Exhibit 10.23

 

December 2, 2002

 

Mr. William Cann

9595 Kumner Rd.

Allison Park, PA 15101

 

Dear Bill:

 

Cable Design Technologies Corporation (the “Company”) considers the 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 — your employment relationship will be
governed by the employment offer letter delivered to you prior to the date
hereof. 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 and
shall continue in effect through November 30 2007; 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 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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Mr. William Cann

December 2, 2002

page 2

 

(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.

 

3.    Termination of Employment Following Change in Control.

 

(i)  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
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 you
terminate your employment with the Company and its subsidiaries for good reason
(as hereinafter defined) then

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Mr. William Cann

December 2, 2002

page 3

 

(A)  you shall be entitled to the benefits provided in Section 4(a) hereof;

 

(B)  any stock options and grants, profit sharing, matching contributions or
other similar items that are unvested shall vest (including, without limitation,
the sign-on bonus, stock option and stock grant issued as contemplated in your
employment agreement), 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, 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 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).

 

(ii)  For purposes of this Agreement: “good cause” means (A) your 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); you shall be “disabled” if your inability to perform 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
“good reason” shall exist if, without your express written 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

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Mr. William Cann

December 2, 2002

page 4

 

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 (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.

 

(b)  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 hereof.
“Date of Termination” shall mean the effective date specified in the 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).

 

(c)  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.

 

(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

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Mr. William Cann

December 2, 2002

page 5

 

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
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. If a change of control occurs prior to
December 31, 2003, your Annual Compensation shall be deemed to be $250,000.
Bonus in the first year shall be based on the greater of actual bonus or
guaranteed bonus.

 

(i)  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
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 tax
benefit” for purposes of this Section 4 shall mean the sum of the total amount
payable to you under this Section 4, plus 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 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
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.

 

(b)  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.

 

(c)  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
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 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 beneficiary
under this Agreement, or any right to receive payment hereunder, shall be
subject in any manner to sale, transfer,

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Mr. William Cann

December 2, 2002

page 6

 

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
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 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 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 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
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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Mr. William Cann

December 2, 2002

page 7

 

(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
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 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.

 

13.    Choice of Law.  All questions concerning the construction, validity 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
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,
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
survive the term of this Agreement.

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Mr. William Cann

December 2, 2002

page 8

 

17.    Enforcement.  The Company agrees to reimburse you for all expenses
(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:

 

 

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at the direction of the Compensation

Committee of the Board of Directors

Name:

 

Charles B. Fromm

Title:

 

Vice President, General Counsel & Secretary

 

Agreed to as of:                             , 2002

 

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William Cann