EXHIBIT 10.14
June 11, 1999
Dear :
Cable Design Technologies Corporation (the "Company") considers the
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maintenance of a sound management to be essential to protecting and enhancing
the best interests of the Company and its stockholders. In this connection, the
Company recognizes that the possibility of a change in control may exist from
time to time, and that this possibility, and the uncertainty and questions it
may raise among management and employees, may result in the departure or
distraction of management and other personnel to the detriment of the Company
and its stockholders. Accordingly, the Company has determined that appropriate
steps should be taken to encourage the continued attention and dedication of
members of the Company's management and other key employees, including yourself,
to their assigned duties without the distraction which may arise from the
possibility of a change in control of the Company.
This is not an employment contract nor does it alter your status as an at-
will employee of the Company. Just as you remain free to leave the employ of
the Company at any time, so too does the Company retain its right to terminate
your employment without notice, at any time, for any reason. However, the
Company believes that, both prior to and at the time a change in control is
anticipated or occurring, it is necessary to have your continued attention and
dedication to your assigned duties without distraction. Therefore, should you
still be an employee of the Company at such time, the Company agrees that you
shall receive the severance benefits hereinafter set forth in the event your
employment with the Company terminates in contemplation of or subsequent to a
"change in control" (as defined in Section 2 hereof) under the circumstances
described below.
For good and valuable consideration, the sufficiency and receipt of which
is acknowledged, the Company and you agree as follows:
1. Term of Agreement. This Agreement shall commence on the date hereof
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and shall continue in effect through June 11, 2004; provided, however, that, if
a change in control of the Company, as defined in Section 2 hereof, shall have
occurred during the term of this Agreement, then this Agreement shall continue
in effect until the date twenty-four months after the occurrence of change in
control.
2. Change in Control. No benefits shall be payable hereunder unless
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there shall have been a change in control of the Company, as set forth below,
and your employment by the Company or any of its subsidiaries shall have been
terminated in accordance with Section 3 below. For purposes of this Agreement,
a "change in control" shall be deemed to have occurred if:
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(a) any "person" or "group" (as such terms are used in Section 13(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) is
or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company
representing 50% or more of the combined voting power of the Company's then
outstanding securities; or
June 11, 1999
page 2
(b) there shall be consummated any consolidation, merger,
reorganization or acquisition involving the Company unless following such
event (i) all or substantially all of the individuals and entities who were
the beneficial owners of the outstanding voting securities of the Company
immediately prior to such event beneficially own, directly or indirectly,
more than 55% of the combined voting power of the then-outstanding voting
securities entitled to vote generally in the election of directors of the
corporation resulting from such event in substantially the same proportions
as their ownership immediately prior to such event and (ii) the provisions
of clause (a) above are not met and (iii) at least 55% of the members of
the board of directors of the corporation resulting from such event were
members of the board of directors at the time of the initial consideration
of, or any action of the board relating to, such event; or
(c) any sale, lease, exchange or other transfer (in one transaction
or a series of related transactions) of all, or substantially all, of the
assets of the Company (on a consolidated basis); or
(d) the stockholders of the Company approve any plan or proposal for
the liquidation or dissolution of the Company; or
(e) as the result of, or in connection with, any cash tender offer,
exchange offer, merger or other business combination, sale of assets, proxy
or consent solicitation, contested election or substantial stock
accumulation (a "Control Transaction"), the members of the Board
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immediately prior to the date the Company initiates, or is notified of,
such Control Transaction (the "Incumbent Board") shall thereafter cease to
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constitute at least a majority of the Board; provided, however, that for
purposes of this clause (e) 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.
