EXHIBIT 10(14)
EMPLOYMENT AGREEMENT
This AGREEMENT dated as of the 17th day of October, 1996, between Superior
TeleCom Inc., a Delaware corporation (the "Company"), and Xxxxxx X. Xxxxxx (the
"Executive").
The Board of Directors of the Company (the "Board") recognizes that the
Executive's contribution to the future growth and success of the Company is
expected to be substantial. The Executive is willing to commit himself to serve
the Company, on the terms and conditions herein provided.
Moreover, 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 dedication
of the Executive, notwithstanding the possibility, threat or occurrence of a
Change of Control (as defined below) of the Company. 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 which ensure that the compensation and
benefits expectations of the Executive will be satisfied and which are
competitive with those of other corporations.
Accordingly, in consideration of the premises and the respective covenants
and agreements of the parties herein contained, and intending to be legally
bound hereby, the parties hereto agree as follows:
1. EMPLOYMENT. The Company hereby agrees to employ the Executive, and
the Executive hereby agrees to serve the Company, on the terms and conditions
set forth herein.
2. TERM.
(a) The employment of the Executive by the Company hereunder will
commence upon completion of the initial public offering (the "IPO") of the
Company's Common Stock (the "Commencement Date") and will continue in effect (i)
until either party gives notice to the other, as provided in Section 8(d), that
it does not wish to continue the Executive's employment hereunder or (ii) unless
terminated as provided in Sections 8(a), (b), (c) or (d). The "Term" shall be
the period commencing on the Commencement Date and ending on the earlier to
occur of the events specified in clause (i) or (ii) of the preceding sentence.
(b) Notwithstanding paragraph (a) above or the provisions of Section
8(d), the Company hereby agrees to continue the Executive in its employ, and the
Executive hereby agrees to remain in the employ of the Company subject to the
terms and conditions of this Agreement, during any Transition Period. For
purposes of this Agreement, the Term shall, unless otherwise specified, include
any Transition Period.
3. CERTAIN DEFINITIONS. (a) A "COC Transition Date" shall mean a date
during the Term (as defined in Section 2) on which a Change of Control (as
defined in Section 4) occurs. Anything in this Agreement to the contrary
notwithstanding, if a Change of Control occurs and if the Executive's employment
with the Company is terminated prior to the date on which the Change of Control
occurs, and if it is reasonably demonstrated by the Executive that such
termination of employment (i) was at the request of a third party who has taken
steps reasonably calculated to effect a Change of Control or (ii) otherwise
arose in connection with or anticipation of a Change of Control, then for all
purposes of this Agreement the "COC Transition Date" shall mean the date
immediately prior to the date of such termination of employment.
(b) A "Transition Period" is a period commencing on a COC Transition
Date and ending on the third anniversary of such date. If a subsequent COC
Transition Date is determined to occur during a Transition Period, then such
Transition Period shall continue until the third anniversary of such subsequent
COC Transition Date. If a subsequent COC Transition Date occurs after the
expiration of a Transition Period, a new Transition Period will commence on such
date and end on the third anniversary thereof.
(c) Notwithstanding anything to the contrary in this Agreement, for
purposes of calculating payments under Section 13(f), "Applicable Bonus" means
the higher of (i) the Highest Recent Bonus (as defined in Section 13(b)(i)) and
(ii) the Annual Bonus (as defined in Section 6(b)) paid or payable, including
any bonus or portion thereof which has been earned but deferred (and annualized
for any fiscal year consisting of less than twelve full months or during which
the Executive was employed for less than twelve full months), for the most
recently completed fiscal year during the Term, if any (the "Recent Annual
Bonus") (such higher amount being referred to as the "Highest Annual Bonus").
For purposes of calculating payments under all sections of this Agreement other
than Section 13(f), Applicable Bonus means the Recent Annual Bonus.
(d) A "Stock Option" is an option to purchase a number of shares of
stock of the Company at a fixed exercise price granted to the Executive by the
Company, whether or not exercisable.
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4. CHANGE OF CONTROL. For the purpose of this Agreement, a "Change of
Control" shall mean the occurance of any of the following events at a time when
or as a result of which The Alpine Group Inc. ("Alpine") owns less than 20% of
the Outstanding Company Voting Securities (as defined below):
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")), other than Alpine (a "Person") of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of voting securities of the Company where such acquisition causes such Person to
own more than 20% or more of 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 be
deemed to result in a Change of Control: (i) any acquisition directly from the
Company, (ii) any acquisition by the Company, (iii) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any corporation controlled by the Company or (iv) any acquisition by any
corporation pursuant to a transaction that complies with clauses (i), (ii) and
(iii) of subsection (c) below; and provided, further, that if any Person's
beneficial ownership of the Outstanding Company Voting Securities reaches or
exceeds more than 20% as a result of a transaction described in clause (i) or
(ii) above, and such Person subsequently acquires beneficial ownership of
additional voting securities of the Company, such subsequent acquisition shall
be treated as an acquisition that causes such Person to own more than 20% or
more of the Outstanding Company Voting Securities; or
(b) 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
(c) The consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the assets of the
Company or the acquisition of assets of another corporation ("Business
Combination"); excluding, however, such a Business Combination pursuant to which
(i)
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all or substantially all of the individuals and entities who were the beneficial
owners of the 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 that 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 Voting
Securities, (ii) no Person (excluding any employee benefit plan (or related
trust) of the Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, more than 20% or more
of, respectively, the then outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting power of the
then outstanding voting securities of such corporation except to the extent that
such ownership existed prior to the Business Combination and (iii) 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
