits payable under

 

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such health plan shall comply with the requirements of Treasury regulation section 1.409A-3(i)(1)(iv)(A) and (B) and, if necessary, the Company shall amend such health plan to comply therewith.

 

(B)                                During the first six months following the Executive’s Separation from Service, the Executive shall pay the Company the cost of any life insurance coverage for the Executive that provides a benefit in excess of $50,000 under a group term life insurance policy.  After the end of such six month period, the Company shall make a cash payment to the Executive (with interest at Prime, compounded quarterly) equal to the aggregate premiums paid by the Executive for such coverage, and thereafter such coverage shall be provided at the expense of the Company for the remainder of the period.

 

If the Executive is entitled to the Termination Payment pursuant to Section 12(b), then on the first anniversary of the Change in Control, the Company shall reimburse the Executive for any COBRA premiums the Executive paid for his or her hospitalization, medical and dental coverage under COBRA from the Executive’s Termination Date through such first anniversary of the Change in Control.

 

(ii)           The Executive shall receive, until the end of the second calendar year following the calendar year in which the Separation from Service occurs, at the expense of the Company, outplacement services, on an individualized basis at a level of service commensurate with the Executive’s most senior status with the Company during the 180-day period prior to the Effective Date (or, if higher, at any time after the Effective Date), provided by a nationally recognized executive placement firm selected by the Company with the consent of the Executive, which consent will not be unreasonably withheld; provided that the cost to the Company of such services shall not exceed 15 percent of the Annual Base Salary.

 

(iii)          The Company shall bear up to $10,000 in the aggregate of fees and expenses of consultants and/or legal or accounting advisors (other than the National Tax Counsel) engaged by the Executive to advise the Executive as to matters relating to the computation of benefits due and payable under this Section 8.

 

(d)           Rabbi Trust.  Prior to or simultaneously with a Change in Control over which the Company has control or within three business days of any other Change in Control, the Company shall establish an irrevocable grantor trust (also known as a “rabbi trust”) for the benefit of the Executive and other executives of the Company who are parties to agreements with the Company similar to this Agreement for the sole purpose of (i) holding assets equal in value to the present value at any time after a Change in Control of the maximum amount of benefits to which the Executive may be entitled under Section 8(a) and Section 8(b) and to which such other executives may be entitled under similar provisions of their respective agreements and (ii) distributing such assets as their payment becomes due.  Prior to or simultaneously with a Change in Control over which the Company has control or within three business days of any other Change in Control, the Company shall fund such trust with cash or marketable securities having the value described in clause (i); provided that the Company shall not be obligated to fund such trust at such time if the funding would result in additional tax being owed under Section 409A of

 

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the Code, and in such event, the Company shall fund such trust on the first date it may fund such trust without causing any such additional tax to be owed.  The Company shall reasonably calculate the value described in clause (i) assuming that the date on which such calculation is made is the Termination Date applicable to the Executive and the corresponding date applicable to such other executives.

 

9.             Death.

 

(a)           Except as provided in Section 9(b), in the event of a Covered Termination due to the Executive’s death, the Executive’s estate, heirs and beneficiaries shall receive all the Executive’s Accrued Benefits through the Termination Date.

 

(b)           If the Executive dies after a Notice of Termination is given (i) by the Company or (ii) by the Executive for Good Reason, then the Executive’s estate, heirs and beneficiaries shall be entitled to the benefits described in Section 9(a) and, subject to the provisions of this Agreement, to such Termination Payment (and the additional benefits described in Section 8(c)) to which the Executive would have been entitled had the Executive lived, except that the Termination Payment shall be paid within 90 days following the date of the Executive’s death, without interest thereon.  For purposes of this Section 9(b), the Termination Date shall be the earlier of 30 days following the giving of the Notice of Termination, subject to extension pursuant to the definition of Termination of Employment, or one day prior to the end of the Employment Period.

 

10.           Retirement.  If, during the Employment Period, the Executive and the Company shall execute an agreement providing for the early retirement of the Executive from the Company, or the Executive shall otherwise give notice that the Executive is voluntarily choosing to retire early from the Company, then the Executive shall receive Accrued Benefits through the Termination Date; provided, that if the Executive’s employment is terminated by the Executive for Good Reason or by the Company other than by reason of death, disability or Cause and the Executive also, in connection with such termination, elects voluntary early retirement, then the Executive shall also be entitled to receive a Termination Payment pursuant to Section 8(a).

 

11.           Termination for Disability.  If, during the Employment Period, as a result of the Executive’s disability due to physical or mental illness or injury (regardless of whether such illness or injury is job-related), the Executive shall have been absent from the Executive’s duties hereunder on a full-time basis for a period of six consecutive months and, within thirty days after the Company notifies the Executive in writing that it intends to terminate the Executive’s employment (which notice shall not constitute the Notice of Termination contemplated below), the Executive shall not have returned to the performance of the Executive’s duties hereunder on a full-time basis, then the Company may terminate the Executive’s employment for purposes of this Agreement pursuant to a Notice of Termination. If the Executive’s employment is terminated on account of the Executive’s disability in accordance with this Section 11, then the Executive shall receive Accrued Benefits and shall remain eligible for all benefits provided by any long term disability programs of the Company in effect at the time the Company sends notice to the Executive of its intent to terminate pursuant to this Section.

 

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12.           Termination Notice and Procedure.

 

(a)           Any termination of the Executive’s employment during the Employment Period by the Company or the Executive (other than a termination of the Executive’s employment referenced in the second sentence of the definition of “Effective Date” in Exhibit A) shall be communicated by written Notice of Termination to the Executive, if such Notice is given by the Company, and to the Company, if such Notice is given by the Executive, all in accordance with the following procedures and those set forth in Section 23:

 

(i)            If such termination is for disability, Cause or Good Reason, then the Notice of Termination shall indicate in reasonable detail the facts and circumstances alleged to provide a basis for such termination.

