EXHIBIT 10.10
CHANGE OF CONTROL EMPLOYMENT AGREEMENT
THIS AGREEMENT, made as of the 17th day of February, 2003, by Xxxxxx Inc., a
Delaware corporation (the "Company"), and Xxxxxxx X. Xxxxxxx ("Executive").
R E C I T A L S
The Executive is an officer of the Company and is employed by Belden
Technologies, Inc. ("Belden Technologies"), a wholly-owned subsidiary of the
Company, in a key executive capacity. The Executive's services are valuable to
the Company. The Executive possesses intimate knowledge of the business and
affairs of the Company and has acquired certain confidential information with
respect to the Company.
The Company desires to insure that it will continue to have the benefit
of the Executive's services and to protect its confidential information and
goodwill. The Company recognizes that circumstances may arise in which a change
in control of the Company occurs, through acquisition or otherwise, causing
uncertainty about the Executive's future employment with the Company without
regard to the Executive's competence or past contributions. Such uncertainty may
result in the loss of valuable services of the Executive to the detriment of the
Company and its stockholders.
The Company and the Executive desire that any proposal for a change in
control or acquisition of the Company will be considered by the Executive
objectively and with reference only to the best interests of the Company and its
stockholders. The Executive will be in a better position to consider the
Company's best interests if the Executive is afforded reasonable security, as
provided in this Agreement, against altered conditions of employment which could
result from any such change in control or acquisition.
NOW, the Company and the Executive (collectively the "Parties" or
individually a "Party"), agree as follows:
1. CERTAIN DEFINITIONS.
1.1 ACT. The term "Act" means the Securities Exchange Act
of 1934, as amended.
1.2 AFFILIATE AND ASSOCIATE. The terms "Affiliate" and
"Associate" shall have the meanings given them in Rule 12b-2 of the Act.
1.3 BENEFICIAL OWNER. A Person shall be deemed to be the
"Beneficial Owner" of
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any securities:
(i) that such Person or any other Person's
Affiliates or Associates has the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding, or upon the exercise of conversion
rights, exchange rights, rights, warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own,
(A) securities tendered pursuant to a
tender or exchange offer made by or on behalf of such Person or any of such
Person's Affiliates or Associates until such tendered securities are accepted
for purchase, or
(B) securities issuable upon exercise
of Rights issued pursuant to the terms of the Rights Agreement between the
Company and First Chicago Trust Company of New York (the "Rights Agreement"),
dated at July 6, 1995, as amended from time to time (or any successor to such
Rights Agreement), at any time before the issuance of such securities;
(ii) that such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right to vote or
dispose of or has "beneficial ownership" of (as determined pursuant to Rule
13d-3 of the Act), including pursuant to any agreement, arrangement or
understanding; provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any security under this
subparagraph (ii) as a result of an agreement, arrangement or understanding to
vote such security if the agreement, arrangement or understanding:
(A) arises solely from a revocable
proxy or consent given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules and
regulations under the Act and
(B) is not also then reportable on a
Schedule 13D under the Act (or any comparable or successor report); or
(iii) that are beneficially owned, directly or
indirectly, by any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting (except pursuant to a revocable proxy as
described in Subsection 1.3 (ii) above) or disposing of any voting securities of
the Company; provided, however, that nothing in this paragraph (iii) shall cause
a Person engaged in the business as an underwriter of securities to be deemed
the "Beneficial Owner" of, or to "beneficially own," any securities acquired
through such Person's participation in good faith in a firm commitment
underwriting until the expiration of forty days (40) after the date of such
acquisition.
1.4 CAUSE. "Cause" for termination by the Company of the
Executive's employment with the Company, Belden Technologies or any of their
Affiliates after a Change of Control of the Company shall, for purposes of this
Agreement, be limited to:
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(i) the engaging by the Executive in intentional
conduct taken in bad faith which has caused demonstrable and serious financial
injury to the Company, as evidenced by a determination in a binding and final
judgment, order or decree of a court or administrative agency of competent
jurisdiction, in effect after exhaustion or lapse of all rights of appeal, in an
action, suit or proceeding, whether civil, criminal, administrative or
investigative;
(ii) conviction of a felony (as evidenced by a
binding and final judgment, order or decree of a court of competent
jurisdiction, in effect after exhaustion of all rights of appeal) which
substantially impairs the Executive's ability to perform his duties or
responsibilities; and
(iii) continuing willful and unreasonable refusal
by the Executive to perform the Executive's duties or responsibilities (unless
significantly changed without the Executive's consent).
1.5 CHANGE IN CONTROL OF THE COMPANY. A "Change in
Control of the Company" shall be deemed to have occurred if:
(i) any Person (other than any employee benefit
plan of the Company or any subsidiary of the Company, any entity holding
securities of the Company for or pursuant to the terms of any such plan or any
trustee, administrator or fiduciary of such a plan) is or becomes the Beneficial
Owner of securities of the Company representing at least 30% of the combined
voting power of the Company's then outstanding securities (other than
acquisitions directly from the Company);
(ii) a Section 11(a)(ii) Event shall have
occurred under the Rights Agreement (or a similar event shall have occurred
under any successor to such Rights Agreement) at any time any Rights are issued
and outstanding thereunder;
(iii) one-third or more of the members of the
Board are not Continuing Directors; or
(iv) there shall be consummated any merger of the
Company in which the Company is not the continuing or surviving corporation or
pursuant to which shares of the Company's Common Stock would be converted into
cash, securities or other property, other than a merger of the Company in which
the holders of the Company's Common Stock immediately prior to the merger have
the same proportionate ownership of common stock of the surviving corporation
immediately after the merger.
