Exhibit 10.1
EXECUTION COPY
AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
This AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT (the
“Agreement” ) is dated and entered into this
April 1, 2008, between Belden Inc. (formerly Belden CDT Inc.)
a Delaware corporation (the “Company” ), and
John Stroup ( “Executive” ).
W I T N E S S
E T H :
WHEREAS , the Company and
Executive entered into an employment agreement dated
September 26, 2005 ( “Prior Agreement”
);
WHEREAS , the Company and
Executive desire to amend and fully restate the Prior Agreement,
and to continue Executive’s employment with the Company as
its President and Chief Executive Officer, in accordance with the
terms hereof; and
WHEREAS , the Company and
Executive desire to amend the Prior Agreement so as to conform the
existing terms of Executive’s employment with
Section 409A ( “Section 409A” ) of the
Internal Revenue Code of 1986, as amended (
“Code” ) and the final Treasury Regulations
related thereto, among other amendments herein.
NOW THEREFORE , in
consideration of the foregoing, of the mutual promises contained
herein and of other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties
hereto hereby agree as follows:
1. POSITION/DUTIES
.
(a) Executive
shall serve as the President and Chief Executive Officer of the
Company. As President and Chief Executive Officer of the Company,
Executive shall have active and general supervision and management
over the business and affairs of the Company and shall have full
power and authority to act for all purposes for and in the name of
the Company in all matters except where action of the Board of
Directors of the Company (the “Board” ) is
required by law, the by-laws of the Company, or resolutions of the
Board, and shall have such other duties and responsibilities as the
Board shall designate that are consistent with Executive’s
position. Executive shall report exclusively to the Board.
(b) Executive
shall use Executive’s best efforts to perform faithfully and
efficiently the duties and responsibilities assigned to Executive
hereunder and devote substantially all of Executive’s
business time to the performance of Executive’s duties with
the Company; provided, the foregoing shall not prevent Executive
from (i) participating in charitable, civic, educational,
professional, community or industry affairs or, with prior approval
of the Board, serving on the board of directors or advisory boards
of other companies and (ii) managing Executive’s and
Executive’s family’s personal investments, in all
events so long as such activities do not materially interfere with
the performance of Executive’s duties hereunder or create a
potential business conflict or the appearance thereof. If at any
time service on any board of directors or advisory board would, in
the good faith judgment of the Board, conflict with
Executive’s fiduciary duty to the Company or create any
appearance thereof, Executive shall, as soon as reasonably
practicable considering any fiduciary duty to the other such
company,
resign from such other board of directors or advisory board after
written notice of the conflict is received from the Board.
(c) The
Board shall take such action as may be necessary to appoint or
elect Executive as a member of the Board as soon as there is a
legal vacancy on the Board, but not to be effective prior to the
Effective Date (defined below). Thereafter, during the Term, the
Board shall nominate Executive for re-election as a member of the
Board at the expiration of Executive’s then-current
term.
(d) Executive
further agrees to serve without additional compensation as an
officer and director of any of the Company’s subsidiaries and
agrees that any amounts received from any such corporation may be
offset against the amounts due hereunder.
2. TERM OF AGREEMENT .
The Agreement was effective September 26, 2005 and the initial
term of Executive’s employment with the Company commenced on
October 31, 2005 (the “Effective Date” )
and, pursuant to the Prior Agreement, ends on the third anniversary
of the Effective Date; provided, the initial term is hereby
extended until October 31, 2011 ( “Initial
Term” ). The term of this Agreement shall be
automatically extended thereafter for successive one (1) year
periods unless, at least ninety (90) days prior to the end of
the Initial Term or the then current succeeding one (1)-year
extended term of this Agreement, the Company or Executive has
notified the other that the term hereunder shall terminate upon its
expiration date. The Initial Term, as it may be extended from year
to year thereafter, is herein referred to as the “Term
. ” The foregoing to the contrary notwithstanding,
upon the occurrence of a Change in Control (defined below), the
Term shall be for a period ending on the later of the last day of
the Initial Term and the second anniversary of the date of the
occurrence of such Change in Control and shall be subject to
expiration upon notice by Executive or the Company to the other
party or to automatic successive additional one-year periods
thereafter, as the case may be, in the manner provided above. If
Executive remains employed by the Company beyond the expiration of
the Term, he shall be an employee at-will; except that any
provisions identified as surviving shall continue. In all events
hereunder, Executive’s employment is subject to earlier
termination pursuant to Section 7 hereof, and upon such
earlier termination the Term shall be deemed to have ended.
