{"id":40377,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/retention-agreement-tyco-international-ltd-and-l-dennis.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"retention-agreement-tyco-international-ltd-and-l-dennis","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/retention-agreement-tyco-international-ltd-and-l-dennis.html","title":{"rendered":"Retention Agreement &#8211; Tyco International Ltd. and L. Dennis Kozlowski"},"content":{"rendered":"<pre>                               RETENTION AGREEMENT\n\n\n         AGREEMENT by and between Tyco International Ltd., a Bermuda corporation\n(the \"Company\") and L. Dennis Kozlowski (the \"Executive\"), effective as of\nJanuary 22, 2001, the Effective Date (as hereinafter defined).\n\n                               W I T N E S S E T H\n\n         WHEREAS, in recognition of Executive's significant contribution to the\ncreation of shareholder value and leadership during his tenure as Chairman of\nthe Board of Directors, President and Chief Executive Officer of the Company,\nthe Compensation Committee of the Board of Directors of the Company (the\n\"Committee\") wishes to obtain his commitment to serve as Chairman of the Board,\nPresident and Chief Executive Officer of the Company until his 62nd birthday on\nNovember 16, 2008 and his commitment to serve after his retirement as a\nconsultant to the Company, at the direction of the then Chief Executive Officer\nof the Company; and\n\n         WHEREAS, the Committee has determined to offer Executive the benefits\ndescribed in this Agreement to provide an incentive to encourage Executive to\nremain in the employ of the Company so that the Company may receive his\ncontinued dedication and assure the continued availability of his advice and\ncounsel and to assure that he will not provide services for a competing business\nin accordance with the terms hereof; and\n\n         WHEREAS, Executive has agreed to serve the Company pursuant to the\nterms and conditions hereinafter set forth.\n\n         NOW, THEREFORE, for good and valuable consideration, the receipt of\nwhich is hereby acknowledged, the Company and Executive hereby agree as follows:\n\n1.       DEFINITIONS.\n\n         As used in this Agreement, the following terms shall have the\nrespective meanings set forth below:\n\n                  (a) \"Cause\" means Executive's conviction of a felony that is\nmaterially and demonstrably injurious to the Company or any of its subsidiaries\nor affiliates, monetarily or otherwise. Notwithstanding the foregoing, Executive\nshall not be deemed to have been terminated for Cause for purposes of this\nAgreement unless and until there shall have been delivered to him a copy of a\nresolution, duly adopted by a vote of three-quarters (3\/4) of the entire Board\nof Directors of the Company (the \"Board\") at a meeting of the Board called and\nheld (after reasonable notice to Executive and an opportunity for Executive and\nhis counsel to be heard before the Board) for the purpose of considering whether\nExecutive has been convicted of a felony as justifies termination for Cause\nhereunder and specifying the particulars thereof. The Company must notify\nExecutive of an event constituting Cause within 90 days following the Board's\nknowledge of its existence or such event shall not constitute Cause under this\nAgreement.\n\n\n\n\n                  (b) \"Change in Control\" means the first to occur of any of the\nfollowing events:\n\n                           (1) Any \"person\" (as that term is used in Sections 13\n         and 14(d)(2) of the Securities Exchange Act of 1934 (\"Exchange Act\"))\n         becomes the beneficial owner (as that term is used in Section 13(d) of\n         the Exchange Act), directly or indirectly, of 30% or more of the\n         Company's capital stock entitled to vote in the election of directors;\n\n                           (2) Persons who, as of the Effective Date constitute\n         the Board (the \"Incumbent Directors\") cease for any reason, including,\n         without limitation, as a result of a tender offer, proxy contest,\n         merger or similar transaction, to constitute at least a majority\n         thereof, provided that any person becoming a director of the Company\n         subsequent to the Effective Date shall be considered an Incumbent\n         Director if such person's election or nomination for election was\n         approved by a vote of at least three-quarters of the Incumbent\n         Directors; but provided further, that any such person whose initial\n         assumption of office is in connection with an actual or threatened\n         election contest relating to the election of members of the Board or\n         other actual or threatened solicitation of proxies or consents by or on\n         behalf of a \"person\" (as that term is used in Sections 13 and 14(d)(2)\n         of the Exchange Act) other than the Board, including by reason of\n         agreement intended to avoid or settle any such actual or threatened\n         contest or solicitation, shall not be considered an Incumbent Director;\n\n                           (3) The shareholders of the Company approve any\n         consolidation or merger of the Company, other than a merger of the\n         Company in which the holders of the common stock of the Company\n         immediately prior to the merger hold more than 50% of the common stock\n         of the surviving corporation immediately after the merger;\n\n                           (4) The shareholders of the Company approve any plan\n         or proposal for the liquidation or dissolution of the Company; or\n\n                           (5) Substantially all of the assets of the Company\n         are sold or otherwise transferred to parties that are not within a\n         \"controlled group of corporations\" (as defined in Section 1563 of the\n         Internal Revenue Code of 1986, as amended (the \"Code\")) in which the\n         Company is a member.\n\n                  (c) \"Company\" means Tyco International Ltd., a Bermuda\ncorporation, and, the successor to, or transferee of all or substantially all of\nthe assets of, the Company.