SEVERANCE AGREEMENT AND RELEASE
Exhibit
99.1
AND
RELEASE
This
Severance Agreement and Release (this “Agreement”) by and between Stoneridge,
Inc., an Ohio corporation, and its subsidiaries and affiliates and its past and
present directors, shareholders, employees, agents, officers, attorneys and
assigns (the “Company”) and Xxxxxxx X. Xxxxxxxxx (“Executive”) has been executed
on the dates set forth on the signature page and shall be effective and no
longer subject to revocation on the seventh day following the date that
Executive executes this Agreement (the “Effective Date”).
Recitals
A. Executive
is the Vice President of Enterprise Planning & Performance. He is
also an officer, director or both of one or more of the Company’s
subsidiaries;
B. The
Company and Executive now desire to enter into an agreement amicably dissolving
all employment relations between them and resolving all matters and relations
between them;
C. In
connection therewith, (i) the Company and Executive have agreed, among other
things, that effective at the close of business on May 31, 2010 (the
“Resignation Date”), Executive will voluntarily resign as an employee and as the
Vice President of Enterprise Planning & Performance, and as an officer,
director or both of all Company subsidiaries on which he serves (ii) Executive
has agreed to waive, release and settle any claims related to or arising out of
his employment and affiliation with the Company in exchange for severance
benefits to which Executive would not otherwise have been entitled, and (iii)
the Company has agreed to provide the severance benefits specified herein, to
which Executive would not otherwise have been entitled, in exchange for this
Agreement; and
D. The
Compensation Committee of the Board of Directors of the Company has approved
this Agreement.
NOW,
THEREFORE, in consideration of the terms, conditions, premises and the mutual
covenants set forth herein, the sufficiency of which is hereby acknowledged, the
parties to this Agreement hereby agree as follows:
1. Resignations. Simultaneously
with the execution and delivery of this Agreement, Executive will resign,
effective as of the close of business on the Resignation Date, as an employee,
and from all positions with the Company, including but not limited to the Vice
President of Enterprise Planning & Performance by executing and delivering
to the Company a letter of resignation substantially in the form of Appendix A
hereto. In addition, simultaneously with the execution and delivery
of this Agreement, Executive will resign, effective as of the close of business
on the Resignation Date, as a director, officer, employee, member or manager (as
applicable) of each subsidiary of the Company of which Executive serves in any
such capacity, by executing and delivering to the Company a letter of
resignation substantially in the form of Appendix B hereto.
Executive
and the Company agree and acknowledge that this Agreement sets forth the
parties’ mutual understanding with respect to Executive’s resignations described
above. The parties agree that (i) for all purposes the resignations
described herein by the Executive are voluntary and (ii) Executive shall remain
an employee of the Company until the close of business on the Resignation Date
and that the Company shall pay Executive pursuant to the Company’s customary
payroll practices his base salary and accrued but unused vacation time earned up
to and through the Resignation Date. Except as otherwise provided
under Section 2 below, all employee benefits provided to Executive through the
Company will cease at the close of business on the Resignation
Date. The Company and Executive also acknowledge and agree
that the Amended and Restated Change in Control Agreement, by and between
Executive and the Company, dated August 2, 2007, as amended December 31, 2008,
shall terminate and shall be null and void and any contingent right thereunder
forfeited and relinquished, as of the Effective Date.
2. Severance
Benefits. The Company agrees to pay Executive the amounts and
provide the benefits specified in this Section in exchange for Executive
executing this Agreement. Executive acknowledges that the payments
and benefits provided in this Section are extra and in addition to all earned
wages, unreimbursed expenses to be reimbursed pursuant to the Company policy,
and other payments or benefits ordinarily due Executive as a separating employee
of the Company.
a. The
Company shall provide a severance payment to Executive in the aggregate amount
of $162,750, less standard required deductions and withholdings, on December 1,
2010.
b. Executive
shall be entitled to any earned unused vacation pay through May 31, 2010, less
standard required deductions and withholdings, payable on December 1,
2010.
c. The
Company shall, in connection with the business benefit to be derived, pay for
reasonable executive outplacement services, not to exceed $25,000, upon the
presentation of an invoice from a mutually agreed upon service provider, which
payment must be invoiced and made no later than December 31, 2010.
d. Any
equity compensation programs of the Company in which the executive participates
shall be governed by their terms, and any rights or benefits of Executive shall
be set forth thereunder.
