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Exhibit 10.01
EXECUTION COPY
EXECUTIVE EMPLOYMENT AGREEMENT
This EXECUTIVE
EMPLOYMENT AGREEMENT (the "AGREEMENT") is dated this
September 26, 2005, between Belden CDT Inc.
a Delaware corporation (the
"COMPANY"), and John Stroup (the
"EXECUTIVE").
WITNESSETH:
WHEREAS, the
Company desires to employ Executive as President and Chief
Executive Officer of the Company and
Executive desires to accept such
employment;
WHEREAS, the
Company and Executive desire to enter into the 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 President and Chief Executive
Officer
of the Company. As President and Chief
Executive Officer of the Company,
Executive shall have active and general
supervision and management over the
business and affairs of the Company and
shall have full power and authority to
act for all purposes for and in the name of
the Company in all matters except
where action of the Board of Directors of
the Company (the "BOARD") is required
by law, the by-laws of the Company, or
resolutions of the Board, and shall have
such other duties and responsibilities as
the Board shall designate that are
consistent with Executive's position.
Executive shall report exclusively to the
Board.
(b) Executive shall use Executive's best efforts to perform
faithfully
and efficiently the duties and
responsibilities assigned to Executive hereunder
and devote substantially all of Executive's
business time to the performance of
Executive's duties with the Company;
provided, the foregoing shall not prevent
Executive from (i) participating in
charitable, civic, educational,
professional, community or industry affairs
or, with prior approval of the
Board, serving on the board of directors or
advisory boards of other companies
and (ii) managing Executive's and
Executive's family's personal investments, in
all events so long as such activities do
not materially interfere with the
performance of Executive's duties hereunder
or create a potential business
conflict or the appearance thereof. If at
any time service on any board of
directors or advisory board would, in the
good faith judgment of the Board,
conflict with Executive's fiduciary duty to
the Company or create any appearance
thereof, Executive shall, as soon as
reasonably practicable considering any
fiduciary duty to the other such company,
resign from such other board of
directors or advisory board after written
notice of the conflict is received
from the Board.
(c) The Board shall take such action as may be necessary to appoint
or
elect Executive as a member of the Board as
soon as there is a legal vacancy on
the Board, but not to be effective prior to
the Effective Date (defined below).
Thereafter, during the Term, the Board
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shall nominate Executive for re-election as
a member of the Board at the
expiration of Executive's then-current
term.
(d) Executive further agrees to serve without additional
compensation
as an officer and director of any of the
Company's subsidiaries and agrees that
any amounts received from any such
corporation may be offset against the amounts
due hereunder.
2. TERM OF
AGREEMENT. The Agreement 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 October 31,
2005 (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 first
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 upon notice by Executive or the
Company to the other party or to
automatic successive additional one-year
periods thereafter, as the case may be,
in the manner provided above. If Executive
remains employed by the Company
beyond the expiration of the Term, he shall
be an employee at-will; except that
any provisions identified as surviving
shall continue. In all events hereunder,
Executive's employment is subject to
earlier termination pursuant to Section 7
hereof, and upon such earlier termination
the Term shall be deemed to have
ended.
3. BASE SALARY.
Commencing on the Effective Date, the Company shall pay
Executive a base salary (the "BASE SALARY")
at an annual rate of $600,000,
payable in accordance with the regular
payroll practices of the Company.
Executive's Base Salary shall be subject to
annual review by the Board (or a
committee thereof) and may be increased
from time to time by the Board. The base
salary as determined herein from time to
time shall constitute "Base Salary" for
purposes of this Agreement.
4. ANNUAL BONUS.
Commencing on the Effective Date, Executive shall be
eligible to participate in the Company's
Management Incentive Plan and any
successor annual bonus plans. 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 100% of Base Salary. Executive's
2005 annual bonus shall not be less than
$280,000.
5. EQUITY
AWARDS.
