Exhibit 10.a

 

 

Laura Owen

 

Vice President, Human Resources

 

Laura_owen@adc.com

 

Tel:  952.917.0706

 

Fax: 952.917.0708

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March 24, 2004

 

Mr. Ron Lowy

 

Dear Mr. Lowy:

 

As you know, ADC Telecommunications, Inc. (“Company”) is anticipating a stock
purchase agreement with Gentek, Inc. under which the Krone Communications
business will be purchased from Gentek (the “Transaction”).  The Company is very
excited about this opportunity, and values the role that you can serve on our
team.  This employment letter agreement (“Letter Agreement”), sets forth our
offer of continued employment following the closing of the Transaction.

 

1.                                       POSITION AND DUTIES.  YOUR INITIAL
POSITION WILL BE VICE-PRESIDENT, GLOBAL SALES, AND PRESIDENT, INFRASTRUCTURE
BUSINESS, REPORTING TO ROBERT SWITZ AND YOUR PRINCIPAL PLACE OF EMPLOYMENT SHALL
BE CENTENNIAL, COLORADO.  WHILE SOME CHANGE IN YOUR DUTIES AND RESPONSIBILITIES
WILL BE INHERENT IN THE INTEGRATION OF THE COMPANY AND KRONE, YOUR JOB DUTIES
WILL BE THOSE NORMALLY AND REASONABLY ATTENDANT TO SUCH A POSITION. REASONABLE
CHANGES MAY BE MADE FROM TIME TO TIME IN YOUR POSITION AND DUTIES IN THE
COMPANY’S DISCRETION.  THE COMPANY WILL CONSULT WITH YOU IN GOOD FAITH PRIOR TO
MAKING ANY SUCH CHANGES. YOU AGREE TO DEVOTE YOUR FULL TIME AND ATTENTION TO THE
PERFORMANCE OF YOUR DUTIES.  YOU ALSO AGREE TO COMPLY WITH APPLICABLE LAW AND
ALL COMPANY POLICIES, INCLUDING THE COMPANY’S CODE OF BUSINESS CONDUCT.  UPON
CLOSING OF THE TRANSACTION, YOU WILL ALSO BE REQUIRED TO SIGN THE COMPANY’S
STANDARD CONFIDENTIALITY AND INVENTION AGREEMENT, AND OTHER ROUTINE HUMAN
RESOURCES DOCUMENTS AS NECESSARY FROM TIME-TO-TIME.

 

2.                                       TERM.  YOUR EMPLOYMENT WILL NOT BE FOR
A SET TERM, BUT RATHER CONTINUE INDEFINITELY ON AN AT-WILL BASIS SUBJECT TO YOUR
POTENTIAL RIGHT TO SEVERANCE DESCRIBED BELOW.

 

3.                                       BASE SALARY.  YOU WILL BE PAID A BASE
SALARY (“BASE SALARY”) AT AN ANNUAL RATE OF THREE HUNDRED SIXTY THOUSAND DOLLARS
($360,000.00), PAYABLE IN ACCORDANCE WITH THE COMPANY’S NORMAL PAYROLL
POLICIES.  YOUR BASE SALARY WILL BE REVIEWED ANNUALLY AND MAY BE INCREASED IN
THE DISCRETION OF THE COMPANY, BUT WILL NOT BE DECREASED.

 

4.                                       BENEFITS.  YOU WILL BE ELIGIBLE TO
PARTICIPATE IN ALL EMPLOYEE BENEFIT PROGRAMS ESTABLISHED BY THE COMPANY THAT ARE
APPLICABLE TO SIMILARLY SITUATED EMPLOYEES OF THE COMPANY AS IN EFFECT FROM TIME
TO TIME.  YOU WILL BE GIVEN CREDIT FOR YOUR TIME OF SERVICE WITH GENTEK FOR
PURPOSES OF THE COMPANY’S BENEFIT PLANS. YOU WILL ALSO BE ELIGIBLE FOR VACATION
AND OTHER PAID TIME OFF IN ACCORDANCE WITH THE COMPANY’S POLICIES IN EFFECT FOR
SIMILARLY SITUATED EMPLOYEES. YOU WILL RETAIN ANY ACCRUED UNUSED VACATION AT THE
TIME OF