1.6 CODE. The term "Code" means the Internal Revenue Code
of 1986, as amended.
1.7 CONTINUING DIRECTOR. The term "Continuing Director"
means (i) any member
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of the Board of Directors of the Company (the "Board") who was a member of such
Board on August 15, 1996, (ii) any successor of a Continuing Director who is
recommended to succeed a Continuing Director by a majority of the Continuing
Directors then on the Board, and (iii) any appointee who is recommended by a
majority of the Continuing Directors then on the Board.
1.8 COVERED TERMINATION. The term "Covered Termination"
means any termination of the Executive's employment where the Termination Date
is any date prior to the end of the Employment Period.
1.9 EMPLOYMENT PERIOD. The term "Employment Period" means
a period beginning on the date of a Change in Control of the Company (as defined
in Section 1.5 above), and ending at 11:59 p.m. St. Louis Time on the earlier of
the third anniversary of such date or the Executive's Normal Retirement Date.
1.10 GOOD REASON. The Executive shall have a "Good Reason"
for termination of employment after a Change in Control of the Company in the
event of:
(i) any breach of this Agreement by the Company,
including specifically any breach by the Company of its agreements contained in
Sections 4 (Duties), 5 (Compensation) or 6 (Annual Compensation Adjustments)
hereof;
(ii) the removal of the Executive from, or any
failure to reelect or reappoint the Executive to, any of the positions held with
the Company, Belden Technologies or any of their affiliates on the date of the
Change in Control of the Company or any other positions with the Company, Belden
Technologies or any of their affiliates, to which the Executive shall thereafter
be elected, appointed or assigned, except when such removal or failure to
reelect or reappoint relates to the termination by the Company of the
Executive's employment for Cause or by reason of disability pursuant to Section
12;
(iii) a good faith determination by the Executive
that there has been a significant adverse change, without the Executive's
written consent, in the Executive's working conditions or status with the
Company, Belden Technologies or any of their affiliates from such working
conditions or status in effect immediately prior to the Change in Control of the
Company, including but not limited to;
(A) a significant change in the nature
or scope of the Executive's authority, powers, functions, duties or
responsibilities, or
(B) a significant reduction in the
level of support services, staff, secretarial and other assistance, office space
and accoutrements; or
(iv) failure by the Company to obtain the
Agreement referred to in Section
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17.1 (Successors) below; or
(v) any voluntary termination of employment by
the Executive where the Notice of Termination is delivered within 30 days of the
first anniversary of the Effective Date.
1.11 NORMAL RETIREMENT DATE. The term "Normal Retirement
Date" means the date Executive attains the age of 70.
1.12 PERSON. The term "Person" shall mean any individual,
firm, partnership, corporation or other entity, including any successor (by
merger or otherwise) of such entity, or a group of any of the foregoing acting
in concert.
1.13 TERMINATION DATE. For purposes of this Agreement,
except as otherwise provided in Section 10.2 (Death) and Section 17.1
(Successors), the term "Termination Date" means:
(i) if the Executive's employment is terminated
by the Executive's death, the date of death;
(ii) if the Executive's employment is terminated
by reason of voluntary early retirement, as agreed in writing by the Company and
the Executive, the date of such early retirement which is set forth in such
written agreement;
(iii) if the Executive's employment is terminated
for purposes of this Agreement by reason of disability pursuant to Section 12,
the earlier of thirty days after the Notice of Termination is given or one day
prior to the end of the Employment Period;
(iv) if the Executive's employment is terminated
by the Executive voluntarily (other than for Good Reason), the date the Notice
of Termination is given; and
(v) if the Executive's employment is terminated
by the Company (whether or not for Cause), or by the Executive for Good Reason,
the earlier of thirty days after the Notice of Termination is given or one day
prior to the end of the Employment Period. Notwithstanding the foregoing;
(A) If termination is for Cause
pursuant to Section 1.4(iii) of this Agreement and if the Executive has cured
the conduct constituting such Cause as described by the Company in its Notice of
Termination within such thirty day or shorter period, then the Executive's
employment under this Agreement shall continue as if the Company had not
delivered its Notice of Termination.
(B) If the Company shall give a Notice
of Termination for Cause or by reason of disability and the Executive in good
faith notifies the Company that a dispute exists
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concerning the termination within the applicable period following receipt of
notice, then the Executive may elect to continue his employment (or, if the
Executive ceased performing his duties under this Agreement at the request of
the Company at the time of delivery of Notice of Termination, resume and
continue employment) during such dispute and the Termination Date shall be
determined under this paragraph. If the Executive so elects and it is thereafter
determined that Cause or disability (as the case may be ) did exist, the
Termination Date shall be the earliest of (1) the date on which the dispute is
finally determined, either (x) by mutual written agreement of the parties or (y)
in accordance with Section 22 (Governing Law; Resolution of Disputes), (2) the
date of the Executive's death, or (3) one day prior to the end of the Employment
Period. If the Executive so elects and it is subsequently determined that Cause
or disability (as the case may be ) did not exist, then the employment of the
Executive under this Agreement shall continue after such determination as if the
Company had not delivered its Notice of Termination and there shall be no
Termination Date arising out of such Notice. In either case, this Agreement
continues, until the Termination Date, if any, as if the Company had not
delivered the Notice of Termination except that, if it is finally determined
that the Company properly terminated the Executive for the reason asserted in
the Notice of Termination, the Executive shall in no case be entitled to a
Termination Payment (as defined below) arising out of events occurring after the
Company delivered its Notice of Termination.
