Document:

BC 2012.06.30 EX 10.2

Exhibit 10.2

BRUNSWICK CORPORATION
 2005 ELECTIVE DEFERRED INCENTIVE COMPENSATION PLAN
(As Amended and Restated Effective January 1, 2013)
SECTION 1
General
1.1    Purpose.  The Brunswick Corporation 2005 Elective Deferred Incentive Compensation Plan (the “Plan”) was previously established by Brunswick Corporation (the “Company”) so that it may provide eligible employees with an opportunity to build additional financial security, thereby aiding the Company in attracting and retaining employees of exceptional ability.  The Brunswick Corporation Elective Deferred Compensation Plan (the “Prior Plan”) previously applied to the deferral of amounts that were earned and became vested on or before December 31, 2004, but upon an amendment of the Plan in 2008, all amounts deferred under the Prior Plan instead became payable under this Plan.  The following provisions constitute an amendment and restatement of the Plan effective January 1, 2013.  Prior to the amendment and restatement of the Plan as set forth herein, the distribution provisions applicable to the Deferred Compensation Accounts maintained under this Plan were set forth in the Brunswick Restoration Plan solely for administrative purposes.  Upon the amendment and restatement of this Plan and the Brunswick Restoration Plan, such distribution provisions have been transferred to this Plan, without any change in the terms and conditions of such distributions.
1.2    Change in Control.  For purposes of the Plan, the term “Change in Control” shall mean a change in control event, within the meaning set forth in Section 409A of the Code; provided, however, in no event shall an acquisition of assets under Treasury Regulation 1.409A-3(i)(5)(vii) constitute a change in control event, unless such event is also a sale or disposition of all or substantially all of the Company's assets.
1.3    Code.  For purposes of the Plan, the term “Code” means the Internal Revenue Code of 1986, as amended.  References to sections of the Code also refer to any successor provisions thereof.  If, after the Effective Date, there is a change in the provisions or interpretation of Section 409A of the Code which would have a material effect on the benefits of the Plan to a Participant or the Company, the Company shall revise the Plan in good faith to preserve the benefits of the Plan for the Company and the Participants.
1.4    Effective Date.  The “Effective Date” of this amendment and restatement of the Plan is January 1, 2013.
1.5    Eligible Employees.  The term “Eligible Employee” for any period shall mean any employee of the Company who is designated as an Eligible Employee for that period, either by individual designation by the Committee, or by being a member of a group of employees designated by the Committee.
1.6    Operation and Administration.  The authority to control and manage the operation and administration of the Plan shall be vested in the Human Resources and Compensation Committee (the “Committee”) of the Board of Directors of the Company (the “Board”).  In controlling and managing the 

