EMPLOYMENT AGREEMENT
This Agreement is made by and between TRIMAS CORPORATION, a Delaware
corporation ("Company") and XXXXXX XXXXXXX (hereinafter "Executive"), effective
August 1, 2005 ("Effective Date"). In order to induce Executive to serve as its
General Counsel and Corporate Secretary ("General Counsel"), Company enters into
this Agreement with Executive to set out the terms and conditions that will
apply to Executive's employment with Company during the term of this Agreement.
Executive is willing to accept such employment and assignment and to perform
services on the terms and conditions hereinafter set forth. It is therefore
hereby agreed by and between the parties as follows:
SECTION 1 - EMPLOYMENT.
(a) Scope. Company employs Executive as its General Counsel. In this
capacity, Executive shall report to the President and Chief
Executive Officer ("CEO"). Executive accepts employment in
accordance with this Agreement and agrees to devote his full
business time and efforts to the performance of his duties and
responsibilities hereunder.
(b) Other Activities. Nothing in this Agreement shall preclude Executive
from engaging in charitable and community affairs or managing any
passive investment (i.e., an investment with respect to which
Executive is in no way involved with the management or operation of
the entity in which Executive has invested) to the extent that such
activities do not conflict with any provision of this Agreement,
provided that Executive shall not, without the prior approval of the
Board of Directors of Company (the "Board"), serve as a director or
trustee of any other corporation, association or entity, or own more
than two percent (2%) of the equity of any publicly traded entity.
SECTION 2 - TERM OF AGREEMENT. This Agreement shall govern the terms of
Executive's employment from the Effective Date until the earlier of the date
that is six (6) months following the date on which Company gives written notice
to Executive of termination of the Agreement or the date that either party
terminates Executive's employment under this Agreement. Executive shall not be
guaranteed employment during the six (6) month period following any notice of
termination of this Agreement ("Notice Period"). If employment terminates during
a Notice Period, the rights and obligations of the parties shall be governed by
the terms of this Agreement, notwithstanding that a notice of termination was
given. The termination of this Agreement shall not be a termination of those
provisions of this Agreement which by their terms survive the termination of
this Agreement.
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SECTION 3 - COMPENSATION.
(a) Salary. Company shall pay Executive at the rate of Three Hundred
Five Thousand dollars ($305,000) per annum ("Base Salary"). Base
Salary shall be payable in accordance with the ordinary payroll
practices of Company and shall be subject to all applicable federal,
state and local withholding and reporting requirements. Base Salary
may be adjusted by the CEO during the term of this Agreement.
(b) Annual Value Creation Plan ("AVCP"). Executive shall be eligible to
participate in the AVCP, a copy of which has been provided to
Executive, subject to all the terms and conditions of such plan, as
such plan may be modified from time to time.
SECTION 4 - EMPLOYEE BENEFITS.
(a) Employee Retirement Benefit Programs, Welfare Benefit Programs,
Plans and Practices. Company shall provide Executive with coverage
under any retirement benefit programs, welfare benefit programs,
plans and practices, that Company makes available to its senior
executives, in accordance with the terms thereof, as such programs,
plans and practices may be amended from time to time in accordance
with their terms.
(b) Vacation. Executive shall be entitled to twenty (20) business days
of paid vacation each calendar year, which shall be taken at such
times as are consistent with Executive's responsibilities hereunder.
Vacation days shall be subject to Company's general policies
regarding vacation days, as such policies may be modified from time
to time.
(c) Perquisites. During Executive's employment hereunder, Company shall
provide Executive, subject to review and approval by the CEO, with
such additional perquisites as are generally available to
similarly-situated executives.
(d) Stock Options. Executive shall be eligible to participate in the
TriMas Corporation 2002 Long Term Equity Incentive Plan in
accordance with the terms and conditions of such plan and any grant
agreements thereunder.
SECTION 5 - EXPENSES. Subject to prevailing Company policy or such
guidelines as may be established by the CEO or his delegee, Company will
reimburse Executive for all reasonable expenses incurred by Executive in
carrying out his duties.
