SEVERANCE AND CONSULTING AGREEMENT
Exhibit 99.1
This Severance and Consulting Agreement (this “Agreement”) by and between Stoneridge, Inc., an
Ohio corporation (the “Company”), and Xxxxxx X. Xxxxxx (“Xxxxxx”) 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 Pisani executes this Agreement (the “Effective Date”).
Recitals
X. Xxxxxx was the President and Chief Executive Officer (“CEO”) of the Company from May 10,
2004 until January 9, 2006;
X. Xxxxxx was appointed Vice Chairman of the Board of Directors on January 9, 2006;
X. Xxxxxx remains an employee of the Company on the date hereof;
X. Xxxxxx also serves as a director on the Company’s board of directors;
E. The Company and Xxxxxx have agreed, among other things, that effective at the close of
business on February 28, 2006 Xxxxxx will resign as a director of the Company, an employee of the
Company and from all other positions Xxxxxx has with the Company’s subsidiaries and affiliates;
X. Xxxxxx has been employed by the Company or its subsidiaries since 1988, and has developed
and is now possessed of certain skills, knowledge, abilities and experience in connection therewith
that may be useful to the Company;
G. In reliance upon that skill, knowledge, abilities and experience, the Company wishes to
retain Xxxxxx to provide consulting services in relation to those and related matters;
H. The Company also desires to prevent Xxxxxx from engaging, directly or indirectly, in any
activity that is in competition with the Company; and
X. Xxxxxx is willing to provide consulting services to the Company as an independent
contractor under the terms and conditions hereinafter set forth.
Agreements
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. Effective at the close of business on February 28, 2006, Xxxxxx
shall resign as a director, employee and officer of the Company and as a director, officer,
employee, member or manager, as applicable, of each subsidiary of the Company by executing and
delivering to the Company a letter of resignation in the form of Appendix A hereto. The
parties understand and agree that Xxxxxx has not been, nor will he be nominated by the Board of
Directors for election to the Board of Directors at the Company’s 2006 annual meeting of
shareholders.
Xxxxxx and the Company acknowledge and agree that this Agreement sets forth the parties’
mutual understanding with respect to Xxxxxx’x resignations set forth above and his engagement as an
independent consultant. The parties agree that for all purposes the resignations of Xxxxxx
referred to herein are voluntary. In addition, the Company and Xxxxxx agree, effective as of the
Effective Date, that (i) the February 12, 1999 letter agreement between the parties relating to any
possible change of control of the Company shall be terminated and null and void, and (ii) the
Change in Control Agreement, by and between Xxxxxx and the Company, dated January 6, 2006, shall be
terminated and null and void.
2. Consulting Services.
a. The Company hereby engages Xxxxxx, effective March 1, 2006, as an independent
consultant, and Xxxxxx hereby accepts such engagement upon the terms and conditions
hereinafter set forth for a period of 18 months commencing February 28, 2006 (the
“Consulting Term”).
b. As an independent consultant to the Company, Xxxxxx shall render such advice and
service to the Company as the Company shall reasonably request from time to time concerning
(i) the business conditions for sale of the Company’s products, (ii) customers and potential
customers of the Company, (iii) the Company’s sales and marketing efforts, (iv) the
Company’s finances, (v) business development, and (vi) such other matters as may arise in
the course of the Company’s conduct of its business. In connection therewith, Xxxxxx shall
hold himself available upon reasonable notice during normal business hours for meetings with
employees of the Company or with other persons. Any such meetings shall be scheduled at
times that are mutually convenient to the parties.
c. Provided that this Agreement has not previously been terminated, for his consulting
services hereunder Xxxxxx shall be paid a consulting fee of $725,000, less applicable taxes,
if any. The Company shall pay the first payment of the consulting fee for the first six
months on or about September 1, 2006. Thereafter, the Company shall pay the remainder of
the consulting fee in twelve (12) equal monthly installments beginning on or about September
1, 2006; provided, however, in the event this Agreement is terminated within the first six
months after February 28, 2006 for any reason other than as a result of a material breach of
this Agreement by Xxxxxx the Company shall promptly pay Xxxxxx the pro rata portion of the
consulting fee earned through the date of termination.
