SECOND AMENDED AND RESTATED DEFERRED COMPENSATION AGREEMENT for José Maria Alapont
EXECUTION
COPY
SECOND
AMENDED AND RESTATED DEFERRED COMPENSATION AGREEMENT
for
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This agreement by and between
Federal-Mogul Corporation, a Delaware corporation (the "Company") and ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ (the "Executive"), dated as of the 23rd day of March, 2010 (the
“Agreement”), constitutes an amendment and
restatement of the Deferred Compensation Agreement originally entered
between the Company and the Executive on December 27, 2007, which was the grant
date of non-qualified options (the “Options”) to purchase from the Company
4,000,000 shares of its Common Stock ("Stock") granted pursuant to the Fourth
Amended Joint Plan of Reorganization (As Modified) of the Corporation, dated
June 5, 2007 that was confirmed by the court in the jointly-administered Chapter
11 cases in the District of Delaware and docketed as Case No. 01-10578 (the
“Plan”) through an order entered November 8, 2007, as amended by the Amended and
Restated Deferred Compensation Agreement dated as of the 31st day of
December 2008. This Agreement as set forth
herein is intended to make the Amended and
Restated Agreement reflect the understandings that were contemporaneous with the
Second Amended and Restated Employment Agreement dated the date
hereof.
1.
Entitlement to
Distribution. The Executive shall be entitled to an amount
calculated in accordance with paragraph 3 hereof (the
“Distribution”).
2.
Payment of
Distribution.
(a)
Form of
Distribution. The Distribution shall be payable in equity (shares
of Common Stock), provided that at the election of the Executive, some or all of
the Distribution will be payable in cash.
(b)
Date of
Distribution. The Distribution shall be paid on the first to occur
of: (1) 6 months and one day after the date on which the Executive incurs a
“Separation from Service” within the meaning of section 409A of the Code (a
“Separation from Service”), (2) December 27, 2014, which is the seventh
anniversary of the date of this Agreement, (3) the Executive’s death, (4) the
date the Executive becomes Disabled, as defined in section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”) or Treasury Regulations issued
thereunder , or (5) the occurrence of an Unforeseeable Emergency, as defined in
section 409A of the Code or Treasury Regulations issued thereunder, provided
that the amount of the Distribution payable upon an Unforeseeable Emergency
shall be limited to the amount necessary to satisfy such Unforeseeable
Emergency, and the remaining amount of the Distribution, if any, shall be paid
on the next to occur of such dates.
(c)
Change in Distribution
Date. Executive shall have the right to substitute a different
payment date for the date in paragraph 2(b)(2) (December 27, 2014), provided
that the Executive must notify the Company of such substitution at least 12
months before such date, such substitution shall not be effective until 12
months after the date of notification, and the different payment date provided
in substitution must be at least 5 years after December 27, 2014.
(d) The time or schedule of
payment of the Distribution may not be accelerated except as otherwise permitted
under Code section 409A and the guidance and Treasury regulations issued
thereunder.
3.
Amount of
Distribution. The amount of the Distribution shall be equal
to the Base Value, reduced by the Offset Amount (but not below zero), determined
as of a Determination Date, as defined in paragraph 3(d).
(a)
Base Value.
The Base Value shall be equal to the fair market value of 500,000 shares
of Stock as of the “Determination Date.”
(b) Adjustments to Base
Value. If the Executive has fewer than 2,000,000 vested,
unexercised Options outstanding as of the Determination Date, the Base Value
shall be reduced by an amount equal to the fair market value of the number of
shares of Stock equal to 2,000,000 minus the number of vested, unexercised
Options outstanding as of the Determination Date, divided by 4.
(c) Offset Amount.
The Offset Amount shall equal the number of vested, outstanding Options as of
the Determination Date, up to a maximum of 2,000,000 Options, multiplied by the
excess of the fair market value of a share of Stock as of the Determination Date
over the per share exercise price of the Options.
(d) Determination
Date. The Determination Date shall be the first to occur of (1) the
date on which the Executive incurs a Separation from Service, (2) March 23,
2010, (3) the Executive’s death, (4) the date the Executive becomes Disabled, as
defined for purposes of section 409A of the Code, (5) at the election of the
Executive, a Change in Control, as defined for purposes of section 409A of the
Code, or (6) the occurrence of an Unforeseeable Emergency, as defined for
purposes of section 409A of the Code.