(d) approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
5. POSITION AND DUTIES.
(a) The Executive shall serve as President, Chief Executive Officer
and Chairman of the Board of Directors of the Company with the responsibility
and authority to manage and supervise the Company's operations in the ordinary
course of its business and shall have such responsibilities, duties and
authority as are generally associated with each such position and as may from
time to time be assigned to the Executive by the Board that are consistent with
such responsibilities, duties and authority, provided, that the Executive shall
at all times be senior to every other employee and director of the Company and
its affiliates. The Executive's services shall be performed primarily at the
Company's headquarters office in the New York City metropolitan area.
(b) The parties acknowledge that the Executive is the Chief Executive
Officer and Chairman of the Board of Directors of Alpine and that he will
allocate his time and efforts between the Company and Alpine as he sees fit in
his good faith business judgment. Subject to the foregoing, during the Term,
and excluding any periods of vacation and sick leave
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to which the Executive is entitled, the Executive agrees to devote reasonable
attention and time during normal business hours to the business and affairs of
the Company and, to the extent necessary to discharge the responsibilities
assigned to the Executive hereunder, to use the Executive's reasonable best
efforts to perform faithfully and efficiently such responsibilities. During the
Term it shall not be a violation of this Agreement for the Executive to (A)
serve on corporate, civic or charitable boards or committees, (B) deliver
lectures, fulfill speaking engagements or teach at educational institutions, (C)
manage personal investments, and (D) serve as Chief Executive Officer and
Chairman of the Board of Directors of Alpine (and in any other positions with
Alpine and its affiliates as Executive deems appropriate) so long as such
activities do not significantly interfere with the performance of the
Executive's responsibilities as an employee of the Company in accordance with
this Agreement and are not directly competitive with the operating businesses of
the Company's subsidiaries. The Company shall continue to nominate the
Executive as a director of the Company during the term hereof consistent with
the Company's By-Laws.
6. COMPENSATION AND RELATED MATTERS.
(a) SALARY. (i) During the Term, the Company shall pay to the
Executive an annual base salary (the "Annual Base Salary") at a rate not less
than $175,000 or such higher rate as may from time to time be determined by the
Board, such salary to be paid in substantially equal installments in accordance
with the normal payroll practice of the Company. The Executive's salary will be
reviewed at least annually and shall be increased pursuant to such review by a
percentage no less than the percentage increase in the consumer price index, as
published by the Bureau of Labor Statistics of the U.S. Department of Labor, for
the calendar year immediately preceding such review (the "CPI Percentage"). Any
increase in Annual Base Salary shall not serve to limit or reduce any other
obligation to the Executive under this Agreement. Annual Base Salary shall not
be reduced after any such increase and the term Annual Base Salary as utilized
in this Agreement shall refer to Annual Base Salary as so increased.
(b) ANNUAL BONUS. In addition to the Annual Base Salary, the Company
will pay the Executive an annual cash bonus (the "Annual Bonus") within 90 days
following the last day of the Company's fiscal year for which the Annual Bonus
is awarded in an amount, if any, determined in the discretion of the Company's
Board of Directors.
(c) STOCK OPTIONS. On the Commencement Date, the Company shall grant
the Executive Stock Options (the "Initial options") to purchase 250,000 shares
of common stock of the Company (the "Company Stock") having exercise prices per
share equal to IPO price per share to the public becoming exercisable
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in three equal installments on each of the first, second and third anniversaries
of the Commencement Date. Such Initial Options are intended to be "incentive
stock options" and are granted under the Company's 1996 Stock Option Plan and
are evidenced by the Company's standard stock option agreement.
In the event of termination of employment (i) by the Executive other
than because of death, disability or for Good Reason, prior to the third
anniversary of the Commencement Date or (ii) by the Company for Cause, all Stock
Options (including, without limitation, the Initial Options) not theretofore
exercisable will lapse and be forfeited. In the event the Executive's
employment is terminated for any other reason prior to the third anniversary of
the Commencement Date all Stock options (including, without limitation, the
Initial Options) not theretofore exercisable will thereupon become exercisable.
Except as provided in Section 11 each Stock Option will expire 10 years after it
is granted.
(d) EXPENSES. During the term of the Executive's employment
hereunder, the Executive shall be entitled to receive prompt reimbursement for
all reasonable and customary expenses incurred by the Executive in performing
services hereunder, including (i) all expenses of travel and living expenses
while away from home or business or at the request of and in the service of the
Company and (ii) if and to the extent not provided to the Executive by Alpine,
an automobile and a driver, plus all expenses of maintaining and operating the
automobile, provided that all such expenses are accounted for in accordance with
the policies and procedures established by the Company, or a monthly cash
allowance in lieu thereof.
