EXHIBIT 10.1
CHANGE OF CONTROL AGREEMENT
This Change of Control Agreement (this "Agreement"), dated as of
______________, 199__, is between Itron, Inc., a Washington corporation (the
"Company"), and NAME (the "Executive").
The Board of Directors of the Company (the "Board") has determined that
it is in the best interests of the Company and its stockholders to ensure that
the Company will have the continued dedication of the Executive, notwithstanding
the possibility, threat or occurrence of a Change of Control (as defined in
Appendix A to this Agreement, which is incorporated herein by this reference) of
the Company. The Board believes it is imperative to diminish the inevitable
distraction of the Executive arising from the personal uncertainties and risks
created by a pending or threatened Change of Control, to encourage the
Executive's full attention and dedication to the Company currently and in the
event of any threatened or pending Change of Control, to encourage the
Executive's willingness to serve a successor in an equivalent capacity, and to
provide the Executive with reasonable compensation and benefits arrangements in
the event that a Change of Control results in the Executive's loss of equivalent
employment.
In order to accomplish these objectives, the Board has caused the
Company to enter into this Agreement.
1. EMPLOYMENT
1.1 CERTAIN DEFINITIONS
(a) "EFFECTIVE DATE" shall mean the first date during
the Change of Control Period (as defined in Section 1.1(b)) on which a Change
of Control occurs.
(b) "CHANGE OF CONTROL PERIOD" shall mean the period
commencing on the date of this Agreement and ending on the [first][second]
anniversary of the date the Company gives notice to the Executive that the
Change of Control Period shall be terminated.
1.2 EMPLOYMENT PERIOD
The Company hereby agrees to continue the Executive in its employ or in
the employ of its affiliated companies, and the Executive hereby agrees to
remain in the employ of the Company or its affiliated companies, in accordance
with the terms and provisions of this Agreement, for the period commencing on
the Effective Date and ending on the [first][second][third] anniversary of such
date (the "Employment Period").
1.3 POSITION AND DUTIES
During the Employment Period, the Executive's position, authority,
duties and responsibilities shall be at least reasonably commensurate in all
material respects with the most significant of those held, exercised and
assigned at any time during the 90-day period immediately preceding the
Effective Date.
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1.4 LOCATION
During the Employment Period, the Executive's services shall be
performed at the [Company's headquarters][headquarters of the Company's UTS
subsidiary] on the Effective Date or any office which is subsequently designated
as the headquarters of [the Company][the Company's UTS subsidiary] and is less
than 50 miles from such location.
1.5 EMPLOYMENT AT WILL
The Executive and the Company acknowledge that, except as may otherwise
be expressly provided under any other written employment agreement between the
Executive and the Company, the employment of the Executive by the Company or its
affiliated companies is "at will" and may be terminated by either the Executive
or the Company or its affiliated companies at any time. Moreover, if prior to
the Effective Date the Executive's employment with the Company or its affiliated
companies terminates, then the Executive shall have no further rights under this
Agreement.
1.6 BOARD OF DIRECTORS
The Executive is either currently or at some future time may become a
member of the Board. His continuation as such shall be subject to the will of
the Company's stockholders and the Board, as provided in the Company's by-laws
and certificate of incorporation. Removal of the Executive from, or nonelection
of the Executive to, the Board by the Company's stockholders or the Board, as
provided in the Company's by-laws and articles of incorporation, shall in no
event be deemed a breach of this Agreement by the Company.
2. ATTENTION AND EFFORT
During the Employment Period, and excluding any periods of vacation and
sick leave to which the Executive is entitled, the Executive will devote all of
his professional productive time, ability, attention and effort to the business
and affairs of the Company and the discharge of the responsibilities assigned to
him hereunder, and will use his best efforts to perform faithfully and
efficiently such responsibilities. It shall not be a violation of this Agreement
for the Executive to (a) serve on corporate, civic or charitable boards or
committees, (b) deliver lectures, fulfill speaking engagements or teach at
educational institutions, and (c) manage personal investments, so long as such
activities do not significantly interfere with the performance of the
Executive's responsibilities in accordance with this Agreement. It is expressly
understood and agreed that to the extent any such activities have been conducted
by the Executive prior to the Employment Period, the continued conduct of such
activities (or the conduct of activities similar in nature and scope thereto)
during the Employment Period shall not thereafter be deemed to interfere with
the performance of the Executive's responsibilities to the Company.