SECTION 6 - TERMINATION OF EMPLOYMENT. Executive remains an
employee-at-will, subject to the terms of this Agreement, and his employment may
be terminated by either party at any time for any reason by written notice. If
employment terminates during the term of this Agreement, this Agreement shall
govern the rights and responsibilities of the parties upon such termination. If
employment terminates after this Agreement has terminated, this Agreement shall
not apply except to the extent of those provisions that by their nature survive
the term of this Agreement.
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(a) Termination Without Cause or for Good Reason. If Executive's
employment is terminated during the term of this Agreement by
Company for any reason other than Cause (as defined in Section 6(c)
hereof), Disability (as defined in Section 6(e) hereof) or death, or
if Executive's employment is terminated by Executive for Good Reason
(as defined in Section 6(a) (2) hereof), then Company shall pay
Executive the Severance Package. Termination of employment after
this Agreement has terminated shall not be a termination under this
Section 6(a). Likewise, a termination by Executive without Good
Reason shall be a termination under Section 6(b) below and not a
termination under this Section 6(a).
(1) For purposes of this Agreement, "Severance Package" shall
mean:
(A) Base Salary continuation for twelve (12) months at
Executive's annual Base Salary rate in effect on the
date of termination, subject to all applicable federal,
state and local withholding and reporting requirements.
These salary continuation payments shall be paid in
accordance with usual Company payroll practices;
(B) An amount equal to the Average Bonus. For purposes of
this Agreement, "Average Bonus" shall be the average of
the annual bonuses paid to Executive by Company for the
last three full annual bonus terms, or such shorter
period as Executive has participated in Company's bonus
program, provided that if Executive has not completed a
full year of service under this Agreement, the Average
Bonus shall be determined based on Executive's level of
participation in the AVCP for the year of termination
with the payout rate determined by reference to the
average bonus, stated as a percentage of base salary,
paid to similarly-situated executives in the preceding
three full years. The Average Bonus shall be paid in
equal installments over the twelve (12) month period
described in Section 6(a)(1)(A) above, subject to the
same withholding and reporting requirements. In
addition, Executive shall receive the bonus for the most
recently completed bonus term if a bonus has been
declared for Executive for such term but not paid, and a
pro rata bonus for the year of termination through the
date of termination equal to the Average Bonus,
multiplied by a fraction the numerator of which is the
number of days that Executive was employed during such
bonus term and the denominator of which is 365. The
prorated bonus shall be paid in a single sum within ten
(10) days of the termination of Executive's employment
with Company. Any unpaid bonus shall be paid in
accordance with customary practices for payment of
bonuses under AVCP; and
(C) Continuation of medical benefits under Company group
benefits (including health, dental and prescription
plans), as defined by the plan documents, until the
earlier of twelve (12) months following Executive's
termination of employment or the date on which
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Executive becomes eligible to receive any medical
benefits under any plan or program of any other
employer; provided, that Executive timely elects to
continue group health coverage under COBRA and subject
to Company's COBRA policies. Executive will be charged
and responsible for payment of the COBRA premium equal
to the employee portion of the premium for the selected
coverage that Executive would have paid if Executive
continued to be a Company employee. Company will pay the
employer-portion of the medical coverage. After the
stated continuation period, Executive will be
responsible for 100% of the COBRA premiums.
Any obligation to pay any portion of premium cost under
this item may be settled, at Company's discretion, by a
lump-sum payment of any remaining premiums.
In connection with the Severance Package, Executive shall
cease to be an active participant under Company retirement
programs and other benefit plans pursuant to the terms of
those plans. No amounts paid under this Agreement shall
constitute compensation for purposes of any such retirement
plan. Executive's rights to any accrued and vested benefits
under a qualified retirement plan shall be determined in
accordance with the applicable plan document.
Except as stated in this Section 6(a) (1), Executive shall not
be entitled to any other benefit or compensation from Company.
(2) For purposes of this Agreement, a termination of employment by
Executive for "Good Reason" shall be a termination by
Executive following the occurrence of any of the following
events unless Company has cured as provided below:
(A) A material and permanent diminution in Executive's
duties or responsibilities;
(B) A material reduction in the aggregate value of Base
Salary and bonus opportunity; or
(C) A permanent reassignment of Executive to another primary
office, or a relocation of Company office that is
Executive's primary office, unless Executive's primary
office following such reassignment or relocation is
within thirty-five (35) miles of Executive's primary
office before the reassignment or relocation or
Executive's permanent residence on the date of the
reassignment or relocation.
