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EXHIBIT 10.40
2002 CHANGE IN CONTROL, SEVERANCE
AND NON-COMPETITION AGREEMENT
AGREEMENT, dated as of July 12, 2002 and effective as of July 12,
2002
by and between Wolverine Tube, Inc., a Delaware corporation
("Wolverine" or
"Company"), and Garry K. Johnson, an individual residing at
Decatur, Alabama
(the "Executive").
W I T N E S S E T H:
WHEREAS, Wolverine recognizes the Executive's expertise in
connection
with his employment by Wolverine or its subsidiaries or
affiliates
(collectively, the "Company"); and
WHEREAS, the Company desires to provide the Executive with
severance
benefits or the opportunity for continued employment in a different
position if
the Executive's employment in his current position is terminated
for the reasons
set forth herein and the Executive refrains from engaging in
certain activities
in the event his employment is terminated, upon the terms and
conditions
hereinafter set forth; and
WHEREAS, the Company and the Executive have heretofore in 1999
entered
into a Change in Control, Severance and Non-Competition Agreement
(the "Prior
Agreement"); and
WHEREAS, the Company believes that the Prior Agreement should
be
amended and restated in its entirety in order to address the
competitiveness of
the current benefits provided under the Prior Agreement and to
resolve certain
ambiguities contained therein; and
WHEREAS, the Company and the Executive have therefore agreed to
enter
into this Agreement, which shall replace and supersede the Prior
Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto hereby agree as
follows:
1.
Termination of Employment.
(a)
Termination for Cause; Resignation without Good Reason.
(i) If the Executive's employment is terminated by the Company
for Cause, as defined in Section 1(a)(ii) hereof, or if the
Executive resigns
from his employment hereunder, other than for Good Reason, as
defined in Section
1(a)(iii) hereof, unless said resignation comes within two (2)
years of a Change
in Control, as discussed in Section 1(b)(i) below, the Executive
shall be
entitled to only (A) severance benefits as provided by the
Company's general
procedures and practices, if any, (B) payment of the pro rata
portion of the
Executive's salary through and
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including the date of termination or resignation, and (C) such
employee benefits
as may be due to Executive pursuant to the provisions of the
benefit plans which
govern such issues.
(ii) For purposes of this Agreement, termination for "Cause"
shall mean termination of the Executive's employment by the Company
because of
(A) the Executive's conviction for, or guilty plea to, a felony or
a crime
involving moral turpitude, (B) the Executive's commission of an act
of personal
dishonesty in connection with his employment by the Company, (C) a
breach of
fiduciary duty in connection with his employment with the Company
which shall
include, but not be limited to, (1) investment in any person or
organization
with the knowledge that such person or organization has or purposes
to have
dealings with the Company, such person or organization competes
with the
Company, or the Company is considering an investment in such person
or
organization (the reference to "organization" excludes federal
credit unions,
publicly owned insurance companies and corporations the stock of
which is listed
on a national securities exchange or quoted on NASDAQ if the direct
and
beneficial stock ownership of the Executive, including members of
his immediate
family, is not more than one percent (1%) of the total outstanding
stock of such
corporation); (2) a loan (including a guaranty of a loan) from or
to any person
or organization having or proposing any dealings with the Company
or in
competition with the Company; (3) participation directly or
indirectly in any
transaction involving the Company other than as a director or as an
officer or
employee of the Company; (4) acceptance from any person or
organization having
or proposing any dealings with the Company or in competition with
the Company of
any gratuity, gift, entertainment or favor which exceeds either
nominal value or
common courtesies which are generally accepted business practice;
or (5) service
as an officer, director, partner or employee of, or consultant to,
any person or
organization having or proposing dealings with the Company or in
competition
with the Company; (D) the Executive's failure to execute or follow
the written
policies of the Company, including, but not limited to, the
Company's policy
against discrimination or harassment, or (E) the Executive's
refusal to perform
the essential functions of the job, following written notice
thereof.
Termination of the Executive's employment as a result of his death
or disability
(if such Executive is eligible for benefits under the Company's
long-term
disability plan or would be eligible for such benefits were the
Executive a
participant in said plan) shall constitute a termination by the
Company with
Cause for purposes of this Agreement.
(iii) For purposes of this Agreement, resignation for "Good
Reason" shall mean the resignation of the Executive within a period
of six (6)
months after (A) a reduction in the Executive's benefits or pay in
an amount in
the aggregate in excess of five percent (5%) thereof, unless all
individuals at
the same managerial level as the Executive experience a similar
reduction in
benefits or pay or (B) a substantial adverse alteration occurs in
the nature or
status of the Executive's responsibilities from those in effect on
the date
hereof, disregarding change in title only.
