Document:

Exhibit 10.11

 

TE Connectivity Ltd.
 2007 Stock and Incentive Plan

 

TERMS AND CONDITIONS

OF

PERFORMANCE STOCK UNIT AWARD

 

PERFORMANCE STOCK UNIT AWARD made as of             .

 

1.             Grant of Award.  TE Connectivity Ltd. (the “Company”) has granted you       TE Connectivity Performance Stock Units, subject to the provisions of this Award Agreement.  The Company will hold the Performance Stock Units in a bookkeeping account on your behalf until they become payable or are forfeited or cancelled.

 

2.             Payment Amount.  Each Performance Stock Unit represents one (1) Share of Common Stock.

 

3.             Form of Payment.  Vested Performance Stock Units will be redeemed solely for Shares, subject to Section 15.

 

4.             Performance Stock Units/Dividends.  Performance Stock Units are a promise to deliver Common Stock upon a specified delivery date, provided that certain vesting and performance requirements are met, as described in this Agreement and Appendix A.  For each Performance Stock Unit that is granted to you under this Award (based on the target number of units awarded), you will be credited with a Dividend Equivalent Unit (DEU) for any cash or stock dividends distributed by the Company on Company Common Stock.  DEUs will be calculated at the same dividend rate paid to other holders of Common Stock.  The number of DEUs that will vest and be delivered to you in the form of Shares will depend on the actual number of underlying Performance Stock Units that are earned and vested, as more fully described in this Agreement and Appendix A. Thus, the number of Shares delivered in conjunction with the DEUs credited to your Performance Stock Unit award will be adjusted (upward or downward) to reflect the actual number of Performance Stock Units that are earned and vested.

 

5.             Time of Delivery.  Except as otherwise provided for in this Award Agreement, vested Performance Stock Units and Dividend Equivalent Units shall be delivered to participants in the form of Shares as soon as is administratively feasible following the specified “Delivery Date”, as described in paragraph 6 below.

 

6.             Normal Vesting.  Subject to the attainment of the performance metrics described in Appendix A, your Performance Stock Unit Award will vest on the later of (a) the third anniversary of the Grant Date or (b) the “Certification Date” for the performance results of the “Performance Cycle”, as more fully described in Appendix A. Except as provided in paragraphs 8, 9, 10 and 11 below, the Delivery Date of the Shares will be after the November 30th following

 

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the end of the Performance Cycle (as defined in Appendix A), but in any case, no earlier than the Certification Date following the close of the Performance Cycle and no later than 90 days after such November 30th.  No credit will be given for periods following Termination of Employment.

 

7.             Termination of Employment.  Any Performance Stock Units and DEUs that have not vested as of your Termination of Employment, other than as set forth in paragraphs 8, 9, 10 and 11, will immediately be forfeited, and your rights with respect to those Performance Stock Units and DEUs will end.

 

8.             Death or Disability.  If you die or become Disabled, your Performance Stock Unit Award will vest in full at 100% of the original target shares granted to you.  Such vested Performance Stock Units will be delivered to you as soon as administratively practicable following the date of Death or Disability event, but in no case after the later of the end of the calendar year in which the death or Disability occurs or two and a half months following the death or Disability date.  If you are deceased, the payment of your vested Performance Stock Units, consistent with the delivery timing described in the preceding sentence, will be made to your estate after the Committee or its designee has determined that the payee is the duly appointed executor or administrator of your estate.

 

9.             Retirement.  If your Termination of employment occurs after you have attained age 55 and have completed at least five years of service, and you have performed satisfactorily, as determined in the sole discretion of your manager, and are not terminated for Cause, (a) your Performance Stock Unit Award will vest pro rata (standard rounding to the nearest Unit, in full-month increments) based on (i) the number of whole months that you have completed from the first day of the Performance Cycle through your Termination of Employment divided by thirty-six (36), times (ii) the number of Performance Stock Units that are actually earned for the Performance Cycle in accordance with the terms of Appendix A; and (b) any remaining Performance Stock Units will be immediately forfeited.  Such vested Performance Stock Units will be delivered to you after the November 30th following the third anniversary of the grant date, but in any case, no earlier than the Certification Date for the performance results following the close of the fiscal year in which your Termination of Employment occurs and no later than 90 days after such November 30th.  Notwithstanding the terms of this paragraph 9, a Termination of Employment within 12 months of the Grant Date will result in the immediate forfeiture of your Performance Stock Unit Award, except as otherwise provided for in paragraphs 8, 10, or 11.

 

10.          Change in Control.  Except as may be otherwise provided by the Committee, if your employment is terminated following a Change in Control, as defined in the Plan, your Performance Stock Unit Award will become vested as described below, provided that:

 

(a) your employment is terminated by the Company or a Subsidiary for any reason other than Cause, Disability or Death in the twelve-month period following the Change in Control; or

 

(b) you terminate your employment with the Company or your employing Subsidiary within the twelve-month period following the Change in Control as a result of, and within 180 days following, the occurrence of one of the following events:

 

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i.      the Company or your employing Subsidiary (1) assigns or causes to be assigned to you duties inconsistent in any material respect with your position as in effect immediately prior to the Change in Control; (2) makes or causes to be made any material adverse change in your position, authority, duties or responsibilities; or (3) takes or causes to be taken any other action which, in your reasonable judgment, would cause you to violate your ethical or professional obligations (after written notice of such judgment has been provided by you to the Company and the Company has been given a 15-day period within which to cure such action), or which results in a significant diminution in such position, authority, duties or responsibilities; or

 

ii.   the Company or your employing subsidiary, without your consent, (1) requires you to relocate to a principal place of employment more than fifty (50) miles from your existing place of employment; or (2) reduces your base salary, annual bonus, or retirement, welfare, stock incentive, perquisite (if any) and other benefits taken as a whole.

 

If you meet the requirements described in the previous sentence, your Performance Stock Unit Award will vest in full at 100% of your original target shares (or any other equity or compensation award granted in replacement of your Performance Stock Unit Award as a result of the Change in Control, as applicable). Such vested Performance Stock Units (or other equity or compensation award granted in replacement of your Performance Stock Unit Award as a result of the Change in Control, as applicable) will be delivered on the later of (1) as soon as administratively practicable after your Termination of Employment following the Change in Control event or (2) the date that is six months following your Termination of Employment.