3. Covenants.
a. During
his employment with the Company, Executive had access to the Company’s
“confidential information” and “trade secrets.” For purposes of this
Agreement, “confidential information” shall mean information which is not
publicly available including, without limitation, information concerning
customers, material sources, suppliers, marketing plans, financial projections,
financial results and operation methods, and “trade secrets” shall mean the
Company’s processes, methodologies and techniques known only to those employees
of the Company who need to know such secrets in order to perform their duties on
behalf of the Company. Executive, recognizing the Company’s
significant investment of time, efforts and money in developing and preserving
its confidential information and trade secrets, shall not, for a five (5) year
period after the Resignation Date, (i) use for his direct or indirect personal
benefit any of the Company’s confidential information or trade secrets or (ii)
disclose to any person or entity any of the Company’s confidential information
or trade secrets.
b. For
a period of two (2) years after the Resignation Date, Executive shall not
(i) directly solicit any employee of the Company or any of its subsidiaries
to leave the employment thereof or in any way interfere with the relationship of
such employee with the Company or its subsidiaries; and/or (ii) induce or
attempt to induce any customer, supplier, licensee or other individual,
corporation or other business organization having a business relationship with
the Company or its subsidiaries to cease doing business with the Company or its
subsidiaries, or in any way interfere with the relationship between any such
customer, supplier, licensee or other person and the Company or its
subsidiaries.
c. For
a period of two (2) years after the Resignation Date, unless otherwise approved
in writing by an officer of the Company, Executive shall not compete with the
Company’s Xxxxxx operations, directly or indirectly, whether as an owner,
partner, employee, officer, director, agent, or otherwise, in any location where
the Company (doing business as Xxxxxx) or any of its subsidiaries is engaged in
business, engage in, or be employed by, or act as a consultant to, or be a
director, officer, employee, owner or partner of or acquire an interest in any
person, firm, corporation or other entity engaged in the United States in a
business which is in competition with the business conducted by the Company’s
Xxxxxx business on the Resignation Date (except investments of 1% or less of the
capital stock of any corporation subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended). The Company’s Xxxxxx
business shall be deemed to include the design, manufacture and sale of
electronic and electrical products sold by the Company’s Xxxxxx business on the
Resignation Date, including but not limited to, ball switches, connectors, fuel
selector valves, master disconnect switches back-up alarms, circuit breakers,
door lock actuators, ignition switches, push-pull switches, rocker switches, and
toggle switches.
d. Except
as required by law (after advice of legal counsel) or as requested by any
governmental or self-regulatory authority, Executive agrees that he will not
make any statements, orally, in writing or otherwise, or in any way disseminate
any information, concerning the Company, its affiliates, employees,
shareholders, members, officers, directors, managers, or agents (past or
present), or concerning the business, business operations or business practices
of the Company which, in form or substance, disparages, or otherwise casts an
unfavorable light upon, the Company, its affiliates, employees, shareholders,
members, officers, directors, managers, or agents, or their reputation or
standing in the business community or the community as a whole. In
the event that Executive is required by law or requested by any governmental or
self-regulatory authority to make statements or disseminate any information
concerning the Company and its related persons as described above, Executive, to
the extent possible shall notify the Company that he is required by law (or has
been requested by a governmental or self-regulatory authority) to make such
disclosure at least two full business days prior to making such
disclosures.
e. Executive
agrees for a period of one (1) year following the Resignation Date to cooperate
with the Company’s officials at reasonable times with regard to any matters or
issues of which he has historical knowledge or with which he was previously
involved while employed at the Company; provided, however, such cooperation
shall not materially interfere with Executive’s retirement or
employment. In the event the Company requires Executive’s cooperation
and that cooperation requires travel to the Company’s headquarters in Warren,
OH, or to the Company’s facility in Canton, MA, the Company shall reimburse
Executive solely for reasonable out-of-pocket and travel expenses (including
lodging and meals) upon submission of adequate receipts.
f. Executive
understands and acknowledges that his failure to comply with his covenants in
this Agreement will be deemed a material breach of this Agreement. In
the event of a breach of this agreement by executive, Executive shall repay to
the Company all money paid by the Company pursuant to this
Agreement. Notwithstanding, however, the Agreement shall otherwise
remain binding and effective and the Company may pursue any and all additional
remedies that it may have as a result of any such breach of the
Agreement.