d. Except for travel outside of Canton, Massachusetts or as expressly provided for
herein or otherwise agreed to in advance by the Company, all costs and expenses of providing
requested services referred to hereunder, including Xxxxxx’x traveling to and from the
Company’s offices in Canton, Massachusetts, shall be paid by Xxxxxx. Xxxxxx may not travel
on behalf of the Company except at the direction of the
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board of directors, the chairman of the board, or the Chief Executive Officer and, in
connection with any such requested travel, Xxxxxx shall furnish the Company with such
evidence of payment of expenses as may be required pursuant to the Company’s existing travel
and entertainment expense reimbursement policies.
e. During the Consulting Term, Xxxxxx is retained on a “when and as needed” basis, upon
reasonable notice during normal business hours at mutual convenient times, to provide those
advisory and consulting services as are specifically requested by the Company. It is
understood that Xxxxxx may provide the consulting services required hereby (at the
discretion of the Company) by telephone. It is understood that Xxxxxx shall not be required
to render such services on a full-time basis and shall not be required to devote his full
business time, effort, skill or attention to the affairs of the Company; provided, however,
Xxxxxx should be available at the Company’s offices in Canton, Massachusetts or by telephone
to consult on a “when and as needed” basis during the Company’s normal working hours for 120
hours per year but no more than 15 hours in any calendar month. All services provided by
Xxxxxx shall be provided in a workmanlike and professional manner. Xxxxxx shall act in good
faith and in the best interests of the Company while providing such services.
x. Xxxxxx shall have the status of a self-employed person, and the consulting fees paid
by the Company to Xxxxxx under this Agreement shall be deemed to be fees for services to an
independent contractor and shall not be subject to any withholding by the Company for the
payment of any social security, federal, state or other taxes or similar programs. Xxxxxx
acknowledges that he is responsible for all applicable self-employment, income taxes,
unemployment taxes, other tax liabilities and workers’ compensation and other insurance
arising out of the performance of any services hereunder, and Xxxxxx, except as expressly
provided for herein or such other applicable document, agreement or plan, shall not be
entitled to, nor shall he make any claim against or seek to participate in any retirement,
insurance, medical or other fringe benefits maintained by the Company. Further, Xxxxxx
understands that upon his resignation as an employee of the Company that effective at the
close of business on February 28, 2006 Xxxxxx’x enrollment and participation in the
Company’s benefit plans shall terminate except for any conversion privileges that are
generally available to employees upon the termination of employment, and except as otherwise
provided under Section 3.e, below.
g. The engagement of Xxxxxx as an independent consultant hereunder and the Consulting
Term shall terminate in the event of Xxxxxx’x death or permanent disability during the term
hereof. Xxxxxx shall be deemed to be permanently disabled upon the earlier of (i) the end
of a two (2) consecutive-month period during which, by reason of physical or mental injury
or disease, Xxxxxx has been unable to provide the above-described services under this
Agreement (whether or not such services are or have been requested), and (ii) the date that
a reputable physician selected by the Company, to whom Xxxxxx has no reasonable objection,
determines in writing that Pisani will, by reason of physical or mental injury or disease,
be unable to perform substantially such services under this Agreement for a period of two
(2) consecutive months. Upon any termination pursuant to this Section 2.g., the Company
shall pay to
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Xxxxxx, or his heirs or legal representatives in the event of his death, all consulting
fees accrued but not paid through the date of termination and all consulting fees that would
have been earned by Pisani if the Consulting Term had not been terminated as a result of his
death or permanent disability. Any such payment shall be paid in a lump sum no later than
thirty (30) days after the date of termination, but in no event earlier than September 15,
2006.
