Exhibit 10.6
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 J.
David Reed (“Executive”).
The
Company and Executive entered into that certain Employment
Agreement dated as of August 13, 2007 (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 continue to be
employed by the Company for a period commencing on August 13,
2007 and ending on December 31, 2008 (the “Employment
Term”) on the terms and subject to the conditions set forth
in this Agreement; provided , however , that
commencing with December 31, 2008 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. 2005 Incentive Plan) shall not affect the term of this
Agreement.
2.
Position
.
a.
During the Employment
Term, Executive shall serve as an Executive Vice President of the
Company and President of Essex Group North America. 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”) or the Chief Executive of the
Company. Executive shall report directly to the Chief
Executive Officer of the Company.
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. Notwithstanding the foregoing,
Executive may, without the prior approval of the Board,
(i) make and manage personal business investments of
Executive’s choice, subject to the prior written consent of
the Board if any such investment is beyond merely buying and
selling in the ordinary course (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.
c.
Notwithstanding anything
to the contrary in this Section 2, Executive agrees to serve
without additional compensation, if elected or appointed thereto,
as a director of the Company and any of its subsidiaries and in one
or more executive offices of any of the Company’s
subsidiaries, provided that Executive is indemnified for
serving in any and all such capacities.
3.
Base Salary
. During the
Employment Term, the Company shall pay Executive a base salary at
the annual rate of $323,000 (effective as of April 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 and no increase
shall serve to limit or reduce any other obligation to Executive
under this Agreement. Executive’s annual base salary,
as in effect from time to time, is hereinafter referred to as the
“Base Salary”.
4.
Bonus
.
Annual Bonus . With respect to each fiscal year ending
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 60% 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 (or its
affiliates’) employee benefit plans, programs and
arrangements 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, (i) any
long-term incentive program generally applicable to the
Company’s senior executive officers, and (ii) the
Superior Essex Inc. Amended and Restated Senior Executive
Retirement Plan (the “SERP”) or another plan providing
materially the same benefits as the SERP effective April 1,
2008. 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 A on April 1,
2008.
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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 B
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 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 30 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 to perform
substantially 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 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, (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
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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
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.
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(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.
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 target Annual Bonus to less than 60%
of the Base Salary or a material reduction by the Company of
Employee Benefits to which Executive is entitled (other than an
overall reduction in benefits that affects substantially all
full-time employees of the Company and its affiliates),
(C) Executive’s removal from the position of Executive
Vice President of the Company or President of Essex Group North
America, (D) a material adverse change in Executive’s
authority, duties and responsibilities or reporting lines,
(E) a relocation of Executive’s principal place of
employment with the Company of more than 35 miles from
Executive’s then current work location, other than a
relocation to the Company’s headquarters in the Greater
Atlanta 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
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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, 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, Executive shall be entitled to receive:
(A)
the Accrued
Rights;
(B)
a lump sum severance
payment equal to one (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);
(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 12 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 during such twelve-month 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
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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 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, 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 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 24
months, and the Severance Factor for purposes of
Section 8(c)(iii)(B) shall be equal to two
(2).
(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. Amended and Restated 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
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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 or any affiliate 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 (or affiliate); provided
that the provisions of Sections 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 employment
by the Company or by Executive (other than due to
Executive’s
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