 

11.          Termination of Employment with a TE Affiliate as a Result of a Divestiture or Outsourcing.  If the business in which you are employed is being separated from the Company as a result of a Disposition of Assets, Disposition of a Subsidiary or an Outsourcing Agreement, and, as of the closing date of the applicable transaction you are designated in the transaction documents (either individually or by classification) as a Business Employee (or similar designation) who will be terminating employment with the Company either because (i) you will remain with the separated business after the transaction or be transferred to the employment of the buyer or Outsourcing Agent as a result of the transaction, or (ii) you will not be offered continued employment by the Company, buyer or Outsourcing Agent after the close of the transaction, then (a) your Performance Stock Unit Award will vest pro rata (standard rounding to the nearest Unit, in full-month increments) on the closing date based on (i) the number of whole months from the first day of the performance cycle through the closing date of the applicable transaction divided by thirty six (36), times (ii) the target number of  Performance Stock Units that were originally granted and (b) any remaining Performance Stock Units will be forfeited.  In the case of a Divestiture through a Disposition of Assets or an Outsourcing Agreement for participants who have not reached Retirement eligibility (as described in paragraph 9. above) as of the close of the Disposition of Assets or the Outsourcing Agreement date, such vested Performance Stock Units will be delivered as soon as administratively practicable following the close of the Divestiture.  In no event will such vested shares be delivered after the later of the end of the calendar year in which the Divestiture takes place or the date that is two and a half months after the Divestiture closing date.  In the case of a Divestiture

 

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through a Disposition of Assets or an Outsourcing Agreement for participants who have reached Retirement eligibility (as described in paragraph 9. above) as of the close Disposition of Assets or the Outsourcing Agreement date, such vested Performance Stock Units will be delivered after the third November 30th following the grant date, but in any case, no earlier than the Certification Date for the performance results following the close of the fiscal year in which your Termination occurs and no later than 90 days after such November 30th.  In the case of a Divestiture through a Disposition of a Subsidiary, the vested Performance Stock Units will be delivered as soon as administratively practicable following the close of the Divestiture. In no event will such vested shares be delivered after the later of the end of the calendar year in which the Divestiture takes place or the date that is two and a half months after the Divestiture closing date.  If you become entitled to the pro-rated vesting described in this Section 11, you will not be entitled to any further vesting in your Performance Stock Unit Award unless you are transferred to employment with the Company in a position outside of the business that is being separated from the Company (with the intent of continued employment with the Company outside of the separated business) after the closing date of the applicable transaction, but prior  to your termination of employment as a result of the Disposition of Assets, Disposition of a Subsidiary or an Outsourcing Agreement.

 

Notwithstanding the foregoing, you will not be eligible for the pro-rata vesting if, (i) your Termination of Employment occurs on or prior to the closing date of such Disposition of Assets or Disposition of a Subsidiary, as applicable, or on such later date as is specifically provided in the applicable transaction agreement or related agreements, or on the effective date of such Outsourcing Agreement applicable to you (the “Applicable Employment Date”), and (ii) you are offered Comparable Employment with the buyer, successor company or outsourcing agent, as applicable, but do not commence such employment on the Applicable Employment Date.

 

For the purposes of this Section 11, (a) “Comparable Employment” shall mean employment at a base salary rate and bonus target that is at least equal to the base salary rate and bonus target in effect immediately prior to your termination of employment and at a location that is no more than 50 miles from your job location in effect immediately prior to your termination of employment; (b) “Disposition of Assets” shall mean the disposition by the Company or a Subsidiary of all or a portion of the assets used by the Company or Subsidiary in a trade or business to an unrelated corporation or entity;  (c) “Disposition of a Subsidiary” shall mean the disposition by the Company or a Subsidiary of its interest in a subsidiary or controlled entity to an unrelated individual or entity, provided that such subsidiary or entity ceases to be an affiliated company as a result of such disposition; and (d) “Outsourcing Agreement” shall mean a written agreement between the Company or a Subsidiary and an unrelated third party (“Outsourcing Agent”) pursuant to which the Company transfers the performance of services previously performed by employees of the Company or Subsidiary to the Outsourcing Agent, and the Outsourcing Agreement includes an obligation of the Outsourcing Agent to offer employment to any employee whose employment is being terminated as a result of or in connection with said Outsourcing Agreement.

 

12.          Responsibility for Taxes.  Regardless of any action the Company or your employer (the “Employer”) takes with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related items related to your participation in the Plan and legally applicable to you (“Tax-Related Items”), by accepting the Award, you acknowledge that

 

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the ultimate liability for all Tax-Related Items is and remains your responsibility and may exceed the amount actually withheld by the Company or the Employer.  You further acknowledge that the Company and/or the Employer do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Performance Stock Units to reduce or eliminate your liability for Tax-Related Items or achieve any particular tax result.  Further, if you have become subject to tax in more than one jurisdiction between the date of grant and the date of any relevant taxable event, you acknowledge that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

 

Prior to any relevant taxable or tax withholding event, as applicable, you will pay or make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all Tax-Related Items.  In this regard, you authorize the Company and/or the Employer, or their respective agents, at their discretion, to satisfy the obligations with regard to all Tax-Related Items by one or a combination of the following:

 

(1)                                 withholding from your wages or other cash compensation paid to you by the Company and/or the Employer; or

 

(2)                                 withholding from proceeds of the sale of Shares acquired upon vesting of the Performance Stock Units either through a voluntary sale or through a mandatory sale arranged by the Company (on your behalf pursuant to this authorization); or

 

(3)                                 withholding in Shares to be issued upon vesting of the Performance Stock Units.

 

To avoid negative accounting treatment, the Company may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding amounts or other applicable withholding rates.  If the obligation for Tax-Related Items is satisfied by withholding in Shares, for tax purposes, you are deemed to have been issued the full number of Shares subject to the vested Performance Stock Units, notwithstanding that a number of the Shares are held back solely for the purpose of paying the Tax-Related Items due as a result of any aspect of your participation in the Plan.

 

Finally, you shall pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of your participation in the Plan that cannot be satisfied by the means previously described.  The Company may refuse to issue or deliver the Shares or the proceeds of the sale of Shares if you fail to comply with your obligations in connection with the Tax-Related Items.

 

For tax withholding purposes, the value of vested Shares will be based on the fair market value defined as the average of the high and low of the stock price reported on the date of delivery or such other reasonable and permissible date as determined by the Plan Administrator.

 

13.          Transfer of Award.  You may not transfer any interest in Performance Stock Units except (a) by will or the laws of descent and distribution or (b) under rules established by the Company, to your spouse or former spouse in accordance with the terms of a domestic

 

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relations order or settlement agreement associated with the dissolution of your marriage to that spouse or former spouse.  Any other attempt to dispose of your interest in Performance Stock Units will be null and void.

 

14.          Covenant; Forfeiture of Award; Agreement to Reimburse Company.

 

(a)           If you have been terminated for Cause, any unvested Performance Stock Units shall be immediately forfeited and, in addition, you hereby agree and promise immediately to deliver to the Company the number of Shares (or, in the discretion of the Committee, the cash value of said shares) you received for Performance Stock Units that vested during the period six (6) months prior to your Termination of Employment through the date of Termination of Employment.

