CHANGE-IN-CONTROL AGREEMENT
AGREEMENT, made and entered into as of the 13th day of May, 1997 by and
between General Cable Corporation, a Delaware corporation (the "Company"), and
Xxxxxx X. Xxxxxx (the "Executive").
W I T N E S S E T H :
WHEREAS, the Executive is a key employee of the Company or one of its
subsidiaries; and
WHEREAS, it is proposed that the Company become a publicly-traded
company by means of a public offering (the "Public Offering") and the Company's
Board of Directors has determined that, in light of the uncertainties affecting
the industry in which the Company operates, it would be in the best interests of
the Company and its future public shareholders to induce key employees,
including the Executive, to remain with the Company after it becomes a public
company and to reinforce and encourage their continued attention and dedication
to the Company; and
WHEREAS, the Company and the Executive have entered into an Employment
Agreement as of the date hereof to become effective as of the Effective Date, as
hereinafter defined (such agreement, as amended from time to time, being
hereinafter referred to as the "Employment Agreement"); and
WHEREAS, the Company desires to enter into this agreement ("Agreement")
with the Executive providing for, among other things, (i) the acceleration of
vesting of the Executive's restricted stock and stock options upon the
occurrence of a Change-in-Control (as hereinafter defined) and (ii) a severance
payment to the Executive and the continuation of the Executive's welfare
benefits if the Executive's employment is terminated in connection with a
Change-in-Control, subject to the terms and conditions specified herein;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the receipt of
which is mutually acknowledged, the Company and the Executive agree as follows:
1. TERM
(a) This Agreement shall become effective upon the consummation of the
Public Offering (the "Effective Date") and shall terminate and be of no further
force or effect upon the expiration of the Employment Agreement (the "Term");
provided, however, that, if a Change-in-Control shall have occurred during the
Term or within six months after Executive's employment terminates, as described
in Paragraph 2(a) hereof, the Term shall expire on the last day of the
twenty-fourth (24th) month following the month in which the Change-in-Control
occurs.
(b) If the consummation of the Public Offering does not occur on or
before October 31, 1997, this Agreement shall terminate and be of no further
force or effect.
2. TERMINATION OF EXECUTIVE'S EMPLOYMENT PRIOR TO OR
FOLLOWING A CHANGE-IN-CONTROL
(a) If the Executive's employment is terminated by the Company or any
of its subsidiaries or by the Company's successor without Cause (as hereinafter
defined), or the Executive terminates his employment with the Company or any of
its subsidiaries or with the Company's successor for Good Reason (as hereinafter
defined), and such termination occurs within six months preceding, or within two
years following, a Change-in-Control, the Executive shall be entitled to receive
a Change-in-Control Payment (as hereinafter defined).
(b) Notwithstanding the foregoing, the Executive shall not be entitled
to receive the Change-in-Control Payment if any of the Circumstances of
Ineligibility (as hereinafter defined) apply to the Executive.
(c) "CHANGE-IN-CONTROL PAYMENT" means the product of (i) one and
one-half times (ii) the sum of (x) the Executive's annual base salary at the
time of the termination of the Executive's employment (or, in the case of a
termination of employment for Good Reason based on a reduction of the
Executive's annual base salary, the annual base salary in effect immediately
prior to such reduction) plus (y) the Executive's target annual incentive bonus
in effect for the year in which the Executive's employment is terminated or the
year in which the Change-in-Control occurs, whichever target bonus is greater.
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(d) "CHANGE-IN-CONTROL" means that any of the following has occurred:
(i) any person or other entity (other than any of the Company's
subsidiaries or any employee benefit plan sponsored by the
Company or any of its subsidiaries) including any person as
defined in Section 13(d)(3) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), becomes the beneficial
owner, as defined in Rule 13d-3 under the Exchange Act,
directly or indirectly, of more than fifty percent (50%) of
the total com- bined voting power of all classes of capital
stock of the Company normally entitled to vote for the
election of directors of the Company (the "Voting Stock"),
(ii) the stockholders of the Company approve the sale of all or
substantially all of the property or assets of the Company and
such sale occurs;
(iii) the stockholders of the Company approve a consolidation or
merger of the Company with another corporation (other than
with any of the Company's subsidiaries), the consummation of
which would result in the shareholders of the Company
immediately before the occurrence of the consolidation or
merger owning, in the aggregate, less than 60% of the Voting
Stock of the surviving entity, and such consolidation or
merger occurs; or
(iv) a change in the Company's Board of Directors occurs with the
result that the members of the Board on the Effective Date
(the "Incumbent Directors") no longer constitute a majority of
such Board of Directors, provided that any person becoming a
director (other than a director whose initial assumption of
office is in connection with an actual or threatened election
contest or the settlement thereof, including but not limited
to a consent solicitation, relating to the election of
directors of the Company) whose election or nomination for
election was supported by two-thirds (2/3) of the then
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Incumbent Directors shall be considered an Incumbent Director
for purposes hereof.
Notwithstanding anything contained herein to the contrary, a Change-in-Control
shall not include the Public Offering.