(a) BUY-OUT OPTION GRANT. The Board or the committee of the Board
(the
"COMMITTEE") appointed to administer the
Company's 2001 Long-Term Performance
Incentive Plan as may be amended or
replaced from time to time ("PLAN"), shall
award Executive as of the Effective Date,
two options (collectively and
singularly, the "BUY-OUT OPTION") to
purchase an aggregate number of shares of
the Company's common stock
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("COMMON STOCK") as equals the product of
(i) the quotient of (A) $3,000,000
divided by (B) the Fair Market Value (as
defined under the Plan) of Common Stock
on the Effective Date, multiplied by (ii)
three (3). 100,000 shares of the
Buy-Out Option shall be granted in
accordance with the form of award attached
hereto as Exhibit A. The balance of the
shares of the Sign-on Option shall be
granted in accordance with the form of
award attached hereto as Exhibit B.
(b) BUY-OUT RESTRICTED STOCK UNITS. The Board or the Committee
shall
award Executive as of the Effective Date
such number of restricted stock units
(the "BUY-OUT RSUS") as equals the quotient
of (i) $3,000,000 divided by (ii)
the Fair Market Value of Common Stock on
the Effective Date, in accordance with
the form of award attached hereto as
Exhibit C.
(c) ANNUAL LONG-TERM INCENTIVE AWARDS.
(i) Commencing with annual awards granted to senior executives
in
2006, Executive
shall be eligible for annual long-term incentive awards
throughout the
Term under such long-term incentive plans and programs as
may be in effect
from time to time in accordance with the Company's
compensation
practices and the terms and provisions of any such plans or
programs;
provided, that Executive's participation in such plans and
programs shall
be at a level and on terms and conditions consistent with
participation by
other senior executives of the Company, as the Board or
the Committee
shall determine in its sole discretion, with due
consideration of
Executive's position and awards granted to other senior
executives of
the Company. Notwithstanding, Executive shall be granted an
annual long-term
incentive equity award during each of the 2006, 2007 and
2008 fiscal
years having a value on the grant date of not less than
$2,500,000 (the
"INITIAL TERM ANNUAL AWARDS"). The Initial Term Annual
Awards shall be
granted in the form of stock options or restricted stock
units ("RSUS")
or a combination thereof, unless Executive and the Committee
otherwise agree.
The portion of such dollar value of each Initial Term
Annual Award
granted as stock options and the portion granted as RSUs shall
be determined in
the discretion of the Board or Committee, provided that
not less than
one-half of such annual value shall be granted as RSUs.
(ii) For Initial Term Annual Awards of RSUs, the number of RSUs
granted shall be
equal to the quotient of (A) the dollar value to be
awarded divided
by (B) the Fair Market Value of a share of Common Stock on
the grant date.
For Initial Term Annual Awards of stock options, the number
of options
granted shall be equal to the quotient of (C) the dollar value
to be awarded
divided by (D) the Black-Scholes value (or other option
valuation
method) of one share of Common Stock on the grant date as
determined by
the Committee or the Board for the valuation of stock option
grants to other
senior executives during such fiscal year.
(iii) For Initial Term Annual Awards granted as stock options,
each such option
share shall have an exercise price equal to the Fair
Market Value of
one (1) share of Common Stock and shall vest and become
exercisable in
three (3) equal installments on the first, second and third
anniversaries of
the grant date, provided that Executive has been
continuously
employed by the Company through each such vesting date for
such installment
to so vest. Initial Term Annual Awards granted as RSUs
shall
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fully vest (A)
on the third anniversary of the grant date or (B) if
Executive shall
have attained stated performance objectives over a
three-year
period, or (C) a combination of (A) and (B), and in no part
prior to such
vesting date, provided that Executive shall have been
continuously
employed by the Company through such vesting date, all as
shall be
determined in the sole discretion of the Committee or the
Board.