Executive must notify Company of any event constituting Good
Reason within one hundred twenty (120) days after Executive
becomes aware of such event or such event shall not constitute
Good Reason for purposes of this
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Agreement provided that Company shall have fifteen (15) days
from the date of such notice to cure the Good Reason event.
Executive cannot terminate his employment for Good Reason if
Cause exists at the time of such termination. A termination by
Executive following cure shall not be a termination for Good
Reason. A failure of Executive to notify Company after the
first occurrence of an event constituting Good Reason shall
not preclude any subsequent occurrences of such event (or
similar event) from constituting Good Reason.
(b) Voluntary Termination by Executive. If Executive terminates his
employment with Company without Good Reason, then Company shall pay
Executive his accrued unpaid Base Salary through the date of
termination and the AVCP award for the most recently completed year
if an award has been declared for such year but not paid. The
accrued unpaid Base Salary amounts payable under this Section 6(b)
shall be payable in a lump sum within ten (10) days of termination
of employment. Any accrued unpaid bonus amounts payable under this
Section 6(b) shall be payable in accordance with customary practices
for payment of bonuses under AVCP. No prorated bonus for the year of
termination shall be paid. Any other benefits under other plans and
programs of Company in which Executive is participating at the time
of Executive's termination of employment shall be paid, distributed,
settled, or shall expire in accordance with their terms, and Company
shall have no further obligations hereunder with respect to
Executive following the date of termination of employment.
(c) Termination for Cause. If Executive's employment is terminated for
Cause, Company shall pay Executive his accrued but unpaid Base
Salary through the date of the termination of employment, and no
further payments or benefits shall be owed. The accrued unpaid Base
Salary amounts payable under this Section 6(c) shall be payable in a
lump sum within ten (10) days of termination of employment. As used
herein, the term "Cause" shall be limited to:
(1) Executive's conviction of or plea of guilty or nolo contendere
to a crime constituting a felony under the laws of the United
States or any state thereof or any other jurisdiction in which
Company conducts business;
(2) Executive's willful misconduct in the performance of his
duties to Company;
(3) Executive's willful and continued failure to follow the
instructions of the Board or the CEO; or
(4) Executive's willful and/or continued neglect of duties (other
than any such neglect resulting from incapacity of Executive
due to physical or mental illness);
provided, however, that Cause shall arise under items (3) or (4)
only following ten (10) days written notice thereof from Company
which specifically identifies such failure or neglect and the
continuance of such failure or neglect during such notice
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period. Any failure by Company to notify Executive after the first
occurrence of an event constituting Cause shall not preclude any
subsequent occurrences of such event (or a similar event) from
constituting Cause.
(d) Termination Following a Change of Control. Notwithstanding any
provision of Section 2 to the contrary, upon the occurrence of a
Change of Control (as defined below), the Notice Period required to
terminate this Agreement shall continue until the later of the date
that is six (6) months from the date of such notice or the third
anniversary of such Change of Control. In the event Executive's
employment with Company terminates by reason of a Qualifying
Termination (as defined below) within the three (3) years after a
Change of Control, then, in lieu of the Severance Package, and
subject to the limitations described in Section 7 below, Company
shall provide Executive the following termination benefits:
(1) Termination Payments. Company shall pay Executive:
(A) A single sum payment equal to two hundred percent (200%)
of Executive's annual Base Salary rate in effect on the
date of termination, subject to all applicable federal,
state and local withholding and reporting requirements.
This single-sum payment shall be paid within ten (10)
days of termination of employment;
(B) An amount equal to two hundred percent (200%) of the
Average Bonus, as that term has been defined above. In
addition, Executive shall receive the bonus for the most
recently completed bonus term if a bonus has been
declared for such term but not paid, and a pro rata
bonus for the year of termination through the date of
termination equal to the Average Bonus, multiplied by a
fraction the numerator of which is the number of days
that Executive was employed during such bonus term and
the denominator of which is 365. The prorated bonus for
the final year shall be paid as a single sum within ten
(10) days of termination of employment. Any unpaid bonus
shall be paid in accordance with customary practices for
payment of bonuses under AVCP.