3. COMPENSATION
During the Employment Period, the Company agrees to pay or cause to be
paid to the Executive, and the Executive agrees to accept in exchange for the
services rendered hereunder by him, the following compensation:
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3.1 SALARY
The Executive shall receive an annual base salary (the "Annual Base
Salary"), at least equal to the annual salary established by the Board or the
Compensation Committee of the Board (the "Compensation Committee") prior to the
Effective Date for the fiscal year in which the Effective Date occurs or, if the
Executive's annual salary has not been established for the fiscal year in which
the Effective Date occurs prior to the Effective Date, then the Annual Base
Salary shall be the Executive's annual salary for the preceding fiscal year. The
Annual Base Salary shall be paid in substantially equal installments and at the
same intervals as the salaries of other officers of the Company are paid.
3.2 BONUS
In addition to Annual Base Salary, the Executive shall be awarded an
annual bonus (the "Annual Bonus") in cash at least equal to the average
annualized (for any fiscal year consisting of less than 12 full months) bonus
paid or payable, including by reason of any deferral, to the Executive by the
Company and its affiliated companies in respect of the three fiscal years
immediately preceding the fiscal year in which the Effective Date occurs;
provided, however, that payment of the Annual Bonus may be tied to either
personal or Company performance goals reasonably consistent with those in the
Company's bonus plan during the immediately preceding three fiscal years. Each
such Annual Bonus shall be paid no later than 90 days after the end of the
fiscal year for which the Annual Bonus is awarded, unless the Executive shall
elect to defer the receipt of such Annual Bonus.
4. BENEFITS
4.1 BENEFIT PLANS; VACATION
During the Employment Period, the Executive shall be entitled to
participate, subject to and in accordance with applicable eligibility
requirements, in such fringe benefit programs as shall be provided to other
executives of the Company and its affiliated companies from time to time during
the Employment Period by action of the Board (or any person or committee
appointed by the Board to determine fringe benefit programs and other
emoluments), including, without limitation, paid vacations; any incentive,
savings and retirement plan, practice, policy or program; and all welfare
benefit plans, practices, policies and programs (including, without limitation,
medical, prescription, dental, disability, salary continuance, employee life,
group life, accidental death and travel accident insurance plans and programs).
4.2 EXPENSES
During the Employment Period, the Executive shall be entitled to
receive prompt reimbursement for all reasonable employment expenses incurred by
him in accordance with the policies, practices and procedures of the Company and
its affiliated companies in effect for the executives of the Company and its
affiliated companies during the Employment Period.
5. TERMINATION
Employment of the Executive during the Employment Period may be
terminated as follows but, in any case, the nondisclosure and noncompetition
provisions set forth in Section 8 hereof shall survive the termination of this
Agreement and the termination of the Executive's employment with the Company:
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5.1 BY THE COMPANY OR THE EXECUTIVE
Upon giving Notice of Termination (as defined below), the Company may
terminate the employment of the Executive with or without Cause (as defined
below), and the Executive may terminate his employment for Good Reason (as
defined below) or for any reason, at any time during the Employment Period.
5.2 AUTOMATIC TERMINATION
This Agreement and the Executive's employment during the Employment
Period shall terminate automatically upon the death or Total Disability of the
Executive. The term "Total Disability" as used herein shall mean the Executive's
inability, as determined by a physician selected by the Company and acceptable
to the Executive, to perform the duties set forth in Section 1.3 hereof for a
period or periods aggregating 120 calendar days in any 12-month period as a
result of physical or mental illness, loss of legal capacity or any other cause
beyond the Executive's control, unless the Executive is granted a leave of
absence by the Board; provided, however, that the Executive shall not be deemed
to have a "Total Disability" if the Executive is capable of performing the
essential functions of his position after being provided with such accommodation
as may be necessary so long as such accommodation does not place undue burden on
the Company. The Executive and the Company hereby acknowledge that the
Executive's presence and ability to perform the duties specified in Section 1.3
hereof is of the essence of this Agreement.
5.3 NOTICE OF TERMINATION
Any termination by the Company or by the Executive during the
Employment Period shall be communicated by Notice of Termination to the other
party given in accordance with Section 10 hereof. The term "Notice of
Termination" shall mean a written notice which (a) indicates the specific
termination provision in this Agreement relied upon and (b) 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. 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 hereunder or preclude the Executive or the Company from asserting
such fact or circumstance in enforcing the Executive's or the Company's rights
hereunder.