 

(b)           If, after your Termination of Employment, the Committee determines in its sole discretion that while you were a Company or Subsidiary employee you engaged in activity that would have constituted grounds for the Company or Subsidiary to terminate your employment for Cause, then you hereby agree and promise immediately to deliver to the Company the number of Shares (or, in the discretion of the Committee, the cash value of said shares) you received for Performance Stock Units that vested during the period six (6) months prior to your Termination of Employment through the date of Termination of Employment.

 

(c)           If the Committee determines, in its sole discretion, that at any time after your Termination of Employment and prior to the second anniversary of your Termination of Employment you (i) disclosed business confidential or proprietary information related to any business of the Company or Subsidiary or (ii) have entered into an employment or consultation arrangement (including any arrangement for employment or service as an agent, partner, stockholder, consultant, officer or director) with any entity or person engaged in a business and (A) such employment or consultation arrangement would likely (in the Committee’s sole discretion) result in the disclosure of business confidential or proprietary information related to any business of the Company or a Subsidiary to a business that is competitive with any Company or Subsidiary business as to which you have had access to business strategic or confidential information, and  (B) the Committee has not approved the arrangement in writing, then you hereby agree and promise immediately to deliver to the Company the number of Shares (or, in the discretion of the Committee, the cash value of said shares) you received for Performance Stock Units that vested during the period six (6) months prior to your Termination of Employment through the date of Termination of Employment.

 

(d)           The Committee shall be entitled to require that you repay all or part of any amount received (whether in cash or stock) pursuant to the terms of this Award (i) to the extent it deems it necessary or appropriate to comply with any future rules of the Securities and Exchange Commission, New York Stock Exchange or any other governmental agency, as they may be amended from time to time, or (ii) to the extent otherwise deemed appropriate by the Committee to recover any overpayment or mistaken payment that was based on deficient financial information, and you hereby agree and promise to promptly remit to the Company any such amount.

 

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15.          Adjustments.  In the event of any stock split, reverse stock split, dividend or other distribution (whether in the form of cash, Shares, other securities or other property), extraordinary cash dividend, recapitalization, merger, consolidation, split-up, spin-off, reorganization, combination, repurchase or exchange of Shares or other securities, the issuance of warrants or other rights to purchase Shares or other securities, or other similar corporate transaction or event, the Committee shall adjust the number and kind of Shares covered by the Performance Stock Units and other relevant provisions to the extent necessary to prevent dilution or enlargement of the benefits or potential benefits intended to be provided by the Performance Stock Units.

 

16.          Restrictions on Payment of Shares.  Payment of Shares for your Performance Stock Units is subject to the conditions that, to the extent required at the time of delivery, (a) the Shares underlying the Performance Stock Units will be duly listed, upon official notice of redemption, upon the NYSE, and (b) a Registration Statement under the Securities Act of 1933 with respect to the Shares will be effective.  The Company will not be required to deliver any Common Stock until all applicable federal and state laws and regulations have been complied with and all legal matters in connection with the issuance and delivery of the Shares have been approved by counsel of the Company.

 

17.          Disposition of Securities.  By accepting the Award, you acknowledge that you have read and understand the Company’s insider trading policy, and are aware of and understand your obligations under federal securities laws in respect of trading in the Company’s securities.  The Company will have the right to recover, or receive reimbursement for, any compensation or profit realized on the disposition of Shares received for Performance Stock Units to the extent that the Company has a right of recovery or reimbursement under applicable securities laws.

 

18.          Plan Terms Govern.  The redemption of Performance Stock Units, the disposition of any Shares received for Performance Stock Units, and the treatment of any gain on the disposition of these Shares are subject to the terms of the Plan and any rules that the Committee may prescribe.  The Plan document, as may be amended from time to time, is incorporated into this Award Agreement.  Capitalized terms used in this Award Agreement have the meaning set forth in the Plan, unless otherwise stated in this Award Agreement.  In the event of any conflict between the terms of the Plan and the terms of this Award Agreement, the Plan will control.  By accepting the Award, you acknowledge receipt of the Plan and the prospectus, as in effect on the date of this Award Agreement.

 

19.          Data Privacy.  By accepting the Award, you hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this Award Agreement and any other grant materials by and among, as applicable, your Employer, the Company and its Subsidiaries (or former Subsidiaries as are deemed necessary) for the exclusive purpose of implementing, administering and managing your participation in the Plan.

 

You understand that the Company and the Employer may hold certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any Shares or directorships held in the Company, details of all Performance Stock Units

 

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or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in your favor, for the exclusive purpose of implementing, administering and managing the Plan (“Data”).

 

You understand that Data may be transferred to any third parties assisting the Company with the implementation, administration and management of the Plan.  You understand that these recipients of the Data may be located in the United States or elsewhere, and that the recipients’ country (e.g., the United States) may have different data privacy laws and protections than your country.  You understand that you may request a list with the names and addresses of any potential recipients of the Data by contacting your local Human Resources Representative.  You authorize the Company and the recipients assisting the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing your participation in the Plan.  You understand that Data will be held only as long as is necessary to implement, administer and manage your participation in the Plan.  You understand that you may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing your local Human Resources Representative.  You understand, however, that refusing or withdrawing your consent may affect your ability to participate in the Plan.  For more information on the consequences of your refusal to consent or withdrawal of consent, you understand that you may contact your local Human Resources Representative.

 

20.          Nature of Grant.  By accepting the Award, you acknowledge that:

 

(a)           the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time;

 

(b)           the grant of the Performance Stock Units is voluntary and occasional and does not create any contractual or other right to receive future grants of Performance Stock Units, or benefits in lieu of Performance Stock Units, even if Performance Stock Units have been granted repeatedly in the past;

 

(c)           all decisions with respect to future Performance Stock Unit grants, if any, will be at the sole discretion of the Company;

 

(d)           your participation in the Plan shall not create a right to further employment with the Employer and shall not interfere with the ability of the Employer to terminate your employment relationship at any time;

 

(e)           you are voluntarily participating in the Plan;

 

(f)            the Performance Stock Units and the Shares subject to the Performance Stock Units are extraordinary items that do not constitute part of your ordinary ongoing compensation;

 

(g)           the Performance Stock Units and the Shares subject to the Performance Stock Units are not intended to replace any pension rights or compensation;

 

(h)           the Performance Stock Units and the Shares subject to the Performance Stock Units are not part of normal or expected compensation or salary for any purposes,

 

