EXECUTIVE EMPLOYMENT
AGREEMENT
This EXECUTIVE
EMPLOYMENT AGREEMENT (this “ Agreement ”) is
dated as of this June 11, 2007, between Belden Inc., a
Delaware corporation (the “ Company ”), and
Denis Suggs (the “ Executive ”).
WHEREAS,
the Company desires to employ Executive as its Vice President,
Operations and President of Belden Americas, and Executive desires
to accept such employment; and
WHEREAS,
the Company and Executive desire to enter into this Agreement to
set forth the terms of Executive’s employment by the
Company;
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:
(a) Executive
shall serve as Vice President of Operations and President of its
Belden Americas Division. In such capacity, Executive shall have
active and general supervision and management over the business
affairs of Belden Americas.
(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 participating in charitable, civic, educational, professional
or community affairs 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.
2. TERM
OF AGREEMENT . This Agreement shall be effective on the date
hereof and the initial term of Executive’s employment with
the Company shall commence on the date as the CEO and Executive
agree, but no later than June 11, 2007 (the “
Effective Date ”), and shall end on the third
anniversary of the Effective Date. 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 of this Agreement or the then
current succeeding one-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 of this
Agreement, 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) at any time after the third
anniversary of the Effective Date, the Term of this Agreement shall
be extended to the second anniversary of the date of the occurrence
of such Change in Control and shall be subject to expiration
thereafter upon notice by Executive or the Company to the other
party or to automatic successive additional one-year periods, 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 on the Effective Date, the Company shall
pay Executive a base salary (the “ Base Salary
”) at an annual rate of $333,000, payable in accordance with
the regular payroll practices of the Company. Executive’s
Base Salary shall be subject to annual review by the CEO and may be
increased from time to time upon the recommendation by the CEO and
approval by the Compensation Committee (the
“Committee”) of 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 Annual Cash
Incentive Plan and any successor annual bonus plans. 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 70% of Base Salary. Executive will
receive a pro-rata bonus for fiscal 2007 equal to the bonus earned
by Executive for fiscal 2007 based upon actual Company and
individual performance multiplied by a fraction, the numerator of
which is the number of days during the period between the Effective
Date and December 31, 2007, and the denominator of which is
365.
(i)
The Board or the Committee shall, in accordance with the form of
award attached hereto as Exhibit A , award Executive as
of the Effective Date, 7,250 restricted stock units (the “
Buy-Out RSUs ”). The Buy-Out RSUs shall vest in full
on the fifth anniversary of the Effective Date, provided that
Executive has been continuously employed by the Company through
such date for the Buy-Out RSUs to so vest, except as otherwise
provided hereunder and in the award agreement.
(i)
The Board or the Committee shall award Executive as of the
Effective Date such number of performance share units (the “
2007 PSUs ”) as equals the quotient of (A) $180,000
divided by (B) the Fair Market Value of one share of Common
Stock on the Effective Date, in accordance with the form of award
attached hereto as Exhibit B . Each Inducement PSU
represents the right to receive between zero and one and one-half
(1.5) restricted stock units, depending on attainment of Company
performance objectives during calendar year 2007. Each such
restricted stock unit represents the right to receive one share of
Common Stock, and shall vest as provided hereunder and in the award
agreement.
(ii)
The Board or the Committee shall, in accordance with the form of
awards attached hereto as Exhibit C, award Executive as
of the Effective Date, such number of stock appreciation rights
settled in shares of the Company’s Common Stock (the
“2007 SSARs” ) as equal to the quotient of (A)
$180,000 divided by (B) the Black-
2
Scholes value
(or other valuation method) of one (1) share of Common Stock
on the Effective Date as determined by the Committee or the Board
for the valuation of SSAR grants to other senior executives during
the 2007 fiscal year. The 2007 SSARs will be granted with an
exercise price equal to the Fair Market Value of one share of
Common Stock on the Effective Date. The 2007 SSARs shall vest and
become exercisable in three (3) equal installments on the
first, second and third anniversaries of the Effective Date,
provided that the Executive has been continuously employed by the
Company through each such vesting date for such installment to so
vest, except as otherwise provided hereunder and in the award
agreement.
(c) LONG-TERM
INCENTIVE AWARDS.