(e) Final
Adjustment. In the event that the Determination Date occurs
before the Distribution Date, then the Distribution may be reduced (but not
below zero) by a Final Adjustment, calculated under this paragraph
3(e). The Final Adjustment is calculated only with respect to Options
which were taken in account in calculating the Offset Amount under paragraph
3(c) and are exercised after the Determination Date on a date when the fair
market value of a share of Stock exceeds the fair market value of a share of
Stock as of the Determination Date. The amount of the Final
Adjustment, if any, is equal to the sum for each such Option of 75% of the
amount by which the fair market value of a share of Stock on the date of
exercise exceeds the fair market value of a share of Stock as of the
Determination Date.
4. Other
Provisions.
(a) Withholding
Taxes. The Company is authorized to withhold from any
Distribution such amount as the Company may be required, under all applicable
federal, state, local or other laws or regulations, to withhold and pay over as
income or other withholding taxes.
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(b)
Adjustment. In
the event of any stock split, stock dividend, recapitalization, reorganization,
merger, consolidation, combination, exchange of shares, liquidation, spin-off or
other similar change in capitalization or event, or any distribution to holders
of Stock other than a regular cash dividend, the number and class of shares
taken into account under paragraph 3 shall be appropriately adjusted by the
Company to reflect such change in capitalization or distribution.
(c) Agreement Confers No Rights
as Stockholder. This Agreement does not entitle the Executive
to status as a shareholder with respect to the shares of Stock taken into
account in calculating the amount of Distribution.
(d) Agreement Confers No Rights
to Continued Employment. In no event shall this Agreement give
or be deemed to give the Executive any right to continued employment by the
Company or any affiliate of the Company.
(e) Successors. This
Agreement shall be binding upon and inure to the benefit of any successor or
successors of the Company and any person or persons who shall, upon the death of
the Executive, acquire any rights hereunder in accordance with this
Agreement.
(f)
Notices. All
notices, requests or other communications provided for in this Agreement shall
be made, if to the Company, to Federal-Mogul Corporation, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel; and
if to the Executive, to ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇. All notices, requests or other communications
provided for in this Agreement shall be made in writing either (a) by personal
delivery to the party entitled thereto, (b) by facsimile with confirmation of
receipt, (c) by mailing in the United States mails to the last known
address of the party entitled thereto or (d) by express courier
service. The notice, request or other communication shall be deemed
to be received upon personal delivery, upon confirmation of receipt of facsimile
transmission or upon receipt by the party entitled thereto if by United States
mail or express courier service; provided, however, that if a notice, request or
other communication sent to the Company is not received during regular business
hours, it shall be deemed to be received on the next succeeding business day of
the Company.
(g) Related
Trust. Simultaneously with the execution of this Agreement,
the Company shall establish a trust or similar arrangement with respect to this
Agreement and transfer 500,000 shares of Stock to the trustee or equivalent
party of such similar arrangement. Such trust or similar arrangement
will provide that the shares of Stock held thereunder may not be released to the
Company until after the amount of the Distribution, if any, required to be paid
to the Executive under this Agreement has been paid in
full. Notwithstanding anything herein to the contrary, any such
arrangement will be established so as to preserve the status of the Agreement as
an unfunded, unsecured promise to pay of the Company and in compliance with the
requirements of section 409A of the Code.
(h) Amendment. The
provisions of this Agreement may be amended only by the written agreement of the
Company and the Executive.
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(i)
Governing
Law. This Agreement and all determinations made and actions
taken pursuant hereto and thereto, to the extent not governed by the laws of the
United States, shall be governed by the laws of the State of Michigan and
construed in accordance therewith without giving effect to principles of
conflicts of laws. This Agreement provides for nonqualified
deferred compensation for purposes of section 409A of the Code and shall be
construed so as to comply with the provisions of such section. To the
extent that an amendment or revision to this Agreement is necessary to ensure
compliance with such section, the Company and the Executive agree to cooperate
to make such amendment or revision in a manner consistent with the other
provisions of this Agreement.
(j)
Counterparts. This
Agreement may be executed in two counterparts, each of which shall be deemed an
original and both of which together shall constitute one and the same
instrument.
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FEDERAL-MOGUL
CORPORATION
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By:
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