Exhibit
10(m)


 


SUPERIOR
TELECOM INC.


KEY
EMPLOYEE RETENTION PLAN


 


(Effective
as of April 10, 2003)


 


INTRODUCTION


 


The purpose of the Plan is to induce a selected group of key employees
of the Employer, who are key to the successful restructuring of the Company, to
remain employed by the Employer by paying such individuals a special Retention
Bonus thereby reinforcing their efforts for, and commitment to, the
Company.  Capitalized terms and phrases
used herein shall have the meanings ascribed thereto in Article I.


 


ARTICLE I.

DEFINITIONS


 


1.1           “Affiliate”
shall mean each of the following: (i) any Subsidiary; (ii) any Parent; (iii)
any corporation, trade or business (including, without limitation, a
partnership or limited liability company) which is directly or indirectly
controlled 50% or more (whether by ownership of stock, assets or an equivalent
ownership interest or voting interest) by the Company or one of its Affiliates;
and (iv) any other entity in which the Company or any of its Affiliates has a
material equity interest and which is designated as an “Affiliate” by
resolution of the Committee.


 


1.2           “Base
Pay” shall mean the Participant’s annual base salary from the
Employer payable at the rate applicable to the Participant on the Effective
Date or, if greater, for Participants in Tier II, the rate applicable to the
Participant on the date immediately prior to the Participant’s termination of
employment.  Base Pay shall be
determined as reflected on the Employer’s payroll records and shall not include
bonuses, overtime pay, shift premiums, commissions, employer contributions for
benefits or other additional compensation. 
For purposes hereof, a Participant’s Base Pay shall include (i) any
salary reduction contributions made on his or her behalf to any plan of the
Employer under Section 125, 132(f) or 401(k) of the Code and (ii) compensation
deferred by the Participant under any deferred compensation plan of the
Employer.


 


1.3           “Bonus Pool” shall mean $250,000.  In the event that an amount less than the
Bonus Pool is distributed to Participants, the excess shall not be reallocated
to Participants.


 


1.4           “Board”
shall mean the board of directors of the Company from time to time.


 


1.5           “Cause”
shall mean (with regard to a Participant’s termination of employment with the
Employer):  (A) a Participant’s gross
negligence or willful misconduct with regard to the Employer or its assets; (B)
a Participant’s misappropriation or fraud with regard to the Employer or its
assets (other than good-faith expense account disputes); (C) a Participant’s
conviction of, or the pleading of guilty or nolo contendere to, a felony or
criminal offense punishable by a term of imprisonment (other than a traffic
violation); or (D) a Participant’s material and willful refusal to perform
services (for any reason other than illness or incapacity), 


 

















 


which refusal
continues more than 30 days after written notice from the Employer to the
Participant setting forth the conduct constituting the breach.  A termination for Cause shall mean a
termination by the Company effected by written notice given within 90 days of
the occurrence of the Cause event.


 


1.6           “Change in Control” shall mean the
acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended), which
together with its affiliates, did not, as of March 3, 2003, hold (legally or
beneficially) secured debt obligations of the Debtors in excess of $1 million,
by sale, purchase, merger, reorganization or otherwise of (i) prior to or
within six months after the Plan Effective Date, all or substantially all of
the assets of the Debtors, (ii) at least 42.5% of the equity of the reorganized
Debtors within six months after the Plan Effective Date or (iii) existing debt obligations
of the Debtors prior to the Plan Effective Date which are convertible into at
least 42.5% of the equity of the reorganized Debtors upon the Plan Effective
Date; provided, however, in the event of a transaction described in subsection
(iii), the occurrence of such transaction shall be the date of the acquisition
even though the determination of whether such acquisition triggers a Change in
Control is not made until the Plan Effective Date or another subsequent date.  With respect to a Participant primarily
employed in the Company’s OEM Group (an “OEM Participant”) or the Company’s
Communications Group (a “Communications Participant”), a Change in Control
shall also mean the occurrence of the acquisition by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended), which together with its affiliates, did not,
as of March 3, 2003, hold secured debt obligations of the Debtors in excess of
$1 million, by sale, purchase, merger, reorganization or otherwise of (1) prior
to or within six months after the Plan Effective Date, all or substantially all
of the assets of the Company’s OEM Group (solely with respect to any OEM
Participant) or the Company’s Communications Group (solely with respect any
Communications Participant) or (2) prior to or within six months after the Plan
Effective Date, all of the outstanding voting securities of an entity holding
all or substantially all of the assets of the Company’s OEM Group (solely with respect
to any OEM Participant) or the Company’s Communications Group (solely with
respect any Communications Participant) (each, a “Divisional Change in
Control”).  Only one Change in Control
may occur under this Plan with respect to each Participant.


