Exhibit 10.24
TRANSITION AGREEMENT
This Transition Agreement (the "Agreement") is being entered into this __
day of __________, 2006 (the "Effective Date") by and between _________ and
Altra Industrial Motion, Inc., its subsidiaries and affiliate companies
(collectively, the "Company").
1. Except as otherwise provided herein, the term of this Agreement will
be from the Effective Date until one year following the closing date
of the sale (the "Closing Date") of the Altra Industrial Motion (the
"Business) of the Company, unless earlier terminated as provided
below.
2. During the term of this Agreement, you will continue to devote your
entire business skill, time, and effort diligently to the affairs of
the Business and you will perform all such duties, and otherwise
conduct yourself, in a manner reasonably determined to promote the
best interests of the Company.
3. Notwithstanding any other provision of this Agreement, your
eligibility to receive from the Company a Severance Benefit under this
Agreement is expressly contingent on the sale of all of the Business
(whether in one transaction or several) or the sale of the business
unit within the Business for which you provide services to a Buyer (or
Buyers) on or before March 31, 2007. If neither all of the Business
nor the business unit within the Business for which you provide
services is sold before March 31, 2007, you shall not be eligible to
receive any Severance Benefit pursuant to this Agreement and this
Agreement shall terminate on April 1, 2007. For the purposes of this
Agreement, a sale shall not be deemed to occur until the transaction
closes, nor shall a sale be deemed to occur if the Company goes
public.
4. Severance Benefit Eligibility
a. In addition to the requirements in Section 3 above, you will be
eligible for a Severance Benefit only if: you satisfy the
requirements of Section 5 and 6 herein; and if during the first
year of your employment with the Buyer, your employment is
terminated by the Buyer other than for Cause or you voluntarily
resign for Good Reason.
b. If you are eligible for a Severance Benefit, it will be
calculated based on 12 months of your base annual salary and will
be paid to you in the form of salary continuation in accordance
with the Company's regular payroll practices and procedures. The
Severance Benefit also includes the following: if you elect to
continue your health care and dental coverage through COBRA or
any similar state law and provided you continue to authorize the
required employee contributions for your share of the premiums,
the Company will continue to pay its share of your premiums (at
the same level of coverage as you have upon termination of
employment) during the period of salary continuation. Please note
that if you elect coverage
through COBRA, that such coverage begins after the benefits
mentioned above end under the terms of this Agreement. For
example, if you have 12 months of salary continuation, you will
have the same amount of months of medical and dental coverage
continuation before COBRA commences.
c. If payable, the Severance Benefit will not be included in
determining the amount of any benefits under any of the Company's
qualified or nonqualified employee benefit plans in which you may
be a participant.
d. Any Severance benefit will cease immediately upon your securing
employment after the end of your employment with the Company. You
agree that if you do secure such employment during the period in
which you are receiving Severance Benefit, you shall immediately
notify the Company.
For purposes of this Agreement, the term "Cause" means: (i) your
conviction(including without limitation by plea of guilty or no
contest) of a misdemeanor crime involving fraud, dishonesty, or
moral turpitude; (ii) your willful misconduct or negligence in
the performance of your duties; (iii) your breach of this
Agreement or any other agreement between you and the Company; or
(iv) any breach of your fiduciary duty or act of fraud,
dishonesty, disloyalty, or embezzlement by you.
For purposes of this Agreement, the term "Good Reason" means: (i)
a material diminution in your job responsibilities or (ii) a
material reduction in your compensation or bonus opportunities.
5. To be eligible for a Severance Benefit, you must execute and deliver
to the Company a General Release of Claims ("General Release") in the
form attached hereto as Exhibit 1 or in such other form as the Company
reasonably determines appropriate. You understand that you shall sign
the General Release no earlier than the first business day after the
last day of your employment.
6. In further consideration for the benefits described in Section 4
above, you agree to the following:
a. Return of Property; Intellectual Property Rights. Upon your
termination of employment for any reason with the Company or at
any time requested by the Company, you will return all property
owned by the Company or containing information relating to the
Company's business or customers, including files, documents, data
and records (whether on paper, tapes, disks, or in any form,
electronic or otherwise), office equipment, credit cards, and
employee identification cards. You acknowledge that the Company
is the rightful owner of any programs, ideas, inventions,
discoveries, copyright material, or trademarks that
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you may have originated or developed, or assisted in originating
or developing, during your period of employment with the Company,
where any such origination or development involved the use of
Company time or resources, or the exercise of your
responsibilities for or on behalf of the Company. You will at all
times, both before and after termination of employment cooperate
with the Company in executing and delivering documents and taking
any other actions that are necessary or requested by the Company
to assist the Company in patenting, copyrighting, or registering
any programs, ideas, inventions, discoveries, copyright material,
or trademarks, and to vest title thereto in the Company.