 

(ii)           Any Notice of Termination by the Company shall have been approved, prior to the giving thereof to the Executive, by a resolution duly adopted by a majority of the directors of the Company (or any successor corporation) then in office, a copy of which shall accompany the Notice.

 

(iii)          If the Notice is given by the Executive for Good Reason, then the Executive may cease performing the Executive’s duties hereunder on or after the date 15 days after the delivery of Notice of Termination (unless the Notice of Termination is based upon clause (vii) of the definition of “Good Reason” in Exhibit A, in which case the Executive may cease performing his duties at the time the Executive’s employment is terminated) and shall in any event cease employment on the Termination Date, if any, arising from the delivery of such Notice.  If the Notice is given by the Company, then the Executive may cease performing the Executive’s duties hereunder on the date of receipt of the Notice of Termination, subject to the Executive’s rights hereunder.

 

(iv)          The recipient of any Notice of Termination shall personally deliver or mail in accordance with Section 23 written notice of any dispute relating to such Notice of Termination to the party giving such Notice within fifteen days after receipt thereof. After the expiration of such fifteen days, the contents of the Notice of Termination shall become final and not subject to dispute.

 

Notwithstanding the foregoing, (A) if the Executive terminates the Executive’s employment after a Change in Control without complying with this Section 12, then the Executive will be deemed to have voluntarily terminated the Executive’s employment other than for Good Reason and deemed to have delivered a written Notice of Termination to that effect to the Company as of the date of such termination and (B) if the Company or the Employer terminates the Executive’s employment after a Change in Control without complying with this Section 12, then the Company will be deemed to have terminated the Executive’s employment other than by reason of death, disability or Cause and the Company will be deemed to have delivered a written Notice of Termination to that effect to the Executive as of the date of such termination.  Under circumstances described in clause (B) above, the Executive may, but shall not be obligated to, also deliver a Notice of Termination based upon clause (vii) of the definition of “Good Reason” in Exhibit A for the purpose of subjecting such Notice to Section 12(a)(iv).

 

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(b)           If a Change in Control occurs and the Executive’s employment with the Employer terminates (whether by the Company, the Executive or otherwise) within 180 days prior to the Change in Control, then the Executive may assert that such termination is a Covered Termination by sending a written Notice of Termination to the Company at any time prior to the day 180 days following the Change in Control in accordance with the procedures set forth in this Section 12(b) and those set forth in Section 23.  If the Executive asserts that the Executive terminated the Executive’s employment for Good Reason or that the Company terminated the Executive’s employment other than for disability or Cause, then the Notice of Termination shall indicate in reasonable detail the facts and circumstances alleged to provide a basis for such assertions.  The Company shall personally deliver or mail in accordance with Section 23 written notice of any dispute relating to such Notice of Termination to the Executive within 15 days after receipt thereof.  After the expiration of such 15 days, the contents of the Notice of Termination shall become final and not subject to dispute.  If the Executive’s termination constitutes a Covered Termination under this Section 12(b) such that the Executive is entitled to receive the Termination Payment, then such Termination Payment shall be paid to the Executive in cash equivalent on the first anniversary of the Change in Control and shall be accompanied by an interest payment calculated at Prime, such rate to be determined on the date of the Change in Control, compounded quarterly, from the date of the Change in Control.

 

13.           Further Obligations of the Executive.

 

(a)           Competition.  The Executive agrees that, in the event of any Covered Termination where the Executive is entitled to (and receives) Accrued Benefits and the Termination Payment, the Executive shall not, for a period of 18 months after the Termination Date, without the prior written approval of the Company’s Board of Directors, engage in any Competitive Activity.

 

(b)           Confidentiality. During the Executive’s employment by the Employer and for a period of 18 months after the Termination Date, the Executive will keep confidential and protect all Confidential Information known to or in the possession of the Executive, will not disclose any Confidential Information to any other person and will not use any Confidential Information, except for use or disclosure of Confidential Information for the exclusive benefit of the Company as it may direct or as necessary to fulfill the Executive’s continuing duties as an employee of the Employer and except to the extent authorized in writing by the Board of Directors of the Company or required by any court or administrative agency.  This Section 13(b) shall not, however, be construed to prohibit competition by the Executive for a longer time or in a broader territory than that specified in Section 13(a).

 

(c)           Trade Secrets. In addition to the obligations that applicable law imposes on the Executive in respect of Trade Secrets, during the Executive’s employment by the Employer and thereafter in respect of information for so long as it remains a Trade Secret, the Executive will keep confidential and protect all Trade Secrets known to or in the possession of the Executive, will not disclose any Trade Secrets to any other person and will not use any Trade Secrets, except for use or disclosure of Trade Secrets for the exclusive benefit of the Company as it may direct or as necessary to fulfill the Executive’s continuing duties as an employee of the Employer and except to the extent authorized in writing by the Board of Directors of the Company or required by any court or administrative agency.

 

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(d)           Return of Property.  All memoranda, notes, records, papers, tapes, disks, programs or other documents or forms of documents and all copies thereof relating to the operations or business of the Company or any of its subsidiaries that contain Confidential Information or Trade Secrets, some of which may be prepared by the Executive, and all objects associated therewith in any way obtained by him shall be the property of the Company.  The Executive shall not, except for the use of the Company or any of its subsidiaries, use or duplicate any such documents or objects, nor remove them from facilities and premises of the Company or any subsidiary, at any time. The Executive will deliver to the Company all of the aforementioned documents and objects, if any, that may be in his possession at any time at the request of the Company during the Executive’s employment and in any event upon termination of employment.  The Executive agrees to attend an exit interview upon such termination for purposes, among others, of determining the Executive’s compliance with this Section 13(d).