4. Release. In
exchange for the payments set forth herein, Executive, for himself and his
heirs, personal representatives, successors and assigns, forever releases,
remises and discharges the Company and each of its past, present, and future
officers, directors, shareholders, members, employees, trustees, agents,
representatives, affiliates, successors and assigns (collectively the “Employer
Released Parties”) from any and all claims, claims for relief, demands, actions
and causes of action of any kind or description whatsoever, known or unknown,
whether arising out of contract, tort, statute, treaty or otherwise, in law or
in equity, which Executive now has, has had, or may hereafter have against any
of the Employer Released Parties from the beginning of his employment with the
Company to the date of execution of this Agreement, arising from, connected
with, or in any way growing out of, directly or indirectly, Executive’s
employment by the Company, Executive’s service as the Vice President of
Enterprise Planning & Performance and any other service provided by
Executive to the Company, or any transaction prior to the Resignation Date and
all effects, consequences, losses and damages relating thereto, including, but
not limited to, all claims arising under the Civil Rights Acts of 1866 and 1964,
the Fair Labor Standards Act of 1938, the Equal Pay Act of 1963, the Age
Discrimination in Employment Act of 1967, the Rehabilitation Act of 1973, the
Older Workers Benefit Protection Act of 1990, the Americans With Disabilities
Act of 1990, the Civil Rights Act of 1991, the Family and Medical Leave Act of
1993, the Consolidated Omnibus Budget Reconciliation Act (“COBRA”), Title 4112
of the Ohio Revised Code, the Massachusetts Fair Employment Practice Act,
Massachusetts General Laws Chapter 151B, and all other federal or state laws
governing employers and employees; provided, however, that nothing in this
Section 4 will bar, impair or affect the obligations, covenants and agreements
of the Company set forth in this Agreement. The Company represents
and warrants to Executive that to the Company’s knowledge, the Company has not
engaged in any violation of law that could give rise to Executive’s having a
claim against the Company.
5. Covenant Not to
Xxx. Except where such agreement is contrary to law or public
policy, Executive agrees that he will not now or hereafter commence or initiate
any claim or charge of employer discrimination with any governmental agency or
xxx the Company concerning any claims relating to his employment or resignation
of employment with the Company, except as the same may affect Executive’s rights
with respect to the enforcement of this Agreement. This Agreement may
be pleaded as a full and complete defense to, and may be used as a basis for
injunction against, any action or proceeding Executive may institute, prosecute,
or maintain in breach of this Agreement.
6. Indemnification.
a. If
Executive is made a party to or is threatened to be made a party to or is
involved in any action, suit or proceeding, whether civil or criminal,
administrative or investigative (a “Proceeding”), by reason of the fact that he
was an employee or officer of the Company and an employee, officer or director
of any of the Company’s subsidiaries, whether the basis of such Proceeding is an
alleged action in an official capacity as such, or in any other capacity,
Executive shall be indemnified and held harmless by the Company to the fullest
extent permitted or authorized by the Company’s Articles of Incorporation, Code
of Regulations and by law at the relevant date on which Executive is made a
party or is threatened to be made a party to or is involved in any action, suit
or proceeding but in no event to a lesser extent than any then current or any
former directors or officers of the Company. Reasonable expenses
incurred by Executive in such Proceeding shall be paid by the Company in advance
of the final disposition of any such Proceeding, as they are incurred, upon
receipt by the Company of a written undertaking by or on behalf of Executive to
repay all amounts so advanced if it should be determined ultimately that
Executive is not entitled to be indemnified under this Agreement or otherwise.