 


1.7           “Code”
shall mean the Internal Revenue Code of 1986, as amended.


 


1.8           “Committee”
shall mean a committee appointed by the Board from time to time to administer
the Plan.  Notwithstanding the
foregoing, if, and to the extent that no Committee exists which has the
authority to administer the Plan, the functions of the Committee shall be
exercised by the Board and all references herein to the Committee shall be
deemed to be references to the Board.


 


1.9           “Company”
shall mean Superior TeleCom Inc. and any successors as provided in Article V
hereof.


 


1.10         “Debtors” shall mean the Company; Superior
Telecommunications Inc.; Superior Telecommunications Realty Company; Essex
International Inc.; Essex Group, Inc., a Michigan corporation; Superior Essex
Realty Company; Active Industries, Inc.; Diamond Wire & Cable 


 


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Co.; Essex
Funding, Inc.; Essex Services, Inc.; Essex Canada Inc.; Essex Technology, Inc.;
Essex Wire Corporation; Essex Group, Inc., a Delaware corporation; Essex Group
Mexico Inc. and Essex Mexico Holdings, L.L.C.


 


1.11         “DIP” shall mean the Revolving Credit,
Guarantee and Security Agreement, dated as of March 4, 2003, among (i) Superior
Telecommunications Inc., (ii) the Company, and each of the direct and indirect
domestic subsidiaries of the Company designated as a guarantor therein, (iii)
General Electric Capital Corporation, (iv) Deutsche Bank Trust Company Americas
and (v) the financial institutions from time to time party thereto.


 


1.12         “Disability”
shall mean a Participant’s disability that would qualify as such under the
Employer’s long-term disability plan without regard to any waiting periods set
forth in such plan.


 


1.13         “Discretionary Bonus” shall mean the bonus
which a Participant (other than a Tier 1 Participant) is entitled to receive,
subject to the terms and conditions (including payment schedule) as determined
by the Committee and set forth in the Participation Notification Letter.  The aggregate amount of Discretionary
Bonuses awarded under the Plan shall not exceed the Bonus Pool.  No Discretionary Bonus shall be awarded,
without the prior written consent of the Agents (as defined in the DIP), to (i)
any Participant entitled to a Stay Bonus or any participant in the Superior
TeleCom Inc. Cash Incentive Bonus Plan) or (ii) any Participant in excess of
$20,000.


 


1.14         “Effective
Date” shall mean April 10, 2003.


 


1.15         “Employer” shall mean the Company and any
Affiliate.


 


1.16         “Exit Facility” shall mean an asset based
facility put in place to refinance the DIP, including customary borrowing base
arrangement for inventories, accounts receivable and other specified criteria.


 


1.17         “Incentive Bonus” shall mean the bonus to
which a Participant is entitled to receive that is equal to the Participant’s
Base Pay multiplied by the Target Incentive Bonus Percentage.


 


1.18         “Liquidity” shall mean the sum of (i) the
weekly average of unrestricted cash or cash equivalents on hand during the four
weeks most recently ended immediately prior to the Plan Effective Date and (ii)
the difference between the Borrowing Base (as defined in the DIP calculated in
a manner consistent with the determination of the Borrowing Base on the
Effective Date, including, the advance rates utilized as of the Effective Date
with respect to the DIP and not otherwise limited by the maximum borrowings
under the DIP) and the average weekly Total Outstandings (as defined in the
DIP) for the four weeks most recently ended immediately prior to the Plan
Effective Date; provided, however, that the Total Outstandings for each of the
four weeks most recently ended shall be adjusted to include the payment of the
restructuring fee payable to the Company’s financial advisors upon the
effectiveness of a plan of reorganization for the Company, Exit Facility costs
(which shall in no event be more than the lesser of 


 


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$3,000,000 or
the negotiated Exit Facility costs) and other reasonable and customary Plan
Effective Date-related payments.


