Exhibit 10.9

 

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

 

 

 

 

 

 

SUPERIOR ESSEX INC.

LONG-TERM INCENTIVE PLAN

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

 

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

ARTICLE 1  ESTABLISHMENT OF PLAN

1

1.1

Background

1

1.2

Purpose

1

1.3

Effective Date

1

ARTICLE 2  DEFINITIONS

1

2.1

Definitions

1

ARTICLE 3  ADMINISTRATION

4

3.1

Committee

4

3.2

Authority of Committee

4

3.3

Decisions Binding

4

ARTICLE 4  ELIGIBILITY

4

4.1

Eligibility

4

ARTICLE 5  OPERATION OF THE PLAN

5

5.1

Plan Structure

5

5.2

Designation of Participants

5

5.3

Establishment of Target Awards

5

5.4

Performance Objectives

5

5.5

Crediting, Vesting and Settlement of Performance Shares

5

5.6

Determination of Performance

6

5.7

No Dividend Equivalents

6

5.8

Terminations of Employment

6

5.9

Recoupment Policy

6

5.10

Effect of Acquisition or Disposition

6

5.11

Vesting of Performance Shares

7

ARTICLE 6  AMENDMENT, MODIFICATION AND TERMINATION

7

6.1

Amendment, Modification and Termination

7

6.2

Termination After or During Performance Period

7

ARTICLE 7  GENERAL PROVISIONS

8

7.1

Limitation of Rights

8

7.2

Payment of Taxes

8

7.3

Notices

8

7.4

Omnibus Plan Controls

8

 

i

--------------------------------------------------------------------------------

 

SUPERIOR ESSEX INC.

LONG-TERM INCENTIVE PLAN

 

ARTICLE 1

ESTABLISHMENT OF PLAN

 

1.1           BACKGROUND.  This Long-Term Incentive Plan (the “Long-Term
Incentive Plan” or the “Plan”) is a subplan of the Superior Essex Inc. Amended
and Restated 2005 Incentive Plan (“Omnibus Plan”), consisting of a program for
the grant of Performance Awards under Article 9 of the Omnibus Plan.  This Plan
has been established and approved, and will be administered by, the Committee
pursuant to the terms of the Omnibus Plan, including without limitation,
Article 14 thereof.  It is intended that the Performance Awards earned under
this Plan shall be Qualified Performance-Based Awards with respect to
Participants who are Covered Employees, with the intent that the Performance
Awards to Covered Employees will be fully deductible by the Company without
regard to the limitations of Code Section 162(m).  The applicable Award limits
of Section 5.4 of the Omnibus Plan shall apply with respect to this Plan.  As of
the Effective Date, Section 5.4 of the Omnibus Plan provides that the maximum
aggregate number of Shares underlying Awards of Restricted Stock, Restricted
Stock Units, Deferred Stock Units, Performance Shares or other Stock-Based
Awards (other than Options or SARs) granted in any one calendar year to any one
Participant shall be 300,000.

 

1.2.          PURPOSE.  The purpose of this Plan is to set forth the terms for
the periodic grant to eligible executives of the Company of Performance Shares
representing the right to receive Shares of the Company’s common stock at the
end of designated performance periods, based on the achievement of Performance
Objectives over such periods.  Performance Objectives are designed to focus on
overall corporate financial results that drive shareholder value.

 

1.3.          EFFECTIVE DATE.  This Plan was adopted by the Committee on
March19, 2008 to be effective as of January 1, 2008.

 

ARTICLE 2

DEFINITIONS

 

2.1.          DEFINITIONS.  Capitalized terms used herein and not otherwise
defined shall have the meanings assigned to such terms in the Omnibus Plan.  In
addition, the following terms shall have the following meanings for purposes of
this Plan, unless the context in which they are used clearly indicates that some
other meaning is intended or unless a Schedule approved for any Performance
Shares assigns a different meaning to such term.  Other defined terms that
relate to Performance Shares granted with respect to a specific Performance
Period may be set out on the applicable Schedule for that Performance Period.

 

Acquisition.  An acquisition (or combination of acquisitions) of a business,
including a line of products.

