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EXHIBIT 10.15
SEVERANCE BENEFITS AGREEMENT
This Agreement is between STANADYNE AUTOMOTIVE CORP. (the "COMPANY")
and XXXX XXXXX (the "EXECUTIVE"), dated as of May 25, 2000.
RECITALS:
The Executive has been a dedicated and valued employee of the Company for
several years on an "at will" basis. The Company, on behalf of itself and its
shareholders, wishes to reward the Executive for his past years of service and
desires to have the continued dedication of the Executive in the future,
undiminished by fear of insecurity as to his position. The Board of Directors of
the Company (the "BOARD") believes it is imperative to eliminate such
distraction of the Executive and to encourage his attention and dedication to
his assigned duties, and therefore the Board has determined, and the Executive
has agreed, that he shall receive certain severance benefits in the event his
employment with the Company is terminated under the circumstances described
below.
THEREFORE, in consideration of the mutual covenants and agreements in this
Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, the parties agree as follows:
1. SEVERANCE PAYMENTS.
(A) If there shall be a Change In Control (as defined below) of the
Company between April 1, 2000 and January 1, 2001, and within three (3) years of
the Change In Control, the Company shall terminate the Executive's employment
other than for Cause, death, or Disability, or the Executive shall terminate his
employment for Good Reason, the Company shall pay the following severance
payments and benefits (collectively, the "BENEFITS") to the Executive:
(i) The Executive's base salary through and including the Date
of Termination at the rate in effect on the Date of Termination.
(ii) An amount equal to two (2) times the Executive's annual
base salary at the highest rate in effect during the twelve (12) month period
preceding the Date of Termination.
(iii) An amount equal to two (2) times the average amount paid
to the Executive over the prior three (3) years in connection with the Company's
Management Profit Sharing Plan for Executive Personnel ("EPS") or any successor
or replacement to the EPS.
(iv) An amount equal to the product of (a) the amount which
Executive would have been entitled to under the EPS, or under any successor or
replacement to the EPS, if Executive had been employed the entire calendar year
in which the termination occurred and (b) a fraction, the numerator of which is
the number of days of Executive's employment with the
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Company for the year of termination of employment through the Date of
Termination, and the denominator of which is 365.
(v) In the case of any other compensation previously deferred
by the Executive, all amounts previously deferred, and not yet paid by the
Company.
(vi) For two (2) years following the Date of Termination, the
Executive and/or the Executive's family, as the case may be, shall be eligible
for participation in and shall receive at no increase in the rate or amount of
contribution by the Executive and/or his family (other than an increase
resulting from a change to the benefit plan(s) of the Company in which the
Executive is a participant that applies generally to all participants in the
plan) all medical, prescription, dental, disability, and life insurance
programs, and allowances for automobiles and country clubs, and other benefits
generally available to all members of senior management of the Company, in
effect in the twelve (12) month period preceding the Date of Termination;
provided, however, that the Company may amend any benefit or benefit plan
generally applicable to its employees so long as the amendment treats the
Executive in the same manner as the other employees of the Company, including
other executives of the Company, covered by the benefit or benefit plan.
(B) The Benefits under Sections 1(A)(i) and 1(A)(iii) shall be paid in
a lump sum no later than the thirtieth (30th) day following the Date of
Termination. The Benefits under Section 1(A)(ii) shall be paid monthly. The
Benefits under Section 1(A)(iv) shall be paid concurrently when payments are
made to other participants in the EPS or any successor or replacement to the EPS
for the year in question. The Benefits under Sections 1(A)(v) shall be payable
in accordance with the terms of the deferred compensation plan (if any).
Premiums for the Benefits under Section 1(A)(vi) shall be paid on or before
their due dates.
(C) For purposes of determining the Executive's benefits under any of
the Company's nonqualified supplemental employee retirement plans ("SERPs"), the
Executive shall be credited with two (2) additional years of service and shall
be credited with additional earnings in an amount equal to those Benefits that
would have been treated as earnings under the SERPs if they had been received by
the Executive while he was an employee of the Company. For purposes of the
SERPs, the Benefits shall be treated as having been paid to the Executive at
such time or times as they would have been paid to the Executive if he had
remained as an employee of the Company.