 

14.           Expenses and Interest.  If, after the Effective Date, (i) a dispute arises with respect to the enforcement of the Executive’s rights under this Agreement or (ii) any legal or arbitration proceeding shall be brought to enforce or interpret any provision contained herein or to recover damages for breach hereof, in either case so long as the Executive is not acting in bad faith, then the Company shall reimburse the Executive for any reasonable attorneys’ fees and necessary costs and disbursements incurred as a result of such dispute, legal or arbitration proceeding or tax audit or proceeding (“Expenses”), and prejudgment interest on any money judgment or arbitration award obtained by the Executive calculated at Prime from the date that payments to the Executive should have been made under this Agreement.  Within ten days after the Executive’s written request therefor (but in no event later than the end of the calendar year following the calendar year in which such Expense is incurred), the Company shall reimburse the Executive, or such other person or entity as the Executive may designate in writing to the Company, the Executive’s reasonable Expenses accompanied by an interest payment at Prime, compounded quarterly.

 

15.           Payment Obligations Absolute.  The Company’s obligation during and after the Employment Period to pay the Executive the amounts and to make the benefit and other arrangements provided herein shall be absolute and unconditional and shall not be affected by any circumstances, including, without limitation, any setoff, counterclaim, recoupment, defense or other right that the Company may have against the Executive or anyone else.  Except as provided in Section 8(b) and Section 14, all amounts payable by the Company hereunder shall be paid without notice or demand.  Each and every payment made hereunder by the Company shall be final, and the Company will not seek to recover all or any part of such payment from the Executive, or from whomsoever may be entitled thereto, for any reason whatsoever.

 

16.           Successors.

 

(a)           If the Company sells, assigns or transfers all or substantially all of its business and assets to any Person or if the Company merges into or consolidates or otherwise combines (where the Company does not survive such combination) with any Person (any such event, a “Sale of Business”), then the Company shall assign all of its right, title and interest in this Agreement as of the date of such event to such Person, and the Company shall cause such Person, by written agreement in form and substance reasonably satisfactory to the Executive, to expressly assume and agree to perform from and after the date of such assignment all of the terms, conditions and provisions imposed by this Agreement upon the Company.  Failure of the

 

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Company to obtain such agreement prior to the effective date of such Sale of Business shall be a breach of this Agreement constituting “Good Reason” hereunder, except that for purposes of implementing the foregoing, the date upon which such Sale of Business becomes effective shall be deemed the Termination Date.  In case of such assignment by the Company and of assumption and agreement by such Person, as used in this Agreement, “Company” shall thereafter mean such Person that executes and delivers the agreement provided for in this Section 16 or that otherwise becomes bound by all the terms and provisions of this Agreement by operation of law, and this Agreement shall inure to the benefit of, and be enforceable by, such Person.  The Executive shall, in the Executive’s discretion, be entitled to proceed against any or all of such Persons, any Person that theretofore was such a successor to the Company (as defined in the first paragraph of this Agreement) and the Company (as so defined) in any action to enforce any rights of the Executive hereunder.  Except as provided in this Section 16(a), this Agreement shall not be assignable by the Company.  This Agreement shall not be terminated by the voluntary or involuntary dissolution of the Company.

 

(b)           This Agreement and all rights of the Executive shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, heirs and beneficiaries.  All amounts payable to the Executive under Sections 7, 8, 9, 10, 11 and 14 if the Executive had lived shall be paid, in the event of the Executive’s death, to the Executive’s estate, heirs and representatives; provided, however, that the foregoing shall not be construed to modify any terms of any benefit plan of the Company, as such terms are in effect on the Effective Date, that expressly govern benefits under such plan in the event of the Executive’s death.

 

17.           Severability.  The provisions of this Agreement shall be regarded as divisible, and if any of said provisions or any part hereof are declared invalid or unenforceable by a court of competent jurisdiction, then the validity and enforceability of the remainder of such provisions or parts hereof and the applicability thereof shall not be affected thereby.

 

18.           Amendment.  This Agreement may not be amended or modified at any time except by written instrument executed by the Company and the Executive.  However, at the request of the Company, the Executive will execute a revised form of this Agreement that reflects changes that the Company determines are appropriate to comply with regulations under Code Section 409A.

 

19.           Withholding.  The Company shall be entitled to withhold from amounts to be paid to the Executive hereunder any federal, state or local withholding or other taxes or charges which it is from time to time required to withhold; provided, that the amount so withheld shall not exceed the minimum amount required to be withheld by law.  In addition, if prior to the date of payment of the Termination Payment hereunder, the Federal Insurance Contributions Act (FICA) tax imposed under Sections 3101, 3121(a) and 3121(v)(2), where applicable, becomes due with respect to any payment or benefit to be provided hereunder, then the Company shall provide for an immediate payment of the amount needed to pay the Executive’s portion of such tax (plus an amount equal to the taxes that will be due on such amount) and the Executive’s Termination Payment shall be reduced accordingly.  The Company shall be entitled to rely on an opinion of the National Tax Counsel if any question as to the amount or requirement of any such withholding shall arise.

 

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20.           Additional Section 409A Provisions.

 

(a)           If any payment amount or the value of any benefit under this Agreement is required to be included in the Executive’s income prior to the date such amount is actually paid or the benefit provided as a result of the failure of this Agreement (or any other arrangement that is required to be aggregated with this Agreement under Code Section 409A) to comply with Code Section 409A, then the Company shall make a payment to the Executive, in a lump sum, within 90 days after the date it is finally determined that the Agreement (or such other arrangement that is required to be aggregated with this Agreement) fails to meet the requirements of Section 409A of the Code; such payment shall equal the amount required to be included in the Executive’s income as a result of such failure and shall reduce the amount of payments or benefits otherwise due hereunder (other than additional payments to be made by the Company pursuant to Section 8(b)).

