EXHIBIT 10.1


 


ANDREW CORPORATION


 


EXECUTIVE SEVERANCE BENEFIT PLAN


 


As Amended and Restated Effective May 14,
2004


 

















 


ANDREW CORPORATION


EXECUTIVE SEVERANCE BENEFIT PLAN


(As Amended and Restated Effective May 14,
2004)


 


SECTION 1


 


General


 


1.1.                              History
and Purpose.  Andrew Corporation
(the “Company”) previously established the Andrew Corporation Executive
Severance Benefit Plan to (i) assure the Company and its stockholders of
continuity of management in the event of any actual or threatened Change in Control;
(ii) assure the Company and its stockholders that key executive employees of
the Company will be able objectively to evaluate whether a potential Change in
Control is in the best interests of the stockholders; and (iii) advance the
interests of the Company and its stockholders by providing financial protection
to selected key executive employees of the Company who have direct
responsibility for running the Company’s operations.


 


1.2.                              Effective
Date.  The Plan was originally
effective June 1, 1986.  The
following provisions constitute an amendment and restatement of the Plan,
effective May 14, 2004.


 


SECTION 2


 


Definitions


 


In addition to terms defined elsewhere in the Plan, the following terms
will have the following meanings:


 


2.1.                              “Base
Salary” means, with respect to any Participant as of any date, the annual
base salary of the Participant as in effect on the date of such determination
or, if greater, as in effect immediately prior to the Change in Control.


 


2.2.                              “Cause”
means any of the following with respect to a Participant:


 


(a)                                  the Participant’s
willful and repeated failure to perform his or her duties with the Company
(other than any such failure due to physical or mental illness);


 


(b)                                 the Participant’s
conviction of, guilty or nolo contendere plea, to a felony which is material
and demonstrably injurious to the Company; or


 


(c)                                  the Participant’s
commission of an act, or failure to act, which constitutes gross negligence or
gross misconduct.


 


No act, or failure to act, shall be deemed “willful” under the Plan
unless done or omitted to be done by the Participant not in good faith and
without reasonable believe that the action or omission was in the best interest
of the Company.


 


2.3                                 “Change
in Control” means any of the following events:


 

















 


(a)                                  the merger or
consolidation of the Company with any other corporation following which the
holders of the Company’s common stock immediately prior thereto hold less than
60% of the outstanding common stock of the surviving or resulting entity;


 


(b)                                 the sale of all or
substantially all of the assets of the Company to any person or entity other
than a wholly-owned subsidiary;


 


(c)                                  any person or group
of persons acting in concert, or any entity, becomes the beneficial owner,
directly or indirectly, of more than 20% of the Company’s outstanding common
stock, other than an acquisition of more than 20%, in one or more transactions,
of the Company’s outstanding common stock by (A) a passive institutional
investor where such investor is eligible pursuant to Rule 13d-1(b) of the
Exchange Act to, and does, file a report of ownership on Schedule 13G with
the Securities and Exchange Commission, (B) a trustee or other fiduciary of an
employee benefit plan maintained by the Company, or (C) a corporation owned
directly or indirectly by the stockholders of the Company in substantially the
same proportions as their ownership of the Company;


 


(d)                                 those individuals who,
as of the close of the most recent annual meeting of the Company’s
stockholders, are members of the Board of Directors (the “Existing Directors”)
cease for any reason to constitute more than 50% of the Board of
Directors.  For purposes of the
foregoing, a new director will be considered an Existing Director if the
election, or nomination for election by the Company’s stockholders, of such new
director was approved by a vote of a majority of the Existing Directors.  No individual shall be considered an
Existing Director if such individual initially assumed office as a result of either
an actual or threatened election contest subject to Rule 14a-11 under the
Exchange Act or other actual or threatened solicitation of proxies by or on
behalf of anyone other than the Board of Directors, including by reason of any
agreement intended to avoid or settle any election proxy contest; or


 


(e)                                  the stockholders of
the Company adopt a plan of liquidation.


