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EXHIBIT 21
FORM OF
FIRST AMENDMENT TO
FISCAL YEAR 1997 MANAGEMENT INCENTIVE PLAN (THE "PLAN")
FOR EXIDE ELECTRONICS GROUP, INC. (THE "COMPANY")
The Plan is hereby amended, effective as of July , 1997, as set forth
below, pursuant to the authority of the HRC to amend the Plan as set forth in
the Plan. (All capitalized terms used in this First Amendment and not defined
herein shall have the meanings ascribed to them in the Plan.)
1. If a Change of Control occurs on or before September 30, 1997, the Plan
Period shall be deemed to have ended immediately before the Change of Control,
the Board shall determine MIP Payments in accordance with the Plan but based
upon performance only during the Plan Period as so ended, and MIP Payments shall
be made as soon as possible and practicable following the Change of Control and
in no event later than 90 days thereafter.
2. In addition, if a Change of Control occurs at any time after the date
of this Amendment pursuant to an agreement entered into by the Company, which
agreement is authorized by the Board on or before September 30, 1998, then each
Participant shall be entitled to receive a supplemental cash bonus (the
"Supplemental Bonus"), computed and payable as set forth below, and subject to
the conditions set forth below.
3. The Supplemental Bonus for each Special Participant shall be the
Special MIP Amount set forth opposite such Special Participant's name on
Schedule C hereto. The Supplemental Bonus for each Plan Participant shall equal
the excess (if any) of the Special MIP Amount for such Plan Participant over the
MIP Payment that becomes payable to such Plan Participant (i) pursuant to the
Plan without regard to this Amendment, if a Change of Control does not occur on
or before September 30, 1997, or (ii) pursuant to Section 1 above, if a Change
of Control does occur on or before September 30, 1997. (The amount described in
clauses (i) or (ii) of the preceding sentence, as applicable, is hereafter
referred to as the "Regular MIP Amount.") If the Special MIP Amount for a Plan
Participant does not exceed the Regular MIP Amount, then notwithstanding any
other provision of this Amendment, no Supplemental Bonus shall be payable to
such Plan Participant. If the Regular MIP Amount for a Plan Participant is zero,
then the Supplemental Bonus for such Plan Participant shall equal his or her
Special MIP Amount.
4. Any Supplemental Bonus that becomes payable to a Participant as
provided above shall be paid in two installments. The first such installment
(the "First Installment") shall equal one-half of the Special MIP Amount, and
shall be paid as soon as possible and practicable after the Change of Control
and in any event not later than the 15th day after the Change of Control. The
second such installment (the "Second Installment") shall equal one-half of the
Supplemental Bonus and shall be paid on the 180th day after the Change of
Control; provided, that in the case of Plan Participants, the amount of the
Second Installment shall be reduced (but not below zero) by the Regular MIP
Amount.
5. Notwithstanding any other provision of this Amendment, neither
installment of a Supplemental Bonus shall be paid to any Participant who has not
been an employee of the Company for the entire Required Period for such
installment. The "Required Period" for each installment of a Supplemental Bonus
shall be the period beginning on (a) the first day of the Plan Period or such
later date during the Plan Period as the Plan Participant first became a Plan
Participant pursuant to the terms of the Plan or, in the case of a Special
Participant, on the date of this Amendment and ending on (b) the earlier of (i)
in the case of the First Installment, the day before the date of the Change of
Control, and in the case of the Second Installment, the 180th day after the date
of the Change of Control, and (ii) the date there occurs any Wrongful
Termination of the Participant's employment.
6. The following new definitions are added to the Plan:
"Aggregate Change of Control Equity Value" means the Change of Control
Price times the number of outstanding shares of voting stock of the Company
as of the effective date of this Amendment,
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appropriately adjusted through the date of the Change of Control to account
for stock splits or combinations, stock dividends and similar adjustments
to capitalization (other than exercises of stock options and warrants
issued by the Company as of or before the effective date of this
Amendment).
"Cause" for termination of a Participant's employment shall be
considered to exist if the termination of employment shall have taken place
as a result of an act or acts of dishonesty by such Participant which
constitutes a felony under the laws of the State of North Carolina and
results in gain or personal enrichment of the Participant at the expense of
the Company.