3. BASE SALARY .
Commencing effective February 21, 2008, the Company shall pay
Executive a base salary (the “Base Salary” ) at
an annual rate of $700,000, payable in accordance with the regular
payroll practices of the Company. Executive’s Base Salary
shall be subject to annual review by the Board (or a committee
thereof) and may be increased from time to time by the Board. The
base salary as determined herein from time to time shall constitute
“Base Salary” for purposes of this Agreement.
4. ANNUAL BONUS .
Commencing on the Effective Date, Executive shall be eligible to
participate in the Company’s Management Incentive Plan and
any successor annual bonus plans. Commencing with the 2008 fiscal
year, Executive shall have the opportunity to earn an annual target
bonus, measured against performance criteria to be determined by
the Board (or a committee thereof), of at least 130% of Base Salary
(for the 2008 fiscal year, such Base Salary amount shall be
$700,000).
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5. EQUITY AWARDS .
(a) BUY-OUT
OPTION GRANT. The Board or the committee of the Board (the
“Committee” ) appointed to administer the
Company’s 2001 Long-Term Performance Incentive Plan as may be
amended or replaced from time to time ( “Plan”
), shall award Executive as of the Effective Date, two options
(collectively and singularly, the “Buy-Out
Option” ) to purchase an aggregate number of shares of
the Company’s common stock ( “Common
Stock” ) as equals the product of (i) the quotient
of (A) $3,000,000 divided by (B) the Fair Market Value (as
defined under the Plan) of Common Stock on the Effective Date,
multiplied by (ii) three (3).
(b) BUY-OUT
RESTRICTED STOCK UNITS. The Board or the Committee shall award
Executive as of the Effective Date such number of restricted stock
units (the “Buy-Out RSUs” ) as equals the
quotient of (i) $3,000,000 divided by (ii) the Fair Market
Value of Common Stock on the Effective Date.
(c) ANNUAL
LONG-TERM INCENTIVE AWARDS.
(i)
Commencing with annual awards granted to senior executives in 2006,
Executive shall be eligible for annual long-term incentive awards
throughout the Term under such long-term incentive plans and
programs as may be in effect from time to time in accordance with
the Company’s compensation practices and the terms and
provisions of any such plans or programs; provided, that
Executive’s participation in such plans and programs shall be
at a level and on terms and conditions consistent with
participation by other senior executives of the Company, as the
Board or the Committee shall determine in its sole discretion, with
due consideration of Executive’s position and awards granted
to other senior executives of the Company. Notwithstanding,
Executive shall be granted an annual long-term incentive equity
award during each of the 2006, 2007 and 2008 fiscal years having a
value on the grant date of not less than $2,500,000 (the
“Initial Term Annual Awards” ). The Initial Term
Annual Awards shall be granted in the form of stock options or
restricted stock units ( “RSUs” ) or a
combination thereof, unless Executive and the Committee otherwise
agree. The portion of such dollar value of each Initial Term Annual
Award granted as stock options and the portion granted as RSUs
shall be determined in the discretion of the Board or Committee,
provided that not less than one-half of such annual value shall be
granted as RSUs.
(ii)
For Initial Term Annual Awards of RSUs, the number of RSUs granted
shall be equal to the quotient of (A) the dollar value to be
awarded divided by (B) the Fair Market Value of a share of
Common Stock on the grant date. For Initial Term Annual Awards of
stock options, the number of options granted shall be equal to the
quotient of (C) the dollar value to be awarded divided by
(D) the Black-Scholes value (or other option valuation method)
of one (1) share of Common Stock on the grant date as
determined by the Committee or the Board for the valuation of stock
option grants to other senior executives during such fiscal
year.