(i)
Commencing with annual awards granted to senior executives in 2008,
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, awards granted to
other senior executives of the Company and competitive compensation
data. Notwithstanding, provided that Executive is employed by the
Company on the date of grant, Executive shall be granted an annual
long-term incentive equity award during the 2008 fiscal year having
a value on the grant date of not less than 120% of Base
Salary.
(ii)
All long-term incentive awards to Executive shall be granted
pursuant to and shall be subject to all of the terms and conditions
imposed upon such awards granted under the Plan.
(d) 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. Executive shall have five (5) years to
satisfy the stock ownership guidelines applicable to Executive;
provided, that the annual interim target for share accumulation by
Executive is 20%.
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, on a basis no less favorable than other senior
executives of the Company, 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).
3
(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 a luncheon club membership in
Indianapolis, annual executive physical examinations, annual tax
preparation/review by the Company’s designated service
provider and for his reasonable professional fees incurred in
connection with the negotiation and finalization of this Agreement,
not in excess of $7,500.
(d) RELOCATION.
Executive will relocate his residence to the vicinity of
Indianapolis, Indiana within 120 days following the Effective
Date. Executive shall be entitled to relocation benefits in
accordance with the Company’s relocation policy; provided,
(i) the Company shall extend the period for which Executive
shall be eligible for reimbursement of his temporary housing
expenses to 120 days and (ii) the Company will reimburse
Executive for the reasonable cost of commuting between Roanoke,
Virginia and Indianapolis, Indiana until the earlier of
(A) 120 days following the Effective Date or (B) the
date that Executive relocates the residence of Executive and his
family to the vicinity of Indianapolis, Indiana. The
Company’s relocation policy includes the requirement that the
Executive sign the Company’s Continuation of Employment
Agreement form. For clarity, it is understood that the Company will
pay for two house hunting trips (to include Executive’s
children) and the shipment of three personal vehicles.
(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, 6(b)
and 6(d) of this Agreement.
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.
(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, which is not cured or reasonable progress toward a
cure 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;
4
(iii)
Executive breaches his representation or covenant under
Section 24; or
(iv)
Executive has engaged in conduct that constitutes gross misconduct
in the performance of his employment duties.
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 in Section 10 below), for
Good Reason. “ Good Reason ” shall mean, without
the express written consent of Executive, the occurrence of any of
the following events during a Protection Period:
(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; or
(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.
(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, it being understood that
RSUs, SSARs and other Long-Term Awards (as defined in
Section 11 hereof) shall be treated as addressed in
Section 11 hereof except as otherwise provided hereunder with
respect to the Buy-Out Awards under Section 5(a) and the 2007 PSUs
and the 2007 SSARS awards under Section 5(b) (the “
Inducement Awards ”). Upon termination of
Executive’s employment, the following amounts and benefits
shall be due to Executive:
5
(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; (B) any accrued and unpaid benefits through
the date of termination in accordance with the applicable plan or
program; (C) reimbursement for any unreimbursed expenses,
incurred and documented in accordance with applicable Company
policy, through the date of termination; and (D) reimbursement
for any unpaid relocation expenses in accordance with Section 6(d)
(collectively, “ Accrued Obligations ”). Accrued
Obligations payable under clause (A) shall be payable within
fifteen (15) days following the date of termination, under
clause (B) shall be paid in accordance with the applicable
plan or program, and under clauses (C) and (D) 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 and a fraction, the
numerator of which is the number of days elapsed during 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;
(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;
and
(v)
Executive’s Inducement Awards shall become immediately fully
vested. Executive’s Inducement SSARs shall be exercisable for
the lesser of one year following the date of termination or the
exercise period stated in the award agreement. Any restricted stock
units awarded with respect to 2007 PSUs shall become immediately
fully vested, and any restricted stock units to be awarded with
respect to 2007 PSUs shall be fully vested immediately upon award.
If Executive’s termination of employment occurs prior to
2008, then restricted stock units shall be awarded with respect to
2007 PSUs based upon performance for all of the calendar year
2007.