 

Office Address:  13625 Technology Drive, Eden Prairie, Minnesota 55344

Mailing Address: P.O. Box 1101, Minneapolis, Minnesota 55411-1101

World Headquarters: Minneapolis, Minnesota USA +1.952.938.8080   www.adc.com

 

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CLOSING.  THE COMPANY DOES NOT GUARANTEE THE ADOPTION OR CONTINUANCE OF ANY
PARTICULAR EMPLOYEE BENEFIT OR BENEFIT PLAN, AND NOTHING IN THIS LETTER
AGREEMENT IS INTENDED TO, OR SHALL IN ANY WAY RESTRICT THE RIGHT OF THE COMPANY,
TO AMEND, MODIFY OR TERMINATE ANY OF ITS BENEFITS OR BENEFIT PLANS.  YOUR
ELIGIBILITY TO PARTICIPATE IN ANY BENEFITS PLAN IS SUBJECT TO THE TERMS OF THE
APPLICABLE PLAN, AS MAY BE AMENDED FROM TIME TO TIME.

 

You will also participate in perquisite programs established by the Company that
are in effect from time to time for similarly-situated executives in your
country.  Currently, this includes an enhancement to the long-term disability
coverage, eligibility for a supplement to the 401(k) plan, which we call the ADC
401(k) Excess Plan, and a monthly allowance in lieu of other perquisites that
has an annualized value of Sixteen Thousand Dollars$16,000.

 

5.                                       INCENTIVE COMPENSATION.  FOR THE PERIOD
OF JANUARY 1, 2004 THROUGH THE TIME OF CLOSING OF THE TRANSACTION, YOU WILL BE
PAID UNDER THE TERMS OF THE 2004 GENTEK OPERATIONS MANAGEMENT INCENTIVE PLAN. 
FROM THAT POINT FORWARD, WHILE YOU ARE EMPLOYED AND WHILE THE COMPANY’S
MANAGEMENT INCENTIVE PLAN (“MIP”) REMAINS IN EFFECT, YOU WILL BE ELIGIBLE TO
PARTICIPATE IN THE MIP SUBJECT TO AND IN ACCORDANCE WITH THE TERMS AND
CONDITIONS THEREOF.  UNDER THE CURRENT MIP, YOUR TARGET INCENTIVE WILL BE 75% OF
YOUR SALARY PAID DURING THE 2004 COMPANY FISCAL YEAR.  UNDER THE CURRENT PLAN
DESIGN, THE ACTUAL MIP AWARD CAN RANGE FROM ZERO TO 300% OF YOUR TARGET AWARD.
THE COMPANY RESERVES THE RIGHT TO MODIFY THE DESIGN AND TERMS OF THE MIP FOR
SUBSEQUENT FISCAL YEARS.

 

