Employment Agreement - NCR Corp. and Hideh Takahashi
October 15, 1997
Hideh Takahashi
c/o NCR
Tokyo, Japan
Subject: International Expatriate Assignment to Singapore
Dear Hideh:
On behalf of Lars Nyberg, Chief Executive Officer, I am delighted to confirm the
details of your assignment to Singapore as a result of the relocation of the
Asia Pacific Headquarters Office. Your targeted start date is subject to
receipt of a valid Singapore employment pass and is currently targeted to be
October 1, 1997. You will be considered a loaned expatriate from NCR Japan.
To ensure that you understand the personnel and administrative aspects of your
international assignment, the following is a summary of your expatriate terms
and conditions relative to your assignment:
1. Position: Your position will continue to be Senior Vice President, Asia/
Pacific Region.
In this position you will be located in Singapore, and will be supported by
Lars Nyberg, CEO.
2. Base Salary: Your base salary on an annualized basis will be JPY 44,065,000.
This base salary is based on the NCR Japan pay system and has no relationship
to the pay system in Singapore.
3. Bonus Plan: You will be eligible for participation in the NCR Management
Incentive Plan International (MIPI). Your MIPI eligibility will include a 50%
target award and a 100% maximum award. The Basis of Measurement (BOM) for
1997 will be as follows:
NCR Net Income 12.5% A/P's Contribution Margin 12.5%
NCR Return on Assets 20.0% A/P's Revenue Growth 12.5%
NCR Revenue Growth 12.5% Discretionary 30.0%
---- ----
45.0% 55.0%
<PAGE>
4. Stock Options: You will continue to be eligible for participation in the
Company Stock Option Plan in accordance with the provisions of the Plan and
as awarded by the Board of Directors.
5. Long-Term Incentive Program: You will be eligible for participation in the
NCR LTI Program with a target pay-out of 50% of base salary with a maximum of
100% of base salary.
This plan provides for an annual award of restricted stock units, cash or a
combination of both. Payout is calculated on 1997's performance based upon
quantitative results for NCR's Net Income, Return on Assets, and Revenue
Growth as well as individual leadership measures. Your position provides for
restricted stock units equal to a normal award opportunity of 50 percent of
your base salary with a maximum opportunity of 100 percent.
6. Incentive in General - For an Officer in your position, short and long-term
incentives at NCR currently take the form of the NCR Management Incentive
Plan International (MIPI), the Long Term Incentive Program (LTIP) and Stock
Options. Since these incentives are designed to address the conditions of an
ever changing marketplace, the company can not make any definitive
representations concerning the continuation of the MIPI, LTIP and Stock
Option format or the size of individual awards under these plans. The above
information, however, will provide a frame of reference concerning the
potential size of our annual and long term incentive opportunities.
7. Retirement: - In addition to your participation in the Pension Plan for NCR
Japan, you will continue to be eligible to participate in the Retirement Plan
for Officers of NCR Corporation (SERP II). This plan consists of the
following elements:
Career average pension with an annual accrual of 2.5 percent of the total
of your base salary, MIP award and LTIP incentive, times service as an
Officer and less pension accrued as an Officer in other NCR sponsored
plans.
8. Financial Counseling: You will be eligible to participate in a financial
counseling program provided through one of several consulting firms
designated by the Company. The Company will pay up to $8,000 annually for
financial planning, estate planning and tax preparation plus a gross-up for
the tax impact of this service.
9. Salary Administration: For the duration of this assignment, salary
administration will be based on NCR Japan policies and practices, based on
your performance as Senior Vice President, Asia/Pacific Region. A
performance review will be conducted each year for the purpose of assessing
your performance in the assignment and to provide a basis for salary review.
Your next merit increase eligibility will be March 1, 1998.
<PAGE>
10. Payments:
The following Expatriate Compensation was developed on a "Home Country"
(Japan) basis. The resulting salary payments consisting of a net Singapore
dollar payment for Commodities & Services (C&S) and a net Japanese Yen
payment are as follows:
Net annual S$ C&S payment-----------------------------------S$ 244,177
Net annual JPY payment* ----------------------------------JPY 12,274,800
* In this case, the Japanese Yen payment is not a true net payment, because
your contributions to your benefits plans and social security will be
deducted therefrom. It is suggested that you confirm the amount of your
local deductions with local payroll contact.
The Commodities and Services Payment and Japanese Yen net Payment shown on
your "Expatriate Terms and Conditions Form A" are designed to provide for
normal needs in the Singapore and Japan in the most effective manner. Should
you prefer a different arrangement, up to 20% of your Home Country payment
or up to 20% of your Host pay can be converted to payment in the other
country. Requests for a modification should be addressed to Bruce Ball,
Expatriate Programs.
