Exhibit 10.4
January 21, 2002 Stock Option Grants
Mr. Fred C. Kuznik
39 Castleton Court
North Barrington, IL 60010
Dear Fred:
The Board of Directors Cable Design Technologies Corporation (the "Company")
(and Compensation Committee hereof) has granted to you ("Grantee"), nonqualified
stock options to purchase shares of common stock, par value $.01 per share (the
"Common Stock"), of the Company. The grant date, option price per share, number
of option shares and plan under which each grant was made (each a "Plan") are as
follows:
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Number of
Option Price Option
Grant Date per Share Shares Plan
---------- ------------ --------- ----
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December 21, 2001 $14.79 100,000 2001 Plan
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December 21, 2001 $14.79 59,820 LT Plan
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December 21, 2001 $14.79 40,180 Supplemental Plan
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December 28, 2001 $14.25 149,560 2001 Plan
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December 28, 2001 $14.25 50,440 Supplemental Plan
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January 4, 2002 $15.23 100,000 2001 Plan
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"2001 Plan" = 2001 Long-Term Performance Incentive Plan; "LT
Plan" = Long-Term Performance Incentive Plan; "Supplemental Plan"
= Supplemental Long-Term Performance Incentive Plan
Each of the foregoing constitutes a separate option grant that was made on the
grant date specified above. This letter and attachment evidences each such
grant. Each option grant is subject to the terms and conditions of the Plan
under which such option grant was issued and those set forth in Schedule I
hereto, including vesting described in Schedule I, all of which terms and
conditions are incorporated herein. Please sign and return a copy of Schedule I
to confirm receipt and understanding of such terms.
Very truly yours,
CABLE DESIGN TECHNOLOGIES CORPORATION
at the direction of the Compensation Committee of the Board of Directors
By: _________________________________
Charles B. Fromm
Vice President, General Counsel
ATTACHMENT
Grantee: Fred C. Kuznik
Attachment to letter dated January 21, 2002
evidencing and describing option grants
SCHEDULE I
CABLE DESIGN TECHNOLOGIES CORPORATION
TERMS OF
NONQUALIFIED STOCK OPTION AGREEMENT EVIDENCING
A GRANT OF A NONQUALIFIED STOCK OPTION
Each of the option grants described in the letter referenced above and
to which these terms are attached (each a "grant," "option" or "option grant")
are subject to the following additional terms and conditions. All terms used but
not defined herein shall have the meanings given to them in the grant letter to
which this Schedule is attached, and if not defined therein, in the applicable
plan under which the grant was made. The grant and these terms constitute the
"Agreement" as used herein.
1. Grantee Bound by Plan. A copy of each applicable Plan has been
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provided to Grantee, which Plans (as the applicable grant) is incorporated
herein by reference and made a part hereof. Grantee hereby acknowledges
receipt of a copy of each Plan and each Plan prospectus and agrees to be
bound by all the terms and provisions thereof. Each Plan and any prospectus
then in effect should be carefully examined before any decision is made to
exercise the option.
2. Exercise of Option. Subject to the earlier termination of the option
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as provided herein and in the Plan, each option grant may be exercised, by
written notice to the Company in the form attached as Exhibit B hereto (or
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through such other procedure as is set up by the Company ), at any time and
from time to time after the date of grant, but, except as otherwise
provided below, such option shall not be exercisable for more than a
percentage of the aggregate number of shares offered as set forth in the
following schedule:
Time Period in which Cumulative Percentage of
Exercise Date occurs Shares from each Option Grant
-------------------- that
May Be Exercisable
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Date of Grant through 20%
December 10, 2002
December 11, 2002 through up to 36%
December 10, 2003
December 11, 2003 through up to 52%
December 2004
December 11, 2004 through up to 68%
December 10, 2005
December 11, 2005 through up to 84%
December 10, 2006
December 11, 2006 and after up to 100%
provided that, subject to the other conditions of this Agreement, if prior to
- --------
the expiration of this option a Change of Control (defined in Exhibit A) occurs
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then all of the then unvested options shall vest (i.e. the option shall be
exercisable for all the shares).
An option shall not be exercisable in any event after the expiration of ten
years from the date of grant. An option may not be exercised for a fraction of a
share of Common Stock.
