Document:

COPY OF CHANGE OF CONTROL AGREEMENT

 

Exhibit 10.3

CHANGE OF CONTROL AGREEMENT

     AGREEMENT by and between Rockwell Automation, Inc., a Delaware corporation
(the “Company”), and Keith D. Nosbusch (the “Executive”), dated as of the 2nd
day of June, 2004.

     The Board of Directors of the Company (the “Board”), has determined that
it is in the best interests of the Company and its shareowners to assure that
the Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control
(as defined below) of the Company. The Board believes it is imperative to
diminish the inevitable distraction of the Executive by virtue of the personal
uncertainties and risks created by a pending or threatened Change of Control
and to encourage the Executive’s full attention and dedication to the Company
currently and in the event of any threatened or pending Change of Control, and
to provide the Executive with compensation and benefits arrangements upon a
Change of Control which ensure that the compensation and benefits expectations
of the Executive will be satisfied and which are competitive with those of
other corporations. Therefore, in order to accomplish these objectives, the
Board has caused the Company to enter into this Agreement.

     NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

     1.  Certain Definitions. (a) The “Effective Date” shall mean the first
date during the Change of Control Period (as defined in Section 1(b)) on which
a Change of Control (as defined in Section 2) occurs. Anything in this
Agreement to the contrary notwithstanding, if a Change of Control occurs and if
the Executive’s employment with the Company is terminated prior to the date on
which the Change of Control occurs, and if it is reasonably demonstrated by the
Executive that such termination of employment (i) was at the request of a third
party who has taken steps reasonably calculated to effect a Change of Control
or (ii) otherwise arose in connection with or anticipation of a Change of
Control, then for all purposes of this Agreement the “Effective Date” shall
mean the date immediately prior to the date of such termination of employment.

     (b) The “Change of Control Period” shall mean the period commencing on the
date hereof and ending on September 30, 2007.

     2.  Change of Control. For the purpose of this Agreement, a “Change of
Control” shall mean:

     (a) The acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (i) the then outstanding shares of common stock of the Company (the
“Outstanding Company Common Stock”) or (ii) the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally in
the election of directors (the “Outstanding Company Voting Securities”);
provided, however, that for purposes of this subsection (a), the following
acquisitions shall not constitute a Change of Control: (i) any acquisition
directly from the Company, (ii) any acquisition by the Company, (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company or (iv)
any acquisition by any

 

 

corporation pursuant to a transaction which complies
with clauses (i), (ii) and (iii) of subsection (c) of this Section 2; or

     (b) Individuals who, as of the date hereof, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of
the Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by the
Company’s shareowners, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than the Board; or

     (c) Consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of the Company or
the acquisition of assets of another corporation (a “Business Combination”), in
each case, unless, following such Business Combination, (i) all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of, respectively, the
then outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election
of directors, as the case may be, of the corporation resulting from such
Business Combination (including, without limitation, a corporation which as a
result of such transaction owns the Company or all or substantially all of the
Company’s assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to
such Business Combination of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (ii) no Person
(excluding any corporation resulting from such Business Combination or any
employee benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then outstanding shares of common
stock of the corporation resulting from such Business Combination or the
combined voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed prior to the
Business Combination and (iii) at least a majority of the members of the board
of directors of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination; or

     (d) Approval by the shareowners of the Company of a complete liquidation
or dissolution of the Company.

     3. Protected Period. The Company hereby agrees to continue the Executive
in its employ, and the Executive hereby agrees to remain in the employ of the
Company subject to the terms and conditions of this Agreement, for the period commencing
on the Effective Date and ending on the third anniversary of such date (the
“Protected Period”).

     4. Terms of Employment. (a) Position and Duties. (i) During the
Protected Period, (A) the Executive’s position (including status, offices,
titles and reporting requirements), authority, duties and responsibilities
shall be at least commensurate in all material respects with

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the most
significant of those held, exercised and assigned at any time during the
120-day period immediately preceding the Effective Date and (B) the Executive’s
services shall be performed at the location where the Executive was employed
immediately preceding the Effective Date or any office or location less than 35
miles from such location.

     (ii) During the Protected Period, and excluding any periods of vacation
and sick leave to which the Executive is entitled, the Executive agrees to
devote reasonable attention and time during normal business hours to the
business and affairs of the Company and, to the extent necessary to discharge
the responsibilities assigned to the Executive hereunder, to use the
Executive’s reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Protected Period it shall not be a violation of
this Agreement for the Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) deliver lectures, fulfill speaking engagements or
teach at educational institutions and (C) manage personal investments, so long
as 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. It is expressly understood and agreed that to the extent that
any such activities have been conducted by the Executive prior to the Effective
Date, the continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the Executive’s
responsibilities to the Company.