(iii)
Except as provided below, for Initial Term Annual Awards granted as
stock options, each such option share shall have an exercise price
equal to the Fair
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Market Value of
one (1) share of Common Stock and shall vest and become
exercisable in three (3) equal installments on the first,
second and third anniversaries of the grant date, provided that
Executive has been continuously employed by the Company through
each such vesting date for such installment to so vest. Initial
Term Annual Awards granted as RSUs shall fully vest (A) on the
third anniversary of the grant date or (B) if Executive shall
have attained stated performance objectives over a three-year
period, or (C) a combination of (A) and (B), and in no
part prior to such vesting date, provided that Executive shall have
been continuously employed by the Company through such vesting
date, all as shall be determined in the sole discretion of the
Committee or the Board.
(iv)
All Initial Term Annual Awards shall be granted pursuant to the
terms of the Plan as then in effect. In the event that, pursuant to
Plan limits, during any fiscal year the Board and Committee are not
authorized to grant a number of Initial Term Annual Award stock
options or RSUs (or both) payable in shares of stock, having an
aggregate value of $2,500,000, then such amount as is not so
granted shall be awarded on substantially the same terms as stock
options and RSUs, but such awards shall be payable to Executive in
cash ( e.g. , as cash-based phantom stock and stock
appreciation rights), subject to applicable tax and other
law.
(v)
Initial Term Annual Awards and all other long-term incentive awards
shall be granted pursuant to and, to the extent not contrary to the
terms of this Agreement, shall be subject to all of the terms and
conditions imposed upon such awards granted under the Plan.
(vi)
The provisions of subparagraphs (i) through (v), above, to the
contrary notwithstanding:
(1)
Executive shall have the opportunity to be granted long-term
incentive equity awards during the 2009 and 2010 fiscal years, in
the sole discretion of the Committee, having a targeted value on
the grant date of not less than $2,500,000, having the terms and
conditions of Initial Term Annual Awards, above, except as set
forth in this subparagraph (vi), and otherwise shall be considered
herein as Initial Term Annual Awards;
(2)
Executive’s Initial Term Annual Awards granted as stock
options or stock appreciation rights during the 2008, 2009 and 2010
fiscal years shall vest on the third anniversary of the date of
award thereof or if subject to performance objectives shall vest
only after completion of a three-year performance period; and
(3)
Executive’s Initial Term Annual Awards that may be granted
during the 2009 and 2010 fiscal years shall be in such ratio of
stock options or stock appreciation rights to RSUs as the Committee
or the Board shall determine in its sole discretion.
(d) RETENTION
AWARD. On the date hereof, Executive shall be awarded an option
(the “Retention Award” ) to purchase such number
of shares of Common Stock as
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have an
aggregate value on the date of grant of $3,000,000, as determined
in accordance with FAS 123R applying assumptions as are generally
applied by the Company for awards of stock options to senior
executives on or about the time of the Retention Award, having an
exercise price per option equal to the Fair Market Value of one
(1) share of Common Stock on the date of grant, a ten
(10) year option term, and vesting and first becoming
exercisable on February 21, 2013 provided that Executive has
been continuously employed by the Company through such vesting date
for the Retention Award to so vest and become exercisable, except
as otherwise provided herein. The Retention Award shall otherwise
be in the form of award generally applicable to awards of stock
options to other senior executives of the Company.
(e) STOCK
OWNERSHIP. Executive shall be subject to, and shall comply with,
the stock ownership guidelines of the Company as may be in effect
from time to time; provided, Executive’s vested and unvested
Buy-Out RSUs and restricted stock units granted as Initial Term
Annual Awards shall be credited towards his stock ownership
obligation.
6. EMPLOYEE BENEFITS .
Commencing on the Effective Date:
(a) BENEFIT
PLANS. Executive shall be entitled to participate in all employee
benefit plans of the Company including, but not limited to, equity,
pension, thrift, profit sharing, medical coverage, education, or
other retirement or welfare benefits that the Company has adopted
or may adopt, maintain or contribute to for the benefit of its
senior executives in accordance with the terms of such plans and
programs.
(b) VACATION.
Executive shall be entitled to annual paid vacation in accordance
with the Company’s policy applicable to senior executives,
but in no event less than four (4) weeks per year (as prorated
for partial years of employment).