h. In accordance with the procedures hereinafter set forth, upon a good faith
determination by the Company’s Board of Directors that “Cause” exists, the Company may
terminate the engagement of Xxxxxx hereunder for “Cause.” For purposes of this Agreement,
“Cause” shall mean (a) any material breach by Xxxxxx of his covenants under this Agreement
that goes uncured for five (5) days after notice, or (b) any of the following that is
materially detrimental to the goodwill of the Company or materially damaging to the
relationship of the Company with its customers, suppliers or employees: (i) the deliberate
and repeated failure to provide reasonably requested consulting services in accordance with
this Agreement, (ii) the conviction of a felony by Xxxxxx which creates a significantly
negative reflection on the Company, or (iv) the disparagement of the Company or its
officers, directors, or agents. This Agreement shall terminate immediately as of the date
that Xxxxxx receives a “Notice of Termination,” or any later date specified in such Notice
of Termination, as the case may be. Any termination of the engagement of Xxxxxx for Cause
shall be communicated to Xxxxxx by a Notice of Termination to Xxxxxx in accordance with the
provisions of Section 9 of this Agreement. For purposes of this Agreement, a “Notice of
Termination” means a written notice which (x) indicates the specific termination provision
in this Agreement relied upon, (y) sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Xxxxxx’x engagement, and (z) if
the date of termination is to be other than the date or receipt of such notice, specifies
the termination date (which date shall in all events be within fifteen (15) days after the
giving of such notice). The Notice of Termination shall include a finding that, in the
reasonable and good faith opinion of the Board of Directors of the Company, Xxxxxx committed
an act that constitutes Cause. In the event this Agreement terminates pursuant to this
Section 2.h., the Company shall only be obligated to pay to Xxxxxx in a lump sum, within
thirty (30) days after the date of termination, all consulting fees accrued but not paid
through the date of termination to the extent not theretofore paid, and all expense
reimbursements accrued but not paid through the date of termination.
3. Severance Benefits.
a. During the Consulting Term, depending on availability and the current need for
Xxxxxx’x services hereunder and at the Company’s sole discretion, the Company may provide
Xxxxxx with an office in Canton, Massachusetts and other reasonably necessary office
supplies.
b. Until the close of business on February 28, 2006, Xxxxxx will be entitled to
continue to be paid his current base salary of $510,000 per annum pursuant to the Company’s
regular pay practices and to continue to participate in any employee benefit plans offered
by the Company for its senior executive management, in accordance with
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the eligibility requirements for participation therein based upon such elections as
Xxxxxx might make and subject to any employee contribution requirements as may be
applicable. Nothing herein shall require the Company to pay Xxxxxx a bonus for the 2005
fiscal year.
c. On or before February 28, 2006, the Company (by action of the appropriate committee
of the board of directors), agrees to extend for a period of eighteen months commencing on
February 28, 2006 the exercise period of each outstanding share option granted to Xxxxxx
under the Company’s Long-Term Incentive Plan, as amended (the “Plan”) as evidenced by
separate Share Option Agreements, except for the option granted in January 2001 with an
exercise price of $5.12, for which the exercise period is extended only until December 31,
2006. Other than the extension of the exercise period of Xxxxxx’x options the terms of the
Plan and Xxxxxx’x Share Option Agreements shall control in all respects the exercise of any
options by Xxxxxx. In addition, Xxxxxx acknowledges that he is familiar with the Company’s
Xxxxxxx Xxxxxxx Policy, the rules of the New York Stock Exchange, and the rules of the
Securities and Exchange Commission relating to the trading of securities. Xxxxxx agrees to
comply with all applicable federal securities laws in connection with his ownership of the
Company’s securities, including but not limited to the reporting provisions of Section 13
and Section 16 of the Securities Exchange Act of 1934, as amended. The Company acknowledges
that pursuant to the Long-Term Incentive Plan and separate Restricted Shares Grant
Agreements, which shall control, Xxxxxx’x time-based restricted common shares (27,100
shares) granted on April 18, 2005, (10,000 shares) granted on May 17, 2004, and (3,400
shares) granted on June 28, 2004 shall vest (to the extend they have not previously vested)
and no longer be subject to forfeiture upon Xxxxxx’x resignation as an employee from the
Company. The remainder of Xxxxxx’x restricted common shares (93,900 shares) shall be
forfeited to the Company upon such resignation. No later than the date as of which an
amount first becomes includable in the gross income of Xxxxxx for federal income tax
purposes with respect to the restricted common shares vesting Xxxxxx shall pay to the
Company, or make arrangements satisfactory to the Compensation Committee of the Board of
Directors regarding the payment of, any federal, state or local taxes of any kind required
by law to be withheld with respect to that amount.
d. On or about September 1, 2006, the Company shall pay to Xxxxxx a one-time severance
payment of $100,000, less applicable taxes, if any.