3. Conditions to Exercise. The option may not be exercised by Grantee
----------------------
unless all of the following conditions are met:
a. Legal counsel for the Company must be satisfied at the time of
exercise that the issuance of shares of Common Stock upon exercise
will be in compliance with the Securities Act of 1933, as amended
(the "Act") and other applicable United States federal, state, local
and foreign laws;
b. Grantee must pay at the time of exercise the full purchase
price for the shares of Common Stock being acquired hereunder, by
paying in United States dollars by cash, tendering shares of Common
Stock owned by Grantee which have a fair market value equal to the
full purchase price for the shares of Common Stock being acquired,
such fair market value to be determined in such reasonable manner as
may be provided from time to time by the Committee or as may be
required in order to comply with or conform to the requirements of
any applicable or relevant laws or regulations, requesting that the
Company withhold from the shares of Common Stock to be issued to the
Grantee the number of shares necessary to satisfy the full purchase
price, based on the fair market value of the shares of Common Stock
determined as set forth in clause (ii); paying in such other form as
the Committee may determine in its sole discretion, or tendering a
combination of the forms of payment provided for above in clauses
(i) through (iv) of this Subparagraph 3(b); provided, however, that
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any payment of the purchase price in the form of shares of Common
Stock owned by the Grantee or to be issued to the Grantee shall be
made in accordance with the Company's policy regarding transactions
involving the Company's securities; and
c. Grantee must, at all times during the period beginning with the
grant date of the option and ending on the date of such exercise,
have been employed by the Company or one of its Subsidiaries,
provided that if:
(i) Grantee ceases to be so employed by reason of Grantee's
disability or retirement (as such terms are defined in the Plan and
interpreted and administered by the Committee) while holding the
option which has not expired and has not been fully exercised Grantee
may, at any time within three years of the date of the
onset of such disability or retirement (but in no event after the
expiration of ten years from the grant date), exercise the option with
respect to the number of shares, determined under Paragraph 2 above,
as to which Grantee could have exercised the option on the date of the
onset of such disability or retirement (or with respect to such
greater number of shares as determined by the Committee in its sole
discretion) and any remaining portion of the option shall be canceled
and no longer exercisable;
(ii) Grantee dies while holding the option which has not
expired and has not been fully exercised, his executors,
administrators, heirs or distributees, as the case may be, may, at any
time within one year (or such other period determined by the
Committee) after the date of death (but in no event after the Option
has expired), exercise the option with respect to any shares,
determined under Paragraph 2, as to which the decedent could have
exercised the option at the time of his death (or with respect to such
greater number of shares as determined by the Committee) and any
remaining portion of the option shall be canceled and no longer
exercisable; and
(iii) Grantee's employment with the Company or its Subsidiaries
is terminated for any reason other than as provided in clauses (i) and
(ii) above and on the date of such termination Grantee holds the
option which has not expired and has not been fully exercised, Grantee
may, at any time within 30 days after such date of termination (but in
no event after the expiration of ten years from the grant date),
exercise the option with respect to the number of shares, determined
under Paragraph 2 above, as to which Grantee could have exercised the
option on such date of termination (or with respect to such greater
number of shares as determined by the Committee in its sole
discretion), and any remaining portion of the option shall be canceled
and no longer exercisable.
Any option that is not exercised within the periods contemplated in clauses (i),
(ii) and (iii) above shall be canceled and no longer exercisable.
4. Transferability. The option may not be sold, assigned, transferred,
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pledged, hypothecated or otherwise disposed of by Grantee, except by will
or the laws of descent and distribution and is exercisable during Grantee's
lifetime only by Grantee. If Grantee or anyone claiming under or through
Grantee attempts to violate this Paragraph 4, such attempted violation
shall be null and void and without effect, and the Company's obligation to
make any further payments (stock or cash) hereunder shall terminate. If at
the time of Grantee's death the option has not been fully exercised,
Grantee's estate or any person who acquires the right to exercise the
option by bequest or inheritance or by reason of Grantee's death may, at
any time within one year after the date of Grantee's death (but in no event
after the expiration of ten years from the grant date), exercise the option
with respect to the number of shares, determined under Paragraph 2 above,
as to which Grantee could have exercised the option at the time of
Grantee's death, or with respect to such greater number of shares as
determined by the Committee in its sole discretion. The applicable
requirements of Paragraph 3 above must be satisfied at the
time of such exercise.