\n\n                  (d) \"Date of Termination\" means (1) the effective date on\nwhich Executive's employment by the Company terminates as specified in a Notice\nof Termination by the Company or Executive, as the case may be, or (2) if\nExecutive's employment by the Company terminates by reason of death, the date of\ndeath of Executive. Notwithstanding the previous sentence, (i) if Executive's\nemployment is terminated for Disability (as defined in Section 4(d)), then such\nDate of Termination shall be no earlier than 30 days following the date on which\na Notice of Termination is received, and (ii) if Executive's employment is\nterminated by the Company other than for Cause or by Executive other than for\nGood Reason, then such Date of Termination shall be no earlier than 30 days\nfollowing the date on which a Notice of Termination is received.\n\n\n                                       2\n\n\n                  (e) \"Effective Date\" means January 22, 2001.\n\n                  (f) \"Good Reason\" means, without Executive's express written\nconsent, the occurrence of any of the following events on or after a Change in\nControl:\n\n                           (1) (i) the assignment to Executive of any duties or\n         responsibilities (including reporting responsibilities) inconsistent in\n         any material and adverse respect with Executive's duties and\n         responsibilities with the Company immediately prior to the Effective\n         Date (including any material and adverse diminution of such duties or\n         responsibilities), or (ii) a material and adverse change in Executive's\n         titles or offices with the Company as in effect immediately prior to\n         the Effective Date;\n\n                           (2) a reduction by the Company in Executive's rate of\n         annual base salary or annual or long-term incentive compensation\n         opportunity as in effect immediately prior to the Effective Date or as\n         the same may be increased from time to time thereafter;\n\n                           (3) the failure of the Company to (i) continue in\n         effect any employee benefit plan or compensation plan in which\n         Executive is participating immediately prior to the Effective Date\n         (including the taking of any action by the Company which would\n         adversely affect Executive's participation in or reduce Executive's\n         benefits under any such plan), unless Executive is permitted to\n         participate in other plans providing Executive with substantially\n         comparable benefits, (ii) provide Executive and Executive's dependents\n         with welfare benefits in accordance with the most favorable plans,\n         practices, programs and policies of the Company and its affiliated\n         companies in effect for Executive immediately prior to the Effective\n         Date or provide substantially comparable benefits at a substantially\n         comparable cost to Executive, (iii) provide fringe benefits in\n         accordance with the most favorable plans, practices, programs and\n         policies of the Company and its affiliated companies in effect for\n         Executive immediately prior to the Effective Date, or provide\n         substantially comparable fringe benefits, or (iv) provide Executive\n         with paid vacation in accordance with the most favorable plans,\n         policies, programs and practices of the Company and its affiliated\n         companies as in effect for Executive immediately prior to the Effective\n         Date, unless the failure to provide such paid vacation is a result of a\n         policy uniformly applied by the Company to its employees;\n\n                           (4) the failure of the Company to obtain the\n         assumption agreement from any successor as contemplated in Section 14;\n         or\n\n                           (5) the relocation of Executive's principal place of\n         employment to a location more than 25 miles from Executive's principal\n         place of employment immediately prior to the Effective Date or the\n         Company's requiring Executive to be based anywhere other than such\n         principal place of employment (or permitted relocation thereof) except\n         for required travel on the Company's business to an extent\n         substantially consistent with Executive's present business travel\n         obligations.\n\n         Notwithstanding the foregoing, an isolated and inadvertent action taken\nin good faith and which is remedied by the Company within ten days after receipt\nof notice thereof given by Executive shall not constitute Good Reason.\n\n\n                                       3\n\n\n                  (g) \"Notice of Termination\" means the written notice as\ndescribed in Section 15(b).\n\n2.       RETENTION PERIOD.\n\n                  (a) POSITION. Executive agrees to continue to serve as\nChairman of the Board, President and Chief Executive Officer of the Company from\nthe Effective Date until his 62nd birthday on November 16, 2008, or, if earlier,\nthe Date of Termination, on terms no less favorable to him than his conditions\nof employment immediately prior to the Effective Date.\n\n                  (b) CERTAIN EQUITY COMPENSATION. In recognition of Executive's\nagreement to continue in the employ of the Company and not seek employment\nelsewhere, and as consideration for Executive's agreements contained in Sections\n8, 9 and 10 hereof, Executive has been granted, as of the Effective Date,\n800,000 restricted common shares of the Company (\"Restricted Stock Award\")\npursuant to the Company's 1994 Restricted Stock Ownership Plan for Key\nEmployees. The restrictions on such shares shall lapse with respect to\none-eighth (1\/8th) of the shares underlying the Restricted Stock Award on each\nanniversary date of the Effective Date, beginning with January 22, 2002, and\nshall lapse with respect to all such shares underlying the Restricted Stock\nAward on Executive's 62nd birthday, in each case conditioned on Executive's\nemployment with the Company on each such date except as otherwise provided\nherein. The shares included in the Restricted Stock Award may not be transferred\nby Executive until such time as the restrictions on such shares lapse. Executive\n(or the event of death, his estate or beneficiary) may choose to sell to the\nCompany or any of its subsidiaries or affiliates (and the Company or a\nsubsidiary or affiliate shall be obligated to purchase from Executive (or the\nevent of death, his estate or beneficiary)) any such shares that become fully\nvested and nonforfeitable at a per share price equal to the average weighted\nvolume share price of the Company's shares on the New York Stock Exchange on the\ndate Executive (or in the event of death, his estate or beneficiary) notifies\nthe Company of his intention to sell such shares to the Company (which notice\nshall not be effective until such time as the restrictions on such shares have\nlapsed).