EXHIBIT 10.2
EXECUTIVE CHANGE IN CONTROL
BENEFITS AGREEMENT
THIS EXECUTIVE CHANGE IN CONTROL BENEFITS AGREEMENT (the "Agreement") is
entered into this _______ day of ______________, 199__ between ______________
("Executive") and BEI Technologies, Inc. ("Company"). This Agreement is
intended to provide Executive with the compensation and benefits described
herein upon the occurrence of specific events. Certain capitalized terms used
in this Agreement are defined in Article V.
Company and Executive hereby agree as follows:
ARTICLE I
EMPLOYMENT BY COMPANY
1.1 Company and Executive wish to set forth the compensation and benefits
which Executive shall be entitled to receive in the event of a Covered
Termination (as hereinafter defined).
1.2 This Agreement shall remain in full force and effect so long as
Executive is employed by Company; provided, however, that the rights and
obligations of the parties hereto contained in Articles II through VI shall
survive for eighteen (18) months following a Covered Termination (as hereinafter
defined).
1.3 The duties and obligations of Company to Executive under this
Agreement shall be in consideration for Executive's past services to Company and
Executive's continued employment with Company.
1.4 This Agreement shall not supersede or affect any other agreements
relating to Executive's employment or severance or a change in control of
Company.
ARTICLE II
SEVERANCE BENEFITS
2.1 ENTITLEMENT TO SEVERANCE BENEFITS. If Executive's employment with
Company terminates due to a Covered Termination following a Change in Control,
Company shall pay Executive the compensation and benefits described in this
Article II. If Executive's employment with Company terminates, but such
termination is not a Covered Termination, Executive will not be entitled to
receive any payments or benefits under this Article II.
1.
2.2 SEVERANCE PAYMENT. Executive shall receive a lump sum severance
payment within thirty (30) days following a Covered Termination equal to the sum
of Annual Base Pay and Average Annual Bonus, subject to any applicable
withholding of federal, state or local taxes.
2.3 HEALTH BENEFITS. Following a Covered Termination, Executive and
Executive's covered dependents, pursuant to the health benefit continuation
provisions of the Employee Retirement Income Security Act of 1974, will be
eligible to continue their health, dental and vision coverage under any plan
providing such benefits maintained by Company on the same terms and conditions
as in effect immediately prior to such Covered Termination, until the earlier of
(i) Executive's commencement of new employment and coverage under such
subsequent employer's benefit plans providing such benefits or (ii) eighteen
(18) months following the Covered Termination. All costs associated with the
continuation of benefits shall be paid by Company.
2.4 MITIGATION. Except as otherwise specifically provided herein,
Executive shall not be required to mitigate damages or the amount of any payment
provided under this Agreement by seeking other employment or otherwise, nor
shall the amount of any payment provided for under this Agreement be reduced by
any compensation earned by Executive as a result of employment by another
employer or by retirement benefits after the date of the Covered Termination, or
otherwise.
ARTICLE III
OTHER RIGHTS AND BENEFITS
3.1 NONEXCLUSIVITY. Nothing in this Agreement shall prevent or limit
Executive's continuing or future participation in any benefit, bonus, incentive
or other plans, programs, policies or practices provided by Company and for
which Executive may otherwise qualify, nor shall anything herein limit or
otherwise affect such rights as Executive may have under any stock option or
other agreements with Company. Except as otherwise expressly provided herein,
amounts which are vested benefits or which Executive is otherwise entitled to
receive under any plan, policy, practice or program of Company at or subsequent
to the date of a Covered Termination shall be payable in accordance with such
plan, policy, practice or program.
3.2 PARACHUTE PAYMENTS. If any amount or benefit received or to be
received by Executive pursuant to this Agreement would constitute an "excess
parachute payment" subject to excise tax under Section 4999 of the Internal
Revenue Code of 1986, as amended (the "Excise Tax"), the amount or benefit to be
received by Executive shall be reduced if such reduction, taking into account
all applicable federal, state and local income and employment taxes and the
Excise Tax, results in a greater after-tax benefit for Executive.
2.
ARTICLE IV
NON-ALIENATION OF BENEFITS
No benefit hereunder shall be subject to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance or charge, and any attempt to so
subject a benefit hereunder shall be void.
ARTICLE V
DEFINITIONS
For purposes of this Agreement, the following terms shall be defined
as follows:
5.1 "AGREEMENT" means this Executive Change in Control Benefits
Agreement.
5.2 "ANNUAL BASE PAY" means Executive's annual base pay at the rate
in effect during the last regularly scheduled payroll period immediately
preceding (i) the Change in Control or (ii) the Covered Termination, whichever
is greater.
5.3 "AVERAGE ANNUAL BONUS" means the average of Executive's actual
annual cash incentive bonus for the three (3) fiscal years of Company preceding
the year in which the Change in Control occurs or in which a Covered Termination
occurs, whichever is greater. For purposes of the foregoing, "Company" shall
include BEI Electronics, Inc. and any subsidiary of BEI Electronics, Inc., if
Executive has been employed by such company.
5.4 "CHANGE IN CONTROL" means the consummation of any of the
following transactions:
(a) a merger or consolidation of Company with any other
corporation, other than a merger or consolidation which would result in the
voting securities of Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least fifty percent (50%) of the total
voting power represented by the voting securities of Company or such surviving
entity outstanding immediately after such merger or consolidation, or the sale,
lease, exchange or other transfer or disposition by Company of all or
substantially all (more than fifty percent (50%)) of Company's assets;
(b) any person (as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) is or
becomes the beneficial owner (within the meaning of Rule 13d-3 under the
Exchange Act) directly or indirectly of fifty percent (50%) or more of Company's
outstanding common stock; or
(c) a change in the composition of the Board of Directors of
Company (the "BEI Board") of Company within a three (3)-year period, as a result
of which fewer than a majority of the directors are Incumbent Directors.