x. Xxxxxx and his qualified beneficiaries shall be entitled to continue health
insurance benefits (initially Anthem Blue Cross and Blue Shield, Option 1, but subject to
change based on the then current plan for the Company’s officers) after February 28, 2006,
under and through the terms of the applicable COBRA law and regulations. During the
eighteen (18) months of the applicable COBRA period (or such later period should COBRA
require the extension of coverage beyond eighteen (18) months) the Company shall pay or
reimburse Xxxxxx the applicable monthly premiums for health insurance benefit continuation,
based upon the applicable COBRA premium applicable from time to time and the initial
continuation reimbursement will be on or about September 1, 2006 for the first six (6)
months of the premium payments. After the
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termination of the applicable COBRA period, Xxxxxx shall be responsible for securing
his health insurance benefits.
4. Covenants.
a. During his employment with the Company Xxxxxx has had, and during the term of this
Agreement Xxxxxx may have, 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, financial projections, marketing plans, financial
results and operation methods. For purposes of this Agreement, “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. The Company takes numerous steps, including these provisions, to protect the
confidentiality of its confidential information and trade secrets, which it considers
unique, valuable and special assets. Xxxxxx, recognizing the Company’s significant
investment of time, efforts and money in developing and preserving its confidential
information, shall not, during the term of this Agreement and for a one (1) year period
thereafter, use for his direct or indirect personal benefit any of the Company’s
confidential information or trade secrets. During the term of this Agreement and for a one
(1) year period thereafter, Xxxxxx shall not disclose to any person or entity any of the
Company’s confidential information or trade secrets.
b. During the Consulting Term and for a period of six (6) months thereafter, but in no
event less than twenty-four (24) months after the Effective Date Xxxxxx shall not (i)
compete with the Company, (ii) directly or indirectly, whether as an owner, partner,
employee, officer, director, agent, or otherwise, in any location where the Company 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 or its
subsidiaries on the Effective Date and throughout the term of this Agreement (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); (iii) directly or
indirectly 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 (iv) directly or indirectly 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.
The Company’s business shall be deemed to be the manufacture and sale of electronic and
electrical products for vehicles, the type and nature of which are described in the
Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004 or in the
Company’s 2005 Annual Report to Shareholders.
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x. Xxxxxx 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 any way, 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. The Company agrees to use its reasonable efforts to prevent the Company or any of
the Company’s directors, officers or employees from making any statement concerning Xxxxxx
or his business practices which in form or substance disparages or otherwise casts an
unfavorable light upon Xxxxxx or his reputation or standing in the business community or the
community as a whole; provided, however, nothing in this Section 4.d. shall any in manner
limit or restrict Xxxxxx’x, on one hand, or the Company’s or its officers’, directors’ or
employees’, on the other hand, communications or disclosure (whether orally or in writing)
that, upon advice of counsel are required by law or applicable rules of any governmental or
self-regulatory authority to be made.
x. Xxxxxx understands and acknowledges that his failure to comply with his covenants in
this Agreement that, in the reasonable opinion of the Board of Directors of the Company,
cause harm to the Company will be deemed a material breach of this Agreement. In the event
of a breach, Xxxxxx 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 such breach.
5. Release. Xxxxxx, 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 Xxxxxx 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
Effective Date of this Agreement, arising from, connected with, or in any way growing out of,
directly or indirectly, Xxxxxx’x employment by the Company, Xxxxxx’x service as a director of the
Company, the services provided by Xxxxxx to the Company, or any transaction prior to the Effective
Date and all effects, consequences, losses and damages relating thereto, including, but not limited
to any claim or right to a separate retirement benefit from the Company relating to Xxxxxx’x
participation in Standard-Thomson Corporation’s Retirement Plan for Salaried Employees (the “Plan”)
or any assumption by the Company of an obligation to Xxxxxx under the Plan or any related such
plan, Xxxxxx acknowledges there are no such payments to which he is entitled, 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, Title 4112 of the Ohio Revised
Code, and all other federal or state laws
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governing employers and employees; provided, however, that nothing in this Section 5 will bar,
impair or affect the obligations, covenants and agreements of the Company set forth in this
Agreement. The Company represents and warrants to Xxxxxx that to the best of the Company’s
knowledge the Company has not engaged in any violation of law that could give rise to Xxxxxx’x
having a claim against the Company.