5.4 DATE OF TERMINATION
During the Employment Period, "Date of Termination" means (a) if the
Executive's employment is terminated by reason of death, at the end of the
calendar month in which the Executive's death occurs, (b) if the Executive's
employment is terminated by reason of Total Disability, immediately upon a
determination by the Company of the Executive's Total Disability, and (c) in all
other cases, five days after the date of personal delivery of or mailing of, as
applicable, the Notice of Termination. The Executive's employment and
performance of services will continue during such five-day period; PROVIDED,
HOWEVER, that the Company may, upon notice to the Executive and without reducing
the Executive's compensation during such period, excuse the Executive from any
or all of his duties during such period.
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6. TERMINATION PAYMENTS
In the event of termination of the Executive's employment during the
Employment Period, all compensation and benefits set forth in this Agreement
shall terminate except as specifically provided in this Section 6.
6.1 TERMINATION BY THE COMPANY FOR OTHER THAN CAUSE OR BY THE
EXECUTIVE FOR GOOD REASON
If the Company terminates the Executive's employment other than for
Cause or the Executive terminates his employment for Good Reason prior to the
end of the Employment Period, the Executive shall be entitled to:
(a) receive payment of the following accrued
obligations (the "Accrued Obligations"):
(i) the Executive's Annual Base Salary through the
Date of Termination to the extent not theretofore paid;
(ii) the product of (x) the Annual Bonus payable
with respect to the fiscal year in which the Date of Termination occurs
and (y) a fraction, the numerator of which is the number of days in the
current fiscal year through the Date of Termination, and the
denominator of which is 365; and
(iii) any compensation previously deferred by the
Executive (together with accrued interest or earnings thereon, if any)
as such deferred compensation becomes payable under the deferral plan,
and any accrued vacation pay, in each case to the extent not
theretofore paid;
(b) for [one][two] year[s] after the Date of Termination, the
Executive and/or the Executive's family, as the case may be, shall be eligible
for participation in and shall receive all benefits under group health insurance
plans and other group insurance programs (such as life, disability, etc.) such
that the Executive and/or the Executive's family is provided with benefits that
are, in the aggregate, substantially equivalent to those which would have been
provided to them in accordance with the Company plans that would have been
available to Executive if the Executive's employment had not been terminated;
PROVIDED, HOWEVER, that if the Executive becomes reemployed with another
employer and is eligible to receive health or other group insurance benefits
under another employer-provided plan, the health and other group insurance
benefits described herein shall be secondary to those provided under such other
plan during such applicable period of eligibility (such continuation of such
benefits for the period herein set forth shall be hereinafter referred to as the
"Welfare Benefit Continuation"); and
(c) subject to adjustment as provided in Section 6.2, an
amount as severance pay equal to the product of (i) [three][two][one] and (ii)
the sum of the Executive's (x) Annual Base Salary and (y) Annual Bonus payable
for the fiscal year in which the Date of Termination occurs.
6.2 OPTION ACCELERATION VALUE ADJUSTMENT TO SEVERANCE PAY
If the multiplicand in clause 6.1(c)(i) above is "three" or "two," the
amount otherwise payable to Executive under Section 6.1(c) is subject to
reduction as provided in this Section 6.2 in the event that the Executive
receives value from acceleration of vesting of stock options in connection with
the
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Change of Control which triggered the Effective Date of this Agreement (as
further defined below, the "Option Acceleration Value"). In such case, any
amounts payable to Executive under Section 6.1(c) shall be reduced by the
LESSER of (a) the amount calculated pursuant to clause 6.1(c)(ii) above or (b)
the Option Acceleration Value.
The "Option Acceleration Value," if any, shall be calculated by
multiplying (y) the amount by which the per share consideration received by the
Company's shareholders in connection with the Change of Control exceeds the per
share exercise price of options held by the Executive, by (z) the number of
options accelerated in connection with the Change of Control which would not
have subsequently vested prior to the termination of Executive's employment. If
Executive holds more than one option at varying exercise prices, the foregoing
calculation shall be done with respect to each option and the results of such
calculations shall be aggregated to determine the Option Acceleration Value.