(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. If
Executive’s employment should be terminated (i) by
Executive for any reason at any time other than during a Protection
Period, (ii) by Executive without Good Reason during a
Protection Period, (iii) by the Company without Cause and
other than for Disability at or after Executive’s attainment
of age 65, or (iv) by the
6
Company for
Cause, then the Company shall pay to Executive any Accrued
Obligations in accordance with Section 8(a)(i). Upon
termination of Executive’s employment by the Company for
Cause, all unvested Inducement Awards and any vested unexercised
2007 SSARs will be immediately forfeited.
(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 without 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 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 and a fraction, the
numerator of which is the number of days elapsed during 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;
(iv)
Severance payments in the aggregate amount equal to the sum of
(A) Executive’s then Base Salary plus (B) his
annual target bonus, which amount shall be payable to Executive in
equal payroll installments over a period of twelve
(12) months;
(v)
Subject to Executive’s continued co-payment of premiums,
continued participation for twelve (12) months in the
Company’s medical benefits plan which covers Executive and
his eligible dependents upon the same terms and conditions (except
for the requirements of Executive’s continued employment) in
effect for active employees of the Company. In the event Executive
obtains other employment that offers substantially similar or more
favorable medical benefits, such continuation of coverage by the
Company under this subsection shall immediately cease. The
continuation of health benefits under this subsection shall reduce
the period of coverage and count against Executive’s right to
healthcare continuation benefits under the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended (“ COBRA
” ) ; and
(vi)
Executive’s Inducement Awards shall become immediately fully
vested. Executive’s Inducement SSARs shall be exercisable for
the lesser of one year following the date of termination or the
exercise period stated in the award agreement. Any restricted stock
units awarded with respect to the 2007 PSUs shall become
immediately fully vested, and any restricted stock units to be
awarded with respect to the 2007 PSUs shall be fully vested
immediately upon award. If Executive’s termination of
employment occurs prior to 2008, then restricted stock units shall
be awarded with respect to 2007 PSUs based upon performance for all
of calendar year 2007.
7
9.
CONDITIONS . Any payments or benefits made or provided to
Executive pursuant to any subsection of Section 8 or
Section 10(b), other than Accrued Obligations, are subject to
Executive’s:
(a) compliance
with the provisions of Section 12 hereof;
(b) delivery
to the Company of an executed Agreement and General Release (the
“ General Release ”), which shall be
substantially in the form attached hereto as Exhibit D
within twenty-one (21) days after presentation thereof by the
Company to Executive; and
(c) delivery
to the Company of a resignation from all offices, directorships and
fiduciary positions held by Executive with the Company, its
affiliates and employee benefit plans.
Notwithstanding
the due date of any post-employment payments, any amounts due
following a termination under this Agreement (other than Accrued
Obligations) shall not be payable until after the expiration of any
statutory revocation period applicable to the General Release
without Executive having revoked such General Release, and, subject
to the provisions of Section 22 hereof, any such amounts shall
be paid to Executive within thirty (30) days thereafter.
Notwithstanding the foregoing, Executive shall be entitled to any
Accrued Obligations, payable without regard for the conditions of
this Section 9.
10.
CHANGE IN CONTROL; EXCISE TAX .
(a) CHANGE
IN CONTROL. A “ Change in Control ” of the
Company shall be deemed to have occurred if any of the events set
forth in any one of the following subparagraphs shall
occur:
(i)
The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the “ Exchange Act ”))
(a “ Person ”) of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act)
of more than 50% of either (i) the then-outstanding shares of
common stock of the Company (the “ Outstanding Company
Common Stock ”) or (ii) the combined voting power of
the then-outstanding voting securities of the Company entitled to
vote generally in the election of directors (the “
Outstanding Company Voting Securities ”); provided,
however, that for purposes of this subsection (a), the following
acquisitions shall not constitute a Change of Control: (1) any
acquisition directly from the Company, (2) any acquisition by
the Company, (3) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company, or (4) any acquisition
by any corporation pursuant to a transaction which complies with
clauses (1) and (2) of subsection (iii) of this
definition;
(ii)
individuals who, as of the date hereof, constitute the Board (the
“ Incumbent Board ”) cease for any reason to
constitute at least a majority of the Board; provided, however,
that any individual becoming a director subsequent to the date
hereof whose election, or nomination for election by the
Company’s shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board
shall
8
be considered
as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the
Board;
(iii)
consummation of a reorganization, merger or consolidation or sale
or other disposition of all or substantially all of the assets of
the Company (a “ Business Combination ”), in
each case, unless, following such Business Combination,
(1) all or substantially all of the individuals and entities
who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 50% of, respectively, the
then-outstanding shares of common stock and the combined voting
power of the then-outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the
corporation resulting from such Business Combination (including,
without limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of the
Company’s assets either directly or through one or more
subsidiaries) and in substantially the same proportions as their
ownership, immediately prior to such Business Combination of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, and (2) at least a majority of
the members of the board of directors of the corporation resulting
from such Business Combination were members of the Incumbent Board
at the time of the execution of the initial agreement, or of the
action of the Board, providing for such Business Combination;
or
(iv)
approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
(b) INDUCEMENT
AWARDS. Upon the occurrence of a Change in Control of the Company,
if Executive is employed by the Company at the time of such Change
in Control, the Inducement Awards, to the extent not vested, shall
immediately vest in full.