All payments under this Section 6(d), however, are subject to
the timing rules, calculations and adjustments described in
Sections 7 and 8.
(C) Medical Benefits Continuation. Continuation of medical
benefits under Company group benefits (including health,
dental and prescription plans), as defined by the plan
documents, until the earlier of twenty four (24) months
following the Qualifying Termination or the date on
which Executive becomes eligible to receive any medical
benefits under any plan or program of any other
employer; provided, that Executive timely elects to
continue group health coverage under COBRA and subject
to Company's COBRA policies. Executive will be charged
and responsible for payment of the COBRA premium
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equal to the employee portion of the premium for the
selected coverage that Executive would have paid if
Executive continued to be a Company employee. Company
will pay the employer-portion of the medical coverage.
After the stated continuation period, Executive will be
responsible for 100% of the COBRA premiums.
Any obligation to pay a portion of the premium cost under this
item may be settled, at Company's discretion, by a lump-sum
payment of any remaining premiums.
In connection with the Termination Payments, Executive shall
cease to be an active participant under Company retirement
programs and other benefit plans pursuant to the terms of
those plans. No amounts paid under this Agreement shall
constitute compensation for purposes of any such retirement
plan. Executive's rights to any accrued and vested benefits
under a qualified retirement plan shall be determined in
accordance with the applicable plan document.
Except as stated in this Section 6(a)(2), Executive shall not
be entitled to any other benefit or compensation from Company.
(2) Qualifying Termination. For purposes of this Agreement, the
term "Qualifying Termination" means a termination of
Executive's employment with the Company for any reason other
than:
(A) death;
(B) Disability, as defined herein;
(C) Cause, as defined herein; or
(D) A termination by Executive without Good Reason, as
defined herein.
(3) Change of Control Defined. "Change of Control" shall have the
same meaning as in the Indenture dated as of June 6, 2002
among Company, each of the Guarantors named therein and the
Bank of New York, as Trustee, relating to the 9 7/8 % Senior
Subordinated Notes due 2012 of Company, as in effect on the
date of this Agreement and regardless of whether or not such
notes or Indenture are hereinafter discharged, defeased or
repaid (the "Indenture"); and all defined terms used in such
definition of Change of Control shall the meanings ascribed
thereto under the Indenture as well; provided that no
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by Company or any of its subsidiaries
shall result in a Change of Control hereunder.
(e) Disability. In the event that Executive is unable to perform his
duties under this Agreement on account of a disability which
continues for one hundred eighty (180) consecutive days or more, or
for an aggregate of one hundred eighty (180) days in
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any period of twelve (12) months, Company may, in its discretion,
terminate Executive's employment hereunder. Company's obligation to
make payments under this Agreement shall, except for earned but
unpaid Base Salary and AVCP awards, cease on the first to occur of
(i) the date that is six (6) months after such termination or (ii)
the date Executive becomes entitled to benefits under a
Company-provided long-term disability program. For purposes of this
Agreement, "Disability" shall be defined by the terms of Company's
long-term disability policy, or, in the absence of such policy, as a
physical or mental disability that prevents Executive from
performing substantially all of his duties under this Agreement and
which is expected to be permanent. Company may only terminate
Executive on account of Disability after giving due consideration to
whether reasonable accommodations can be made under which Executive
is able to fulfill his duties under this Agreement. The commencement
date and expected duration of any physical or mental condition that
prevents Executive from performing his duties hereunder shall be
determined by a medical doctor selected by Company. Company may, in
its discretion, require written confirmation from a physician of
Disability during any extended absence.
(f) Death. In the event of Executive's death before this Agreement
terminates, all obligations of Company to make any further payments,
other than an obligation to pay any accrued but unpaid Base Salary
to the date of death and any accrued but unpaid bonuses under AVCP
to the date of death, shall terminate upon Executive's death.
(g) No Duplication of Benefits. Notwithstanding any provision of this
Agreement to the contrary, if Executive's employment is terminated
for any reason, in no event shall Executive be eligible for payments
under more than one subsection of this Section 6.