(D) All Benefits shall be subject to normal withholdings for federal,
state, and local taxes and other payroll deductions required by applicable law
or regulation.
2. GOOD REASON.
(A) The Executive may terminate his employment for Good Reason, in
which case the Executive shall be entitled to the Benefits.
(B) For purposes of this Agreement, "GOOD REASON" means:
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(i) Any reduction in Executive's base salary while this
Agreement is in effect; or any change which would materially and adversely
affect the potential of Executive to earn bonuses based upon the performance of
the Company, unless such change is applicable to all other executives of the
Company who are eligible for the bonuses so affected.
(ii) The assignment to the Executive while this Agreement is
in effect of (a) any duties materially inconsistent with the Executive's
position (including status, offices, titles and reporting requirements),
authority, power, duties or responsibilities as in effect on the date of this
Agreement or as may be changed with Executive's consent; or (b) any other action
by the Company while this Agreement is in effect which results in a material
diminution in such position, authority, power, duties or responsibilities, other
than an insubstantial and inadvertent action which is remedied by the Company
promptly after receipt of written notice from the Executive;
(iii) Any failure by the Company to comply with any of the
provisions of this Agreement, other than an insubstantial and inadvertent
failure which is remedied by the Company promptly after receipt of written
notice from the Executive;
(iv) The Company's requiring the Executive to be based at any
office or location which is greater than thirty (30) miles from Executive's
principal location on the date of this Agreement, except for travel reasonably
required in the performance of the Executive's responsibilities and consistent
with Executive's past travel responsibilities;
(v) Any purported termination by the Company of the
Executive's employment other than for Cause; or
(vi) Any failure by the Company to comply with and satisfy
Section 12(C) of this Agreement.
3. CAUSE.
(A) If the Executive's employment shall be terminated by the Company
for Cause, the Company shall pay the Executive the Benefits under Sections
1(A)(i) and 1(A)(v), his accrued expenses, accrued vacation benefits (if any),
and any other accrued benefit payable under Company policy to employees
terminated for Cause, through the Date of Termination, and shall have no further
obligations to the Executive under this Agreement. If the Executive's employment
shall be terminated by the Company other than for Cause, death, or Disability,
the Executive shall be entitled to the Benefits.
(B) For purposes of this Agreement "CAUSE" means (i) an act or acts of
dishonesty taken by the Executive in the performance of his duties for the
Company or any of its subsidiaries; (ii) any substantial and repeated failure,
inability, or refusal to perform, or breach of his material duties as an
employee of the Company, which remains uncured sixty (60) days after written
notice from the Company to the Executive which notice describes the failure,
inability, refusal or breach in reasonable detail; (iii) the Executive
materially breaches any confidentiality, nondisclosure, assignment of invention,
noncompetition, or similar agreement or provision in
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connection with his employment with the Company; or (iv) the Executive is
convicted of a felony.
4. NOTICE OF TERMINATION. Any termination by the Executive for Good Reason
or by the Company for Cause shall be communicated by Notice of Termination to
the other party in accordance with Section 13(C) of this Agreement. For purposes
of this Agreement, a "NOTICE OF TERMINATION" means a written notice which (A)
indicates the specific termination provision in this Agreement relied upon; and
(B) sets forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment under the
provision so indicated.
5. DATE OF TERMINATION. "DATE OF TERMINATION" means: (A) if the Executive's
employment is terminated by the Company, the Date of Termination shall be the
date on which the Company notifies the Executive of such termination; and (B) if
the Executive's employment is terminated by the Executive for Good Reason, the
Date of Termination shall be the date on which the Executive notifies the
Company of such termination, or such later date that Executive may specify in
the Notice of Termination, which later date shall not be more than fifteen (15)
days from the date of the Notice.
