AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This AMENDED
AND RESTATED EMPLOYMENT AGREEMENT (this
“Agreement”) is made and entered into as of this 30th
day of December, 2008 (the “Effective Date”) by and
between COLEMAN CABLE, INC., a Delaware corporation (the
“Company”), on the one hand, and G. GARY YETMAN (the
“Employee”), on the other hand. (The Company and the
Employee are sometimes referred to herein together as the
“Parties”.)
WHEREAS, the
Company is engaged in the business of manufacturing wire and cable
products (the “Business”);
WHEREAS, the
Company and the Employee are parties to that certain Employment
Agreement dated December 30, 1999, amended and restated
effective September 1, 2006 (the “Original
Agreement”), which the Parties desire to amend and restate in
its entirety on the terms and conditions set forth
herein.
NOW, THEREFORE, in
consideration of the mutual covenants contained herein and other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as
follows:
1.
Restatement of the Original Agreement . The Parties do
hereby amend and restate the Original Agreement in its entirety as
set forth herein. Upon the Effective Date, the Original Agreement
shall be superseded in its entirety and of no further force or
effect.
2.
Employment . The Company hereby agrees to employ the
Employee for the Term of this Agreement (as defined in
Section 5 hereof) and the Employee hereby accepts such
employment.
(a)
Position . During the Term, the Employee shall serve as the
President and Chief Executive Officer of the Company, overseeing
all day to day operations of the Company and any person or entity
that directly, or through one or more intermediaries is controlled
by the Company (collectively, the “Affiliates”) and
shall have and perform the duties, responsibilities and authority
commensurate with such position, which are enumerated from time to
time by the Company’s Board of Directors. Such duties,
responsibilities and authority shall include, but not be limited
to, the following:
(i) the authority
to employ (and terminate), any and all Vice Presidents and other
subordinate officers (of whatever position), any general managers,
managers, supervisors and other employees of the Company or its
Affiliates as the Employee shall deem necessary or appropriate for
the conduct of the Business and its Affiliates; to delegate to such
employees such authority as he shall determine; and to determine
the compensation to be paid to any such employees, all consistent
with the employee policies and
procedures
promulgated by the Company’s Board of Directors;
and
(ii) the authority
to make or otherwise authorize expenditures by and to contract
liabilities for the Company and the Affiliates in the ordinary
course of business; and
(iii) the
authority to make any and all decisions of a material nature for
the Company and the Affiliates subject only to the approval of the
Company’s Board of Directors in the case of decisions
fundamentally altering the Company’s or any Affiliate’s
structure, management or the way it conducts business or otherwise
of an extraordinary nature.
(b)
Efforts . The Employee shall devote his full working time,
diligent efforts and attention (except for permitted vacation
periods and periods of illness or other incapacity) to the business
and affairs of the Company as may be required to perform his duties
and responsibilities in a diligent and businesslike
manner.
(c) Board
of Directors Seats . During the Term, the Employee shall be
entitled to be nominated to fill one (1) seat on the
Company’s and each Affiliate’s Board of Directors.
Employee may not be removed from the Company’s or an
Affiliate’s Board of Directors other than for Cause (as
defined in Section 5(b) hereof).
(a) Base
Salary . During the Term, the Company shall pay to the Employee
a minimum base salary of $550,000 per year. The Company shall pay
such salary in equal bi-weekly installments on the Company’s
regular pay days. Regular installments of base salary shall be paid
less all applicable taxes, social security payments and other items
that the Company is required by law to withhold or deduct
therefrom.
(b)
Automatic Annual Raises . During the Term, the
Employee’s base salary shall be increased, effective as of
each anniversary of the Effective Date, by a percentage amount
equal to the percentage increase in the Chicago area Consumer Price
Index as reported by the U.S. Department of Labor.
(c) Merit
Raises . The Board of Directors of the Company may, in its
absolute and sole discretion, increase the salary payable to
Employee for merit.
(d)
Performance Bonuses . During each year of the Term, the
Employee shall be entitled to receive cash performance bonuses in
an amount up to 100% of the Employee’s base salary, as
determined by the Company’s Board of Directors based upon the
attainment of performance goals conveyed to the Employee. The cash
performance bonus may be increased in any year in the discretion of
the Compensation Committee.