\n\n                  (c) PROVISIONS RELATING TO RESTRICTED STOCK AWARD. The Company\nrepresents and warrants to Executive that all actions necessary to exempt the\ngrant of the Restricted Stock Award under Rule 16b-3(d) under the Securities\nExchange Act of 1934, as amended, were taken by the Company. The Company shall,\nat its sole expense, cause the common shares included in the Restricted Stock\nAward to be registered under the Securities Act of 1933, as amended and\nregistered or qualified under applicable state securities laws, so that such\ncommon shares shall be freely tradable. The Company shall thereafter maintain\nthe continuing effectiveness of such registration and qualification for so long\nas Executive holds any of the common shares in the Restricted Stock Award\n(whether or not the restrictions thereon have lapsed), or until such earlier\ndate as counsel to the Company, reasonably acceptable to Executive, provides the\nCompany a written opinion (a copy of which shall promptly be provided to\nExecutive) satisfactory to Executive to the effect that all such common shares\nmay otherwise be freely sold under United States federal and other applicable\nlaw once the restrictions have lapsed. As soon as practicable after the\nEffective Date, the Company shall, at its sole expense, cause the common shares\nincluded in the Restricted Stock Award to be listed on all exchanges on which\nthe common shares are from time to time listed. The Company shall thereafter\nmaintain the continued listing\n\n\n                                       4\n\n\nof such common shares for so long as Executive holds any of the Restricted Stock\nAward (whether or not the restrictions thereon have lapsed).\n\n3.       CONSULTING.\n\n         Executive agrees that, following his retirement from the Company (other\nthan a termination due to Executive's death, a termination by the Company for\nCause or a termination by Executive other than for Good Reason), and when and as\nrequested by the Chief Executive Officer of the Company, subject to his\nreasonable availability, he will provide consulting and advice to the Company up\nto 30 days per year for the remainder of his life (the \"Consulting Period\").\nDuring the Consulting Period Executive shall be paid an annual consulting fee\nequal to 1\/36th of the amount set forth in Section 5(b)(i). Subject to the\nprovisions of Section 11(e) hereof, during the Consulting Period the Company\nshall provide Executive with all welfare and fringe benefits provided to\nExecutive immediately prior to the Date of Termination, including but not\nlimited to relocation benefits, security, sponsorships and events, grossed-up\npayments for New York state and city taxes, if applicable, health insurance\ncoverage (including coverage for spouse (or domestic partner)), life insurance\ncoverage and continued access to Company facilities and services, including\naccess to Company aircraft, cars, office (with secretarial and administrative\nsupport), apartments and financial planning (tax, accounting and legal) services\n(hereinafter, the \"Continuing Benefits\"). For three years following the Date of\nTermination, Executive shall also continue to receive contribution credits under\nthe Company's Supplemental Executive Retirement Plan and shall be eligible to\nparticipate in the Company's Deferred Compensation Plan. The Consulting Period\nshall end upon Executive's death during the Consulting Period (in which case\nSection 5(d) hereof shall not apply) and, in the event of Executive's death\nduring the Consulting Period, the Company shall continue to provide health\ninsurance coverage to Executive's spouse (or domestic partner) for her life or\nuntil she is eligible to be covered under another employer-provided health plan,\nif earlier. Subject to the provisions of Section 10 hereof, during the\nConsulting Period Executive shall be permitted to engage in any employment,\nbusiness or other activities he may choose, so long as such activities do not\nunreasonably interfere with the performance of his duties under this Section 3.\n\n4.       TERMINATION OF EMPLOYMENT.\n\n         Executive's employment hereunder may be terminated under the following\ncircumstances:\n\n                  (a) NORMAL RETIREMENT. Executive may retire at any time after\nattaining his 62nd birthday.\n\n                  (b) EARLY RETIREMENT. Executive may retire at any time before\nhis 62nd birthday provided that he (1) obtains the consent of the Board, (2)\nprovides a viable successor nomination for Board consideration, and (3) provides\nadvance notice of at least 90 days of his intention to retire. Notwithstanding\nthe foregoing, the Board, in its sole discretion, may waive the requirement of\n(2) and\/or (3).\n\n                  (c) DEATH. Executive's employment with the Company shall\nterminate upon his death.\n\n\n                                       5\n\n\n                  (d) DISABILITY. If, as a result of Executive's incapacity due\nto physical or mental illness, Executive shall have been absent from his duties\nfor the Company on a full-time basis for 180 calendar days in the aggregate in\nany 12-month period, the Company may terminate Executive's employment with the\nCompany for Disability. Any question as to the existence of any physical or\nmental illness referred to above which the Company and Executive cannot agree\nshall be determined by a qualified independent physician selected by the Company\nand reasonably acceptable to Executive. The determination of such a physician\nmade in writing to the Company and to Executive shall be final and conclusive\nfor purposes of this Agreement.\n\n                  (e) TERMINATION BY COMPANY FOR CAUSE. Subject to the\nprovisions of Section 1(b) hereof and upon a Notice of Termination to Executive,\nthe Company may terminate Executive's employment with the Company for Cause.\n\n                  (f) TERMINATION BY COMPANY WITHOUT CAUSE. Upon a Notice of\nTermination to Executive, the Company may terminate Executive's employment with\nthe Company without Cause.