CONFIDENTIAL CHANGE IN CONTROL, SEVERANCE AND NON-COMPETITION AGREEMENT
EXHIBIT 10.53
CONFIDENTIAL
CHANGE IN CONTROL, SEVERANCE
AND NON-COMPETITION AGREEMENT
AND NON-COMPETITION AGREEMENT
AGREEMENT, dated as of 3-23-01 and effective as of
March 1, 2001 by and between Wolverine Tube, Inc., a Delaware corporation (“Wolverine” or
“Company”), and ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, an individual residing at ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the “Executive”).
W I T N E S S E T H:
WHEREAS, Wolverine recognizes the Executive’s expertise in connection with his employment by
Wolverine or its subsidiaries or affiliates (collectively, the “Company”); and
WHEREAS, the Company desires to provide the Executive with severance benefits or the
opportunity for continued employment in a different position if the Executive’s employment is
terminated for the reasons set forth herein and the Executive refrains from engaging in certain
activities in the event his employment is terminated, upon the terms and conditions hereinafter
set forth; and
WHEREAS, the Company and the Executive have therefore agreed to enter into this Agreement
effective on the date above;
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained,
the parties hereto hereby agree as follows:
| 1. | Termination of Employment. |
| (a) | Termination for Cause: Resignation without Good Reason. |
(i) If the Executive’s employment is terminated by the Company for Cause, as defined in
Section l(a)(ii) hereof, or if the Executive resigns from his employment hereunder, other than for
Good Reason, as defined in Section l(a)(iii) hereof unless said resignation comes within two (2)
years of a Change in Control, as discussed in Section l(b)(i) below, the Executive shall be
entitled to only (A) severance benefits as provided by the Company’s general procedures and
practices, if any, (B) payment of the pro rata portion of the Executive’s salary through and
including the date of termination or resignation, and (C) such employee benefits as may be due to
Executive pursuant to the provisions of the benefit plans which govern such issues.
(ii) For purposes of this Agreement, termination for “Cause” shall mean termination of the
Executive’s employment by the Company because of (A) the Executive’s conviction for, or guilty
plea to, a felony or a crime involving moral turpitude, (B) the Executive’s commission of an act
of personal dishonesty in connection with his employment by the Company, (C) a breach of fiduciary
duty in connection with his employment with the Company which shall include, but not be limited
to, (1) investment in any person or organization with the knowledge that such person or
organization has or proposes to have dealings with the Company, such person or organization
competes with the Company, or the Company is considering an investment in such person or
organization (the reference to “organization” excludes federal credit unions, publicly owned
insurance companies and corporations the stock of which is
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listed on a national securities exchange or quoted on NASDAQ if the direct and beneficial stock
ownership of the Executive, including members of his immediate family, is not more than one percent
(1%) of the total outstanding stock of such corporation); (2) a loan (including a guaranty of a
loan) from or to any person or organization having or proposing any dealings with the Company or in
competition with the Company; (3) participation directly or indirectly in any transaction involving
the Company other than as a director or as an officer or employee of the Company; (4) acceptance
from any person or organization having or proposing any dealings with the Company or in competition
with the Company of any gratuity, gift, entertainment or favor which exceeds either nominal value
or common courtesies which are generally accepted business practice; or (5) service as an officer,
director, partner or employee of, or consultant to, any person or organization having or proposing
dealings with the Company or in competition with the Company; (D) the Executive’s failure to
execute or follow the written policies of the Company, including, but not limited to, the Company’s
policy against discrimination or harassment, or (E) the Executive’s refusal to perform the
essential functions of the job, following written notice thereof. Termination of the Executive’s
employment as a result of his death or disability (if such Executive is eligible for benefits under
the Company’s long-term disability plan or would be eligible for such benefits were the Executive a
participant in said plan) shall constitute a termination by the Company with Cause for purposes of
this Agreement.
(iii) For purposes of this Agreement, resignation for “Good Reason” shall mean the
resignation of the Executive within a period of six (6) months after a reduction in the
Executive’s benefits or pay in an amount in the aggregate in excess of five percent (5%) thereof,
unless all individuals at the same managerial level as the Executive experience a similar
reduction in benefits or pay.
(iv) The date of termination for Cause shall be the date of receipt by the Executive of
written notice of such termination, or such later date as may be contained in said notice. The
date of resignation without Good Reason shall be the date of receipt by the Company of a written
notice of such resignation.
| (b) | Termination without Cause: Resignation for Good Reason or after a Change in Control. |
(i) If the Executive’s employment is terminated by the Company without Cause, or if the
Executive resigns from his employment for any reason within two (2) year’s following a Change in
Control, the Executive shall be entitled to receive the benefits described in subparagraphs (A),
(B), (C) and (D) below. If the Executive resigns for Good Reason (unless said resignation is
within two (2) years following a Change in Control, in which event his benefits are described in
the preceding sentence), he shall be entitled to those benefits described in (A) and (B) below
only. In either case, said benefits will only be paid if the Executive executes an Agreement and
General Release, which shall be drafted by the Company, and if the Executive complies with Section
2 of this Agreement.