 

(b)           The Company and the Executive intend the terms of this Agreement to be in compliance with Section 409A of the Code.  To the maximum extent permissible, any ambiguous terms of this Agreement shall be interpreted in a manner which avoids a violation of Section 409A of the Code.

 

(c)           The Executive acknowledges that to avoid an additional tax on payments that may be payable or benefits that may be provided under this Agreement and that constitute deferred compensation that is not exempt from Section 409A of the Code, the Executive must make a reasonable, good faith effort to collect any payment or benefit to which the Executive believes the Executive is entitled hereunder no later than 90 days after the latest date upon which the payment could have been made or benefit provided under this Agreement, and if the payment or benefit is not paid or provided, then the Executive must take further enforcement measures within 180 days after such latest date.

 

21.           Certain Rules of Construction.  No party shall be considered as being responsible for the drafting of this Agreement for the purpose of applying any rule construing ambiguities against the drafter or otherwise.  No draft of this Agreement shall be taken into account in construing this Agreement.  Any provision of this Agreement that requires an agreement in writing shall be deemed to require that the writing in question be signed by the Executive and an authorized representative of the Company.  This Agreement supersedes any prior Key Executive Employment and Severance Agreement between the Executive and the Company.

 

22.           Governing Law; Resolution of Disputes.

 

(a)           This Agreement and the rights and obligations hereunder shall be governed by and construed in accordance with the internal laws of the State of Wisconsin (excluding any choice of law rules that may direct the application of the laws of another jurisdiction) except that Section 22(b) shall be construed in accordance with the Federal Arbitration Act if arbitration is chosen by the Executive as the method of dispute resolution.

 

(b)           Any dispute arising out of this Agreement shall, at the Executive’s election, be determined by arbitration under the rules of the American Arbitration Association then in effect (but subject to any evidentiary standards set forth in this Agreement), in which case both parties shall be bound by the arbitration award, or by litigation.  Whether the dispute is to be

 

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settled by arbitration or litigation, the venue for the arbitration or litigation shall be Oshkosh, Wisconsin or, at the Executive’s election, if the Executive is no longer residing or working in the Oshkosh, Wisconsin, in the judicial district encompassing the city in which the Executive resides; provided, that, if the Executive is not then residing in the United States, then the election of the Executive with respect to such venue shall be either Oshkosh, Wisconsin or in the judicial district encompassing that city in the United States among the thirty cities having the largest population (as determined by the most recent United States Census data available at the Termination Date) that is closest to the Executive’s residence.  The parties consent to personal jurisdiction in each trial court in the selected venue having subject matter jurisdiction notwithstanding their residence or situs, and each party irrevocably consents to service of process in the manner provided hereunder for the giving of notices.

 

23.           Notice.  Notices given pursuant to this Agreement shall be in writing and, except as otherwise provided by Section 12(a)(iii), shall be deemed given when actually received by the Executive or actually received by the Company’s Secretary or any officer of the Company other than the Executive.  If mailed, such notices shall be mailed by United States registered or certified mail, return receipt requested, addressee only, postage prepaid, if to the Company, to Oshkosh Corporation, Attention: Secretary (or, if the Executive is then Secretary, to the Chief Executive Officer), 2307 Oregon Street, P.O. Box 2566, Oshkosh, WI 54903-2566, or if to the Executive, at the address set forth below the Executive’s signature to this Agreement, or to such other address as the party to be notified shall have theretofore given to the other party in writing.

 

24.           No Waiver.  The Executive’s or the Company’s failure to insist upon strict compliance with any provision of this Agreement or the failure to assert any right the Executive or the Company may have hereunder, including, without limitation, the right of the Executive to terminate employment for Good Reason, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.

 

25.           Headings.  The headings herein contained are for reference only and shall not affect the meaning or interpretation of any provision of this Agreement.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above.

 

	
 
    	
OSHKOSH   CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Attest:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
EXECUTIVE
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(SEAL)
    
	
 
    	
[NAME]
    	
 
    	
 
    
	
 
    	
Address:
    	
 
    
	
 
    	
 
    	
 
    
					

 

17

 

Exhibit A

 

CERTAIN DEFINED TERMS

 

For purposes of this Agreement,

 

(a)           409A Affiliate.  The term “409A Affiliate” means each entity that is required to be included in the Company’s controlled group of corporations within the meaning of Section 414(b) of the Code, or that is under common control with the Company within the meaning of Section 414(c) of the Code; provided, however, that the phrase “at least 50 percent” shall be used in place of the phrase “at least 80 percent” each place it appears therein or in the regulations thereunder.

 

(b)           Act.  The term “Act” means the Securities Exchange Act of 1934, as amended.

 

(c)           Accrued Benefits.  The term “Accrued Benefits” shall include the following amounts, payable as described herein:  (i) all base salary for the time period ending with the Termination Date; (ii) reimbursement for any and all monies advanced in connection with the Executive’s employment for reasonable and necessary expenses incurred by the Executive on behalf of the Company for the time period ending with the Termination Date; (iii) any and all other cash earned through the Termination Date and deferred at the election of the Executive or pursuant to any deferred compensation plan then in effect; (iv) notwithstanding any provision of any bonus or incentive compensation plan applicable to the Executive, but subject to any deferral election then in effect, a lump sum amount, in cash, equal to the sum of (A) any bonus or incentive compensation that has been allocated or awarded to the Executive for a fiscal year or other measuring period under the plan that ends prior to the Termination Date but has not yet been paid (pursuant to Section 5(f) or otherwise) and (B) a pro rata portion to the Termination Date of the aggregate value of all contingent bonus or incentive compensation awards to the Executive for all uncompleted periods under the plan calculated as to each such award as if the target or expected performance Goals with respect to such bonus or incentive compensation award had been attained (reduced, but not below zero, by amounts paid under all such contingent bonuses or incentive compensation awards upon a Change in Control to the extent such amounts relate to the same period of time); and (v) all other payments and benefits to which the Executive (or in the event of the Executive’s death, the Executive’s surviving spouse or other beneficiary) may be entitled as compensatory perquisites or under the terms of any benefit plan of the Company, including (subject to Section 8(a)(i)) severance payments under the Company’s severance policies and practices in the form most favorable to the Executive that were in effect at any time during the 180-day period prior to the Effective Date.  Payment of Accrued Benefits shall be made promptly in accordance with the Company’s prevailing practice with respect to clauses (i) and (ii) or, with respect to clauses (iii), (iv) and (v), pursuant to the terms of the benefit plan or practice establishing such benefits; provided, however, that payments pursuant to clause (iv)(B) shall be paid on the first day of the seventh month following the month in which the Separation from Service occurs, unless the Separation from Service is due to death, in which event such payment shall be made within 90 days of the date of the Executive’s death.

