**EXHIBIT 10.1**

 

ANDREW CORPORATION

 

EXECUTIVE SEVERANCE BENEFIT PLAN

 

As Amended and Restated Effective May 14,2004

 

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ANDREW CORPORATION

EXECUTIVE SEVERANCE BENEFIT PLAN

(As Amended and Restated Effective May 14,2004)

 

**SECTION 1**

 

**General**

 

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

 

1.2.                              EffectiveDate.  The Plan was originallyeffective June 1, 1986.  Thefollowing 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 termswill have the following meanings:

 

2.1.                              “BaseSalary” means, with respect to any Participant as of any date, the annualbase salary of the Participant as in effect on the date of such determinationor, 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’swillful 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’sconviction of, guilty or nolo contendere plea, to a felony which is materialand demonstrably injurious to the Company; or

 

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

 

No act, or failure to act, shall be deemed “willful” under the Planunless done or omitted to be done by the Participant not in good faith andwithout reasonable believe that the action or omission was in the best interestof the Company.

 

2.3                                 “Changein Control” means any of the following events:

 

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(a)                                  the merger orconsolidation of the Company with any other corporation following which theholders of the Company’s common stock immediately prior thereto hold less than60% of the outstanding common stock of the surviving or resulting entity;

 

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

 

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

 

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

 

(e)                                  the stockholders ofthe 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 theParticipant to be unable to perform his or her duties with the Company on asubstantially full time basis for a period of at least six calendar months.

 

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

 

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

 

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

 

2.9.                              “GoodReason” means any of the following:

 

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

 

(b)                                 a reduction in theParticipant’s base salary, bonus or incentive opportunity, or a substantialreduction in benefits (other than a reduction in benefits applicable to allemployees); or

 

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

 

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

 

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

 

2.12.                        “SeveranceBenefit” means the benefits payable to an eligible Participant underSection 5.2.

 

2.13.                        “SeveranceMultiplier” means, with respect to a Participant, the multiplier used tocalculate a Participant’s Severance Benefits, determined in accordance with thefollowing:

 
| **Participant**      |   | **Severance Multiplier** |
|----------------------|--------|--------------------------|
|                 |   |                     |
| Tier I Participant   |   | 3.0                      |
| Tier II Participant  |   | 2.5                      |
| Tier III Participant |   | 1.0                      |

 

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

 

2.15                           “Terminationof Employment” means the date the Participant ceases to perform servicesfor the Company or its affiliates for any reason.

 

2.16.                        “TierI Participant” means a key executive employee of the Company who has beendesignated as eligible for participation in the Plan by the Committee as a TierI Participant.

 

2.17.                        “TierII Participant” means a key executive employee of the Company who has beendesignated as eligible for participation in the Plan by the Committee as a TierII Participant.

 

2.18.                        “TierIII Participant” means a key executive employee of the Company who has beendesignated as eligible for participation in the Plan by the Committee as a TierIII Participant.

 

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2.19.                        “WindowPeriod” means the period beginning 90 days prior to the date of a Change inControl 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 Companywho are eligible to participate in the Plan, and shall designate whether suchkey executive employee shall participate as a Tier I, Tier II or Tier IIIParticipant.  In selecting the eligiblePlan participants and designating the tier level applicable to suchParticipant, the Committee shall take into consideration such factors as itdeems relevant in connection with accomplishing the purposes of the Plan.

 

Each Participant selected by the Committee shall execute a separateagreement with the Company which will provide for the payment of SeveranceBenefits in accordance with the provisions of this Plan.

 

**SECTION 4**

 

**Administration**

 

The Committee shall, from time to time, establish rules for theadministration of the Plan.  Except asotherwise provided herein, the Committee shall have the exclusive right tointerpret the Plan and to decide any matters arising in connection with theadministration of the Plan.  Thedecisions and the records of the Committee shall be conclusive and binding uponthe Company, its officers, employees and stockholders, Participants, and allother persons having any interest under the Plan.

 

**SECTION 5**

 

**Severance Benefits**

 

5.1.                              Eligibilityfor Severance Benefits.  AParticipant shall be eligible for Severance Benefits under the Plan, determinedin accordance with Section 5.2, if the Participant’s Termination ofEmployment occurs during the Window Period by reason of (i) involuntarytermination by the Company for reasons other than Cause, or (ii) voluntarytermination by the Participant for Good Reason.