(h) Payments Not Compensation. Any participation by Executive in, and
any terminating distributions and vested rights under,
Company-sponsored retirement or savings plans, regardless of whether
such plans are qualified or nonqualified for tax purposes, shall be
governed by the terms of those respective plans. For purposes of
determining benefits and the amounts to be paid to Executive under
such plans, any salary continuation or severance benefits other than
salary or bonus accrued before termination shall not be compensation
for purposes of accruing additional benefits under such plans.
(i) Executive's Duty to Provide Materials. Upon the termination of
Executive's employment for any reason, Executive or his estate shall
surrender to Company all correspondence, letters, files, contracts,
mailing lists, customer lists, advertising material, ledgers,
supplies, equipment, checks, and all other materials and records of
any kind that are the property of Company or any of its subsidiaries
or affiliates, that may be in Executive's possession or under his
control, including all copies of any of the foregoing.
(j) Timing of Payments. Notwithstanding any provision of this Agreement
to the contrary, if any amount payable under this Agreement is
subject to Section 409A of the Internal Revenue Code, then the
payment of such amount shall be restructured or
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delayed, as necessary, in a manner that preserves as far as
practically possible the form and timing of benefit otherwise
described herein, to ensure that the amount is paid in compliance
with Section 409A; provided that Company does not by operation of
this provision assume responsibility for compliance with Section
409A. The parties agree that Executive shall be responsible for any
additional tax, interest or penalties under Section 409A arising out
of payments under this Agreement.
SECTION 7 - CAP ON PAYMENTS.
(a) General Rules. The Code may place significant tax burdens on
Executive and Company if the total payments made to Executive due to
a Change of Control exceed prescribed limits. In order to avoid this
excise tax and the related adverse tax consequences for Company, by
signing this Agreement, Executive will be agreeing that, subject to
the exception noted below, the present value of Executive's Total
Payments will not exceed an amount equal to Executive's Cap.
(b) Special Definitions. For purposes of this Section, the following
specialized terms will have the following meanings:
(1) "Base Period Income". "Base Period Income" is an amount equal
to Executive's "annualized includable compensation" for the
"base period" as defined in Sections 280G(d)(1) and (2) of the
Code and the regulations adopted thereunder. Generally,
Executive's "annualized includable compensation" is the
average of Executive's annual taxable income from Company for
the "base period," which is the five calendar years prior to
the year in which the Change of Control occurs. These concepts
are complicated and technical and all of the rules set forth
in the applicable regulations apply for purposes of this
Agreement.
(2) "Cap" or "280G Cap". "Cap" or "280G Cap" shall mean an amount
equal to 2.99 times Executive's "Base Period Income." This is
the maximum amount which Executive may receive without
becoming subject to the excise tax imposed by Section 4999 of
the Code or which Company may pay without loss of deduction
under Section 280G of the Code.
(3) "Total Payments". The "Total Payments" include any "payments
in the nature of compensation" (as defined in Section 280G of
the Code and the regulations adopted thereunder), made
pursuant to this Agreement or otherwise, to or for Executive's
benefit, the receipt of which is contingent on a Change of
Control and to which Section 280G of the Code applies.
(c) Calculating the Cap and Adjusting Payments. If Company believes that
these rules will result in a reduction of the payments to which
Executive is entitled under this Agreement, it will so notify
Executive as soon as possible. Company will then, at its expense,
retain a "Consultant" (which shall be a law firm, a certified public
accounting firm, and/or a firm of recognized executive compensation
consultants) to
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provide an opinion or opinions concerning whether Executive's Total
Payments exceed the limit discussed above. Company will select the
Consultant. At a minimum, the opinions required by this Section must
set forth the amount of Executive's Base Period Income, the present
value of the Total Payments and the amount and present value of any
excess parachute payments. If the opinions state that there would be
an excess parachute payment, Executive's payments under this
Agreement will be reduced to the Cap. Executive will be allowed to
choose the payment that should be reduced or eliminated, but the
payment Executive chooses to reduce or eliminate must be a payment
determined by such Consultant to be includable in Total Payments.