 


2.4.                              “Committee”
means the Compensation Committee of the Board of Directors of the Company.


 


2.5.                              “Company”
means Andrew Corporation, and its successors and assigns.


 


2.6.                              “Disability”
means an incapacity due to physical or mental illness or injury that causes the
Participant to be unable to perform his or her duties with the Company on a
substantially full time basis for a period of at least six calendar months.


 


2.7.                              “Estimated
Bonus” means, with respect to a Participant, the greatest of (i) the
Participant’s target bonus in effect for the fiscal year in which the Change in
Control occurs (calculated using the Participant’s Base Salary), (ii) the
Participant’s target bonus in effect for the fiscal year in which the
Participant’s Termination of Employment occurs (calculated using the
Participant’s Base Salary), (iii) the average annual bonus actually payable to
the Participant for the three fiscal years immediately prior to the fiscal year
in which the Change in Control occurs, or (iv) the average annual bonus
actually payable to the Participant for the three fiscal years immediately
prior to the fiscal year in which the Participant’s Termination of Employment
occurs.  If the Participant’s
Termination of Employment occurs before the fiscal year in which the Change in
Control occurs, Estimated Bonus shall


 


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be calculated using target bonus for the year of such termination and
the three year annual average bonus for the three fiscal years preceding such
termination.


 


2.8.                              “Exchange
Act” means the Securities Exchange Act of 1934, as amended.


 


2.9.                              “Good
Reason” means any of the following:


 


(a)                                  the diminution in the
Participant’s position, authority, duties or responsibilities (other than
isolated, insubstantial and inadvertent action which is remedied by the Company
within 30 days after notice by the Participant);


 


(b)                                 a reduction in the
Participant’s base salary, bonus or incentive opportunity, or a substantial
reduction in benefits (other than a reduction in benefits applicable to all
employees); or


 


(c)                                  a relocation of the
Participant’s principal office more than 50 miles from its location immediately
prior to the Change in Control.


 


2.10.                        “Participant”
means a Tier I Participant, Tier II Participant or Tier III Participant, as
applicable.


 


2.11.                        “Retirement”
means Termination of Employment on or after attainment of age [65?].


 


2.12.                        “Severance
Benefit” means the benefits payable to an eligible Participant under
Section 5.2.


 


2.13.                        “Severance
Multiplier” means, with respect to a Participant, the multiplier used to
calculate a Participant’s Severance Benefits, determined in accordance with the
following:


 


	
  Participant

  	
   

  	
  Severance Multiplier

  
	
   

  	
   

  	
   

  
	
  Tier I Participant

  	
   

  	
  3.0

  
	
  Tier II Participant

  	
   

  	
  2.5

  
	
  Tier III Participant

  	
   

  	
  1.0

  



 


2.14.                        “Severance
Period” means, with respect to a Participant, the period determined by
multiplying 12 months by the Participant’s Severance Multiplier.


 


2.15                           “Termination
of Employment” means the date the Participant ceases to perform services
for the Company or its affiliates for any reason.


 


2.16.                        “Tier
I Participant” means a key executive employee of the Company who has been
designated as eligible for participation in the Plan by the Committee as a Tier
I Participant.


 


2.17.                        “Tier
II Participant” means a key executive employee of the Company who has been
designated as eligible for participation in the Plan by the Committee as a Tier
II Participant.


 


2.18.                        “Tier
III Participant” means a key executive employee of the Company who has been
designated as eligible for participation in the Plan by the Committee as a Tier
III Participant.


 


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2.19.                        “Window
Period” means the period beginning 90 days prior to the date of a Change in
Control and ending 24 months after the date of the Change in Control.