operation and administration of the Plan, the Committee shall have the rights, powers and duties set forth in Section 6.  Capitalized terms in the Plan shall be defined as set forth in the Plan.
1.7    Plan Year.  The term “Plan Year” means the calendar year.
1.8    Applicable Law.  The Plan shall be construed and administered in accordance with the laws of the State of Illinois to the extent that such laws are not preempted by the laws of the United States of America.
1.9    Notices.  Any notice or document required to be filed with the Plan Administrator (as specified in subsection 6.1) or the Committee under the Plan will be properly filed if delivered or mailed to the Plan Administrator, in care of the Company, at its principal executive offices.  The Plan Administrator may, by advance written notice to affected persons, revise such notice procedure from time to time.  Any notice required under the Plan may be waived by the person entitled to notice.
1.10    Form and Time of Elections.  Unless otherwise specified herein, each election required or permitted to be made by any Participant or other person entitled to benefits under the Plan, and any permitted modification or revocation thereof, shall be in writing filed with the Plan Administrator at such times, in such form, and subject to such restrictions and limitations as the Plan Administrator shall require.
1.11    Benefits Under Qualified Plans.  Compensation of any Participant that is deferred under the Plan, and benefits payable under the Plan, shall be disregarded for purposes of determining the benefits under any plan that is intended to be qualified under Section 401(a) of the Code.
1.12    Other Costs and Benefits.  The Plan is intended to defer, but not to eliminate, payment of compensation to a Participant.  Accordingly, if any compensation or benefits that would otherwise be provided to a Participant in the absence of the Plan are reduced or eliminated by reason of deferral under the Plan, the Company shall equitably compensate the Participant for such reduction or elimination.  However, no reimbursement will be made for increased taxes resulting from benefits under the Plan (whether resulting from a change in individual income tax rates or otherwise).
1.13    Evidence.  Evidence required of anyone under the Plan may be by certificate, affidavit, document or other information which the person acting on it considers pertinent and reliable, and signed, made or presented by the proper party or parties.
1.14    Withholding.   Except as otherwise provided by the Committee, (i) the deduction of withholding and any other taxes required by law will be made from all amounts paid in cash and (ii) in the case of payments in shares of common stock of the Company (“Company Stock”), the Participant shall be required to pay in cash the amount of any taxes required to be withheld prior to receipt of such Company Stock, or alternatively, at the election of the Committee, a number of shares of Company Stock the Fair Market Value (defined below) of which equals the amount required to be withheld may be deducted from the payment; provided, however, that the number of shares of Company Stock so deducted may not have an aggregate Fair Market Value in excess of the amount determined by applying the minimum statutory withholding rate.  “Fair Market Value” means the closing price on the New York Stock Exchange - Composite Transactions Tape on the relevant date or on the next preceding date on which a closing price was quoted; provided, however, that the Committee may specify some other definition of Fair Market Value.
1.15    Adjustments.  In the event of any increase or decrease in the number of issued shares of Company Stock resulting from a subdivision or consolidation of shares or other capital adjustment, or the 

payment of a stock dividend or an extraordinary cash dividend, or other increase or decrease in shares, effected without receipt of consideration by the Company, or other change in corporate or capital structure, the number and class of securities distributable under this Plan and the number of share units in Participants' Elective Stock Deferral Accounts shall be appropriately adjusted by the Committee; provided, however, that any fractional shares resulting from any such adjustment shall be eliminated.  The decision of the Committee regarding any such adjustment shall be final, binding and conclusive.
SECTION 2
Participation
2.1    Deferral Election.  An Eligible Employee shall participate in the Plan by electing to defer payment of all or a portion of the Eligible Employee's Eligible Compensation pursuant to the terms of a “Deferral Election.”  An Eligible Employee's Deferral Election shall be made in the form and during the election period specified by the Committee.  Such election period shall end no later than the last day of the Plan Year preceding the Plan Year to which the election applies; provided, however, if the Committee determines that the Eligible Compensation being deferred satisfies the requirements of “performance-based compensation” within the meaning of Section 409A of the Code, then any election to defer such Eligible Compensation must be made no later than the date which is six months prior to the end of the performance period; provided, further, that a new Eligible Employee may make a Deferral Election with respect to Eligible Compensation earned after the election is made within 30 days after becoming an Eligible Employee.  A deferral election shall be irrevocable for the Plan Year to which it relates.  All Plan deferral elections shall be administered in accordance with the requirements of Section 409A of the Code.

2.2    Eligible Compensation.  For purposes of the Plan, a Participant's “Eligible Compensation” from the Company for any Plan Year means such amounts as would otherwise be payable to the Participant by the Company, and which are designated by the Committee prior to the date of the Participant's Deferral Election as compensation eligible for deferral in accordance with the Plan.

2.3    Plan Not Contract of Employment.  The Plan does not constitute a contract of employment, and participation in the Plan will not give any employee the right to be retained in the employ of the Company nor any right or claim to any benefit under the Plan, unless such right or claim has specifically accrued under the terms of the Plan.