(iv) All Initial Term Annual Awards shall be granted pursuant
to
the terms of the
Plan as then in effect. In the event that, pursuant to
Plan limits,
during any fiscal year the Board and Committee are not
authorized to
grant a number of Initial Term Annual Award stock options or
RSUs (or both)
payable in shares of stock, having an aggregate value of
$2,500,000, then
such amount as is not so granted shall be awarded on
substantially
the same terms as stock options and RSUs, but such awards
shall be payable
to Executive in cash (e.g., as cash-based phantom stock
and stock
appreciation rights), subject to applicable tax and other law.
The Company
shall use its reasonable efforts to cause an amendment of the
Plan to be
adopted and approved by shareholders at the 2006 annual
meeting,
prior to the
grant of the 2006 Initial Term Annual Awards, in compliance
with applicable
law (including stock exchange listing requirements), as is
necessary to
authorize the granting of the full value of Initial Term
Annual Awards
payable in shares of stock under the Plan during each of the
2006, 2007 and
2008 fiscal years provided hereunder.
(v) Initial Term Annual Awards and all other long-term
incentive
awards shall be
granted pursuant to and, to the extent not contrary to the
terms of this
Agreement, shall be subject to all of the terms and
conditions
imposed upon such awards granted under the Plan.
(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; provided, Executive's vested
and unvested Buy-Out RSUs and
restricted stock units granted as Initial
Term Annual Awards shall be credited
towards his stock ownership obligation,
provided that Executive otherwise does
not dispose of any shares acquired
following vesting of such Buy-Out RSUs and
restricted stock units.
6. EMPLOYEE
BENEFITS. Commencing on the Effective Date:
(a) BENEFIT PLANS. Executive shall be entitled to participate in
all
employee benefit plans of the Company
including, but not limited to, equity,
pension, thrift, profit sharing, medical
coverage, education, or other
retirement or welfare benefits that the
Company has adopted or may adopt,
maintain or contribute to for the benefit
of its senior executives in accordance
with the terms of such plans and
programs.
(b) VACATION. Executive shall be entitled to annual paid vacation
in
accordance with the Company's policy
applicable to senior executives, but in no
event less than four (4) weeks per year (as
prorated for partial years of
employment).
(c) BUSINESS AND ENTERTAINMENT EXPENSES. Upon presentation of
appropriate documentation, Executive shall
be reimbursed in accordance with the
Company's
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expense reimbursement policy for all
reasonable and necessary business expenses
incurred in connection with the performance
of Executive's duties hereunder. The
Company shall reimburse Executive for his
reasonable professional fees incurred
to negotiate and prepare this Agreement,
not in excess of $7,500.
(d) RELOCATION. Executive will relocate his residence to the
vicinity
of the Company's headquarters within a time
frame mutually agreed upon between
Executive and the Board (the "RELOCATION
PERIOD"), but not later than 120 days
following the Effective Date. Executive
shall be entitled to relocation benefits
in accordance with the Company's relocation
policy; provided, the Company shall
extend the period for which Executive shall
be eligible for reimbursement of his
temporary housing expenses to 120 days.
(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 and is not cured by
Executive within
a reasonable period, not to exceed thirty (30) days;
(ii) Executive is convicted of (or pleads guilty or no contest
to) a felony or
any crime involving moral turpitude;
(iii) Executive has engaged in conduct that constitutes gross
misconduct in
the performance of his employment duties; or
(iv) Executive breaches any representation, warranty or
covenant
under Section
22.
An act or
omission by Executive shall not be "willful" if conducted in
good
faith and with
Executive's reasonable belief that such conduct is in the
best interests
of the Company.
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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 below), for Good Reason.
"GOOD REASON" shall mean, without the
express written consent of Executive, the
occurrence of any of the following
events:
(i) Executive's Base Salary or annual target bonus opportunity
is
reduced (other
than any (A) reduction related to Company or individual
performance and
(B) reduction in connection with any across-the-board
reduction of
base salaries or target bonus opportunities of senior
executives of
the Company);
(ii) Executive's duties or responsibilities are negatively and
materially
changed in a manner inconsistent with Executive's position
(including
status, offices, titles, and reporting responsibilities) or
authority;
(iii) The Company requires Executive's principal office to be
relocated more
than 50 miles from its location as of the date immediately
preceding the
Change in Control; or
(iv) Failure by the Company to elect or reelect Executive as a
member of the
Board of Directors.