6.                                       STOCK OPTIONS.  THE COMPANY WILL GRANT
YOU AN OPTION TO PURCHASE 375,000 SHARES OF THE COMPANY’S COMMON STOCK IN
ACCORDANCE WITH THE TERMS OF THE COMPANY’S GLOBAL STOCK INCENTIVE PLAN (THE
“GLOBAL PLAN”), AS THE SAME MAY BE AMENDED FROM TIME-TO-TIME, AND A
NON-QUALIFIED STOCK OPTION AGREEMENT TO BE ENTERED INTO BETWEEN YOU AND THE
COMPANY.  THE EXERCISE PRICE FOR THIS OPTION SHALL BE THE AVERAGE OF THE HIGH
AND LOW TRADING PRICES OF THE COMPANY’S COMMON STOCK ON THE EFFECTIVE DATE OF
GRANT, AS DETERMINED IN ACCORDANCE WITH THE TERMS OF THE GLOBAL PLAN.  THESE
OPTIONS WILL VEST OVER A FOUR (4) YEAR PERIOD, WITH 25% OF THE GRANT VESTING
AFTER THE LAPSE OF EACH FULL YEAR FROM THE DATE OF GRANT AND SHALL TERMINATE TEN
(10) YEARS FROM THE DATE OF GRANT IF NOT EARLIER IN THE EVENT OF TERMINATION OF
EMPLOYMENT.  VESTING IS CONDITIONAL ON YOUR CONTINUED EMPLOYMENT DURING THE
VESTING PERIOD, PROVIDED HOWEVER, THAT THE OPTIONS GRANTED HEREBY SHALL BECOME
FULLY VESTED AND EXERCISABLE IF YOUR EMPLOYMENT TERMINATES AFTER NOVEMBER 12,
2004 BY THE COMPANY WITHOUT “CAUSE” OR BY YOU FOR “GOOD REASON”, IN EACH CASE AS
DEFINED IN THE KERP (AS DESCRIBED IN SECTION 8 HEREOF).  THE EFFECTIVE DATE OF
THE GRANT WILL BE THE LAST BUSINESS DAY OF THE MONTH IN WHICH YOU BECOME AN
EMPLOYEE OF ADC (THE MONTH OF THE TRANSACTION CLOSING).  THE GRANT WILL BE
CONDITIONAL ON YOUR SIGNED ACCEPTANCE OF ADC’S STANDARD FORM OF OPTION
AGREEMENT, WHICH INCLUDES YOUR PROMISE NOT TO SOLICIT ADC EMPLOYEES IN THE CASE
OF YOUR DEPARTURE FROM ADC.

 

7.                                       RESTRICTED STOCK UNITS.  THE COMPANY
WILL GRANT TO YOU 125,000 SHARES OF THE RESTRICTED STOCK UNITS (RSU’S”) IN THE
COMPANY’S COMMON STOCK IN ACCORDANCE WITH THE TERMS OF THE GLOBAL PLAN, AS THE
SAME MAY BE AMENDED FROM TIME-TO-TIME, AND ADC’S STANDARD FORM OF RSU AGREEMENT
TO BE ENTERED INTO BETWEEN YOU AND THE COMPANY.  THESE RSU’S WILL VEST OVER A
FOUR (4) YEAR PERIOD, WITH 25% OF THE GRANT VESTING AFTER THE LAPSE OF EACH FULL
YEAR FROM THE DATE OF GRANT.  THE EFFECTIVE DATE OF THE GRANT WILL BE THE LAST
BUSINESS DAY OF THE MONTH IN WHICH YOU BECOME AN EMPLOYEE OF ADC.  AS WITH YOUR
STOCK OPTIONS, VESTING IS CONDITIONAL ON YOUR CONTINUED EMPLOYMENT WITH ADC
DURING THE VESTING PERIOD, PROVIDED HOWEVER, THAT THE RSU’S GRANTED HEREBY SHALL
BECOME FULLY VESTED IF YOUR

 

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EMPLOYMENT TERMINATES AFTER NOVEMBER 12, 2004 BY THE COMPANY WITHOUT “CAUSE” OR
BY YOU FOR “GOOD REASON,” IN EACH CASE AS DEFINED IN THE KERP.

 

8.                                       KERP SEVERANCE PROVISIONS.  THE COMPANY
AND GENTEK ARE IN DISCUSSIONS ABOUT THE GENTEK INC. KEY EMPLOYEE RETENTION PLAN
(“KERP”).  REGARDLESS OF THE RESULT OF THOSE DISCUSSIONS, THE SEVERANCE BENEFITS
CURRENTLY AVAILABLE TO YOU AND THE CONDITIONS UNDER WHICH YOU MAY BE ENTITLED TO
SUCH SEVERANCE WILL BE MAINTAINED, EITHER DIRECTLY UNDER THE KERP OR UNDER A
COMPARABLE SEVERANCE PLAN TO BE ESTABLISHED BY THE COMPANY.  ANY SUCH PLAN
ESTABLISHED BY THE COMPANY WILL BE IN EFFECT UNTIL NOVEMBER 13, 2008.  IN EITHER
CASE, ANY POTENTIAL RIGHT TO “ENHANCED SEVERANCE” AS SET FORTH IN THE KERP
EXPIRES ON NOVEMBER 13, 2004.  PLEASE UNDERSTAND THAT WE DO NOT INTEND ANY
DUPLICATION OF SEVERANCE PAY BENEFITS ACROSS THE GENTEK KERP, ANY COMPARABLE
PLAN ADOPTED BY THE COMPANY OR ANY OTHER SEVERANCE PAY MAINTAINED BY THE
COMPANY.  ACCORDINGLY, UNDER NO CIRCUMSTANCES WOULD YOU BE ENTITLED TO SEVERANCE
PAYMENTS UNDER MORE THAN ONE SUCH PLAN.