SECTION 3

Plan Accounting

3.1    Deferred Compensation Accounts.  A “Deferred Compensation Account” shall be established on behalf of each Participant.  Subject to subsection 3.2, the balance of a Participant's Deferred Compensation Account shall be credited with the amount by which the Participant's Eligible Compensation subject to a Deferral Election is reduced pursuant to the Deferral Election that is not deferred into an Elective Stock Deferral Account pursuant to subsection 3.2.  Participants' Deferred Compensation Accounts shall be maintained, adjusted (including adjustments for hypothetical investment returns) and distributed as provided in Section 4 below.

3.2    Elective Stock Deferral Accounts.  A Participant's Deferral Election with respect to an award under the Brunswick Performance Plan (“BPP”) (or the Brunswick Corporation Strategic Incentive Plan (“SIP”) for periods prior to January 1, 2008) may designate all or a portion of such award to be 

deferred into an “Elective Stock Deferral Account” for the Participant.  A Participant's Elective Stock Deferral Account shall be credited with (i) the number of “Original” stock units equal to the sum of (i) the number of shares of Company Stock the Fair Market Value of which (determined as of the date on which funding of the deferred BPP award is approved by the Committee) equals the amount of the BPP award deferred into the Elective Stock Deferral Account and (ii) the number of “Premium” stock units equal to 20% of the number of Original stock units determined in clause (i).  A Participant's Elective Stock Deferral Account shall be adjusted to reflect the deemed reinvestment of dividends in accordance with the terms of the Company's dividend reinvestment program, as in effect from time to time, and shall be charged the amount of any distributions under the Plan with respect to that Account that have not previously been charged.

3.3    Statement of Accounts.  The Company shall periodically provide each Participant with a statement of the transactions in the Participant's Accounts.

SECTION 4

Distributions

4.1    General.  Subject to this Section 4, the balance of a Participant's Account(s) shall be distributed in a single lump sum within 90 days after the date of the Participant's separation from service, within the meaning of Section 409A of the Code; provided, however, that distribution to a Participant who is a corporate officer or an employee in Salary Grade 21 or above, or is otherwise considered a “specified employee” under Section 409A of the Code, shall be made upon the earlier to occur of (i) six months after the date of the Participant's separation from service or (ii) the date of the Participant's death.  In no event shall the amount distributed with respect to any Participant's Account(s) as of any date exceed the amount of the balance of the Account(s) as of that date.

4.2    Rule of 65 for Deferred Compensation Accounts.  Notwithstanding the foregoing, if, as of a Participant's separation from service, the sum of the Participant's age and years of service with the Company and its affiliates equals or exceeds 65 and the Participant has so elected in his or her Deferral Election, the balance in the Participant's Deferred Compensation Account as of December 31, 2004, and earnings thereon, shall be distributed, in accordance with rules and procedures adopted by the Committee, in annual installments over a period not exceeding five years beginning in the month of January following the Participant's separation from service; provided, however, that the first installment to a Participant who is a corporate officer or an employee in Salary Grade 21 or above, or is otherwise considered a “specified employee” under Section 409A of the Code, shall not be made prior to the earlier to occur of (i) six months after the date of the Participant's separation from service or (ii) the date of the Participant's death.

4.3    Additional Distribution and Withdrawal Rights for Deferred Compensation Accounts.  A Participant may elect in his or her Deferral Election that amounts in such Participant's Deferred Compensation Account be distributed prior to the Participant's separation from service.  In addition, in the event of an “Unforeseeable Financial Emergency,” a Participant may, in accordance with rules and procedures established by the Committee, make a withdrawal from his Deferred Compensation Account of up to the amount reasonably needed to satisfy the Unforeseeable Financial Emergency (including amounts necessary to pay income taxes or penalties reasonably anticipated to result from the withdrawal).  “Unforeseeable Financial Emergency” shall mean a severe financial hardship of the Participant resulting from an illness or accident of the Participant or the Participant's spouse or dependent, loss of the Participant's property due to casualty, or other similar extraordinary and unforeseeable 

circumstances arising as a result of events beyond the control of the Participant, and shall be determined by the Committee in its discretion in accordance with the requirements of Section 409A of the Code.