"Incumbent Directors" shall mean directors who either:
3.
(A) are directors of Company as of the date hereof;
(B) are elected, or nominated for election, to the BEI Board with
the affirmative votes of at least a majority of the directors of Company who are
Incumbent Directors described in (A) above at the time of such election or
nomination; or
(C) are elected, or nominated for election, to the BEI Board with
the affirmative votes of at least a majority of the directors of Company who are
Incumbent Directors described in (A) or (B) above at the time of such election
or nomination.
Notwithstanding the foregoing, "Incumbent Directors" shall not include
an individual whose election or nomination is in connection with an actual or
threatened proxy contest relating to the election of directors of Company.
The provisions of paragraphs (b) and (c) above shall not apply to
private or public financing transactions for the purpose of raising operating or
working capital for Company, as long as such transactions have received the
approval of not less than two-thirds of the members of the BEI Board and the
person or persons providing the financing do not acquire operational control of
Company.
5.5 "COMPANY" means BEI Technologies, Inc. and any successor thereto.
5.6 "COVERED TERMINATION" means the voluntary or involuntary
termination of Executive's employment within twelve (12) months following a
Change in Control, including termination by reason of death or disability but
excluding termination by reason of fraud, misappropriation or embezzlement on
the part of Executive which resulted in material loss, damage or injury to
Company. Notwithstanding the foregoing, Executive shall not be deemed to have
been terminated for fraud, misappropriation or embezzlement unless and until
there shall have been delivered to Executive a copy of a resolution, duly
adopted by the affirmative vote of not less than two-thirds of the entire
membership of the BEI Board at a meeting of the BEI Board called and held for
such purpose (after reasonable notice to Executive and an opportunity for the
Executive, together with Executive's counsel, to be heard before the BEI Board).
Such resolution must provide that in the good faith opinion of the BEI Board,
Executive was guilty of fraud, misappropriation or embezzlement which resulted
in material loss, damage or injury to Company and must specify the particulars
thereof in detail.
ARTICLE VI
GENERAL PROVISIONS
6.1 EMPLOYMENT STATUS. This Agreement does not constitute a contract
of employment or impose on Executive any obligation to remain as an employee, or
impose on Company any obligation (i) to retain Executive as an employee, (ii)
to change the status of Executive as an at-will employee, or (iii) to change
Company's policies regarding termination of employment.
4.
6.2 NOTICES. Any notices provided hereunder must be in writing and
such notices or any other written communication shall be deemed effective upon
the earlier of personal delivery (including personal delivery by facsimile) or
the third day after mailing by first class mail, to Company at its primary
office location and to Executive at the address as then listed in Company's
payroll records. Any payments made by Company to Executive under the terms of
this Agreement shall be delivered to Executive either in person or at such
address.
6.3 SEVERABILITY. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provisions had never been contained herein.
6.4 WAIVER. If either party should waive any breach of any
provisions of this Agreement, such party shall not thereby be deemed to have
waived any preceding or succeeding breach of the same or any other provision of
this Agreement.
6.5 COMPLETE AGREEMENT. This Agreement constitutes the entire
agreement between Executive and Company, and it is the complete, final, and
exclusive embodiment of their agreement with regard to this subject matter
except for existing agreements with Messrs. Wrench and Madni. It is entered
into without reliance on any promise or representation other than those
expressly contained herein.
6.6 AMENDMENT OR TERMINATION OF AGREEMENT. This Agreement may be
changed or terminated only upon the mutual written consent of Company and
Executive. The written consent of Company to a change or termination of this
Agreement must be signed by an executive officer of Company after such change or
termination has been approved by the Compensation Committee of the BEI Board.
6.7 COUNTERPARTS. This Agreement may be executed in separate
counterparts, any one of which need not contain signatures of more than one
party, but all of which taken together will constitute one and the same
Agreement.
6.8 HEADINGS. The headings of the Articles and Sections hereof are
inserted for convenience only and shall not be deemed to constitute a part
hereof nor affect the meaning thereof.
6.9 SUCCESSORS AND ASSIGNS. This Agreement is intended to bind and
inure to the benefit of and be enforceable by Executive and Company, and their
respective successors, assigns, heirs, executors and administrators, except that
Executive may not assign any duties hereunder and may not assign any rights
hereunder without the written consent of Company, which consent shall not be
withheld unreasonably.
5.
6.10 ATTORNEYS' FEES. If either party brings any action to enforce
its rights hereunder, the prevailing party shall be entitled to recover
reasonable attorneys' fees and costs incurred in connection with such action,
regardless of the outcome of such action.
6.11 CHOICE OF LAW. All questions concerning the construction,
validity and interpretation of this Agreement will be governed by the law of the
State of California, without regard to choice-of-law provisions.
6.12 NON-PUBLICATION. The parties mutually agree not to disclose
publicly the terms of this Agreement except to the extent that disclosure is
mandated by applicable law.
6.13 CONSTRUCTION OF AGREEMENT. In the event of a conflict between
the text of the Agreement and any summary, description or other information
regarding the Agreement, the text of the Agreement shall control.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
day and year written above.
BEI TECHNOLOGIES, INC. EXECUTIVE
By:
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Name:
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Title:
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6.