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including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end of service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Company, the Employer or any Subsidiary of  the Company;

 

(i)            the Performance Stock Unit grant and your participation in the Plan will not be interpreted to form an employment contract or relationship with the Company or any Subsidiary of the Company;

 

(j)            the future value of the underlying Shares is unknown and cannot be predicted with certainty;

 

(k)           in consideration of the grant of the Performance Stock Units, no claim or entitlement to compensation or damages shall arise from forfeiture of the Performance Stock Units resulting from termination of your employment with the Company or the Employer (for any reason whatsoever and whether or not in breach of local labor laws) and you irrevocably release the Company and the Employer from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, you shall be deemed irrevocably to have waived your entitlement to pursue such claim;

 

(l)           the Performance Stock Units and the benefits under the Plan, if any, will not automatically transfer to another company in the case of a merger, take-over or transfer of liability;

 

(m)          payment of your Performance Stock Units is not secured by a trust, insurance contract or other funding medium, and you do not have any interest in any fund or specific asset of the Company by reason of this Award or the account established on your behalf; and

 

(n)           you have no rights as a stockholder of the Company pursuant to the Performance Stock Units until Shares are actually delivered to you.

 

21.          No Advice Regarding Grant.  The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding your participation in the Plan or your acquisition or sale of the underlying Shares.  You are hereby advised to consult with your own personal tax, legal and financial advisors regarding your participation in the Plan before taking any action related to the Plan.

 

22.          Incorporation of Other Agreements.  This Award Agreement and the Plan constitute the entire understanding between you and the Company regarding the Performance Stock Units.  This Award Agreement supersedes any prior agreements, commitments or negotiations concerning the Performance Stock Units.

 

23.          Severability.  The invalidity or unenforceability of any provision of this Award  will not affect the validity or enforceability of the other provisions of the Agreement, which will remain in full force and effect.  Moreover, if any provision is found to be excessively broad in duration, scope or covered activity, the provision will be construed so as to be enforceable to the maximum extent compatible with applicable law.

 

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24.          Delayed Payment.  Notwithstanding anything in this Award Agreement to the contrary, if the Employee (i) is subject to US Federal income tax on any part of the payment of the Performance Stock Units, (ii) is a “specified employee” within the meaning of section 409A(a)(2)(B) of the Internal Revenue Code and the regulations thereunder, and (iii) is or will become eligible for Retirement prior to the Normal Vesting of some or all of the Performance Stock Units, then any payment of Performance Stock Units that is made on account of his separation from service within the meaning of section 409A(a)(2)(A)(i) of the Internal Revenue Code and the regulations thereunder shall be delayed until six months following such separation from service.

 

25.          Language.  If you have received this Award Agreement or any other document related to the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.

 

26.          Electronic Delivery.  The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means.  You hereby consent to receive such documents by electronic delivery and agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.

 

27.          Imposition of Other Requirements.  The Company reserves the right to impose other requirements on your participation in the Plan, including but not limited to such requirements as described in Appendix A, if applicable, on the Performance Stock Units and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable in order to comply with local law or facilitate the administration of the Plan, and to require you to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

 

By accepting this Award, you agree to the following:

 

(i)            you have carefully read, fully understand and agree to all of the terms and conditions described in this Award Agreement and the Plan; and

 

(ii)           you understand and agree that this Award Agreement and the Plan constitute the entire understanding between you and the Company regarding the Award, and that any prior agreements, commitments or negotiations concerning the Performance Stock Units are replaced and superseded.

 

	
 
    	
Thomas J. Lynch
    
	
 
    	
Chief Executive Officer,
    
	
 
    	
TE Connectivity
    

 

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APPENDIX A

 

PERFORMANCE METRICS APPLICABLE TO

FISCAL YEAR 2016 PERFORMANCE STOCK UNIT AWARDS

 

1.                                      Purpose — This document is Appendix A to the “Terms and Conditions of Performance Stock Unit Award” document (your “PSU award agreement”) which reflects the terms and conditions of your Fiscal Year 2016 performance stock unit (“PSU”) award granted on November 9, 2015.  The purpose of this Appendix is to describe the terms under which you will earn PSUs granted to you under your Fiscal Year 2016 PSU award through the applicable three-year performance cycle.  (Note that the earned PSUs will not be delivered to you unless you meet the applicable vesting requirements described in your PSU award agreement.)  For purposes of your Fiscal Year 2016 PSU award, the “Performance Cycle” is the three (3) fiscal-year period beginning with the first day of fiscal year 2016 and ending on the last day of fiscal year 2018.

 

2.                                      Vesting — The vesting terms applicable to your Fiscal Year 2016 PSU award are described in your PSU award agreement.  This Appendix describes how many PSUs you will earn over the three (3) fiscal years of the Performance Cycle under the Company Performance Metric, which will vest and be delivered to you in the form of Shares if you meet the applicable vesting requirements described in your PSU award agreement.

 

3.                                      Performance Metric — The performance metric which will be measured to determine how many PSUs you will earn over the three (3) fiscal years of the Performance Cycle is relative earnings per share (“EPS”) growth.

 

·                  The performance metric is the average three-year growth rate of “adjusted EPS”, which is adjusted diluted EPS from continuing operations, evaluated over three (3) years. Bloomberg News refers to this metric as “Diluted EPS before Abnormal Items”.  In determining the Company’s relative performance, the Company will use the Diluted EPS before Abnormal Items data published in Bloomberg for the companies included in the benchmark described below.

 

The Company’s relative EPS performance will be calculated by ranking its three-year EPS growth versus the three-year EPS growth of all eligible S&P 500 Non-Financial companies.  The calculation of the Company’s relative EPS growth performance will be conducted under written procedures adopted by the Management Development and Compensation Committee (the “MDCC”) of the Board of Directors at the time the

 

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Fiscal Year 2016 PSU awards were granted.  (The approved calculation procedures will be made available to you upon written request sent to Executive Compensation, Attention Director of Executive Compensation, 1050 Westlakes Drive, Berwyn, PA  USA 19312.)

 

4.                                      Determination of PSUs Earned — The number of PSUs earned over the three (3) fiscal year Performance Cycle will be determined based on the Company’s relative EPS growth performance for the cycle.  The performance metric, as determined at the end of the three (3) fiscal year performance cycle, will be applied to the target amount of PSUs granted to you under the award.  Depending on the Company’s relative EPS growth performance for the performance cycle, you can earn from 0% to 200% of the PSUs granted to you, based on the following scale:

 

	
 
    	
 
    	
Threshold
    	
 
    	
Target
    	
 
    	
Maximum
    
	
Performance Zone  
   (relative EPS growth % ranking)
    	
 
    	
25th
    	
 
    	
50th
    	
 
    	
75th
    
	
PSUs Earned  
   (% of PSUs eligible to be earned)
    	
 
    	
50%
    	
 
    	
100%
    	
 
    	
200%
    

 

Performance below the 25th percentile results in zero PSUs earned for the fiscal year.  Performance between the 25th and 75th percentile will be interpolated.  Performance above the 75th percentile is capped at 200%.