6. DEATH. If the Executive's employment is terminated by reason of the
Executive's death, this Agreement shall terminate without further obligations to
the Executive's legal representatives under this Agreement, other than those
obligations accrued or earned by the Executive as of the date of the Executive's
death. Notwithstanding any contrary provision in this Agreement, the Executive's
family shall be entitled to receive benefits at least equal to the most
favorable benefits provided by the Company to surviving families of its
executives under such plans, programs and policies relating to family death
benefits (if any) as in effect on the date of this Agreement or, if more
favorable to the Executive and/or the Executive's family, as in effect on the
date of the Executive's death with respect to other key executives and their
families.
7. DISABILITY.
(A) If the Executive's employment is terminated by reason of the
Executive's Disability, this Agreement shall terminate without further
obligations to the Executive, other than those obligations accrued or earned by
the Executive under this Agreement as of the effective date of Executive's
termination. Notwithstanding any contrary provision in this Agreement, the
Executive shall be entitled after such termination for Disability to receive
disability and other benefits at least equal to the most favorable of those
provided by the Company to disabled employees and/or their families in
accordance with such plans, programs and policies relating to disability (if
any) as in effect on the date of this Agreement or, if more favorable to the
Executive and/or the Executive's family, as in effect on the date of Termination
of Executive due to Disability with respect to other key executives and their
families.
(B) For purposes of this Agreement "Disability" means disability which,
after the expiration of more than twenty-six (26) weeks from its commencement,
is determined to be total and permanent by a physician selected by the Company
or its insurers and acceptable to the Executive or the Executive's legal
representative (such agreement to acceptability not to be
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withheld unreasonably).
8. NON-EXCLUSIVITY OF RIGHTS; NON-MITIGATION. Nothing in this Agreement
shall prevent or limit the Executive's continuing or future participation in any
benefit, bonus, incentive, or other plan or program provided by the Company and
for which the Executive may qualify. Amounts which are vested benefits or which
the Executive is otherwise entitled to receive under any plan or program of the
Company, at or subsequent to the Date of Termination, shall be payable in
accordance with such plan or program. The Executive shall not be required to
mitigate the amount of any payments made to the Executive under this Agreement
by seeking other employment or otherwise.
9. CERTAIN REDUCTION OF PAYMENTS BV THE COMPANY. Notwithstanding any
contrary provision in this Agreement, in the event it shall be determined that
any payment or distribution by the Company to or for the benefit of the
Executive, whether pursuant to this Agreement or otherwise (a "PAYMENT") would
be subject to the excise tax ("EXCISE TAX") imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended (the "CODE"), then (A) the aggregate
present value of amounts payable or distributable to or for the benefit of the
Executive pursuant to this Agreement ("AGREEMENT PAYMENTS") shall be reduced
(but not below zero) if such reduction would result in the Executive retaining a
larger amount, after-taxes, (including the Excise Tax) than if the Executive
received all of the Agreement Payments; and (B) the aggregate present value of
the Payments other than Agreement Payments ("OTHER PAYMENTS") shall also be
reduced (but not below zero) if such reduction would result in the Executive
retaining a larger amount after taxes (including the Excise Tax) than if the
Executive received all of the Other Payments.
All determinations under this Section 9 shall be made by the Company's
independent auditors (the "ACCOUNTING FIRM") which shall provide detailed
supporting calculations both to the Company and the Executive within fifteen
(15) days of the Date of Termination or such earlier time as is requested by the
Company. Any determination by the Accounting Firm shall be binding upon the
Company and the Executive. The Executive shall determine which and how much of
the Agreement Payments or Other Payments, as the case may be, shall be
eliminated or reduced consistent with the requirements of this Section 9,
provided that, if the Executive does not make the determination within ten (10)
days of the receipt of the calculations, the Company shall make the
determination, consistent with the requirements of this Section 9 and shall
notify the Executive promptly of such election. Within five (5) days after the
determination by the Executive or the Company, as applicable, the Company shall
pay or distribute such amounts as are then due to the Executive under this
Agreement.
As a result of the uncertainty in the application of Section 28OG of the
Code at the time of the initial determination by the Accounting Firm, it is
possible that an overpayment or underpayment may occur, in which case the amount
of any underpayment shall be paid to Executive or the amount of any overpayment
shall be refunded to the Company (as the case may be) promptly and in either
case with interest at the applicable federal rate provided for in Section
1274(c) of the Code or any successor provision.
