EXHIBIT 10.25 - CHANGE OF CONTROL AGREEMENT, DATED AUGUST 11, 2004, BETWEEN
METALDYNE CORPORATION AND XXXXXX XXXXXXXX.
CHANGE OF CONTROL AGREEMENT
This Agreement is made by and between Metaldyne Corporation, a Delaware
Corporation ("Company") and XXXXXX XXXXXXXX (hereinafter "Executive") AUGUST 11,
2004 effective ("Effective Date").
Company considers the maintenance of a sound and vital management to be
essential to protecting and enhancing the best interests of Company and its
shareholders. Company recognizes that any possibility of a Change of Control is
unsettling to executives of Company and may result in the departure or
distraction of management personnel to the detriment of Company and its
shareholders. The Board of Directors of Company have previously determined that
it is in the best interests of Company and its shareholders for Company to
minimize these concerns by entering into an agreement which would provide
Executive severance benefits in the event employment with Company terminates
under certain circumstances.
These arrangements are being made to help assure a continuing focus by
executives on Company performance. In particular, the Board believes it
important, if Company receives proposals from third parties with respect to its
future, to enable executives, without being influenced by the uncertainties of
their own situations, to assess and advise the Board whether such proposals
would be in the best interests of Company and its shareholders and to take such
other action regarding such proposals as the Board might determine to be
appropriate. The Board also wishes to demonstrate to executives of Company that
Company is concerned with the welfare of its executives and intends to see that
loyal executives are treated fairly.
In view of the foregoing, in order to induce Executive to remain in the
employ of Company and to prevent unfair competition following employment,
Company and Executive agree to a Change of Control Agreement as follows:
SECTION 1 - TERMINATION BENEFITS. In the event Executive's employment with
Company terminates during the term of this Agreement by reason of a Qualifying
Termination (as defined below) within three (3) years after a Change of Control
of Company (as defined below), Company shall provide Executive the following
termination benefits:
(a) A single sum payment equal to THREE HUNDRED PERCENT (300%) 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 made within ten (10) days of termination of employment; plus
(b) A bonus equal to THREE HUNDRED PERCENT (300%) of the target bonus
opportunity under the Annual Value Creation Plan ("AVCP"). 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
calculated at one hundred percent (100%) of the bonus opportunity for
target performance for that term, 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 the AVCP; plus
(c) Continuation of benefits under any life, group medical, and dental
insurance benefits substantially similar to those which Executive was
receiving immediately prior to termination of employment until the
earlier of:
(1) the end of the THIRTY-SIX (36) month period following
Executive's termination of employment, or
(2) the date on which Executive becomes eligible to receive any
benefits under any plan or program of any other employer.
The continuing coverage provided under this Section 1(c) is subject to
Executive's eligibility to participate in such plans and all other
terms and conditions of such plans, including, without limitation, any
employee contribution requirements and Company's ability to modify or
terminate such plans or coverages. Company may satisfy this obligation
in whole or in part by paying the premium otherwise payable by
Executive for continuing coverage under Section 601 et seq. of the
Employee Retirement Income Security Act of 1974, as it may be amended
or replaced from time to time. If Executive is not eligible for
continued coverage under an employer-provided benefit plan noted in
this paragraph (c) that he was participating in during his employment,
Company shall pay Executive the cash equivalent of the insurance cost
for the duration of the applicable period at the rate of the Company's
cost of coverage for Executive's benefits as of the date of
termination. Any obligation to pay the cash equivalent of such cost
under this item may be settled, at Company's discretion, by a lump-sum
payment of any remaining premiums.
SECTION 2 - NON-COMPETITION; NON-SOLICITATION; CONFIDENTIALITY.
(a) 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, during his employment with Company and for the TWENTY-FOUR
(24) month period following the termination of Executive's employment
with Company, 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, 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,
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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
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 engaged in the Business and listed or traded
on a national securities exchanges or in an over-the-counter
securities market.
(b) During the Non-Compete Term, Executive shall not (1) 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 (2) 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.
(c) 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 the 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 (c) 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.
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(d) It is expressly understood and agreed that although Executive and
Company consider the restrictions contained in this Section 2 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 be amended so as to make it enforceable, such finding shall not
affect the enforceability of any of the other restrictions contained
herein.