b. Proprietary and Confidential Information. You will at all times
both during and after your employment with the Company preserve
the confidentiality of all proprietary or confidential
information and trade secrets of the Company, except to the
extent that disclosure of such information is legally required,
authorized in writing by the Company, or necessary in the
performance of your duties on behalf of the Company. The phrase
"proprietary or confidential information" includes without
limitation information that has not been disclosed to the public
or that has been disclosed to the public wrongfully or in breach
of the disclosing party's obligations to the Company and that is
treated as confidential within the business of the Company, such
as strategic or tactical business plans; financial data, ideas,
processes, methods, techniques, systems, patented or copyrighted
information; documents relating to regulatory matters and
correspondence with governmental entities; information concerning
any past, pending, or threatened legal dispute; pricing and cost
data; reports and analyses of business prospects; business
transactions which are contemplated or planed; research data;
personnel information and data; identities or lists of or
information regarding users, purchasers, or customers of any of
the Company's products or services; and other confidential
matters pertaining to or known by the Company, including
confidential information of a third party which you know or
should know the Company is bound to protect.
c. Interference with Business Relations. During the period of your
employment with the Company except in accordance with your duties
and responsibilities on behalf of the Company, and for a period
ending 24 months following your termination of employment from
the Company for any reason, you will not, without the prior
written consent of the Company, directly or indirectly on behalf
of yourself or any other entity: (i) recruit, solicit, or hire
any employee of the Company (or any person who had been employed
by the Company within six months following your last day of
employment with the Company) for employment or for retention as a
consultant or service provider; (ii) solicit or induce, or in any
manner attempt to solicit or induce, any client, customer, or
prospective client or customer of the Company to
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cease being, or not to become, a customer of the Company, or to
divert any business of such customer or prospective customer or
client from the Company; or (iii) otherwise interfere with,
disrupt, or attempt to interfere with or disrupt, the
relationship, contractual or otherwise, between the Company and
any of its customers, clients, prospective customers or clients,
suppliers, consultants, or employees.
d. You agree that for a period of two (2) years from the date of
your termination, you will not accept employment with, provide
advice, consulting services, or in any other capacity work for or
provide services to companies that directly compete with the
Company, including but not limited to the following companies (a
list of Companies will be included when/if this document becomes
officially effective) including their successors, assigns,
parents, subsidiaries, divisions, or affiliates for one year
following your termination date.
e. You agree that for two (2) full years from your termination date,
you shall not solicit or service orders from (a list of Customers
will be included here when/if this document becomes officially
effective) for the purchase of products similar to those the
Company manufactures and sells.
f. Other Agreements and Policies. The obligations imposed on you by
this Section 6 are in addition to, and not in lieu of, any and
all other policies or agreements of the Company regarding the
subject matter of the foregoing obligations.
7. You acknowledge that the Company's customers and prospective customers
are national and international in scope and that the terms of these
covenants are necessary and reasonable and will not prevent you from
earning a livelihood. You agree that your agreement to these covenants
is a material inducement to the Company to enter into this Agreement
and to make possible to you the benefits provided in this Agreement.
You further agree that money damages may be insufficient as remedy for
your breach of these covenants. Accordingly, you agree that, in
addition to any other relief that may be available, the Company shall
be entitled to specifically enforce these covenants, including without
limitation by means of temporary, preliminary, and permanent
injunctive relief. You also agree that should any court of competent
jurisdiction find any portion of these covenants to be unenforceable
for any reason, that the court shall modify such portion so that it is
enforceable then enforce the covenant as modified. You further agree
that if the Court is unwilling or unable to make such a modification,
then it shall sever the unenforceable provision and shall enforce the
remaining portions of these covenants as fully as possible so as to
achieve the original intent of these covenants.
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8. The Company will endeavor to have the Buyer assume this Agreement. If
the Buyer assumes the Agreement, the Company will assign all of its
rights and obligation under this Agreement to the Buyer; and if the
Company makes such an assignment, all references in this Agreement
(not including section 7) to "Company" will be deemed to refer to the
Buyer on and after the effective date of such assignment, unless the
context clearly requires a contrary meaning. The Company may otherwise
assign its rights and obligations under this Agreement to another
entity with or without your consent. Upon any assumption or assignment
provided in this Section 7, the Company shall owe no further
obligation to you under this Agreement. You may not assign your rights
and obligations under this Agreement.
9. The payment of any benefits under this Agreement will be in lieu of,
and not in addition to, any separation or severance benefits to which
you may otherwise be entitled from the Company. In addition, no
provision of this Agreement will require the Company to provide you
with any payment, benefit, or grant that duplicates any payment,
benefit or grant that you are entitled to receive under any Company
compensation or benefit plan or other agreement or arrangement.