The amount of your Commodities and Services allowance and the amount of your
Commodities and Services deduction are based on a market basket of goods and
services that the "average" person from Japan with your pay and family size
would purchase. The market basket is priced in both Japanese Yen and
Singapore dollars as of a given day. (As provided by our outside consultant,
AIRINC) The exchange rate as of the pricing of the market basket is the rate
used to calculate any requested modification to your split pay.
The amount of your split payments is subject to periodic review (at a
minimum, once per year upon merit review) based on data provided by our
consultant relative to changes in price levels.
11. Tax Equalization/Tax Preparation Assistance: NCR will be responsible for
any Host Country income tax on Company-source payments and the gross-up on
items described in this letter which would draw tax under your home or host
country tax laws. It is the intent of NCR' tax equalization policy that the
expatriate should neither materially gain, nor suffer a loss, on personal
income taxes on NCR and certain non-NCR source income because of an
assignment outside the home country.
In order to meet the Tax Policy objective, NCR will compute a "Stay-at-Home"
Hypothetical tax on your "Stay-at-Home" income. The Company pays all of the
home and host country income tax on NCR and certain non-NCR income in excess
of
<PAGE>
the "stay-at-home-tax" on the same income. However, Home Country tax
resulting from extraordinary personal transactions and windfall type income
(lottery, etc.) will be the responsibility of the expatriate. Host country
tax resulting from extraordinary personal transactions and windfall type
income in excess of U.S. $25,000 will be the responsibility of the
expatriate. Income related to stock options will be considered as personal
income for Tax Equalization purposes.
The timely gathering and submission of information for filing of tax returns
and the payment of income taxes remains your responsibility. However, in
accordance with NCR Tax Policy, NCR will provide tax preparation assistance
through their tax consultants, Price Waterhouse. The consultants will
provide a final hypothetical tax calculation and tax reconciliation. This
final reconciliation will calculate what your tax on this income would have
been if you had stayed at home. This will be your final obligation to NCR,
less hypothetical income taxes withheld. After the final reconciliation, you
may owe NCR (Tax refund checks are Company funds, even if made payable to
you), and the Company may owe you in other years.
The estimated hypothetical tax used to develop your terms and conditions was
calculated by Price Waterhouse. This estimate will be revised to include
your personal income and deductions by Price Waterhouse after your pre
assignment consultation.
As a condition to this assignment, and as stated in the NCR Tax Policy, all
tax attributes including, but not limited to, Foreign Tax Credits and
Foreign Earned Income & Housing exclusions belong to the Company. NCR will
utilize these attributes to reduce its overall tax burden. Any tax refund
resulting from the utilization of tax attributes resulting from your
assignment belongs to the Company. This includes, not only the period in
which you are on assignment, but at the Company's discretion, may include
tax periods prior to or subsequent to your return from assignment.
At least once per year, you will be required to submit a letter to NCR
stating (1) that you have filed all tax returns required during the year;
and (2) that all returns contain all income required by the jurisdictions in
which they are filed. This letter will be sent to you by Price Waterhouse
each year along with other tax information/forms that are required for your
tax return. Further, all tax returns prepared will be confidential. NCR will
not have access to them unless approved by you.
Any tax penalties or interest resulting from late filing or underpayment of
tax. attributable to your actions, will be your responsibility. You will
receive a Pre-Assignment Consultation with Price Waterhouse to review these
tax terms and conditions. Should you require personal tax advice, not
related to your assignment, you may engage Price Waterhouse at your own
expense. NCR will not bear any personal tax advice expenses and will seek
reimbursement from you in the event any charges are incurred and billed to
the Company.
<PAGE>
The net of tax payments described in this letter are based on your remaining
in the assignment for the period specified. If you terminate early for
personal reasons, causing a greater actual tax obligation, you will be
reimbursed for taxes only at the rate which would have been incurred had you
remained the full assignment duration.
Be advised that the above-referenced Tax Equalization policy is subject to
revision at the Company's discretion.
If, at any time, you have questions regarding your personal tax matters, you
may contact Krishen Mehta, Price Waterhouse, Tokyo at 81 3 5424 6500.
12. Other Conditions:
a. Method of Payment: The net annual Japanese Yen payment of JPY 12,274,800
will be paid in accordance with NCR Japan payroll practice. The net
annual Singapore dollar C&S payment of S$244,177 will be paid monthly in
accordance with NCR-Singapore payroll practices.
b. Home Leave: You will be eligible for reimbursement of round trip
transportation (business air) and reasonable expenses in route, (for you
and your family) each year. Your first home leave reimbursement
eligibility occurs after 12 months in your international assignment.