     (b) Compensation. (i) Base Salary. During the Protected Period, the
Executive shall receive an annual base salary (“Annual Base Salary”), which
shall be paid at a monthly rate, at least equal to twelve times the highest
monthly base salary paid or payable, including any base salary which has been
earned but deferred, to the Executive by the Company and its affiliated
companies in respect of the twelve-month period immediately preceding the month
in which the Effective Date occurs. During the Protected Period, the Annual
Base Salary shall be reviewed no more than 12 months after the last salary
increase awarded to the Executive prior to the Effective Date and thereafter at
least annually. Any increase in Annual Base Salary shall not serve to limit or
reduce any other obligation to the Executive under this Agreement. Annual Base
Salary shall not be reduced after any such increase and the term Annual Base
Salary as utilized in this Agreement shall refer to Annual Base Salary as so
increased. As used in this Agreement, the term “affiliated companies” shall
include any company controlled by, controlling or under common control with the
Company.

     (ii) Annual Bonus. In addition to Annual Base Salary, the Executive shall
be awarded, for each fiscal year ending during the Protected Period, an annual
bonus (the “Annual Bonus”) in cash at least equal to the Executive’s highest
bonus under the Company’s annual incentive plans, or any comparable bonus under any predecessor or
successor plan, for the last three full fiscal years prior to the Effective
Date (annualized in the event that the Executive was not employed by the
Company for the whole of such fiscal year) (the “Recent Annual Bonus”). Each
such Annual Bonus shall be paid no later than the end of the third month of the
fiscal year next following the fiscal year for which the Annual Bonus is
awarded, unless the Executive shall elect to defer the receipt of such Annual
Bonus.

     (iii) Incentive, Savings and Retirement Plans. During the Protected
Period, the Executive shall be entitled to participate in all incentive,
savings and retirement plans, practices, policies and programs applicable
generally to other peer executives of the Company

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and its affiliated companies, but in no event shall such plans, practices, policies and programs provide the
Executive with incentive opportunities (measured with respect to both regular
and special incentive opportunities, to the extent, if any, that such
distinction is applicable), savings opportunities and retirement benefit
opportunities, in each case, less favorable, in the aggregate, than the most
favorable of those provided by the Company and its affiliated companies for the
Executive under such plans, practices, policies and programs as in effect at
any time during the 120-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 other peer executives of the Company and its affiliated
companies.

     (iv) Welfare Benefit Plans. During the Protected Period, the Executive
and/or the Executive’s family, as the case may be, shall be eligible for
participation in and shall receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Company and its affiliated
companies (including, without limitation, medical, prescription, dental,
disability, employee life, group life, accidental death and travel accident
insurance plans and programs) to the extent applicable generally to other peer
executives of the Company and its affiliated companies, but in no event shall
such plans, practices, policies and programs provide the Executive with
benefits which are less favorable, in the aggregate, than the most favorable of
such plans, practices, policies and programs in effect for the Executive at any
time during the 120-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 other peer executives of the Company and its affiliated
companies.

     (v) Expenses. During the Protected Period, the Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred
by the Executive in accordance with the most favorable policies, practices and
procedures of the Company and its affiliated companies in effect for the
Executive at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect generally
at any time thereafter with respect to other peer executives of the Company and
its affiliated companies.

     (vi) Fringe Benefits. During the Protected Period, the Executive shall be
entitled to fringe benefits, including, without limitation, tax and financial
planning services, payment of club dues, and, if applicable, use of an
automobile and payment of related expenses, in accordance with the most
favorable plans, practices, programs and policies of the Company and its
affiliated companies in effect for the Executive at any time during the 120-day
period immediately preceding the Effective Date or, if more favorable to the
Executive, as in effect generally at any time thereafter with respect to other peer executives of
the Company and its affiliated companies.

     (vii) Office and Support Staff. During the Protected Period, the
Executive shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to exclusive personal secretarial and
other assistance, at least equal to the most favorable of the foregoing
provided to the Executive by the Company and its affiliated companies at any
time during the 120-day period immediately preceding the Effective Date or, if
more favorable to the Executive, as provided generally at any time thereafter
with respect to other peer executives of the Company and its affiliated
companies.

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     (viii) Vacation. During the Protected Period, the Executive shall be
entitled to paid vacation in accordance with the most favorable plans,
policies, programs and practices of the Company and its affiliated companies as
in effect for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other peer executives
of the Company and its affiliated companies.

     5. Termination of Employment. (a) Death or Disability. The Executive’s
employment shall terminate automatically upon the Executive’s death during the
Protected Period. If the Company determines in good faith that the Disability
of the Executive has occurred during the Protected Period (pursuant to the
definition of Disability set forth below), it may give to the Executive written
notice in accordance with Section 12(b) of this Agreement of its intention to
terminate the Executive’s employment. In such event, the Executive’s
employment with the Company shall terminate effective on the 30th day after
receipt of such notice by the Executive (the “Disability Effective Date”),
provided that, within the 30 days after such receipt, the Executive shall not
have returned to full-time performance of the Executive’s duties. For purposes
of this Agreement, “Disability” shall mean the absence of the Executive from
the Executive’s duties with the Company on a full-time basis for 180
consecutive business days as a result of incapacity due to mental or physical
illness which is determined to be total and permanent by a physician selected
by the Company or its insurers and acceptable to the Executive or the
Executive’s legal representative.