This Section shall survive the termination of this Agreement. To the
best knowledge of Executive, there are no claims threatened or which are likely
to be threatened or prosecuted against the Company or Executive for acts or
omissions of Executive during the period of time Executive was an officer or
director of the Company.
b. The
Company currently carries Officers and Directors liability insurance and
Executive will continue to be fully covered by such insurance, subject to its
terms, for any of his acts or omissions through the Resignation Date as an
officer, employee or agent of the Company or as a director, trustee, officer,
employee, member, manager or agent of another corporation, limited liability
company, partnership, joint venture or other enterprise, domestic or foreign,
which he served as at the request of the Company.
7. Acknowledgment.
By
entering into this Agreement, and in connection with Executive’s release of
claims and covenant not to xxx set forth in Sections 4 and 5, Executive
acknowledges that:
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a.
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Executive
is knowingly and voluntarily entering into this
Agreement;
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b.
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No
promise or inducement has been offered to Executive except as set forth
herein;
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c.
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This
Agreement is being executed by Executive without reliance upon any
statements by the Company or any of its representatives concerning the
nature or extent of any claims or damages or legal liability
therefor;
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d.
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This
Agreement has been written in understandable language, and all provisions
hereof are understood by Executive;
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e.
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Executive
has been advised in writing to consult with an attorney prior to executing
this Agreement;
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f.
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Executive
has had a period of at least twenty-one (21) days from May 20, 2010 within
which to consider this Agreement before accepting the same and, by signing
this Agreement earlier than twenty-one (21) days following receipt of it,
Executive acknowledges that he has knowingly and voluntarily waived the
twenty-one (21) day period and has accelerated the date when he may
commence receipt of the severance payments identified hereunder following
expiration of the revocation period referenced in Section 7.g.;
and
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g.
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Executive
has the right to revoke this Agreement for a period of seven (7) days
following his execution hereof, and this Agreement will not become
effective or enforceable until such seven (7) day period has
expired.
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Should
Executive desire to revoke this Agreement, Executive must notify the Company in
writing at the address listed in Section 9, Attention: Chief Executive Officer,
prior to the close of business on the seventh (7th) day
following the date when he signs this Agreement. If Executive
declines to accept the terms of this Agreement or, having accepted them,
effectively revokes his acceptance thereof, this Agreement will have no force or
effect and neither its terms nor any of the discussions of the parties relative
to its negotiation will be admissible in evidence in any proceeding brought by
or on behalf of Executive against the Company or any other person.
8. Return of
Property. Executive agrees that he will, on or before the
Resignation Date, return to the Company (i) all property of the Company in his
possession or under his control, including, but not limited to, any Company
credit cards, keys, computers, cellular phones, mobile devices, office
furniture, automobiles, equipment, and supplies, and (ii) all originals and
copies of writings and records (including records stored in electronic form)
relating to the Company’s business, confidential information or trade secrets
that are in Executive’s possession or under his control at such
time. Executive represents and warrants that immediately after the
Resignation Date he will not have any property of the Company in his possession
(including but not limited to at his residence or on his personal computer) or
under his control.
9. Notice. Any
notice required or permitted to be given to a party pursuant to the provisions
of this Agreement must be in writing and will be deemed to have been given on
the date of receipt if delivered by messenger to, or if mailed to such party by
registered or certified mail, postage prepaid, at, the address for such party
set forth below (or to such other address or party as such party shall designate
in writing to the other party from time to time).
If to the
Company:
Stoneridge, Inc.