(e) WELFARE BENEFITS. During the Term, the Executive and/or the
Executive's family, as the case may be, shall, except to the extent Alpine
provides comparable benefits to the Executive, be eligible for participation in
and shall receive all benefits under welfare benefit plans, practices, policies
and programs provided by the Company and its affiliated companies (including,
without limitation, medical, prescription, dental, disability, salary
continuance, employee life, group life, accidental death and travel accident
insurance plans and programs) to the extent applicable generally to the most
senior executives of the Company and its affiliated companies, but in no event
shall such plans, practices, policies and programs provide the Executive with
benefits which are materially less favorable, in the aggregate, than the most
favorable of such plans, practices, policies and programs in effect for the
Executive as of the date hereof or, if more favorable to the Executive, those
provided generally at any time to any other executives of the Company and its
affiliated companies. As used in this Agreement, the term "affiliated
companies" shall include any company controlled by, controlling or under common
control with the Company.
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(f) INCENTIVE, SAVINGS AND RETIREMENT PLANS. During the Term, the
Executive shall be entitled to participate in all incentive, savings and
retirement plans, practices, policies and programs applicable generally to the
most senior executives of the Company and its affiliated companies.
(g) FRINGE BENEFITS. During the Term, except to the extent Alpine
provides comparable benefits to the Executive:
(i) The Company shall reimburse the Executive for the reasonable
expenses incurred by the Executive in undergoing an annual physical examination
by a licensed physician.
(ii) The Company shall reimburse the Executive for membership fees,
dues and special assessments incurred by the Executive in connection with his
membership in a country club.
(iii) The Company shall reimburse the Executive for the reasonable
expenses incurred by the Executive in connection with obtaining professional tax
and financial planning advice.
(h) VACATION. During the Term, the Executive shall be entitled to
paid vacation of four weeks per year, any unused portion of which shall be
forfeited as of the end of each year.
(i) DISABILITY OFFSET. Payments made to the Executive pursuant to
this Section 6 shall be reduced by the sum of the amounts, if any, payable to
the Executive at or prior to the time of any such payment under disability
benefit plans of the Company or under the Social Security disability insurance
program, and which amounts were not previously applied to reduce any such
payments.
7. OFFICES. Subject to Section 5, the Executive agrees to serve without
additional compensation, if elected or appointed thereto, as a director of the
Company and any of its subsidiaries and in one or more executive offices of any
of the Company's subsidiaries, provided that the Executive is indemnified for
serving in any and all such capacities.
8. TERMINATION. The Executive's employment hereunder may be terminated
only under the following circumstances:
(a) DEATH OR DISABILITY. The Executive's employment shall terminate
automatically upon the Executive's death during the Term. If the Company
determines in good faith that Disability of the Executive has occurred during
the Term (pursuant to the definition of Disability set forth below), it may give
to the Executive written notice in accordance with Section 18 of this Agreement
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 (the "Disability Effective
Date"), provided that, within the 30 days after such receipt,
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the Executive shall not have returned to full-time performance of the
Executive's duties. For purposes of this Agreement, "Disability" shall mean the
absence of the Executive from the Executive's duties with the Company on a full-
time basis for 180 consecutive business days (or such shorter period as will
suffice for the Executive to qualify for full disability benefits under the
applicable disability insurance policy or policies of the Company) as a result
of incapacity due to mental or physical illness which is determined to be total
and permanent by a physician selected by the Company or its insurers and
reasonably acceptable to the Executive or the Executive's legal representative.
(b) CAUSE. The Company may terminate the Executive's employment
during the Term for Cause. For purposes of this Agreement, "Cause" shall mean:
(i) the willful and continued failure of the Executive to perform
substantially the Executive's duties pursuant to this Agreement (other than
any such failure resulting from incapacity due to physical or mental
illness), after a written demand for substantial performance is delivered
to the Executive by the Board which specifically identifies the manner in
which the Board believes that the Executive has not substantially performed
the Executive's duties, or
(ii) the willful engaging by the Executive in illegal conduct or
gross misconduct which is materially and demonstrably injurious to the
Company.
For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or based upon the advice of counsel for the Company shall
be conclusively presumed to be done, or omitted to be done, by the Executive in
good faith and in the best interests of the Company. The cessation of
employment of the Executive shall not be deemed to be for Cause unless and until
there shall have been delivered to the Executive a copy of a resolution duly
adopted by the affirmative vote of not less than three-quarters of the entire
membership of the Board at a meeting of the Board called and held for such
purpose (after reasonable notice is provided to the Executive and the Executive
is given an opportunity, together with counsel, to be heard before the Board),
finding that, in the good faith opinion of the Board, the Executive is guilty of
the conduct described in subparagraph (i) or (ii) above, and specifying the
particulars thereof in detail.