(iv) The date of termination for Cause shall be the date of
receipt by the Executive of written notice of such termination, or
such later
date as may be contained in said
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notice. The date of resignation without Good Reason shall be the
date of receipt
by the Company of a written notice of such resignation.
(b)
Termination without Cause; Resignation for Good Reason or
after a Change in Control.
(i) If the Executive's employment is terminated by the Company
without Cause, or if the Executive resigns from his employment for
any reason
within two (2) years following a Change in Control, the Executive
shall be
entitled to receive the benefits described in subparagraphs (A),
(B), (C) and
(D) below. If the Executive resigns for Good Reason (unless said
resignation is
within two (2) years following a Change in Control, in which event
his benefits
are described in the preceding sentence), he shall be entitled to
those benefits
described in (A) and (B) below only. In either case, said benefits
will only be
paid if the Executive executes an Agreement and General Release,
which shall be
drafted by the Company, and if the Executive complies with Section
2 of this
Agreement.
(A) The Company shall pay to the Executive either (x)
during the two years immediately following a change in Control, in
the event of
(i) termination by the Company without Cause, or (ii) resignation
by the
Executive for any reason, an amount equal to two (2) years' salary;
or (y) at
any other time, in the event of (i) termination by the Company
without Cause or
(ii) resignation by the Executive for Good Reason, an amount equal
to two (2)
year's salary; in either case to be paid at the rate in effect
immediately prior
to the Severance Date (as defined in Section 1 (b)(iv)) plus pay at
the same
rate for all vacation time accrued during the calendar year in
which the
Severance Date occurs, with such payment to be made at the
Executive's option
either:
(X) as a lump sum within 30 days after the
Severance Date, or
(Y) as a series of payments in accordance
with the Company's normal payroll procedures following the
Severance Date;
(B) An election as to the form of payment under this
paragraph (b)(i)(A) shall be made at a time and in a manner
prescribed by the
Company. An election of either form of payment may be revoked or
modified, in
accordance with the rules prescribed by the Company, at any time
that is at
least twelve (12) months before the Executive's Severance Date. A
change in the
payment form that occurs within twelve (12) months of the
Executive's Severance
Date shall be null and void. If the Executive does not elect a form
of payment,
the amount due to the Executive under this paragraph (b)(i)(A)
shall be paid as
a lump sum within thirty (30) days of the Severance Date.
The amount payable to the Executive by the Company under this
paragraph
(b)(i)(A) shall be offset by the non-compete and non-solicitation
fee as defined
in Section 2(d)(i) of this Agreement.
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(B)(I) For a period of twenty-four (24) months,
following the Executive's Severance Date (the "Continuation
Period"), the
Company will arrange to provide the Executive with medical and
disability
benefits (the "Employee Benefits") substantially similar to those
that the
Executive was receiving or entitled to receive immediately prior to
the
Severance Date at no cost to the Executive. Without otherwise
limiting the
purposes or effect of Section 1(b), Employee Benefits otherwise
receivable by
the Executive pursuant to this Section 1(b)(i)(B)(I) will be
reduced or
eliminated to the extent comparable Employee Benefits at
substantially similar
cost are actually received by the Executive from another employer
during the
Continuation Period following the Executive's Termination Date, and
any such
benefits actually received by the Executive shall be reported by
the Executive
to the Company. If and to the extent that any benefit described in
this Section
1(b)(i)(B)(I) is not or cannot be paid or provided under any
policy, plan,
program or arrangement of the Company or any Subsidiary, as the
case may be,
then the Company will reimburse the Executive for the costs
incurred in
obtaining comparable Employee Benefits coverage.
(B)(II) Following the Continuation Period, the
Company will provide the Executive access to Employee Benefits
coverage on a
group basis equal to that generally available to the majority of
the Company's
employees or retirees, as the case may be, who receive said
benefits, at the
Executive's own expense based upon the amount charged active
employees for such
coverage until the Executive attains the age of sixty-five (65).
Without
otherwise limiting the purposes of effect of Section 1(b), Employee
Benefits to
which access is otherwise provided to the Executive pursuant to
this Section
1(b)(i)(B)(II) will not be required to be made available to the
extent
comparable Employee Benefits at substantially similar cost are
actually received
by the Executive from another employer during the period following
the
Continuation Period until attainment of age sixty-five (65). If and
t