4.4    In-Service Distribution Election for Elective Stock Deferral Accounts.  A Participant may elect in the Deferral Election with respect to a BPP award (or SIP award, prior to 2008), in accordance with such rules and procedures as determined by the Committee, to receive a distribution of the stock units credited to the Participant's Elective Stock Deferral Account with respect to such award prior to the date of the Participant's separation from service (“In-Service Distribution Election”); provided, however, that no In-Service Distribution Election may be changed after it has been made and, subject to subsection 4.1, no distribution to be made pursuant to an In-Service Distribution Election may be accelerated to a date earlier than that set forth in the In-Service Distribution Election.  Notwithstanding the foregoing provisions of this subsection 4.4, during the election period established by the Committee and ending on or before December 31, 2008, a Participant was permitted to make or change an In-Service Distribution Election with respect to all or a portion of the vested stock units credited to his or her Elective Stock Deferral Account as of December 31, 2008 (including deemed reinvestment of dividends thereon); provided, however, the in-service distribution date elected could not be prior to April 1, 2009.  Such In-Service Distribution Election became irrevocable after December 31, 2008.  Except as specifically provided in this paragraph with respect to the ability to make or change an In-Service Distribution Election on or before December 31, 2008, the normal terms of the Plan shall govern distribution of a Participant's Elective Stock Deferral Account, including the provisions of Sections 4.1, 4.5 and 4.6.

4.5    Forfeiture of Unvested Premium Stock Units.  In the event of any distribution of Original stock units that were credited to a Participant's Elective Stock Deferral Account as a result of a deferred BPP award (or SIP award, if applicable) less than three years before the date of distribution, other than a distribution following termination of the Participant's employment due to death, permanent and total disability, after a Change in Control, or after the sum of the Participant's age and years of service is at least 65, the Premium stock units (and associated dividend reinvestments) that were credited at the same time as such Original stock units shall be forfeited.

4.6    Medium of Payment.  All distributions from Participants' Deferred Compensation Accounts shall be paid in cash and all distributions from Participants' Elective Stock Deferral Accounts shall be distributed by the Company in shares of Company Stock.

4.7    Beneficiary.  Subject to the terms of the Plan, any benefits payable to a Participant under the Plan that have not been paid at the time of the Participant's death shall be paid at the time and in the form determined in accordance with the foregoing provisions of the Plan, to the beneficiary designated by the Participant under the Brunswick Rewards Plan (the “Rewards Plan”) or, if no such beneficiary has been so designated or if a designated beneficiary has predeceased the Participant, to the default beneficiary determined pursuant to the terms of the Rewards Plan; provided, however, that if the Participant had made a beneficiary designation under the terms of this Plan in the form and manner required by the Plan Administrator and such beneficiary designation was in effect as of December 31, 2012, such beneficiary designation shall continue in effect until the Participant revokes such designation.

4.8      Distributions to Disabled Persons.  Notwithstanding the provisions of this Section 4, if, in the Plan Administrator's opinion, a Participant or beneficiary is under a legal disability or is in any way incapacitated so as to be unable to manage such person's financial affairs, the Plan Administrator may direct that payment be made to a relative or friend of such person for the benefit of such person until claim is made by a conservator or other person legally charged with the care of such person or such person's estate, and such payment shall be in lieu of any such payment to such Participant or 

beneficiary.  Thereafter, any benefits under the Plan to which such Participant or beneficiary is entitled shall be paid to such conservator or other person legally charged with the care of such person or such person's estate.