10. Nothing in this Agreement shall be construed as a right to continued
employment with the Company and nothing in this Agreement limits the
Company's right to terminate your employment with the Company at any
time (including prior to the Closing Date) with or without cause or
notice. The term of this Agreement shall end on your last day of
employment if the term has not already ended.
11. Failure to insist upon strict compliance with any of the terms,
covenants, or conditions of this Agreement will not be deemed a waiver
of such term, covenant, or condition, nor will any waiver or
relinquishment of any tight or power hereunder at any one or more
times be deemed a waiver or relinquishment of such right or power at
any other time or times.
12. The Company may withhold from any benefits payable under this
Agreement all taxes, deductions, and withholdings that the Company
determines to be required pursuant to any law, regulation, or ruling.
However, it is your obligation to pay all required taxes on any
amounts provided under this Agreement, regardless of whether
withholding is required.
13. Except to the extent otherwise required by law, you will not disclose,
in whole or in part, any of the terms of this Agreement. However, you
may disclose the terms of this Agreement to your spouse and to your
legal or financial advisor, provided that you take all reasonable
measures to assure that he or she does not disclose the terms of this
Agreement to a third party except as otherwise required by law. In
addition, notwithstanding anything in this paragraph to the
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contrary, you may disclose to any and all persons, without limitation
or any kind, the tax treatment and tax structure of the transaction
and all materials of any kind (including opinions and other tax
analyses) that are provided to you relating to such tax treatment and
tax structure.
14. Dispute Resolution.
a. The parties agree that, except for any claims pursuant to Section
6 of this Agreement, they shall submit to arbitration and resolve
in accordance with the procedures specified in this Section 13
any and all disputes arising from or relating to this Agreement.
The parties further agree that the arbitration process agreed
upon herein shall be the exclusive means for resolving all
disputes made subject to arbitration herein.
b. Notwithstanding any other choice of law provisions in the
Agreement, the interpretation and enforcement of the arbitration
provisions of this Agreement shall be governed exclusively by the
Federal Arbitration Act ("FAA"), and shall otherwise be governed
by the law of the State of Delaware.
c. These arbitration provisions shall not prevent the Company from
obtaining injunctive relief from a court of competent
jurisdiction to enforce any obligations of the Agreement;
including without limitation issues concerning covenants not to
compete, the use of trade secrets or confidential commercial
information (which are excluded from this arbitration process as
set forth above), or any other matters for which the Company in
its sole discretion may require provisional relief pending a
decision on the merits by the arbitrator.
d. Any arbitration hereunder shall be conducted under the Model
Employment Procedures of the American Arbitration Association
("AAA"), as modified herein, and, unless otherwise agreed by the
parties, shall take place in Boston, Massachusetts, at a place
designated by the AAA.
e. Each party shall be responsible for its costs (including
attorneys' fees) incurred in any arbitration, and the arbitrator
shall not have the authority to include all or any portion of
said costs (including attorneys' fees) in an award, regardless of
which party prevails. The costs and fees of the arbitrator and of
the AAA shall be borne equally by the parties.
f. Except as set forth herein, the arbitrator shall have authority
to award any remedy or relief that a court of the State of
Delaware could grant in conformity to applicable law.
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g. With respect to any claims pursuant to section 6 of this
Agreement, such claims too will be governed by the law of the
State of Delaware, and both you and the Company agree to and
submit to the jurisdiction and venue of any state or federal
court located in the state where the Company maintains its
headquarters.
15. The provisions contained in this Agreement and within the General
Release will each constitute a separate agreement independently
supported by good and adequate consideration, and will each be
severable from the other provisions of the Agreement and the General
Release. If a court of competent jurisdiction or an arbitrator
determines that any term, provision, or portion of this Agreement or
the General Release is void, illegal, or unenforceable, the other
terms, provisions, and portions of this Agreement and General Release
will remain in full force and effect, and the terms, provisions, and
portions that are determined to be void, illegal, or unenforceable
will either be limited so that they will remain in effect to the
extent permissible by law, or such court or arbitrator will
substitute, to the extent enforceable, provisions similar thereto or
other provisions, so as to provide to the Company and you, to the
fullest extent permitted by applicable law, the benefits intended by
this Agreement and the General Release.
16. The provisions of this Agreement as well as the General Release shall
survive the termination of this Agreement according to their terms.
17. This Agreement sets forth the entire understanding of you and the
Company with respect to severance or separation pay matters, and
supersedes all prior agreements and communications, whether oral or
written, between you and the Company regarding such matters. This
Agreement will not be modified except by the written agreement of you
and the Company.
18. You acknowledge that you have read and understand this Agreement and
execute it voluntarily and without coercion. You further acknowledge
that you have been advised in writing of your opportunity to consult
with counsel and that you have been given a more than sufficient
period of time to consider the terms of this Agreement.
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Please indicate your acceptance by signing below.
AGREED TO AND ACCEPTED BY:
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Name Witness
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Date
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Altra Industrial Motion
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