 

5.                                      Certification Date — The date on which the MDCC of the Board of Directors certifies performance results for each fiscal year in the Performance Cycle is the Certification Date for purposes of the PSU award agreement.

 

6.                                      PSUs Earned— Once the MDCC determines the number of PSUs that you have earned within the Performance Cycle under the Company Performance Metric, that number of units will be credited to your PSU account.

 

7.                                      MDCC Discretion — All decisions regarding the interpretation of your PSU award and the calculation of PSUs earned under your PSU award, including without limitation, any and all matters relating to the calculation of the Company’s relative EPS growth performance, will be made in the sole and absolute discretion of the MDCC.  All determinations of the MDCC will be final, binding and conclusive on all parties.

 

8.                                      Governing Document — This Appendix A is part of and incorporated into the terms of your PSU award agreement and should be read in context of the award agreement.

 

12Exhibit 10.17

 

INDEMNIFICATION AGREEMENT

 

THIS AGREEMENT is entered into, effective as of [•], by and between TE Connectivity Ltd.., a Swiss corporation (the “Company”), and                (“Indemnitee”).

 

WHEREAS, it is essential to the Company to retain and attract as directors and officers the most capable persons available;

 

WHEREAS, Indemnitee is a director and/or officer of the Company;

 

WHEREAS, both the Company and Indemnitee recognize the increased risk of litigation and other claims currently being asserted against directors and officers of corporations;

 

WHEREAS, the Articles of Association of the Company require the Company to indemnify its directors and officers to the fullest extent permitted by law, and permit the Company to advance expenses relating to the defense of indemnification matters, and the Indemnitee has been serving and continues to serve as a director and/or officer of the Company in part in reliance on the Company’s Articles of Association;

 

WHEREAS, the recognition of Indemnitee’s need for (i) substantial protection against personal liability based on Indemnitee’s reliance upon aforesaid Articles of Association, (ii) specific contractual assurance that the protection promised by the Articles of Association will be available to Indemnitee (regardless of, among other things, any amendment to or revocation of the Articles of Association or any change in the composition of the Company’s Board of Directors or acquisition transaction relating to the Company), the Company wishes to provide in this Agreement for the indemnification of and the advancing of expenses to Indemnitee to the fullest extent (whether partial or complete) permitted under law and as set forth in this Agreement, and, to the extent insurance is maintained, to provide for the continued coverage of Indemnitee under the Company’s directors’ and officers’ liability insurance policies;

 

NOW, THEREFORE, in consideration of the above premises and of Indemnitee continuing to serve the Company directly or, at its request, with another Enterprise, and intending to be legally bound hereby, the parties agree as follows:

 

1.             Certain Definitions:

 

(a)           Affiliate:  any corporation or other person or entity that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the person specified.

 

(b)           Board:  the Board of Directors of the Company.

 

(c)           Change in Control:  shall be deemed to have occurred if:

 

 

(i)            any “person,” as such term is used in Sections 3(a)(9) and 13(d) of the Exchange Act, becomes a “beneficial owner,” as such term is used in Rule 13d-3 promulgated under the Exchange Act, of 50% or more of the Voting Stock (as defined below) of the Company;

 

(ii)           the majority of the Board consists of individuals other than Incumbent Directors, which term means the members of the Board on the effective date of the separation of the Company from Tyco International Ltd., provided that any person becoming a director subsequent to such date whose election or nomination for election was supported by three-quarters of the directors who then comprised the Incumbent Directors shall be considered to be an Incumbent Director;

 

(iii)          the Company adopts any plan of liquidation providing for the distribution of all or substantially all of its assets;

 

(iv)          all or substantially all of the assets or business of the Company is disposed of pursuant to a merger, consolidation or other transaction (unless the shareholders of the Company immediately prior to such a merger, consolidation or other transaction beneficially own, directly or indirectly, in substantially the same proportion as they owned the Voting Stock of the Company, all of the Voting Stock or other ownership interests of the entity or entities, if any, that succeed to the business of the Company); or

 

(iv)          the Company combines with another company and is the surviving corporation but, immediately after the combination, the shareholders of the Company immediately prior to the combination hold, directly or indirectly, 50% or less of the Voting Stock of the combined company (there being excluded from the number of shares held by such shareholders, but not from the Voting Stock of the combined company, any shares received by Affiliates of such other company in exchange for stock of such other company).

 

(d)           Enterprise:  the Company and any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, trustee, general partner, managing member, fiduciary, board of directors’ committee member, employee or agent.

 

(e)           Exchange Act:  the Securities Exchange Act of 1934, as amended.

 

(f)            Expenses:  any expense, liability, or loss, including reasonable attorneys’ fees, judgments, fines, ERISA excise taxes and penalties, amounts paid or to be paid in settlement, any interest, assessments, or other charges imposed thereon, any federal, state, local, or foreign taxes imposed as a result of the actual or deemed receipt of any payments under this Agreement, and all other costs and obligations, paid or incurred in connection with investigating, defending, prosecuting (subject to Section 2(b)), being a

 

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witness in, participating in (including on appeal), or preparing for any of the foregoing in, any Proceeding relating to any Indemnifiable Event.  Expenses also shall include Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersedes bond, or other appeal bond or its equivalent.

 

(g)           Indemnifiable Event:  (i) any event or occurrence that takes place either prior to or after the execution of this Agreement, related to the fact that Indemnitee is or was a director or officer of the Company, or while a director or officer is or was serving at the request of the Company as a director, officer, employee, trustee, agent, or fiduciary of another foreign or domestic corporation, partnership, limited liability company, joint venture, employee benefit plan, trust, or other Enterprise, or was a director, officer, employee, or agent of a foreign or domestic corporation that was a predecessor corporation of the Company or another Enterprise at the request of such predecessor corporation, or related to anything done or not done by Indemnitee in any such capacity, whether or not the basis of the Proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee, or agent of the Company, as described above or (ii) any event or fact related to the fact that Indemnitee is or was a director, officer, employee, trustee, agent, or fiduciary of another foreign or domestic corporation, partnership, limited liability company, joint venture, employee benefit plan, trust, or other Enterprise and that related to the subject matter of the investigations referred to in the Company’s Form 10 as filed on June 8, 2007 or any other investigation (whether or not the Company is a target of such investigation) by any government entity covering subject matter that is substantially similar to the subject matter of, or arises out of, the foregoing investigations.