5. Adjustments; Change of Control. In the event of any change in the
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number of shares of Common Stock outstanding by reason of any stock split,
stock dividend, split-up, split-off, spin-off, recapitalization, merger or
consolidation in which the Company is the surviving corporation, rights
offering, reorganization, combination or exchange of shares, distribution
to shareholders other than a normal cash dividend, or other extraordinary
or unusual event occurring after the grant date specified above and prior
to its exercise in full, the number of shares of Common Stock for which the
option may then be exercised, the type of consideration for which the
option may be exercised and the option price per share may or may not be
adjusted so as to reflect such change, all as determined by the Committee
in its sole discretion. In the event of a Change of Control, the Committee
shall (i) if the Company is not the surviving corporation, provide for the
conversion of this option into an option to acquire shares of the acquiror,
with such adjustments to price and number of shares as the Committee deems
to be equitable to reflect the conversion or (ii) if the Company is the
surviving corporation, make such equitable adjustments to the price and
number of shares to reflect such Change of Control. Notwithstanding
anything in this Agreement to the contrary, the Committee may take the
foregoing actions without the consent of the Grantee, and the Committee's
determination shall be conclusive and binding on all persons for all
purposes. Following any Change of Control in which the Company is not the
surviving corporation, the term "Company" shall refer to the acquiror.
6. Withholding of Tax. It shall be a condition to the obligation of
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the Company to furnish shares of Common Stock upon exercise of an option
(i) that Grantee (or any person acting under Paragraph 4 above) pay to the
Company or its designee, upon its demand, in accordance with the Plan, such
amount as may be demanded for the purpose of satisfying the Company's
obligation to withhold federal, state, local or foreign income, employment
or other taxes incurred by reason of the exercise of the option or the
transfer of shares thereupon (the "Tax Withholding Amount"), and (ii) that
Grantee (or any person acting under Paragraph 4 above) provide the Company
with any forms, documents or other information reasonably required by the
Company in connection with the grant. In order to satisfy the condition of
clause (i), upon approval by the Committee, Grantee may (a) make payment of
the Tax Withholding Amount in United States dollars cash, (b) tender shares
of Common Stock owned by Grantee which have a fair market value equal to
the Tax Withholding Amount, such fair market value to be determined in such
reasonable manner as may be provided from time to time by the Committee or
as may be required in order to comply with or conform to the requirements
of any applicable or relevant laws or regulations, or (c) request that the
Company withhold from the shares of Common Stock to be issued to the
Grantee the number of shares which have a fair market value equal to the
Tax Withholding Amount, based on the fair market value of the shares of
Common Stock determined as set forth in clause (b), (d) make payment in
such other form as the Committee may determine in its sole discretion, or
(e) tender a combination of the forms of payment provided for above in
clauses (a) through (d) of this Paragraph 6; provided, however, that any
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payment in the form of shares of Common Stock owned by the Grantee or to be
issued to the Grantee shall be made during the period beginning on
the third business day following the date of release of the Company's
quarterly or annual summary statements of sales and earnings and shall be
made in accordance with the Company's policy regarding transactions
involving the Company's securities. If the amount requested for the purpose
of satisfying the withholding obligation is not paid, the Company may
refuse to furnish shares of Common Stock upon exercise of the option.
7. Financial Assistance. In accordance with the provisions of the
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Plan, if Grantee meets all eligibility requirements on the date of the
option exercise, as defined by the Committee, upon Grantee's request the
Company may assist Grantee in obtaining financing from the Company or from
a bank or other third party, in such amount as may be necessary to permit
the exercise of the option and/or the payment of any taxes required to be
withheld by the Company in respect thereof.