(c) BUSINESS
AND ENTERTAINMENT EXPENSES. Upon presentation of appropriate
documentation, Executive shall be reimbursed in accordance with the
Company’s expense reimbursement policy for all reasonable and
necessary business expenses incurred in connection with the
performance of Executive’s duties hereunder. The Company
shall reimburse Executive for his reasonable professional fees
incurred to negotiate and prepare this Agreement, not in excess of
$7,500.
(d) RELOCATION.
[Intentionally Omitted]
(e) CERTAIN
AMENDMENTS. Nothing herein shall be construed to prevent the
Company from amending, altering, terminating or reducing any plans,
benefits or programs so long as Executive continues to receive
compensation and benefits consistent with Sections 4, 5 and
6(b).
7. TERMINATION .
Executive’s employment and the Term shall terminate on the
first of the following to occur:
(a) DISABILITY.
Upon written notice by the Company to Executive of termination due
to Disability, while Executive remains Disabled. For purposes of
this Agreement, “Disability” shall have the
meaning defined under the Company’s then-current long-term
disability insurance plan in which Executive participates.
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(b) DEATH.
Automatically on the date of death of Executive.
(c) CAUSE.
Immediately upon written notice by the Company to Executive of a
termination of Executive’s employment for Cause.
“Cause” shall mean:
(i)
Executive’s willful and continued failure to perform
substantially his duties owed to the Company or its affiliates
after a written demand for substantial performance is delivered to
him specifically identifying the nature of such unacceptable
performance and is not cured by Executive within a reasonable
period, not to exceed thirty (30) days;
(ii)
Executive is convicted of (or pleads guilty or no contest to) a
felony or any crime involving moral turpitude;
(iii)
Executive has engaged in conduct that constitutes gross misconduct
in the performance of his employment duties; or
(iv)
Executive breaches any representation, warranty or covenant under
Section 22.
An act or
omission by Executive shall not be “willful” if
conducted in good faith and with Executive’s reasonable
belief that such conduct is in the best interests of the
Company.
(d) WITHOUT
CAUSE. Upon written notice by the Company to Executive of an
involuntary termination of Executive’s employment other than
for Cause (and other than due to his Disability).
(e) GOOD
REASON. Upon written notice by Executive to the Company of a
voluntary termination of Executive’s employment, at any time
during a Protection Period (defined below), for Good Reason.
“Good Reason” shall mean, without the express
written consent of Executive, the occurrence of any of the
following events:
(i)
Executive’s Base Salary or annual target bonus opportunity is
reduced;
(ii)
Executive’s duties or responsibilities are negatively and
materially changed in a manner inconsistent with Executive’s
position (including status, offices, titles, and reporting
responsibilities) or authority;
(iii)
The Company requires Executive’s principal office to be
relocated more than 50 miles from its location as of the date
immediately preceding the Change in Control; or
(iv)
Failure by the Company to elect or reelect Executive as a member of
the Board of Directors.
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Prior
to any termination by Executive for “Good Reason” he
shall provide the Board not less than thirty (30) nor more
than ninety (90) days’ notice, with specificity, of the
grounds constituting Good Reason and an opportunity within such
notice period for the Company to cure such grounds. Such notice
shall be given within ninety (90) days following the initial
existence of such grounds constituting Good Reason for such notice
and subsequent termination, if not so cured above, to be
effective.
(f) VOLUNTARY
TERMINATION FOR ANY REASON (WITHOUT GOOD REASON DURING A PROTECTION
PERIOD). Upon at least thirty (30) days’ prior written
notice by Executive to the Company of Executive’s voluntary
termination of employment (i) for any reason prior to or after
a Protection Period or (ii) without Good Reason during a
Protection Period, in either case which the Company may, in its
sole discretion, make effective earlier than any termination date
set forth in such notice.