The following example is intended to illustrate the foregoing
calculation of Option Acceleration Value. Facts assumed for purposes of example
only: (a) Executive is granted an option on November 1, 1998 to purchase 1,000
shares of the Company's common stock at an exercise price of $10 per share, with
vesting 25% annually over a four-year period; (b) a Change of Control occurs on
March 31, 2000, in which the Company's shareholders exchange each of their
shares of the Company's common stock for $25 worth of common stock of the
acquiring company; (c) vesting of the unvested portion (750 shares) of
Executive's option is accelerated in connection with the Change of Control; and
(d) Executive's employment is terminated by the Company without Cause on
November 30, 2000. Although vesting of options to purchase 750 shares was
accelerated in connection with the Change of Control, because Executive would
have vested (on November 1, 2000) an additional 250 shares prior to his
termination, the benefit Executive realized from the acceleration was
acceleration of vesting of 500 shares. Executive's Option Acceleration Value is
therefore ($25 - $10) x 500, which equals $7,500.
6.3 TERMINATION FOR CAUSE OR OTHER THAN FOR GOOD REASON
If the Executive's employment shall be terminated by the Company for
Cause or by the Executive for other than Good Reason during the Employment
Period, this Agreement shall terminate without further obligation to the
Executive other than the obligation to pay to the Executive his Annual Base
Salary through the Date of Termination plus the amount of any compensation
previously deferred by the Executive (as such deferred compensation becomes
payable under the deferral plan), in each case to the extent theretofore unpaid.
6.4 STAY BONUS
If the Executive's employment is not terminated prior to the first
anniversary of the Effective Date, upon the first anniversary of the Effective
Date the Executive shall be entitled to receive a bonus equal to the sum of the
Executive's then current Annual Base Salary and Annual Bonus paid or payable
with respect to the Company's most recently completed fiscal year, whether or
not Executive's employment with the Company continues beyond the first
anniversary of the Effective Date. The bonus payable under this Section 6.4
shall be in addition to all other compensation to which the Executive is
entitled.
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6.5 TERMINATION BECAUSE OF DEATH OR TOTAL DISABILITY
If the Executive's employment is terminated by reason of the
Executive's death or Total Disability during the Employment Period, this
Agreement shall terminate automatically without further obligations to the
Executive or his legal representatives under this Agreement, other than for
payment of Accrued Obligations (which shall be paid to the Executive's estate or
beneficiary, as applicable in the case of the Executive's death), and the timely
payment or provision of the Welfare Benefit Continuation.
6.6 PAYMENT SCHEDULE
All payments under Section 6.1(a) and (c) shall be paid to the
Executive in a lump sum in cash within 30 days of the Date of Termination.
6.7 EXCISE TAXES
(a) In the event that the Executive becomes entitled to the
payments or other benefits described in Section 6.1 hereof and the Executive
becomes subject to the tax imposed by Section 4999 of the Internal Revenue Code
of 1986, as amended (the "Code"), or any successor provision (the "Excise Tax")
as a result of such payments and benefits and any other payments or benefits
from the Company required to be taken into account under Code Section 280G(b)(2)
(collectively, "Parachute Payments"), the Company shall pay to Executive an
additional amount (the "Make-Whole Payment") equal to the sum of (i) the Excise
Tax payable to the Executive prior to the Make-Whole Payment and (ii) the
Federal, state and local income tax and Excise Tax (including any interest or
penalties thereon) payable upon all payments made under subparagraphs (i) and
(ii) of this Section 6.7(a).
(b) All determinations required to be made under this Section
6.7, including whether the Executive has received a Parachute Payment, shall be
made by the Company's accounting firm (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 the
Executive has received a payment under Section 6.1, or such earlier time as is
requested by the Company. In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity or group effecting the Change
of Control, the Executive shall appoint another nationally recognized accounting
firm to make the determinations required hereunder (which accounting firm shall
then be referred to as the Accounting Firm hereunder). All fees and expenses of
the Accounting Firm shall be borne solely by the Company. If the Accounting Firm
determines that no Excise Tax is payable by the Executive, it shall furnish the
Executive with a written opinion that failure to report the Excise Tax on the
Executive's applicable federal income tax return would not result in the
imposition of a negligence or similar penalty. As promptly as practicable
following such determination, the Company shall pay to or distribute for the
benefit of the Executive such payments as are then due to the Executive under
this Agreement. Any determination by the Accounting Firm shall be binding upon
the Company and Executive.
