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Exhibit 10.41
SENIOR VICE PRESIDENT
[AMENDED AND RESTATED] CHANGE OF CONTROL
EMPLOYMENT AGREEMENT
This [Amended and Restated] Change of Control Employment
Agreement ("Agreement") is made and entered into as of
,
2006 by and between SUPERIOR ESSEX INC., a Delaware corporation
(the "Company"), and [NAME OF SENIOR VICE PRESIDENT] (the
"Executive"). [This Agreement amends and restates that
certain Change of Control Employment Agreement dated as
of ,
2004 by and between the Company and the Executive.]
The Board of Directors of the Company (the "Board"), has
determined that it is in the best interests of the Company and its
shareholders to assure that the Company will have the continued
dedication of the Executive, notwithstanding the possibility,
threat or occurrence of a Change of Control. The Board
believes it is imperative to diminish the inevitable distraction of
the Executive by virtue of the personal uncertainties and risks
created by a pending or threatened Change of Control and to
encourage the Executive’s full attention and dedication to
the Company currently and in the event of any threatened or pending
Change of Control, and to provide the Executive with compensation
and benefits arrangements upon a Change of Control that ensure that
the compensation and benefits expectations of the Executive will be
satisfied and that are competitive with those of other
corporations. Therefore, in order to accomplish these
objectives, the Board has caused the Company to enter into this
Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1.
Effect of Agreement . (a) Unless and until there
occurs, during the Term of this Agreement, either a Change of
Control or a termination of the Executive’s employment in
anticipation of a Change of Control as contemplated by Section
3(d), (i) Sections 2, 3 and 4 of this Agreement shall have no
effect and shall not give rise to any rights of the Executive, (ii)
the Executive’s employment shall be "at will," except as may
be otherwise provided in any Employment Agreement, and (iii) upon
any termination of the Executive’s employment, the Executive
shall have no further rights under this Agreement. Nothing in
this Section 1(a) affects the Term of this Agreement.
(b)
From and after the first date during the Term of this Agreement on
which a Change of Control occurs, this Agreement shall supersede
any Employment Agreement except to the extent otherwise provided in
such Employment Agreement, but shall have no effect on any Other
Agreement or Other Plan, except as specifically provided in Section
2(e) or Section 5.
2.
Terms of Employment . This Section 2 sets forth
the terms and conditions on which the Company agrees to employ the
Executive during the period (the "Protected Period") beginning on
the first day during the Term of this Agreement on which a Change
of Control occurs and ending on the first anniversary of that date,
or such earlier date as the Executive’s employment terminates
as contemplated by Section 3.
(a)
Position and Duties.
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(i)
During the Protected Period, the Executive shall serve as a Senior
Vice President with substantially the same duties, responsibility
and authority and with respect to the same business unit as the
Executive served during the 120 day period prior to the Change of
Control.
(ii)
During the Protected Period, the Executive will devote the
Executive’s full business time and best efforts to the
performance of the Executive’s duties hereunder and will not
engage in any other business, profession or occupation for
compensation or otherwise which would conflict or interfere, in any
significant respect, with rendering such services either directly
or indirectly, without the prior written consent of the Executive
Vice President to which the Executive reports or, if none, the
Chief Executive Officer ("Supervising Officer"). Notwithstanding
the foregoing, the Executive may (x) without the prior approval of
the Supervising Officer, make and manage personal business
investments of the Executive’s choice and (y) serve in any
capacity with any civic, educational or charitable organization or
any governmental entity or trade association; provided that
in each case, and in the aggregate, such activities are in
accordance with the Company’s code of ethics and related
policies and do not conflict or interfere, in any significant
respect, with the performance of Executive’s duties hereunder
or conflict with Sections 7 or 8.
(b)
Base Salary. During the Protected Period, the
Company shall pay the Executive a base salary at the highest annual
rate in effect during the 120 days prior to the Change of Control
("Base Salary"), payable in regular installments in accordance with
the Company’s usual payment practices (but not less often
than monthly). During the Protected Period, the
Executive’s Base Salary may be increased but shall not be
decreased.