 


1.19         “Parent” shall mean any parent corporation
of the Company within the meaning of Section 424(e) of the Code.


 


1.20         “Participant”
shall mean each key employee of the Employer selected by the Committee in its
sole discretion and designated as a Participant by the Committee in
writing.  No more than four individuals
shall be designated as Tier 1 Participants and no more than 22 individuals
shall be designated as Tier 2 Participants and any such designated individual
will only become a Participant upon receipt of a Participation Notification
Letter.


 


1.21         “Participation
Notification Letter” shall mean the letter from the Company
informing an employee of his or her selection as a Participant in the Plan and
setting forth the Participant’s Target Incentive Bonus Percentage, Target Stay
Bonus Percentage or Discretionary Bonus, as applicable, and designating the
Participant as either a Tier 1 Participant or a Tier 2 Participant for purposes
of the distribution of the Stay Bonus.


 


1.22         “Plan”
shall mean the Superior TeleCom Inc. Key Employee Retention Plan.


 


1.23         “Plan Effective Date” shall mean the date a confirmed plan
of reorganization for the Company becomes effective.


 


1.24         “Retention
Bonus” shall mean any award under this Plan of any: (i) Stay
Bonus; (ii) Incentive Bonus; or (iii) Discretionary Bonus.  Any Retention Bonus payable hereunder will
not be treated as compensation for purposes of the 401(k) and defined benefit
pension plans in which the Employer is a participating employer, unless
otherwise specifically included in “salary” or “compensation” or “bonus” for
purposes of such plan.


 


1.25         “Stay Bonus” shall mean the bonus to which a Participant is
entitled to receive that is equal to the Participant’s Base Pay multiplied by
the Target Stay Bonus Percentage.


 


1.26         “Subsidiary” shall mean any corporation
that is defined as a subsidiary corporation in Section 424(f) of the Code.


 


1.27          “Target Incentive Bonus Percentage” shall
mean the percentage of a Participant’s Base Pay, if any, a Participant is
entitled to receive as an Incentive Bonus, as determined by the Committee and
set forth in the Participation Notification Letter.  The Target Incentive Bonus Percentage shall range from 0% to 42%
of a Participant’s Base Pay.


 


1.28         “Target Stay Bonus Percentage” shall mean
the percentage of a Participant’s Base Pay, if any, a Participant is entitled
to receive as a Stay Bonus, determined by the Committee and set forth in the
Participation Notification Letter.  The
Target Stay Bonus Percentage for Tier 1 Participants shall range from 65% to
112% of a Participant’s Base Pay and for Tier 2 Participants shall range from
35% to 75% of a Participant’s Base Pay.


 


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ARTICLE II.

RETENTION BONUS


 


2.1           Stay Bonus.  Subject to provisions of this Article II, a Participant shall be
entitled to receive a Stay Bonus to the extent provided in the Participation
Notification Letter, payable in three installments in accordance with the
following schedule, provided that the Participant remains continuously employed
by the Employer through each such installment date except as otherwise provided
in Section 2.4.  Notwithstanding
anything herein to the contrary, the maximum aggregate amount of Stay Bonuses
paid to Tier 1 Participants under the Plan shall not exceed $968,600 and the
maximum amount of Stay Bonuses paid to Tier 2 Participants shall not exceed
$1,671,000.


 




	
  Installment Date

  	
   

  	
  Percentage of Stay

  Bonus Payable

  	
   

  
	
  May 3, 2003

  	
   

  	
  25

  	
  %

  
	
  The earlier
  of the Plan Effective Date or September 4, 2003

  	
   

  	
  37.5

  	
  %

  
	
  Six-Month
  Anniversary of the Plan Effective Date

  	
   

  	
  37.5

  	
  %

  






 


2.2           Incentive Bonus.  Subject to the provisions of this Article
II, a Tier 1 Participant shall be entitled to receive an Incentive Bonus to the
extent provided in the Participant Notification Letter based on the achievement
of the Liquidity targets set forth in the following schedule, payable in a
single installment as soon as practicable following the Plan Effective Date
(but in no event later than the thirtieth day following the Plan Effective Date),
provided that the Participant remains continuously employed by the Employer
through such date.  Notwithstanding
anything herein to the contrary, the maximum aggregate amount of Incentive
Bonuses paid to Tier 1 Participant shall not exceed $307,200.