(e) Employee
Benefits . In addition to the compensation described above, the
Company will provide or offer for the Employee’s
participation such benefits (other than bonus, incentive
compensation and severance benefits) as are generally provided or
offered by the Company to its other similarly positioned executive
officers, including, without limitation, retirement
benefits,
health/major
medical insurance and welfare benefits, sick days and other fringe
benefits (collectively, “Benefits”), if and to the
extent that the Employee is eligible to participate in accordance
with the terms of the applicable Benefit plan or program generally.
These Benefits shall include:
(i) group health,
life and disability insurance (to the extent offered to similarly
positioned executive officers);
(ii) participation
in any Company sponsored retirement savings or pension plan (to the
extent such plans are in existence and participation is offered to
similarly positioned executive officers);
(iii)
participation in all stock or stock option plans (to the extent
such plans exist);
(iv) use of a
company car comparable to the car presently being driven by the
Employee;
(v) business
expense allowances;
(vi) paid vacation
accruing at the rate of four (4) weeks per year;
(vii) paid
religious and other holidays to the extent provided under the
Company’s personal leave policies;
(viii) health and
country club membership; and
(x) such other
perquisites as the Company and the Employee shall agree.
(f) Life
and Supplemental Disability Insurance . In addition to the
Benefits herein provided for, the Company shall purchase and
maintain in full force and effect one or more policies of term
insurance on the life of the Employee, with benefits payable as the
Employee may direct, in the aggregate amount of not less than
$1,000,000. The Employee agrees to submit to standard medical exams
for the purpose of enabling the Company to secure a Company owned
insurance policy on the life of the Employee. In addition, the
Company shall purchase and maintain in full force and effect one or
more policies of supplemental disability insurance, with benefits
consistent with those provided to the Employee as of the date
hereof.
(g)
Equity and Option Grants . In addition to all other salary
and benefits herein provided, the Company hereby agrees that
Employee shall be entitled to participate in restricted stock and
stock option plans established for the benefit of the
Company’s employees.
(h) Expense
Reimbursement . The Company shall reimburse the Employee for
all reasonable business expenses properly incurred by the Employee
in the ordinary course of performing the Employee’s duties
and responsibilities hereunder, subject to the Company’s
normal and customary practices and policies as are in effect from
time to time with respect to travel, entertainment and other
business expenses (including the Company’s
reasonable
requirements
with respect to prior approval, reporting and documentation of such
expenses).
5. Term
and Termination .
(a)
Term . Subject to the rights of termination set forth below,
the Term of the Employee’s employment under this Agreement
shall be for a rolling three (3) year period (i.e.,
upon completion of each day of the Employee’s employment, the
term of his employment automatically shall be extended for one
additional day), commencing on the Effective Date (the
“Term”).
(b)
Termination for Cause . The Company may terminate the
Employee’s employment under this Agreement at any time upon
written notice for “Cause.” For the purposes of this
Agreement, Cause shall mean:
(i) the gross
neglect or willful failure by the Employee to perform his duties
and responsibilities in all material respects as set forth
hereunder, after a written demand for substantial performance is
delivered to the Employee by the Company’s Board of Directors
which demand specifically identifies the manner in which the
Company’s Board of Directors believes that the Employee has
not so performed his duties and which demand is not met within
thirty (30) days of its delivery to Employee;
(ii) any act of
fraud or embezzlement by the Employee in connection with the
Company or its affiliates;
(iii) a willful
and material breach of this Agreement by the Employee which the
Employee fails to cure within thirty (30) days of the
Employee’s receipt of written notice of such breach;
or
(iv) the
Employee’s conviction or entering into a plea of nolo
contendere to (A) a crime involving moral turpitude; or
(B) any other crime materially impairing or materially
hindering the Employee’s ability to perform his duties for
the Company.
(c)
Voluntary Termination By The Employee With Good Reason . The
Employee may, at any time within 90 days of the occurrence of
any event which constitutes “Good Reason” upon written
notice, terminate his employment under this Agreement with
“Good Reason”.
(i) For the
purposes of this Agreement, “Good Reason” shall mean
without the prior written consent of the Employee: (A) a
material reduction in the base compensation of the Employee, other
than an insubstantial and inadvertent failure not occurring in bad
faith; or (B) a significant reduction in the responsibilities
and/or duties of the Employee the result of which is that the
Employee (1) shall no longer have control or authority over
the management of the Company or the Affiliates, or (2) shall
have responsibilities which are not commensurate with the
historical responsibilities of the President and Chief Executive
Officer of the Company; or (C) a change of location of the
Employee’s office which is thirty-five (35) miles or
more from the office where the Employee was located as of the
Effective Date; or (D) a Change of Control (as herein
defined); or (E) any willful failure or willful breach by the
Company (not covered by any of the clauses
(A) through (D) above) of any material
obligations of this Agreement. The Company shall have thirty
(30) days after written notice thereof by the Employee to the
Company’s Board of Directors to remedy the occurrences of
clause (A) through (E) above.