(c)
Annual Bonus. During the Protected Period, the
Executive shall be eligible to earn an annual bonus at a target
rate no less than the target rate in effect for the Executive
immediately prior to the Change of Control ("Annual Bonus").
The Annual Bonus may be conditioned upon the achievement of
performance targets reasonably established by the Company.
(d)
Benefits . During the Protected Period, the
Executive and the Executive’s eligible dependents shall be
entitled to participate in the welfare benefit plans, practices,
policies and programs provided by the Company or the Affiliated
Employer (including, without limitation, medical, prescription
drug, dental, vision, disability and life insurance benefits) on
the same basis as those benefits were generally made available
during the 120 day period preceding the Change of Control to other
similarly situated executives of the Company, commensurate with the
Executive’s position with the Company.
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(e)
Effect of a Change of Control on Equity Awards
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(i)
Accelerated Vesting . Upon the occurrence of a Change
of Control, (A) all of the Executive’s outstanding stock
options and any other equity awards in the nature of appreciation
rights (collectively, "Appreciation Rights"), shall become fully
vested and exercisable as of the date of the Change of Control and,
unless settled in accordance with Section 2(e)(ii) below, shall
remain exercisable until the later of the 15 th day of the third month following
the date at which, or December 31 of the calendar year in which,
the equity awards would otherwise have expired, as provided in the
original award agreement, but in no event after the original full
term of the equity award; (B) all time-based vesting restrictions
on the Executive’s outstanding restricted stock, restricted
stock units and other equity awards (collectively, "Restricted
Rights") shall lapse as of the date of the Change of Control,
unless otherwise provided in the applicable award agreement, and
(C) all performance-based vesting conditions on the
Executive’s Restricted Rights shall be deemed to have been
met at the "target" level as of the date of the Change of Control,
unless otherwise provided in the applicable award
agreement.
(ii)
Settlement of Awards in Certain Events . The following
shall apply only upon the occurrence of a Change of Control in
which the consideration paid to the Company’s shareholders is
consideration other than shares in the resulting or surviving
entity that are listed for trading on a nationally recognized
exchange. In such event, (A) all of the Executive’s
Appreciation Rights shall vest and be cancelled simultaneously with
the Change of Control and the Executive shall be entitled to
receive therefor the same transaction consideration as if he or she
were a shareholder of the Company holding the number of shares of
Company common stock having a fair market value, as of the
effective time of the Change of Control, equal to (x) the excess,
if any, of the value of the consideration per share to be received
by the Company’s shareholders in such Change of Control, over
the exercise price for such Appreciation Right, less (y) applicable
withholding taxes; and (B) all of the Executive’s Restricted
Rights shall vest and be cancelled simultaneously with the Change
of Control and the Executive shall be entitled to receive therefor
the same transaction consideration as if he were a shareholder of
the Company holding the number of shares of Company common stock
having a fair market value, as of the effective time of the Change
of Control, equal to the value of such Restricted Rights, less
applicable withholding taxes.
3.
Termination of Employment.
(a)
Death or Disability. The Executive’s
employment shall terminate automatically if the Executive dies
during the Protected Period. If the Company determines in
good faith that the Disability of the Executive has occurred during
the Protected Period, it may give to the Executive written notice
in accordance with Section 10(b) of its intention to terminate the
Executive’s employment. In such event, the
Executive’s employment with the Company shall terminate
effective on the 30th day after receipt of such notice by the
Executive, provided that the Executive shall not have returned to
full-time performance of the Executive’s duties before such
30th day.
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(b)
By the Company. The Company may terminate the
Executive’s employment during the Protected Period for Cause
or without Cause.
(c)
By the Executive. The Executive may terminate
employment during the Protected Period for Good Reason or without
Good Reason. The Executive’s mental or physical
incapacity following the occurrence of an event described in
clauses (a) through (e) of the definition of Good Reason shall not
affect the Executive’s ability to terminate employment for
Good Reason.
(d)
Termination in Anticipation of a Change of Control.