 




	
  Liquidity

  	
   

  	
  Percentage of Incentive

  Bonus Payable

  	
   

  
	
  If greater
  than $50 million

  	
   

  	
  150

  	
  %

  
	
  If greater
  than $40 million but less than $50 million

  	
   

  	
  100

  	
  %

  
	
  If greater
  than $30 million but less than $40 million

  	
   

  	
  50

  	
  %

  
	
  If less than
  $30 million

  	
   

  	
  0

  	
  %

  






 


Notwithstanding the foregoing, in the event that a Change in Control
occurs, the percentage of the Incentive Bonus payable hereunder shall be deemed
to be 100% and the


 


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Incentive Bonus shall be payable in a single installment as soon as
practicable following the Plan Effective Date or the date of a Change in
Control (but in no event later than the thirtieth day following the Plan
Effective Date or the date of a Change in Control).  Solely for purposes of this Section 2.2, a Change in Control for
shall include a Divisional Change in Control regardless of whether or not a
Participant is employed by the OEM Group or the Communications Group, as
applicable.


 


2.3           Discretionary Bonus.  Subject to provisions of this Article II, a
Participant (other than a Participant entitled to receive a Stay Bonus pursuant
to Section 2.1) shall be entitled to receive a Discretionary Bonus to the
extent provided in the Participation Notification Letter, payable at such time
or times specified in the Participation Notification Letter, provided that the
Participant remains continuously employed by the Employer through each such
payment date.


 


2.4           Form of Payment.  Any Participant entitled to a portion of the
Retention Bonus pursuant to Sections 2.1, 2.2 or 2.3 shall receive such portion
in the form of a lump sum payable in cash within ten (10) business days (or at
such earlier time as required by applicable law) following each installment
date.


 


2.5           Effect of Termination of Employment and Other Events.


 


(a)           Termination Without Cause, Death or Disability.  If a Participant’s employment with the
Employer is terminated by the Employer without Cause or on account of the
Participant’s death or Disability prior to the payment of the Retention Bonus,
(i) the Participant (or, in the event of the Participant’s death, the
Participant’s estate) shall be entitled to receive a pro-rata portion of the
next installment of the Stay Bonus or, to the extent that the Discretionary
Bonus is payable in installments, the next installment of the Discretionary
Bonus that would have been payable had the Participant’s employment with the
Employer not terminated (determined by multiplying the amount of the next
installment of the Stay Bonus or the Discretionary Bonus by a fraction, the
numerator of which is the number of days from the prior installment date that
the Participant is employed by the Employer and the denominator of which is the
number of days from the prior installment date to the next installment date)
and (ii) the Participant (or, in the event of the Participant’s death, the
Participant’s estate) shall be entitled to receive a pro-rata portion of the
Incentive Bonus or, to the extent that the Discretionary Bonus is not payable
in installments, the Discretionary Bonus, (determined by multiplying the amount
of the next installment of the Incentive Bonus or the Discretionary Bonus by a
fraction, the numerator of which is the number of days from the Effective Date
that the Participant is employed by the Employer and the denominator of which
is the number of days from the Effective Date to the payment date).  All additional installments, if any, shall
be forfeited.  Payment pursuant to this
Section 2.5(a) shall be made in a single lump sum payment as soon as
practicable, but in no event later than 5 business days, following the date of
such termination, except that any payment relating to the Incentive Bonus shall
be paid at the Plan Effective Date based on the actual Liquidity level.


 


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(b)           Termination for Cause; Voluntary Termination.  If a Participant’s employment with the
Employer is terminated by the Employer for Cause or by the Participant
voluntarily for any reason (or no reason) prior to any installment date, the
Participant shall not be entitled to receive any future installment of the
Retention Bonus or the Discretionary Bonus after such termination.