"Change of Control" means:
(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")) (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 30% 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 Corporation, (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 pursuant to a transaction that complies with clauses (i),
(ii) and (iii) of subsection (c) below; or
(b) individuals who, as of the date hereof, constitute the Board of
Directors (the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board of Directors; 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 of Directors; or
(c) the approval by the shareholders of the Company 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 entity ("Business Combination") or, if consummation
of such Business Combination is subject, at the time of such approval by
shareholders, to the consent of any government or governmental agency,
the obtaining of such consent (either explicitly or implicitly by
consummation); excluding, however, such a Business Combination pursuant
to which (i) 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 60% 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, 30% 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
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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 of Directors, providing for such Business Combination; or
(d) approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
"Change of Control Price" means the higher of (i) the highest reported
sales price, regular way, of a share of common stock of the Company in any
transaction reported on the New York Stock Exchange Composite Tape or other
national exchange on which such shares are listed or on NASDAQ during the
60-day period prior to and including the date of a Change of Control or
(ii) if the Change of Control is the result of a tender or exchange offer
or a Business Combination, the highest price per share of Common Stock paid
in such tender or exchange offer or Business Combination. To the extent
that the consideration paid in any such transaction described above
consists all or in part of securities or other noncash consideration, the
value of such securities or other noncash consideration shall be determined
based upon trading on a national exchange or NASDAQ, if any, and otherwise,
by the Board.
"Good Reason" means:
(a) the Participant's base salary is reduced below the higher of
(i) the Participant's base salary as in effect immediately before the
Change of Control (but disregarding any reduction thereof that occurs at
the request of a third party who has taken steps reasonably calculated
to effect a Change of Control or otherwise arises in connection with or
anticipation of a Change of Control) and (ii) the Participant's highest
base salary in effect at any time thereafter;
(b) without the Participant's express written consent, the
Participant is assigned any duties inconsistent in any respect with the
Participant's position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as in effect before
the Change of Control, or the Company takes any other action which
results in a diminution in such position, authority, duties or
responsibilities as compared to before the Change of Control, excluding
for this purpose an isolated, insubstantial and inadvertent action not
taken in bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Participant;
(c) without the Participant's express written consent, the Company
requires the Participant to change the location of his or her job or
office, so that he or she will be based at a location more than fifty
(50) miles from the location of his job or office immediately prior to
the Change of Control;
(d) the Company fails to continue in effect, or, in the case of a
discontinuance, fails to replace with a superior or substantially
similar benefit or plan, any benefit or compensation plan, profit
sharing plan, 401(k) plan, stock purchase plan, stock option plan, life
insurance plan, or health, accident or disability plan in which the
Participant is participating before the Change of Control (or plans
providing no less favorable and substantially similar benefits), or the
Employer takes any action which would materially adversely affect the
Participant's participation or materially reduce the Participant's
benefits under any of such plans;
(e) the Company takes any action which would deprive the
Participant of any material fringe benefit to which he or she was
entitled immediately prior to the Change of Control;
(f) a successor company fails or refuses to assume the Company's
obligation under the Plan;
(g) the Company or any successor company breaches any of the
provisions of the Plan; or
(h) if the Participant is party to any employment agreement or
severance agreement with the Company, the material breach by the
Employer of any provision of such employment agreement.
"Incremental Amount" means two percent of the amount by which the
Aggregate Change of Control Equity Value exceeds $221,230,000.
"Participant" means a Plan Participant or a Special Participant.
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"Special MIP Amount" means: (i) with respect to any Plan Participant
listed on Schedule A or Schedule B hereto, the Target MIP for such Plan
Participant plus the percentage of the Incremental Amount listed opposite
such Plan Participant's name on Schedule A or Schedule B, as applicable;
provided, that the Special MIP Amount for a Plan Participant listed on
Schedule B shall not exceed the Maximum MIP for such Plan Participant; (ii)
with respect to Plan Participants other than those listed on Schedule A or
Schedule B hereto, the Maximum MIP for 1997 for such Plan Participant (as
determined before the date of this Amendment); and (iii) with respect to
any Special Participant, the amount listed opposite such Special
Participant's name on Schedule C hereto.
"Special Participant" means an individual listed on Schedule C hereto.
"Wrongful Termination" of a Participant means: (i) a termination of
the Participant's employment after a Change of Control by the Company
without Cause or by the Participant for Good Reason; or (ii) a termination
of the Participant's employment before a Change of Control by the Company
without Cause at the request of a third party who has taken steps
reasonably calculated to effect a Change of Control or otherwise in
connection with or anticipation of a Change of Control.
7. The rights of Participants to Supplemental Bonuses hereunder are vested
subject only to the conditions set forth in this Amendment, and may not be
amended or terminated in any way adverse to Participants.
8. The Plan is in all other respects ratified and affirmed without
amendment.
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