     (b) Cause. The Company may terminate the Executive’s employment during
the Protected Period for Cause. For purposes of this Agreement, “Cause” shall
mean:

     (i) the willful and continued failure of the Executive to perform
substantially the Executive’s duties with the Company or one of its affiliates
(other than any such failure resulting from incapacity due to physical or
mental illness), after a written demand for substantial performance is
delivered to the Executive by the Board or the Chief Executive Officer of the
Company which specifically identifies the manner in which the Board or Chief
Executive Officer believes that the Executive has not substantially performed
the Executive’s duties, or

     (ii) the willful engaging by the Executive in illegal conduct or gross
misconduct which is materially and demonstrably injurious to the Company.

     For purposes of this provision, 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. 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.
The cessation of employment of the Executive shall not be deemed to be for
Cause unless and until there shall have been delivered to the Executive a copy
of a resolution duly adopted by the affirmative vote of not less than
three-quarters of the entire membership of the Board at a meeting of the Board
called and held for such purpose (after reasonable notice is provided to the
Executive and the Executive is given an opportunity, together with counsel, to
be heard before the Board), finding that, in the good faith opinion of the

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Board, the Executive is guilty of the conduct described in subparagraph (i) or
(ii) above, and specifying the particulars thereof in detail.

     (c) Good Reason. The Executive’s employment may be terminated by the
Executive for Good Reason. For purposes of this Agreement, “Good Reason” shall
mean:

     (i) the assignment to the Executive of any duties inconsistent in any
respect with the Executive’s position (including status, offices, titles and
reporting requirements), authority, duties or responsibilities as contemplated
by Section 4(a) of this Agreement, or any other action by the Company which
results in a diminution in such position, authority, duties or
responsibilities, excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith and which is remedied by the Company
promptly after receipt of notice thereof given by the Executive;

     (ii) any failure by the Company to comply with any of the provisions of
Section 4(b) of this Agreement, other than an isolated, insubstantial and
inadvertent failure not occurring in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by the Executive;

     (iii) the Company’s requiring the Executive to be based at any office or
location other than as provided in Section 4(a)(i)(B) hereof or the Company’s
requiring the Executive to travel on Company business to a substantially
greater extent than required immediately prior to the Effective Date;

     (iv) any purported termination by the Company of the Executive’s
employment otherwise than as expressly permitted by this Agreement; or

     (v) any failure by the Company to comply with and satisfy Section 11(c) of
this Agreement.

     For purposes of this Section 5(c), any good faith determination of “Good
Reason” made by the Executive shall be conclusive. Anything in this Agreement
to the contrary notwithstanding, a termination by the Executive for any reason
during the 30-day period immediately following the first anniversary of the
Effective Date shall be deemed to be a termination for Good Reason for all
purposes of this Agreement.

     (d) Notice of Termination. Any termination by the Company for Cause, or
by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 12(b) of
this Agreement. For purposes of this Agreement, a “Notice of Termination”
means a written notice which (i) indicates the specific termination provision
in this Agreement relied upon, (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision so indicated and
(iii) if the Date of Termination (as defined below) is other than the date of
receipt of such notice, specifies the termination date (which date shall be not
more than thirty days after the giving of such notice). The failure by the
Executive or the Company to set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of Good Reason or Cause shall not
waive any right of the Executive or the Company,

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respectively, hereunder or
preclude the Executive or the Company, respectively, from asserting such fact
or circumstance in enforcing the Executive’s or the Company’s rights hereunder.

     (e) Date of Termination. “Date of Termination” means (i) if the
Executive’s employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein, as the case may be, (ii) if the Executive’s
employment is terminated by the Company other than for Cause or Disability, the
Date of Termination shall be the date on which the Company notifies the
Executive of such termination and (iii) if the Executive’s employment is
terminated by reason of death or Disability, the Date of Termination shall be
the date of death of the Executive or the Disability Effective Date, as the
case may be.