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(c) TERMINATION BY THE EXECUTIVE FOR GOOD REASON. The Executive's
employment may be terminated by the Executive for Good Reason. For purposes of
this Agreement, "Good Reason" shall mean:
a. the assignment to the Executive of any duties inconsistent with
the Executive's position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as the President,
Chairman of the Board and Chief Executive Officer of the Company as
contemplated by Section 5(a) of this Agreement, or any other action by the
Company which results in a diminution in such position, authority, duties
or responsibilities, excluding for this purpose isolated, insubstantial and
inadvertent action(s) not taken in bad faith and remedied by the Company
promptly after receipt of notice thereof given by the Executive;
b. any failure by the Company to comply with any of the provisions
of Section 6 or Section 13(a) or (b) of this Agreement, other than
isolated, insubstantial and inadvertent failure(s) not occurring in bad
faith and remedied by the Company promptly after receipt of notice thereof
given by the Executive;
c. the Company's requiring the Executive to be based at any office
or location other than as provided in Section 5(a) hereof;
d. any termination by the Company of the Executive's employment
otherwise than as expressly permitted by this Agreement; or
e. any failure by the Company to comply with and satisfy Section
17(a) of this Agreement.
For purposes of this Section 8(c), any good faith determination of "Good Reason"
made by the Executive shall be conclusive.
(d) TERMINATION ELECTION. Subject to the provisions of Section 2(b):
(i) A notice to Executive by the Company will constitute an election
by the Company to terminate the Executive's employment pursuant to Section 2(a)
60 days following the date of delivery of the notice;
(ii) A notice to the Company by the Executive will constitute an
election by the Executive to terminate Executive's employment pursuant to
Section 2(a) 90 days following the date of delivery of the notice;
(iii) In no event, however, shall the Term of the Executive's
employment hereunder extend beyond the end of the
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month in which the Executive's sixty-fifth (65th) birthday occurs.
(e) NOTICE OF TERMINATION. Any termination of the Executive's
employment by the Company or by the Executive (other than termination by reason
of the Executive's death) shall be communicated by written Notice of Termination
to the other party hereto in accordance with Section 18 hereof. For purposes of
this Agreement, a "Notice of Termination" means a written notice which (i)
indicates the specific termination provision in this Agreement relied upon (ii)
to the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated and (iii) if the Date of Termination
(as defined below) is other than the date of receipt of such notice, specifies
the termination date. The good faith failure by the Executive or the Company to
set forth in the Notice of Termination any fact or circumstance which
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 the Executive's or the Company's rights hereunder.
(f) DATE OF TERMINATION. "Date of Termination" shall mean (i) if the
Executive's employment is terminated by reason of death or Disability, the date
of death of the Executive or the Disability Effective Date, as the case may be,
(ii) if the Executive's employment is terminated for Cause, the date specified
in the Notice of Termination, and (iii) if the Executive's employment is
terminated by either of the elections pursuant to Section 8(d) above, the
applicable date of termination determined under Section 8(d) above, and (iv) if
the Executive's employment is terminated for any other reason, the date on which
a Notice of Termination is given; provided, however, that, if within thirty (30)
days after any Notice of Termination is given the party receiving such Notice of
Termination notifies the other party that a dispute exists concerning the
termination, the Date of Termination shall be the date on which the dispute is
finally determined, either by mutual written agreement of the parties, by a
binding and final arbitration award or by a final judgment, order or decree of a
court of competent jurisdiction (the time for appeal therefrom having expired
and no appeal having been perfected).
9. COMPENSATION UPON TERMINATION.
(a) DISABILITY. If the Executive's employment is terminated by
reason of the Executive's Disability during the Term, this Agreement shall
terminate without further obligations to the Executive, other than for payment
of Accrued Obligations (as defined in Section 13(f)(i)a.) and the timely payment
or provision of Other Benefits (as defined in Section 13(f)(iv)). Accrued
Obligations shall be paid to the
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Executive in a lump sum in cash within 30 days of the Date of Termination.
Notwithstanding the foregoing, the Company shall maintain, at the Company's sole
expense, in full force and effect, for the continued benefit of the Executive
for twelve months following the Disability Effective Date, all employee welfare
benefit plans and programs in which the Executive was entitled to participate
immediately prior to the Disability Effective Date provided that the Executive's
continued participation is possible under the general terms and provisions of
such plans and programs. In the event that the Executive's participation in any
such plan or program is barred, the Company shall arrange to provide the
Executive with benefits substantially similar to those which the Executive would
otherwise have been entitled to receive under such plans and programs from which
his continued participation is barred.
(b) DEATH. If the Executive's employment is terminated by reason of
the Executive's death during the Term, this Agreement shall terminate without
further obligations to the Executive's legal representatives under this
Agreement, other than for (i) payment of Accrued Obligations (as defined in
Section 13(f)(i)a.), calculated as if the Executive's employment had continued
for a period of 12 months following the date of death; and (ii) the timely
payment or provision of Other Benefits (as defined in Section 13(f)(iv)).
Accrued Obligations shall be paid to the Executive's estate or beneficiary, as
applicable, in a lump sum in cash within 30 days of the Date of Termination.
(c) CAUSE. If the Executive's employment shall be terminated for
Cause during the Term, this Agreement shall terminate without further
obligations to the Executive other than the obligation to pay to the Executive
(x) his Annual Base Salary through the Date of Termination, (y) the amount of
any compensation previously deferred by the Executive, and (z) Other Benefits,
in each case to the extent theretofore unpaid.
(d) VOLUNTARY TERMINATION. If the Executive voluntarily terminates
employment during the Term, excluding a termination for Good Reason, this
Agreement shall terminate without further obligations to the Executive, other
than for Accrued Obligations and the timely payment or provision of Other
Benefits. In such case, all Accrued Obligations shall be paid to the Executive
in a lump sum in cash within 30 days of the Date of Termination.