(e) "CAUSE" shall have the meaning set forth in the Employment
Agreement and shall be subject to the procedures set forth therein.
(f) "GOOD REASON" means the occurrence of any of the following without
the prior written consent of the Executive:
(i) removal from the positions of Executive Vice President or
General Counsel held by the Executive with respect to the
Company or any of its significant subsidiaries (as defined in
Regulation S-X under the Securities Exchange Act of 1934) on
the 181st day prior to the Change-in-Control or any senior
position that the Executive subsequently achieves;
(ii) the assignment of duties or responsibilities materially
inconsistent with those customarily associated with the
position held by the Executive on the 181st day prior to the
Change-in-Control or any senior position that the Executive
subsequently achieves (alternatively, the "Measuring
Position"), or any other action by the Company or a successor
that results in a diminution of the Executive's position,
authority, duties or responsibilities compared to the
Measuring Position, other than an isolated action that is not
taken in bad faith and is remedied by the Company or a
successor promptly after receipt of written notice thereof
from the Executive;
(iii) a reduction in the Executive's annual base salary or a
material reduction in any other material benefit provided the
Executive by the Company;
(iv) notice by the Company not to extend the Employment Agreement;
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(v) the relocation of the Executive's principal place of
employment to a location more than fifty (50) miles from the
Executive's principal place of employment (unless such
relocation does not increase the Executive's commute by more
than twenty (20) miles) on the 181st day prior to the
Change-in-Control, except for required travel on the Company's
business to an extent substantially consistent with the
Executive's business travel obligations as of such day; or
(vi) the failure by the Company to obtain an agreement from any
successor to assume and agree to perform this Agreement.
(g) "CIRCUMSTANCES OF INELIGIBILITY" mean any one or more of the
following circumstances:
(i) Death, Disability or Voluntary Termination. If the Executive
is terminated due to death or Disability (as defined in the
Employment Agreement) or if the Executive elects to
voluntarily terminate his employment, including a termination
due to retirement, with the Company or a successor, the
Executive shall not be eligible to receive the
Change-in-Control Payment; provided, however, that termination
of employment by the Executive for Good Reason shall not
constitute a Circumstance of Ineligibility.
(ii) Termination for Cause. If the Executive's employment with the
Company or a successor is terminated for Cause at any time
preceding or following a Change-in-Control, the Executive
shall not be eligible to receive the Change-in-Control
Payment.
3. TIME OF PAYMENT OF CHANGE-IN-CONTROL PAYMENT
The Change-in-Control Payment (if any) shall be paid to the Executive
in cash in a lump sum within 10 business days following the later of (i) the
date of the termination of the Executive's employment with the Company or the
successor or (ii) the date of the Change-in-Control.
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4. VESTING OF RESTRICTED STOCK AND STOCK OPTIONS
Upon the occurrence of a Change-in-Control, (i) any and all restricted
stock held by the Executive as of such date shall become immediately vested and
fully transferable and (ii) any and all unexercisable stock options held by the
Executive as of such date shall become fully vested and immediately exercisable
and shall remain exercisable until their expiration in accordance with the terms
of the applicable plan.
5. CONTINUATION OF EXECUTIVE WELFARE BENEFITS
Notwithstanding anything contained herein to the contrary, if the
Executive is entitled to receive the Change-in-Control Payment, the Company or
any of its subsidiaries or successor shall continue his participation, as if he
were still an employee, in the medical, dental, hospitalization and life
insurance plans, programs and/or arrangements of the Company or any of its
subsidiaries in which he was participating on the date of the termination of his
employment (or on the 181st day prior to the Change-in-Control, if more
favorable to the Executive) on the same terms and conditions as other executives
under such plans, programs and/or arrangements until the earlier of (i) the end
of the 18-month period following the date of the termination of his employment
or (ii) the date, or dates, he receives equivalent coverage and benefits under
the plans, programs and/or arrangements of a subsequent employer (such coverage
and benefits to be determined on a coverage-by-coverage or benefit-by-benefit
basis).
6. LIMITATION ON PAYMENTS
(a) If any of the payments or benefits received or to be received by
the Executive in connection with a Change in Control or the Executive's
termination of employment (whether such payments or benefits are provided
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) (such payments
or benefits being hereinafter referred to as the "Total Payments") would be
subject to the excise tax (the "Excise Tax") imposed under Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code"), then the payments under
Paragraph 5 hereof shall be reduced and thereafter, if
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necessary, the Change-in-Control Payment shall be reduced (but not below the
minimum possible amount), so that no portion of the Total Payments is subject to
the Excise Tax.
(b) For purposes of determining whether any of the Total Payments will
be subject to the Excise Tax and the amount of such Excise Tax, (i) 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") selected by the Company and reasonably acceptable to the Executive,
such 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, (ii) all
"excess parachute payments" within the meaning of Section 280G(b)(1) of the Code
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" (as defined in
Section 280G(b)(3) of the Code) allocable to such payment, or are otherwise not
subject to the Excise Tax, and (iii) the value of any noncash benefits or any
deferred payment or benefit shall be determined by Tax Counsel in accordance
with the principles of Sections 280G(d)(3) and (4) of the Code.