6. Indemnification.
a. If Xxxxxx 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 is or was a director, officer
and/or consultant of the Company or any of the Company’s subsidiaries, whether the basis of
such Proceeding is an alleged action in an official capacity as a director, officer, or
consultant or in any other capacity while serving as a director, officer or consultant,
Xxxxxx 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 Xxxxxx 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 Pisani in such Proceeding shall be paid by the Company in advance of the final
disposition of any such Proceeding upon receipt by the Company of a written undertaking by
or on behalf of Xxxxxx to repay all amounts so advanced if it should be determined
ultimately that Xxxxxx is not entitled to be indemnified under this Agreement or otherwise;
provided, however, that indemnity set forth in this Section 6.a. relating to Xxxxxx’x status
as a consultant is limited to consulting services requested by the Company hereunder and no
indemnity shall be provided to Xxxxxx as a consultant for Xxxxxx’x negligence or
recklessness as such or with respect to any breach by Xxxxxx of a fiduciary duty owed to the
Company. This Section shall survive the termination of this Agreement. To the best
knowledge of Xxxxxx, there are no claims threatened or which are likely to be threatened or
prosecuted against the Company or Xxxxxx for acts or omissions of Xxxxxx during the period
of time Xxxxxx was an officer or director of the Company.
b. The Company currently carries Officers and Directors liability insurance and Xxxxxx
will continue to be covered by such insurance for any of his acts or omissions through
February 28, 2006 as a director, 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. Covenant Not to Xxx. Except where such agreement is contrary to law or public
policy, Xxxxxx 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 and/or resignation of employment with the Company, except as the same
may affect Xxxxxx’x 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
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for injunction against, any action or proceeding Xxxxxx may institute, prosecute, or maintain
in breach of this Agreement.
8. Acknowledgment.
By entering into this Agreement, and in connection with Xxxxxx’x release of claims and
covenant not to xxx set forth in Sections 5 and 7, Xxxxxx acknowledges that:
| x. | Xxxxxx is knowingly and voluntarily entering into this Agreement; |
| b. | No promise or inducement has been offered to Xxxxxx except as set forth herein; |
| c. | This Agreement is being executed by Xxxxxx 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; |
| d. | This Agreement has been written in understandable language, and all provisions hereof are understood by Xxxxxx; |
| x. | Xxxxxx has been advised in writing to consult with an attorney prior to executing this Agreement; |
| x. | Xxxxxx has had a period of at least twenty-one (21) days 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, Xxxxxx acknowledges that he has knowingly and voluntarily waived the twenty-one (21) day period and has accelerated the date when he may receive the severance payments identified hereunder following expiration of the revocation period referenced in Section 8.g.; and |
| x. | Xxxxxx 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. |
Should Xxxxxx desire to revoke this Agreement, Xxxxxx must notify the Company in writing at
the address listed in Section 10, Attention: Chief Executive Officer, prior to the close of
business on the seventh (7th) day following the date when he signs this Agreement. If
Xxxxxx 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 Xxxxxx against the Company or any other person.
9. Return of Property. Xxxxxx agrees that he will, on or before February 28, 2006,
return to the Company (i) all property of the Company, including, but not limited to, any Company
credit cards, keys, computers, office furniture, automobiles, and equipment, and (ii) all originals
and copies of writings and records (including records stored in electronic form)
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relating to the Company’s business, confidential information or trade secrets that are in
Xxxxxx’x possession at such time.
10. 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:
Chief Executive Officer
Stoneridge, Inc.
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxx 00000
Stoneridge, Inc.