(e) TERMINATION ELECTION BY COMPANY; TERMINATION BY EXECUTIVE FOR
GOOD REASON. If the Executive's employment is terminated by the Company under
Section 8(d)(i) hereof or by the Executive under Section 8(c) hereof the Company
shall pay to the Executive a lump sum in cash within ten days of the Date of
Termination in an amount equal to the sum of (x) the product of the sum of the
Annual Base Salary in effect immediately prior to termination plus the
Applicable Bonus times either (A)
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two, if the Termination Date occurs prior to the fifth anniversary of the
Commencement Date or (B) one and one-half, if the Termination Date occurs on or
after the fifth anniversary of the Commencement Date plus (y) the Accrued
Obligations (as defined in Section 13(f)(i)a.).
10. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any plan, program,
policy or practice provided by the Company or any of its affiliated companies
and for which the Executive may qualify, nor, subject to Section 22, shall
anything herein limit or otherwise affect such rights as the Executive may have
under any contract or agreement with the Company or any of its affiliated
companies. Amounts which are vested benefits or which the Executive is
otherwise entitled to receive under any plan, policy, practice or program of or
any contract or agreement with the Company or any of its affiliated companies at
or subsequent to the Date of Termination shall be payable in accordance with
such plan, policy, practice or program or contract or agreement except as
explicitly modified by this Agreement.
11. STOCK OPTIONS AND COMPANY STOCK.
(a) In the event of the Executive's death, whether his death occurs
during or after the Term of this Agreement, all unexercised and exercisable
Stock Options will be assigned to his Estate.
(b) In the event of the termination of the employment of the
Executive for any reason, all unexercised and exercisable Stock Options must be
exercised by him, or his estate (or heir(s)) as the case may be, before the
second anniversary of the termination of his employment, but in no event after
the tenth anniversary of the date of grant thereof, any such Stock Options not
exercised by that date will lapse immediately thereafter.
(c) In the Event of any change in the number of issued shares of
Company Stock resulting from a subdivision or consolidation of shares or other
capital adjustment, or the payment of a stock dividend, or other increase or
decrease in such shares, then appropriate adjustments in the terms of any
unexercised Stock Options shall be made by the Company.
12. FULL SETTLEMENT. 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 which the Company 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. Unless the
Executive's Ter-
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mination of employment gives rise to a right to payments and benefits described
in Section 13, if the Executive secures other employment, any benefits the
Company is required to provide to the Executive following termination of the
Executive's employment shall be secondary to those provided by another employer
(if any). However, if the Executive's employment is terminated such that the
Executive has a right to payments and benefits under Section 13, such amounts
shall not be reduced whether or not the Executive obtains other employment.
13. CHANGE OF CONTROL PROVISIONS. The following provisions of this
Section 13 shall apply notwithstanding any contrary or inconsistent provision in
any other section of this Agreement, and all other provisions of this Agreement,
to the extent they may be contrary to or inconsistent with the provisions of
this Section 13, are hereby made subject to the provisions of this Section 13,
which shall be paramount in all respects, PROVIDED, however, that the provisions
of Section 3(c) shall apply, where applicable.
(a) POSITION AND DUTIES. During any Transition Period, the
Executive's position (including status, offices, titles and reporting
requirements), authority, duties and responsibilities shall be at least
commensurate in all material respects with the most significant of those held,
exercised and assigned at any time during the 120-day period immediately
preceding the latest COC Transition Date, and the Executive's services shall be
performed at the location or locations where or in the manner in which the
Executive was employed immediately preceding a COC Transition Date or at the
Company's headquarters in the New York City metropolitan area.
(b) COMPENSATION AND RELATED MATTERS.
(i) ANNUAL BONUS. For each fiscal year ending during any Transition
Period, the Company shall pay to the Executive an Annual Bonus in cash at least
equal to the Executive's highest cash bonus under the Company's annual cash
bonus program, or any comparable cash bonus under any predecessor or successor
plan, for the last three full fiscal years prior to the latest COC Transition
Date (the "Highest Recent Bonus"). Each such Annual Bonus shall be paid no
later than 60 days following the commencement of the fiscal year next following
the fiscal year for which the Annual Bonus is awarded, unless the Executive
shall elect to defer the receipt of such Annual Bonus.
(ii) WELFARE BENEFITS. During any Transition Period, the benefits to
which the Executive and/or the Executive's family are entitled to pursuant to
Section 6(e) shall be no less favorable, in the aggregate, than the most
favorable of such plans, practices, policies and programs in effect for the
Executive at any time during the 120-day period immediately preceding the latest
COC Transition Date or, if
13
more favorable to the Executive, those provided generally at any time after the
latest COC Transition Date to any other executive of the Company and its
affiliated companies.