 


(c)           Change in Control.  In the event of a Change in Control, the
Participant shall be entitled to receive all remaining installments of the Stay
Bonus and the Discretionary Bonus (or, to the extent that the Discretionary
Bonus is payable in installments, all remaining installments) in a single lump
sum payment as soon as practicable, but in no event later than 5 business days,
following the date of such Change in Control. 
With respect to the Incentive Bonus, the provisions of Section 2.2 shall
govern in the event of a Change in Control.


 


2.6           No Duty to Mitigate/Set-off.  No Participant entitled to receive a
Retention Bonus hereunder shall be required to seek other employment or to
attempt in any way to reduce any amounts payable to him or her pursuant to this
Plan.  Further, the amount of the
Retention Bonus payable hereunder shall not be reduced by any compensation
earned by the Participant as a result of employment by another employer or
otherwise.  The amounts payable
hereunder shall not be subject to setoff, counterclaim, recoupment, defense or
other right which the Employer may have against the Participant or others, including
without limitation, any severance or termination benefits provided under any
other agreement, plan, program or arrangement maintained or sponsored by the
Employer.


 


ARTICLE III.

FUNDING


 


This Plan shall be funded out of the general assets of the Company as
and when benefits are payable under this Plan. 
All Participants shall be solely unsecured creditors of the Company and,
if a bankruptcy proceeding of the Company is pending, the Participants shall be
solely unsecured creditors of the Company with administrative priority.  If the Company decides in its sole
discretion to establish any advance accrued reserve on its books against the
future expense of benefits payable hereunder, or if the Company decides in its
sole discretion to fund a trust under this Plan, such reserve or trust shall
not under any circumstances be deemed to be an asset of this Plan.


 


ARTICLE IV.

AMENDMENT AND TERMINATION


 


The Company shall not amend or terminate any provision of this Plan as
it relates to the Stay Bonus, the Incentive Bonus or to the extent that the
Committee has awarded a Discretionary Bonus, the Discretionary Bonus but the
Company reserves the right to amend or terminate, in whole or in part, any
provision of this Plan as it relates to any Discretionary Bonus not then
outstanding at any time following the six-month anniversary of the Plan
Effective Date.


 


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ARTICLE V.

SUCCESSORS


 


For purposes of this Plan, the Company shall include any and all
successors and assignees, whether direct or indirect, by purchase, merger,
consolidation or otherwise, to all or substantially all the business or assets
of the Company and such successors and assignees shall perform the Company’s
obligations under this Plan, in the same manner and to the same extent that the
Company would be required to perform if no such succession or assignment had
taken place.  In such event, the term
“Company”, as used in this Plan, shall mean the Company, as hereinbefore
defined and any successor or assignee to the business or assets which by reason
hereof becomes bound by the terms and provisions of this Plan.


 


ARTICLE VI.

MISCELLANEOUS


 


6.1           Rights of Participants.  Nothing herein contained shall be held or
construed to create any liability or obligation upon the Employer to retain any
Participant in its service.  All
Participants shall remain subject to discharge or discipline to the same extent
as if this Plan had not been put into effect.


 


6.2           Governing Law.  This Plan shall be governed by the laws of
the State of New Jersey (without reference to rules relating to conflicts of
law).


 


6.3           Withholding.  The Employer shall have the right to make such provisions as it
deems necessary or appropriate to satisfy any obligations it may have to
withhold federal, state or local income or other taxes incurred by reason of
payments pursuant to this Plan.


 


6.4           Severability.  In case any provision of this Plan be deemed or held to be
unlawful or invalid for any reason, such fact shall not adversely affect the
other provisions of this Plan unless such determination shall render impossible
or impracticable the functioning of this Plan, and in such case, an appropriate
provision or provisions shall be adopted so that this Plan may continue to
function properly.


 


6.5           Assignment and Alienation.  The benefits payable to the Participant
under the Plan shall not be subject to alienation, transfer, assignment,
garnishment, execution or levy of any kind and any attempt to cause any
benefits to be so subjected shall not be recognized.


 


6.6           Communications.  All announcements, notices and other
communications regarding this Plan will be made by the Employer in writing.


 


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