Exhibit 10.1
EXECUTION COPY
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT (the “Agreement”) dated
as of March 19, 2008 by and between Superior Essex Inc. (the
“Company”) and Stephen M. Carter
(“Executive”).
The Company and
Executive entered into that certain Employment Agreement dated as
of November 10, 2003, as amended and restated on
March 10, 2006 (the “Original Agreement”).
The Company and Executive desire to amend and restate the Original
Agreement as set forth herein.
THEREFORE, in
consideration of the premises and mutual covenants herein and for
other good and valuable consideration, the Company and Executive
amend and restate the Original Agreement as follows:
1.
Term of Employment . Subject to the provisions of
Section 8 of this Agreement, Executive shall be employed by
the Company for a period commencing on November 10, 2003 (the
“Commencement Date”) and ending on November 9,
2007 (the “Employment Term”) on the terms and subject
to the conditions set forth in this Agreement; provided ,
however , that commencing with November 10, 2007 and on
each anniversary thereof (each an “Extension Date”),
the Employment Term shall be automatically extended for an
additional one-year period, unless the Company or Executive
provides the other party hereto 90 days prior written notice before
the next Extension Date that the Employment Term shall not be so
extended. The occurrence of a Change in Control (as defined
in the Superior Essex Inc. Amended and Restated 2005 Incentive
Plan) shall not affect the term of this Agreement.
2.
Position .
a.
During the Employment Term, Executive shall serve as the Chief
Executive Officer (“CEO”) of the Company. In such
position, Executive shall have such duties and authority,
consistent with such position with the Company, as shall be
determined from time to time by the Board of Directors of the
Company (the “Board”). During the Employment
Term, Executive also shall serve as a member of the Board without
additional compensation.
b.
During the Employment Term, Executive will devote Executive’s
full business time and best efforts to the performance of
Executive’s duties hereunder and will not engage in any other
business, profession or occupation for compensation or otherwise
which would conflict or interfere, in any significant respect, with
the rendition of such services either directly or indirectly,
without the prior written consent of the Board. The current
outside positions of Executive are listed on Exhibit A
attached hereto. Notwithstanding the foregoing, Executive
may, without the prior approval of the Board, (i) make and
manage personal business investments of Executive’s choice
(and, in so doing, may serve as an officer, director, agent or
employee of entities and business enterprises that are related to
such personal investments) and (ii) serve in any capacity with
any civic, educational or charitable organization or any
governmental entity or trade association; provided that in
each case, and in the aggregate, such
activities do not conflict
or interfere, in any significant respect, with the performance of
Executive’s duties hereunder or conflict with
Section 9.
3.
Base Salary . During the Employment Term, the Company
shall pay Executive a base salary at the annual rate of $840,000
(effective as of January 1, 2008), payable in regular
installments in accordance with the Company’s usual payment
practices (but not less often than monthly).
Executive’s base salary shall be reviewed annually by the
Board, and Executive shall be entitled to such increases in the
base salary, if any, as may be determined from time to time in the
sole discretion of the Board. Once increased, such base
salary shall not be decreased. Executive’s annual base
salary, as in effect from time to time, is hereinafter referred to
as the “Base Salary”.
4.
Annual Bonus . With respect to each full fiscal year
during the Employment Term, Executive shall be eligible to earn an
annual bonus award (an “Annual Bonus”) based upon the
achievement of certain performance targets, as reasonably
established by the Board in good faith, after consultation with
Executive; provided , however , that Executive shall
have a target Annual Bonus of 100% of the Base Salary, subject to
Executive’s achievement of such performance
targets.
5.
Equity Arrangements . [Intentionally
Omitted]
6.
Employee Benefits . During the Employment Term,
Executive shall be entitled to participate in the Company’s
employee benefit plans as in effect from time to time
(collectively, the “Employee Benefits”), on the same
basis as those benefits generally are made available to other
senior executives of the Company, commensurate with
Executive’s position with the Company. Such benefits
shall include, but not be limited to, the Superior Essex Inc.
Amended and Restated Senior Executive Retirement Plan (the
“SERP”) effective April 1, 2008, or another plan
providing materially the same benefits as the SERP. The
accrual rate applicable to Executive shall be reduced to 1.5%
effective January 1, 2009. In consideration of such
reduction and other changes reflected in the SERP, Executive shall
be entitled to receive shares of restricted stock described in
Exhibit B on April 1, 2008.
7.
Business Expenses and Perquisites .
a.
Business and Other Expenses . During the Employment
Term, reasonable business expenses incurred by Executive in the
performance of Executive’s duties hereunder shall be
reimbursed by the Company in accordance with Company
policies.
b.
Perquisites . While employed hereunder, Executive
shall be entitled to (i) any perquisites that generally are
made available to other senior executives of the Company and
(ii) those perquisites set forth on Exhibit C attached
hereto.