 

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(d)           Affiliate and Associate.  The terms “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations of the Act.

 

(e)           Annual Cash Compensation.  The term “Annual Cash Compensation” shall mean the sum of (A) the Executive’s Annual Base Salary, plus (B) the higher of (1) the highest annual bonus or incentive compensation award earned by the Executive under any cash bonus or incentive compensation plan of the Company or any of its Affiliates during the three complete fiscal years of the Company immediately preceding the Termination Date or, if more favorable to the Executive, during the three complete fiscal years of the Company immediately preceding the Effective Date; or (2) the highest average annual bonus and/or incentive compensation earned during the three complete fiscal years of the Company immediately preceding the Termination Date (or, if more favorable to the Executive, during the three complete fiscal years of the Company immediately preceding the Effective Date) under any cash bonus or incentive compensation plan of the Company or any of its Affiliates by the group of executives of the Company and its Affiliates participating under such plan during such fiscal years at a status or position comparable to that at which the Executive participated or would have participated pursuant to the Executive’s most senior position at any time during the 180 days preceding the Effective Date or thereafter until the Termination Date, plus (C) the greater of the Perquisite Amount based on perquisites received for the fiscal year of the Company in which the Termination Date occurs or the Perquisite Amount based on the perquisites the Executive received for the complete fiscal year of the Company prior to the Change in Control.

 

(f)            Cause.  The Company may terminate the Executive’s employment after the Effective Date for “Cause” only if the conditions set forth in paragraphs (i) and (ii) have been met and the Company otherwise complies with this Agreement:

 

(i)            (A)  the Executive has committed any act of fraud, embezzlement or theft in connection with the Executive’s duties as an executive or in the course of employment with the Company and/or its subsidiaries; (B) the Executive has willfully and continually failed to perform substantially the Executive’s duties with the Company or any of its Affiliates (other than any such failure resulting from incapacity due to physical or mental illness or injury, regardless of whether such illness or injury is job-related) for an appropriate period, which shall not be less than 30 days, after the Chief Executive Officer of the Company (or, if the Executive is then Chief Executive Officer, the Board) has delivered a written demand for performance to the Executive that specifically identifies the manner in which the Chief Executive Officer (or the Board, as the case may be) believes the Executive has not substantially performed the Executive’s duties; (C) the Executive has willfully engaged in illegal conduct or gross misconduct that is materially and demonstrably injurious to the Company; (D) the Executive has willfully and wrongfully disclosed any Trade Secrets or Confidential Information of the Company or any of its Affiliates; or (E) the Executive has engaged in any Competitive Activity; and in any such case the act or omission shall have been determined by the Board to have been materially harmful to the Company and its subsidiaries taken as a whole.

 

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For purposes of this provision, (1) no act or failure to act on the part of the Executive shall be considered “willful” unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive’s action or omission was in the best interests of the Company and (2) any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or upon the instructions of the Chief Executive Officer or a senior officer of the Company or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company.

 

(ii)           (A) The Company terminates the Executive’s employment by delivering a Notice of Termination to the Executive, (B) prior to the time the Company has terminated the Executive’s employment pursuant to a Notice of Termination, the Board, by the affirmative vote of not less than three-quarters (3/4) of the entire membership of the Board, has adopted a resolution finding that the Executive was guilty of conduct set forth in this definition of Cause, and specifying the particulars thereof in detail, at a meeting of the Board called and held for the purpose of considering such termination (after reasonable notice to the Executive and an opportunity for the Executive, together with the Executive’s counsel, to be heard before the Board) and (C) the Company delivers a copy of such resolution to the Executive with the Notice of Termination at the time the Executive’s employment is terminated.

 

In the event of a dispute regarding whether the Executive’s employment has been terminated for Cause, no claim by the Company that the Company has terminated the Executive’s employment for Cause in accordance with this Agreement shall be given effect unless the Company establishes by clear and convincing evidence that the Company has complied with the requirements of this Agreement to terminate the Executive’s employment for Cause.