(c) QUALIFYING
TERMINATION. If prior to Executive’s attainment of age 65
Executive’s employment is involuntarily terminated by the
Company without Cause (and other than due to his Disability), or if
Executive’s employment is voluntarily terminated by Executive
for Good Reason, in either case only in connection with the
occurrence of a Change in Control or during the period commencing
on the occurrence of a Change in Control of the Company and ending
on the second anniversary of the date of the Change in Control (the
“ Protection Period ”), 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;
9
(iii)
A pro-rated annual bonus for the fiscal year in which such
termination occurs, the amount of which shall be based on target
performance and a fraction, the numerator of which is the number of
days elapsed during 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;
(iv)
A lump sum severance payment in the aggregate amount equal to the
product of (A) the sum of (1) Executive’s highest Base
Salary during the Protection Period plus (2) his annual target
bonus multiplied by (B) two (2);
(v)
Subject to Executive’s continued co-payment of premiums,
continued participation for two (2) years in the
Company’s medical benefits plan which covers Executive and
his eligible dependents upon the same terms and conditions (except
for the requirements of Executive’s continued employment) in
effect for active employees of the Company. In the event Executive
obtains other employment that offers substantially similar or more
favorable medical benefits, such continuation of coverage by the
Company under this subsection shall immediately cease. The
continuation of health benefits under this subsection shall reduce
the period of coverage and count against Executive’s right to
healthcare continuation benefits under COBRA; and
(vi)
All of Executive’s unvested Long-Term Awards (except for any
performance shares or PSUs (other than the 2007 PSUs which are
covered above under Section 10(b)) where termination of
Executive’s employment occurs prior to a Performance
Determination Date) shall become immediately fully vested. All
then-unexercised stock-settled or other stock appreciation rights
shall be exercisable for the lesser of one year following the date
of termination or the exercise period stated in the award agreement
to the extent permissible under the applicable award agreement and
plan. With respect to any PSUs (other than 2007 PSUs) where the
Executive’s employment is terminated prior to a Performance
Determination Date, the consequence of such termination shall be
governed by the award agreement.
(i)
If it is determined that any amount, right or benefit paid or
payable (or otherwise provided or to be provided) to the Executive
by the Company or any of its affiliates under this Agreement or any
other plan, program or arrangement under which Executive
participates or is a party, other than amounts payable under this
Section 10(d), (collectively, the “ Payments
”), would constitute an “excess parachute
payment” within the meaning of Section 280G of the Internal
Revenue Code of 1986, as amended (the “ Code ”),
subject to the excise tax imposed by Section 4999 of the Code,
as amended from time to time (the “ Excise Tax
”), and the present value of such Payments (calculated in a
manner consistent with that set forth in the applicable regulations
promulgated under Section 280G of the Code) is equal to or
less than 110% of the threshold at which such amount becomes an
“excess parachute payment,” then the amount of the
Payments payable to the Executive under this Agreement shall be
reduced (a “ Reduction ”) to the
10
extent
necessary so that no portion of such Payments payable to the
Executive is subject to the Excise Tax.
(ii)
In the event it shall be determined that the amount of the Payments
payable to the Executive is more than 110% greater than the
threshold at which such amount becomes an “excess parachute
payment,” then the Executive shall be entitled to receive an
additional payment from the Company (a “ Gross-Up
Payment ”) in an amount such that, after payment by the
Executive of all taxes (including any interest or penalties imposed
with respect to such taxes), including, without limitation, any
income and employment taxes and Excise Tax imposed upon the
Gross-Up Payment, the Executive retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the
Payments.