3. Termination of Employment Following Change in Control.
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(a) If at any time after the date hereof any of the events described in
Section 2 hereof constituting a change in control of the Company occurs and in
contemplation thereof, in connection therewith or within two years thereafter
(i) you involuntarily cease to be an employee of the Company or any of its
subsidiaries for any reason other than termination for good cause (as
hereinafter defined), disability (as hereinafter defined) or death or (ii) you
terminate your employment with the Company and its subsidiaries for good reason
(as hereinafter defined) then
(A) you shall be entitled to the benefits provided in Section 4(a)
hereof;
(B) any options, profit sharing, matching contributions or other
similar items that are unvested shall vest, and, in the case of options or
other items that have an expiration date, you shall be entitled to exercise
such options or other items for a period of 90 days following such
termination;
(C) contributions on your behalf to any pension, profit sharing,
401(k) matching or similar plan shall be made, to the extent not previously
made, for the period(s) (including any partial periods) up to the Date of
Termination (defined below) or, if such plan does not permit such
contributions, compensation in such amount shall be paid to you (it being
understood that to the extent such contributions are not mandatory,
June 11, 1999
page 3
contributions in the amount consistent with prior contributions shall be
made), and all amount under such plans shall vest; and
(D) the Company shall provide you with health benefits, at a level no
less than those in effect prior to the change in control, for 24 months
after such termination or, the extent that you are able to purchase health
benefits at a level no less than those in effect prior to the change in
control, reimburse you for COBRA payments for such period (in each case,
together with a tax "gross-up" to offset the tax impact of such benefits or
payment and gross-up); provided that the benefits under this clause (D)
shall cease to the extent that such benefits, at a level no less than those
in effect prior to the change of control, are otherwise available to you
(at a cost no more than that paid by you prior to the change of control)
during such period.
In the event of multiple changes of control during the term of this Agreement,
the foregoing two year period shall re-start in the event of such subsequent
change of control(s).
(b) For purposes of this Agreement: (i) "good cause" means (A) your
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conviction of any felony involving dishonesty, fraud or breach of trust with
respect to the Company or its subsidiaries, or (B) your willful engagement in
gross misconduct in the performance of your duties that is materially and
demonstrably injurious to the Company and its subsidiaries, which conduct is not
cured after notice (any action or failure to act shall not be "willful" unless
it is done, or omitted to be done, by you in bad faith or without reasonable
belief that the act, or failure to act was in the best interests of the Company
and its subsidiaries); (ii) you shall be "disabled" if your inability to perform
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your normal duties on a full-time basis for 180 consecutive business days (or
such shorter period as will suffice for you to qualify for full disability
benefits under the applicable disability insurance policy or policies of the
Company or its applicable subsidiaries) as a result of incapacity due to mental
or physical illness which is determined to be total and permanent by a qualified
physician selected by the Company or its insurers and reasonably acceptable to
you; and (iii) "good reason" shall exist if, without your express written
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consent:
(A) you are assigned duties materially inconsistent with your
position, duties, responsibilities and status with the Company and/or its
subsidiaries as of the time of the change in control (excluding for
purposes of establishing such "base" any adverse change made in
contemplation of such change of control), excluding for this purpose
isolated, insubstantial and inadvertent action(s) not taken in bad faith
and remedied by the Company or applicable subsidiary promptly after receipt
of notice from you; or
(B) the Company or any of its subsidiaries reduces your annual base
salary as in effect on the date hereof or as the same may be increased from
time to time; or
(C) the Company or any of its subsidiaries reduces your aggregate
compensation and incentive and benefit package as in effect at the time of
the change in control (excluding for purposes of establishing such "base"
any adverse change made in contemplation of such change of control); or
(D) the Company or any of its subsidiaries requires you regularly to
perform your duties of employment beyond a fifty-mile radius from the
location of your employment as of the time of the change in control
(excluding for purposes of establishing such "base" any adverse change made
in contemplation of such change of control); or
(E) the Company or any of its subsidiaries takes any other action
which materially and adversely changes the conditions or perquisites of
your employment as in effect at the time of the change in control
June 11, 1999
page 4
(excluding for purposes of establishing such "base" any adverse change made
in contemplation of such change of control); or
(F) the Company or any of its subsidiaries fails to obtain a
satisfactory agreement from any successor to assume and agree to perform
this Agreement, as contemplated by Section 10(a) hereof.
(c) For purposes of this Agreement, any purported termination by the
Company or any of its subsidiaries or by you shall be communicated by written
"Notice of Termination" to the other party hereto in accordance with Section 11
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hereof. "Date of Termination" shall mean the effective date specified in the
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Notice of Termination as of which your employment terminates (which shall be not
more than sixty (60) days after the date such Notice of Termination is given).
(d) The above provisions of this Section 3, and the provisions of Section
4, shall be applicable after a change in control has occurred, but not prior
thereto (unless termination is in contemplation of or in connection with such
change of control, in which case they shall apply).