6.8 CAUSE
For purposes of this Agreement, "Cause" means cause given by the
Executive to the Company and shall include, without limitation, the occurrence
of one or more of the following events:
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(a) Failure or refusal to carry out any lawful duties of the
Executive described in Section 1.3 hereof or any directions of the Board
reasonably consistent with the duties herein set forth to be performed by the
Executive;
(b) Violation by the Executive of a state or federal criminal
law involving the commission of a crime against the Company or any other
criminal act involving moral turpitude;
(c) Current abuse by the Executive of alcohol or controlled
substances; deception, fraud, misrepresentation or dishonesty by the Executive;
any incident materially compromising the Executive's reputation or ability to
represent the Company with the public; any act or omission by the Executive
which substantially impairs the Company's business, goodwill or reputation; or
any other misconduct; or
(d) Any other material violation of any provision of this
Agreement.
6.9 GOOD REASON
For purposes of this Agreement, "Good Reason" means
(a) The assignment to the Executive of any duties inconsistent
in any material respect with the Executive's position, authority, duties or
responsibilities as contemplated by Section 1.3 hereof or any other action by
the Company which results in a diminution in such position, authority, duties or
responsibilities, excluding for this purpose an isolated 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, and further excluding
reasonable changes in particular duties and reporting responsibilities which may
result from the Company becoming part of a larger business organization at some
future time provided that such changes in the aggregate do not result in a
material alteration in the Executive's position, authority, duties or
responsibilities;
(b) Any failure by the Company to comply with any of the
provisions of Section 3 hereof, other than an isolated and inadvertent failure
not occurring in bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Executive;
(c) The Company's requiring the Executive to be based at any
office or location other than that described in Section 1.4 hereof; or
(d) Any failure by the Company to comply with and satisfy
Section 11 hereof, provided that the Company's successor has received at least
ten days' prior written notice from the Company or the Executive of the
requirements of Section 11 hereof.
7. REPRESENTATIONS, WARRANTIES AND OTHER CONDITIONS
In order to induce the Company to enter into this Agreement, the
Executive represents and warrants to the Company as follows:
7.1 HEALTH
The Executive is in good health and knows of no physical or mental
disability which, with or without any accommodation which may be required by law
and which places no undue burden on the
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Company, would prevent him from fulfilling his obligations hereunder. The
Executive agrees, if the Company requests, to submit to periodic medical
examinations by a physician or physicians designated by, paid for and arranged
by the Company. The Executive agrees that the examination's medical report
shall be provided to the Company.
7.2 NO VIOLATION OF OTHER AGREEMENTS
The Executive represents that neither the execution nor the performance
of this Agreement by the Executive will violate or conflict in any way with any
other agreement by which the Executive may be bound.
8. NONDISCLOSURE; NONCOMPETITION; RETURN OF MATERIALS
The Company and the Executive hereby reaffirm the Employee Invention
and Nondisclosure Agreement previously executed by the Executive (attached as
Exhibit A to this Agreement), and expressly incorporated herein as part of this
Agreement. Consistent with the Employee Invention and Nondisclosure Agreement,
Employee agrees that at no time during the Employment Period or within one year
thereafter will Employee become involved in any activity or with any business
entity anywhere in the world which directly or indirectly competes with any
material product or service of the Company or its affiliates.
All documents, records, notebooks, notes, memoranda, drawings or other
documents pertaining to the Company and its business made or compiled by the
Executive at any time, or in his possession, including any and all copies
thereof, shall be the property of the Company and shall be held by the Executive
in trust and solely for the benefit of the Company, and shall be delivered to
the Company by the Executive upon termination of employment or at any other time
upon request by the Company.
The Executive understands that the Company will be relying on this
Agreement in continuing the Executive's employment, paying him compensation,
granting him any promotions or raises, or entrusting him with any information
which helps the Company compete with others.
9. NOTICE AND CURE OF BREACH
Whenever a breach of this Agreement by either party is relied upon as
justification for any action taken by the other party pursuant to any provision
of this Agreement, other than clause (b), (c) or (d) of Section 6.8 hereof,
before such action is taken, the party asserting the breach of this Agreement
shall give the other party at least ten days' prior written notice of the
existence and the nature of such breach before taking further action hereunder
and shall give the party purportedly in breach of this Agreement the opportunity
to correct such breach during the ten-day period.
10. FORM OF NOTICE
Every notice required by the terms of this Agreement shall be given in
writing by serving the same upon the party to whom it was addressed personally
or by registered or certified mail, return receipt requested, at the address set
forth below or at such other address as may hereafter be designated by notice
given in compliance with the terms hereof:
If to the Executive:
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If to the Company: Itron, Inc.