 


SECTION 3


 


Participation


 


The Committee shall select the key executive employees of the Company
who are eligible to participate in the Plan, and shall designate whether such
key executive employee shall participate as a Tier I, Tier II or Tier III
Participant.  In selecting the eligible
Plan participants and designating the tier level applicable to such
Participant, the Committee shall take into consideration such factors as it
deems relevant in connection with accomplishing the purposes of the Plan.


 


Each Participant selected by the Committee shall execute a separate
agreement with the Company which will provide for the payment of Severance
Benefits in accordance with the provisions of this Plan.


 


SECTION 4


 


Administration


 


The Committee shall, from time to time, establish rules for the
administration of the Plan.  Except as
otherwise provided herein, the Committee shall have the exclusive right to
interpret the Plan and to decide any matters arising in connection with the
administration of the Plan.  The
decisions and the records of the Committee shall be conclusive and binding upon
the Company, its officers, employees and stockholders, Participants, and all
other persons having any interest under the Plan.


 


SECTION 5


 


Severance Benefits


 


5.1.                              Eligibility
for Severance Benefits.  A
Participant shall be eligible for Severance Benefits under the Plan, determined
in accordance with Section 5.2, if the Participant’s Termination of
Employment occurs during the Window Period by reason of (i) involuntary
termination by the Company for reasons other than Cause, or (ii) voluntary
termination by the Participant for Good Reason.


 


In no event shall a Participant be eligible for Severance Benefits
under this Plan if the Participant’s Termination of Employment occurs by reason
of death, Disability, Retirement , voluntary termination by the Participant for
other than Good Reason or by the Company for Cause.


 


5.2.                              Amount
of Severance Benefits.  If a
Participant’s Termination of Employment occurs under circumstances entitling
the Participant to Severance Benefits under Section 5.1, the Participant
shall be entitled to the following:


 


(a)                                  An amount equal to
the Participant’s Base Salary times the Participant’s Severance Multiplier.


 


(b)                                 An amount equal to the
Participant’s Estimated Bonus times the Participant’s Severance Multiplier.


 


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(c)                                  A bonus for the
fiscal year in which the Change in Control occurs equal to the greater of (i)
the Participant’s Estimated Bonus for such fiscal year, or (ii) the actual
bonus that would have been earned by the Participant for such fiscal year based
on performance prior to the Change in Control, reduced, if applicable, by any
bonus previously paid to the Participant for such fiscal year.


 


(d)                                 If the Participant’s
Termination of Employment occurs in a fiscal year after the fiscal year in
which the Change in Control occurs, a pro rata Estimated Bonus for the fiscal
year in which the Participant’s Termination of Employment occurs, based on the
number of days in the fiscal year preceding the termination date.


 


(e)                                  An amount equivalent
to the Company profit-sharing and matching contributions the Participant would
have received under the Andrew Profit Sharing Trust and the Andrew Employee
Retirement Benefit Restoration Plan for the Severance Period, determined by
adding the contributions made to such plans on behalf of the Participant expressed
as a percentage of his base salary for each of the three years immediately
prior to his or her termination date, and multiplying the sum by the
Participant’s Base Salary as of his or her Termination of Employment.


 


(f)                                    Immediate and full
vesting of any outstanding awards under the Andrew Corporation Management
Incentive Program, or any similar or replacement plan or program.


 


(g)                                 Immediate and full
vesting of any long-term incentive plan awards.  To the extent that the amount of any such award is determined
based on attainment of performance goals, the amount of such award shall be
determined assuming the greatest of (i) target performance, (ii) actual
performance prior to Termination of Employment [the Change in Control], or
(iii) average performance over the three year period preceding the year in
which Termination of Employment occurs.


 


(h)                                 Continued coverage
during the Severance Period for the Participant and, if applicable, his or her
spouse and dependents, under the Company’s welfare benefit plans, including
health, life and long term disability, at the same rate as active employees of
the Company; provided, however, if the Participant obtains other employment
during the Severance Period and becomes eligible to participate in welfare
plans of another employer, continued coverage under the Company’s welfare
benefit plans shall end as of the date the Participant first becomes eligible
for coverage under such other employer’s welfare plans.