(A) The Company shall pay to the Executive either (x) during the two
years
immediately following a Change in Control, in the event of (i) termination by the Company without
Cause, or (ii) resignation by the Executive for any reason, an amount equal to one (1) year’s
salary; or (y) at any other time, in the event of (i) termination by the Company without Cause or
(ii) resignation by the Executive for Good Reason, an amount equal to one (1) years’ salary; in
either case to be paid at the rate in effect immediately prior to the Severance Date (as defined
in Section l(b)(iv)) plus pay at the same rate
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for all vacation time accrued during the calendar year in which the Severance Date occurs, with
such payment to be made at the Company’s option either:
(X) as a lump sum within 30 days after the Severance Date, or
(Y) as a series of payments in accordance with the Company’s normal payroll procedures
following the Severance Date;
(B) the Company shall reimburse the Executive for any costs incurred by the
Executive in electing COBRA continuation coverage under only the Company’s medical plan and
maintaining life insurance coverage comparable to that maintained for him by the Company for
the period
from the Severance Date until the earlier to occur of:
(X) the date which follows the Severance Date by the lesser of (1) 18
months or (2) the number of months of salary which is being paid to Executive pursuant to
subparagraph (i)(A)(x) or (y) above, or
(Y) the date on which the Executive is covered under any other medical plan;
(C) in lieu of any benefit otherwise due to him under the Company’s annual
bonus plan, the Company shall pay the Executive, an amount equal to (i) a lump sum equal to 20% of
his annual base salary multiplied by (ii) the number of years for which the Executive is entitled
to pay under paragraph (b)(i)(A) above; provided, however, that in the event that the Severance
Date occurs after the first six (6) full months of the Company’s then current fiscal year, the
Company shall pay the Executive an additional amount equal to the actual bonus which would have
been paid to the Executive for said year had he remained employed throughout said year less the
amount of the above-described lump sum paid to him pursuant to this subparagraph (C) for the first
of the years for which he is entitled to be paid under paragraph (b)(i)( A).
(D) the Company shall reimburse the Executive for any reasonable costs
actually incurred by the Executive for outplacement services provided by an outplacement
consultant
mutually agreeable to the Executive and the Company for a period not to exceed six (6) months.
(ii) In the event the Executive refuses to execute or breaches the Agreement and General
Release tendered to the Executive on or about the Severance Date, or in the event the Executive
breaches any of the covenants contained in Section 2, the Executive acknowledges and agrees that
the Company will cease any payments remaining under Section 2(b)(i) of this Agreement and that the
Executive shall be entitled to no further payments or benefits under this Agreement.
(iii) The Executive shall have no further right under this Agreement or otherwise to receive
any bonus or other compensation with respect to the year in which the Severance Date occurs and
later years
(iv) The date of termination of employment without Cause shall be the date specified in a
written notice of termination to the Executive and the date of resignation for Good Reason shall
be the date
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of receipt by the Company of written notice of resignation (both such dates hereinafter referred
to as the “Severance Date”).
(v) For purposes of this Agreement, “Change in Control” shall mean:
(A) The Company is merged, consolidated or reorganized into or with
another
corporation or other legal person, and as a result of such merger, consolidation or reorganization
less than a majority of the combined voting power of the then-outstanding securities of such
corporation or person immediately after such transaction are held in the aggregate by the holders
of Voting Stock (as that term is hereafter defined) of the Company immediately prior to such
transaction;
(B) The Company sells or otherwise transfers all or substantially all of its
assets to another corporation or other legal person, and as a result of such sale or transfer
less than a
majority of the combined voting power of the then-outstanding securities of such corporation
or person
immediately after such sale or transfer is held in the aggregate by the holders of Voting
Stock of the
Company immediately prior to such sale or transfer;
(C) There is a report filed on Schedule 13D or Schedule 14D-1 (or any
successor schedule, form or report), each as promulgated pursuant to the Securities Exchange
Act of 1934,
as amended (the “Exchange Act”), disclosing that (x) any person (as the term “person” is used
in Section
13(d)(3) or Section 14(d)(2) of the Exchange Act) has become the beneficial owner (as the term
“beneficial
owner” is defined under Rule 13d-3 or any successor rule or regulation promulgated under the
Exchange
Act) of securities representing 15% or more of the combined voting power of the
then-outstanding
securities entitled to vote generally in the election of directors of the Company (“Voting
Stock”), or (y) any
person has, during any period, increased the number of shares of Voting Stock beneficially
owned by such
person by an amount equal to or greater than 15% of the outstanding shares of Voting Stock;
provided,
however, that transfers of shares of Voting Stock between a person and the affiliates
or associates (as such
terms are defined under Rule 12b-2 or any successor rule or regulation promulgated under the
Exchange
Act) of such person shall not be considered in determining any increase in the number of
shares of Voting
Stock beneficially owned by such person; or
(D) The Company files a report or proxy statement with the Securities and
Exchange Commission pursuant to the Exchange Act disclosing in response to form 8-K or
Schedule 14A
(or any successor schedule, form or report or item therein) that a change in control of the
Company has
occurred or will occur in the future pursuant to any then-existing contract or transaction.