7. MISCELLANEOUS
(a) No Employment Agreement. This Agreement does not constitute a
contract of employment or impose on the Company any obligation to retain the
Executive as an employee.
(b) Deductions and Withholding. The Executive agrees that the Company
shall withhold from any and all compensation required to be paid to the
Executive pursuant to this Agreement all federal, state, local and/or other
taxes which the Company determines are required to be withheld in accordance
with applicable statutes and/or regulations from time to time in effect.
(c) Waiver and Release. The Executive acknowledges that (i) the
Change-in-Control Payment is in excess of the amounts that the Executive would
otherwise be entitled to receive under any employment or severance agreement,
plan, program or arrangement of the Company or between the Company and the
Executive and (ii) the Company has no obligation to
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enter into this Agreement. In consideration of the Company assuming these
additional obligations and entering into this Agreement, the Executive agrees to
execute a customary release of all claims related to the Executive's employment
or termination thereof, in substantially the same form as annexed hereto other
than any modifications which may be required to effectuate such release based
upon any changes in law.
(d) Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration
conducted in Cincinnati, Ohio under the Commercial Arbitration Rules then
prevailing of the American Arbitration Association and such submission shall
request the American Arbitration Association to: (i) appoint an arbitrator
experienced and knowledgeable concerning the matter then in dispute; (ii)
require the testimony to be transcribed; (iii) require the award to be
accompanied by findings of fact and a statement of reasons for the decision; and
(iv) request the matter to be handled by and in accordance with the expedited
procedures provided for in the Commercial Arbitration Rules. The determination
of the arbitrators, which shall be based upon a de novo interpretation of this
Agreement, shall be final and binding and judgment may be entered on the
arbitrators' award in any court having jurisdiction. All costs of the American
Arbitration Association and the arbitrator shall be borne by the Company, unless
the position advanced by the Executive is determined by the arbitrator to be
frivolous in nature.
(e) Legal Fees. The Company or the successor shall pay to the Executive
all reasonable legal fees and expenses incurred by the Executive in disputing in
good faith any issues hereunder relating to the termination of the Executive's
employment, in seeking in good faith to obtain or enforce any benefit or right
provided by this Agreement or in connection with any tax audit or proceeding to
the extent attributable to the application of Section 4999 of the Code to any
payment or benefit provided hereunder. Such payments shall be made within 30
days after delivery of the Executive's written request for payment accompanied
with such evidence of fees and expenses incurred as the Company reasonably may
require. The Company or the successor shall pay to the Executive interest at the
prime lending rate as announced from time to time by The Chase Manhattan Bank on
all or any part of the Change-in-Control Payment that is not paid when due. The
prime rate for each calendar quarter
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shall be the prime rate in effect on the first day of the calendar quarter.
(f) No Duty to Mitigate/Set-off. The Company agrees that if the
Executive's employment with the Company or a successor is terminated during the
Term, the Executive shall not be required to seek other employment. Further, the
amount of any payment or benefit hereunder shall not be reduced by any
compensation earned by the Executive or any benefit provided to the Executive as
the result of employment by another employer or otherwise, except as provided in
Paragraph 5 or 7(g) hereof. The Company's obligations to make any payment or
provide any benefit hereunder shall not be affected by any circumstances,
including, without limitation, any set-off, counterclaim, recoupment, defense or
other right which the Company or a successor corporation may have against the
Executive.
(g) Offset. The Change-in-Control Payment shall be reduced by any
severance payment made by the Company or any subsidiary of the Company to the
Executive pursuant to (i) any severance plan, program, policy or arrangement of
the Company or any subsidiary of the Company, (ii) the Employment Agreement or
any other employment agreement between the Company or any subsidiary of the
Company and the Executive, and (iii) any federal, state or local statute, rule,
regulation or ordinance.
(h) Entire Agreement. This Agreement embodies the entire agreement of
the parties with respect to any payment due the Executive in the event of a
Change-in-Control and supersedes any other prior oral or written agreements
between the Executive and the Company with respect thereto, except that nothing
herein shall be construed to adversely affect the Executive's right to receive
any non-duplicative payment or benefit to which he is entitled under the
Employment Agreement or any other employment agreement between the Company or
any subsidiary of the Company and the Executive in connection with his
termination of employment. No party may amend, modify or terminate this
Agreement without the express written consent of the other party.
(i) Binding Agreement. This Agreement 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.
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(j) Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the Commonwealth of Kentucky without reference to
principles of conflict of laws.
(k) Counterparts. This Agreement may be executed and delivered in
separate counterparts, each of which when so executed and delivered shall be
deemed an original and all of which taken together shall constitute one and the
same agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.
GENERAL CABLE CORPORATION
By:______________________________
Xxxxxxx Xxxxxxxxxx
Chairman, Chief Executive
Officer and President
ACCEPTED AND AGREED TO
as of the date first written above
By:__________________________________
Xxxxxx X. Xxxxxx
Address: 0000 Xxxxx Xxxx
Xxxxxxxxxx, XX 00000
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