(C) If the Executive shall in good
faith give a Notice of Termination for Good Reason and the Company notifies the
Executive that a dispute exists concerning the termination within the applicable
period following receipt of notice, then the Executive may elect to continue his
employment during such dispute and the Termination Date shall be determined
under this paragraph. If the Executive so elects and it is subsequently
determined that Good Reason did exist, the Termination Date shall be the
earliest of (1) the date on which the dispute is finally determined, either (x)
by mutual written agreement of the parties or (y) in accordance with Section 22
(Governing Law; Resolution of Disputes), (2) the date of the Executive's death
or (3) one day prior to the end of the Employment Period. If the Executive so
elects and it is subsequently determined that Good Reason did not exist, then
the employment of the Executive under this Agreement shall continue after such
determination as if the Executive had not delivered the Notice of Termination
asserting Good Reason and there shall be no Termination Date arising out of such
Notice. In either case, this Agreement continues, until the Termination Date, if
any, as if the Company had not delivered the Notice of Termination except that,
if it is finally determined that Good Reason did exist, the Executive shall in
no case be denied the benefits described in Sections 8 and 9 (including a
Termination Payment) based on events occurring after the Executive delivered his
Notice of Termination.
(D) If an opinion is required to be
delivered pursuant to Section 9.3 hereof and such opinion shall not have been
delivered, the Termination Date shall be the earlier of the date on which such
opinion is delivered or one day prior to the end of the Employment Period.
(E) Except as provided in Paragraphs
(B) and (C) above, if the party receiving the Notice of Termination notifies the
other Party that a dispute exists concerning the
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termination within the appropriate period following receipt of notice and it is
finally determined that the reason asserted in such Notice of Termination did
not exist, then (1) if such Notice was delivered by the Executive, the Executive
will be deemed to have voluntarily terminated his employment and the Termination
Date shall be the earlier of the date thirty days after the Notice of
Termination is given or one day prior to the end of the Employment Period and
(2) if delivered by the Company, the Company will be deemed to have terminated
the Executive other than by reason of death, disability or Cause.
2. TERMINATION PRIOR TO CHANGE IN CONTROL. The Company and the
Executive shall each retain the right to terminate the employment of the
Executive at any time prior to a Change in Control of the Company. If the
Executive's employment is terminated prior to a Change in Control of the
Company, this Agreement shall be terminated and all rights and obligations of
the parties under it shall cease.
3. EMPLOYMENT PERIOD. If a Change in Control of the Company
occurs when the Executive is employed by Belden Technologies, Belden
Technologies will continue subsequently to employ the Executive during the
Employment Period, and the Executive will remain in the employ of Belden
Technologies, in accordance with and subject to the provisions of this
Agreement.
4. DUTIES. During the Employment Period, the Executive shall, in
the same capacities and positions held by the Executive at the time of the
Change in Control of the Company or in such other capacities and positions as
may be agreed to by the Company and the Executive in writing, devote the
Executive's best efforts and all of the Executive's business time, attention and
skill to the business and affairs of the Company, as such business and affairs
now exist and as they may subsequently be conducted. The services that are to be
performed by the Executive under this Agreement are to be rendered in the same
metropolitan area in which the Executive was employed at the time of such Change
in Control of the Company, or in such other place or places as shall be agreed
upon in writing by the Executive and the Company from time to time. Without the
Executive's consent, the Executive shall not be required to be absent from such
metropolitan area more than 45 days in any fiscal year of the Company.
5. COMPENSATION. During the Employment Period, the Executive
shall be compensated as follows:
5.1 The Executive shall receive, at reasonable intervals
(but not less often than monthly) and in accordance with such standard policies
as may be in effect immediately prior to the Change in Control of the Company,
an annual base salary in cash equivalent of not less than the Executive's annual
base salary as in effect immediately prior to the Change in Control of the
Company (which base salary shall, unless otherwise agreed in writing by the
Executive, include the current receipt by the Executive of any amounts that,
prior to the Change in Control of the Company, the Executive had elected to
defer, whether such compensation is deferred under Section 401(k) of the Code or
otherwise), subject to adjustment as provided below.
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5.2 The Executive shall receive fringe benefits at least
equal in value to those provided for the Executive immediately prior to the
Change in Control of the Company, and shall be reimbursed, at such intervals and
in accordance with such standard policies as may be in effect immediately prior
to the Change in Control of the Company, for any monies advanced in connection
with the Executive's employment for reasonable and necessary expenses incurred
by the Executive on behalf of the Company, Belden Technologies or their
affiliates, including travel expenses.