Notwithstanding the foregoing provisions of Sections (C) or (D) unless otherwise determined
in a specific case by majority vote of the Board, a “Change in Control” shall not be deemed to
have occurred for purposes of Sections (C) or (D) solely because (1) the Company, (2) an entity in
which the Company directly or indirectly beneficially owns 50% or more of the voting securities (a
“Subsidiary”), or (3) any employee stock ownership plan or any other employee benefit plan of the
Company or any Subsidiary either files or becomes obligated to file a report or a proxy statement
under or in response to Schedule 13D, Schedule 14D-1, Form 8-K or Schedule 14A (or any successor
schedule, form or report or item therein) under the Exchange Act disclosing beneficial ownership
by it of shares of Voting Stock, whether in excess
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of 15% or otherwise, or because the Company reports that a change in control of the Company has
occurred or will occur in the future by reason of such beneficial ownership.
| 2. | Secrecy, Non-Solicitation and Non-Competition. |
(a) Secrecy. During the Executive’s employment with the Company and for a period of
three
(3) years after his termination from the Company for any reason, the Executive Covenants and
agrees that
he will not, except in performance of the Executive’s obligations to the Company, or with the
prior written
consent of the Company pursuant to the authority granted by a resolution of the Board,
directly or
indirectly, disclose any secret or confidential information that he may learn or has learned
by reason of his
association with the Company or use any such information. The term “secret or confidential
information”
includes, without limitation, information not previously disclosed to the public or to the
trade by the
Company’s management with respect to the Company’s products, facilities and methods, trade
secrets and
other intellectual property, systems, procedures, manuals, confidential reports, products
price lists,
customer lists, financial information (including the revenues, costs or profits associated
with any of the
Company’s products), business plans, prospects, employee or employees, compensation, or
opportunities
but shall exclude any information already in the public domain which has been disclosed to the
public
during the normal course of the Company’s business.
(b) Customer Protection. During the Executive’s employment with the Company and for a
period of two (2) years following the termination of the Executive’s employment for any
reason, the
Executive covenants and agrees that he will not solicit or attempt to solicit any business
from the
Company’s customers, including actively sought prospective customers, with whom the Executive
had
Material Contact during his employment, for the purpose of providing products or services
competitive
with those provided by the Company. Material Contacts exist between the Executive and each
customer or
prospective customers with whom the Executive has dealt within the twelve months prior to the
last day
worked, whose dealings with the Company were coordinated or supervised by the Executive, or
about
whom the Executive obtained trade secrets or confidential information as a result of the
Executive’s
association with the Company.
(c) Non-solicitation of Employees. During the Executive’s employment and for a period of
one (1) year following the termination of the Executive’s employment for any reason, the
Executive,
covenants and agrees that he shall not directly or indirectly, on his behalf or on behalf of
any person or
other entity, solicit or induce, or attempt to solicit or induce, any person who, on the date
hereof or at
anytime during the term of this Agreement, is an employee of the Company, to terminate his or
her
employment with the Company, whether expressed in a written or oral agreement or understanding
or is
otherwise an “at-will” employee.
(d) Noncompetition. During the Executive’s employment and for a period of one (1)
year
following the termination of the Executive’s employment for any reason, the Executive
covenants and
agrees that he will not, directly or indirectly, compete against the Company within the United
States in the
managerial or executive capacity for another company or entity that designs, produces, sells,
or distributes
copper and copper alloy tubing, copper, copper alloy, and aluminum fabricated products, and
silver bearing
brazing and copper-phos brazing alloys and soft solders including, but not limited to, those
companies
listed on Attachment A.
(e) Equitable Relief. The Executive acknowledges and agrees that the services
performed by
him are special, unique and extraordinary in that, by reason of the Executive’s employment,
the Executive
may acquire confidential information and trade secrets concerning the operation of the
Company, or that
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the Executive may have contact with or obtain knowledge of the Company’s customers or prospects,
the use or disclosure of which could cause the Company substantial loss and damages, which could
not be readily calculated and for which no remedy at law would be adequate. Accordingly, the
Executive acknowledges and agrees that the Company shall be entitled to obtain a temporary
restraining order and/or a preliminary or permanent injunction restraining the Executive from
engaging in activities prohibited by this Section 2 or such other relief as may be required to
specifically enforce any of the covenants in this Section 2. The Executive acknowledges and agrees
that the Company shall be entitled to its attorneys’ fees and court costs should the Company
pursue legal action to enforce its rights under this section.