Anything in this Agreement to the contrary notwithstanding,
if (i) a Change of Control occurs, (ii) the Executive’s
employment with the Company is terminated by the Company before the
Change of Control occurs in a manner and under circumstances that
would be considered a termination by the Company without Cause if
it had occurred during the Protected Period, and (iii) it is
reasonably demonstrated by the Executive that such termination of
employment was at the request of a third party that had taken steps
reasonably calculated to effect the Change of Control or otherwise
arose in connection with or in anticipation of the Change of
Control, then such termination shall be treated for all purposes of
this Agreement as a termination by the Company without Cause during
the Protected Period.
(e)
Notice of Termination. Any termination of the
Executive’s employment by the Company or the Executive shall
be communicated by Notice of Termination to the other party hereto
given in accordance with Section 10(b). The failure by the
Executive or the Company to set forth in the Notice of Termination
any fact or circumstance that contributes to a showing of Good
Reason or Cause shall not waive any right of the Executive or the
Company, respectively, hereunder, or preclude the Executive or the
Company, respectively, from asserting such fact or circumstance in
enforcing their respective rights hereunder.
4.
Obligations of the Company upon Termination .
Whenever this Agreement provides for the payment of a lump sum
benefit following the Date of Termination, if any, such payment
shall be made in cash within 30 days after the Date of Termination,
or if the Executive has not executed the Release by such date, in a
lump sum within 10 days after the Executive executes the
Release. Notwithstanding the foregoing, to the extent
required to comply with Section 409A of the Internal Revenue Code
of 1986, as amended (the "Code") and the applicable regulations and
guidance thereunder, any payment under this Section 4 shall be
delayed to the first day after the six-month anniversary of
Executive’s separation from service, as defined in Code
Section 409A and the applicable regulations and guidance
thereunder.
(a)
Other than for Cause, Death or Disability; Good
Reason. If, during the Protected Period, (x) the
Company terminates the Executive’s employment other than for
Cause, Death or Disability or (y) the Executive terminates
employment for Good Reason, and provided in either case the
Executive executes a release substantially in the form attached
hereto as Exhibit A (a "Release"), the Executive shall be entitled
to the following benefits (the "Severance Benefits"):
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(i)
The Company shall pay to the Executive, in a lump sum, the
aggregate of the following amounts:
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(A) the
sum of the following amounts, to the extent not previously paid to
the Executive (the "Accrued Obligations"): (1) the Base
Salary through the Date of Termination; (2) any Annual Bonus earned
but unpaid as of the Date of Termination for any previously
completed fiscal year; and (3) reimbursement for any unreimbursed
business expenses properly incurred by the Executive in accordance
with Company policy prior to the Date of Termination; and
(B)
150% times the sum of the Executive’s Base Salary and target
Annual Bonus for the year in which the Date of Termination
occurred.
(ii)
Subject to the Executive’s continued compliance with the
provisions of Sections 7 and 8 of this Agreement (other than a
breach which is insubstantial and insignificant, as determined in
good faith by the Chief Executive Officer taking into account all
of the circumstances), for a period of 12 months following the Date
of Termination, the Company shall provide to the Executive and his
or her eligible dependents the Specified Welfare Benefits, on the
same basis as the Company or the Affiliated Employer provides such
benefits for its then actively employed executives, and the Company
or the Affiliated Employer and the Executive shall share the costs
of the continuation of such coverage in the same proportion as such
costs were shared immediately prior to Executive’s
termination; provided , however , that such
participation shall terminate, or the benefits under such plans
shall be reduced, if and to the extent the Executive becomes
covered (or is eligible to become covered) during such period by
plans of a subsequent employer or other entity to which the
Executive provides services providing comparable benefits or if the
Executive fails to pay any required contribution or premium.
Such coverage shall be credited against the time period that the
Executive and the Executive’s dependents are entitled to
receive continued coverage under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended. Notwithstanding the
foregoing: (i) if the Company determines that it is not possible to
provide one or more of the Specified Welfare Benefits as required
above through plans sponsored by the Company or the Affiliated
Employer under the terms thereof, or that providing any of the
Specified Welfare Benefits would have adverse tax consequences for
the Executive, then the Company shall provide such Specified
Welfare Benefits in a manner that keeps the Executive in the same
position, on an After-Tax basis, as if the Executive had remained
employed by the Company or an Affiliate during the Severance
Period; and provided that if it is not reasonably practicable to so
provide such Specified Welfare Benefits, then the Company shall
instead make a cash payment that is equal, on an After-Tax basis,
to the value of such Specified Welfare Benefits.
