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EXECUTION COPY
EXHIBIT 10.3
EXECUTIVE EMPLOYMENT AGREEMENT
THIS
EXECUTIVE EMPLOYMENT AGREEMENT (this "AGREEMENT") is dated as of
this
August 24, 2006, between Belden CDT Inc., a Delaware corporation
(the
"COMPANY"), and Gray Benoist (the "EXECUTIVE").
WITNESSETH:
WHEREAS, the Company desires to employ Executive as its Vice
President and
Chief Financial Officer, 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:
1.
POSITION/DUTIES.
(a) Executive shall serve as the Vice President and Chief
Financial
Officer of the Company. In such capacity, Executive shall have
active and
general supervision and management over the financial affairs of
the Company,
including its treasury and accounting functions, and shall report
to the
Company's Chief Executive Officer ("CEO").
(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
of Directors of the Company (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) 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. This Agreement shall be effective on the date
hereof
and the initial term of Executive's employment with the Company
shall commence
on such date as the Board and Executive agree, but not later than
August 24,
2006 (the "EFFECTIVE
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DATE") and shall end on the fifth 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
$360,000,
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 Management 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 85% of Base Salary.
Executive
will receive a pro-rata bonus for fiscal 2006 equal to the bonus
earned by
Executive for fiscal 2006 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, 2006, and
the denominator
of which is 365.
5.
EQUITY AWARDS.
(a) INDUCEMENT AWARDS.
(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
such number of restricted stock units (the "INDUCEMENT RSUS")
as
equals the quotient of (A) $300,000 divided by (B) the Fair Market
Value
(as
defined under the Company's 2001 Long-Term Performance Incentive
Plan
(the
"Plan")) of one share of Common Stock on the Effective Date, in
accordance with the form of award attached hereto as Exhibit A.
The
Inducement 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 Inducement RSUs to so vest,
except as
otherwise provided hereunder and in the award agreement.
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(ii) The Board or the Committee shall, in accordance with the
form
of award attached hereto as Exhibit B, award Executive as of
the
Effective Date such number of stock appreciation rights settled in
shares
of
the Company's Common Stock (the "INDUCEMENT SSARS") as equals
the
quotient of (A) $500,000 divided by (B) the Black-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 2006 fiscal year. The
Inducement
SSARs will be granted with an exercise price equal to the Fair
Market Value
of
one (1) share of Common Stock on the Effective Date. The
Inducement
SSARs shall vest and become exercisable in three (3) equal
installments on
the
first, second and third anniversaries of the Effective Date,
provided
that
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.
(iii) The Board or the Committee shall award Executive as of
the
Effective Date such number of performance share units ("INDUCEMENT
PSUS")
as
equals the quotient of (A) $500,000 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 C. 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 2006. 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.
(b) LONG-TERM INCENTIVE AWARDS.
(i) Commencing with annual awards granted to senior executives
in
2007, 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 2007 fiscal year (the "2007 LTI AWARD")
having a
value on the grant date of not less than 200% of Base Salary.
(ii) Fifty percent (50%) of the 2007 LTI Award will be provided
in
stock appreciation rights settled in shares of the Company's
Common
Stock (the "2007 SSARS"). The 2007 SSARs will be granted with an
exercise
price equal to the Fair Market Value of one (1) share of Common
Stock on
the
date of grant 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,
except as
otherwise provided hereunder. The number of 2007 SSARs granted
shall be
equal to the
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quotient of (A) the dollar value to be awarded divided by (B)
the
Black-Scholes value (or other 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 2007 SSAR grants to other senior executives during the
2007
fiscal year.
(iii) The remaining fifty percent (50%) of the 2007 LTI Award
will
be provided in performance-based restricted stock (the
"RESTRICTED
STOCK") Such Restricted Stock shall vest in two (2) equal
installments on
the
second and third anniversaries of the grant dated, provided
that
Executive has been continuously employed by the Company through
each such
vesting date for such installment to so vest, except as otherwise
provided
hereunder. The actual number of shares of Common Stock awarded to
Executive
as
Restricted Stock will be based on attainment of 2007 financial
performance goals, which will be determined by the Committee.
(iv) All long-term incentive awards to Executive 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.
(c) 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, which presently provide that (i) the projected
after-tax value of
Executive's vested and unvested Inducement RSUs and vested and
unvested
restricted stock units that are awarded in connection with the
Inducement PSUs,
(ii) the after-tax intrinsic value of Executive's vested Inducement
SSARs, to
the extent not exercised, and (iii) the intrinsic value of vested,
in-the-money
stock options held by Executive shall be included in the
calculation of
Executive's stock ownership. Under the Company's current stock
ownership
guidelines, 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).
(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 in connection with the negotiation and finalization
of this
Agreement, not in excess of $7,500.
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(d) RELOCATION. Executive will relocate his residence to the
vicinity
of the Company's headquarters within 2 years 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 the Company's headquarters in
St. Louis and
Chicago (grossed-up for any income taxable to Executive (and
employment taxes)
arising from such reimbursement) until the earlier of (A) 2 years
following the
Effective Date, or (B) the date that Executive relocates the
residence of
Executive and Executive's family to the vicinity of the Company's
headquarters.
(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).
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
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 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.
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(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 stock options 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 inducement awards
under Section
5(a) (the "INDUCEMENT AWARDS"). 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; (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
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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
Inducement PSUs shall become immediately fully vested, and any
restricted
stock units to be awarded with respect to Inducement PSUs shall be
fully
vested immediately upon award. If Executive's termination of
employment
occurs prior to 2007, then restricted stock units shall be awarded
with
respect to Inducement PSUs based upon performance for all of
calendar year
2006.
(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 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 vested and unvested Inducement Awards
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);
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(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
Inducement PSUs shall become immediately fully vested, and any
restricted
stock units to be awarded with respect to Inducement PSUs shall be
fully
vested immediately upon award. If Executive's termination of
employment
occurs prior to 2007, then restricted stock units shall be awarded
with
respect to Inducement PSUs based upon performance for all of
calendar year
2006.
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.
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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
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
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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. Any restricted stock units awarded with respect to
Inducement PSUs
based on achievement of applicable performance targets shall become
immediately
fully vested, and any restricted stock units to be awarded with
respect to
Inducement PSUs based on achievement of applicable performance
targets shall be
fully vested immediately upon award, in each case, if Executive is
employed by
the Company at the time of such Change in Control.
(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;
(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;
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(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 shall become
immediately fully vested. All then-unexercised stock options shall
be
exercisable for the lesser of one year following the date of
termination or
the
exercise period stated in the award agreement. 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.
(d) EXCISE TAX.
(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 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.
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(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 options, 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,
whether granted before or after the Effective Date (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 vested Long-Term Awards will be immediately
forfeited.
Upon a voluntary resignation by Executive for any reason at any
time other than
during a Protection Period or by Executive without Good 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 and shall not apply to any restricted
stock units
awarded with respect to Inducement PSUs.
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
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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,
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
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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
Execut
