Termination and Change of Control Provisions

Pursuant to the current employment practices of Bombardier, the compensation of each of the Named Executive Officers is revised and set on an annual basis by the HRCC as described on the Remuneration of Named Executive Officers page.

As a general rule, Bombardier does not sign employment contracts with its executives. As a result, when the employment of an executive has to be or is terminated, any termination settlement to which he/she might be entitled according to the circumstances at hand would then be determined either in accordance with the applicable law or jurisprudence or by mutual agreement. As part of any termination agreement with an executive, Bombardier requests the inclusion of non-solicitation, non-disclosure and non-compete provisions for the duration of the severance period.

However, Bombardier has an employment agreement with Mr. Navarri which is governed by French law. As a result, Mr. Navarri would be entitled to receive a separation allowance in an amount equal to 24 months of his base salary and target bonus in the event that his employment is terminated by the Corporation. Had Mr. Navarri’s employment been terminated on December 31, 2012, he would have been entitled to a cash lump sum payment of $5,076,400 (1).

In the case of Mr. Hachey, there is an agreement pursuant to which he would be entitled to receive a separation allowance in an amount equal to 18 months of his base salary and target bonus in the event that his employment is terminated by the Corporation. Had Mr. Hachey been terminated on December 31, 2012, he would have been entitled to a cash lump sum payment of $2,856,900 (1). In order to compensate Mr. Hachey for part of the loss of his accumulated pension with his previous employer, the following additional amount would be paid if his employment is terminated by Bombardier for reasons other than cause:

Age at Termination Additional Amount (1)
57 $1,762,400
58 $1,370,800

(1) Amounts are converted from Canadian dollars (for Mr. Guy C. Hachey) and Euros (for Mr. André Navarri) to US dollars based on an exchange rate of 1.0043 and 1.3194 respectively as of December 31, 2012.

This additional amount would also be paid to his spouse in the event of his death during that same period.

As of the date of the 2013 Management Proxy Circular, there are no other termination or severance agreements or arrangements, including change-of-control arrangements, between Bombardier and any of the other NEOs.

The following table describes the consequences resulting from different types of termination from employment on the entitlement to the benefits of the Bombardier compensation programs assuming the event took place on December 31, 2012. As a general rule, only the accrued and vested benefits are paid under each of the compensation plans.

Read the Types of Termination table

The following table set forth estimates of the amounts payable to each of the NEOs upon retirement, termination without cause or death, assuming that each such event would have taken place on December 31, 2012.

Read the Supplementary Amounts table