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxx 00000
Attention: Chief Executive
Officer
With a
copy to:
Xxxxxx X. Xxxxxx
Xxxxx & Xxxxxxxxx LLP
0000 Xxxx
Xxxxx Xxxxxx
0000 XXX Xxxxxx
Xxxxxxxxx, Xxxx 00000
If to
Executive:
000 Xxx
Xxxx
Xxxxxxxxxxx,
Xxxxx Xxxxxx 00000
10. Modification, Waiver and
Disclosure.
a. No
waiver or modification of this Agreement or of any covenant, condition, or
limitation herein contained will be valid or effective unless in writing and
duly executed by the party to be charged therewith and no evidence of any waiver
or modification will be offered or received in evidence in any proceeding or
litigation between the parties arising out of or affecting this Agreement, or
the rights or obligations of the parties hereunder, unless such waiver or
modification is in writing, duly executed as aforesaid. No waiver of
any of the provisions of this Agreement will be deemed, or will constitute, a
waiver of any other provision, whether or not similar, nor will any waiver
constitute a continuing waiver. No waiver of any breach of condition
of this Agreement will be deemed to be a waiver of any other subsequent breach
of condition, whether of a like or different nature.
b. Notwithstanding
any other provision in this Agreement, but consistent with Subsection 3.d.,
above, the parties agree that the Company may make such disclosure regarding
Executive’s resignation from the Company as in the judgment of the Company is
required by law, regulation or the listing rules of the
NYSE. Executive acknowledges and agrees that this Agreement may be
filed by the Company as an exhibit with the Securities and Exchange
Commission. Except as may be required by law or as may be requested
by a governmental or self-regulatory authority, Executive hereby covenants and
agrees not to make any statements to any third party, including, without
limitation, any representative of any news organization, regarding the Company
or the Company’s directors, officers, employees or agents or to otherwise
publish, whether in print or through means of any electronic communication, any
remarks about the Company or the Company’s directors, officers, employees or
agents, unless such statements or remarks are agreed to in writing in advance by
the President of the Company.
11. Consent to Jurisdiction,
Venue and Service of Process. Each of the Company and
Executive, after having had the opportunity to consult with legal counsel,
knowingly, voluntarily, intentionally, and irrevocably: (i) consents to the
jurisdiction of the Court of Common Pleas, County of Trumbull, State of Ohio and
the United States District Court for the Northern District of Ohio, Eastern
Division with respect to any action, suit, proceeding, investigation, or claim
(“Litigation”); (ii) waives any objections to the jurisdiction and venue of any
Litigation in either such court; (iii) agrees not to commence any Litigation
except in either of such courts and agrees not to contest the removal of any
Litigation commenced in any other court to either of such courts; (iv) agrees
not to seek to remove, by consolidation or otherwise, any Litigation commenced
in either of such courts to any other court; and (v) waives personal service of
process in connection with any Litigation and consents to service of process by
registered or certified mail, postage prepaid, addressed as set forth
herein.
12. Severability. If
a judicial determination is made that any of the provisions of this Agreement
constitutes an unreasonable or otherwise unenforceable restriction against any
party, such determination shall not affect the validity of the remaining
provisions. In the event that a provision shall be declared to be
invalid, then the parties agree that they will, in good faith, negotiate with
one another to replace such invalid provision with a valid provision as similar
as possible to that which was held to be invalid; provided, however if any
provision of this Agreement or the application thereof to any person or
circumstance shall to any extent be held in any proceeding to be invalid or
unenforceable, the remainder of this Agreement, or the application of such
provision to persons or circumstances other than those to which it was held to
be invalid or unenforceable, shall not be affected thereby, and shall be valid
and be enforceable to the fullest extent permitted by law.
13. Injunctive
Relief. Executive recognizes that the provisions of this
Agreement, especially his nondisclosure and nonsolicitation covenants, are
vitally important to the continuing welfare of the Company and its subsidiaries
and that money damages would constitute a totally inadequate remedy for any
violation hereof. Accordingly, in the event of any such violation by
Executive, the Company and its subsidiaries, in addition to any other remedies
they may have, shall have the right to institute and maintain a proceeding to
compel specific performance thereof or to issue an injunction restraining any
action of Executive in violation of such Sections. This Section shall
survive the expiration or termination of this Agreement for any
reason.
14. Advice of
Counsel. Executive acknowledges that he has been given the
opportunity to be represented by competent counsel in connection with the
negotiation, preparation, and signing of this Agreement, that he understands and
agrees to every term contained herein, and that this Agreement was negotiated at
arm’s length.