(iii) INCENTIVE, SAVINGS AND RETIREMENT PLANS. During any Transition
Period, the plans, practices, policies and programs in which the Executive is
entitled to participate pursuant to Section 6(f) shall provide the Executive
with incentive opportunities (measured with respect to both regular and special
incentive opportunities, to the extent, if any, that such distinction is
applicable), savings opportunities and retirement benefit opportunities, in each
case, at least as favorable, in the aggregate, as the most favorable of those
provided by the Company and its affiliated companies for the Executive under
such plans, practices, policies and programs as of the date hereof or if more
favorable to the Executive, those provided generally at any time to any other
executive of the Company and its affiliated companies.
(iv) FRINGE BENEFITS. During any Transition Period, the Executive
shall be entitled to fringe benefits, including, without limitation, the
benefits described in Section 6(g), in accordance with the most favorable plans,
practices, programs and policies of the Company and its affiliated companies in
effect for the Executive at any time during the 120-day period immediately
preceding the latest COC Transition Date or, if more favorable to the Executive,
as in effect generally at any time thereafter with respect to any other
executive of the Company and its affiliated companies.
(v) OFFICE AND SUPPORT STAFF. During any Transition Period, the
Executive shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to exclusive personal secretarial and
other assistance, at least equal to the most favorable of the foregoing provided
to the Executive by the Company and its affiliated companies at any time during
the 120-day period immediately preceding the latest COC Transition Date or, if
more favorable to the Executive, as provided generally at any time thereafter
with respect to any other executive of the Company and its affiliated companies.
(vi) VACATION. During any Transition Period, the Executive shall be
entitled to paid vacation in accordance with the most favorable plans, policies,
programs and practices of the Company and its affiliated companies as in effect
for the Executive at any time during the 120-day period immediately preceding
the latest COC Transition Date or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to any other executive of
the Company and its affiliated companies.
(c) GOOD REASON. Anything in this Agreement to the contrary
notwithstanding, a termination by the Executive for
14
any reason during the 30-day period immediately following the date which is six
months after any COC Transition Date shall be deemed to be a termination for
Good Reason for all purposes of this Agreement. For purposes of this Section
13(c) and Section 8(c), in the event a Business Combination takes place, "Chief
Executive Officer of the Company" shall refer to the Executive's position as
Chief Executive Officer 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).
(d) COMPENSATION UPON TERMINATION FOR DISABILITY. If the Executive's
employment is terminated by reason of the Executive's Disability during any
Transition Period, then with respect to the provision of Other Benefits, the
term Other Benefits as utilized in Section 9(a) shall include, and the Executive
shall be entitled after the Disability Effective Date to receive, disability and
other benefits at least equal to the most favorable of those generally provided
by the Company and its affiliated companies to disabled executives and/or their
families in accordance with such plans, programs, practices and policies
relating to disability, if any, as in effect generally with respect to any other
executives and their families at any time during the 120-day period immediately
preceding the latest COC Transition Date or, if more favorable to the Executive
and/or the Executive's family, as in effect at any time thereafter generally
with respect to any other executive of the Company and its affiliated companies
and their families.
(e) COMPENSATION UPON TERMINATION BY DEATH. If the Executive's death
occurs during any Transition Period, then with respect to the provision of other
Benefits, the term Other Benefits as utilized in Section 9(b) shall include,
without limitation, and the Executive's estate and/or beneficiaries shall be
entitled to receive, benefits at least equal to the most favorable benefits
provided by the Company and its affiliated companies to the estates and
beneficiaries of the most senior executives of the Company and its affiliated
companies under such plans, programs, practices and policies relating to death
benefits, if any, as in effect with respect to any other executive and their
beneficiaries at any time during the 120-day period immediately preceding the
latest COC Transition Date or, if more favorable to the Executive's estate
and/or the Executive's beneficiaries, as in effect on the date of the
Executive's death with respect to any other executive of the Company and its
affiliated companies and their beneficiaries.