5.3 The Executive shall be included, to the extent
eligible thereunder (which eligibility shall not be conditioned on the
Executive's salary grade or on any other requirement that excludes persons of
comparable status to the Executive unless such exclusion was in effect for such
plan or an equivalent plan immediately prior to the Change in Control of the
Company), in any plan providing benefits for the Company's salaried employees in
general of the Company, Belden Technologies or their Affiliates, including but
not limited to the Management Incentive Plan, the Long-Term Incentive Plan,
group life insurance, hospitalization, medical, dental, savings, profit sharing
and stock bonus plans. However, in no event shall the aggregate level of
benefits under such plans in which the Executive is included be less than the
aggregate level of benefits under plans of the Company, Belden Technologies or
their Affiliates of the type referred to in this Section 5.3 in which the
Executive was participating immediately prior to the Change in Control of the
Company.
5.4 The Executive shall annually be entitled to not less
than the amount of paid vacation and not fewer than the number of paid holidays
to which the Executive was entitled annually immediately prior to the Change in
Control of the Company or such greater amount of paid vacation and number of
paid holidays as may be made available annually to other executives of the
Company, Belden Technologies or their Affiliates of comparable status and
position to the Executive.
5.5 The Executive shall be included in all plans
providing additional benefits to executives of the Company, Belden Technologies
or their Affiliates of comparable status and position to the Executive,
including deferred compensation, split-dollar life insurance, supplemental
retirement, stock option, stock appreciation, stock bonus and similar or
comparable plans. However, in no event shall the aggregate level of benefits
under such plans be less than the aggregate level of benefits under plans of the
Company, Belden Technologies or their Affiliates of the type referred to in this
Section 5.5 in which the Executive was participating immediately prior to the
Change in Control of the Company. Moreover, the obligation of the Company,
Belden Technologies or their Affiliates to include the Executive in bonus or
incentive compensation plans shall be determined by Section 5.6.
5.6 To assure that the Executive will have an opportunity
to earn incentive compensation after a Change in Control of the Company, the
Executive shall be included in a bonus plan of the Company, Belden Technologies
or their Affiliates that shall satisfy the standards described below (such plan,
the "Bonus Plan"). Bonuses under the Bonus Plan shall be payable with respect to
achieving such financial or other goals reasonably related to the business of
the Company
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as the Company shall establish (the "Goals"), all of which Goals shall be
attainable, prior to the end of the Employment Period, with approximately the
same degree of probability as the goals under the bonus plan of the Company,
Belden Technologies or their Affiliates as in effect immediately prior to the
Change in Control of the Company (the "Company Bonus Plan") and in view of the
Company's existing and projected financial and business circumstances applicable
at the time. The amount of the bonus (the "Bonus Amount") that the Executive
will be eligible to earn under the Bonus Plan shall be no less than the amount
of the Executive's maximum award provided in such Company Bonus Plan (such bonus
amount is referred to as the "Targeted Bonus"). If the Goals are not achieved
such that the entire Targeted Bonus is not payable, the Bonus Plan shall provide
for a payment of a Bonus Amount equal to a portion of the Targeted Bonus
reasonably related to that portion of the Goals that were achieved. Payment of
the Bonus Amount shall not be affected by any circumstance occurring subsequent
to the end of the Employment Period, including termination of the Executive's
employment.
6. ANNUAL COMPENSATION ADJUSTMENTS. During the Employment Period,
the Board of Directors of the Company (or an appropriate committee or officer
thereof) will consider and review, at least annually, the contributions of the
Executive to the Company, Belden Technologies or their Affiliates and in
accordance with the practice of the Company, Belden Technologies or their
Affiliates prior to the Change in Control of the Company, due consideration
shall be given to the upward adjustment of the Executive's base compensation
rate, at least annually, (i) commensurate with increases generally given to
other executives of the Company, Belden Technologies or their Affiliates of
comparable status and position to the Executive, and (ii) as the scope of the
operations of the Company, Belden Technologies or their Affiliates or the
Executive's duties expand.
7. TERMINATION FOR CAUSE OR WITHOUT GOOD REASON. If there is a
Covered Termination for Cause or if the Executive voluntarily terminates his
employment other than for Good Reason (any such terminations to be subject to
the procedures set forth in Section 13), then the Executive shall be entitled to
receive only Accrued Benefits pursuant to Section 9.1.
8. TERMINATION GIVING RISE TO A TERMINATION PAYMENT.
8.1 If there is a Covered Termination by the Executive
for Good Reason, or by the Company other than by reason of (i) death, (ii)
disability pursuant to Section 12, or (iii) Cause (any such terminations to be
subject to the procedures set forth in Section 13), then the Executive shall be
entitled to receive, and the Company shall promptly pay, Accrued Benefits
pursuant to Section 9.1 and, in lieu of further base salary for periods
following the Termination Date, as liquidated damages and additional severance
pay the Termination Payment pursuant to Section 9.2.
8.2 If there is Covered Termination and the Executive is
entitled to Accrued Benefits and the Termination Payment, then the Executive
shall be entitled to the following additional benefits:
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(i) The Executive shall receive, at the expense
of the Company, outplacement services, on an individualized basis at a level of
service commensurate with the Executive's status with the Company, Belden
Technologies or their Affiliates immediately prior to the Change in Control of
the Company (or, if higher, immediately prior to the termination of the
Executive's employment), provided by a nationally recognized executive placement
firm selected by the Company.