8.
Termination . The Employment Term and
Executive’s employment hereunder may be terminated by either
party at any time and for any reason in the manner provided
herein. Notwithstanding any other provision of this
Agreement, the provisions of this Section 8 shall exclusively
govern Executive’s rights upon termination of employment with
the Company and its affiliates. Subject to
Section 12(h) hereof, whenever this Agreement provides
for the payment
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of a lump sum benefit
following termination of employment, such payment shall be made
within 30 days after the employment termination date, subject to
the execution and non-revocation of the release referred to in
Section 8(h).
a.
By
the Company for Cause or Resignation by Executive without Good
Reason .
(i)
The Employment Term and Executive’s employment hereunder may
be terminated by the Company for Cause and shall terminate
automatically upon Executive’s resignation without Good
Reason; provided , however , that Executive will be
required to give the Company at least 60 days advance written
notice of a resignation without Good Reason.
(ii)
For purposes of this Agreement, “Cause” shall mean
(A) Executive’s continued willful failure substantially
to perform Executive’s duties hereunder (other than as a
result of total or partial incapacity due to physical or mental
illness) following written notice by the Company to
Executive of such failure, (B) dishonesty in the performance
of Executive’s duties hereunder, (C) Executive’s
conviction of, or plea of guilty or nolo contendere
to, a crime constituting (y) a felony under the laws of the
United States or any state thereof or (z) a misdemeanor
involving misconduct by Executive in his personal or professional
conduct punishable by imprisonment of more than three days or a
fine in excess of $5,000 (other than a traffic violation), which is
reasonably likely to damage the business, prospects or reputation
of the Company or any of its affiliates in any respect,
(D) Executive’s willful malfeasance or willful
misconduct in connection with Executive’s duties hereunder or
any act or omission which is injurious (other than in some
immaterial or de minimis respect) to the financial condition or
business reputation of the Company or any of its affiliates or
(E) Executive’s breach of the provisions of
Section 9 or 10 of this Agreement (other than a breach which
is insubstantial and insignificant, taking into account all of the
circumstances); provided , however , that any event
described in clauses (A), (B) and (D) of this
Section 8(a)(ii) shall constitute Cause only if Executive
fails to cure such event, to the reasonable satisfaction of the
Board, within 10 days after receipt from the Company of written
notice of the event which constitutes Cause.
(iii)
If Executive’s employment is terminated by the Company for
Cause or if Executive resigns without Good Reason, Executive shall
be entitled to receive:
(A)
the Base Salary through the date of termination;
(B)
any Annual Bonus earned but unpaid as of the date of termination
for any previously completed fiscal year;
(C)
reimbursement for any unreimbursed business expenses properly
incurred by Executive in accordance with Company policy prior to
the date of Executive’s termination; and
(D)
such Employee Benefits, if any, as to which Executive may be
entitled under the employee benefit plans of the Company
or any of its affiliates,
including, without limitation, any vested accrued benefit under the
SERP (the
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amounts described in clauses
(A) through (D) hereof being referred to as the
“Accrued Rights”).
Following such
termination of Executive’s employment by the Company for
Cause or resignation by Executive without Good Reason, except as
set forth in this Section 8(a)(iii), Section 8(d) or
Sections 12(h), (l), (n) and (o), Executive shall have no
further rights to any compensation or any other benefits under this
Agreement. Executive’s rights with respect to any
equity awards in the case of his termination by the Company for
Cause or his resignation without Good Reason shall be as provided
in the applicable equity award agreements and the plan under which
such awards were granted.
b.
Disability or Death .
(i)
The Employment Term and Executive’s employment hereunder
shall terminate upon Executive’s death, and may be terminated
by the Company if Executive becomes physically or mentally
incapacitated and is therefore reasonably likely to be unable for a
period of six consecutive months or for an aggregate of nine months
in any twelve consecutive month period to perform Executive’s
material duties (such incapacity is hereinafter referred to as
“Disability”). Any question as to the existence
of the Disability of Executive as to which Executive and the
Company cannot agree shall be determined in writing by a qualified
independent physician mutually acceptable to Executive and the
Company. If Executive and the Company cannot agree as to a
qualified independent physician, each shall appoint such a
physician and those two physicians shall select a third who shall
make such determination in writing. The determination of
Disability made in writing to the Company and Executive shall be
final and conclusive for all purposes of the
Agreement.
(ii)
Upon termination of Executive’s employment hereunder for
Disability or death Executive or Executive’s estate (as the
case may be) shall be entitled to receive:
(A)
the Accrued Rights; and
(B)
an Annual Bonus for the fiscal year in which Executive’s
termination occurs, payable in a lump sum payment, equal to the
greater of (i) a pro-rata portion of Executive’s target
Annual Bonus for such year (determined by multiplying the target
Annual Bonus by a fraction, the numerator of which is the number of
days during the performance year that Executive is employed by the
Company and the denominator of which is 365), or (ii) such
other amount as may be provided in the Company’s annual bonus
plan for the fiscal year in which Executive’s termination
occurs.