(f) COMPENSATION UPON TERMINATION BY THE COMPANY WITHOUT CAUSE OR FOR
GOOD REASON. If, during any Transition Period, the Company shall terminate the
Executive's employment
15
other than for Cause or Disability or the Executive shall terminate employment
for Good Reason:
(i) the Company shall pay to the Executive in a lump sum in cash
within 30 days after the Date of Termination the aggregate of the following
amounts:
a. the sum of (1) the Executive's Annual Base Salary
through the Date of Termination to the extent not theretofore paid,
(2) the product of (x) the Applicable Bonus and (y) a fraction, the
numerator of which is the number of days in the current fiscal year
through the Date of Termination, and the denominator of which is 365
and (3) any compensation previously deferred by the Executive
(together with any accrued interest or earnings thereon) and any
accrued vacation pay, in each case to the extent not theretofore paid
(the sum of the amounts described in clauses (1), (2), and (3) shall
be referred to in this Agreement as the "Accrued Obligations"); and
b. the amount equal to the product of (1) three and (2)
the sum of (x) the Executive's Annual Base Salary and (y) the Highest
Annual Bonus; and
c. an amount equal to the excess of (a) the actuarial
equivalent of the benefit under the Company's defined benefit
retirement plans, including any excess or supplemental retirement plan
in which the Executive participates (together, the "Retirement Plans")
(utilizing actuarial assumptions no less favorable to the Executive
than those in effect under the Retirement Plans immediately prior to
the latest COC Transition Date), which the Executive would receive if
the Executive's employment continued for three years after the Date of
Termination assuming for this purpose that all accrued benefits are
fully vested, and, assuming that the Executive's compensation in each
of the three years is that required by Section 6(a) and Section 6(b),
over (b) the actuarial equivalent of the Executive's actual benefit
(paid or payable), if any, under the Retirement Plans as of the Date
of Termination;
(ii) for three years after the Executive's Date of Termination, or
such longer period as may be provided by the terms of the appropriate plan,
program, practice or policy, the Company shall continue benefits to the
Executive and/or the Executive's family at least equal to those which would
have been provided to them in accordance with the plans, programs,
practices and policies described in Section 6(h) of this Agreement if the
Executive's employment had not been terminated or, if more favorable to the
Executive, as in effect generally at any time
16
thereafter with respect to any other executive of the Company and its
affiliated companies and their families, provided, however, that if the
Executive becomes reemployed with another employer and is eligible to
receive medical or other welfare benefits under another employer provided
plan, the medical and other welfare benefits described herein shall be
secondary to those provided under such other plan during such applicable
period of eligibility. For purposes of determining eligibility (but not
the time of commencement of benefits) of the Executive for retiree benefits
pursuant to such plans, practices, programs and policies, the Executive
shall be considered to have remained employed until two years after the
Date of Termination and to have retired on the last day of such period;
(iii) the Company shall, at its sole expense as incurred, provide the
Executive with outplacement services the scope and provider of which shall
be selected by the Executive in his sole discretion, and which shall
include the provision of reasonable office space and secretarial
assistance;
(iv) to the extent not theretofore paid or provided, the Company
shall timely pay or provide to the Executive any other amounts or benefits
required to be paid or provided or which the Executive is eligible to
receive under any plan, program, policy or practice or contract or
agreement of the Company and its affiliated companies (such other amounts
and benefits shall be referred to in this Agreement as the "Other
Benefits"); and
(v) the Company shall cause all Stock Options and Company Stock held
by or for the benefit of the Executive to become immediately fully vested
and/or exercisable.
14. LEGAL FEES.
(a) Following any termination of the Executive's employment that
gives rise to a right to payments and benefits under Section 13, the Company
shall pay as incurred, to the full extent permitted by law, all legal fees and
expenses which the Executive may reasonably incur as a result of any contest
(regardless of the outcome thereof) by the Company, the Executive or others of
the validity or enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof (including as a result of any
contest by the Executive about the amount of any payment pursuant to this
Agreement), plus in each case interest on any delayed payment at the applicable
Federal rate provided for in Section 7872(f)(2)(A) of the Code.
(b) Following any termination of the Executive's employment other
than a termination of employment described in
17
paragraph (a), above, the Company shall promptly reimburse the Executive, to the
extent permitted by law, for all reasonable legal fees and expenses reasonably
incurred by the Executive as a result of any contest by the Company or the
Executive of the validity or enforceability of, or liability under, any
provisions of this Agreement or any guarantee of performance thereof (including
as a result of any contest by the Executive about the amount of any payment
pursuant to this Agreement), plus in each case interest on any delayed payment
at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the
Code, provided, that such reimbursement shall be limited to fees and expenses
incurred in connection with the contest of issues on which the Executive
substantially prevails.
15. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.
(a) Anything in this Agreement to the contrary notwithstanding and
except as set forth below, in the event it shall be determined that any payment
or distribution by the Company to or for the benefit of the Executive (whether
paid or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, but determined without regard to any additional payments
required under this Section 15) (a "Payment") would be subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties are incurred by
the Executive with respect to such excise tax (such excise tax, together with
any such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then the Executive shall be entitled to receive an additional
payment (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 taxes (and any
interest and penalties imposed with respect thereto) 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. Notwithstanding the
foregoing provisions of this Section 15(a), if it shall be determined that the
Executive is entitled to a Gross-Up Payment, but that the Payments do not exceed
110% of the greatest amount (the "Reduced Amount") that could be paid to the
Executive such that the receipt of Payments would not give rise to any Excise
Tax, then no Gross-Up Payment shall be made to the Executive and the Payments,
in the aggregate, shall be reduced to the Reduced Amount.
(b) Subject to the provisions of Section 15(c), all determinations
required to be made under this Section 15, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions
to be utilized in arriving at such determination, shall be made by Xxxxxx
Xxxxxxxx LLP or such other certified public accounting firm as may be designated
by the Executive (the "Accounting Firm") which shall provide detailed supporting
calculations both to the Company and the Executive within 15 business days
18
of the receipt of notice from the Executive that there has been a Payment, or
such earlier time as is requested by the Company. In the event that the
Accounting Firm is serving as accountant or auditor for the individual, entity
or group effecting the Change of Control, the Executive shall appoint another
nationally recognized accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder). All fees and expenses of the Accounting Firm shall be borne
solely by the Company. Any Gross-Up Payment, as determined pursuant to this
Section 15, shall be paid by the Company to the Executive within five days of
the receipt of the Accounting Firm's determination. Any determination by the
Accounting Firm shall be binding upon the Company and the Executive. As a
result of the uncertainty in the application of Section 4999 of the Code at the
time of the initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by the Company
should have been made ("Underpayment"), consistent with the calculations
required to be made hereunder. In the event that the Company exhausts its
remedies pursuant to Section 15(c) and the Executive thereafter is required to
make a payment of any Excise Tax, the Accounting Firm shall determine the amount
of the Underpayment that has occurred and any such Underpayment shall be
promptly paid by the Company to or for the benefit of the Executive.