(ii) For two years after the date of Termination,
the Executive shall continue to be covered, at the expense of the Company, by
the same or equivalent life insurance, hospitalization, medical and dental
coverage as was required under this Agreement with respect to the Executive
immediately prior to the date the Notice of Termination is given.
9. PAYMENTS UPON TERMINATION.
9.1 ACCRUED BENEFITS. The Executive's "Accrued Benefits"
shall include the following amounts, payable as described in this Agreement:
(i) all base salary for the time period ending
with the Termination Date;
(ii) reimbursement for any monies advanced in
connection with the Executive's employment for reasonable and necessary expenses
incurred by the Executive on behalf of the Company, Belden Technologies or their
Affiliates for the time period ending with the Termination Date;
(iii) any other cash earned through the
Termination Date and deferred at the election of the Executive or pursuant to
any deferred compensation plan then in effect;
(iv) a lump sum payment of the bonus or incentive
compensation otherwise payable to the Executive with respect to the year in
which termination occurs under all bonus or incentive compensation plans in
which the Executive is a participant; and
(v) all other payments and benefits to which the
Executive (or in the event of the Executive's death, the Executive's surviving
spouse or other beneficiary) may be entitled as compensatory fringe benefits or
under the terms of any benefit plan of the Company, Belden Technologies or their
Affiliates, and severance payments under the Company's severance policies and
practices as in effect immediately prior to the Change in Control of the
Company. Payment of Accrued Benefits shall be made promptly in accordance with
the Company's prevailing practice with respect to Subsections (i) and (ii) or,
with respect to Subsections (iii), (iv) and (v), pursuant to the terms of the
benefit plan or practice establishing such benefits.
9.2 TERMINATION PAYMENT. The Termination Payment shall be
an amount equal to (A) the Executive's annual base salary, as in effect
immediately prior to the Change in Control of
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the Company, as adjusted upward, from time to time, pursuant to Section 6, plus
(B) the amount of the highest annual bonus award (determined on an annualized
basis for any bonus award paid for a period of less than one year) paid to the
Executive with respect to the two complete fiscal years preceding the
Termination Date (the aggregate amount set forth in (A) and (B) hereof shall be
referred to as "Annual Cash Compensation"), times (C) a factor of 2. The
Termination Payment shall be paid in cash and shall not be reduced by any
present value or similar factor, and the Executive shall not be required to
mitigate the amount of the Termination Payment by securing other employment or
otherwise, nor will such Termination Payment be reduced by reason of the
Executive's securing other employment or for any other reason. The Termination
Payment shall be in addition to any other severance payments to which the
Executive is entitled under the Company's severance policies and practices as in
effect immediately prior to the Change in Control of the Company.
9.3 TAXES.
(i) Gross-Up. Whether or not the Executive
becomes entitled to the Termination Payment, if any payment or benefit received
or to be received by the Executive in connection with a Change in Control or the
termination of the Executive's employment, including those provided under
Section 9.1, (whether pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with the Company, any Person whose actions result in a
Change in Control or any Person affiliated with the Company or such Person) (all
such payments and benefits, including the Termination Payment, being hereinafter
called "Total Payments") will be subject (in whole or part) to the Excise Tax,
then the Company shall pay to the Executive an additional amount (the "Gross-Up
Payment") such that the net amount retained by the Executive, after deduction of
any Excise Tax on the Total Payments and any federal, state and local income and
employment taxes and Excise Tax upon the Gross-Up Payment, shall be equal to the
Total Payments. (Excise Tax shall mean any excise tax imposed under Section 4999
of the Code.) For purposes of determining the amount of the Gross-Up Payment,
the Executive shall be deemed to pay federal income taxes at the highest
marginal rate of federal income taxation in the calendar year in which the
Gross-Up Payment is to be made and state and local income taxes at the highest
marginal rate of taxation in the state and locality of the Executive's residence
on the Date of Termination (or if there is no Date of Termination, then the date
on which the Gross-Up Payment is calculated for purposes of this Section 9.3),
net of the maximum reduction in federal income tax which could be obtained from
deduction of such state and local taxes.
(ii) Tax Counsel. For purposes of determining
whether any of the Total Payments will be subject to the Excise Tax and the
amount of such Excise Tax, (a) all of the Total Payments shall be treated as
"parachute payments" within the meaning of section 280G(b)(2) of the Code,
unless in the opinion of tax counsel ("Tax Counsel") reasonably acceptable to
the Executive and selected by the accounting firm which was, immediately prior
to the Change in Control, the Company's independent auditor (the "Auditor"),
such other payments or benefits (in whole or in part) do not constitute
parachute payments, including by reason of section 280G(b)(4)(A) of the Code,
(b) all "excess parachute payments" within the meaning of section 280G(b)(l) of
the Code
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shall be treated as subject to the Excise Tax unless, in the opinion of Tax
Counsel, such excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered, within the meaning of
section 280G(b)(4)(B) of the Code, in excess of the Base Amount allocable to
such reasonable compensation, or are otherwise not subject to the Excise Tax,
and (c) the value of any non-cash benefits or any deferred payment or benefit
shall be determined by the Auditor in accordance with the principles of sections
280G(d)(3) and (4) of the Code. Prior to the payment date set forth in Section
9.3(iii) below, the Company shall provide the Executive with its calculation of
the amounts referred to in this Section 9.2(ii) and such supporting materials as
are reasonably necessary for the Executive to evaluate the Company's
calculations. If the Executive disputes the Company's calculations (in whole or
in part), the reasonable opinion of Tax Counsel with respect to the matter in
dispute shall prevail.