 

(h)           Independent Counsel:  the person or body appointed in connection with Section 3.

 

(i)            Proceeding:  any threatened, pending, or completed action, suit, or proceeding or any alternative dispute resolution mechanism (including an action by or in the right of the Company), or any inquiry, hearing, or investigation, whether conducted by the Company or any other party, that Indemnitee in good faith believes might lead to the institution of any such action, suit, or proceeding, whether civil, criminal, administrative, investigative, or other.

 

(j)            Reviewing Party:  the person or body appointed in accordance with Section 3.

 

(k)           Voting Stock:  capital stock of any class or classes having general voting power under ordinary circumstances, in the absence of contingencies, to elect the directors (or similar function) of an Enterprise.

 

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2.             Agreement to Indemnify

 

(a)           General Agreement.  In the event Indemnitee was, is, or becomes a party to or witness or other participant in, or is threatened to be made a party to or witness or other participant in, a Proceeding by reason of (or arising in part out of) an Indemnifiable Event, the Company shall indemnify Indemnitee from and against any and all Expenses to the fullest extent permitted by law, as the same exists or may hereafter be amended or interpreted.  

 

(b)           Initiation of Proceeding.  Notwithstanding anything in this Agreement to the contrary, Indemnitee shall not be entitled to indemnification pursuant to this Agreement in connection with any Proceeding initiated by Indemnitee against the Company or any director or officer of the Company unless (i) the Company has joined in or the Board has consented to the initiation of such Proceeding; (ii) the Proceeding is one to enforce indemnification rights under Section 5; or (iii) the Proceeding is instituted after a Change in Control (other than a Change in Control approved by a majority of the directors on the Board who were directors immediately prior to such Change in Control) and Independent Counsel has approved its initiation.

 

(c)           Expense Advances.  If so requested by Indemnitee, the Company shall advance (within five business days of such request) any and all Expenses to Indemnitee (an “Expense Advance”); provided that, (i) such Expense Advance shall be made only upon delivery to the Company of an undertaking by or on behalf of the Indemnitee to repay the amount thereof if it is ultimately determined that Indemnitee is not entitled to be indemnified by the Company, and (ii) the Company shall not (unless a court of competent jurisdiction shall determine otherwise) be required to make an Expense Advance if and to the extent that the Reviewing Party has determined that Indemnitee is not permitted to be indemnified under applicable law, and (iii) if and to the extent that the Reviewing Party determines after payment of one or more Expense Advances that Indemnitee would not be permitted to be so indemnified under applicable law, the Company shall be entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the Company) for all such amounts theretofore paid.  If Indemnitee has commenced or commences legal proceedings in a court of competent jurisdiction to secure a determination that Indemnitee should be indemnified under applicable law, as provided in Section 5, any determination made by the Reviewing Party that Indemnitee would not be permitted to be indemnified under applicable law shall not be binding, and Indemnitee shall not be required to reimburse the Company for any Expense Advance until a final judicial determination is made with respect thereto (as to which all rights of appeal therefrom have been exhausted or have lapsed).  Indemnitee’s obligation to reimburse the Company for Expense Advances shall be unsecured and no interest shall be charged thereon.

 

(d)           Mandatory Indemnification.  Notwithstanding any other provision of this Agreement, to the extent that Indemnitee has been successful on the merits or otherwise in defense of any Proceeding relating in whole or in part to an Indemnifiable Event or in defense of any issue or matter therein, Indemnitee shall be indemnified against all Expenses incurred in connection therewith.

 

(e)           Partial Indemnification.  If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses,

 

4

 

but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.

 

(f)            Prohibited Indemnification.  No indemnification pursuant to this Agreement shall be paid by the Company:

 

(i)            on account of any Proceeding in which judgment is rendered against Indemnitee for an accounting of profits made from the purchase or sale by Indemnitee of securities of the Company pursuant to the provision of Section 16(b) of the Exchange Act or similar provision of any federal, state, or local laws;

 

(ii)           if a court of competent jurisdiction by a final judicial determination, shall determine that such indemnification is not permitted under applicable law;

 

(iii)          if the Indemnitee has been convicted of a crime constituting a felony under the laws of the jurisdiction where the criminal action had been brought; or

 

(iv) in respect of any fraud, dishonesty or intentional or grossly negligent breach of duties of which the Indemnitee may be guilty in relation to the Company, provided that, notwithstanding the foregoing, the Company shall provide Expense Advances to an Indemnitee for the costs, charges and expenses incurred by him in defending any civil or criminal proceedings against him in respect of an allegation of fraud, dishonesty, or intentional or grossly negligent breach of duties, on condition that he shall repay the advance if any such allegation is proved against him.

 

3.             Reviewing Party.  Prior to any Change in Control, the Reviewing Party shall be any appropriate person or body consisting of a member or members of the Board or any other person or body appointed by the Board who is not a party to the particular Proceeding with respect to which Indemnitee is seeking indemnification; after a Change in Control, the Independent Counsel referred to below shall become the Reviewing Party.  With respect to all matters arising after a Change in Control (other than a Change in Control approved by a majority of the directors on the Board who were directors immediately prior to such Change in Control) concerning the rights of Indemnitee to indemnity payments and Expense Advances under this Agreement or any other agreement or under applicable law or the Company’s Articles of Association now or hereafter in effect relating to indemnification for Indemnifiable Events, the Company shall seek legal advice only from Independent Counsel selected by Indemnitee and approved by the Company (which approval shall not be unreasonably withheld), and who has not otherwise performed services for the Company or the Indemnitee (other than in connection with indemnification matters) within the last five years.  The Independent Counsel shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this

 

5

 

Agreement.  Such counsel, among other things, shall render its written opinion to the Company and Indemnitee as to whether and to what extent the Indemnitee should be permitted to be indemnified under applicable law.  In doing so, the Independent Counsel may consult with (and rely upon) counsel in any appropriate jurisdiction (e.g., _Switzerland) who would qualify as Independent Counsel (“Local Counsel”).  The Company agrees to pay the reasonable fees of the Independent Counsel and the Local Counsel and to indemnify fully such counsel against any and all expenses (including attorneys’ fees), claims, liabilities, loss, and damages arising out of or relating to this Agreement or the engagement of Independent Counsel or the Local Counsel pursuant hereto.

 

4.             Indemnification Process and Appeal.

 

(a)           Indemnification Payment.  Indemnitee shall be entitled to indemnification of Expenses, and shall receive payment thereof, from the Company in accordance with this Agreement as soon as practicable after Indemnitee has made written demand on the Company for indemnification, unless the Reviewing Party has given a written opinion to the Company that Indemnitee is not entitled to indemnification under applicable law.