8. CONSEQUENCES OF
TERMINATION . Any termination payments made and benefits
provided under this Agreement to Executive shall be in lieu of any
termination or severance payments or benefits for which Executive
may be eligible under any of the plans, policies or programs of the
Company or its affiliates. Except to the extent otherwise provided
in this Agreement, all benefits, including, without limitation,
stock option grants, restricted stock units grants and other awards
under the Company’s long-term incentive programs, shall be
subject to the terms and conditions of the plan or arrangement
under which such benefits accrue, are granted or are awarded. Upon
termination of Executive’s employment, the following amounts
and benefits shall be due to Executive:
(a) DEATH;
DISABILITY. If Executive’s employment terminates due to
Executive’s death or Disability, then the Company shall pay
or provide Executive (or the legal representative of his estate in
the case of his death) with:
(i)
(A) any accrued and unpaid Base Salary through the date of
termination and any accrued and unused vacation in accordance with
Company policy; and (B) reimbursement for any unreimbursed
expenses, incurred and documented in accordance with applicable
Company policy, through the date of termination (collectively,
“Accrued Obligations” ). Accrued Obligations
payable under clause (A) shall be payable within fifteen
(15) days following the date of termination, and under clause
(B) shall be paid within fifteen (15) days after
Executive shall have provided the Company all required
documentation therefor;
(ii)
Any unpaid bonus earned with respect to any fiscal year ending on
or preceding the date of termination, payable when bonuses are paid
generally to senior executives for such year;
(iii) A
pro-rated annual bonus for the fiscal year in which such
termination occurs, the amount of which shall be based on actual
performance under the applicable bonus plan (for this purpose
determined at fiscal year end, by treating Company financial
performance goals for such fiscal year as the only performance
goals applicable to Executive and without any exercise of negative
discretion by the Committee) and the fraction the numerator of
which is the number of days elapsed during
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the performance
year through the date of termination and the denominator of which
is 365, which pro-rated bonus shall be paid when bonuses are
paid generally to senior executives for such year (
“Pro-Rated Bonus” );
(iv)
Any disability insurance benefits, or life insurance proceeds, as
the case may be, as may be provided under the Company plans in
which Executive participates immediately prior to such
termination;
(v)
Executive’s Buy-Out Option and Buy-Out RSUs shall become
immediately fully vested, and Executive’s Buy-Out Option
shall be exercisable for the lesser of one (1) year following
the date of termination or the unexpired stated term of the
grant;
(vi) A
pro-rated portion of Executive’s Retention Award, if not then
vested and exercisable, shall become vested and exercisable on the
date of termination in such number of options as equals the
fraction the numerator of which is the number of days Executive was
continuously employed from and after February 21, 2008 through
the date of termination and the denominator of which is 1,826, and
the remaining portion of the Retention Award shall be immediately
forfeited. The Retention Award, to the extent vested and
exercisable prior to or upon such termination shall remain
exercisable for the lesser of one (1) year following the date
of termination and the expiration of the ten (10) year option
term. The provisions of this subparagraph (vi) shall survive
any expiration of the Term in which Executive’s employment
continues thereafter; and
(vii)
All of Executive’s other unvested long-term incentive awards
(including unvested Initial Term Annual Awards), granted to
Executive through the date of termination, other than as set forth
in subparagraphs (v) and (vi), above, shall vest or be
forfeited, and any such vested awards granted as stock options
shall be exercisable, in accordance with the terms and conditions
set forth in such awards.
(b) VOLUNTARY
TERMINATION (INCLUDING VOLUNTARY TERMINATION WITHOUT GOOD REASON
DURING A PROTECTION PERIOD); INVOLUNTARY TERMINATION WITHOUT CAUSE
AT OR AFTER AGE 65; INVOLUNTARY TERMINATION FOR CAUSE.
(i) If
Executive’s employment should be terminated (i) by
Executive for any reason at any time other than during a Protection
Period, or (ii) by Executive without Good Reason during a
Protection Period, then: (A) the Company shall pay to
Executive any Accrued Obligations in accordance with
Section 8(a)(i); (B) all unvested stock options,
restricted stock units and other unvested long-term incentive
grants (including the unvested portion of the Buy-Out Option,
unvested Buy-Out RSUs, unvested Retention Award and any unvested
Initial Term Annual Awards) shall be immediately forfeited and
cancelled; and (C) all vested stock options (including the
vested portion of the Buy-Out Option and the Retention Award and
any vested Initial Term Annual Awards granted as stock options)
shall be exercisable for ninety (90) days following such
termination.