4.9    Benefits May Not be Assigned.  Neither the Participant nor any other person shall have any voluntary or involuntary right to commute, sell, assign, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate or convey in advance of actual receipt of the amounts, if any, payable hereunder, or any part hereof, which are expressly declared to be unassignable and non-transferable; provided that vested Plan benefits may be transferred to an alternate payee (within the meaning of Section 414(p)(8) of the Code) pursuant to a domestic relations order that the Plan Administrator determines satisfies the criteria set forth in paragraphs (1), (2), and (3) of Section 414(p) of the Code (a “DRO”).  Any benefits payable to an alternate payee under the Plan will be paid in a lump sum payment within 90 days after the Plan Administrator determines the order satisfies the requirements of a DRO.  Except for transfers pursuant to a DRO, no part of the amounts payable shall be, prior to actual payment, subject to seizure or sequestration for payment of any debts, judgments, alimony or separate maintenance owed by the Participant or any other person, or be transferred by operation of law in the event of the Participant's or any other person's bankruptcy or insolvency.  Payments to or on behalf of a Participant under the Plan are not subject to reduction or offset for amounts due or alleged to be due from the Participant to the Company.

SECTION 5

Source of Benefit Payments

Neither a Participant nor any other person shall, by reason of the Plan, acquire any right in or title to any assets, funds or property of the Company whatsoever, including, without limitation, any specific funds, assets, or other property which the Company, in its sole discretion, may set aside in anticipation of a liability under the Plan.  A Participant shall have only a contractual right to the amounts, if any, payable under the Plan, unsecured by any assets of the Company.  Nothing contained in the Plan shall constitute a guarantee by the Company that the assets of the Company shall be sufficient to pay any benefits to any person.
SECTION 6
Committee
6.1    Powers of Committee.  Responsibility for the day-to-day administration of the Plan shall be vested in the Plan Administrator, which shall be the Committee or its delegate.  The authority to control and manage all other aspects of the operation and administration of the Plan shall also be vested in the Committee.  The Committee is authorized to interpret the Plan, to establish, amend, and rescind any rules and regulations relating to the Plan, to determine the terms and provisions of any agreements made pursuant to the Plan, and to make all other determinations that may be necessary or advisable for the administration of the Plan.  Except as otherwise specifically provided by the Plan, any determinations to be made by the Committee under the Plan shall be decided by the Committee in its sole discretion.  Any interpretation of the Plan by the Committee and any decision made by it under the Plan is final and binding on all persons.
6.2    Delegation by Committee.  The Committee may allocate all or any portion of its responsibilities and powers to any one or more of its members and may delegate all or any part of its 

responsibilities and powers to any person or persons selected by it.  Any such allocation or delegation may be revoked by the Committee at any time.  Until the Committee takes action to the contrary:
(a)The Chief Executive Officer of the Company shall be delegated the power and responsibility to take all actions assigned to or permitted to be taken by the Committee under Section 2, Section 3, and Section 4 (other than the powers and responsibility of the Plan Administrator).

(b)The powers and responsibilities of the Plan Administrator shall be delegated to the Vice President - Human Resources (or delegate) of the Company, subject to such direction as may be provided to the Vice President - Human Resources or delegate from time to time by the Committee and the Chief Executive Officer of the Company.

6.3    Information to be Furnished to Committee.  The Company shall furnish the Committee with such data and information as may be required for it to discharge its duties.  The records of the Company as to an employee's or Participant's employment, termination of employment, leave of absence, reemployment and Eligible Compensation shall be conclusive on all persons unless determined to be incorrect.  Participants and other persons entitled to benefits under the Plan must furnish the Committee such evidence, data or information as the Committee considers desirable to carry out the Plan.

6.4    Liability and Indemnification of Committee.  No member or authorized delegate of the Committee shall be liable to any person for any action taken or omitted in connection with the administration of the Plan unless attributable to such person's own fraud or willful misconduct; nor shall the Company be liable to any person for any such action unless attributable to fraud or willful misconduct on the part of a director or employee of the Company.  The Committee, the individual members thereof, and persons acting as the authorized delegates of the Committee under the Plan, shall be indemnified by the Company against any and all liabilities, losses, costs and expenses (including legal fees and expenses) of whatsoever kind and nature which may be imposed on, incurred by or asserted against the Committee or its members or authorized delegates by reason of the performance of a Committee function if the Committee or its members or authorized delegates did not act dishonestly or in willful violation of the law or regulation under which such liability, loss, cost or expense arises.  This indemnification shall not duplicate but may supplement any coverage available under any applicable insurance.