0000 X. Xxxxxxxx Xx.
Xxxxxxx, XX 00000
Attention: President
or such other address as shall be provided in accordance with the terms hereof.
Except as set forth in Section 5.4 hereof, if notice is mailed, such notice
shall be effective upon mailing.
11. ASSIGNMENT
This Agreement is personal to the Executive and shall not be assignable
by the Executive. The Company may assign its rights hereunder to (a) any
corporation resulting from any merger, consolidation or other reorganization to
which the Company is a party or (b) any corporation, partnership, association or
other person to which the Company may transfer all or substantially all of the
assets and business of the Company existing at such time. All the terms and
provisions of this Agreement shall be binding upon and inure to the benefit of
and be enforceable by the parties hereto and their respective successors and
permitted assigns.
The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all the
business and/or assets of the Company to assume expressly and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. As used in this
Agreement, "Company" shall mean Itron, Inc. and any successor to its business
and/or assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise.
12. 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 that 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, except as provided in Section 6.1(b),
such amounts shall not be reduced whether or not the Executive obtains other
employment. The Company agrees to pay promptly upon invoice, to the full extent
permitted by law, all legal fees and expenses that the Executive may incur as a
result of any contest (regardless of the outcome thereof) by the Company, the
Executive or others of the validity or enforceability of, or liability under,
any provision of this Agreement or any guarantee of performance thereof
(including as a result of any contest by the Executive about the amount of any
payment pursuant to this Agreement).
13. WAIVERS
No delay or failure by any party hereto in exercising, protecting or
enforcing any of its rights, titles, interests or remedies hereunder, and no
course of dealing or performance with respect thereto, shall constitute a waiver
thereof. The express waiver by a party hereto of any right, title, interest or
remedy in a particular instance or circumstance shall not constitute a waiver
thereof in any other instance or circumstance. All rights and remedies shall be
cumulative and not exclusive of any other rights or remedies.
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14. TERMINATION; AMENDMENTS IN WRITING
The Company may unilaterally terminate the Change of Control Period by
notice given to the Executive in accordance with Section 1.1(b) and Section 9
hereof. No other amendment, modification, waiver, termination or discharge of
any provision of this Agreement, nor consent to any departure therefrom by
either party hereto, shall in any event be effective unless the same shall be in
writing, specifically identifying this Agreement and the provision intended to
be amended, modified, waived, terminated or discharged and signed by the Company
and the Executive, and each such amendment, modification, waiver, termination or
discharge shall be effective only in the specific instance and for the specific
purpose for which given. No provision of this Agreement shall be varied,
contradicted or explained by any oral agreement, course of dealing or
performance or any other matter not set forth in an agreement in writing and
signed by the Company and the Executive.
15. APPLICABLE LAW
This Agreement shall in all respects, including all matters of
construction, validity and performance, be governed by, and construed and
enforced in accordance with, the laws of the State of Washington, without regard
to any rules governing conflicts of laws.
16. SEVERABILITY
If any provision of this Agreement shall be held invalid, illegal or
unenforceable in any jurisdiction, for any reason, including, without
limitation, the duration of such provision, its geographical scope or the extent
of the activities prohibited or required by it, then, to the full extent
permitted by law, (a) all other provisions hereof shall remain in full force and
effect in such jurisdiction and shall be liberally construed in order to carry
out the intent of the parties hereto as nearly as may be possible, (b) such
invalidity, illegality or unenforceability shall not affect the validity,
legality or enforceability of any other provision hereof, and (c) any court or
arbitrator having jurisdiction thereover shall have the power to reform such
provision to the extent necessary for such provision to be enforceable under
applicable law.
17. ENTIRE AGREEMENT
This Agreement on and as of the date hereof constitutes the entire
agreement between the Company and the Executive with respect to the subject
matter hereof and all prior or contemporaneous oral or written communications,
understandings or agreements between the Company and the Executive with respect
to such subject matter are hereby superseded and nullified in their entireties,
with the exception of the Employee Invention and Nondisclosure Agreement
referenced in Section 8.
18. WITHHOLDING
The Company may withhold from any amounts payable under this Agreement
such federal, state or local taxes as shall be required to be withheld pursuant
to any applicable law or regulation.
19. COUNTERPARTS
This Agreement may be executed in counterparts, each of which
counterpart shall be deemed
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an original, but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties have executed and entered into this
Agreement on the date set forth above.