 

9.                                       NO “GOOD REASON” TO RESIGN.  BY
ACCEPTING THIS LETTER AGREEMENT, YOU EXPRESSLY AGREE THAT THE TERMS OF
EMPLOYMENT, INCLUDING YOUR INITIAL POSITION, OFFERED IN THIS AGREEMENT ARE
SATISFACTORY TO YOU AND THE CHANGES IN THE TERMS AND CONDITIONS OF YOUR
EMPLOYMENT CONTEMPLATED HEREBY SHALL NOT CONSTITUTE “GOOD REASON” FOR A
VOLUNTARY RESIGNATION UNDER THE KERP AND SHALL NOT GIVE RISE TO YOUR RIGHT TO
RECEIVE ANY SEVERANCE PAYMENT UNDER THE KERP OR ANY COMPARABLE PLAN ADOPTED BY
THE COMPANY.  YOU ARE NOT FORFEITING YOUR RIGHT TO RESIGN FOR GOOD REASON AS SET
FORTH IN THE KERP IF THERE ARE FUTURE CHANGES FROM YOUR INITIAL POSITION WITH
THE COMPANY THAT CONSTITUTE GOOD REASON AS DEFINED IN KERP, WHICH DEFINITION
WILL BE EXPRESSLY ADOPTED INTO ANY COMPARABLE COMPANY PLAN.

 

10.                                 NON-SOLICITATION AND NON-HIRE.  YOU AGREE
THAT, FOR A PERIOD OF ONE (1) YEAR AFTER TERMINATION OF YOUR EMPLOYMENT UNDER
ANY CIRCUMSTANCES, YOU SHALL NOT DIRECTLY OR INDIRECTLY:  (A) HIRE OR ATTEMPT TO
HIRE FOR EMPLOYMENT ANY PERSON WHO IS EMPLOYED BY THE COMPANY OR ITS AFFILIATES,
OR ATTEMPT TO INFLUENCE ANY SUCH PERSON TO TERMINATE EMPLOYMENT WITH THE COMPANY
OR ITS AFFILIATES; (B) INDUCE OR ATTEMPT TO INDUCE ANY EMPLOYEE OF THE COMPANY
OR ITS AFFILIATES TO WORK FOR, RENDER SERVICES TO, PROVIDE ADVICE TO, OR SUPPLY
CONFIDENTIAL BUSINESS INFORMATION OR TRADE SECRETS OF THE COMPANY OR ITS
AFFILIATES TO ANY THIRD PERSON, FIRM OR CORPORATION; OR (C) INDUCE OR ATTEMPT TO
INDUCE ANY CUSTOMER, SUPPLIER, LICENSEE, LICENSOR OR OTHER BUSINESS RELATION OF
THE COMPANY TO CEASE OR REDUCE DOING BUSINESS WITH THE COMPANY OR ITS
AFFILIATES, OR IN ANY WAY INTERFERE WITH THE RELATIONSHIP BETWEEN ANY SUCH
CUSTOMER, SUPPLIER, LICENSEE, LICENSOR, OR OTHER BUSINESS RELATION OF THE
COMPANY OR ITS AFFILIATES.

 

You agree that your breach of the non-solicitation, non-hire restrictions will
cause the Company irreparable harm which would not be adequately compensated by
monetary damages and that an injunction may be granted by any court or courts
having jurisdiction, restraining you from breaches of those terms.