 

1

--------------------------------------------------------------------------------

 

Adjusted EBITDA.  A non-GAAP financial measure for the Company for a given year,
as reflected in the Company’s year-end earnings release, or if Adjusted EBITDA
is no longer reported, EBITDA.  Adjusted EBITDA is generally operating income,
increased by other income (exclusive of interest income) and reduced by other
expense and further adjusted as follows, without duplication and only to the
extent such item is included as a component of operating income:

 

(1)                                  increased by depreciation and amortization,

(2)                                  increased or reduced to eliminate the
effects of extraordinary items, within the meaning of GAAP,

(3)                                  increased or reduced to eliminate the
effects of accounting changes implemented during the Plan Year,

(4)                                  increased or reduced to eliminate the
impact of discontinued operations,

(5)                                  increased or reduced by other charges or
credits that are considered to be non-recurring or special items, and

(6)                                  increased or reduced by non-cash gains,
losses, income or expenses, such as non-cash compensation expense.

 

Adjusted EBITDA Margin.  With respect to any Performance Period, the quotient
obtained by dividing (i) the quotient of Adjusted EBITDA for a Plan Year divided
by Core Business Revenues for such Plan Year, by (ii) the number of years in the
Performance Period.

 

Adjusted Operating Income.  Consolidated Company operating income, a GAAP
financial measure for a given period, as reflected in the applicable Company
earnings release, adjusted without duplication by charges that are considered to
be non-recurring or special items.

 

Average Annual RONA.  With respect to any Performance Period, the quotient
obtained by dividing (i) the sum of RONA for each Plan Year, by (ii) the number
of years in the Performance Period.

 

Average Net Assets.  The average of total assets of the Company (on a
consolidated basis) during a Plan Year, less: (i) cash, (ii) current liabilities
other than debt, and (iii) intangible assets, as reflected on the Company’s
balance sheet on December 31 immediately prior to such Plan Year and on the last
day of each fiscal quarter in such Plan Year.

 

Core Business Revenues.  Revenues of the Company’s businesses during a Plan
Year, other than the copper rod segment, as reflected in the applicable earnings
release, with the copper component of revenues adjusted to $3.00 per pound COMEX
value or equivalent values used by the Company for Europe and China.

 

Disposition.  The disposition of businesses, product lines or interests.

 

GAAP.  Generally accepted accounting principles for U.S. companies.

 

Grantee Agreement.  Any Employment Agreement or Change in Control Agreement
between a Participant and the Company as may be in effect on the Grant Date of
Performance

 

2

--------------------------------------------------------------------------------

 

Shares hereunder.

 

Key Performance Objectives.  With respect to any Performance Shares and the
related Performance Period, the Performance Objectives specified by the
Committee which shall be used to trigger adjustments to the Performance
Objectives in the event of Acquisitions as provided in Section 5.10 hereof.

 

Pay-Out Date.  With respect to any Performance Period, the earlier of the
Scheduled Pay-Out Date or the date of the occurrence of a Change in Control.

 

Performance Period.  A period of two or more fiscal years of the Company over
which the performance shall be determined for purposes of a given Performance
Share Award.  Unless otherwise specified by the Committee, Performance Periods
under the Plan shall consist of three consecutive Plan Years.

 

Performance Objective.  With respect to any Performance Shares, any performance
objective for a given Performance Period as designated by the Committee and set
forth in a Schedule.  Performance Objectives shall be based on one or more
Qualified Business Criteria as set out in the Omnibus Plan.

 

Plan Year.  Individually, a fiscal year of the Company ended December 31, and
collectively, all such fiscal years within a given Performance Period.

 

Pro Forma Revenues.  Core Business Revenues for a specified Plan Year, increased
to reflect historic pro forma annual revenues of any Acquisition that occurs
during such Plan Year to the extent not otherwise reflected in Core Business
Revenues.

 

Return on Net Assets (RONA).  Adjusted Operating Income for the applicable Plan
Year, divided by Average Net Assets for such Plan Year.

 

Schedule.  With respect to any Performance Shares, a written document approved
by the Committee which sets forth the Performance Period, the Performance
Objectives, the Key Performance Objectives and any other matters required under
Section 5.4 hereof or deemed to be appropriate by the Committee.

 

Scheduled Pay-Out Date.  With respect to any Performance Period, March 15 of the
year following the last Plan Year in the Performance Period.

 

Target Award.  Has the meaning described in Section 5.1.