(iii) Repayment. In the event that (a) amounts are
paid to the Executive pursuant to subsection (i) of this Section 9.2, and (b)
the Excise Tax is finally determined to be less than the amount taken into
account hereunder in calculating the Gross-Up Payment, the Executive shall repay
to the Company, within five (5) business days following the time that the amount
of such reduction in Excise Tax is finally determined, the portion of the
Gross-Up Payment attributable to such reduction (plus that portion of the
Gross-Up Payment attributable to the Excise Tax and federal, state and local
income and employment taxes imposed on the Gross-Up Payment being repaid by the
Executive), to the extent that such repayment results in (i) no portion of the
Total Payments being subject to the Excise Tax and (b) a dollar-for-dollar
reduction in the Executive's taxable income and wages for purposes of federal,
state and local income and employment taxes plus interest on the amount of such
repayment at the rate provided in section 1274(b)(2)(B)of the Code. In the event
that the Excise Tax is determined to exceed the amount taken into account
hereunder at the time of the termination of the Executive's employment
(including by reason of any payment the existence or amount of which cannot be
determined at the time of the Gross-Up Payment), the Company shall make an
additional Gross-Up Payment in respect of such excess and in respect of any
portion of the Excise Tax with respect to which the Company had not previously
made a Gross-Up Payment (plus any interest, penalties or additions payable by
the Executive with respect to such excess and such portion) within five (5)
business days following the time that the amount of such excess is finally
determined.
9.4 DATE OF PAYMENTS. The payments provided in Sections
9.2 and 9.3 shall be made not later than the fifth day following the Date of
Termination; provided, however, that if the amounts of such payments, and the
limitations on such payments set forth in Sections 9.2 or 9.3 above, cannot be
finally determined on or before such day, the Company shall pay to the Executive
on such day an estimate, as determined in good faith by the Executive or, in the
case of payments under Section 9.3, in accordance with Section 9.3 above, of the
minimum amount of such payments to which the Executive is clearly entitled and
shall pay the remainder of such payments (together with interest on the unpaid
remainder [or on all such payments to the extent the Company fails to make such
payments when due] at the rate provided in section 1274(b)(2)(B) of the Code) as
soon as the amount thereof can be determined but in no event later than the
thirtieth (30th) day after the Date
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of Termination. In the event that the amount of the estimated payments exceeds
the amount subsequently determined to have been due, such excess shall
constitute a loan by the Company to the Executive, payable on the fifth (5th)
business day after demand by the Company (together with interest at the rate
provided in section 1274(b)(2)(B) of the Code). At the time that payments are
made under this Agreement, the Company shall provide the Executive with a
written statement setting forth the manner in which such payments were
calculated and the basis for such calculations including, without limitation,
any opinions or other advice the Company has received from Tax Counsel, the
Auditor or other advisors or consultants (and any such opinions or advice which
are in writing shall be attached to the statement).
10. DEATH.
10.1 Except as provided in Section 10.2, in the event of a
Covered Termination due to the Executive's death, the Executive's estate, heirs
and beneficiaries shall receive all the Executive's Accrued Benefits through the
Termination Date.
10.2 In the event the Executive dies after a Notice of
Termination is given (i) by the Company or (ii) by the Executive for Good
Reason, the Executive's estate, heirs and beneficiaries shall be entitled to the
benefits described in Section 10.1 hereof and, subject to the provisions of this
Agreement, to such Termination Payment as the Executive would have been entitled
to had the Executive lived. For purposes of this Subsection 10.2, the
Termination Date shall be the earlier of thirty days following the giving of the
Notice of Termination, subject to extension pursuant to Section 1.14, or one day
prior to the end of the Employment Period.
11. RETIREMENT. If, during the Employment Period, the Executive
and the Company shall execute an agreement providing for the early retirement of
the Executive from the Company, or the Executive shall otherwise give notice
that he is voluntarily choosing to retire early from the Company, the Executive
shall receive Accrued Benefits through the Termination Date. However, if the
Executive's employment is terminated by the Executive for Good Reason or by the
Company other than by reason of death, disability or Cause and the Executive
also, in connection with such termination, elects voluntary early retirement,
the Executive shall also be entitled to receive a Termination Payment.
12. TERMINATION FOR DISABILITY. If, during the Employment Period,
as a result of the Executive's disability due to physical or mental illness or
injury (regardless of whether such illness or injury is job-related), the
Executive shall have been absent from the Executive's duties under this
Agreement on a full-time basis for a period of six consecutive months and,
within thirty days after the Company notifies the Executive in writing that it
intends to terminate the Executive's employment (which notice shall not
constitute the Notice of Termination contemplated below), the Executive shall
not have returned to the performance of the Executive's duties under this
Agreement on a full-time basis, the Company may terminate the Executive's
employment for purposes of this Agreement pursuant to a Notice of Termination
given in accordance with Section 13. If the
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Executive's employment is terminated on account of the Executive's disability in
accordance with this Section, the Executive shall receive Accrued Benefits in
accordance with Section 9.1 hereof and shall remain eligible for all benefits
provided by any long term disability programs of the Company, Belden
Technologies or its Affiliates in effect at the time of such termination.