Executive's decision shall be in writing and delivered to Company
within thirty (30) days of Executive's receipt of such opinions. If
Executive fails to so notify Company, Company will decide which
payments to reduce or eliminate. If the Consultant selected to
provide the opinions referred to above so requests in connection
with the opinion required by this Section, a firm of recognized
executive compensation consultants selected by Company shall provide
an opinion, upon which such Consultant may rely, as to the
reasonableness of any item of compensation as reasonable
compensation for services rendered before or after the Change of
Control. If Company believes that Executive's Total Payments will
exceed the limitations of this Section, it will nonetheless make
payments to Executive, at the times stated above, in the maximum
amount that it believes may be paid without exceeding such
limitations. The balance, if any, will then be paid after the
opinions called for above have been received. If the amount paid to
Executive by Company is ultimately determined, pursuant to the
opinion referred to above or by the Internal Revenue Service, to
have exceeded the limitation of this Section, the excess will be
treated as a loan to Executive by Company and shall be repayable on
the ninetieth (90th) day following demand by Company, together with
interest at the lowest "applicable federal rate" provided in Section
1274(d) of the Code. If it is ultimately determined, pursuant to the
opinion referred to above or by the Internal Revenue Service, that a
greater payment should have been made to Executive, Company shall
pay Executive the amount of the deficiency, together with interest
thereon from the date such amount should have been paid to the date
of such payment, at the rate set forth above, so that Executive will
have received or be entitled to receive the maximum amount to which
Executive is entitled under this Agreement.
(d) Effect of Repeal. In the event that the provisions of Sections 280G
and 4999 of the Code are repealed without succession, this Section
shall be of no further force or effect.
(e) Exception. The Consultant selected pursuant to Section 7(c) will
calculate Executive's "Uncapped Benefit" and Executive's "Capped
Benefit." The limitations of Section 7(a) shall not apply to
Executive's benefit if the Company reasonably determines that the
amount of the Uncapped Benefit that would be retained by Executive,
after payment of all applicable taxes by Executive, including excise
tax (but not the amount of any excise tax arising from any payment
under Section 8), exceeds the Capped Benefit, after payment by
Executive of all applicable taxes. If
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the after tax amount of the Uncapped Benefit that would be retained
by Executive is equal to or less than the after tax amount of the
Capped Benefit that would be retained by Executive, then payments to
Executive shall be adjusted, as necessary, so Executive's Capped
Benefit is not exceeded, as provided in Section 7(a). For this
purpose, Executive's "Uncapped Benefit" is the amount to which
Executive would be entitled pursuant to Section 6(d), without regard
to the limitations of Section 7(a). Executive's "Capped Benefit" is
the amount to which Executive would be entitled pursuant to Section
6(d) after the application of the limitations of Section 7(a). In
making this determination the Company shall use Executive's total
presumed taxes. "Total presumed taxes" means all federal, state and
local income taxes, excise taxes and employment taxes. Executive's
total presumed taxes shall be conclusively calculated using a
combined tax rate equal to the sum of the maximum marginal federal
and applicable state and local income tax rates and employment and
excise tax rates. The state tax rate for Executive's principal place
of residence will be used and no adjustments will be made for the
deduction of state taxes on the federal return, any deduction of
federal taxes on a state return, the loss of itemized deductions or
exemptions, or for any other purpose.
SECTION 8 - PAYMENT OF EXCISE TAX.
(a) If the Cap imposed by Section 7(a) does not apply to Executive
because of the exception provided by Section 7(e), Company shall pay
Executive an amount, in addition to the payments otherwise due
hereunder, that is calculated to equal the amount of excise tax that
Executive will incur under Section 4999 of the Code in connection
with Total Payments and this payment under Section 8. This amount
will be calculated by the Consultant and will paid by Company, less
applicable tax withholdings, as soon possible after the amount of
the Uncapped Benefit is determined. No adjustment shall be required
if the actual amount of the excise tax is more or less than the
amount calculated by the Consultant.
SECTION 9 - NOTICES. All notices or communications hereunder shall be
in writing, addressed as follows:
To Company: TriMas Corporation
00000 Xxxxxxxx Xxx.
Xxxxx 000
Xxxxxxxxxx Xxxxx, XX 00000
Attn: Vice President, Human Resources
To Executive: Xxxxxx Xxxxxxx
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Any such notice or communication shall be delivered by hand or by courier or
sent certified or registered mail, return receipt requested, postage prepaid,
addressed as above (or to such other
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address as such party may designate in a notice duly delivered as described
above), and the third (3rd) business day after the actual date of mailing shall
constitute the time at which notice was given.
