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 10 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 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 reasonably 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 (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, which demand specifically identifies the manner in which the Board believes that the Executive has not substantially performed the Executive’s duties, (ii) the willful engaging by the Executive in illegal conduct or gross misconduct which is materially and demonstrably injurious to the Company, (iii) the Executive’s conviction of, or plea of nolo contendere to, a felony or (iv) the Executive’s material breach of any provision of this Agreement. For purposes of this provision, no act, or failure to act, on the Executive’s part shall be considered “willful” unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the Executive’s action or omission was in the best interest of the Company. (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 the occurrence (without the Executive’s express written consent) of any one of the following acts by the Company, or failures by the Company to act, unless, in the case of any act or failure to act described in clause (i), (ii), (iii) or (iv) below, such act or failure to act is corrected prior to the Date of Termination specified in the Notice of Termination given in respect thereof: (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 material 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) a material reduction by the Company in the Executive’s Annual Base Salary as in effect on the Effective Date or as the same may be increased from time to time thereafter; (iii) the relocation of the Executive’s principal place of employment to a location which is more than 35 miles from the Executive’s principal place of employment immediately prior to the Effective Date; or (iv) the failure by the Company to continue in effect any compensation plan in which the Executive participates immediately prior to the Effective Date, which plan is material to the Executive’s total compensation, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the failure by the Company to continue the Executive’s participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amount of benefits provided and the level of the Executive’s participation relative to other participants, as existed at the time of the Effective Date. For purposes of this Agreement, any good faith determinations of “Good Reason” made by the Executive shall be final, binding and conclusive on the Company and the Executive. (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 10 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 is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than 15 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, 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. 6. Obligations of the Company upon Termination. (a) Good Reason; Other than for Cause or Disability; Death. (i) During the Protected Period, any termination of the Executive’s employment by the Executive for Good Reason, or by the Company other than for Cause or Disability, or by reason of the Executive’s death, shall be communicated by a Notice of Termination to the other party hereto given in accordance with Section 10 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 such termination of the Executive’s employment under the provision so indicated and (iii) if the Date of Termination is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than 15 days after the giving of such notice). (ii) The Date of Termination shall be the date specified in the Notice of Termination (which, in the case of a termination by the Company other than for Cause or Disability, shall not be less than 30 days nor more than 60 days from the giving of such notice). (iii) In the event that the Executive’s employment is terminated during the Protected Period other than for Cause, Disability or death, or by the Executive for Good Reason, 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 amount of any bonus declared for a fiscal year ending prior to the Date of Termination but not yet paid (the “Prior Bonus”) and (3) any accrued vacation pay, in each case to the extent not theretofore paid (the amounts described in clauses (1), (2) and (3) shall be hereinafter referred to as the “Accrued Obligations”); (B) the product of (1) the highest annual bonus paid or payable to the Executive (including any Prior Bonus) pursuant to the Company’s annual incentive plan for the three fiscal years immediately preceding the fiscal year in which the Date of Termination occurs or, if the Date of Termination occurs prior to the end of the third fiscal year of the Protected Period, the fiscal year in which the Date of Termination occurs, and (2) 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 (C) an amount equal to three times the sum of (1) the Executive’s Annual Base Salary in effect immediately prior to the Date of Termination and (2) the highest annual bonus paid or payable to the Executive (including any Prior Bonus) pursuant to the Company’s annual incentive plan for the three fiscal years immediately preceding the fiscal year in which the Date of Termination occurs or, if the Date of Termination occurs prior to the end of the third fiscal year of the Protected Period, the fiscal year in which the Date of Termination occurs. (iv) The Company shall also provide to the Executive during the Protected Period the welfare benefits described in Sections 4(b)(iv) and 4(b)(v) hereof and the other benefits described in Section 4(b) hereof to the extent necessary to produce the same economic result that would have obtained had the Executive’s employment not been terminated. (v) Anything in this Agreement to the contrary notwithstanding, if the Executive shall have been in receipt of disability payments under the Company’s long-term disability plan or under the Social Security Act at the time of the Executive’s termination of employment, the amount of the payments described in clause (iii) above shall be reduced by the amount of such disability payments. (vi) This Agreement shall not be terminated by the Company following a Change of Control without the Executive’s express written consent. (b) Cause; Disability. If the Executive’s employment is terminated by the Company for Cause, or if the Executive’s employment terminates by reason of the Executive’s Disability, then the Company’s obligations to the Executive shall be the Accrued Obligations. 7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the Executive’s continuing or future participation in any benefit, bonus, incentive or other plan or program provided by the Company and for which the Executive may qualify, nor, subject to Section 9, shall anything herein limit or otherwise affect such rights as the Executive may have under any stock option or other agreements with the Company. Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan or program of the Company at or subsequent to the Date of Termination shall be payable in accordance with such plan or program. 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. 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 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 Internal Revenue Code of 1986, as amended (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. (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 the accounting firm engaged by the Company that is the Company’s independent auditor immediately before the Change of Control (the “Accounting Firm”) which 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. (c) The Gross-Up Payment provided for in this Section 9 shall be paid by the Company to or for the benefit of 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(d) and the Executive thereafter is required to make a payment of any Excise Tax, the 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. (d) 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 to effectively 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(d), 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 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. (e) If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 9(d), 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(d)) 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(d), 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. Notices. For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested, postage prepaid, addressed, if to the Executive, to the address last provided by the Executive to the Company, or, if to the Company, to the address of its principal corporate offices, attention of the Secretary. 11. Section 409A. Notwithstanding anything in this Agreement to the contrary, to the extent that any amounts payable under this Agreement constitute “nonqualified deferred compensation” for purposes of Section 409A of the Code, and are not otherwise exempt from the application of Section 409A of the Code, and if the Executive is a “specified employee” as defined in Section 409A(a)(2)(B)(i) of the Code, any such payment that is otherwise payable within six months following the Executive’s termination of employment shall be delayed and paid on the first business day following the earlier of (i) the expiration of the six-month period measured from the Executive’s separation from service, and (ii) the date of the Executive’s death (the “409A Deferral Period”). For purposes of this Agreement, each payment or amount due under this Agreement shall be considered a separate payment. 12. Miscellaneous. No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and such officer as may be specifically designated by the Board. No waiver by either party hereto at any time of any breach As a result of these announcements, the company's shares have moved 0.2% on the market, and are now trading at a price of $349.40. For the full picture, make sure to review ROCKWELL AUTOMATION, INC's 8-K report.
ROCKWELL AUTOMATION EXECUTIVE FACES POTENTIAL TERMINATION
By
Philip Seaworth
• Monday, October 06 06:03 •
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