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(ii) If
Executive’s employment is terminated by the Company other
than for Cause and other than for Disability at or after
Executives’ attainment of age 65, (x) the Company shall
pay to Executive any Accrued Obligations and
(y) Executive’s long-term incentive grants shall vest or
be forfeited, and any stock options shall be exercisable, as set
forth in the applicable grant agreement, but not less than ninety
(90) days.
(iii)
If Executive’s employment is terminated by the Company for
Cause, the Company shall pay to Executive any Accrued Obligations,
and all vested and unvested stock options, restricted stock units
and other vested and unvested long-term incentive grants (including
the vested and unvested portion of the Buy-Out Option and the
Retention Award, vested and unvested Buy-Out RSUs and any vested
and unvested Initial Term Annual Awards) shall be immediately
forfeited and cancelled.
(c) TERMINATION
WITHOUT CAUSE. If at any time (A) prior to Executive’s
attainment of age 65 and (B) other than during a Protection
Period, Executive’s employment by the Company is terminated
by the Company other than for Cause (and other than a termination
for Disability), then the Company shall pay or provide Executive
with:
(i)
Executive’s Accrued Obligations, payable in accordance with
Section 8(a)(i);
(ii)
Any unpaid bonus earned with respect to any fiscal year ending on
or preceding the date of termination, payable when bonuses are paid
generally to senior executives for such year;
(iii) A
Pro-Rated Bonus;
(iv)
Severance payments in the aggregate amount equal to the product of
(A) the sum of (1) Executive’s then Base Salary
plus (2) his annual target bonus multiplied by (B) one
and one-half (1.5), which amount shall be payable to Executive in
equal payroll installments over a period of eighteen
(18) months;
For
purposed of this subparagraph (iv) each installment severance
payment to Executive under this subparagraph (iv) shall be
treated as a separate payment (within the meaning of
Section 409A).
Provided,
anything herein to the contrary notwithstanding, if on the date of
termination Executive is a “specified employee” of the
Company (as defined in Treasury
Regulation Section 1.409A-1(i)), to the extent that such
severance payments (and any other payments and benefits provided in
Section 8) constitute a “deferral of compensation”
under a “nonqualified deferred compensation plan” under
Section 409A and Treasury Regulation Section 1.409A-1,
the following provisions shall apply ( “Safe Harbor and
Postponement” ):
(1) If
such payments and benefits are payable on account of
Executive’s “involuntary separation from service”
(as defined in Treasury Regulation Section 1.409A-1(n)),
Executive shall receive such amount of his
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severance
payments during the six (6)-month period immediately following the
date of termination as equals the lesser of: (x) such
severance payment amount due Executive under Section 8 during
such six (6)-month period or (y) two (2) multiplied by
the compensation limit in effect under Section 401(a)(17) of
the Code, for the calendar year in which the date of termination
occurs and as otherwise provided under Treasury
Regulation Section 1.409A-1(b)(9)(iii) and shall be
entitled to such of his benefits as satisfy the exception under
Treasury Regulation Section 1.409A-1(b)(9)(v) (
“Limitation Amount” ).
(2) To
the extent that, upon such “involuntary separation from
service,” the amount of payments and benefits that would have
been payable to Executive under Section 8 during the six
(6)-month period following the last day of his employment exceeds
the Limitation Amount, such excess shall be paid on the first
regular payroll date following the expiration of such six (6)-month
period.
(3) If
the Company reasonably determines that such employment termination
is not such an “involuntary separation from service,”
all such payments and benefits that would have been payable to the
Executive under Section 8 during the six (6)-month period
immediately following the date of termination, but for such
determination, shall be paid on the first regular payroll date
immediately following the expiration of such six (6)-month period
following the date of termination.
(4) Any
payments under this Section 8(c) that are postponed pursuant
to the Safe Harbor and Postponement shall accrue interest at an
annual rate (compounded monthly) equal to the short-term applicable
federal rate (as in effect under Section 1274(d) of the Code on the
last day of the Executive’s employment) plus 100 basis
points, which interest shall be paid on the first regular payroll
date immediately following the expiration of the six (6)-month
period following the date of termination.
(v)
Subject to Executive’s continued co-payment of premiums,
continued participation for eighteen (18) months in the
Company’s
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