4. Benefits Upon Termination.
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(a) If your employment with the Company or any of its subsidiaries is
terminated under circumstances which entitle you to benefits under this Section
4(a), then the amount of such benefits (which benefits shall be in addition to
any other benefits to which you are entitled other than by reason of this
Agreement, except as specifically set forth in Section 9) shall be equal to the
sum of:
(i) unpaid salary with respect to any vacation days accrued but not
taken as of the Date of Termination;
(ii) accrued but unpaid salary and bonus through the Date of
Termination; and
(iii) an amount equal to the product of (A) two (2) times (B) the
sum of (x) the highest Annual Compensation in effect at any time during the
three calendar years preceding the date the change in control occurs and
(y) your average annual bonus during the three calendar years (or, if you
have not been employed for three calendar years, such shorter number of
calendar years during which you've been employed) preceding the date the
change in control occurs.
"Annual Compensation" means your total compensation (including salary but
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excluding bonus) as reported on your W-2(s), or other applicable tax form, plus
any deductions or other deferrals of compensation not reported thereon
(including 401(k) contributions) and excluding any income resulting from
bonuses, the exercise of stock options, stock appreciation rights or other
similar long-term incentive plans.
(b) Notwithstanding paragraph (a) of this Section 4, if all or any portion
of the payments or benefits provided under this Section 4 either alone or
together with other payments or benefits which you receive or are then entitled
to receive from the Company and any of its subsidiaries, would constitute a
"parachute payment" within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended (the "Code"), such payments or benefits provided to you
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under this Section 4 shall be reduced to the extent necessary so that no portion
thereof shall be subject to the excise tax imposed by Section 4999 of the Code;
but only if, by reason of such reduction, your net after tax benefit shall
exceed the net after tax benefit if such reduction were not made. "Net after
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tax benefit" for purposes of this Section
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June 11, 1999
page 5
4 shall mean the sum of (i) the total amount payable to you under this Section
4, plus (ii) all other payments and benefits which you receive or are then
entitled to receive from the Company and any of its subsidiaries that would
constitute a "parachute payment" within the meaning of Section 280G of the Code,
less (iii) the amount of federal income taxes payable with respect to the
payment and benefits described in (i) and (ii) above calculated at the maximum
marginal income tax rate for each year in which such payments and benefits shall
be paid to you (based upon the rate in effect for such year as set forth in the
Code at the time of the first payment of the foregoing), less (iv) the amount of
excise taxes imposed with respect to the payments and benefits described in (i)
and (ii) above by Section 4999 of the Code.
(c) The cash payment obligation of the Company under Sections 4(a)(i), (ii)
and (iii) above shall be paid to you in a lump sum within ten days of the Date
of Termination.
(d) Following any change of control, the Company will indemnify you to the
fullest extent permitted under applicable laws against any claim, proceeding,
lawsuit, investigation or other action (collectively, an "Action") involving you
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in connection with, or relating to, your employment with the Company or its
subsidiaries, and the Company will, to the fullest extent permitted under
applicable laws, advance to you such expenses incurred by you in connection with
your investigation and defense of any such Action.
5. Default in Payment. Any payment not made within ten days after it is
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due in accordance with this Agreement shall thereafter bear interest, compounded
annually, at the prime rate from time to time in effect at Citibank, N.A. (or
any successor thereto).
6. No Assignment. No interest of you or your spouse or any other
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beneficiary under this Agreement, or any right to receive payment hereunder,
shall be subject in any manner to sale, transfer, assignment, pledge,
attachment, garnishment, or other alienation or encumbrance of any kind (except
a transfer upon death of rights that have accrued prior to such death), nor may
such interest or right to receive a payment or distribution be taken,
voluntarily or involuntarily, for the satisfaction of the obligations or debts
of, or other claims against, you or your spouse or other beneficiary, including
for alimony.
7. Unsecured Obligation. All rights of you and your spouse or their
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beneficiary under this Agreement shall at all times be entirely unfunded and no
provision shall at any time be made with respect to segregating any assets of
the Company or payment of any amounts due hereunder. Neither you nor your
spouse or other beneficiary shall have any interest in or rights against any
specific assets of the Company, and you and your spouse or other beneficiary
shall have only the rights of a general unsecured creditor of the Company.