10. CONFIDENTIAL INFORMATION. The Executive shall hold in a fiduciary
capacity for the
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benefit of the Company all secret or confidential information, knowledge, and
data relating to the Company and its business which shall have been obtained by
the Executive during the Executive's employment by the Company and which shall
not be public knowledge (other than by acts by the Executive or his
representatives in violation of this Agreement). After termination of the
Executive's employment with the Company, the Executive shall not, without the
prior written consent of the Company, communicate or divulge any such
information, knowledge, or data to anyone other than the Company and those
designated by it.
11. CHANGE IN CONTROL. For purposes of this Agreement, a "Change in
Control" shall be deemed to have occurred if (A) there is an acquisition by an
unrelated party of 50% or more of the voting securities of the Company or of any
company or other business entity which directly or indirectly controls the
Company; or (B) there is a merger or consolidation of the Company with or into
another entity whereby America Industrial Partners Capital Fund II, L.P. is no
longer directly or indirectly the controlling shareholder of the Company; or (C)
a plan of complete liquidation of the Company is instituted or there is an
agreement for the sale or disposition by the Company of all or substantially all
of its assets or stock; or (D) there is an equity holder with an interest in the
Company or in any company or other business entity which directly or indirectly
controls the Company in excess of 20% (or a company or other business entity
with whom the Company has had discussions and as a direct result thereof such
company or other business entity expresses an intent to take such an interest)
and such holder, or company or other business entity, as the case may be, (i)
recommends the termination of the Executive without Cause and as a direct result
thereof the Company terminates the Executive's employment without Cause or (ii)
recommends any action which would constitute or result in Good Reason and as a
direct result thereof the Company takes an action which constitutes or results
in Good Reason and the Executive terminates his employment for Good Reason.
12. SUCCESSORS.
(A) This Agreement is personal to the Executive and the duties of the
Executive shall not be assigned without the prior written consent of the
Company. This Agreement shall inure to the benefit of and be enforceable by the
Executive and the Executive's heirs and legal representatives. If Executive
should die when amounts are payable to him under this Agreement, such amounts
shall be paid to Executive's estate.
(B) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
(C) The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to enter into a written assumption
agreement by which the successor expressly assumes and agrees to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. As used in this
Agreement, "COMPANY" shall mean the Company as previously defined and any such
successor to its business and/or assets which assumes and agrees to perform this
Agreement by operation of law or otherwise.
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13. MISCELLANEOUS.
(A) This Agreement shall be governed by and construed in accordance
with the laws of the State of Connecticut, without reference to principles of
conflict of laws. The captions of this Agreement are not part of this Agreement
and shall have no force or effect.
(B) This Agreement may not be amended or modified except by a written
agreement executed by both parties or their respective successors and legal
representatives.
(C) All notices and other communications under this Agreement shall be
in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
IF TO THE EXECUTIVE:
Xxxx Xxxxx
000 Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
IF TO THE COMPANY:
Stanadyne Automotive Corp.
00 Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
or to such other address as either party shall have furnished to the other in
writing in accordance with this subsection. Notice and communications shall be
effective when received by the addressee.
(D) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
(E) The Executive's or the Company's failure to insist upon strict
compliance with any provision of this Agreement shall not be deemed to be a
waiver of such provision or any other provision of this Agreement.
(F) This Agreement contains the entire understanding of the Company and
the Executive with respect to its subject matter.
(G) If the Executive or his legal representative institutes any legal
action to enforce Executive's or legal representative's rights under this
Agreement and obtains a judgment in his or its favor, then the Company shall
pay, in addition to all amounts payable under such judgment, the reasonable
attorneys' fees incurred by the Executive or his legal representative.
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EXECUTIVE
/s/ Xxxx X. Xxxxx
---------------------------
Xxxx Xxxxx
Date: 5/25/00
STANADYNE AUTOMOTIVE CORP
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------
Title: President and CEO
Date: 5/30/00