 

3

--------------------------------------------------------------------------------

 

ARTICLE 3

ADMINISTRATION

 

3.1.          COMMITTEE.  This Plan shall be administered by the Committee.

 

3.2.          AUTHORITY OF COMMITTEE.  Without limiting its authority under
Article 4 of the Omnibus Plan, the Committee has the exclusive power, authority
and discretion to:

 

(a)           Designate Participants for each Performance Period;

 

(b)           Establish and review Performance Objectives and weightings for
different Performance Objectives for each Performance Period;

 

(c)           Establish Target Awards for Participants for each Performance
Period;

 

(d)           Determine whether and to what extent Performance Objectives were
achieved for each Performance Period;

 

(e)           Increase the Performance Objectives or decrease the number of
Shares otherwise payable to any Participant resulting from the achievement of
financial Performance Objectives in any Performance Period, if the Committee
determines that the Performance Objectives would result in payouts that would be
disproportionate to the Company’s performance or other extraordinary
circumstances merit a reduction in the amounts earned;

 

(f)            Establish, adopt or revise any rules and regulations as it may
deem necessary or advisable to administer this Plan;

 

(g)           Make all other decisions and determinations that may be required
under this Plan or as the Committee deems necessary or advisable to administer
this Plan; and

 

(h)           Amend this Plan as provided herein.

 

3.3.          DECISIONS BINDING.  The Committee’s interpretation of this Plan
and all decisions and determinations by the Committee with respect to this Plan
are final, binding, and conclusive on all parties.

 

ARTICLE 4

ELIGIBILITY

 

4.1.          ELIGIBILITY.  Participants must be employees of the Company. 
Until the Committee determines otherwise, it is anticipated that participation
will be limited to officers of the Company or its Affiliates.

 

4

--------------------------------------------------------------------------------

 

ARTICLE 5

OPERATION OF THE PLAN

 

5.1.          PLAN STRUCTURE.  The Plan provides the underlying terms for
Performance Shares granted to executive officers of the Company or other
eligible participants under the Omnibus Plan.  Performance Shares are
performance-based restricted stock units that represent the right to receive
Shares of the Company’s Stock at the end of a designated Performance Period,
based on the degree to which designated Performance Objectives are achieved. 
Performance Objectives for each Performance Period will be set forth in a
Schedule approved by the Committee.

 

5.2.          DESIGNATION OF PARTICIPANTS.  Within the first 90 days of any
Performance Period, the Committee shall approve the names of Covered Employees
for that Performance Period.  The Committee may delegate to the Chief Executive
Officer the ability to designate Participants who are not Covered Employees. 
The Committee will notify or cause Participants to be notified of their
eligibility to participate, and the terms thereof, in writing.

 

5.3.          ESTABLISHMENT OF TARGET AWARDS.  Awards under the Plan are
expressed as a target number of Performance Shares, which represents the number
of Shares that will be earned at the end of the Performance Period if all of the
Performance Objectives are earned at the “target” level of achievement (“Target
Award”).  The actual number of Shares that may be earned can vary from 0% to
200% of the Target Award, depending on the level of achievement of Performance
Objectives and depending on whether the Committee exercises its discretion to
reduce a resulting pay-out as provided herein or in a relevant Schedule.  Within
the first 90 days of any Performance Period, the Committee shall approve the
Target Award for each Participant who is a Covered Employee.  Each Participant’s
Target Award will be communicated in writing to the Participant.

 

5.4.          PERFORMANCE OBJECTIVES.  Within the first 90 days of any
Performance Period, the Committee shall approve the Performance Objectives for
the Performance Period and set forth such Performance Objectives in a Schedule. 
The Schedule shall provide a description of the Performance Objectives and their
respective weightings, if applicable, and any other information that is relevant
to the formula the Committee will use to determine the number of Shares to be
granted at the end of the Performance Period, based on the level of achievement
of Performance Objectives.

 

5.5.          CREDITING, VESTING AND SETTLEMENT OF PERFORMANCE SHARES.  The
maximum number of Performance Shares that a Participant may earn shall be
credited at the time of grant to a bookkeeping account on behalf of the
Participant.  The Performance Shares will vest and will be converted to actual
Shares of Stock (one Share per vested Performance Share) on the dates and to the
extent set forth in the applicable Schedule.  Vested Performance Shares will be
registered on the books of the Company in the Participant’s name on the earlier
of the Scheduled Pay-Out Date or the date of the occurrence of a Change in
Control (whichever is applicable, the “Pay-Out Date”), and will be delivered to
the Participant as soon as practical thereafter, in certificated or
uncertificated form, as the Participant shall direct.