 

(b)           Adjudication or Arbitration.

 

(i) Regardless of any action by the Reviewing Party, if Indemnitee has not received full indemnification within thirty days after making a demand in accordance with Section 4(a) (a “Nonpayment”), Indemnitee shall have the right to enforce its indemnification rights under this Agreement by commencing litigation in the court at the Company’s domicile as evidenced in the commercial register (the “Court at the Company’s domicile”) or in any federal or state court located in New York County, State of New York (a “New York Court”) having subject matter jurisdiction thereof seeking an initial determination by the court or by challenging any determination by the Reviewing Party or any aspect thereof.  Any determination by the Reviewing Party not challenged by Indemnitee in any such litigation shall be binding on the Company and Indemnitee.  The remedy provided for in this Section 4 shall be in addition to any other remedies available to Indemnitee at law or in equity.  The Company and Indemnitee hereby irrevocably and unconditionally (A) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Court at the Company’s domicile or in a New York Court and not in any other court in the United States or in any other country, (B) consent to submit to the exclusive jurisdiction of the Court at the Company’s domicile or the New York Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (C) waive any objection to the laying of venue or any such action or proceeding in the Court at the Company’s domicile or in the New York Court, and (D) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Court at the Company’s domicile or the New York Court has been brought in an improper or inconvenient forum.

 

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(ii)           Alternatively, in the case of a Nonpayment Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association.

 

(iii)          In the event that a determination shall have been made pursuant to Section 3 of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 4(b) shall be conducted in all respects as a de novo trial, or arbitration, on the merits, and Indemnitee shall not be prejudiced by reason of that adverse determination.  In any judicial proceeding or arbitration commenced pursuant to this Section 4(b) the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.  If Indemnitee commences a judicial proceeding or arbitration pursuant to this Section 4(b), Indemnitee shall not be required to reimburse the Company for any advances pursuant to Section 2(c) until a final determination is made with respect to Indemnitee’s entitlement to indemnification (as to which all rights of appeal have been exhausted or lapsed).

 

(iv)          In the event that Indemnitee, pursuant to this Section 4(b), seeks a judicial adjudication of or an award in arbitration to enforce his rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company against, any and all Expenses actually and reasonably incurred by him in such judicial adjudication or arbitration.  If it shall be determined in said judicial adjudication or arbitration that Indemnitee is entitled to receive part but not all of the indemnification or advancement of Expenses sought, the Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company against, any and all Expenses reasonably incurred by Indemnitee in connection with such judicial adjudication or arbitration.

 

(c)           Defense to Indemnification, Burden of Proof, and Presumptions.

 

(i) It shall be a defense to any action brought by Indemnitee against the Company to enforce this Agreement (other than an action brought to enforce a claim for Expenses incurred in defending a Proceeding in advance of its final disposition where the required undertaking has been tendered to the Company) that it is not permissible under applicable law for the Company to indemnify Indemnitee for the amount claimed.

 

(ii)           In connection with any action or any determination by the Reviewing Party or otherwise as to whether Indemnitee is entitled to be indemnified hereunder, the burden of proving such a defense or determination shall be on the Company.

 

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(iii)          Neither the failure of the Reviewing Party or the Company (including its Board, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action by Indemnitee that indemnification of the Indemnitee is proper under the circumstances because Indemnitee has met the standard of conduct set forth in applicable law, nor an actual determination by the Reviewing Party or Company (including its Board, independent legal counsel, or its stockholders) that the Indemnitee had not met such applicable standard of conduct, shall be a defense to the action or created a presumption that the Indemnitee has not met the applicable standard of conduct.

 

(iv)          For purposes of this Agreement, to the fullest extent permitted by law, the termination of any claim, action, suit, or proceeding, by judgment, order, settlement (whether with or without court approval), conviction, or upon a plea of nolo contendere, or its equivalent, shall not, of itself, create a presumption that Indemnitee did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by applicable law.

 

5.             Indemnification for Expenses Incurred in Enforcing Rights.  The Company shall indemnify Indemnitee against any and all Expenses that are incurred by Indemnitee in connection with any action brought by Indemnitee:

 

(a)           as provided in Section 4(b)(iv), for indemnification or advance payment of Expenses by the Company under this Agreement or any other agreement or under applicable law or the Company’s Articles of Association now or hereafter in effect relating to indemnification for Indemnifiable Events, and/or

 

(b)           for recovery under directors’ and officers’ liability insurance policies maintained by the Company,

 

but only in the event that Indemnitee ultimately is determined to be entitled to such indemnification or insurance recovery, as the case may be.  In addition, the Company shall, if so requested by Indemnitee, advance the foregoing Expenses to Indemnitee, subject to and in accordance with Section 2(c).

 

6.             Notification and Defense of Proceeding.

 

(a)           Notice.  Promptly after receipt by Indemnitee of notice of the commencement of any Proceeding, Indemnitee shall, if a claim in respect thereof is to be made against the Company under this Agreement, notify the Company of the commencement thereof; but the omission so to notify the Company will not relieve the Company from any liability that it may have to Indemnitee, except as provided in Section 6(c).

 

(b)           Defense.  With respect to any Proceeding as to which Indemnitee notifies the Company of the commencement thereof, the Company will be entitled to participate

 

8

 

in the Proceeding at its own expense and except as otherwise provided below, to the extent the Company so wishes, it may assume the defense thereof with counsel reasonably satisfactory to Indemnitee.  After notice from the Company to Indemnitee of its election to assume the defense of any Proceeding, the Company shall not be liable to Indemnitee under this Agreement or otherwise for any Expenses subsequently incurred by Indemnitee in connection with the defense of such Proceeding other than reasonable costs of investigation or as otherwise provided below.  Indemnitee shall have the right to employ legal counsel in such Proceeding, but all Expenses related thereto incurred after notice from the Company of its assumption of the defense shall be at Indemnitee’s expense unless; (i) the employment of legal counsel by Indemnitee has been authorized by the Company, (ii) Indemnitee has reasonably determined that there may be a conflict of interest between Indemnitee and the Company in the defense of the Proceeding, (iii) after a Change in Control (other than a Change in Control approved by a majority of the directors on the Board who were directors immediately prior to such Change in Control), the employment of counsel by Indemnitee has been approved by the Independent Counsel, or (iv) the Company shall not in fact have employed counsel to assume the defense of such Proceeding, in each of which cases all Expense of the Proceeding shall be borne by the Company.  The Company shall not be entitled to assume the defense of any Proceeding brought by or on behalf of the Company or as to which Indemnitee shall have made the determination provided for in (ii), (iii) and (iv) above.