 


(i)                                     Continued
eligibility for perquisites during the Severance Period at the level provided
to the Participant immediately prior to the Change in Control.


 


(j)                                     Outplacement
assistance, in an amount not to exceed $25,000.


 


5.3.                              Payment
of Severance Benefits.  The
Severance Benefits provided under paragraphs (a) through (e) of
Section 5.2 shall be paid in cash, with payment of at least 50% of such
amount made within 30 days of the later of the Participant’s Termination of
Employment or the Change in Control event, and the remaining amount, if any,
paid no later than 13 months after such event, as determined by the Company in
its discretion.


 


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SECTION 6


 


Make-Whole Payments


 


If any amount payable to the Participant by
the Company or any subsidiary or affiliate thereof, whether under this
Agreement or otherwise (a “Payment”), is subject to any tax under
section 4999 of the Internal Revenue Code of 1986, as amended (the
“Code”), or any similar federal or state law (an “Excise Tax”), the Company
shall pay to the Participant an additional amount (the “Make Whole-Amount”)
which is equal to (i) the amount of the Excise Tax, plus (ii) the aggregate
amount of any interest, penalties, fines or additions to any tax which are
imposed in connection with the imposition of such Excise Tax, plus (iii) all
income, excise and other applicable taxes imposed on the Participant under the
laws of any Federal, state or local government or taxing authority by reason of
the payments required under clause (i) and clause (ii) and this clause (iii).  The following rules shall apply to
Make-Whole Payments under this Section 6:


 


(a)                                  For purposes of determining the Make-Whole
Amount, the Participant shall be deemed to be taxed at the highest marginal
rate under all applicable local, state, federal and foreign income tax laws for
the year in which the Make-Whole Amount is paid. The Make-whole Amount payable
with respect to an Excise Tax shall be paid by the Company coincident with the
Payment with respect to which such Excise Tax relates.


 


(b)                                 All calculations under this Section 6 shall
be made initially by the Company and the Company shall provide prompt written
notice thereof to the Participant to enable the Participant to timely file all
applicable tax returns. Upon request of the Participant, the Company shall
provide the Participant with sufficient tax and compensation data to enable the
Participant or his tax advisor to independently make the calculations described
above and the Company shall reimburse the Participant for reasonable fees and
expenses incurred for any such verification.


 


(c)                                  If the Participant gives written notice to the
Company of any objection to the results of the Company’s calculations within 60
days of the Participant’s receipt of written notice thereof, the dispute shall
be referred for determination to tax counsel selected by the independent
auditors of the Company (“Tax Counsel”). The Company shall pay all fees and
expenses of such Tax Counsel. Pending such determination by Tax Counsel, the
Company shall pay the Participant the Make-Whole Amount as determined by it in
good faith. The Company shall pay the Participant any additional amount
determined by Tax Counsel to be due under this Section 6 (together with
interest thereon at a rate equal to 120% of the Federal short-term rate
determined under section 1274(d) of the Code) promptly after such
determination.


 


(d)                                 The determination by Tax Counsel shall be
conclusive and binding upon all parties unless the Internal Revenue Service, a
court of competent jurisdiction, or such other duly empowered governmental body
or agency (a “Tax Authority”) determines that the Participant owes a greater or
lesser amount of Excise Tax with respect to any Payment than the amount
determined by Tax Counsel.