(iii) To the
extent not theretofore paid or provided, the Company shall timely
pay or provide to the Executive any Other Benefits.
(b)
Death or Disability. If the Executive’s
employment is terminated because of the Executive’s Death or
Disability during the Protected Period, the Company shall pay the
Accrued
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Obligations to the Executive in a lump sum, shall
timely pay or deliver any Other Benefits, and shall have no other
severance obligations under this Agreement.
(c)
Cause; Other than for Good Reason. If the
Executive’s employment is terminated for Cause during the
Protected Period, the Company shall provide to the Executive the
Accrued Obligations and shall timely pay or deliver any Other
Benefits, in each case, to the extent theretofore unpaid, and shall
have no other severance obligations under this Agreement. If
the Executive voluntarily terminates employment during the
Protected Period, other than for Good Reason, the Company shall pay
the Accrued Obligations to the Executive in a lump sum, shall
timely pay or deliver any Other Benefits, and shall have no other
severance obligations under this Agreement.
5.
Non-exclusivity of Rights . Nothing in this
Agreement shall prevent or limit the Executive’s continuing
or future participation in any Other Plan for which the Executive
may qualify, nor shall anything herein limit or otherwise affect
such rights as the Executive may have under any Other
Agreement. Amounts that are vested benefits or that the
Executive is otherwise entitled to receive under any Other Plan or
any Other Agreement shall be payable in accordance with such Other
Plan or Other Agreement, except as explicitly modified by this
Agreement. Notwithstanding the foregoing, if the Executive
receives payments and benefits pursuant to Section 4(a), then (a)
the Executive shall not be entitled to any severance pay or
benefits under any severance plan, program or policy of the Company
or its Affiliates, unless otherwise specifically provided therein
in a specific reference to this Agreement, and (b) the Executive
shall not be treated as having any additional years of service or
age for purposes of any Other Plan or Other Agreement by virtue of
receiving such payments and benefits, unless such Other Plan or
Other Agreement specifically so provides.
6.
No Mitigation Required . The Company’s
obligation to make the payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other
claim, right or action that the Company or any Affiliate may have
against the Executive or others. In no event shall the
Executive be obligated to seek other employment or take any other
action by way of mitigation of the amounts payable to the Executive
under any of the provisions of this Agreement, and, except as
specifically provided in Section 4(a)(iii), such amounts shall not
be reduced, regardless of whether the Executive obtains other
employment.
7.
Certain Restrictive Covenants . In consideration of and
as a condition of the receipt of the Severance Benefits by the
Executive, the Executive agrees to the following provisions:
(a)
So long as the Executive is employed by the Company or any of its
Affiliates and for a period of 12 months following the
Executive’s termination of employment for any reason (the
"Restricted Period"), the Executive will not, whether on the
Executive’s own behalf or on behalf of or in conjunction with
any person, firm, partnership, joint venture, association,
corporation or other business organization, entity or enterprise
whatsoever ("Person"), including, without limitation a Competitive
Business, directly or indirectly, solicit or assist in soliciting a
Company Client for the purpose of providing or having that Company
Client provided with
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products or services directly competitive with or
directly substitutable for products or services of the Company or
any Affiliate; provided that after the Date of Termination, the
foregoing covenant shall be limited to Company Clients:
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(i)
with whom the Executive had personal contact or dealings on behalf
of the Company or any of its Affiliates during the one year period
preceding the Executive’s termination of employment;
(ii)
with whom employees reporting to the Executive have had personal
contact or dealings on behalf of the Company or its Affiliates
during the one year period immediately preceding the
Executive’s termination of employment; or
(iii) for
whom the Executive had direct responsibility or direct access to
and knowledge of sensitive client information during the one-year
period immediately preceding the Executive’s termination of
employment.
(b)
During the Restricted Period, the Executive will not own an equity
interest in or provide services (as an employee or otherwise) or
funding to or affiliate with any Competitive Business within the
Restricted Territory; provided, however, that during the 12 months
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