SECTION 7

Amendment and Termination

The Committee may, at any time, amend or terminate the Plan (including the rules for administration of the Plan), provided, however, no amendment or termination may materially adversely affect the rights of any Participant or beneficiary under the Plan, subject to the following:
(a)    The Committee, with the approval of the Board, may terminate the Plan, in which case benefits shall continue to be paid in accordance with the terms of the Plan, unless the Committee determines to pay all benefits in a lump sum payment during the period beginning 12 months after the termination date and ending 24 months after the termination; provided, further if the Plan is terminated in connection with a Change in Control, all benefits shall be paid during the period beginning 30 days prior to such Change in Control and ending 12 months after the Change in Control.
(b)    Prior to the beginning of any Plan Year, the Committee may eliminate future deferrals under the Plan for such Plan Year.

(c)    Notwithstanding any other provision of the Plan to the contrary, neither the Committee nor the Board may delegate its rights and responsibilities under this Section 7; provided, however, that, the Board of Directors may, from time to time, substitute itself, or another committee of the Board, for the Human Resources and Compensation Committee under this Section 7.abernathyemployltr.htm

Exhibit 10.1

 

Frontier Communications Corporation

3 High Ridge Park

Stamford, Connecticut  06905

(203) 614-5600

May 31, 2012

Ms. Kathleen Q. Abernathy

983 Spring Hill Road

McLean, VA  22102

Dear Kathleen:

 

Reference is made to the Offer Letter dated January 20, 2010 (“Offer Letter”) between you and Frontier Communications Corporation (the “Company”).

 

The terms of the benefits payable upon a change in control referred to in the Offer Letter are hereby amended as follows:

 

If, within one year following a “Change in Control” (as defined below) of the Company, you have a “Separation from Service” (as defined below) either because (a) your employment is terminated by the Company without “Cause” (as defined below) or (b) you terminate your employment as a result of (i) a material decrease in your base salary, target bonus or long term incentive compensation target from those in effect immediately prior to the Change in Control for any reason other than Cause; (ii) a material relocation of your principal office location (for this purpose, a relocation more than 50 miles from the Company’s Washington, D.C. office will be automatically deemed material) or (iii) a material decrease in your responsibilities or authority for any reason other than Cause (and prior to your terminating your employment you provide the Company with notice of the decrease or relocation within 90 days of the occurrence of such condition, the Company does not remedy the condition within 30 days of such notice, and you Separate from Service within two years of the initial occurrence of one or more such conditions), you shall be entitled to a lump sum payment equal to one year’s base salary and 100% of your bonus target prorated for the plan year (based on the then current level of salary and bonus target or, if greater, that in effect immediately prior to the Change in Control), all restrictions on restricted shares held by you shall immediately lapse and such restricted shares shall become fully-vested and non-forfeitable and all performance shares granted to you under the Long-Term Incentive Plan (LTIP) or other performance incentive plan pursuant to a performance-based vesting schedule shall immediately be earned by you and non-forfeitable, with the number of shares earned equal to the target level of shares granted.  The lump sum payment will be made on the Expiration Date, as defined below.

 

A “Change in Control” shall be deemed to have occurred:

 

  

  

  

(A)           When any “person” as defined in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as used in Section 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) of the Exchange Act (but excluding the Company and any subsidiary and any employee benefit plan sponsored or maintained by the Company or any subsidiary (including any trustee of such plan acting as trustee)), directly or indirectly, becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), of securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding securities; or

 

(B)           Upon the consummation of any merger or other business combination involving the Company, a sale of substantially all of the Company's assets, liquidation or dissolution of the Company or a combination of the foregoing transactions (the “Transactions”) other than a Transaction immediately following which the shareholders of the Company immediately prior to the Transaction own, in the same proportion, at least 51% of the voting power, directly or indirectly, of (i) the surviving corporation in any such merger or other business combination; (ii) the purchaser of or successor to the Company’s assets; (iii) both the surviving corporation and the purchaser in the event of any combination of Transactions; or (iv) the parent company owning 100% of such surviving corporation, purchaser or both the surviving corporation and the purchaser, as the case may be.