 


(e)                                  If a Taxing Authority makes a claim against the
Participant which, if successful, would require the Company to make a payment
under this Section 6, the Participant agrees to contest the claim on
request of the Company subject to the following conditions:


 


(i)                                     The Participant shall notify the Company of any
such claim within 10 days of becoming aware thereof. In the event that the
Company desires the claim to be


 


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contested, it shall promptly (but in no event
more than 30 days after the notice from the Participant or such shorter time as
the Tax Authority may specify for responding to such claim) request the
Participant to contest the claim.  The
Participant shall not make any payment of any tax which is the subject of the
claim before the Participant has given the notice or during the 30-day period
thereafter unless the Participant receives written instructions from the
Company to make such payment together with an advance of funds sufficient to
make the requested payment plus any amounts payable under this Section 6
determined as if such advance were an Excise Tax, in which case the Participant
will act promptly in accordance with such instructions.


 


(ii)                                  If the Company so requests, the Participant will
contest the claim by either paying the tax claimed and suing for a refund in
the appropriate court or contesting the claim in the United States Tax Court or
other appropriate court, as directed by the Company; provided, however, that
any request by the Company for the Participant to pay the tax shall be
accompanied by an advance from the Company to the Participant of funds
sufficient to make the requested payment plus any amounts under this
Section 6 determined as if such advance were an Excise Tax.  If directed by the Company in writing the
Participant will take all action necessary to compromise or settle the claim,
but in no event will the Participant compromise or settle the claim or cease to
contest the claim without the written consent of the Company; provided,
however, that the Participant may take any such action if the Participant
waives in writing his right to a payment under this Section 6 for any
amounts payable in connection with such claim. 
The Participant agrees to cooperate in good faith with the Company in
contesting the claim and to comply with any reasonable request from the Company
concerning the contest of the claim, including the pursuit of administrative
remedies, the appropriate forum for any judicial proceedings, and the legal
basis for contesting the claim.  Upon
request of the Company, the Participant shall take appropriate appeals of any
judgment or decision that would require the Company to make a payment under
this Section 6.  Provided that the
Participant is in compliance with the provisions of this section, the Company
shall be liable for and indemnify the Participant against any loss in
connection with, and all costs and expenses, including attorneys, fees, which
may be incurred as a result of, contesting the claim, and shall provide to the
Participant within 30 days after each written request therefore by the
Participant cash advances or reimbursement for all such costs and expenses
actually incurred or reasonably expected to be incurred by the Participant as a
result of contesting the claim.


 


(f)                                    Should a Tax Authority finally determine that an
additional Excise Tax is owed, then the Company shall pay an additional
Make-Whole Amount to the Participant in a manner consistent with this
Section 6 with respect to any additional Excise Tax and any assessed
interest, fines, or penalties.  If any
Excise Tax as calculated by the Company or Tax Counsel, as the case may be, is
finally determined by a Tax Authority to exceed the amount required to be paid
under applicable law, then the Participant shall repay such excess to the
Company within 30 days of such determination; provided that such repayment
shall be reduced by the amount of any taxes paid by the Participant on such
excess which is not offset by the tax benefit attributable to the repayment.


 


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SECTION 7


 


General


 


7.1.                              Amendment
or Termination.  The Committee
reserves the right to amend, modify, suspend, or terminate the Plan at any
time, subject to the following:


 


(a)                                  without the consent
of the Participant, no such amendment, modification, suspension or termination
shall reduce or diminish his right to receive any payment or benefit then due
and payable under the Plan immediately prior to such amendment, modification,
suspension or termination;  and


 


(b)                                 in the event of a
Change in Control, no such amendment, modification, suspension or termination
of the benefits, and eligibility therefor, will be effective prior to the
expiration of the 24 consecutive month period following the date of the Change
in Control.


 


7.2.                              Arbitration.  Any controversy or claim arising out of or
relating to this Plan, or breach hereof, shall be settled by arbitration in the
City of Chicago in accordance with the laws of the State of Illinois by three
arbitrators, one of whom shall be appointed by the Company, one by the
Participant, and the third of whom shall be appointed by the first two
arbitrators.  The arbitration shall be
conducted in accordance with the rules of the American Arbitration Association,
except with respect to the selection of arbitrators.  The arbitrators’ determination shall be final and binding upon
all parties and judgment upon the award rendered by the arbitrators may be
entered in any court having jurisdiction thereof.