 

(g)           Change in Control.  The term “Change in Control” shall mean the occurrence of any one of the following events:

 

(i)            any Person (other than (A) the Company or any of its subsidiaries, (B) a trustee or other fiduciary holding securities under any employee benefit plan of the Company or any of its subsidiaries, (C) an underwriter temporarily holding securities pursuant to an offering of such securities, or (D) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock in the Company (individually, an “Excluded Person” and collectively, “Excluded Persons”)) is or becomes the “Beneficial Owner” (as such term is defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its Affiliates after July 14, 2008, pursuant to express authorization by the Board that refers to this exception) representing 25 percent or more of (1) the combined voting power of the Company’s then outstanding voting securities or (2) the then outstanding shares of common stock of the Company; or

 

(ii)           the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on July 14, 2008,

 

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constituted the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on July 14, 2008, or whose appointment, election or nomination for election was previously so approved; or

 

(iii)          consummation of a merger, consolidation or share exchange of the Company with any other corporation or issuance of voting securities of the Company in connection with a merger, consolidation or share exchange of the Company (or any direct or indirect subsidiary of the Company), other than (A) a merger, consolidation or share exchange that would result in the voting securities of the Company outstanding immediately prior to such merger, consolidation or share exchange continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least 50 percent of the combined voting power of the voting securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger, consolidation or share exchange or (B) a merger, consolidation or share exchange effected to implement a recapitalization of the Company (or similar transaction) in which no Person (other than an Excluded Person) is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its Affiliates after July 14, 2008, pursuant to express authorization by the Board that refers to this exception) representing 25 percent or more of (1) the combined voting power of the Company’s then outstanding voting securities or (2) the then outstanding shares of common stock of the Company; or

 

(iv)          (A) the shareholders of the Company approve a plan of complete liquidation or dissolution of the Company or (B) the consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets (in one transaction or a series of related transactions within any period of 24 consecutive months), other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity at least 75 percent of the combined voting power of the voting securities of which are owned by Persons in substantially the same proportions as their ownership of the Company immediately prior to such sale.

 

Notwithstanding the foregoing, (x) no “Change in Control” shall be deemed to have occurred if there is consummated any transaction or series of integrated transactions immediately following which the record holders of the common stock of the Company immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity that owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions and (y) solely for purposes of Section 12(b) and the second sentence of the definition of “Effective Date” in this Exhibit A, a “Change in Control” shall be deemed to have occurred only if the applicable event also constitutes a change in control within the meaning of Section 409A of the Code.

 

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(h)           Code.  The term “Code” means the Internal Revenue Code of 1986, including any amendments thereto or successor tax codes thereof.

 

(i)            Competitive Activity.  The Executive shall engage in a “Competitive Activity” if the Executive engages in, is employed by, or in any way advises or acts for, in any capacity where Confidential Information would reasonably be considered to be useful, or has any material financial interest (excluding trade debt) in, any business that, as of the Effective Date, is engaged directly or indirectly in the Geographic Area (as defined below) in the business of designing, manufacturing or marketing fire apparatus (including, without limitation, aircraft rescue and firefighting vehicles), refuse truck bodies or vehicles, concrete mixers, snow removal vehicles, defense trucks or trailers or their related components, or any other business in which the Company or any of its subsidiaries is engaged as of the Effective Date. However, “Competitive Activity” shall not include any business if neither the Company nor any of its subsidiaries is engaged in such business as of the Termination Date and the Board of Directors of the Company has approved the exit of the Company and/or its subsidiaries from such business. Further, the ownership of minority and noncontrolling shares of any corporation whose shares are listed on a recognized stock exchange or traded in an over-the-counter market, even though such corporation may be a competitor of the Company or any subsidiary specified above, shall not be deemed as constituting a financial interest in such competitor. “Geographic Area” shall mean an area that extends to all of the United States and to any other country if the Company has directly or indirectly (i) sold product for delivery to a customer in that country during the 18 months preceding the Effective Date, (ii) actively sought to sell product for delivery to any customer in that country during such period or (iii) made plans, in which the Executive participated, to sell product for delivery to any customer in that country during such period unless the Company abandoned such plans prior to the Effective Date.

 

(j)            Confidential Information. The term “Confidential Information” shall mean ideas, information, knowledge and discoveries of the Company and/or a subsidiary of the Company, whether or not patentable, that are not generally known in the trade or industry, including without limitation defense product engineering information, marketing, sales, distribution, pricing and bid process information, product specifications, manufacturing procedures, methods, business plans, marketing plans, internal memoranda, formulae, know-how, research and development and other confidential technical or business information and data.  “Confidential Information” shall not include any information that the Executive can demonstrate is in the public domain by means other than disclosure by the Executive. “Confidential Information” shall also not include Trade Secrets.

 

(k)           Covered Termination.  Subject to Section 12(b), the term “Covered Termination” means any Termination of Employment during the Employment Period where the Termination Date, or the date Notice of Termination is delivered, is any date on or prior to the end of the Employment Period.

 

(l)            Effective Date.  The term “Effective Date” shall mean the first date on which a Change in Control occurs.  Anything in this Agreement to the contrary notwithstanding, if (i) a Change in Control occurs, (ii) the Executive’s employment with the Employer terminates (whether by the Company, the Executive or otherwise) within 180 days prior to the Change in Control and (iii) it is reasonably demonstrated by the Executive that either (A) any such termination of employment by the Employer (1) was at the request of a third party who has taken

 

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steps reasonably calculated to effect a Change in Control or (2) otherwise arose in connection with or in anticipation of a Change in Control, or (B) any such Termination of Employment by the Executive took place subsequent to the occurrence of an event described in clause (ii), (iii), (iv) or (v) of the definition of “Good Reason,” which event (1) occurred at the request of a third party who has taken steps reasonably calculated to effect a Change in Control or (2) otherwise arose in connection with or in anticipation of a Change in Control, then for all purposes of this Agreement the term “Effective Date” shall mean the day immediately prior to the date of such termination of employment.

 

(m)                               Employer.  The term “Employer” means the Company and/or any subsidiary of the Company that employed the Executive immediately prior to the Effective Date.