8. Confidential Information. You hereby acknowledge that, in the course
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of your employment, you will necessarily have access to become familiar with
and, as an indispensable part of your employment, use trade secrets, customer
lists and detailed customer-related information (some or all of which may
constitute trade secrets), business plans, financial and other proprietary and
confidential information (collectively "Confidential Information") concerning
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the Company and its subsidiaries and that such knowledge and familiarity was and
will continue to be of special, unique, and extraordinary value to the Company
and its subsidiaries. You agree that you will not reveal or disclose to any
unauthorized person, or take and use for your own account any Confidential
Information concerning the Company or any of its subsidiaries unless and to the
extent that (a) the information was or becomes available to you on a
nonconfidential basis from a source which is not, to your knowledge, bound by a
confidentiality obligation to the Company or any of its subsidiaries, (b) you
are required by a court of competent jurisdiction or otherwise compelled by law
to disclose such Confidential Information or (c) such disclosure is made by you
in good faith in connection with your responsibilities and duties to the Company
or any of its subsidiaries. Upon termination of employment, you agree
June 11, 1999
page 6
to promptly return to the Company and its subsidiaries or destroy all materials
and all copies of materials involving any Confidential Information in your
possession or control. You also agree to represent to the Company in writing
that you have complied with the provisions of the preceding sentence upon
termination of employment. In no event shall a breach or alleged breach of this
Section 8 be grounds for withholding or reclaiming payments under this
Agreement.
9. Effect on Other Plans, Agreements and Benefits. Except to the extent
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expressly set forth herein, any benefit or compensation to which you are
entitled under any agreement between you and the Company or any of its
subsidiaries or under any plan maintained by the Company or any of its
subsidiaries in which you participate or participated shall not be modified or
lessened in any way, but shall be payable according to the terms of the
applicable plan or agreement. The terms of this Agreement shall supersede any
existing agreement between you and the Company or any of its subsidiaries
executed prior to the date hereof to the extent any such agreement is
inconsistent with the terms hereof. Notwithstanding the above, any benefits
received by you pursuant to this Agreement shall be in lieu of any severance
benefits to which you would otherwise be entitled under any general severance
policy maintained by the Company or any of its subsidiaries for its management
or other personnel.
10. Successors; Binding Agreement.
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(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 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. As used in
this Agreement, "Company" shall mean Cable Design Technologies Corporation and
any successor to its business and/or assets as aforesaid which assumes and
agrees to perform this Agreement by operation of law, or otherwise.
(b) This Agreement shall inure to the benefit of and be enforceable by
your personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees. If you should die while any amount
would still be payable to you hereunder if you had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to your devisee, legatee or other designee or if there
is no such designee, to your estate.
11. Notice. For the purposes of this Agreement, notices and all other
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communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when actually delivered or mailed by United
States registered mail, return receipt requested, postage prepaid, addressed to
the respective addresses set forth on the first page of this Agreement, provided
that all notices to the Company shall be directed to the attention of the
President of the Company with a copy to the Secretary of the Company, or to such
other address for either party as it may have furnished to the other in writing
in accordance herewith, except that notice of change of address shall be
effective only upon receipt.
12. Miscellaneous. No provision of this Agreement may be modified, waived
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or discharged unless such modification, waiver or discharge is agreed to in
writing and signed by you and a duly authorized officer of the Company. No
waiver by either party hereto at any time of any breach of or failure to comply
with any condition or provision of this Agreement by the other party hereto
shall be deemed to be a waiver of any similar or dissimilar provisions or
conditions at the same or 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 expressly set
forth in this Agreement.
June 11, 1999
page 7
13. Choice of Law. All questions concerning the construction, validity
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and interpretation of this Agreement and any exhibits and schedules hereto will
be governed by the internal law, and not the law of conflicts of, the State of
Delaware.
14. Validity. The invalidity or unenforceability of any provision of this
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Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
15. Counterpart. This Agreement may be executed in several counterparts,
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each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
16. Survival. The obligations of the parties under this Agreement all
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survive the term of this Agreement.
17. Enforcement. The Company agrees to reimburse you for all expenses
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(including reasonable legal fees and expenses) incurred by you to enforce the
terms of this Agreement.
* * * * *
If this letter correctly sets forth our agreement on the subject matter
hereof, kindly sign and return to the Company this letter and the enclosed copy
of this letter which will then constitute our agreement on this subject. We
will return the copy of this letter to you.
Sincerely,
CABLE DESIGN TECHNOLOGIES CORPORATION
By: /s/ Paul M. Olson
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at the direction of the Board of
Directors
Name: Paul M. Olson
Title: CEO & President
Agreed to as of: ______________, 1999
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