     6. Obligations
of the Company upon Termination. (a) Good Reason; Other
Than for Cause, Death or Disability. If, during the Protected Period, the
Company shall terminate the Executive’s employment other than for Cause or
Disability or the Executive shall terminate employment for Good Reason:

     (i) the Company shall pay to the Executive in a lump sum in cash within 30
days after the Date of Termination the aggregate of the following amounts:

     A. the sum of (1) the Executive’s Annual Base Salary
through the Date of Termination to the extent not theretofore
paid, (2) the product of (x) the higher of (I) the Recent
Annual Bonus and (II) the Annual Bonus paid or payable,
including any bonus or portion thereof which has been earned
but deferred (and annualized for any fiscal year consisting
of less than twelve full months or during which the Executive
was employed for less than twelve full months), for the most
recently completed fiscal year during the Protected Period,
if any (such higher amount being referred to as the “Highest
Annual Bonus”) and (y) a fraction, the numerator of which is
the number of days in the current fiscal year through the
Date of Termination, and the denominator of which is 365 and
(3) any compensation previously deferred by the Executive
(together with any accrued interest or earnings thereon) and
any accrued vacation pay, in each case to the extent not
theretofore paid (the sum of the amounts described in clauses
(1), (2), and (3) shall be hereinafter referred to as the
“Accrued Obligations”); and

     B. the amount equal to the product of (1) three and (2)
the sum of (x) the Executive’s Annual Base Salary and (y) the
Highest Annual Bonus; and

     C. an amount equal to the excess of (a) the actuarial
equivalent of the benefit under the Company’s qualified
defined benefit retirement plan (the “Retirement Plan”)
(utilizing actuarial assumptions no less favorable to the
Executive than those in effect under the Company’s Retirement
Plan immediately prior to the Effective Date), and any excess
or supplemental retirement plan in which the Executive
participates (together, the “SERP”) which the Executive would
receive if the

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Executive’s employment continued for three
years after the Date of Termination assuming for this purpose
that all accrued benefits are fully vested, and, assuming
that the Executive’s compensation in each of the three years
is that required by Section 4(b)(i) and Section 4(b)(ii),
over (b) the actuarial equivalent of the Executive’s actual
benefit (paid or payable), if any, under the Retirement Plan
and the SERP as of the Date of Termination;

     (ii) for three years after the Executive’s Date of Termination, or such
longer period as may be provided by the terms of the appropriate plan, program,
practice or policy, the Company shall continue benefits to the Executive and/or
the Executive’s family at least equal to those which would have been provided
to them in accordance with the plans, programs, practices and policies
described in Section 4(b)(iv) of this Agreement if the Executive’s employment
had not been terminated or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer executives of the
Company and its affiliated companies and their families, provided, however,
that if the Executive becomes reemployed with another employer and is eligible
to receive medical or other welfare benefits under another employer provided
plan, the medical and other welfare benefits described herein shall be
secondary to those provided under such other plan during such applicable period
of eligibility. For purposes of determining eligibility (but not the time of
commencement of benefits) of the Executive for retiree benefits pursuant to
such plans, practices, programs and policies, the Executive shall be considered
to have remained employed until three years after the Date of Termination and
to have retired on the last day of such period;

     (iii) the Company shall, at its sole expense as incurred, provide the
Executive with outplacement services the scope and provider of which shall be
selected by the Executive in his sole discretion; and

     (iv) to the extent not theretofore paid or provided, the Company shall
timely pay or provide to the Executive any other amounts or benefits required
to be paid or provided or which the Executive is eligible to receive under any
plan, program, policy or practice or contract or agreement of the Company and
its affiliated companies (such other amounts and benefits shall be hereinafter
referred to as the “Other Benefits”).

     (b) Death. If the Executive’s employment is terminated by reason of the
Executive’s death during the Protected Period, this Agreement shall terminate
without further obligations to the Executive’s legal representatives under this
Agreement, other than for payment of Accrued Obligations and the timely payment or provision of Other
Benefits. Accrued Obligations shall be paid to the Executive’s estate or
beneficiary, as applicable, in a lump sum in cash within 30 days of the Date of
Termination. With respect to the provision of Other Benefits, the term Other
Benefits as utilized in this Section 6(b) shall include, without limitation,
and the Executive’s estate and/or beneficiaries shall be entitled to receive,
benefits at least equal to the most favorable benefits provided by the Company
and affiliated companies to the estates and beneficiaries of peer executives of
the Company and such affiliated companies under such plans, programs, practices
and policies relating to death benefits, if any, as in effect with respect to
other peer executives and their beneficiaries at any time during the 120-day
period immediately preceding the Effective Date or, if more favorable to the
Executive’s estate and/or the Executive’s

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beneficiaries, as in effect on the
date of the Executive’s death with respect to other peer executives of the
Company and its affiliated companies and their beneficiaries.

     (c) Disability. If the Executive’s employment is terminated by reason of
the Executive’s Disability during the Protected Period, this Agreement shall
terminate without further obligations to the Executive, other than for payment
of Accrued Obligations and the timely payment or provision of Other Benefits.
Accrued Obligations shall be paid to the Executive in a lump sum in cash within
30 days of the Date of Termination. With respect to the provision of Other
Benefits, the term Other Benefits as utilized in this Section 6(c) shall
include, and the Executive shall be entitled after the Disability Effective
Date to receive, disability and other benefits at least equal to the most
favorable of those generally provided by the Company and its affiliated
companies to disabled executives and/or their families in accordance with such
plans, programs, practices and policies relating to disability, if any, as in
effect generally with respect to other peer executives and their families at
any time during the 120-day period immediately preceding the Effective Date or,
if more favorable to the Executive and/or the Executive’s family, as in effect
at any time thereafter generally with respect to other peer executives of the
Company and its affiliated companies and their families.