 

5

--------------------------------------------------------------------------------

 

5.6.          DETERMINATION OF PERFORMANCE. The Committee shall, as soon as
practicable after the end of a Performance Period certify the Company’s
performance against the Performance Objectives, but not later than March 15 of
the year following the last Plan Year in the Performance Period.

 

5.7.          NO DIVIDEND EQUIVALENTS.  Prior to the Pay-Out Date, the
Participant shall have no rights to cash dividends or other cash distributions
paid with respect to Performance Shares.

 

5.8.          TERMINATION OF EMPLOYMENT.  If the Participant’s employment
terminates prior to the end of a Performance Period for any reason other than as
set forth in the applicable Schedule or in Section 5.11, the Participant shall
forfeit all right, title and interest in and to the Performance Shares as of the
date of such termination.  In addition, the Participant shall have no rights to
any Performance Shares that fail to vest in accordance with the terms of the
Plan.

 

5.9.          RECOUPMENT POLICY.  Shares earned hereunder with respect to
Performance Shares awarded in 2008 or later to Covered Employees are subject to
recoupment pursuant to the terms of that certain Incentive Compensation
Recoupment Policy adopted by the Committee on March 6, 2008, or any replacement
policy or policies adopted by the Board or the Committee setting forth standards
for seeking the return (recoupment) from executive officers of incentive
payments if such payments were inflated due to financial results that are later
restated; provided that any such replacement policy that would have a material
adverse affect on a Participant shall only be effective prospectively.

 

5.10         EFFECT OF ACQUISITION OR DISPOSITION.  If prior to the end of a
Performance Period, the Company engages in a Disposition or Acquisition, the
following shall occur (the “Automatic Adjustments”):

 

(a)           In the case of a Disposition, each Performance Objective shall be
adjusted, effective as of the date of the Disposition, by eliminating from the
original Performance Objectives the plan business results and net assets
relating to the disposed business or assets for the remainder of the Performance
Period.

 

(b)           In the case of an Acquisition that would result in a reduction in
the Company’s performance under a Key Performance Objective for the remainder of
the Performance Period, the Performance Objectives shall be reduced, effective
as of the date of the Acquisition, for the effect of such Acquisition for the
remainder of the Performance Period.

 

Notwithstanding the Automatic Adjustments, if an Acquisition or Disposition
occurs, the Committee may, in its sole discretion, increase the applicable
Performance Objectives, so that as adjusted, the difficulty in attaining such
Performance Objectives is increased, or reduce the percentage pay-out, as a
result of such Acquisition or Disposition.

 

6

--------------------------------------------------------------------------------

 

5.11         VESTING OF PERFORMANCE SHARES.  Except as may be provided in a
Schedule with respect to a Performance Award, Performance Shares will vest and
will be converted to actual Shares of Stock (one Share per vested Performance
Share) on the dates and to the extent set forth below:

 

(a)           On the Scheduled Pay-Out Date, as to the number of Shares earned
based on the achievement of Performance Objectives as provided on the applicable
Schedule for the Performance Award.

 

(b)           On the date of a Change in Control, if any, that occurs on or
prior to the Scheduled Pay-Out Date, as to the number of Shares determined by
the Committee between the Target Award and the maximum award, subject to the
provisions of the Grantee Agreement.

 

(c)           On the Scheduled Pay-Out Date, if the Participant’s employment is
terminated due to death, Disability, Retirement, the Participant’s resignation
for “Good Reason” (as defined in the Grantee Agreement) or termination by the
Company without “Cause” (as defined in the Grantee Agreement) prior to the end
of the Performance Period, as to the number of Shares that would have been
earned if the Participant had remained employed through the end of the
Performance Period, multiplied by a fraction, the numerator of which is the
number of days lapsed since the beginning of the Performance Period and the date
of such event, and the denominator of which is the number of days in the
Performance Period.

 

If a Participant’s employment is terminated for any reason between the end of
the Performance Period and the Scheduled Pay-Out Date, the Performance Shares
shall be converted to actual Shares of Stock on the Scheduled Pay-Out Date and
be transferred to the Participant as if the Participant remained employed on the
Scheduled Pay-Out Date.

 

ARTICLE 6

AMENDMENT, MODIFICATION AND TERMINATION

 

6.1.          AMENDMENT, MODIFICATION AND TERMINATION.  The Committee may, at
any time and from time to time, amend, modify or terminate this Plan.  The
Committee may condition any amendment or modification on the approval of
shareholders of the Company if such approval is necessary or deemed advisable
with respect to tax, securities or other applicable laws, policies or
regulations, including without limitation Code Section 162(m).