(iii)
All determinations required to be made under this
Section 10(d), including whether and when a Gross-Up Payment
or a Reduction is required, the amount of such Gross-Up Payment or
Reduction and the assumptions to be utilized in arriving at such
determination, shall be made by an independent, nationally
recognized accounting firm mutually acceptable to the Company and
the Executive (the “ Auditor ”); provided that
in the event a Reduction is determined to be required, the
Executive may determine which Payments shall be reduced in order to
comply with the provisions of this Section 10(d). The Auditor
shall promptly provide detailed supporting calculations to both the
Company and Executive following any determination that a Reduction
or Gross-Up Payment is necessary. All fees and expenses of the
Auditor shall be paid by the Company. Any Gross-Up Payment, as
determined pursuant to this Section 10(d), shall be paid by
the Company to the Executive within five (5) days of the
receipt of the Auditor’s determination. All determinations
made by the Auditor shall be binding upon the Company and the
Executive; provided that if, notwithstanding the Auditor’s
initial determination, the Internal Revenue Service (or other
applicable taxing authority) determines that an additional Excise
Tax is due with respect to the Payments, then the Auditor shall
recalculate the amount of the Gross-Up Payment or Reduction Amount,
if applicable, based upon the determinations made by the Internal
Revenue Service (or other applicable taxing authority) after taking
into account any additional interest and penalties (the “
Recalculated Amount ”) and the Company shall pay to
the Executive the excess of the Recalculated Amount over the
Gross-Up Payment initially paid to the Executive or the amount of
the Payments after the Reduction, as applicable, within five
(5) days of the receipt of the Auditor’s recalculation
of the Gross-Up Payment.
11.
LONG-TERM AWARDS . All of Executive’s stock
appreciation rights, restricted stock units, performance share
units and any other long-term incentive awards granted under any
long-term incentive plan of the Company (collectively, “
Long-Term Awards ”), shall remain in effect in
accordance with their terms and conditions, including with respect
to the consequences of the termination of Executive’s
employment or a Change in Control, and shall not be in any way
amended, modified or affected by this Agreement except as provided
in Section 10(c)(vi) and except as hereinafter provided. Upon
termination of Executive’s employment by the Company for
Cause, all unvested Long-Term Awards will be immediately forfeited
as well as any vested unexercised awards. Upon a voluntary
resignation by Executive for any reason at any time other than
during a Protection Period or by Executive without Good
11
Reason during a
Protection Period, all vested Long-Term Awards will remain
exercisable for ninety (90) days following the effective date
of such termination of employment. Upon any termination by the
Company for Cause, by the Executive for any reason at any time
other than during a Protection Period or by Executive without Good
Reason during a Protection Period, all unvested Long-Term Awards
will be immediately forfeited. The provisions of this
Section 11 shall not apply to Executive’s Inducement
Awards.
12.
EXECUTIVE COVENANTS .
(a) CONFIDENTIALITY.
Executive agrees that Executive shall not, commencing on the date
hereof and at all times thereafter, directly or indirectly, use,
make available, sell, disclose or otherwise communicate to any
person, other than in the course of Executive’s employment
and for the benefit of the Company, any nonpublic, proprietary or
confidential information, knowledge or data relating to the
Company, any of its subsidiaries, affiliated companies or
businesses, which shall have been obtained by Executive during
Executive’s employment by the Company. The foregoing shall
not apply to information that (i) was known to the public
prior to its disclosure to Executive; (ii) becomes known to
the public subsequent to disclosure to Executive through no
wrongful act of Executive or any representative of Executive; or
(iii) Executive is required to disclose by applicable law,
regulation or legal process (provided that Executive provides the
Company with prior notice of the contemplated disclosure and
reasonably cooperates with the Company at its expense in seeking a
protective order or other appropriate protection of such
information). Notwithstanding clauses (i) and (ii) of the
preceding sentence, Executive’s obligation to maintain such
disclosed information in confidence shall not terminate where only
portions of the information are in the public domain.
(b) NONSOLICITATION.