(f) VOLUNTARY TERMINATION FOR ANY REASON (WITHOUT GOOD REASON
DURING A
PROTECTION PERIOD). Upon at least thirty
(30) days' prior written notice by
Executive to the Company of Executive's
voluntary termination of employment (i)
for any reason prior to or after a
Protection Period or (ii) without Good Reason
during a Protection Period, in either case
which the Company may, in its sole
discretion, make effective earlier than any
termination date set forth in such
notice.
8. CONSEQUENCES
OF TERMINATION. Any termination payments made and benefits
provided under this Agreement to Executive
shall be in lieu of any termination
or severance payments or benefits for which
Executive may be eligible under any
of the plans, policies or programs of the
Company or its affiliates. Except to
the extent otherwise provided in this
Agreement, all benefits, including,
without limitation, stock option grants,
restricted stock units grants and other
awards under the Company's long-term
incentive programs, shall be subject to the
terms and conditions of the plan or
arrangement under which such benefits
accrue, are granted or are awarded. Upon
termination of Executive's employment,
the following amounts and benefits shall be
due to Executive:
(a) DEATH; DISABILITY. If Executive's employment terminates due
to
Executive's death or Disability, then the
Company shall pay or provide Executive
(or the legal representative of his estate
in the case of his death) with:
(i) (A) any accrued and unpaid Base Salary through the date of
termination and
any accrued and unused vacation in accordance with Company
policy;
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(B)
reimbursement for any unreimbursed expenses, incurred and
documented in
accordance with
applicable Company policy, through the date of termination;
and (C)
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, and under clauses (B) and (C) 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 the 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 Buy-Out Option and Buy-Out RSUs shall become
immediately
fully vested, and Executive's Buy-Out Option shall be
exercisable for
the lesser of one year following the date of termination or
the unexpired
stated term of the grant. All of Executive's other unvested
long-term
incentive awards (including Initial Term Annual Awards) granted
to Executive
through the date of termination shall vest or be forfeited,
and any such
vested awards granted as stock options shall be exercisable,
in accordance
with the terms and conditions set forth in such awards.
(b) VOLUNTARY TERMINATION (INCLUDING VOLUNTARY TERMINATION
WITHOUT
GOOD REASON DURING A PROTECTION PERIOD);
INVOLUNTARY TERMINATION WITHOUT CAUSE
AT OR AFTER AGE 65; INVOLUNTARY TERMINATION
FOR CAUSE.
(i) If Executive's employment should be terminated (i) by
Executive for
any reason at any time other than during a Protection Period,
or (ii) by
Executive without Good Reason during a Protection Period, then:
(A) the Company
shall pay to Executive any Accrued Obligations in
accordance with
Section 8(a)(i); (B) all unvested stock options, restricted
stock units and
other unvested long-term incentive grants (including the
unvested portion
of the Buy-Out Option, unvested Buy-Out RSUs and any
unvested Initial
Term Annual Awards) shall be immediately forfeited and
cancelled; and
(C) all vested stock options (including the vested portion
of the Buy-Out
Option and any vested Initial Term Annual Awards granted as
stock options)
shall be exercisable for ninety (90) days following such
termination.
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(ii) If Executive's employment is terminated by the Company
other
than for Cause
and other than for Disability at or after Executives'
attainment of age 65, (x)
the Company shall pay to Executive any Accrued
Obligations and
(y) Executive's long-term incentive grants shall vest or be
forfeited, and
any stock options shall be exercisable, as set forth in the
applicable grant
agreement, but not less than ninety (90) days.