Following
Executive’s termination of employment due to death or
Disability, except as set forth in this Section 8(b)(ii),
Section 8(d) or Sections 12(h), (l), (n) and (o),
Executive shall have no further rights to any compensation or any
other benefits under this Agreement. Executive’s rights
with respect to any equity awards in the case of his termination of
employment due to death or Disability shall be as provided in the
applicable equity award agreements and the plan under which such
awards were granted.
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c.
By the Company without Cause or Resignation by Executive for
Good Reason .
(i)
The Employment Term and Executive’s employment hereunder may
be terminated by the Company without Cause (other than by reason of
death or Disability) or by Executive’s resignation for Good
Reason.
(ii)
For purposes of this Agreement, “Good Reason” shall
mean, without Executive’s written consent, (A) a
reduction in Executive’s Base Salary as then in effect,
(B) a reduction in Executive’s annual bonus opportunity
to less than 100% of Base Salary or a material reduction by the
Company of benefits to which Executive is entitled (other than an
overall reduction in benefits that affects substantially all
full-time employees of the Company), (C) Executive’s
removal from the position of CEO of the Company, (D) a
material adverse change in Executive’s authority, duties and
responsibilities that is substantially inconsistent with
Executive’s position as CEO of the Company, (E) a
relocation of Executive’s principal place of employment with
the Company of more than 35 miles from the Atlanta, Georgia
metropolitan area, (F) the Company’s failure to pay
amounts to which Executive is entitled under this Agreement, or
(G) the Company’s giving written notice that it elects
not to extend the Employment Term pursuant to Section 1 of
this Agreement (but this clause (G) shall apply only if
Executive would be less than age 62 at the end of the Employment
Term); provided that any event described in clauses
(A) through (F) above shall constitute Good Reason only
if the Company fails to cure such event within 30 days after
receipt from Executive of written notice of the event which
constitutes Good Reason; provided , further , that
Good Reason shall cease to exist for an event described in clauses
(A) through (F) above on the 60th day following the later
of its occurrence or Executive’s knowledge thereof, unless
Executive has given the Company written notice thereof prior to
such date.
(iii)
O ther than as provided
in Section 8(c) (iv) below,
i f Executive’s
employment is terminated by the Company without Cause (other than
by reason of death or Disability) or if Executive resigns for Good
Reason, Executive shall be entitled to receive:
(A)
the Accrued Rights; and
(B)
a lump sum severance payment
equal to two (the “Severance Factor”) times the sum of
(i) Executive’s then Base Salary, plus
(ii) Executive’s target Annual Bonus for the fiscal year
in which Executive’s termination pursuant to this
Section 8(c)(iii) occurred; provided that the amount described in this clause
(B) shall be in lieu of any other cash severance payable to
Executive under any other plans, programs or arrangements of the
Company or its affiliates (but excluding the SERP) up to the amount
described in this clause (B); and
(C)
subject to Executive’s continued compliance with the
provisions of Sections 9 and 10 of this Agreement (other than a
breach that is insubstantial and insignificant, taking into account
all of the circumstances), for a period of 24 months following the
date of such termination (the “Welfare Benefits Continuation
Period”), continued participation in the health and welfare
plans maintained by the Company or any of its affiliates as in
effect from time to time
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during the Welfare Benefits
Continuation Period, on the same basis as the Company and its
affiliates provides such plans for its then actively employed
executives (which may include, without limitation, medical, dental,
disability and life insurance), and the Company and Executive shall
share the costs of the continuation of such coverage in the same
proportion as such costs were shared immediately prior to
Executive’s termination; provided , however ,
that (i) such participation shall terminate, or the benefits
under such plan shall be reduced, if and to the extent Executive
becomes covered (or is eligible to become covered) during such
period by plans of a subsequent employer or other entity to which
Executive provides services providing comparable benefits or if
Executive fails to pay any required contribution or premium,
(ii) during the Welfare Benefits Continuation Period, the
benefits provided in any one calendar year shall not affect the
amount of benefits to be provided in any other calendar year, and
(iii) the reimbursement of an eligible expense must be made no
later than December 31 of the year after the year in which the
expense was incurred. Such coverage shall be credited against
the time period that Executive and Executive’s dependents are
entitled to receive continued coverage under the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended. To the
extent any benefits described in this
Section 8(c)(iii)(C) cannot be provided under the
Company’s welfare plans, the Company shall pay to Executive a
lump sum amount equal to the amount that such coverage would have
cost the Company for the remainder of the Welfare Benefits
Continuation Period. Executive’s rights pursuant to
this Section 8(c)(iii)(C) shall not be subject to
liquidation or exchange for another benefit; and
(D)
the Compensation Committee of the Company may, but need not,
provide that (i) all or any part of Executive’s unvested
stock options then held by Executive shall become vested and
exercisable as of the date of termination and may continue to be
exercisable for a designated period of time, but in no event to
exceed the original full term of the option; and/or that
(ii) all or any part of vesting restrictions on other
outstanding equity awards, including but not limited to the
Restricted Shares described in Exhibit B, then held by
Executive shall vest and cease to be restricted as of the date of
termination. Such decision may be based on such factors, if
any, as the Compensation Committee shall determine, subject to
ratification by the non-management directors of the Board of
Directors, including, but not limited to, the Company’s
financial condition and market conditions. Notwithstanding
the foregoing, to the extent that any portion of Executive’s
outstanding equity awards are subject to market or performance
criteria (other than service requirements) affecting vesting or
exercisability and such market or performance criteria have been
satisfied as of the date of termination, that portion of the award
shall be deemed fully vested as of the date of
termination.