     (d) Cause; Other than for Good Reason. If the Executive’s employment
shall be terminated for Cause during the Protected Period, this Agreement shall
terminate without further obligations to the Executive other than the
obligation to pay to the Executive (x) his Annual Base Salary through the Date
of Termination, (y) the amount of any compensation previously deferred by the
Executive, and (z) Other Benefits, in each case to the extent theretofore
unpaid. If the Executive voluntarily terminates employment during the
Protected Period, excluding a termination for Good Reason, this Agreement shall
terminate without further obligations to the Executive, other than for Accrued
Obligations and the timely payment or provision of Other Benefits. In such
case, all Accrued Obligations shall be paid to the Executive in a lump sum in
cash within 30 days of the Date of Termination.

     7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
limit the Executive’s continuing or future participation in any plan, program,
policy or practice provided by the Company or any of its affiliated companies
and for which the Executive may qualify, nor, subject to Section 12(f), shall
anything herein limit or otherwise affect such rights as the Executive may have
under any contract or agreement with the Company or any of its affiliated
companies. Amounts which are vested benefits or which the Executive is
otherwise entitled to receive under any plan, policy, practice or program of or
any contract or agreement with the Company or any of its affiliated companies
at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice or program
or contract or agreement except as explicitly modified by this Agreement.

     8. Full Settlement. The Company’s obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to the Executive under any of the provisions of this Agreement and such
amounts shall not be reduced whether or not the Executive obtains other
employment. The Company agrees to pay as incurred, to the full extent
permitted by law, all legal fees and expenses which the

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Executive may
reasonably incur as a result of any contest (regardless of the outcome thereof)
by the Company, the Executive or others of the validity or enforceability of,
or liability under, any provision of this Agreement or any guarantee of
performance thereof (including as a result of any contest by the Executive
about the amount of any payment pursuant to this Agreement), plus in each case
interest on any delayed payment at the applicable Federal rate provided for in
Section 7872(f)(2)(A) of the Internal Revenue Code of 1986, as amended (the
“Code”).

     9. Certain Additional Payments by the Company.

     (a) Anything in this Agreement to the contrary notwithstanding and except
as set forth below, in the event it shall be determined that any payment or
distribution by the Company or its affiliates to or for the benefit of the
Executive (whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise, but determined without regard to any
additional payments required under this Section 9) (a “Payment”) would be
subject to the excise tax imposed by Section 4999 of the Code or any interest
or penalties are incurred by the Executive with respect to such excise tax
(such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the “Excise Tax”), then the Executive
shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an
amount such that after payment by the Executive of all taxes (including any
interest or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed with
respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments. Notwithstanding the foregoing provisions of this
Section 9(a), if it shall be determined that the Executive is entitled to a
Gross-Up Payment, but that the Payments do not exceed 110% of the greatest
amount (the “Reduced Amount”) that could be paid to the Executive such that the
receipt of Payments would not give rise to any Excise Tax, then no Gross-Up
Payment shall be made to the Executive and the Payments, in the aggregate,
shall be reduced to the Reduced Amount.

     (b) Subject to the provisions of Section 9(c), all determinations required
to be made under this Section 9, including whether and when a Gross-Up Payment
is required and the amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by an independent
certified public accounting firm designated by the Executive (the “Accounting
Firm”), which shall not be serving as accountant or auditor for the Company or
the individual, entity or group effecting the Change of Control. The
Accounting Firm shall provide detailed supporting calculations both to the
Company and the Executive within 15 business days of the receipt of notice from
the Executive that there has been a Payment, or such earlier time as is requested by the Company. All fees
and expenses of the Accounting Firm shall be borne solely by the Company. Any
Gross-Up Payment, as determined pursuant to this Section 9, shall be paid by
the Company to the Executive within five days of the receipt of the Accounting
Firm’s determination. Any determination by the Accounting Firm shall be
binding upon the Company and the Executive. As a result of the uncertainty in
the application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that Gross-Up
Payments which will not have been made by the Company should have been made
(“Underpayment”), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 9(c) and the Executive thereafter is required to make a payment of any
Excise Tax, the

10

 

Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive.