 

“Cause” shall mean your (a) willful and continued failure (other than as a result of physical or mental illness or injury) to perform your material duties in effect immediately prior to the Change in Control which continues beyond 10 days after a written demand for substantial performance is delivered to you by the Company, which demand shall identify and describe each failure with sufficient specificity to allow you to respond, (b) willful or intentional conduct that causes material and demonstrable injury, monetary or otherwise, to the Company or (c) conviction of, or a plea of nolo contendere to, a crime constituting (i) a felony under the laws of the United States or any State thereof, or (ii) a misdemeanor involving moral turpitude.  For these purposes, no act or failure to act on your part shall be considered “willful” or “intentional” unless it is done, or omitted to be done by you in bad faith and without reasonable belief that your action or inaction 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 of Directors or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by you in good faith and in the best interests of the Company.

 

If it is determined (as hereafter provided) that any payment or distribution by the Company to or for your benefit, whether paid or payable or distributed or distributable pursuant to the terms of this letter agreement or otherwise pursuant to or by reason of any other agreement, policy, plan, program or arrangement, including without limitation any stock option, restricted stock award, stock appreciation right or similar right, or the lapse or termination of any restriction on or the vesting or exercisability of any of the foregoing (a “Severance Payment”), would be subject to the excise tax imposed by Section 4999 of the Code (or any successor provision thereto) by reason of being “contingent on a change in ownership or control” of the Company, within the meaning of Section 280G of the Code (or any successor provision thereto) or to any similar tax imposed by state or local law, or any interest or penalties with respect to such excise tax (such tax or taxes, together with any such interest and penalties, are hereafter collectively referred to as the “Excise Tax”), then the Severance Payment shall be payable either (i) in full or (ii) as to such lesser amount which would result in no portion of the Severance Payment being subject to the Excise Tax (“Capped Payment”), whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the Excise Tax, results in your receipt on an after-tax basis, of the greatest amount of economic benefits to you, notwithstanding that all or some portion of such benefits may be taxable under Section 4999 of the Code.

 

  

  

  

Subject to the provisions of immediately preceding paragraph, all determinations required to be made pursuant to this letter agreement, including whether an Excise Tax is payable by you and the amount of such Excise Tax, shall be made by the nationally recognized firm of certified public accountants (the “Accounting Firm”) used by the Company prior to the Change in Control (or, if such Accounting Firm declines to serve, the Accounting Firm shall be a nationally recognized firm of certified public accountants selected by you).  The Accounting Firm shall be directed by the Company or you, as applicable, to submit its preliminary determination and detailed supporting calculations to both the Company and you within 15 calendar days after the date of your termination of employment, if applicable, and any other such time or times as may be requested by the Company or you.  If the Accounting Firm determines that any Excise Tax is payable by you, the Company shall either (x) make payment of the Severance Payment, or (y) reduce the Severance Payment by the amount which, based on the Accounting Firm’s determination and calculations, would provide you with the Capped Payment (except that any portion of the Severance Payment that constitutes deferred compensation that is subject to Section 409A shall not be reduced, and its time and form of payment shall not be altered as a result of this process), and pay to you such reduced amount, in each case, less any Excise Taxes, federal, state, and local income and employment withholding taxes and any other amounts required to be deducted or withheld by the Company under applicable statute or regulation.  If the Accounting Firm determines that no Excise Tax is payable by you, it shall, at the same time as it makes such determination, furnish you with an opinion that you have substantial authority not to report any Excise Tax on your federal, state, local income or other tax return.  All fees and expenses of the Accounting Firm and opinion letter shall be paid by the Company in connection with the calculations required by this letter.