(iv)
If Executive’s employment is terminated by the Company
without Cause (other than by reason of death or Disability) or if
Executive resigns for Good Reason at any time during the period
beginning on the date of a Change in Control (as defined in the
Superior Essex Inc. Amended and Restated 2005 Incentive Plan) and
ending two years after the date of such
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Change in Control, Executive
shall be entitled to receive the benefits as provided under
Section 8(c)(iii)(A), (B) and (C), except that
the Welfare Benefits Continuation
Period as defined in Section 8(c)(iii)(C) shall be 33 months, and the
Severance Factor for purposes of
Section 8(c)(iii)(B) shall be 2.75.
(v)
Following Executive’s termination of employment by the
Company without Cause (other than by reason of Executive’s
death or Disability) or by Executive’s resignation for Good
Reason, except as set forth in this Section 8(c),
Section 8(d) or Sections 12(h), (l), (n) and (o),
Executive shall have no further rights to any compensation or any
other benefits under this Agreement. Except as set forth
herein, Executive’s rights with respect to any equity awards
in the case of his termination by the Company without Cause or his
resignation for Good Reason shall be as provided in the applicable
equity award agreements and the plan under which such awards were
granted.
d.
Effect of a Change in Control on Equity Awards
.
(i)
Accelerated Vesting . In addition to the rights described
above, upon the occurrence of a Change in Control (as defined in
the Superior Essex Inc. 2005 Incentive Plan), (A) all of
Executive’s outstanding stock options and any other equity
awards in the nature of appreciation rights (collectively,
“Appreciation Rights”), shall become fully vested and
exercisable as of the date of the Change in Control, and
(B) all time-based or performance-based vesting restrictions
on Executive’s outstanding restricted stock, restricted stock
units and other equity awards (collectively, “Restricted
Rights”) shall lapse as of the date of the Change in
Control.
(ii)
Settlement of Awards in Certain Events . The following
shall apply only upon the occurrence of a Change in Control in
which the consideration paid to Company shareholders is
consideration other than shares in the resulting or surviving
entity that are listed for trading on a nationally recognized
exchange. In such event, (A) all of Executive’s
Appreciation Rights shall vest and be cancelled simultaneously with
the Change in Control and Executive shall be entitled to receive
therefor the same transaction consideration as if he were a
shareholder of the Company holding the number of shares of Company
common stock having a fair market value, as of the effective time
of the Change in Control, equal to (x) the excess, if any, of
the value of the consideration per share to be received by Company
shareholders in such Change of Control, over the exercise price for
such Appreciation Right, less (y) applicable withholding
taxes; and (B) all of Executive’s Restricted Rights
shall vest and be cancelled simultaneously with the Change in
Control and Executive shall be entitled to receive therefor the
same transaction consideration as if he were a shareholder of the
Company holding the number of shares of Company common stock having
a fair market value, as of the effective time of the Change in
Control, equal to the value of such Restricted Rights, less
applicable withholding taxes.
e.
Expiration of Employment
Term .
Unless
the parties otherwise agree in writing, continuation of
Executive’s employment with the Company beyond the expiration
of the Employment Term shall be deemed an employment at-will and
shall not be deemed to extend any of the provisions of this
Agreement and Executive’s employment may thereafter be
terminated at will by either Executive or the Company;
provided that the provisions of Sections
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9, 10, 11 and 12(n) of
this Agreement shall survive any termination of this Agreement or
Executive’s termination of employment hereunder; and
provided further that if Executive shall have given notice
of intent to resign for Good Reason pursuant to clause
8(c)(ii)(G) as a result of the Company’s election not to
extend the Employment Term, the provisions of
Section 8(c) and Sections 12(h), (l) and
(o) shall continue to apply with respect to such
resignation.
f.
Notice of Termination . Any purported termination of
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