SECTION 10 - SEPARABILITY; LEGAL FEES. If any provision of this Agreement
shall be declared to be invalid or unenforceable, in whole or in part, such
invalidity or unenforceability shall not affect the remaining provisions hereof
which shall remain in full force and effect. In the event of a dispute by
Company, Executive or others as to the validity or enforceability of, or
liability under, any provision of this Agreement, Company shall reimburse
Executive for all reasonable legal fees and expenses incurred by him in
connection with such dispute if Executive substantially prevails in the dispute
and if Executive has not substantially prevailed in such dispute one-half (1/2)
the amount of all reasonable legal fees and expenses incurred by him in
connection with such dispute except to the extent Executive's position is found
by a tribunal of competent jurisdiction to have been frivolous.
SECTION 11 - ASSIGNMENT AND ASSUMPTION. This contract shall be binding
upon and inure to the benefit of the heirs and representatives of Executive and
the assigns and successors of Company, but neither this Agreement nor any rights
or obligations hereunder shall be assignable or otherwise subject to
hypothecation by Executive (except by will or by operation of the laws of
intestate succession) or by Company, except that Company may assign this
Agreement to any successor (whether by merger, purchase or otherwise) to all or
substantially all of the stock, assets or business of Company.
SECTION 12 - AMENDMENT. This Agreement may only be amended by written
agreement of the parties hereto.
SECTION 13 - NON-COMPETITION; NON-SOLICITATION; CONFIDENTIALITY.
(a) Executive represents that acceptance of employment under this
Agreement and performance under this Agreement are not in violation
of any restrictions or covenants under the terms of any other
agreements to which Executive is a party.
(b) Executive acknowledges and recognizes the highly competitive nature
of the business of Company and accordingly agrees that, in
consideration of this Agreement, the rights conferred hereunder, and
any payment hereunder, while he is employed by Company and for the
two (2) year period following the termination of Executive's
employment with Company, whether such termination occurs before or
after this Agreement has terminated, for any reason ("Non-Compete
Term"), Executive shall not engage, either directly or indirectly,
as a principal for Executive's own account or jointly with others,
or as a stockholder in any corporation or joint stock association,
or as a partner or member of a general or limited liability entity,
or as an employee, officer, director, agent, consultant or in any
other advisory capacity in any business other than Company or its
subsidiaries which designs, develops, manufacturers, distributes,
sells or markets the type of products or services sold, distributed
or provided by Company or its subsidiaries during the two (2) year
period prior to the date of employment termination (the "Business");
provided that nothing herein shall prevent Executive from owning,
directly or indirectly, not more than five percent (5%) of the
outstanding shares of, or any other equity interest in, any entity
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engaged in the Business and listed or traded on a national
securities exchanges or in an over-the-counter securities market.
(c) During the Non-Compete Term, Executive shall not (i) directly or
indirectly employ or solicit, or receive or accept the performance
of services by, any active employee of Company or any of its
subsidiaries who is employed primarily in connection with the
Business, except in connection with general, non-targeted
recruitment efforts such as advertisements and job listings, or
directly or indirectly induce any employee of Company to leave
Company, or assist in any of the foregoing, or (ii) solicit for
business (relating to the Business) any person who is a customer or
former customer of Company or any of its subsidiaries, unless such
person shall have ceased to have been such a customer for a period
of at least six (6) months.
(d) Executive shall not at any time (whether during or after his
employment with Company) disclose or use for Executive's own benefit
or purposes or the benefit or purposes of any other person, firm,
partnership, joint venture, association, corporation or other
business organization, entity or enterprise other than Company and
any of its subsidiaries, any trade secrets, information, data, or
other confidential information of Company, including but not limited
to, information relating to customers, development programs, costs,
marketing, trading, investment, sales activities, promotion, credit
and financial data, financing methods, plans or the business and
affairs of Company generally, or of any subsidiary of Company,
unless required to do so by applicable law or court order, subpoena
or decree or otherwise required by law, with reasonable evidence of
such determination promptly provided to Company. The preceding
sentence of this paragraph (d) shall not apply to information which
is not unique to Company or which is generally known to the industry
or the public other than as a result of Executive's breach of this
covenant. Executive agrees that upon termination of employment with
Company for any reason, Executive will return to Company immediately
all memoranda, books, papers, plans, information, letters and other
data, and all copies thereof or therefrom, in any way relating to
the business of Company and its subsidiaries, except that Executive
may retain personal notes, notebooks and diaries. Executive further
agrees that Executive will not retain or use for Executive's account
at any time any trade names, trademark or other proprietary business
designation used or owned in connection with the business of Company
or its subsidiaries.