 

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

 

5.2.                              Amountof Severance Benefits.  If aParticipant’s Termination of Employment occurs under circumstances entitlingthe Participant to Severance Benefits under Section 5.1, the Participantshall be entitled to the following:

 

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

 

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

 

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(c)                                  A bonus for thefiscal 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 actualbonus that would have been earned by the Participant for such fiscal year basedon performance prior to the Change in Control, reduced, if applicable, by anybonus previously paid to the Participant for such fiscal year.

 

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

 

(e)                                  An amount equivalentto the Company profit-sharing and matching contributions the Participant wouldhave received under the Andrew Profit Sharing Trust and the Andrew EmployeeRetirement Benefit Restoration Plan for the Severance Period, determined byadding the contributions made to such plans on behalf of the Participant expressedas a percentage of his base salary for each of the three years immediatelyprior to his or her termination date, and multiplying the sum by theParticipant’s Base Salary as of his or her Termination of Employment.

 

(f)                                    Immediate and fullvesting of any outstanding awards under the Andrew Corporation ManagementIncentive Program, or any similar or replacement plan or program.

 

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

 

(h)                                 Continued coverageduring the Severance Period for the Participant and, if applicable, his or herspouse and dependents, under the Company’s welfare benefit plans, includinghealth, life and long term disability, at the same rate as active employees ofthe Company; provided, however, if the Participant obtains other employmentduring the Severance Period and becomes eligible to participate in welfareplans of another employer, continued coverage under the Company’s welfarebenefit plans shall end as of the date the Participant first becomes eligiblefor coverage under such other employer’s welfare plans.

 

(i)                                     Continuedeligibility for perquisites during the Severance Period at the level providedto the Participant immediately prior to the Change in Control.

 

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

 

5.3.                              Paymentof Severance Benefits.  TheSeverance Benefits provided under paragraphs (a) through (e) ofSection 5.2 shall be paid in cash, with payment of at least 50% of suchamount made within 30 days of the later of the Participant’s Termination ofEmployment 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 inits discretion.

 

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**SECTION 6**

 

**Make-Whole Payments**

 

If any amount payable to the Participant bythe Company or any subsidiary or affiliate thereof, whether under thisAgreement or otherwise (a “Payment”), is subject to any tax undersection 4999 of the Internal Revenue Code of 1986, as amended (the“Code”), or any similar federal or state law (an “Excise Tax”), the Companyshall 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 aggregateamount of any interest, penalties, fines or additions to any tax which areimposed in connection with the imposition of such Excise Tax, plus (iii) allincome, excise and other applicable taxes imposed on the Participant under thelaws of any Federal, state or local government or taxing authority by reason ofthe payments required under clause (i) and clause (ii) and this clause (iii).  The following rules shall apply toMake-Whole Payments under this Section 6:

 

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

 

(b)                                 All calculations under this Section 6 shallbe made initially by the Company and the Company shall provide prompt writtennotice thereof to the Participant to enable the Participant to timely file allapplicable tax returns. Upon request of the Participant, the Company shallprovide the Participant with sufficient tax and compensation data to enable theParticipant or his tax advisor to independently make the calculations describedabove and the Company shall reimburse the Participant for reasonable fees andexpenses incurred for any such verification.

 

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

 

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

 

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

 

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

 

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

 