(e) 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.
(f) This Section 2 will survive the termination of this Agreement.
SECTION 3 - CHANGE OF CONTROL DEFINED. For purposes of this Agreement, a
"Change of Control" means the first of the following events to occur following
the date hereof:
(a) The sale, lease, or transfer in one or a series of related
transactions (1) of eighty percent (80%) or more of the consolidated
assets of Company and its subsidiaries or (2) of seventy-five percent
(75%) or more of Capital Stock of Company held by the Heartland
Entities as of November 28, 2000 (appropriately adjusted for stock
splits, combinations, subdivisions, stock dividends and similar
events) to any Person or group of persons other than an affiliate of
the Heartland Entities, whether directly or indirectly or by way of
any merger, consolidation or other business combination or purchase of
beneficial ownership or otherwise. The term "group of persons" shall
have the meaning of the term "person" set forth in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934 ("1934 Act") or any
similar successor provision, and the rules, regulations and
interpretations promulgated thereunder. The term "beneficial
ownership" shall have the meaning defined under Rule 13d-3 under the
1934 Act or any similar successor rules, regulations and
interpretations promulgated thereunder.
(b) The date on which the individuals who constitute Company's Board of
Directors on the date of this agreement, and any new Directors who are
hereafter designated by the Heartland Entities cease, for any reason,
to constitute at least a majority of the members of the Board.
Except as otherwise indicated herein, the definition of each capitalized
term in this Section 3 is set forth below:
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"Capital Stock" means, with respect to any person, any and all shares,
interests, participations, rights in or other equivalents (however
designated) of such person's capital stock, and any rights (other than debt
securities convertible into capital stock), warrants or options
exchangeable for or convertible into such capital stock.
"Heartland Entities" means Heartland Industrial Partners, L.P., Heartland
Industrial Partners (FF), L.P., Heartland Industrial Partners (E1), L.P.,
Heartland Industrial Partners (K1), L.P., Heartland Industrial Partners
(C1), L.P. or any controlled affiliate of any of these entities.
SECTION 4 - QUALIFYING TERMINATION DEFINED.
(a) Qualifying Termination. For purposes of this Agreement, the term
"Qualifying Termination" means a termination of Executive's employment
with Company for any reason other than:
(1) death;
(2) Disability, as defined herein;
(3) Cause, as defined herein;
(4) a termination by Executive without Good Reason, as defined
herein.
(b) Disability. For purposes of this Agreement, "Disability" shall be
defined by the terms of any long-term disability policy provided by
Company to Executive, or, in the absence of such policy, as a physical
or mental disability that prevents Executive from performing
substantially all of his duties as an employee and which is expected
to be permanent. A medical doctor selected by Company shall determine
any commencement date and expected duration of any physical or mental
condition that prevents Executive from performing his duties as an
employee.
(c) Cause. For purposes of this Agreement, "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 Company's Board, CEO, or other superior; or
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(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 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) Good Reason. For purposes of this Agreement, "Good Reason" shall be a
termination by Executive following the occurrence of any of the
following events unless Company has cured as provided below:
(1) A material and permanent diminution in Executive's duties or
responsibilities;
(2) A material reduction in the aggregate value of Base Salary
and bonus opportunity; or
(3) A permanent reassignment of Executive to another primary
office, or a relocation of the 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 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.
(e) Employment by Successors. For purposes of this Agreement, employment by
a successor of Company, or a successor of any subsidiary of Company, that
has assumed this Agreement pursuant to Section 10 shall be considered to be
employment by Company. As a result, if Executive is employed by such a
successor following a Change of Control, Executive shall not be entitled to
receive the benefits provided by Section 1 unless Executive's employment
with the successor is subsequently terminated in a Qualifying Termination.
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(f) 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.
SECTION 5 - CAP ON PAYMENTS.
(a) General Rules. The Internal Revenue Code (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.
For example, if Executive's "Base Period Income" (as defined below) is
$100,000, Executive's limit or "Cap" is $299,999. If Executive's
"Total Payments" exceed the Cap by even $1.00, Executive is subject to
an excise tax under Section 4999 of the Code of 20% of all amounts
paid to Executive in excess of $100,000. In other words, if
Executive's Cap is $299,999, Executive will not be subject to an
excise tax if Executive receives exactly $299,999. If Executive
receives $300,000, Executive will be subject to an excise tax of
$40,000 (20% of $200,000). 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.