\n\n                  (g) TERMINATION BY EXECUTIVE. Upon a Notice of Termination to\nthe Company, Executive may terminate his employment with the Company for any\nreason, including but not limited to Good Reason.\n\n5.       COMPENSATION UPON TERMINATION.\n\n                  (a) TERMINATION GENERALLY. If Executive's employment with the\nCompany is terminated for any reason, the Company shall pay or provide to\nExecutive (or to his authorized representatives or estate) any earned but unpaid\nbase salary, incentive compensation earned but not yet paid, unpaid expense\nreimbursements, accrued but unused vacation and any vested benefits that\nExecutive may have under any employee benefit plan of the Company, including\nwithout limitation, executive compensation, insurance and retirement plans or\narrangements (the \"Accrued Benefits\").\n\n                  (b) TERMINATION BY THE COMPANY WITHOUT CAUSE OR UPON\nEXECUTIVE'S DISABILITY, BY EXECUTIVE FOR GOOD REASON OR UPON EXECUTIVE'S NORMAL\nOR EARLY RETIREMENT. In the event of a termination of Executive's employment by\nthe Company without Cause or upon Executive's Disability, by Executive for Good\nReason, or upon Executive's normal or early retirement pursuant to Section 4(a)\nor (b), the Company shall pay to Executive (in addition to the Accrued Benefits)\nnot later than ten (10) days following the Date of Termination, (i) an amount\nequal to three times the sum of (x) Executive's then current annual base salary\n(without giving effect to any reductions thereof following the Effective Date)\nplus (y) the highest annual proxy cash bonus earned by Executive with respect to\nthe eight fiscal years preceding the year in which the Date of Termination\noccurs (or an amount equal to the proxy cash bonus earned by Executive with\nrespect to the Company's 2000 fiscal year, if higher); and (ii) an amount equal\nto the product of (A) the maximum annual bonus that Executive would have been\neligible to earn under the Company's annual bonus plan for the bonus measurement\nperiod during which the Date of Termination occurs, and (B) a fraction, the\nnumerator of which is the number of days from the first day of such period\nthrough the Date of Termination and the denominator of which is the total number\nof days in such measurement period, together with a similarly pro rated bonus\nwith respect to any applicable long term incentive plan then in effect.\nNotwithstanding the preceding\n\n\n                                       6\n\n\nprovisions of this Section 5(b), Executive may elect prior to the receipt of\nsuch payments (X) to receive the foregoing cash payments over a three year\nperiod commencing upon the Date of Termination or (Y) to defer the receipt of\nsuch payments in a manner consistent with the manner in which deferrals are made\nunder the Company's deferred compensation plan for executives (in which case the\ndeferred amounts shall be treated in a manner consistent with amounts deferred\nunder such plan, including but not limited to accrual of interest thereon).\n\n                  (c) TREATMENT OF EQUITY UPON TERMINATION. Immediately upon the\noccurrence of any termination of Executive's employment with the Company (other\nthan a termination by the Company for Cause or a termination by Executive\nwithout Good Reason), (i) any remaining restrictions on the Restricted Stock\nAward granted under Section 2(b) shall immediately lapse and all shares\nunderlying the Restricted Stock Award shall become fully vested and\nnonforfeitable, (ii) all outstanding options to acquire common shares of the\nCompany held by Executive shall become immediately exercisable and shall remain\noutstanding for their full terms notwithstanding the termination of Executive's\nemployment and (iii) all other shares of common stock of the Company held by\nExecutive that are subject to risk of forfeiture shall become fully vested and\nnonforfeitable.\n\n                  (d) DEATH. If Executive's employment is terminated by reason\nof his death, the Company shall pay Executive's estate the Accrued Benefits. In\nthe event Executive is survived by a surviving spouse (or domestic partner) who\nis provided health benefits by the Company or any of its affiliates at the time\nof his death, such surviving spouse (or domestic partner) shall be provided with\nhealth benefits, based on a health plan of the Company or any of its affiliates\nmade available to Executive immediately prior to the date of death, for her life\nor until she is eligible to be covered under another employer-provided health\nplan.\n\n                  (e) TERMINATION BY COMPANY WITH CAUSE OR BY EXECUTIVE WITHOUT\nGOOD REASON. If Executive's employment is terminated by the Company with Cause\nunder Section 4(e) or by Executive without Good Reason under Section 4(g), the\nCompany shall have no further obligation to Executive other than the Accrued\nBenefits.\n\n6.       CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.\n\n                  (a) GROSS-UP PAYMENT. If it shall be determined that any\npayment or distribution of any type to or in respect of Executive, by the\nCompany or any other person, whether paid or payable or distributed or\ndistributable pursuant to the terms of this Agreement or otherwise (the \"Total\nPayments\"), is or will be subject to the excise tax imposed by Section 4999 of\nthe Internal Revenue Code of 1986, as amended (the \"Code\") or any interest or\npenalties are incurred by Executive with respect to such excise tax (such excise\ntax, together with any such interest and penalties, are collectively referred to\nas the \"Excise Tax\"), then Executive shall be entitled to receive an additional\npayment (a \"Gross-Up Payment\") in an amount such that after payment by Executive\nof all taxes (including any interest or penalties imposed with respect to such\ntaxes) imposed upon the Gross-Up Payment, Executive retains an amount of the\nGross-Up Payment equal to the Excise Tax imposed upon the Total Payments.\n\n\n                                       7\n\n\n                  (b) DETERMINATION BY ACCOUNTANT.\n\n                           (1) All computations and determinations relevant to\n         this Section shall be made by a national accounting firm selected by\n         the Company from among the five (5) largest accounting firms in the\n         United States (the \"Accounting Firm\"), and reasonably acceptable to\n         Executive, which firm may be the Company's accountants. All fees and\n         expenses of the Accounting Firm shall be borne solely by the Company.