13. TERMINATION NOTICE AND PROCEDURE. Any Covered Termination by
the Company or the Executive shall be communicated by written Notice of
Termination to the Executive, if such Notice is given by the Company, and to the
Company, if such Notice is given by the Executive, all in accordance with the
following procedures and those set forth in Section 23:
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13.1 If such termination is for disability, Cause or Good
Reason, the Notice of Termination shall indicate in reasonable detail the facts
and circumstances alleged to provide a basis for such termination.
13.2 Any Notice of Termination by the Company shall have
been approved, prior to the giving thereof to the Executive, by a resolution
duly adopted by a majority of the directors of the Company (or any successor
corporation) then in office.
13.3 If the Notice is given by the Executive for Good
Reason, the Executive may cease performing his duties under this Agreement on or
after the date fifteen days after the delivery of Notice of Termination and
shall in any event cease employment on the Termination Date. If the Notice is
given by the Company, then the Executive may cease performing his duties under
this Agreement on the date of receipt of the Notice of Termination, subject to
the Executive's rights under this Agreement.
13.4 The Executive shall have thirty days, or such longer
period as the Company may determine to be appropriate, to cure any conduct or
act, if curable, alleged to provide grounds for termination of the Executive's
employment for Cause under this Agreement pursuant to Subsection 1.4(iii).
13.5 The recipient of any Notice of Termination shall
personally deliver or mail in accordance with Section 23 written notice of any
dispute relating to such Notice of Termination to the party giving such Notice
within fifteen days after receipt thereof. However, if the Executive's conduct
or act alleged to provide grounds for termination by the Company for Cause is
curable, then such period shall be thirty days. After the expiration of such
period, the contents of the Notice of Termination shall become final and not
subject to dispute.
14. FURTHER OBLIGATIONS OF THE EXECUTIVE. The Executive agrees
that, in the event of any Covered Termination where the Executive is entitled to
and receives Accrued Benefits and the Termination Payment, the Executive shall
not, for a period of one year after the Termination Date, without the prior
written approval of the Company's Board of Directors, participate in the
management of, be employed by or own any business enterprise at a location
within the United States that engages in substantial competition with the
Company or its subsidiaries, where such enterprise's revenues from any
competitive activities amount to 40% or more of such enterprise's net revenues
and sales for its most recently completed fiscal year. However, nothing in this
Section 14 shall prohibit the Executive from owning stock or other securities of
a competitor amounting to less than five percent of the outstanding capital
stock of such competitor. The Executive also shall perform his obligations under
the "Secrecy Agreement" and the "Invention Assignment and Confidentiality
Agreement" entered into by the Company and the Executive.
15. EXPENSES AND INTEREST. If, after a Change in Control of the
Company, (i) a dispute
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arises with respect to the enforcement of the Executive's rights under this
Agreement or (ii) any legal or arbitration proceeding shall be brought to
enforce or interpret any provision contained in this Agreement or to recover
damages for breach, in either case so long as the Executive is not acting in bad
faith, the Executive shall recover from the Company any reasonable attorneys'
fees and necessary costs and disbursements incurred as a result of such dispute,
legal or arbitration proceeding ("Expenses"), and prejudgment interest on any
money judgment or arbitration award obtained by the Executive calculated at the
rate of interest announced by Bank of America, St. Louis, Missouri from time to
time as its prime or base lending rate from the date that payments to him should
have been made under this Agreement. Within ten days after the Executive's
written request, the Company shall pay to the Executive, or such other person or
entity as the Executive may designate in writing to the Company, the Executive's
reasonable Expenses in advance of the final disposition or conclusion of any
such dispute, legal or arbitration proceeding.
16. PAYMENT OBLIGATIONS ABSOLUTE. The Company's obligation during
and after the Employment Period to pay the Executive the amounts and to make the
benefit and other arrangements provided in this Agreement shall be absolute and
unconditional and shall not be affected by any circumstances, including, without
limitation, any setoff, counterclaim, recoupment, defense or other right which
the Company may have against him or anyone else. Except as provided in Section
15 of this Agreement, all amounts payable by the Company hereunder shall be paid
without notice or demand. Each payment made under this Agreement by the Company
shall be final, and the Company will not seek to recover any part of such
payment from the Executive, or from whoever may be entitled to such payment, for
any reason.