     (c) The Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after the Executive is informed
in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid. The Executive
shall not pay such claim prior to the expiration of the 30-day period following
the date on which it gives such notice to the Company (or such shorter period
ending on the date that any payment of taxes with respect to such claim is
due). If the Company notifies the Executive in writing prior to the expiration
of such period that it desires to contest such claim, the Executive shall:

     (i) give the Company any information reasonably requested by the Company
relating to such claim,

     (ii) take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim
by an attorney reasonably selected by the Company,

     (iii) cooperate with the Company in good faith in order effectively to
contest such claim, and

     (iv) permit the Company to participate in any proceedings relating to such
claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions
of this Section 9(c), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and sue for a refund or
contest the claim in any permissible manner, and the Executive agrees to
prosecute such contest to a determination before any administrative tribunal,
in a court of initial jurisdiction and in one or more appellate courts, as the
Company shall determine; provided, however, that if the Company directs the
Executive to pay such claim and sue for a refund, the Company shall advance the
amount of such payment to the Executive, on an interest-free basis and shall
indemnify and hold the Executive harmless, on an after-tax basis, from any
Excise Tax or income tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed income with
respect to such advance; and further provided that any extension of the statute
of limitations relating to payment of taxes for the taxable year of the
Executive with respect to which such contested amount is claimed to be due

11

 

is limited solely to such contested amount. Furthermore, the Company’s control of
the contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.

     (d) If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 9(c), the Executive becomes entitled to receive any
refund with respect to such claim, the Executive shall (subject to the
Company’s complying with the requirements of Section 9(c)) promptly pay to the
Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Company pursuant to Section 9(c), a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be paid.

     10. Confidential Information. The Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its affiliated companies,
and their respective businesses, which shall have been obtained by the
Executive during the Executive’s employment by the Company or any of its
affiliated companies and which shall not be or become public knowledge (other
than by acts by the Executive or representatives of the Executive in violation
of this Agreement). After termination of the Executive’s employment with the
Company, the Executive shall not, without the prior written consent of the
Company or as may otherwise be required by law or legal process, communicate or
divulge any such information, knowledge or data to anyone other than the
Company and those designated by it. In no event shall an asserted violation of
the provisions of this Section 10 constitute a basis for deferring or
withholding any amounts otherwise payable to the Executive under this
Agreement.

     11. 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 and assigns.

     (c) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to assume expressly and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
As used in this Agreement, “Company” shall mean the Company as hereinbefore
defined and any successor to its business and/or assets as aforesaid which
assumes and agrees to perform this Agreement by operation of law, or otherwise.

     12. Miscellaneous. (a) This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware, without reference to
principles of conflict

12

 

of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This Agreement may
not be amended or modified otherwise than by a written agreement executed by
the parties hereto or their respective successors and legal representatives.

     (b) All notices and other communications hereunder shall be in writing and
shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as
follows:

If to the Executive:

Keith D. Nosbusch

Rockwell Automation, Inc.

777 East Wisconsin Avenue, Suite 1400

Milwaukee, WI 53202

If to the Company:

Rockwell Automation, Inc.

777 East Wisconsin Avenue, Suite 1400

Milwaukee, WI 53202

Attention: General Counsel

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

     (c) The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement.

     (d) The Company may withhold from any amounts payable under this Agreement
such Federal, state, local or foreign taxes as shall be required to be withheld
pursuant to any applicable law or regulation.

     (e) 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
pursuant to Section 5(c)(i)-(v) of this Agreement, shall not be deemed to be a
waiver of such provision or right or any other provision or right of this
Agreement.

     (f) The Executive and the Company acknowledge that, except as may
otherwise be provided under any other written agreement between the Executive
and the Company, the employment of the Executive by the Company is “at will”
and, subject to Section 1(a) hereof, prior to the Effective Date, the
Executive’s employment may be terminated by either the Executive or the Company
at any time prior to the Effective Date, in which case the Executive shall have
no further rights under this Agreement. From and after the Effective Date

13

 

this Agreement shall supersede any other agreement between the parties with respect
to the subject matter hereof.

     IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.

	 	 	 	 	 
	 	Executive

 	 
	 	/s/ Keith D. Nosbusch
 	 
	 	Keith D. Nosbusch 	 
	 	 	 
	 
	 	ROCKWELL AUTOMATION, INC.

 	 
	 	By  /s/ Douglas M. Hagerman
 	 
	 	Douglas M. Hagerman 	 
	 	Senior Vice President, General Counsel and

Secretary 	 
	 

14AGREEMENT AS OF 5-27-04

 

Exhibit 10.4

— AGREEMENT AND GENERAL RELEASE —

          W. J.
CALISE, JR. and ROCKWELL AUTOMATION, INC. have reached the following
Agreement. In this Agreement, “EMPLOYEE” refers to W. J. Calise, Jr., and
“COMPANY” refers to Rockwell Automation, Inc.

     FIRST: Benefits.

     EMPLOYEE and COMPANY agree that EMPLOYEE will cease actively working full
time for COMPANY as of the close of business on May 30, 2004, but will remain
on COMPANY’S active payroll and continue to make himself available to perform
work for COMPANY, as directed by COMPANY’S Chief Executive Officer, Chairman,
or General Counsel, through the close of business on September 30, 2004
(hereafter referred to as his “initial salary continuation period”).
Thereafter, EMPLOYEE will remain on COMPANY’S active payroll for 24 months from
October 1, 2004, through the close of business on September 30, 2006 (hereafter
referred to as his “subsequent salary continuation period”), at which time
EMPLOYEE will retire. EMPLOYEE will receive no additional pay or notice at the
time of his retirement, except for payments he is entitled to receive from
COMPANY’S qualified and/or unqualified pension plans and for vacation pay.