\n         Such determinations shall include whether any of the Total Payments are\n         \"parachute payments\" (within the meaning of Section 280G of the Code).\n         In making the initial determination hereunder as to whether a Gross-Up\n         Payment is required, the Accounting Firm shall be required to determine\n         that no Gross-Up Payment is required if, but only if, the Accounting\n         Firm (A) concludes that (i) there has not occurred a change in the\n         ownership or effective control of the Company or a change in the\n         ownership of a substantial portion of the assets of the Company (as\n         such terms are defined in Section 280G of the Code) or (ii) no portion\n         of the Total Payments constitutes \"parachute payments\" (within the\n         meaning of said Section 280G), in either case on the basis of\n         \"substantial authority\" (within the meaning of Section 6230 of the\n         Code), and (B) provides an opinion to that effect to both the Company\n         and Executive, including the reasons therefor and an opinion that\n         Executive has substantial authority not to report any Excise Tax on his\n         federal income tax return. If the Accounting Firm determines that a\n         Gross-Up Payment is required, the Accounting Firm shall provide its\n         determination (the \"Determination\"), together with detailed supporting\n         calculations regarding the amount of any Gross-Up Payment and any other\n         relevant matter both to the Company and Executive by no later than ten\n         (10) days following the Date of Termination, or such earlier time as is\n         requested by the Company or Executive (if Executive reasonably believes\n         that any of the Total Payments may be subject to the Excise Tax).\n\n                           (2) If a Gross-Up Payment is determined to be\n         payable, it shall be paid to Executive within 20 days after the\n         Determination is delivered to the Company by the Accounting Firm. Any\n         determination by the Accounting Firm shall be binding upon the Company\n         and Executive, absent manifest error. Notwithstanding the foregoing, a\n         Gross-up Payment shall be made as soon as practicable following a\n         determination by the Internal Revenue Service that any portion of the\n         Total Payments is subject to the Excise Tax.\n\n                           (3) As a result of uncertainty in the application of\n         Section 4999 of the Code at the time of the initial determination by\n         the Accounting Firm hereunder, it is possible that Gross-Up Payments\n         not made by the Company should have been made (\"Underpayment\"), or that\n         Gross-Up Payments will have been made by the Company which should not\n         have been made (\"Overpayments\"). In either such event, the Accounting\n         Firm shall determine the amount of the Underpayment or Overpayment that\n         has occurred. In the case of an Underpayment, the amount of such\n         Underpayment (together with any interest and penalties payable by\n         Executive as a result of such Underpayment) shall be promptly paid by\n         the Company to or for the benefit of Executive.\n\n\n                                       8\n\n\n                           (4) In the case of any Overpayment, Executive shall,\n         at the direction and expense of the Company, take such steps as are\n         reasonably necessary (including the filing of returns and claims for\n         refund), follow reasonable instructions from, and procedures\n         established by, the Company, and otherwise reasonably cooperate with\n         the Company to correct such Overpayment, provided, however, that (i)\n         Executive shall not in any event be obligated to return to the Company\n         an amount greater than the net after-tax portion of the Overpayment\n         that he has retained or has recovered as a refund from the applicable\n         taxing authorities and (ii) this provision and all other provisions in\n         this Agreement shall be interpreted in a manner consistent with the\n         intent of this Section, which is to make Executive whole, on an\n         after-tax basis, from the application of the Excise Taxes, it being\n         acknowledged and understood that the correction of an Overpayment may\n         result in Executive repaying to the Company an amount which is less\n         than the Overpayment.\n\n                           (5) Executive shall notify the Company in writing of\n         any claim by the Internal Revenue Service relating to the possible\n         application of the Excise Tax under Section 4999 of the Code to any of\n         the payments and amounts referred to herein and shall afford the\n         Company, at its expense, the opportunity to control the defense of such\n         claims.\n\n                           (6) Executive shall cooperate with any reasonable\n         requests by the Company in connection with any contests or disputes\n         with the Internal Revenue Service in connection with the Excise Tax and\n         shall be reimbursed by the Company, on an after-tax basis, for all\n         costs, expenses, interest and penalties incurred by Executive in\n         connection with any such contest or dispute.\n\n7.       WITHHOLDING TAXES.\n\n         The Company may withhold from all payments due to Executive (or his\nbeneficiary or estate) hereunder all taxes which, by applicable federal, state,\nlocal or other law, the Company is required to withhold therefrom.\n\n8.       CONFIDENTIAL INFORMATION.\n\n         Executive agrees that he shall not, directly or indirectly, use, make\navailable, sell, disclose or otherwise communicate to any person, other than in\nthe course of Executive's assigned duties and for the benefit of the Company,\neither during the period of Executive's employment or at any time thereafter,\nany nonpublic, proprietary or confidential information, knowledge or data\nrelating to the Company, any of its subsidiaries, affiliated companies or\nbusinesses, which shall have been obtained by Executive during Executive's\nemployment by the Company. The foregoing shall not apply to information that (i)\nwas known to the public prior to its disclosure to Executive; (ii) becomes known\nto the public subsequent to disclosure to Executive through no wrongful act of\nExecutive or any representative of Executive; or (iii) Executive is required to\ndisclose by applicable law, regulation or legal process (provided that Executive\nprovides the Company with prior notice of the contemplated disclosure and\nreasonably cooperates with the Company at its expense in seeking a protective\norder or other appropriate protection of such information). Notwithstanding\nclauses (i) and (ii) of the preceding sentence, Executive's obligation to\nmaintain such disclosed information in confidence shall not terminate where only\nportions of the information are in the public domain.