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(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 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 extent necessary to
eliminate the excess. 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
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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 5(c) will
calculate Executive's "Uncapped Benefit" and Executive's "Capped
Benefit." The limitations of Section 5(a) will not apply to Executive
if Executive's Uncapped Benefit is at least one hundred five percent
(105%) of Executive's Capped Benefit. For this purpose, Executive's
"Uncapped Benefit" is the amount to which Executive will be entitled
pursuant to Section 1, without regard to the limitations of Section
5(a). Executive's "Capped Benefit" is the amount to which Executive
would be entitled pursuant to Section 1, after the application of the
limitations of Section 5(a).
SECTION 6 - TAX GROSS-UP.
(a) Gross-Up Payment. If the Cap imposed by Section 5(a) does not apply to
Executive because of the exception provided by Section 5(e), Company
will provide Executive with a "Gross-Up Payment" if an excise tax is
imposed on Executive pursuant to Section 4999 of the Code. Except as
otherwise noted below, this Gross-Up Payment will consist of a single
lump sum payment in an amount such that after payment by Executive of
the "total presumed federal and state taxes" and the excise taxes
imposed by Section 4999 of the Code on the Gross-Up Payment (and any
interest or penalties actually imposed), Executive would retain an
amount of the Gross-Up Payment equal to the remaining excise taxes
imposed by Section 4999 of the Code on Executive's Total Payments
(calculated before the Gross-Up Payment). For purposes of calculating
Executive's Gross-Up Payment, Executive's actual federal and state
income taxes will not be used. Instead, Company will use Executive's
"total presumed federal and state taxes." For purposes of this
Agreement, Executive's "total presumed federal and state taxes" shall
be conclusively calculated using a combined tax rate equal to the sum
of the maximum marginal federal and applicable state income 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.
(b) Calculations. All determinations concerning whether a Gross-Up Payment
is required pursuant to Section 6(a) and the amount of any Gross-Up
Payment (as well as any assumptions to be used in making such
determinations) shall be made by the Consultant selected pursuant to
Section 5(c). The Consultant shall provide Executive and Company with
a written notice of the amount of the excise taxes that Executive is
required to pay and the amount of the Gross-Up Payment. The
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notice from the Consultant shall include any necessary calculations in
support of its conclusions. All fees and expenses of the Consultant
shall be paid by Company. Any Gross-Up Payment shall be made by
Company within fifteen (15) days after the mailing of such notice. As
a general rule, the Consultant's determination shall be binding on
Executive and Company. The application of the excise tax rules of
Section 4999, however, is complex and uncertain and, as a result, the
Internal Revenue Service may disagree with the Consultant concerning
the amount, if any, of the excise taxes that are due. If the Internal
Revenue Service determines that excise taxes are due, or that the
amount of the excise taxes that are due is greater than the amount
determined by the Consultant, the Gross-Up Payment will be
recalculated by the Consultant to reflect the actual excise taxes that
Executive is required to pay (and any related interest and penalties).
Any deficiency will then be paid to Executive by Company within
fifteen (15) days of the receipt of the revised calculations from the
Consultant. If the Internal Revenue Service determines that the amount
of excise taxes that Executive paid exceeds the amount due, Executive
shall return the excess to Company (along with any interest paid to
Executive on the overpayment) immediately upon receipt from the
Internal Revenue Service or other taxing authority. Company has the
right to challenge any excise tax determinations made by the Internal
Revenue Service. If Company agrees to indemnify Executive from any
taxes, interest and penalties that may be imposed upon Executive
(including any taxes, interest and penalties on the amounts paid
pursuant to Company's indemnification agreement), Executive must
cooperate fully with Company in connection with any such challenge.