     During his initial salary continuation period, EMPLOYEE will be paid at
his monthly base salary rate as of May 30, 2004 and will continue to receive
his current benefits except as otherwise provided herein. At the end of his
initial salary continuation period, COMPANY will pay EMPLOYEE for all accrued
but unused Calendar Year 2004 vacation. In addition, EMPLOYEE’S 2001 deferred
vacation payment will be paid in accordance with the Board’s resolution
regarding

 

 

payout of the 320 deferred hours at EMPLOYEE’S current rate, in the amount of
$73,846, less applicable taxes. The payment will be made on January 31, 2005.

     EMPLOYEE will not be expected to perform any work for COMPANY but will be
paid at his monthly base salary rate as of May 30, 2004. In December 2004,
EMPLOYEE will receive Fiscal Year 2004 Incentive Compensation (“ICP”) in the
amount of 62 1/2% of his current salary times the percentage determined to be
earned by the Senior Corporate Staff, and will receive such ICP, less all
applicable federal, state and local taxes and other applicable deductions,
unless COMPANY’S Board of Directors decides not to give ICP to any other
COMPANY Senior Executive. EMPLOYEE further understands and agrees that he will
not receive any Fiscal Year 2005 or 2006 ICP, and that he will receive no more
stock option grants; stock options may be exercised, will vest, and will be
forfeited according to the rules of the employee stock option plan. During his
subsequent salary continuation period, EMPLOYEE will be provided the following
benefits only:

	•	 	A car allowance in the amount of $1,700 per month through December 31, 2004;
	 
	•	 	Eligibility to participate in Company savings plan;
	 
	•	 	Credited service under COMPANY’S qualified Pension Plan;
	 
	•	 	Return Relocation Program, including movement of furnishings to
California and one-way air travel;
	 
	•	 	Income tax preparation/estate planning benefit in an amount not to
exceed $7,500 for Calendar Year 2004 and 2005;
	 
	•	 	Company paid executive physical in Calendar Year 2005, including
travel and lodging, and related costs to the Mayo Clinic in Scottsdale,
Arizona;
	 
	•	 	Medical benefits coverage and officer dental and vision will
continue through September 30, 2006;
	 
	•	 	Liability insurance benefits will continue through February 28,
2007;

-2-

 

	•	 	Continuing use of COMPANY provided phone line, PC hook-up and
facsimile machine (in home), car phone and cellular phone and receipt
of newspapers, periodicals and journals through September 30, 2006; and

     SECOND: No Obligation to Provide These Benefits Under Normal Policies.

     EMPLOYEE acknowledges that, under COMPANY’S normal policies and procedures
and absent this Agreement, he would not be entitled to receive any pay, bonuses
or benefits between the date he stops performing work for COMPANY and the date
he retires, which benefits are set forth in Paragraph First.

     THIRD: Complete Mutual Release

     EMPLOYEE and COMPANY agree to release each other and each of their
predecessors, successors and assigns, any subsidiaries, any related companies,
and the employees, directors, officials, agents, officers, representatives and
attorneys of any of them, from all claims or demands EMPLOYEE or COMPANY may
have based on EMPLOYEE’S employment with COMPANY or the termination of that
employment. This includes, but is not limited to, a release of any rights or
claims EMPLOYEE may have under the Age Discrimination in Employment Act, which
prohibits age discrimination in employment; under Title VII of the Civil Rights
Act of 1964; or under any other federal, state or local laws or regulations
prohibiting employment discrimination. This also includes, but is not limited
to, a release by EMPLOYEE of any claims for breach of contract or wrongful
discharge. Furthermore, this includes a release by EMPLOYEE of any claims
under the Wisconsin workers’ compensation laws and statutes, or any other
applicable state workers compensation laws or statutes, only as to injuries, if
any, incurred prior to the date of this Agreement. This release covers both
claims that EMPLOYEE and COMPANY know about and

-3-

 

those they may not know about and, for the purpose of implementing a full and
complete release, EMPLOYEE and COMPANY expressly acknowledge that this
Agreement is intended to include all claims which they do not know or suspect
to exist in their favor at the time of their signatures on the Agreement, and
that this Agreement will extinguish any such claims.

     This release does not include, however, a release of EMPLOYEE’S rights, if
any, to pension, retiree, health or similar benefits under the COMPANY’S
standard retirement program, to EMPLOYEE’S rights under COMPANY’S stock option
plans, or to any claims arising after he signs this Agreement.

     FOURTH: No Future Lawsuits.

     EMPLOYEE promises never to file a lawsuit or request arbitration asserting
any claims that are released in Paragraph Third.