17. SUCCESSORS.
17.1 If the Company sells, assigns or transfers all or
substantially all of its business and assets to any Person or if the Company
merges into or consolidates or otherwise combines (where the Company does not
survive such combination) with any Person (any such event, a "Sale of
Business"), then the Company shall assign all of its right, title and interest
in this Agreement as of the date of such event to such Person, and the Company
shall cause such Person, by written agreement in form and substance reasonably
satisfactory to the Executive, to expressly assume and agree to perform from and
after the date of such assignment all of the terms, conditions and provisions
imposed by this Agreement upon the Company. Failure of the Company to obtain
such agreement prior to the effective date of such Sale of Business shall be a
breach of this Agreement constituting "Good Reason" for termination hereunder,
except that for purposes of implementing the foregoing the date upon which such
Sale of Business becomes effective shall be deemed the Termination Date. In case
of such assignment by the Company and of assumption and agreement by such
Person, as used in this Agreement, "Company" shall subsequently mean such Person
which executes and delivers the agreement provided for in this Section 17 or
that otherwise becomes bound by all the terms and provisions of this Agreement
by operation of law, and this Agreement shall inure to the benefit of, and be
enforceable by, such Person. The Executive shall, in his discretion, be entitled
to proceed against any of such Persons, any Person which theretofore was such a
successor
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to the Company and the Company (as so defined) in any action to enforce any
rights of the Executive under this Agreement. Except as provided in this
Subsection, this Agreement shall not be assignable by the Company. This
Agreement shall not be terminated by the voluntary or involuntary dissolution of
the Company.
17.2 This Agreement and all rights of the Executive shall
inure to the benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, heirs and beneficiaries. All amounts
payable to the Executive under Sections 7, 8, 9, 10, 11, 12 and 15 if the
Executive had lived shall be paid, in the event of the Executive's death, to the
Executive's estate, heirs and representatives. However, the foregoing shall not
be construed to modify any terms of any benefit plan of the Company, as such
terms are in effect on the date of the Change in Control of the Company, that
expressly govern benefits under such plan in the event of the Executive's death.
18. SEVERABILITY. The provisions of this Agreement shall be
regarded as divisible, and if any provision or any part is declared invalid or
unenforceable by a court of competent jurisdiction, the validity and
enforceability of the remainder of such provisions or parts and the
applicability thereof shall not be so affected.
19. AMENDMENT. This Agreement may not be amended or modified at
any time except by written instrument executed by the Company and the Executive.
20. WITHHOLDING. The Company shall be entitled to withhold from
amounts to be paid to the Executive under this Agreement any federal, state or
local withholding or other taxes or charges which it is from time to time
required to withhold. However, the amount so withheld shall not exceed the
minimum amount required to be withheld by law. The Company shall be entitled to
rely on an opinion of nationally recognized tax counsel if any question as to
the amount or requirement of any such withholding shall arise.
21. CERTAIN RULES OF CONSTRUCTION. No Party shall be considered as
being responsible for the drafting of this Agreement for the purpose of applying
any rule construing ambiguities against the drafter or otherwise. No draft of
this Agreement shall be taken into account in construing this Agreement. Any
provision of this Agreement which requires an agreement in writing shall be
deemed to require that the writing in question be signed by the Executive and an
authorized representative of the Company. This Agreement supersedes the Change
of Control Employment Agreement previously entered into by the Parties.
22. GOVERNING LAW; RESOLUTION OF DISPUTES. This Agreement and the
rights and obligations under it shall be governed by and construed in accordance
with the laws of the State of Delaware. Any dispute arising out of this
Agreement shall, at the Executive's election, be determined by arbitration under
the rules of the American Arbitration Association then in effect (in which case
both parties shall be bound by the arbitration award) or by litigation. Whether
the dispute is to be settled by arbitration or litigation, the venue for the
arbitration or litigation shall be St. Louis,
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Missouri or, at the Executive's election, if the Executive is no longer residing
or working in the St. Louis, Missouri metropolitan area, in the judicial
district encompassing the city in which the Executive resides. However, if the
Executive is not then residing in the United States, the election of the
Executive with respect to such venue shall be either St. Louis, Missouri or in
the judicial district encompassing that city of the United States among the
thirty cities having the largest population (as determined by the most recent
United States Census data available at the Termination Date) that is closest to
the Executive's residence. The Parties consent to personal jurisdiction in each
trial court in the selected venue having subject matter jurisdiction regardless
of their residence or situs, and each party irrevocably consents to service of
process in the manner provided in Section 23.
23. NOTICE. Notices given pursuant to this Agreement shall be in
writing and, except as otherwise provided by Section 13.4, shall be deemed given
when actually received by the Executive or actually received by the Company's
Secretary or any officer of the Company other than the Executive. If mailed,
such notices shall be mailed by United States registered or certified mail,
return receipt requested, addressee only, postage prepaid, if to the Company, to
Xxxxxx Inc., Attention: Secretary (or President, if the Executive is the
Secretary), 0000 Xxxxxxx Xxxx., Xxxxx 000, Xx. Xxxxx, Xxxxxxxx 00000, or if to
the Executive, at the address set forth below the Executive's signature to this
Agreement, or to such other address as the Party to be notified shall have given
to the other Party in writing.
24. NO WAIVER. No waiver by either Party at any time of any breach
by the other Party of, or compliance with, any condition or provision of this
Agreement to be performed by the other Party shall be deemed a waiver of similar
or dissimilar provisions or conditions at the same time or any prior or
subsequent time.
25. HEADINGS. The headings are for reference only and shall not
affect the meaning or interpretation of any provision of this Agreement.
End of Page
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
day and year first written above.
XXXXXX INC.
By: /s/X. Xxxxx Xxxxxxxxxx
----------------------------------------
Attest: /s/Xxxxx X. Xxxxxxxxxx
------------------------------------
EXECUTIVE
/s/Xxxxxxx X. Xxxxxxx
---------------------------------------------
Xxxxxxx X. Xxxxxxx
0 Xxxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
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