 

(n)                                 Good Reason.  The Executive shall have a “Good Reason” for termination of employment on or after the Effective Date if the Executive determines in good faith that any of the following events has occurred:

 

(i)                                     any breach of this Agreement by the Company, including specifically any breach by the Company of its agreements contained in Section 4, Section 5 or Section 6, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith that the Company remedies promptly after receipt of notice thereof given by the Executive;

 

(ii)                                  any reduction in the Executive’s base salary, percentage of base salary available as incentive compensation or bonus opportunity or benefits, in each case relative to those most favorable to the Executive in effect at any time during the 180-day period prior to the Effective Date or, to the extent more favorable to the Executive, those in effect after the Effective Date;

 

(iii)                               a material adverse change, without the Executive’s prior written consent, in the Executive’s working conditions or status with the Company or the Employer from such working conditions or status in effect during the 180-day period prior to the Effective Date or, to the extent more favorable to the Executive, those in effect after the Effective Date, including but not limited to (A) a material change in the nature or scope of the Executive’s titles, authority, powers, functions, duties, reporting requirements or responsibilities, or (B) a material reduction in the level of support services, staff, secretarial and other assistance, office space and accoutrements, but excluding for this purpose an isolated, insubstantial and inadvertent event not occurring in bad faith that the Company remedies promptly after receipt of notice thereof given by the Executive;

 

(iv)                              the relocation of the Executive’s principal place of employment to a location more than 50 miles from the Executive’s principal place of employment on the date 180 days prior to the Effective Date;

 

(v)                                 the Employer requires the Executive to travel on Employer business to a materially greater extent than was required during the 180-day period prior to the Effective Date;

 

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(vi)                              failure by the Company to obtain the agreement referred to in Section 16(a) as provided therein; or

 

(vii)                           the Company or the Employer terminates the Executive’s employment after a Change in Control without delivering a Notice of Termination in accordance with Section 12;

 

provided that (A) any such event occurs following the Effective Date or (B) in the case of any event described in clauses (ii), (iii), (iv) or (v) above, such event occurs on or prior to the Effective Date under circumstances described in clause (iii)(B)(1) or (iii)(B)(2) of the definition of “Effective Date.”  In the event of a dispute regarding whether the Executive terminated the Executive’s employment for “Good Reason” in accordance with this Agreement, no claim by the Company that such termination does not constitute a Covered Termination shall be given effect unless the Company establishes by clear and convincing evidence that such termination does not constitute a Covered Termination.  Any election by the Executive to terminate the Executive’s employment for Good Reason shall not be deemed a voluntary termination of employment by the Executive for purposes of any other employee benefit or other plan.

 

(o)                                 Indemnified Section 409A Violation.  The term “Indemnified Section 409A Violation” means a violation of Section 409A of the Code that occurs in connection with any payment or benefit (or any acceleration of any payment or benefit) in connection with this Agreement (including any Gross-Up Payment under Section 8(b)(i)-(iv)) or, on or after the Effective Date, the Executive’s employment or the termination thereof as a result of (i) the Company’s clerical error, (ii) the Company’s failure to administer this Agreement or any benefit plan or program in accordance with its written terms, or (iii) the fact that a provision of any benefit plan or program of the Company fails to comply with Code Section 409A, and the Executive incurs additional tax under Section 409A of the Code as a result of such violation.

 

(p)                                 Normal Retirement Date.  The term “Normal Retirement Date” means the date the Executive reaches “Normal Retirement Age” as defined in the Oshkosh Corporation Salaried and Clerical Employees Retirement Plan as in effect on the date hereof, or the corresponding date under any successor plan of the Employer as in effect on the Effective Date.

 

(q)                                 Notice of Termination.  The term “Notice of Termination” means a written notice as contemplated by Section 12.

 

(r)                                    Perquisite Amount.  The term “Perquisite Amount” means the fair market value of the perquisites provided to the Executive by the Employer (determined as of the time of the Change in Control or, if higher, immediately prior to the date the Notice of Termination is given).  For these purposes, the Perquisite Amount includes, but is not limited to the fair market value of the personal use of a Company car, tax preparation, Executive physical, country club membership, spousal travel, and health care reimbursement, and does not include the value of welfare benefits, such as medical coverage (including prescription drug coverage), dental coverage, life insurance, disability insurance and accidental death and dismemberment benefits.

 

(s)                                  Person.  The term “Person” shall have the meaning given in Section 3(a)(9) of the Act, as modified and used in Sections 13(d) and 14(d) thereof.

 

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(t)                                    Prime.  “Prime” means the rate of interest announced by U.S. Bank, National Association, Milwaukee, Wisconsin, from time to time as its prime or base lending rate.

 

(u)                                 Section 409A Indemnification.  The term “Section 409A Indemnification” means a payment to be made by the Company to the Executive, in the event of an Indemnified Section 409A Violation, such that the net amount of such payment that the Executive retains, after the Executive pays any federal, state, or local income tax or FICA tax on the amount of the Section 409A Indemnification, shall be equal to the Section 409A Tax attributable to the Indemnified Section 409A Violation.  For purposes of determining the Section 409A Indemnification amount, the Executive shall be deemed to pay federal income tax and employment taxes at the highest marginal rate of federal income and employment taxation in the calendar year in which the Section 409A Indemnification is to be paid to the Executive and state and local income taxes at the highest marginal rate of taxation in the state and locality of the Executive’s domicile for income tax purposes on the date the Section 409A Indemnification is to be paid to the Executive, net of the maximum reduction in federal income taxes that may be obtained from the deduction of such state and local taxes.

 

(v)                                 Section 409A Tax.  The term “Section 409A Tax” means the sum of (i) the 20 percent additional income tax described in Code Section 409A(a)(1)(B)(I)(ii) to the extent such additional tax is incurred by the Executive as a result of an Indemnified Section 409A Violation, (ii) the interest determined to be due under Code Section 409A(a)(1)(B)(I)(i) in connection with the same Indemnified Section 409A Violation, and (iii) any penalties incurred by the Executive in connection with the same Indemnified Section 409A Violation, provided that the Executive pays such additional income tax and related interest and penalties promptly upon being notified that such amount is due.  Section 409A Tax does not include any interest or penalties assessed by the Internal Revenue Service on the Executive that are attributable to Executive’s willful misconduct or negligence.