\n\n\n\n                                       9\n\n\n9.       NON-SOLICITATION AGREEMENT.\n\n         During Executive's employment with the Company and continuing for the\nperiod for which compensation or benefits are payable under Section 3 or 5,\nExecutive agrees that he will not, directly or indirectly, individually or on\nbehalf of any other person, firm, corporation or other entity, knowingly\nsolicit, aid or induce (a) any managerial level employee of the Company or any\nof its subsidiaries or affiliates to leave such employment in order to accept\nemployment with or render services to or with any other person, firm,\ncorporation or other entity unaffiliated with the Company or knowingly take any\naction to materially assist or aid any other person, firm, corporation or other\nentity in identifying or hiring any such employee or (b) any customer of the\nCompany or any of its subsidiaries or affiliates to purchase goods or services\nthen sold by the Company or any of its subsidiaries or affiliates from another\nperson, firm, corporation or other entity or assist or aid any other persons or\nentity in identifying or soliciting any such customer.\n\n10.      NONCOMPETITION AGREEMENT.\n\n         Executive acknowledges that he performs services of a unique nature for\nthe Company that are irreplaceable, and that his performance of such services to\na competing business will result in irreparable harm to the Company.\nAccordingly, during Executive's employment hereunder, and continuing for the\nperiod for which compensation or benefits are payable under Section 3 or 5,\nExecutive agrees that Executive will not, directly or indirectly, own, manage,\noperate, control, be employed by (whether as an employee, consultant,\nindependent contractor or otherwise, and whether or not for compensation) or\nrender services to any person, firm, corporation or other entity, in whatever\nform, engaged in any business of the same type as any business in which the\nCompany or any of its subsidiaries or affiliates is engaged on the Date of\nTermination or in which they have proposed, on or prior to such date, to be\nengaged in on or after such date and in which Executive has been involved to any\nextent (other than DE MINIMIS) at any time during the 12-month period ending\nwith the Date of Termination, in any locale of any country in which the Company\nconducts business. This Section 10 shall not prevent Executive from owning not\nmore than one percent of the total shares of all classes of stock outstanding of\nany publicly held entity engaged in such business, nor will it restrict\nExecutive from rendering services to charitable organizations, as such term is\ndefined in Section 501(c) of the Code.\n\n11.      ACKNOWLEDGEMENTS RESPECTING RESTRICTIVE COVENANTS\n\n                  (a) NO ADEQUATE REMEDY AT LAW. Executive acknowledges that it\nis impossible to measure in money the damages that will accrue to the Company in\nthe event that Executive breaches any of the restrictive covenants and that any\nsuch damages, in any event, would be inadequate and insufficient. Therefore, if\nExecutive breaches any restrictive covenant, the Company and any of its\nsubsidiaries or affiliates shall be entitled to an injunction restraining\nExecutive from violating such restrictive covenant. If the Company or any of its\nsubsidiaries or affiliates shall institute any action or proceeding to enforce a\nrestrictive covenant, Executive hereby waives, and agrees not to assert in any\nsuch action or proceeding, the claim or defense that the Company or any of its\nrespective subsidiaries or affiliates have an adequate remedy at law.\n\n\n                                       10\n\n\n                  (b) INJUNCTIVE RELIEF NOT EXCLUSIVE REMEDY. In the event of a\nbreach of any of the restrictive covenants, Executive agrees that, in addition\nto any injunctive relief as described in Section 11(b), the Company shall be\nentitled to any other appropriate legal or equitable remedy.\n\n                  (c) THIS SECTION REASONABLE, FAIR AND EQUITABLE. Executive\nagrees that this Section 11 is reasonable, fair and equitable in light of his\nduties and responsibilities under this Agreement and the benefits to be provided\nto him under this Agreement and that it is necessary to protect the legitimate\nbusiness interests of the Company and that Executive has had independent legal\nadvice in so concluding.\n\n                  (d) CONSTRUCTION. If any of the restrictions contained in\nSections 8, 9 or 10 hereof are deemed by a court of competent jurisdiction to be\nunenforceable by reason of their extent, duration or geographical scope or\notherwise, Executive and Company contemplate that the court shall revise such\nextent, duration, geographical scope or other provision but only to the extent\nrequired in order to render such restrictions enforceable, and enforce any such\nrestriction in its revised form for all purposes in the manner contemplated\nhereby.\n\n                  (e) CHANGE IN CONTROL. The parties hereto agree that the\nrestrictive covenants contained in Sections 9, 10 and 12 of this Agreement shall\nbe null and void and shall not be enforceable against Executive following any\ntermination of Executive's employment on or after a Change in Control of the\nCompany. Notwithstanding anything to the contrary contained herein, in the event\nthat Executive's employment with the Company is terminated following a Change in\nControl, each Continuing Benefit shall be provided to him at a level no less\nfavorable that provided to him immediately prior to the Change in Control.\n\n12.      NONDISPARAGEMENT.