(c) The Executive shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment by
the Company of the Gross-Up Payment. Such notification shall be given as soon
as practicable but no later than ten business days after the Executive is
informed in writing of such claim and shall apprise the Company of the nature of
such claim and the date on which such claim is requested to be paid. The
Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which it gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes with respect to such claim
is due). If the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the Executive
shall:
(i) give the Company any information reasonably requested by the
Company relating to such claim,
(ii) take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with respect
to such claim by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order effectively
to contest such claim, and
19
(iv) permit the Company to participate in any proceedings relating
to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions
of this Section 15(c), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and xxx for a refund or contest the
claim in any permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
such claim and xxx for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance;
and further provided that any extension of the statute of limitations relating
to payment of taxes for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Executive shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.
(c) If, after the receipt by the Executive of an amount advanced by
the Company pursuant to Section 15(c), the Executive becomes entitled to receive
any refund with respect to such claim, the Executive shall (subject to the
Company's complying with the requirements of Section 15(c)) promptly pay to the
Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the receipt by the Executive
of an amount advanced by the Company pursuant to Section 15(c), a determination
is made that the Executive shall not be entitled to any refund with respect to
such claim and the Company does not notify the Executive in writing of its
intent to contest such denial of refund prior to the expiration of 30 days after
such determination, then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance
20
shall offset, to the extent thereof, the amount of Gross-Up Payment required to
be paid.
16. NONCOMPETITION.
(a) So long as the Executive is employed by the Company under this
Agreement and unless this Agreement is terminated for any reason, the Executive
agrees not to enter into competitive endeavors, provided, however, that any
endeavors entered into by Executive in connection with his employment by Alpine
shall be deemed not to be competitive endeavors for purposes of this Section
16(a).
(b) During the Term and any period thereafter during which or in
respect of which the Executive receives payments from the Company under Section
9 or Section 13, the Executive shall hold in a fiduciary capacity for the
benefit of the Company all secret or confidential information, knowledge or data
relating to the Company or any of its affiliated companies, and their respective
businesses, which shall have been obtained by the Executive during the
Executive's employment by the Company or any of its affiliated companies and
which shall not be or become public knowledge (other than by acts by the
Executive or representatives of the Executive in violation of this Agreement).
After termination of the Executive's employment with the Company, the Executive
shall not, without the prior written consent of the Company or as may otherwise
be required by law or legal process, communicate or divulge any such
information, knowledge or data to anyone other than the Company and those
designated by it. In no event shall an asserted violation of the provisions of
this Section 16 constitute a basis for deferring or withholding any amounts
otherwise payable to the Executive under Section 13 of this Agreement.
17. SUCCESSORS; BINDING AGREEMENT.
(a) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement in
form and substance satisfactory to the Executive, to expressly assume and agree
to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
Failure of the Company to obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a breach of the Agreement and
shall entitle the Executive to compensation from the Company in the same amount
and on the same terms as he would be entitled to hereunder if he terminated his
employment for Good Reason, except that for purposes of implementing the
foregoing, the date on which any such succession becomes effective shall be
deemed the Date of Termination. As used in the Agreement, "Company" shall mean
the Company as herein before defined and any successor to its business and/or
assets as aforesaid which
21
executes and delivers the agreement provided for in this Section 17 or which
otherwise becomes bound by all the terms and provisions of this Agreement by
operation of law.
(b) This Agreement and all rights of the Executive hereunder shall
inure to the benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devises and legatees. If the Executive should die while any amounts would still
be payable to him hereunder if he had continued to live, all such amounts unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to the Executive's devise, legatee, or other designee or, if there be
no such designee, to the Executive's estate.
18. NOTICE. For the purposes of this Agreement, notices, demands and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered or (unless otherwise
specified) mailed by United States certified or registered mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Executive:
Xx. Xxxxxx X. Xxxxxx
000 Xxxxx Xxxx
Xxxxx Xxxxx, XX 00000
If to the Company:
Superior TeleCom Inc.
0000 Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Attention: Chief Financial Officer
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
19. MISCELLANEOUS. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the Executive and such officer of the Company as may be
specifically designated by the Board. No waiver by either party hereto at any
time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not set forth expressly in this
22
Agreement. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of New York without regard to its
conflicts of law principles.
20. VALIDITY. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
21. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
22. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement of
the parties hereto in respect of the subject matter contained herein and
supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto and any prior agreement
of the parties hereto in respect of the subject matter contained herein is
hereby terminated and cancelled, provided, however, that this Agreement should
not supersede any existing benefit or agreement which provides such benefit,
including, without limitation, life or disability insurance agreements and
retirement plans currently in effect.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date and year first above written.
SUPERIOR TELECOM INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Secretary
EXECUTIVE
/s/ Xxxxxx X. Xxxxxx
--------------------
Xxxxxx X. Xxxxxx
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