 

(w)                               Separation from Service.  The term “Separation from Service” means the Termination of Employment with the Company and all 409A Affiliates or, if the Executive continues to provide services following his or her Termination of Employment, such later date as is considered a separation from service from the Company and its 409A Affiliates within the meaning of Code Section 409A.  Specifically, if the Executive continues to provide services to the Company or a 409A Affiliate in a capacity other than as an employee, such shift in status is not automatically a Separation from Service.

 

(x)                                   Termination Date.  Except as otherwise provided in Section 9(b), Section 12(b) and Section 16(a), the term “Termination Date” means (i) if the Termination of Employment is by the Executive’s death, the date of death; (ii) if the Termination of Employment is by reason of voluntary early retirement, as agreed in writing by the Company and the Executive, the date of such early retirement that is set forth in such written agreement; (iii) if the Termination of Employment for purposes of this Agreement is by reason of disability pursuant to Section 11, 30 days after the Notice of Termination is given; (iv) if the Termination of Employment is by the Executive voluntarily (other than for Good Reason), the date the Notice of Termination is given; and (v) if the Termination of Employment is by the Employer (other than by reason of disability pursuant to Section 11) or by the Executive for Good Reason, 30 days after the Notice of Termination is given.

 

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(A)                              If termination is for Cause pursuant to Section 7(b) and if the Executive has cured the conduct constituting such Cause as described by the Employer in its Notice of Termination within such 30-day or shorter period, then the Executive’s employment hereunder shall continue as if the Employer had not delivered its Notice of Termination.

 

(B)                                If the Executive shall in good faith give a Notice of Termination for Good Reason and the Company notifies the Executive that a dispute exists concerning the termination within the fifteen day period following receipt thereof, then the Executive may elect to continue the Executive’s employment during such dispute and the Termination Date shall be determined under this paragraph.  If the Executive so elects and it is thereafter determined that the Executive terminated the Executive’s employment for Good Reason in accordance with this Agreement, then the Termination Date shall be the earlier of (1) the date on which the dispute is finally determined, either (x) by mutual written agreement of the parties or (y) in accordance with Section 22 or (2) the date of the Executive’s death.  If the Executive so elects and it is thereafter determined that the Executive did not terminate the Executive’s employment for Good Reason in accordance with this Agreement, then the employment of the Executive hereunder shall continue after such determination as if the Executive had not delivered the Notice of Termination asserting Good Reason and there shall be no Termination Date arising out of such Notice.  In either case, this Agreement continues, until the Termination Date, if any, as if the Executive had not delivered the Notice of Termination except that, if it is finally determined that the Executive terminated the Executive’s employment for Good Reason in accordance with this Agreement, then the Executive shall in no case be denied the benefits described in Section 8 (including a Termination Payment) based on events occurring after the Executive delivered the Notice of Termination.

 

(C)                                Except as provided in paragraph (A) above, if the party receiving the Notice of Termination notifies the other party that a dispute exists concerning the termination within the fifteen day period following receipt thereof and it is finally determined that termination of the Executive’s employment for the reason asserted in such Notice of Termination was not in accordance with this Agreement, then (1) if such Notice was delivered by the Executive, then the Executive will be deemed to have voluntarily terminated the Executive’s employment other than for Good Reason by means of such Notice and (2) if delivered by the Company, then the Company will be deemed to have terminated the Executive’s employment other than by reason of death, disability or Cause by means of such Notice.

 

(y)                                 Termination of Employment.  The term “Termination of Employment” means a termination of employment of the Executive (A) when the Company and the Executive reasonably anticipate that no further services will be performed by the Executive for the

 

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Company and its 409A Affiliates or that the level of bona fide services the Executive will perform as an employee of the Company and its 409A Affiliates will permanently decrease to no more than 20 percent of the average level of bona fide services performed by the Executive (whether as an employee or independent contractor) for the Company and its 409A Affiliates over the immediately preceding 36-month period (or such lesser period of services) or (B) when the Company determines in good faith based on the facts and circumstances in accordance with Code Section 409A, upon a decrease in services by the Executive that is to more than 20 percent of such average level of bona fide services but less than 50 percent, that a Termination of Employment has occurred.  The Executive’s termination of employment shall be presumed not to occur where the level of bona fide services performed by the Executive for the Company and its 409A Affiliates continues at a level that is 50 percent or more of the average level of bona fide services performed by the Executive (whether as an employee or independent contractor) for the Company and its 409A Affiliates over the immediately preceding 36-month period (or such lesser period of service).  No presumption applies to a decrease in services that is to more than 20 percent of such average level of bona fide services but less than 50 percent, and in such event, whether the Executive has had a Termination of Employment will be determined in good faith by the Company based on the facts and circumstances in accordance with Code Section 409A.  Notwithstanding the foregoing, if the Executive takes a leave of absence for purposes of military leave, sick leave or other bona fide leave of absence, then the Executive will not be deemed to have incurred a Separation from Service for the first six months of the leave of absence or, if longer, for so long as the Executive’s right to reemployment is provided either by statute or by contract, including this Agreement; provided that if the leave of absence is due to a medically determinable physical or mental impairment that can be expected to result in death or last for a continuous period of not less than six months, where such impairment causes the Executive to be unable to perform the duties of his or her position of employment or any substantially similar position of employment, the leave may be extended for up to 29 months without causing a Termination of Employment.

 

(z)                                   Trade Secrets. “Trade Secrets” means “trade secrets” as defined in Wis. Stats. Section 134.90(1)(c), as such definition may be amended from time to time, of the Company and/or a subsidiary of the Company, as well as other information as to which the Company and/or a subsidiary of the Company has an obligation of confidentiality or secrecy to any third party.

 

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