8. Amendment or Substitution of Awards. The terms of this Agreement
-----------------------------------
may be amended from time to time by the Committee in its sole discretion in
any manner that it deems appropriate (including, but not limited to,
acceleration of the vesting provisions of the option in Paragraph 2);
provided, however, that no such amendment shall adversely affect in a
material manner any right of Grantee under this Agreement without Grantee's
written consent, unless the Committee determines in its sole discretion
that there have occurred or are about to occur significant changes in
Grantee's position, duties or responsibilities, or significant changes in
economic, legislative, regulatory, tax, accounting or cost/benefit
conditions which are determined by the Committee in its sole discretion to
have or to be expected to have a substantial effect on the performance of
the Company, or any Subsidiary, affiliates, division, or department
thereof, on the Plan or on this grant under the Plan. The Committee may, in
its sole discretion, permit Grantee to surrender this grant in order to
exercise or realize the rights under other awards under the Plan, or in
exchange for the grant of new awards under the Plan, or require Grantee to
surrender this grant as a condition precedent to the grant of new awards
under the Plan.
9. Confidential Information. Grantee acknowledges that in the course
------------------------
of his employment, he will necessarily have access to become familiar with
and, as an indispensable part of his 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 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. Grantee agrees
that he will not reveal or disclose to any unauthorized person, or take and
use for his own account any Confidential Information concerning the Company
and its Subsidiaries unless and to the extent that (i) the information was
or becomes available to Grantee on a nonconfidential basis from a source
which is not bound by a confidentiality obligation to the Company or a
Subsidiary or (ii) Grantee is required by a court of competent jurisdiction
or otherwise compelled by law to disclose such Confidential Information. In
the event that Grantee is so required or compelled to make such disclosure,
such party shall cooperate with the Company to preserve in full the
confidentiality of all Confidential Information whose disclosure is not
required or compelled. Upon termination of employment, Grantee shall
promptly return to the Company all materials and all copies of materials
involving any Confidential Information in Grantee's possession or control.
Grantee agrees to represent to the Company in writing that he has complied
with the provisions of this paragraph 9(b) upon termination of employment.
10. Administration. Any action taken or decision made by the Company,
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the Board, or the Committee or its delegates arising out of or in
connection with the construction, administration, interpretation or effect
of the Plan or this Agreement shall lie within its sole and absolute
discretion, as the case may be, and shall be final, conclusive and binding
on Grantee and all persons claiming under or through Grantee. By accepting
this grant or other benefit under the Plan, Grantee and each person
claiming under or through Grantee shall be conclusively deemed to have
indicated acceptance and ratification of, and consent to, any action taken
under the Plan by the Company, the Board or the Committee or its delegates.
11. No Rights as Stockholder. Unless and until a certificate or
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certificates representing such shares of Common Stock shall have been
issued to Grantee (or any person acting under Paragraph 4 above), Grantee
shall not be or have any of the rights or privileges of a stockholder of
the Company with respect to shares of Common Stock acquirable upon exercise
of the option. No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or
distributions or other rights for which the record date is prior to the
date such stock certificate is issued to Grantee.
12. Investment Representation. Grantee hereby acknowledges that the
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shares of Common Stock which Grantee may acquire by exercising the option
shall be acquired for investment without a view to distribution, within the
meaning of the Act, and shall not be sold, transferred, assigned, pledged
or hypothecated in the absence of an effective registration statement for
the shares under the Act and applicable state securities laws or an
applicable exemption from the registration requirements of the Act and any
applicable state securities laws. Grantee also agrees that the shares of
Common Stock which Grantee may acquire by exercising the option will not be
sold or otherwise disposed of in any manner which would constitute a
violation of any applicable securities laws, whether federal or state.
13. Listing and Registration of Common Stock. The Company, in its
----------------------------------------
discretion, may postpone the issuance and/or delivery of shares of Common
Stock upon any exercise of the option until completion of such stock
exchange listing, or registration, or other qualification of such shares
under any state and/or federal law, rule or regulation as the Company may
consider appropriate.
14. Rights of Participants. Neither this Agreement nor the Plan creates
----------------------
any employment rights in Grantee and the Company shall have no liability
for terminating Grantee's employment. Grantee shall have no rights under
the Plan other than as an unsecured general creditor of the Company except
that insofar as Grantee may have become entitled to payment of additional
compensation by performance of services,
Grantee shall have the same rights as other employees under general law.