     FIFTH: Non-Release of Future Claims.

     This Agreement does not waive or release any rights or claims that
EMPLOYEE may have under the Age Discrimination in Employment Act which arise
after the date the EMPLOYEE signs this Agreement.

-4-

 

     SIXTH: Consequences of Party’s Violation of Promises.

     Except as otherwise provided herein, if a party breaks its or his promise
in Paragraph Fourth of this Agreement and files a lawsuit, request for
arbitration or other claim or action based on legal claims that the party has
released, that party will pay for all costs incurred by the other party, any
related companies or the directors or employees of any of them, including
reasonable attorneys’ fees, in defending against the claim, however, EMPLOYEE
will not be obligated to pay for such costs for any lawsuit, arbitration or
other claim or action brought pursuant to the federal Age Discrimination in
Employment Act.

     SEVENTH: Confidentiality and Cooperation.

     EMPLOYEE and COMPANY agree not to make the existence or terms of this
Agreement and General Release public except as may be necessary to protect the
rights contained herein or as otherwise required by law.

     Further, EMPLOYEE agrees to reasonable cooperation with COMPANY in the
defense or prosecution of any litigation, arbitration, or claim against or by
any person or party. COMPANY agrees to pay EMPLOYEE’S reasonable, documented,
out-of-pocket expenses in providing any such cooperation pursuant to the terms
of this Paragraph. EMPLOYEE shall not, however, be paid for his time or
inconvenience in providing cooperation pursuant to the terms of this Paragraph.
Employee shall be entitled to indemnification by COMPANY for any activities
for which indemnification is required under COMPANY’S Bylaws or under Delaware
state law or otherwise.

-5-

 

     EIGHTH: Period for Review and Consideration of Agreement.

     EMPLOYEE understands that EMPLOYEE has been given a period of 21 days to
review and consider this Agreement before signing it. EMPLOYEE further
understands that EMPLOYEE may use as much of this 21-day period as EMPLOYEE
wishes prior to signing.

     NINTH: Non-Admission of Liability.

     By making this Agreement, neither the EMPLOYEE nor COMPANY admits that he
or it has done anything wrong.

     TENTH: Representation By Counsel.

     EMPLOYEE was advised by COMPANY to consult with an attorney before signing
this Agreement.

     ELEVENTH: EMPLOYEE’S Right to Revoke Agreement.

     EMPLOYEE may revoke this Agreement within seven (7) days of EMPLOYEE’S
signing it. Revocation can be made by delivering a written notice of
revocation to:

Marc G. Kartman, Vice President and Associate General Counsel

777 East Wisconsin Avenue, Suite 1400

Milwaukee, WI 53202.

     For this revocation to be effective, written notice must be received by Mr.
Kartman no later than the close of business on the seventh day after EMPLOYEE
signs this Agreement. If EMPLOYEE revokes this Agreement, it shall not be
effective or enforceable and EMPLOYEE will not receive the benefits described
in the First Paragraph.

-6-

 

     TWELFTH: Arbitration.

     Any and all disputes regarding this Agreement will be resolved by binding
Arbitration pursuant to the “Mutual Agreement to Arbitrate Claims” between
EMPLOYEE and COMPANY, such arbitration to take place at the American
Arbitration Association’s offices nearest to COMPANY’S World Headquarters in
Milwaukee, Wisconsin.

     THIRTEENTH: In Event of a Change of Control

     EMPLOYEE agrees and understands that upon the effectiveness of this
Agreement, the Change of Control Agreement between EMPLOYEE and COMPANY dated
January 15, 1999 becomes null and void and EMPLOYEE will not be entitled to any
benefits so described in the Change of Control Agreement.

     FOURTEENTH: Entire Agreement.

     This is the entire Agreement between EMPLOYEE and COMPANY. COMPANY has
made no promises to EMPLOYEE other than those in this Agreement.

EMPLOYEE ACKNOWLEDGES THAT HE HAS READ THIS AGREEMENT, UNDERSTANDS
IT AND IS ENTERING INTO IT VOLUNTARILY. PLEASE READ THIS AGREEMENT CAREFULLY. IT CONTAINS A RELEASE OF ALL
KNOWN AND UNKNOWN CLAIMS.

-7-

 

THIS AGREEMENT WILL NOT TAKE EFFECT FOR SEVEN (7) DAYS AFTER
EMPLOYEE SIGNS IT.

	 	 	 	 	 	 	 	 	 
	ROCKWELL AUTOMATION, INC.	 	EMPLOYEE
	 
	 	 	 	 	 	 	 	 
	By:	 	/s/ Keith D. Nosbusch

KEITH D. NOSBUSCH	 	/s/ William J. Calise, Jr.

WILLIAM J. CALISE, JR.
	 
	 	 	 	 	 	 	 	 
	

	 	Date:
	 	May 27, 2004

	 	Date:
	 	May 26, 2004

-8-

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