Company shall bear all costs associated with the challenge of any
determination made by the Internal Revenue Service and Company shall
control all such challenges. The additional Gross-Up Payments called
for by the preceding paragraph shall not be made until Company has
either exhausted its (or Executive's) rights to challenge the
determination or indicated that it intends to concede or settle the
excise tax determination. Executive must notify Company in writing of
any claim or determination by the Internal Revenue Service that, if
upheld, would result in the payment of excise taxes in amounts
different from the amount initially specified by the Consultant. Such
notice shall be given as soon as possible but in no event later than
fifteen (15) days following Executive's receipt of notice of the
Internal Revenue Service's position.
SECTION 7 - TERM OF AGREEMENT.
This Agreement is effective immediately and will continue in effect until
the date specified in a written amendment terminating this Agreement signed by
both parties, or the date on which Employee's employment with Company
terminates, provided, however, that this Agreement shall remain in effect for
three (3) years following a Change of Control that occurs during the three year
period preceding a Qualifying Termination.
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SECTION 8 - NOTICES. All notices or communications hereunder shall be in
writing, addressed as follows:
To Company: Metaldyne Corporation
00000 Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000-0000
ATTN: Chairman of the Board
with a copy to: R. Xxxxxxx Xxxxxxx, Esq.
McDonald, Hopkins, Xxxxx &
Xxxxx Co., L.P.A.
0000 Xxxx Xxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
To Executive:
---------------------------
---------------------------
---------------------------
with a copy to:
---------------------------
---------------------------
---------------------------
---------------------------
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 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 9 - 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 or competent jurisdiction to have been frivolous.
SECTION 10 - EMPLOYMENT BY SUCCESSOR. 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 or any of its subsidiaries in a Change of Control to expressly assume
and agree to perform this Agreement in the same manner
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and to the same extent that the Company or any subsidiary would be required to
perform it if no such succession had taken place. Failure of the Company to
obtain such assumption and agreement prior to the effectiveness of any such
succession, or of the successor to acknowledge the assumption of this Agreement,
shall entitle Executive to payments in the same amount and on the same terms to
which Executive would have been entitled hereunder if he had terminated his
employment for Good Reason following a Change of Control, except that for
purposes of implementing the foregoing, the date on which any such succession
becomes effective shall be Executive's deemed termination date.
SECTION 11 - AMENDMENT. This Agreement may only be amended by written
agreement of the parties hereto.
SECTION 12 - REMEDIES. Executive acknowledges and agrees that Company's
remedies at law for a breach or threatened breach of any of the provisions of
Section 2 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 and all benefits paid under this Agreement.
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 13- 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 13 are in addition to the survivorship provisions of
any other section of this Agreement.
SECTION 14 - GOVERNING LAW; REVENUE AND JURISDICTION. If any judicial or
administrative proceeding or claim relating to or pertaining to this Agreement
is initiated by either party hereto, such proceeding or claim shall and must be
filed in a state or federal court located in Xxxxx County, Michigan and such
proceeding or claim shall be governed by and construed under Michigan law,
without regard to conflict of law and principals.
SECTION 15 - DISPUTE RESOLUTION. Any dispute related to or arising under
this Agreement shall be resolved in accordance with the Metaldyne Dispute
Resolution Policy in effect at the time such dispute arises. The Metaldyne
Dispute Resolution Policy in effect at the time of this Agreement is attached to
this Agreement.
SECTION 16 - 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 affiliate of Company or any predecessor of Company or affiliate of
any predecessor of Company and Executive; provided, however, that this Agreement
does not supercede the MascoTech, Inc. Retention Plan or any change in control
agreements between Executive and Xxxxxxx Industries, Inc., Global Metal
Technologies, Inc. ("GMTI"), or MascoTech, Inc. that predates the Heartland
Industrial Partners' acquisition of Xxxxxxx Industries, Inc., GMTI, or
MascoTech, Inc. in the year 2000 or 2001 and which agreements by their terms
survive such acquisition for a specified period.
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SECTION 17 - WITHHOLDING. Company shall be entitled to withhold from
payments any amount of withholding required by law.
SECTION 18 - 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.
SECTION 19 - 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.
COMPANY
METALDYNE CORPORATION
August 30, 2004 By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------- ------------------------------------------------
Date
Its: Chairman, President and Chief Executive Officer
EXECUTIVE
August 30, 2004 /s/ Xxxxxx Xxxxxxxx
------------------------- ----------------------------------
Date
13