 

11.                                 CONDITIONS.  THIS LETTER SHALL BE LEGALLY
BINDING UPON MUTUAL EXECUTION AND DELIVERY BY THE COMPANY AND YOU, SUBJECT TO
THE FOLLOWING CONDITIONS:  (A) RECEIPT OF APPROVAL OF THE MATERIAL TERMS OF THIS
AGREEMENT BY THE COMPENSATION COMMITTEE OF ADC’S BOARD OF DIRECTORS, WHICH
APPROVAL SHALL BE SOUGHT PRIOR TO THE EXECUTION OF THE ACQUISITION AGREEMENT
BETWEEN ADC AND GENTEK; AND (B) THE EFFECTIVE DATE OF EMPLOYMENT UNDER THE TERMS
OF THIS AGREEMENT SHALL NOT COMMENCE UNTIL THE DATE OF CLOSING OF THE
TRANSACTION.  IF THE ACQUISITION AGREEMENT IS TERMINATED FOR ANY REASON PRIOR TO
THE CLOSING OF THE

 

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TRANSACTION, THIS LETTER AGREEMENT SHALL BE TERMINATED AND NEITHER PARTY SHALL
HAVE ANY OBLIGATION TO THE OTHER BY REASON OF THIS AGREEMENT.

 

12.                                 REQUIRED DISCLOSURES.  AS A PUBLICLY-HELD
COMPANY, ADC MAY HAVE CERTAIN DISCLOSURE OBLIGATIONS WITH RESPECT THE TERMS OF
YOUR COMPENSATION AND EMPLOYMENT.  YOU ACKNOWLEDGE AND AGREE THAT ADC MAY MAKE
SUCH DISCLOSURES REGARDING THIS INFORMATION AS IT DEEMS APPROPRIATE UNDER
APPLICABLE LAWS, HOWEVER THE COMPANY WILL PROVIDE YOU NOTICE PRIOR TO ANY SUCH
DISCLOSURE BEING MADE TO ANY PARTY OUTSIDE OF THE COMPANY.

 

13.                                 ENTIRE AGREEMENT.  THIS LETTER AGREEMENT AND
THE SERVICE AGREEMENT, EXCEPT AS MODIFIED HEREIN, CONSTITUTE THE ENTIRE
AGREEMENT BETWEEN YOU AND THE COMPANY, ITS AFFILIATES AND/OR SUBSIDIARIES, WITH
RESPECT TO THE MATTERS ADDRESSED HEREIN, INCLUDING WITH RESPECT TO COMPENSATION
AND TERMINATION, AND AT CLOSING WILL SUPERCEDE ALL PRIOR AGREEMENTS AND
UNDERSTANDINGS WITH RESPECT TO THE MATTERS ADDRESSED HEREIN.  YOU ACKNOWLEDGE
THAT THERE HAVE BEEN NO OTHER REPRESENTATIONS OR AGREEMENTS OTHER THAN AS STATED
IN THIS LETTER AGREEMENT RELATED TO THE TERMS AND CONDITIONS OF YOUR EMPLOYMENT
AND/OR THE TERMINATION THEREOF.  THIS LETTER AGREEMENT MAY BE CHANGED ONLY BY AN
AGREEMENT IN WRITING SIGNED BY BOTH YOU AND THE CHIEF EXECUTIVE OFFICER OF THE
COMPANY.  IF ANY COURT OR COMPETENT AUTHORITY DEEMS ANY PORTION OF THIS
AGREEMENT UNENFORCEABLE, SUCH UNENFORCEABLE PORTION SHALL BE SEVERED OR MODIFIED
TO PERMIT ENFORCEMENT TO THE MAXIMUM EXTENT ALLOWABLE.  IN THE EVENT THAT THE
TRANSACTION DOES NOT OCCUR, THIS LETTER AGREEMENT IS NULL AND VOID.

 

By your signature below, you acknowledge that you have read, understood, and
agreed to the terms set forth in this Letter Agreement.

 

Dated:

  3-24-04

 

 

 

 

 

ADC Telecommunications, Inc.

 

 

 

 

 

 

By

/s/ Laura N. Owen

 

 

Company

 

 

 

 

 

I agree to the above terms.

 

 

 

 

 

Dated:

3-24-04

 

 

 

 

 

 

 

/s/ Ron Lowy

 

 

RON LOWY

 

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