\n\n         Each of Executive and the Company (for purposes hereof, the Company\nshall mean only the executive officers and directors thereof and not any other\nemployees) agrees not to make any public statements that disparage the other\nparty or, in the case of the Company, its respective affiliates, employees,\nofficers, directors, products or services. Notwithstanding the foregoing,\nstatements made in the course of sworn testimony in administrative, judicial or\narbitral proceedings (including, without limitation, depositions in connection\nwith such proceedings) shall not be subject to this Section 12.\n\n13.      INDEMNIFICATION.\n\n         To the fullest extent permitted by law, the Company shall indemnify\nExecutive (including the advancement of expenses) for any judgments, fines,\namounts paid in settlement and reasonable expenses, including attorneys' fees,\nincurred by Executive in connection with the defense of any lawsuit or other\nclaim to which he is made a party by reason of being an officer, director\nemployee or consultant of the Company or any of its subsidiaries or affiliates.\nFor at least three years following Executive's ceasing to be employed by or a\nconsultant for the Company, the Company shall make every reasonable effort to\nmaintain customary director and officer liability insurance covering Executive\nfor acts and omissions prior to Executive's ceasing to be employed by, or a\nconsultant to, the Company. The provisions of this Section 13 shall survive the\ntermination of this Agreement.\n\n\n                                       11\n\n\n14.      SUCCESSORS; BINDING AGREEMENT.\n\n                  (a) The provisions of this Agreement shall be binding upon the\nsurviving or resulting corporation in any merger, consolidation,\nrecapitalization or similar corporate transaction or the person or entity to\nwhich all or substantially all of the Company's assets are transferred.\n\n                  (b) In addition to any obligations imposed by law upon any\nsuccessor to the Company, the Company shall require any successor (whether\ndirect or indirect, by purchase, merger, consolidation or otherwise) to all or\nsubstantially all of the business and\/or assets of the Company to expressly\nassume and agree to perform this Agreement in the same manner and to the same\nextent that the Company would be required to perform it if no such succession\nhad taken place.\n\n                  (c) This Agreement shall inure to the benefit of and be\nenforceable by Executive's personal or legal representatives, executors,\nadministrators, successors, heirs, distributees, devisees and legatees. If\nExecutive shall die while any amounts would be payable to Executive hereunder\nhad Executive continued to live, all such amounts, unless otherwise provided\nherein, shall be paid in accordance with the terms of this Agreement to such\nperson or persons appointed in writing by Executive to receive such amounts or,\nif no person is so appointed, to Executive's estate.\n\n15.      NOTICE.\n\n                  (a) For purposes of this Agreement, all notices and other\ncommunications required or permitted hereunder shall be in writing and shall be\ndeemed to have been duly given when delivered or five days after deposit in the\nUnited States mail, certified and return receipt requested, postage prepaid,\naddressed as follows:\n\n                  If to Executive:\n\nTo the most recent address set forth in the personnel records of the Company;\n\n                  If to the Company:\n\n                  Tyco International Ltd.\n                  The Zurich Centre\n                  Second Floor\n                  90 Pitts Bay Road\n                  Pembroke, HM08, Bermuda\n\n                  Attention: Corporate Secretary\n\nor to such other address as either party may have furnished to the other in\nwriting in accordance herewith, except that notices of change of address shall\nbe effective only upon receipt.\n\n\n                                       12\n\n\n                  (b) A written notice of Executive's Date of Termination by the\nCompany or Executive, as the case may be, to the other, shall (i) indicate the\nspecific termination provision in this Agreement relied upon, (ii) to the extent\napplicable, set forth in reasonable detail the facts and circumstances claimed\nto provide a basis for termination of Executive's employment under the provision\nso indicated and (iii) specify the Date of Termination. Except as provided in\nSection 1(b) hereof the failure by Executive or the Company to set forth in such\nnotice any fact or circumstance which contributes to a showing of Good Reason or\nCause shall not waive any right of Executive or the Company hereunder or\npreclude Executive or the Company from asserting such fact or circumstance in\nenforcing Executive's or the Company's rights hereunder.\n\n16.      FULL SETTLEMENT.\n\n         The Company's obligation to make any payments provided for in this\nAgreement and otherwise to perform its obligations hereunder shall not be\naffected by any set-off, counterclaim, recoupment, defense or other claim, right\nor action which the Company may have against Executive or others. In no event\nshall Executive be obligated to seek other employment or take other action by\nway of mitigation of the amounts payable to Executive under any of the\nprovisions of this Agreement, and such amounts shall not be reduced whether or\nnot Executive obtains other employment.\n\n17.      GOVERNING LAW; VALIDITY.\n\n         The validity, interpretation, and enforcement of this Agreement shall\nbe governed by the laws of the State of New York. The invalidity or\nunenforceability of any provision of this Agreement shall not affect the\nvalidity or enforceability of any other provision of this Agreement, which other\nprovisions shall remain in full force and effect.\n\n18.      ARBITRATION; LEGAL FEES.\n\n         Any dispute or controversy under this Agreement shall be settled\nexclusively by arbitration in accordance with the rules of the American\nArbitration Association then in effect. Judgment may be entered on the\narbitration award in any court having jurisdiction. The Company shall bear all\ncosts and expenses arising in connection with any arbitration proceeding\npursuant to this Section 18 (including, without limitation, all reasonable legal\nfees incurred by Executive in connection with such arbitration). Promptly\nfollowing the execution of this Agreement, the Company shall reimburse Executive\nfor all legal fees and expenses incurred by Executive in negotiating and\nentering into this Agreement.\n\n19.      