Commencing on the date hereof, and continuing during
Executive’s employment with the Company and for the twelve
(12) month period following termination of Executive’s
employment for any reason (a twenty-four (24) month
post-employment period in the event of a termination of
Executive’s employment for any reason at any time during a
Protection Period) (“ Restricted Period ”),
Executive agrees that Executive shall not, without the prior
written consent of the Company, directly or indirectly,
individually or on behalf of any other person, firm, corporation or
other entity: (i) solicit, recruit or employ (whether as an
employee, officer, director, agent, consultant or independent
contractor) any person who was or is at any time during the six
(6) months preceding termination of Executive’s
employment an employee, representative, officer or director of the
Company; (ii) take any action to encourage or induce any
employee, representative, officer or director of the Company to
cease their relationship with the Company for any reason; or
(iii) knowingly solicit, aid or induce any customer of the
Company or any of its subsidiaries or affiliates to purchase goods
or services then sold by the Company or any of its subsidiaries or
affiliates from another person, firm, corporation or other entity
or assist or aid any other persons or entity in identifying or
soliciting any such customer.
(c) NONCOMPETITION.
Executive acknowledges that Executive performs services of a unique
nature for the Company that are irreplaceable, and that
Executive’s performance of such services to a competing
business will result in irreparable harm to the Company.
Accordingly, during the Restricted Period, Executive agrees that
Executive shall not, directly or indirectly, own, manage, operate,
control, be employed by (whether as an employee,
12
consultant,
independent contractor or otherwise, and whether or not for
compensation) or render services to any person, firm, corporation
or other entity, in whatever form, engaged in any business of the
same type as any business in which the Company or any of its
subsidiaries or affiliates is engaged on the date of termination or
in which they have proposed, within twelve (12) months prior to
such date, to be engaged in on or after such date at any time
during the Restricted Period, in any locale of any country in which
the Company conducts business. This Section 12(c) shall not prevent
Executive from owning not more than two percent (2%) of the total
shares of all classes of stock outstanding of any publicly held
entity engaged in such business.
(d) NONDISPARAGEMENT.
Each of Executive and the Company (for purposes hereof, “the
Company” shall mean only (i) the Company by press
release or other formally released announcement and (ii) the
executive officers and directors thereof and not any other
employees) agrees not to make any public statements that disparage
the other party, or in the case of the Company, its respective
affiliates, employees, officers, directors, products or services.
Notwithstanding the foregoing, statements made in the course of
sworn testimony in administrative, judicial or arbitral proceedings
(including, without limitation, depositions in connection with such
proceedings) shall not be subject to this Section 12(d).
Executive’s provision shall also not cover normal competitive
statements which do not cite Executive’s employment by the
Company.
(e) RETURN
OF COMPANY PROPERTY AND RECORDS. Executive agrees that upon
termination of Executive’s employment, for any cause
whatsoever, Executive will surrender to the Company in good
condition (reasonable wear and tear excepted) all property and
equipment belonging to the Company and all records kept by
Executive containing the names, addresses or any other information
with regard to customers or customer contacts of the Company, or
concerning any proprietary or confidential information of the
Company or any operational, financial or other documents given to
Executive during Executive’s employment with the Company.
Excepted from this are Executive’s daily calendar or log and
any notes related thereto (and with access thereof).
(f) COOPERATION.
Executive agrees that, following termination of Executive’s
employment for any reason, Executive shall upon reasonable advance
notice, and to the extent it does not interfere with previously
scheduled travel plans and does not unreasonably interfere with
other business activities or employment obligations, assist and
cooperate with the Company with regard to any matter or project in
which Executive was involved during Executive’s employment,
including any litigation. The Company shall compensate Executive
for reasonable expenses incurred in connection with such
cooperation and assistance. Executive’s duty to cooperate
shall terminate when the period during which Company has an
actionable claim has expired.
(g) ASSIGNMENT
OF INVENTIONS. Executive will promptly communicate and disclose in
writing to the Company all inventions and developments including
software, whether patentable or not, as well as patents and patent
applications (hereinafter collectively called “
Inventions ”), made, conceived, developed, or
purchased by Executive, or under which Executive acquires the right
to grant licenses or to become licensed, alone or jointly with
others, which have arisen or jointly with others, which have arisen
or may arise out of
13
Executive’s employment, or relate to any
matters pertaining to, or useful in connection therewith, the
business or affairs of the Company or any of its subsidiaries.
Included herein as if developed during the empl
|