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxx 00000
With a copy to:
Xxxxxx X. Xxxxxx
Xxxxx & Xxxxxxxxx LLP
Xxxxx & Xxxxxxxxx LLP
0000 Xxxx Xxxxx Xxxxxx
0000 Xxxxxxxx Xxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Xxxxxxxxx, Xxxx 00000
If to Xxxxxx:
Xxxxxx X. Xxxxxx
9 The Marshes
Xxxxxxx, XX 00000
9 The Marshes
Xxxxxxx, XX 00000
With copy to:
Xxx Xxxxxx
Benesch, Friedlander, Xxxxxx & Xxxxxx LLP
0000 XX Xxxxxxx Xxxx.
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Benesch, Friedlander, Xxxxxx & Xxxxxx LLP
0000 XX Xxxxxxx Xxxx.
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
11. 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
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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 like or different nature.
b. The parties further agree that the Company may make such disclosure regarding this
Agreement and the subject matter hereof as in the judgment of the Company’s legal counsel is
required by law, regulation or the listing rules of the NYSE. If possible the Company shall
provided Xxxxxx with the language of any such disclosure sufficiently in advance of such
disclosure to allow Xxxxxx to comment on such disclosure. Xxxxxx 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 to otherwise publish,
whether in print or through means of any electronic communication, any remarks about the
Company, unless such statements or remarks are agreed to in advance by the Company or unless
otherwise required by law.
12. Consent to Jurisdiction, Venue and Service of Process. Each of the Company and
Xxxxxx, after having consulted 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 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. These provisions will not be deemed to have been modified in any respect or
relinquished by any party except by written instrument executed in accordance with Section 11.a.
13. 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.
14. Injunctive Relief. Xxxxxx recognizes that the provisions of this Agreement,
especially his noncompetion and nondisclosure 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
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any such violation by Xxxxxx, 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 Xxxxxx in
violation of such Sections. This Section shall survive the expiration or termination of this
Agreement for any reason.
15. Advice of Counsel. Xxxxxx acknowledges that he has been 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.
16. Term. Unless previously terminated in accordance herewith, this Agreement shall
terminate on the expiration of Pisani’s covenants set forth in Section 4.
17. 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, and to conform to
the extent it would not have an adverse effect on the benefits provided Xxxxxx under this Agreement
to applicable law, including but not limited to Internal Revenue Code Section 409A.
18. Governing Law. This Agreement will be governed by and construed in accordance
with the laws of the State of Ohio.
19. 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.
20. Successors and Assigns. Xxxxxx 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 Xxxxxx and his heirs, personal representatives, and permitted
successors and assigns. Upon a change in control of the Company or upon the sale of substantially
all the assets of the Company the Company may assign this Agreement or any rights or obligations
under this Agreement without the prior written consent of Xxxxxx. In all other circumstances the
Company may not make such assignments without the prior written consent of Xxxxxx, which shall not
be unreasonably withheld. This Agreement will be binding upon and inure to the benefit of the
Company and its successors and assigns.
21. 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
Release were a party hereto.
22. Attorneys’ Fees. In the event that it shall be necessary or desirable for Xxxxxx
or the Company to retain legal counsel or incur other costs and expenses in connection with the
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enforcement of any or all of their respective rights under this Agreement, the prevailing party
shall be entitled to recover from the other party, attorneys’ fees and costs and expenses incurred
in connection with the enforcement of his or its rights hereunder.
23. Construction. The Company and Xxxxxx 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.
24. 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.
| STONERIDGE, INC. | |||||
Dated: February 28, 2006
|
By: | /s/ Xxxx X. Xxxxx | |||
| Xxxx X. Xxxxx | |||||
| Xxxxxx X. Xxxxxx | |||||
Dated: February 28, 2006
|
By: | /s/ Xxxxxx X. Xxxxxx | |||
| Xxxxxx X. Xxxxxx | |||||
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Appendix A
Form of Resignation
Effective at the close of business on February 28, 2006, I, Xxxxxx X. Xxxxxx, hereby
voluntarily resign as a director, an employee and an officer of Stoneridge, Inc. I hereby confirm
that I have not resigned because of a disagreement with Stoneridge, Inc. on any matter relating to
Stoneridge’s operations, policies or practices.
I further voluntarily resign, effective at the close of business on February 28, 2006, as an
employee, officer, director, member, manager or agent, as the case may be, of each subsidiary of
Stoneridge, Inc. and I agree to executive such other documents as may be reasonably requested by
Stoneridge, Inc. or its counsel to evidence the resignations set forth in this letter of
resignation.
Dated: February 28, 2006
/s/
Xxxxxx X. Xxxxxx
———————————————
Xxxxxx X. Xxxxxx
———————————————
Xxxxxx X. Xxxxxx
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