 

(c)           Settlement of Claims.  The Company shall not be liable to indemnify Indemnitee under this Agreement or otherwise for any amounts paid in settlement of any Proceeding effected without the Company’s written consent, such consent not to be unreasonably withheld; provided, however, that if a Change in Control has occurred (other than a Change in Control approved by a majority of the directors on the Board who were directors immediately prior to such Change in Control), the Company shall be liable for indemnification of Indemnitee for amounts paid in settlement if the Independent Counsel has approved the settlement.  The Company shall not settle any Proceeding in any manner that would impose any penalty or limitation on Indemnitee without Indemnitee’s written consent.  The Company shall not be liable to indemnify the Indemnitee under this Agreement with regard to any judicial award if the Company was not given a reasonable and timely opportunity, at its expense, to participate in the defense of such action; the Company’s liability hereunder shall not be excused if participation in the Proceeding by the Company was barred by this Agreement.

 

7.             Establishment of Trust.  In the event of a Change in Control (other than a Change in Control approved by a majority of the directors on the Board who were directors immediately prior to such Change in Control) the Company shall, upon written request by Indemnitee, create a trust for the benefit of the Indemnitee (the “Trust”) and from time to time upon written request of Indemnitee shall fund the Trust in an amount sufficient to satisfy any and all Expenses reasonably anticipated at the time of each such request to be incurred in connection with investigating, preparing for, participating in, and/or defending any Proceeding relating to an Indemnifiable Event.  The amount or amounts to be deposited in the Trust pursuant to the foregoing funding obligation shall be

 

9

 

determined by the Independent Counsel.  The terms of the Trust shall provide that (i) the Trust shall not be revoked or the principal thereof invaded without the written consent of the Indemnitee, (ii) the Trustee (as defined below) shall advance, within five business days of a request by the Indemnitee, any and all Expenses to the Indemnitee (and the Indemnitee hereby agrees to reimburse the Trust under the same circumstances for which the Indemnitee would be required to reimburse the Company under Section 2(c) of this Agreement), (iii) the Trust shall continue to be funded by the Company in accordance with the funding obligation set forth above, (iv) the Trustee shall promptly pay to the Indemnitee all amounts for which the Indemnitee shall be entitled to indemnification pursuant to this Agreement or otherwise, and (v) all unexpended funds in the Trust shall revert to the Company upon a final determination by the Independent Counsel or a court of competent jurisdiction, as the case may be, that the Indemnitee has been fully indemnified under the terms of this Agreement.  The trustee of the Trust (the “Trustee”) shall be chosen by the Indemnitee.  Nothing in this Section 7 shall relieve the Company of any of its obligations under this Agreement.  All income earned on the assets held in the Trust shall be reported as income by the Company for federal, state, local, and foreign tax purposes.  The Company shall pay all costs of establishing and maintaining the Trust and shall indemnify the Trustee against any and all expenses (including attorney’s fees), claims, liabilities, loss, and damages arising out of or relating to this Agreement or the establishment and maintenance of the Trust.

 

8.             Non-Exclusivity.  The rights of Indemnitee hereunder shall be in addition to any other rights Indemnitee may have under the Company’s Articles of Association, applicable law, or otherwise; provided, however, that this Agreement shall supersede any prior indemnification agreement between the Company and the Indemnitee.  To the extent that a change in applicable law (whether by statute or judicial decision) permits greater indemnification than would be afforded currently under the Company’s Articles of Association, applicable law, or this Agreement, it is the intent of the parties that Indemnitee enjoy by this Agreement the greater benefits so afforded by such change.

 

9.             Liability Insurance.  To the extent the Company maintains an insurance policy or policies providing general and/or directors’ and officers’ liability insurance, Indemnitee shall be covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage available for any Company director or officer.

 

10.          Continuation of Contractual Indemnity or Period of Limitations.  All agreements and obligations of the Company contained herein shall continue for so long as Indemnitee shall be subject to, or involved in, any proceeding for which indemnification is provided pursuant to this Agreement.

 

11.          Amendment of this Agreement.  No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto.  No waiver of any of the provisions of this Agreement shall be binding unless in the form of a writing signed by the party against whom enforcement of the waiver is sought, and no such waiver shall operate as a continuing waiver.  Except, as

 

10

 

specifically provided herein, no failure to exercise or any delay in exercising any right or remedy hereunder shall constitute a waiver thereof.

 

12.          Subrogation.  In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the Company effectively to bring suit to enforce such rights.

 

13.          No Duplication of Payments.  The Company shall not be liable under this Agreement to make any payment in connection with any claim made against Indemnitee to the extent Indemnitee has otherwise received payment (under any insurance policy, Articles of Association, or otherwise) of the amounts otherwise indemnifiable hereunder.

 

14.          Binding Effect.  This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors (including any direct or indirect successor by purchase, merger, consolidation, or otherwise to all or substantially all of the business and/or assets of the Company), assigns, spouses, heirs, and personal and legal representatives.  The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation, or otherwise) to all, substantially all, or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.  The indemnification provided under this Agreement shall continue as to Indemnitee for any action taken or not taken while serving in an indemnified capacity pertaining to an Indemnifiable Event even though he may have ceased to serve in such capacity at the time of any Proceeding or is deceased and shall inure to the benefit of the heirs, executors, administrators, legatees and assigns of such a person.

 

15.          Severability.  If any provision (or portion thereof) of this Agreement shall be held by a court of competent jurisdiction to be invalid, void, or otherwise unenforceable, the remaining provisions shall remain enforceable to the fullest extent permitted by law.  Furthermore, to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of this Agreement containing any provision held to be invalid, void, or otherwise unenforceable that is not itself invalid, void or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, void or unenforceable.

 

16.          Governing Law.  This Agreement shall be governed by and construed and enforced in accordance with the substantive laws of Switzerland applicable to contracts made and to be performed in such jurisdiction without giving effects to its principles of conflicts of laws.

 

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17.          Notices.  All notices, demands, and other communications required or permitted hereunder shall be made in writing and shall be deemed to have been duly given if delivered by hand, against receipt, or mailed, postage prepaid, certified or registered mail, return receipt requested, and addressed to the Company at:

 

TE Connectivity Ltd..
 Rheinstrasse 20
 8200 Schaffhausen

Switzerland
 Attention: Corporate Secretary

 

And to Indemnitee at:

 

 

 

 

Notice of change of address shall be effective only when given in accordance with this Section.  All notices complying with this Section shall be deemed to have been received on the date of hand delivery or on the day of actual receipt.

 

18.          Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as the day specified above.

 

COMPANY

 

 

By:  TE Connectivity Ltd.

 

 

Its:

 

 

INDEMNITEE

 

 

 

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