(iii) If Executive's employment is terminated by the Company
for
Cause, the
Company shall pay to Executive any Accrued Obligations, and all
vested and
unvested stock options, restricted stock units and other vested
and unvested
long-term incentive grants (including the vested and unvested
portion of the
Buy-Out Option, vested and unvested Buy-Out RSUs and any
vested and
unvested Initial Term Annual Awards) shall be immediately
forfeited and
cancelled.
(c) TERMINATION WITHOUT CAUSE. If at any time (A) prior to
Executive's
attainment of age 65 and (B) other than
during a Protection Period, Executive's
employment by the Company is terminated by
the Company other than for Cause (and
other than a termination for Disability),
then the Company shall pay or provide
Executive with:
(i) Executive's Accrued Obligations, payable in accordance with
Section
8(a)(i);
(ii) Any unpaid bonus earned with respect to any fiscal year
ending on or
preceding the date of termination, payable when bonuses are
paid generally
to senior executives for such year;
(iii) A pro-rated 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 the 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
product of (A)
the sum of (1) Executive's then Base Salary plus (2) his
annual target
bonus multiplied by (B) one and one-half (1.5), which amount
shall be payable
to Executive in equal payroll installments over a period
of eighteen (18)
months;
(v)
Subject to Executive's continued co-payment of premiums,
continued
participation for eighteen (18) months in the Company's medical
benefits plan
which covers Executive (and his eligible dependents) upon the
same terms and
conditions (except for the requirement 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
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against Executive's
right to healthcare continuation benefits under the
Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended
("COBRA");
and
(vi) Executive's Buy-Out Option and Buy-Out RSUs shall become
immediately
fully vested, and Executive's Buy-Out Option shall be
exercisable for
the lesser of one year following the date of termination or
the unexpired
stated term of the grant. All of Executive's other unvested
long-term
incentive awards (including unvested Initial Term Annual
Awards)
granted to
Executive through the date of termination shall vest or be
forfeited, and
any such vested awards granted as stock options shall be
exercisable, in
accordance with the terms and conditions set forth in such
awards.
(d) COMPANY NON-RENEWAL OF TERM. In the event that the Term expires
at
any time prior to the fifth anniversary of
the Effective Date (without regard
for a termination of Executive's employment
upon such expiration or a
continuation of Executive's employment
at-will following such expiration), as a
result of a Company notice to Executive
that the Term shall not be extended
beyond such expiration date, the Buy-Out
RSUs shall become immediately fully
vested upon such expiration date.
9. CONDITIONS.
Any payments or benefits made or provided to Executive
pursuant to any subsection of Section 8
(provided, in the case of Section 8(d),
only if Executive's employment then
terminates), or Section 10(c) and Section
10(d), other than Accrued Obligations, are
subject to Executive's:
(a) compliance with the provisions of Section 11 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 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 20 hereof, any such
amounts shall be paid to Executive within
thirty (30) days thereafter.
Notwithstanding, 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
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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 (c)
of this definition; or
(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; or
(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) 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.
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(b) BUY-OUT RSU AND BUY-OUT OPTION GRANTS. Upon the occurrence of
a
Change in Control of the Company, the
Buy-Out RSUs and the Buy-Out Option, to
the extent not vested and exercised by the
Executive, shall immediately vest in
full, the Buy-Out RSUs shall be immediately
payable to Executive (unless payment
shall be deferred in accordance with the
terms thereof), and the Buy-Out Option
shall be exercisable.
(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 is voluntarily terminated by
Executive for Good Reason, in either case
only during the period commencing on
the occurrence of a Change in Control of
the Company and ending on the second
anniversary of date of the Change in
Control ("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 actual
performance
under the applicable bonus plan and the 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 then Base Salary 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 stock option, restricted stock
unit and other
long-term incentive equity awards (including any Initial
Term Annual
Awards) shall become immediately fully vested, and such stock
option awards
shall be exercisable for the lesser of one year following the
date of
termination or the unexpired stated term of the grant.
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(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
("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.
(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
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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
the Gross-Up Payment.
11. 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