15. Notices. Any notice hereunder to the Company shall be addressed to:
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Cable Design Technologies Corporation, Foster Plaza 7, 661 Andersen Drive,
Pittsburgh, Pennsylvania 15220, Attention: President, and any notice
hereunder to Grantee shall be addressed to Grantee at Grantee's last
address on the records of the Company, subject to the right of either party
to designate at any time hereafter in writing some other address. Any
notice shall be deemed to have been duly given when delivered personally or
enclosed in a properly sealed envelope, addressed as set forth above, and
deposited (with first class postage prepaid) in the United States mail.
16. Counterparts. This Agreement may be executed in one or several
------------
counterparts, each of which shall constitute one and the same instrument.
17. Binding Effect. This Agreement shall be binding upon and inure to
--------------
the benefit of any successors to the Company and all persons lawfully
claiming under Grantee.
18. Severability. Whenever possible, each provision of this Agreement
------------
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law
or rule in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision or any other
jurisdiction, but this Agreement shall be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision
had never been contained herein. The parties agree that a court of
competent jurisdiction making a determination of the invalidity or
unenforceability of any term or provision of Paragraph 9 of this Agreement
shall have the power to reduce the scope, duration or area of any such term
or provision, to delete specific words or phrases or to replace any invalid
or unenforceable term or provision of Paragraph 9 with a term or provision
that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this
Agreement shall be enforceable as so modified.
19. Remedies. The parties hereto agree and acknowledge that Grantee's
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breach of Paragraph 9 of this Agreement shall materially and irreparably
harm the Company and its Subsidiaries, that money damages shall accordingly
not be an adequate remedy for any breach of the provisions of Paragraph 9
of this Agreement by Grantee and that the Company in its sole discretion
and in addition to any other remedies it may have at law or in equity may
apply to any court of law or equity of competent jurisdiction (without
posting any bond or deposit) for specific performance and/or other
injunctive relief in order to enforce or prevent any violations of the
provisions of this Agreement.
20. Delivery by Facsimile. This Agreement, and any amendments hereto or
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thereto, to the extent signed and delivered by means of a facsimile
machine, shall be treated in all manner and respects as an original
agreement or instrument and shall be considered to have the same binding
legal effect as if it were the original signed version thereof delivered in
person. At the request of any party hereto or to any such agreement, each
other party hereto or thereto shall re-execute original forms thereof and
deliver them to all other parties. No party hereto or to any such agreement
shall raise the use of a facsimile machine to deliver a signature or the
fact that any signature or agreement was transmitted or communicated
through the use of a facsimile machine as a defense to the formation of a
contract and each such party forever waives any such defense.
21. Governing Law. The validity, construction, interpretation,
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administration and effect of the Plan, and of its rules and regulations,
and rights relating to the Plan and to this Agreement, shall be governed by
the substantive laws, but not the choice of law rules, of the State of
Delaware.
* * * * * *
The Grantee has reviewed the foregoing and acknowledges that the
option grant to which this Schedule I is attached is subject hereto. The Grantee
agrees to be bound by the terms of this Schedule I.
Dated: _______________
Fred C. Kuznik
EXHIBIT A
Definitions
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"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
(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
-------------------
immediately prior to the date the Company initiates, or is notified of,
such Control Transaction (the "Incumbent Board") shall thereafter cease to
---------------
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.
"Subsidiary" shall mean any corporation of which the securities having a
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majority of the voting power in electing directors are, at the time of
determination, owned by the Company, directly or through one or more
Subsidiaries.
EXHIBIT B
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Form of Letter to be Used on
Exercise of Stock Options
_______________
Date
Cable Design Technologies Corporation
Foster Plaza 7
661 Andersen Drive
Pittsburgh, Pennsylvania 15220
Attention: President
Dear Sir:
I wish to exercise the stock option granted on ____________, ____ and
evidenced by my Supplemental Long-Term Performance Incentive Plan Stock Option
Agreement dated ____________, ____ to the extent of ________ shares of the
Common Stock of Cable Design Technologies Corporation, at the option price of
$________ per share. My check in the amount of $________ in payment of the
entire purchase price for these shares accompanies this letter.
Please issue a certificate for these shares in the following name:
___________________________________
Name
___________________________________
Street Address
___________________________________
City/State/Zip
Very truly yours,
_______________________
Signature
_______________________
Typed or Printed Name
________________________
Social Security Number