 

6.2.          TERMINATION AFTER OR DURING PERFORMANCE PERIOD.  Termination of
this Plan after the end of a Performance Period but before the Scheduled Pay-Out
Date will not reduce Participants’ rights to receive and vested Shares for the
Performance Period.  Termination or amendment of this Plan during a Performance
Period shall not affect outstanding Performance Awards except as permitted under
the terms of the Omnibus Plan.

 

7

--------------------------------------------------------------------------------

 

ARTICLE 7

GENERAL PROVISIONS

 

7.1.          LIMITATION OF RIGHTS.  The Plan does not confer to the Participant
or the Participant’s Beneficiary, executors or administrators any rights of a
stockholder of the Company unless and until Shares of Stock are in fact
registered in such person’s name on the Pay-Out Date.  Prior to the Pay-Out
Date, no right or interest of the Participant in Performance Shares may be
pledged, encumbered, or hypothecated or be made subject to any lien, obligation,
or liability of the Participant to any other party other than the Company or an
Affiliate.  Prior to the Pay-Out Date, Performance Shares may not be sold,
assigned, transferred or otherwise disposed of by the Participant other than by
will or the laws of descent and distribution.

 

7.2.          PAYMENT OF TAXES.  The Company or any Affiliate shall have the
authority and the right to deduct or withhold, or require a Participant to remit
to the Company, an amount sufficient to satisfy federal, state, and local taxes
(including the Participant’s FICA obligation) required by law to be withheld
with respect to any taxable event arising as a result of this Plan.  A
Participant shall, no later than the date as of which any amount related to his
or her Performance Shares first becomes includable in the Participant’s gross
income for federal income tax purposes, pay to the Company, or make other
arrangements satisfactory to the Company regarding payment of, any federal,
state and local taxes of any kind required by law to be withheld with respect to
such amount.  By adopting this Plan, the Committee hereby approves the
Participant’s surrender to the Company of a number of Shares earned under a
Performance Share award (or the withholding of such Shares) as necessary to pay
the minimum applicable withholding tax obligation, and by accepting an award of
Performance Shares hereunder, the Participant consents to such method of tax
withholding if requested by the Company.  The obligations of the Company under
the Plan will be conditional on such payment or arrangements, and the Company,
and, where applicable, its Affiliates will, to the extent permitted by law, have
the right to deduct any such taxes from any payment of any kind otherwise due to
the Participant.

 

7.3.          NOTICES.  Notices and communications under the Plan must be in
writing and either personally delivered or sent by registered or certified
United States mail, return receipt requested, postage prepaid. Notices to the
Company must be addressed to Superior Essex Inc., 150 Interstate North Parkway,
Atlanta, Georgia 30339; Attention: Corporate Secretary, or any other address
designated by the Company with notice to the Participant.  Notices to a
Participant will be directed to the address of the Participant then currently on
file with the Company, or at any other address given by the Participant in a
written notice to the Company.

 

7.4           OMNIBUS PLAN CONTROLS.  This Plan is adopted pursuant to and shall
be governed by and construed in accordance with the Omnibus Plan.  Performance
Shares granted hereunder shall be subject to all the terms, conditions and
provisions of the Omnibus Plan and to such rules, regulations and
interpretations relating to the Omnibus Plan as may be adopted by the Committee
and as may be in effect from time to time.  The Omnibus Plan and applicable
provisions of any Grantee Agreement are incorporated herein by reference.  If
and to the extent that the provisions of this Plan conflict or are inconsistent
with the terms, conditions and provisions of the Omnibus Plan or such Grantee
Agreement, if any, the Omnibus Plan and such Grantee Agreement shall control,
provided that to the extent the Omnibus Plan provides the

 

8

--------------------------------------------------------------------------------

 

Committee with discretion to determine the terms of Performance Shares, the
exercise of such discretion shall not be considered to be inconsistent with the
terms of the Plan.

 

The foregoing is hereby acknowledged as being the Superior Essex Inc. 2008
Long-Term Incentive Plan as adopted by the Committee on March19, 2008, to be
effective as of January 1, 2008.

 

 

SUPERIOR ESSEX INC.

 

 

 

/s/ Barbara L. Blackford

 

Barbara L. Blackford

 

Executive Vice President,

 

General Counsel and Corporate Secretary

 

9

--------------------------------------------------------------------------------