15. Other
Agreements. All confidentiality, non-disclosure and other
obligations that Executive already has to the Company shall survive and remain
in full force and effect. As of the Resignation Date, the Company
shall not have any further obligation to Executive with respect to any
compensation, payments, or benefits or other rights under any agreements,
including but not limited to the Amended and Restated Change In Control
Agreement referred to in Section 1 above, except as provided or contemplated by
this Agreement. Executive affirms that he has no charges, claims or
lawsuits pending against the Company, their officers, agents, representatives,
employees, affiliates, divisions, subsidiaries, or their successors or assigns,
trustees, heirs, administrators, executors, representatives or principals
thereof. Executive agrees he shall not hold himself out as an
employee of the Company and agrees that he shall have no authority, express,
implied or otherwise to act in any agency capacity or otherwise bind the
Company.
16. Further
Assurances. The parties agree to take such action and execute
and deliver, promptly upon request, such additional documents as may be
reasonably necessary or appropriate to implement the terms of this Agreement and
effectuate its intent.
17. Governing
Law. This Agreement will be governed by and construed in
accordance with the laws of the State of Ohio.
18. Entire
Agreement. This Agreement constitutes the entire agreement
between the parties pertaining to the subject matter hereof and supersedes all
prior and contemporaneous agreements, representations, and understandings,
whether oral or in writing, of the parties.
19. Successors and
Assigns. Executive may not assign any rights or obligations
under this Agreement without the prior written consent of the
Company. This Agreement will be binding upon and inure to the benefit
of Executive and his heirs, estate, personal representatives, and permitted
successors and assigns. The Company may assign any rights or
obligations under this Agreement without the prior written consent of
Executive. This Agreement will be binding upon and inure to the
benefit of the Company and its successors and assigns.
20. Third Party
Beneficiaries. Each of the Employer Released Parties that is
not a party to this Agreement will be a third party beneficiary of this
Agreement. This Agreement will be enforceable by each such Employer
Released Party to the same extent as if the Employer Released Parties were a
party hereto.
21. Construction. The
Company and Executive have participated jointly in the negotiation and drafting
of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties and no presumption or burden of proof shall arise favoring or
disfavoring either party by virtue of the authorship of any of the provisions of
this Agreement. Moreover, the Company and Executive intend that this
Agreement will be administered in accordance with Internal Revenue Code (“IRC”)
Section 409A. Should an Agreement provision fail to satisfy IRC
Section 409A, then such provision shall be construed in a manner so as to comply
with the requirements of IRC Section 409A.
22. Counterparts. This
Agreement may be executed in one or more counterparts, each of which will be
deemed to constitute an original but all of which together will constitute one
and the same instrument.
IN
WITNESS WHEREOF, the parties have executed this Agreement on the dates set forth
below.
READ
CAREFULLY – THIS DOCUMENT CONTAINS A RELEASE.
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STONERIDGE,
INC.
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Dated: May
28, 2010
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By:
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/s/ Xxxx X. Xxxxx | |
| Xxxx X. Xxxxx | |||
| President and Chief Executive Officer | |||
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Dated: May
31, 2010
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/s/ Xxxxxxx X. Xxxxxxxxx | |
| Xxxxxxx X. Xxxxxxxxx | |||
Appendix
A
Form of
Resignation – Employee
I, Xxxxxxx X. Xxxxxxxxx, hereby resign,
effective at the close of business on May 31, 2010, as an employee of and any
other relationship I may have in Stoneridge, Inc.
Dated: May 31, 2010
| /s/ Xxxxxxx X. Xxxxxxxxx | |||
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Xxxxxxx
X. Xxxxxxxxx
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Appendix
B
Form of
Resignation (Subsidiaries)
I, Xxxxxxx X. Xxxxxxxxx, hereby resign,
effective at the close of business on May 31, 2010, as an employee, officer,
member, manager and director of, as applicable, and any other relationship that
I may have in each subsidiary of Stoneridge, Inc.
Dated: May
31, 2010
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/s/ Xxxxxxx X. Xxxxxxxxx | |
| Xxxxxxx X. Xxxxxxxxx | |||