(ii)                                  If the Company so requests, the Participant willcontest the claim by either paying the tax claimed and suing for a refund inthe appropriate court or contesting the claim in the United States Tax Court orother appropriate court, as directed by the Company; provided, however, thatany request by the Company for the Participant to pay the tax shall beaccompanied by an advance from the Company to the Participant of fundssufficient to make the requested payment plus any amounts under thisSection 6 determined as if such advance were an Excise Tax.  If directed by the Company in writing theParticipant 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 tocontest the claim without the written consent of the Company; provided,however, that the Participant may take any such action if the Participantwaives in writing his right to a payment under this Section 6 for anyamounts payable in connection with such claim. The Participant agrees to cooperate in good faith with the Company incontesting the claim and to comply with any reasonable request from the Companyconcerning the contest of the claim, including the pursuit of administrativeremedies, the appropriate forum for any judicial proceedings, and the legalbasis for contesting the claim.  Uponrequest of the Company, the Participant shall take appropriate appeals of anyjudgment or decision that would require the Company to make a payment underthis Section 6.  Provided that theParticipant is in compliance with the provisions of this section, the Companyshall be liable for and indemnify the Participant against any loss inconnection with, and all costs and expenses, including attorneys, fees, whichmay be incurred as a result of, contesting the claim, and shall provide to theParticipant within 30 days after each written request therefore by theParticipant cash advances or reimbursement for all such costs and expensesactually incurred or reasonably expected to be incurred by the Participant as aresult of contesting the claim.

 

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

 

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**SECTION 7**

 

**General**

 

7.1.                              Amendmentor Termination.  The Committeereserves the right to amend, modify, suspend, or terminate the Plan at anytime, subject to the following:

 

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

 

(b)                                 in the event of aChange in Control, no such amendment, modification, suspension or terminationof the benefits, and eligibility therefor, will be effective prior to theexpiration of the 24 consecutive month period following the date of the Changein Control.

 

7.2.                              Arbitration.  Any controversy or claim arising out of orrelating to this Plan, or breach hereof, shall be settled by arbitration in theCity of Chicago in accordance with the laws of the State of Illinois by threearbitrators, one of whom shall be appointed by the Company, one by theParticipant, and the third of whom shall be appointed by the first twoarbitrators.  The arbitration shall beconducted 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 uponall parties and judgment upon the award rendered by the arbitrators may beentered in any court having jurisdiction thereof.

 

7.3.                              NoFunding of Benefits Compensation. Nothing herein shall require the Company to segregate, earmark orotherwise set aside any funds or other assets to provide for any payments to bemade hereunder.  The rights of anyParticipant under this Plan shall be solely those of a general creditor of theCompany.  However, in the event of aChange in Control, the Company may deposit cash or property, or both, equal invalue to all or a portion of the benefits anticipated to be payable hereunderfor any or all Participants into a trust, the assets of which are to be distributedat such times as are otherwise provided for in this Plan and are subject to theclaims of the general creditors of the Company.

 

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

 

7.5.                              NoDuty to Seek Employment.  TheParticipant shall not be under any duty or obligation to seek or accept otheremployment after termination or resignation. Except as provided in Section 5.2(h) (relating to eligibility forwelfare benefits from another employer), no benefit due the Participant hereundershall be reduced or suspended if the Participant accepts subsequent employment.

 

7.6.                              NoAlienation of Benefits.  TheParticipant shall not have any right to pledge, hypothecate, anticipate or inany way create a lien upon any amounts provided under this Plan and no benefitspayable hereunder shall be assignable in anticipation of payment either byvoluntary or involuntary acts, or by operation of law.

 

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

 

7.8.                              LegalExpenses.  The Company agrees toreimburse the Participant, or any beneficiary or legal representative of theParticipant, for all reasonable legal expenses, including without limitationlegal fees, court costs, arbitration costs and ordinary and necessaryout-of-pocket costs of attorneys, incurred in enforcing any provision hereof orrights hereunder.

 

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

 

7.10.                        Successorsto the Company.  This Plan shall bebinding upon the Company and any successor of the Company, including withoutlimitation any corporation or other entity acquiring directly or indirectly allor substantially all of the assets of the Company whether by merger,consolidation, sale or otherwise.  Suchsuccessor shall thereafter be deemed the “Company” for the purposes of thisPlan.

 

7.11.                        Genderand Number.  Except when otherwiseindicated by the context, words in the masculine gender shall include thefeminine and neuter genders, the plural shall include the singular, and thesingular shall include the plural.

 

7.12.                        EmploymentRights.  This Plan does notconstitute a contract of employment and nothing in the Plan shall be construedto give any Participant the right to be retained by the Company or to anybenefits not specifically provided by the Plan.

 

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

 

7.14.                        GoverningLaw.  This Plan shall be governedand construed in accordance with the laws of the State of Illinois.

 

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