(e) It is expressly understood and agreed that although Executive and
Company consider the restrictions contained in this Section 13 to be
reasonable, if a final judicial determination is made by a court of
competent jurisdiction that the time or territory or any other
restriction contained in this Agreement is an unenforceable
restriction against Executive, the provisions of this Agreement
shall not be rendered void but shall be deemed amended to apply as
to such maximum time and territory and to such maximum extent as
such court may judicially determine or indicate to be enforceable.
Alternatively, if any tribunal of competent jurisdiction finds that
any restriction contained in this Agreement is unenforceable, and
such restriction cannot
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be amended so as to make it enforceable, such finding shall not
affect the enforceability of any of the other restrictions contained
herein.
(f) As a condition to the receipt of any benefits described in this
Agreement, Executive shall be required to execute an agreement
pursuant to which Executive releases any claims he may have against
Company and agrees to the continuing enforceability of the
restrictive covenants of this Agreement.
(g) This Section 13 will survive the termination of this Agreement.
SECTION 14 - REMEDIES. Executive acknowledges and agrees that Company's
remedies at law for a breach or threatened breach of any of the provisions of
Section 13 would be inadequate and, in recognition of this fact, Executive
agrees that, in the event of such a breach or threatened breach, in addition to
any remedies at law, Executive shall forfeit all payments otherwise due under
this Agreement and shall return any Severance Package payment made. Moreover,
Company, without posting any bond, shall be entitled to seek equitable relief in
the form of specific performance, temporary restraining order, temporary or
permanent injunction or any other equitable remedy which may then be available.
SECTION 15- SURVIVORSHIP. The respective rights and obligations of the
parties hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations. The
provisions of this Section 15 are in addition to the survivorship provisions of
any other section of this Agreement.
SECTION 16 - DISPUTE RESOLUTION; GOVERNING LAW. Any dispute related to or
arising under this Agreement shall be resolved in accordance with the TriMas
Dispute Resolution Policy in effect at the time such dispute arises. The TriMas
Dispute Resolution Policy in effect at the time of this Agreement is attached to
this Agreement. This Agreement and any dispute related hereto shall be governed
by and construed under Michigan law, without regard to conflict of law and
principles.
SECTION 17 - EFFECT ON PRIOR AGREEMENTS. This Agreement contains the
entire understanding between the parties hereto and supersedes in all respects
any prior or other agreement or understanding, both written and oral, between
Company, any parent, subsidiary or affiliate of Company or any predecessor of
Company or parent, subsidiary, or affiliate of any predecessor of Company and
Executive.
SECTION 18 - WITHHOLDING. Company shall be entitled to withhold from
payment any amount of withholding required by law.
SECTION 19 - SECTION HEADINGS AND CONSTRUCTION. The headings of sections
in this Agreement are provided for convenience only and will not effect its
construction or interpretation. All references to "Section" or "Sections" refer
to the corresponding section or sections of this Agreement unless otherwise
specified. All words used in this Agreement will be construed to be of such
gender or number as circumstances require.
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SECTION 20 - COUNTERPARTS. This Agreement may be executed in one (1) or
more counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same Agreement.
Intending to be legally bound hereby, the parties have executed this
Agreement on the dates set forth next to their names below.
COMPANY
TRIMAS CORPORATION
8/1/2005 By: /s/ Xxxxx X. Xxxxx
-------------------------- ------------------
Date
Its: President & C.E.O.
EXECUTIVE
8/16/2005 /s/ Xxxxxx Xxxxxxx
--------------------------- ------------------
Date Xxxxxx Xxxxxxx
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