 

The provisions in this letter regarding lapsing of restrictions on restricted stock and the earning of performance shares in certain circumstances in the event of a Change in Control will remain in effect as long as you are a member of the Senior Leadership Team (“SLT”).  If at any time you are no longer a member of the SLT, such provisions will not apply.

 

  

  

  

You shall not receive any payments or benefits to which you may be entitled hereunder unless you agree to execute a release of all then existing claims against the Company, its subsidiaries, affiliates, shareholders, directors, officers, employees and agents in relation to claims relating to or arising out of your employment or the business of the Company; provided, however, that any such release shall not bar or prevent you from responding to any litigation or other proceeding initiated by a released party and asserting any claim or counterclaim you have in such litigation or other proceeding as if no such release had been given as to such party, nor shall it bar you from claiming rights that arise under, or that are preserved by, this letter agreement.  To comply with this paragraph, you must sign and return the release within 45 days of the termination of your employment, and you must not revoke it during a seven-day revocation period that begins when the release is signed and returned to the Company.  Then following the expiration of this revocation period, there shall occur the “Expiration Date,” which is the 53rd day following the date of termination of your employment.

 

To the extent that a payment of Section 409A compensation under this letter agreement is based upon your having a termination of employment, “termination of employment” shall have the same meaning as “Separation from Service” under Section 409A(a)(2)(A)(i) of the Code.  In addition, to avoid having such a separation from service occur after your termination of employment, you shall not have (after your termination of employment) any duties or responsibilities that are inconsistent with the termination of employment being treated as such a separation from service as of the date of such termination.

 

This letter agreement sets forth the entire agreement and understanding between the Company and you relating to the subject matter hereof and supersedes and replaces all prior discussions and agreements between us regarding the subject matter hereof, including, without limitation, the terms of the Offer Letter relating to benefits payable upon a change in control.  This letter agreement can only be modified by a subsequent written agreement executed by the Company and you.  This letter agreement shall be governed by and interpreted in accordance with the laws of the State of Connecticut, without regard to its conflicts of laws or principles.

 

It is the intention of the parties that the lump sum described in the third and fourth paragraphs of this letter should be exempt from Section 409A as short-term deferrals, and that the restricted stock should also be exempt from Section 409A, and this letter agreement in the normal course is to be interpreted accordingly.  Nonetheless, if you are a “specified employee” within the meaning of Section 409A and any amounts or other compensation are (i) payable under this letter agreement, (ii) subject to Section 409A as deferred compensation and (iii) payable on account of your Separation from Service, then such amounts or compensation may not be paid until six months after your Separation from Service date.  Finally, the parties intend at all times that no payment or entitlement pursuant to this letter agreement will give rise to any adverse tax consequences to either party pursuant to Section 409A, and this letter agreement shall be interpreted consistently with this paragraph.  The term “Separation from Service” shall have the meaning given to it by Section 409A (or any successor provision) (“Section 409A”) of the Internal Revenue Code of 1986, as amended (the “Code”).

 

  

  

  

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 letter 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.  “Company” means the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid that assumes and agrees to perform this letter agreement by operation of law or otherwise.

 

To acknowledge your acceptance of the terms and conditions of this letter agreement, please sign the bottom of this letter agreement and fax it to me directly at (203) 614-4627.  Also, please return the originally signed offer letter to my attention.

 

 

	 	 Sincerely,
	 	 
	 	 /s/ Cecilia K. McKenney
	 	 
	 	 Cecilia K. McKenney
	 	 Executive Vice President, Human Resources and Sales Operations
	 	 

 

 

Agreed to and acknowledged:

 

 

/s/ Kathleen Q. Abernathy                        May 31, 2012                                           

Kathleen Q. Abernathy                                                 Date

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