You will receive no extra time off for Home Leave. Your days spent on
home leave are charged against your vacation entitlement. Subsequent home
leave reimbursement may be requested another 12 months after prior home
leave eligibility. However, no home leave within 3 months of your
repatriation is considered eligible for reimbursement.
NCR will purchase the air tickets for you and your family for the home
leave return trip to your home location. Travel to locations other than
your home country will not be reimbursed under the policy provision.
In addition to the above, your wife will be eligible for four additional
return trips per year from Singapore to Tokyo on a business class airfare
basis plus reasonable expenses enroute (taxi to and from airport).
c. Host Country Housing and Utilities: The Company will provide for
furnished housing in Singapore for the duration of your assignment. The
level of housing is to be determined locally and is based on your salary
level and family size. Housing rental payments will be made directly by
the Company. As you will be issued a temporary visa for a relatively
short term assignment, NCR's policy does not provide for reimbursement of
real estate fees or any other financial consequences of purchasing a home
in Singapore.
<PAGE>
In most cases, the company will sign a lease for a partially furnished
accommodation and will pay for the shipping costs for you to bring your
personal furniture. Therefore, the "total" arrangement provides for
furnished housing.
Utilities: NCR will pay for expenses relating to electricity, gas, and
water usage and installation fees. These expenses will be billed directly
to the Company.
Telephone services: NCR will reimburse that cost of phone installation
(up to 2 lines and local calls) and will reimburse (via expense form
submission) any charges for calls relating to business activities. The
associate will be responsible for all charges relating to personal
matters as they are covered within the Commodities and Services Allowance
(i.e., personal long distance calls).
Appliances allowance: NCR will provide standard/normal appliances for
living in Singapore.
Drapes: These should be negotiated with your apartment lease whenever
possible.
d. Sale of Personal Residence: The Company will not support the sale of your
personal residence in Japan or any other property as part of this
assignment offer.
This includes sales costs, tax on gains, exchange rate gains/losses etc.
e. Transportation: Transportation arrangements will be provided for the
duration of your assignment in Singapore, in accordance with NCR Asia-
Pacific policies.
f. Club Membership: Annual dues and membership fees for one civic/
business-oriented and one social club in Singapore will be provided.
13. Relocation Expenses:
a. Travel Expenses: NCR will provide transportation expenses (business air,
most direct route) plus reasonable expenses en route and reasonable pre-
approved excess baggage charges for you and your family from Japan to
Singapore to relocate.
b. Moving Expenses: Any household goods and personal possessions that you
wish to bring from Tokyo to Singapore will be shipped at NCR's expense.
c. Immigration Expenses: Visas, passport, and immigration expenses will be
reimbursed.
<PAGE>
d. Pets: NCR will pay for the costs of transporting household pets from
Tokyo to Singapore. This payment does not cover any required
inoculations, examinations, kennel/boarding charges, quarantine charges,
customs or similar charges.
e. Relocation Allowance: A one time relocation allowance equal to one
month's salary (Y 3,672,084) will be paid net-of-tax to cover incidental
expenses arising out of the transfer of your residence from Japan to
Singapore. This payment, which is designed to defray expenses not
otherwise covered by the provisions of this letter, will be made to you
in the most tax effective manner. Please note that this payment will not
be made until a signed copy of this letter has been received by my office
and until it has been confirmed by Price Waterhouse that you have
completed a pre-departure tax consultation with Price Waterhouse.
14. Benefits: Your benefit coverages will be as follows:
a. You will continue to participate in the local NCR Japan benefit plans
wherever possible. NCR will investigate the provision of medical/surgical
in Singapore and make a determination as to whether to enroll you in
local plans. In any event, your current NCR Japan coverage will be the
"floor level" coverage that you are entitled to during your assignment
b. Your current vacation eligibility under NCR Japan's vacation policy will
continue to apply. Your public holidays will coincide with the local the
Singapore schedule.
c. You will continue to participate in the NCR Japan pension program.
d. You will continue to participate in the Japan Social Security system,
with any employee contribution that is required deducted from your net
Japanese Yen Payment of JPY 12,274,800. If any contributions are required
to be made to the Singapore Social Security Plan, the cost will be borne
by NCR.
The above compensation and benefits arrangements are described by using an
effective date of October 1, 1997. If you have any questions concerning the
details of this letter, please feel free to contact me at (937) 445-2910.
Please acknowledge your acceptance of this offer by signing the original copy in
the space provided below. The enclosed copy of this letter is intended for your
purposes.
<PAGE>
Sincerely,
/s/ Richard H. Evans
Richard H. Evans
Sr. Vice President, Global Human Resources
NCR Corporation
I hereby agree to and accept the foregoing terms and conditions.
/s/ Hideh Takahashi October 16, 1997
Agreed and Accepted
Hideh Takahashi Date