STATUS POST-RETIREMENT\n\n         During the Consulting Period, Executive shall be an independent\ncontractor under this Agreement, and, except as otherwise provided herein no\nprovision of, or action under, this Agreement shall affect in any way\nExecutive's rights under any Company compensation, employee benefit and welfare\nplans, programs or practices, including, without limitation, Company executive\ncompensation, insurance and retirement plans or arrangements.\n\n\n                                       13\n\n\n20. AMENDMENT.\n\n         No provision of this Agreement may be amended, waived or discharged\nexcept by the mutual written agreement of the parties.\n\n21.      COUNTERPARTS.\n\n         This Agreement may be executed in counterparts, each of which shall be\ndeemed to be an original and all of which together shall constitute one and the\nsame instrument.\n\n         IN WITNESS WHEREOF, the parties hereto have executed this Agreement\nthis 22nd day of January, 2001.\n\n         THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE\nENFORCED BY THE PARTIES.\n\n\nEXECUTIVE                                    TYCO INTERNATIONAL LTD.\n\n\n\n\/s\/ L. Dennis Kozlowski                      By: \/s\/ Philip M. Hampton\n--------------------------------                 -------------------------------\nL. Dennis Kozlowski                              Philip M. Hampton, Director\n\n\n\n                                             By: \/s\/ Stephen W. Foss\n                                                 -------------------------------\n                                                 Stephen W. Foss, Director\n\n\n\n                                             By: \/s\/ James S. Pasman\n                                                 -------------------------------\n                                                 James S. Pasman, Director\n\n\n\n                                             By: \/s\/ W. Peter Slusser\n                                                 -------------------------------\n                                                 W. Peter Slusser, Director\n\n                                       14\n\n\n\n                        AMENDMENT TO RETENTION AGREEMENT\n\n\nA.       The Retention Agreement dated January 22, 2001 by and between Tyco\nInternational Ltd., a Bermuda corporation, and L. Dennis Kozlowski is hereby\namended as follows:\n\n         1.       By deleting clause (y) of Section 5(b)(i) and substituting\n                  therefor the following new clause (y):\n\n\n                  \"(y) the highest annual bonus (including cash, shares and\n                  other forms of consideration) earned by Executive with respect\n                  to the eight fiscal years preceding the year in which the Date\n                  of Termination occurs (or an amount equal to the annual bonus\n                  including cash, shares and other forms of consideration earned\n                  by Executive with respect to the Company's 2000 fiscal year,\n                  if higher); and\"\n\n         2.       By deleting the first two sentences of Section 2(b) and\n                  substituting the following:\n\n                  \"In recognition of Executive's agreement to continue in the\n                  employ of the Company and not seek employment elsewhere, and\n                  as consideration for Executive's agreements contained in\n                  Sections 8, 9 and 10 hereof, Executive will be granted, as of\n                  January 22, 2002, 800,000 restricted common shares of the\n                  Company (`Restricted Stock Award') pursuant to the Company's\n                  1994 Restricted Stock Ownership Plan for Key Employees (the\n                  `Plan'). The Restricted Stock Award shall be subject to the\n                  terms of this Agreement and the Plan. The restrictions on such\n                  shares shall lapse with respect to one-eighth (1\/8th) of the\n                  shares underlying the Restricted Stock Award beginning with\n                  January 22, 2002 and each anniversary thereof and shall lapse\n                  with respect to all such shares underlying the Restricted\n                  Stock Award on the Executive's 62nd birthday, in each case\n                  conditioned on Executive's employment with the Company on each\n                  such date except as otherwise provided herein.\"\n\nB.       Except as otherwise amended herein, the Retention Agreement is hereby\nconfirmed in all other respects.\n\n         THIS AGREEMENT MAY BE EXECUTED IN COUNTERPARTS, EACH OF WHICH SHALL BE\nDEEMED TO BE AN ORIGINAL AND ALL OF WHICH TOGETHER SHALL CONSTITUTE ONE AND THE\nSAME INSTRUMENT.\n\n                                       15\n\n\n\n         IN WITNESS WHEREOF, the parties have executed this Amendment as of this\n1st day of August, 2001.\n\n\nEXECUTIVE                                      TYCO INTERNATIONAL LTD.\n\n\n\/s\/ L. Dennis Kozlowski                        By: \/s\/ Stephen W. Foss\n------------------------                          ----------------------------\nL. Dennis Kozlowski                                Stephen W. Foss, Director\n\n\n                                               By: \/s\/ James S. Pasman\n                                                  -----------------------------\n                                                   James S. Pasman, Director\n\n\n                                               By: \/s\/ W. Peter Slusser\n                                                  -----------------------------\n                                                   W. Peter Slusser, Director\n\n\n\n                                       16\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[9133],"corporate_contracts_industries":[9452],"corporate_contracts_types":[9539,9544],"class_list":["post-40377","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-tyco-international-ltd","corporate_contracts_industries-manufacturing__conglomerates","corporate_contracts_types-compensation","corporate_contracts_types-compensation__employment"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/40377","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=40377"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=40377"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=40377"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=40377"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}