For the
purposes of this Agreement, a “Change of Control” shall
mean that any of the following has occurred:
(i) any person or
other entity (other than any of the Company’s subsidiaries or
any employee benefit plan sponsored by the Company or any of its
subsidiaries) including any person as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), becomes the beneficial
owner, as defined in Rule 13d-3 under the Exchange Act,
directly or indirectly, of more than fifty percent (50%) of the
total combined voting power of all classes of capital stock of the
Company normally entitled to vote for the election of directors of
the Company (the “Voting Stock”),
(ii) the
stockholders of the Company approve the sale of all or
substantially all of the property or assets of the Company and such
sale occurs;
(iii) the
stockholders of the Company approve a consolidation or merger of
the Company with another corporation (other than with any of the
Company’s subsidiaries), the consummation of which would
result in the shareholders of the Company immediately before the
occurrence of the consolidation or merger owning, in the aggregate,
less than 60% of the Voting Stock of the surviving entity, and such
consolidation or merger occurs;
(iv) a change in
the Company’s Board of Directors occurs with the result that
the members of the Board immediately prior to such change no longer
constitute a majority of such Board of Directors; or
(v) any other
change of ownership or effective control (as defined in Section
280G(b)(2) of the Internal Revenue Code (the
“Code”)).
For the
avoidance of doubt, no Change of Control shall be deemed to occur
if any of the events enumerated above occur as a result of
(i) the 144A equity offering and private placement of equity
securities with Friedman, Billings & Ramsey, Co. as initial
purchaser and placement agent (the “144A offering”);
(ii) any issuance of equity securities pursuant to the shelf
registration statement filed in connection with the 144A offering;
(iii) any changes associated with the listing of the
Company’s stock on the NASDAQ stock market; or (iv) an
initial public offering or shelf registration of the
Company’s stock.
For the further
avoidance of doubt, the Employee’s decision not to terminate
his employment within 90 days after the occurrence of any
event which constitutes “Good Reason” shall not
preclude or otherwise constitute a waiver of the Employee’s
right to terminate his employment within 90 days of any other
event which constitutes “Good Reason.”
(d) Voluntary
Termination By The Employee Without Good Reason . The Employee
may,
at any time
upon three (3) months prior written notice, terminate his
employment under this Agreement without Good Reason.
(e)
Termination on Death or Permanent Disability . The
Employee’s employment under this Agreement shall terminate
upon the Employee’s death or Disability. For purposes of this
Agreement, “Disability” shall mean the inability of the
Employee to substantially perform the Employee’s duties and
responsibilities to the Company by law, by reason of a physical or
mental disability or infirmity (i) for a total of one hundred
twenty (120) days in any consecutive twelve (12) month
period or (ii) at such earlier time as the Employee submits or
the Company receives satisfactory medical evidence that the
Employee has a physical or mental disability or infirmity which
will likely prevent him from returning to the performance of the
Employee’s work duties for four (4) months or longer. In the
event of any dispute regarding the determination of the
Employee’s Disability, such determination shall be made by a
physician selected by the Company, at the Company’s sole
expense, in consultation with the Employee’s primary treating
physician; provided, however, that the Employee’s Disability
shall be conclusively presumed if such determination is made by an
insurer providing disability insurance coverage to the Employee or
the Company in respect of the Employee.
6.
Severance Benefits . Upon termination of the
Employee’s employment under this Agreement, the Employee
shall be entitled to receive the following termination benefits in
lieu of all other considerations and payments under this Agreement
and all claims for damages and remedies based on a claim of
wrongful discharge, after receipt of which the rights and
obligations of the parties hereunder shall become void and of no
further force and effect; provided, however, that the Employee
shall remain obligated to abide by the restrictive covenants set
forth in Section 9 of this Agreement until such time as they
would otherwise expire.
(a)
Termination for Cause or Without Good Reason . If the
Employee’s employment is terminated for Cause by the Company
in accordance with Section 5(a) or is terminated voluntarily by the
Employee in accordance with Section 5(d), then the following
severance benefits shall be due:
(i) base salary
shall be paid through such date of termination;
(ii) any bonus
that may otherwise have become due for the fiscal year prior to the
year in which the Employ
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