3. Amendment; Waiver. This Agreement may not be modified, amended or waived in any manner
except by an instrument in writing signed by both parties hereto; provided, however, that
any such modification, amendment or waiver on the part of the Company shall have been previously
approved by the Board. The waiver by either party of compliance with any provision of this
Agreement by the other party shall not operate or be construed as a waiver of any other provision
of this Agreement, or of any subsequent breach by such party of a provision of this Agreement.
4. Withholding. Payments to the Executive of all compensation contemplated under this Agreement
shall be subject to all applicable legal requirements with respect to the withholding of taxes and
similar
deductions.
5. Governing Law All matters affecting this Agreement, including the validity thereof,
are to be
governed by, and interpreted and construed in accordance with, the laws of the State of Alabama applicable
to contracts executed in and to be performed in that State. Nothing in this agreement shall affect the rights
of either party under state or federal laws affecting employment.
6. Notices. Any notice hereunder by either party to the other shall be given in writing by personal
delivery or certified mail, return receipt requested. If addressed to the Executive, the notice
shall be
delivered or mailed to the Executive at the address first set forth below, or if addressed to the
Company, the
notice shall be delivered or mailed to AmSouth Bank Building, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, or such address as the Company or the Executive may designate by written
notice at any time or from time to time to the other party. A notice shall be deemed given, if by
personal
delivery, on the date of such delivery or, if by certified mail, on the date shown on the
applicable return
receipt.
7. Supersedes Previous Agreements. This Agreement supersedes all prior or
contemporaneous
negotiations, commitments, agreements and writings with respect to the subject matter hereof, all
such
other negotiations, commitments, agreements and writings will have no further force or effect, and
the
parties to any such other negotiation, commitment, agreement or writing will have no further rights
or
obligations thereunder.
8. Severability. The parties agree that if any part of this Agreement is found to be illegal or
unenforceable, including, but not limited to, the geographic, temporal, or activity restrictions contained in
Section 2, the court should delete or modify the illegal or unenforceable provision(s) hereby leaving the
remaining or modified provision(s) fully enforceable.
9. Counterparts. This Agreement may be executed by either of the parties hereto in counterparts,
each of which shall be deemed to be an original, but all such counterparts shall together
constitute one and the same instrument.
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10. Headings. The headings of sections herein are included solely for convenience
of reference and shall not control the meaning or interpretation of any of the provisions of this
Agreement.
IN WITNESS WHEREOF, the Company has caused the Agreement to be signed by its officer pursuant
to the authority of its Board, and the Executive has executed this Agreement, as of the day and
year first written above.
| WOLVERINE TUBE, INC. |
||||
| By: | /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | |||
| Title: | Chairman, President & CEO | |||
| EXECUTIVE |
||||
| /s/ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ | ||||
| Name: | ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ | |||
| Executive’s Address: ▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ |
||||
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ATTACHMENT “A”
1. Cerro Copper Products Company, Inc.
2. Outokumpu American Brass Company
3. Industrias Nacobre S.A. de C. V.
4. ▇▇▇▇ Corporation
5. ▇▇▇▇▇▇▇ Industries, Inc.
6. Kobe Copper Products, Inc.
7. ▇. ▇. ▇▇▇▇▇▇
8. National Copper
9. ▇▇▇▇▇▇▇
10. Hitachi, Ltd.
11. Trefimetaux
12. IUSA and Reading Tube Corporation
13. Linderme
14. Amcast Industrial
15. NIBCO
16. High Performance Tube
17. DeGussa
18. ▇▇▇▇▇ — ▇▇▇▇▇▇▇▇
2. Outokumpu American Brass Company
3. Industrias Nacobre S.A. de C. V.
4. ▇▇▇▇ Corporation
5. ▇▇▇▇▇▇▇ Industries, Inc.
6. Kobe Copper Products, Inc.
7. ▇. ▇. ▇▇▇▇▇▇
8. National Copper
9. ▇▇▇▇▇▇▇
10. Hitachi, Ltd.
11. Trefimetaux
12. IUSA and Reading Tube Corporation
13. Linderme
14. Amcast Industrial
15. NIBCO
16. High Performance Tube
17. DeGussa
18. ▇▇▇▇▇ — ▇▇▇▇▇▇▇▇
Reference to the above companies shall incorporate any related companies thereto, including, but
not limited to, all parent companies, subsidiary companies, majority-owned companies and joint
ventures.
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