 


7.3.                              No
Funding of Benefits Compensation. 
Nothing herein shall require the Company to segregate, earmark or
otherwise set aside any funds or other assets to provide for any payments to be
made hereunder.  The rights of any
Participant under this Plan shall be solely those of a general creditor of the
Company.  However, in the event of a
Change in Control, the Company may deposit cash or property, or both, equal in
value to all or a portion of the benefits anticipated to be payable hereunder
for any or all Participants into a trust, the assets of which are to be distributed
at such times as are otherwise provided for in this Plan and are subject to the
claims of the general creditors of the Company.


 


7.4.                              Effect
of Death.  In the event of the
Participant’s death after entitlement to Severance Benefits but before such Severance
Benefits have been paid in full, any unpaid Severance Benefits under
Section 5.2 shall be paid to the Participant’s estate at the time such
amounts would have otherwise been paid to the Participant.  Any welfare benefits that are being provided
to the Participant’s spouse or dependents under Section 5.2(h) at the time
of such death, shall continue to be provided for the remainder of the Severance
Period.


 


7.5.                              No
Duty to Seek Employment.  The
Participant shall not be under any duty or obligation to seek or accept other
employment after termination or resignation. 
Except as provided in Section 5.2(h) (relating to eligibility for
welfare benefits from another employer), no benefit due the Participant hereunder
shall be reduced or suspended if the Participant accepts subsequent employment.


 


7.6.                              No
Alienation of Benefits.  The
Participant shall not have any right to pledge, hypothecate, anticipate or in
any way create a lien upon any amounts provided under this Plan and no benefits
payable hereunder shall be assignable in anticipation of payment either by
voluntary or involuntary acts, or by operation of law.


 


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7.7.                              Incapacity.  If, in the opinion of the Committee, a
Participant or other person entitled to benefits hereunder is physically or
mentally incapable of personally receiving any payment due hereunder, the
Committee may determine that payments be made to a person, persons or
institution who, in the opinion of the Committee, maintains or has custody of
the Participant, until claim is made by a conservator or guardian legally
charged with the care of his or her person or estate.  Any payments hereunder shall constitute a full discharge of the
liability of the Company to the extent thereof.


 


7.8.                              Legal
Expenses.  The Company agrees to
reimburse the Participant, or any beneficiary or legal representative of the
Participant, for all reasonable legal expenses, including without limitation
legal fees, court costs, arbitration costs and ordinary and necessary
out-of-pocket costs of attorneys, incurred in enforcing any provision hereof or
rights hereunder.


 


7.9.                              Withholding.  All benefits and payments under the Plan are
subject to the withholding of all applicable Federal, state and local taxes.


 


7.10.                        Successors
to the Company.  This Plan shall be
binding upon the Company and any successor of the Company, including without
limitation any corporation or other entity acquiring directly or indirectly all
or substantially all of the assets of the Company whether by merger,
consolidation, sale or otherwise.  Such
successor shall thereafter be deemed the “Company” for the purposes of this
Plan.


 


7.11.                        Gender
and Number.  Except when otherwise
indicated by the context, words in the masculine gender shall include the
feminine and neuter genders, the plural shall include the singular, and the
singular shall include the plural.


 


7.12.                        Employment
Rights.  This Plan does not
constitute a contract of employment and nothing in the Plan shall be construed
to give any Participant the right to be retained by the Company or to any
benefits not specifically provided by the Plan.


 


7.13.                        Validity.  The invalidity or unenforceability of any
provision of this Plan shall not affect the validity or enforceability of any
other provision of this Plan, which shall continue in full force and effect.


 


7.14.                        Governing
Law.  This Plan shall be governed
and construed in accordance with the laws of the State of Illinois.


 


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