EXECUTIVE
[Executive]
ITRON, INC.
By
----------------------------------
Its Chairman of the Board,
President & CEO
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APPENDIX A TO
CHANGE OF CONTROL AGREEMENT
For purposes of this Agreement, a "Change of Control" shall mean:
(a) A "Board Change" which, for purposes of this Agreement, shall have
occurred if a majority (excluding vacant seats) of the seats on the Company's
Board are occupied by individuals who were neither (i) nominated by a majority
of the Incumbent Directors nor (ii) appointed by directors so nominated. An
"Incumbent Director" is a member of the Board who has been either (i) nominated
by a majority of the directors of the Company then in office or (ii) appointed
by directors so nominated, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person (as hereinafter defined) other than the
Board; or
(b) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of (i) 20% or more of either (A) the then outstanding shares of
Common Stock of the Company (the "Outstanding Company Common Stock") or (B) the
combined voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the "Outstanding
Company Voting Securities"), in the case of either (A) or (B) of this clause
(i), which acquisition is not approved in advance by a majority of the Incumbent
Directors, or (ii) 33% or more of either (A) the Outstanding Company Common
Stock or (B) the Outstanding Company Voting Securities, in the case of either
(A) or (B) of this clause (ii), which acquisition is approved in advance by a
majority of the Incumbent Directors; PROVIDED, HOWEVER, that the following
acquisitions shall not constitute a Change of Control: (w) any acquisition
directly from the Company, (x) any acquisition by the Company, (y) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company or (z)
any acquisition by any corporation pursuant to a reorganization, merger or
consolidation, if, following such reorganization, merger or consolidation, the
conditions described in clauses (i), (ii) and (iii) of subsection (c) of this
Appendix A are satisfied; or
(c) Approval by the stockholders of the Company of a reorganization,
merger or consolidation, in each case, unless, immediately following such
reorganization, merger or consolidation, (i) more than 60% of, respectively, the
then outstanding shares of common stock of the corporation resulting from such
reorganization, merger or consolidation and the combined voting power of the
then outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all the individuals and entities who were
the beneficial owners, respectively, of the Outstanding Company Common Stock and
the Outstanding Company Voting Securities immediately prior to such
reorganization, merger or consolidation in substantially the same proportion as
their ownership immediately prior to such reorganization, merger or
consolidation of the Outstanding Company Common Stock and the Outstanding
Company Voting Securities, as the case may be, (ii) no Person
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(excluding the Company, any employee benefit plan (or related trust) of the
Company or such corporation resulting from such reorganization, merger or
consolidation and any Person beneficially owning, immediately prior to such
reorganization, merger or consolidation, directly or indirectly, 33% or more
of the Outstanding Company Common Stock or the Outstanding Voting Securities,
as the case may be) beneficially owns, directly or indirectly, 33% or more of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such reorganization, merger or consolidation or the combined
voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors, and (iii) at least a
majority of the members of the board of directors of the corporation resulting
from such reorganization, merger or consolidation were the Incumbent Directors
at the time of the execution of the initial agreement providing for such
reorganization, merger or consolidation; or
(d) Approval by the stockholders of the Company of (i) a complete
liquidation or dissolution of the Company or (ii) the sale or other disposition
of all or substantially all the assets of the Company, other than to a
corporation with respect to which immediately following such sale or other
disposition, (A) more than 60% of, respectively, the then outstanding shares of
common stock of such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or indirectly, by
all or substantially all the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities immediately prior to such sale or other
disposition in substantially the same proportion as their ownership, immediately
prior to such sale or other disposition, of the Outstanding Company Common Stock
and the Outstanding Company Voting Securities, as the case may be, (B) no Person
(excluding the Company, any employee benefit plan (or related trust) of the
Company or such corporation and any Person beneficially owning, immediately
prior to such sale or other disposition, directly or indirectly, 33% or more of
the Outstanding Company Common Stock or the Outstanding Company Voting
Securities, as the case may be) beneficially owns, directly or indirectly, 33%
or more of, respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors and (C) at least a majority of the members of the board of directors
of such corporation were approved by a majority of the Incumbent Directors at
the time of the execution of the initial agreement or action of the Board
providing for such sale or other disposition of assets of the Company.
Notwithstanding the foregoing, there shall not be a Change of Control
if, in advance of such event, the Executive agrees in writing that such event
shall not constitute a Change of Control.
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