AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS
AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “
Agreement ”), dated as of January 1, 2009 (the
“ Effective Date ”), is entered into among Altra
Holdings, Inc., a Delaware corporation (“ Holdings
”), Altra Industrial Motion, Inc., a Delaware corporation and
wholly-owned subsidiary of Holdings (“ Altra ,”
and together with Holdings, the “ Companies ”),
and Carl Christenson (“ Executive ”). This
Agreement amends and restates in its entirety that certain
Employment Agreement, dated as of January 6, 2005, as amended,
among Holdings, Altra and the Executive. Certain capitalized terms
used in this Agreement are defined in Section 12
hereof.
Holdings,
Altra and Executive desire to enter into this agreement relating to
Executive’s employment by the Companies.
The
parties hereto agree as follows:
1.
Employment . The Companies shall employ Executive, and
Executive hereby agrees to be employed by the Companies, upon the
terms and conditions set forth in this Agreement for the period
beginning on the Effective Date and ending as provided in
Section 3 hereof (the “ Employment Period
”).
(a)
Position . During the Employment Period, Executive shall
serve as the Chief Executive Officer of the Companies and in such
capacity shall have the duties, responsibilities and authority that
are normally associated with such office, subject to the direction
and supervision of the Board. Executive shall report directly to
the Board.
(b)
Duties . Executive shall devote substantially all of his
business time and attention (except for permitted vacation periods
and periods of illness or incapacity and other activities approved
by the Board from time to time) to the business and affairs of the
Companies and their Subsidiaries.
3.
Termination . The Employment Period shall terminate on the
fifth anniversary of the Effective Date (the “ Initial
Term ”) and shall automatically renew for successive one
(1) year periods unless one party gives written notice to the
other at least six (6) months prior to the end of the Initial
Term, or at least six (6) months prior to the end of any one
(1) year renewal period, that the Agreement shall not be
further extended. The date on which the Employment Period
terminates after any notice of non-renewal is referred to herein as
the “ Expiration Date .” Notwithstanding the
foregoing, the Companies and Executive agree that Executive is an
“at-will” employee, subject only to the contractual
rights upon termination set forth herein, and that the Employment
Period (a) shall terminate automatically at any time upon
Executive’s death, (b) shall terminate automatically at
any time upon the Board’s determination of Executive’s
Disability, (c) may be terminated by the Board at any time for any
reason or no reason (whether for Cause or without Cause) by giving
Executive written notice of the termination, and (d) may be
terminated by Executive for any reason or no reason (including for
Good Reason) by giving
the Companies
written notice at least 30 days in advance of his termination
date. Notwithstanding anything herein to the contrary, in no event
shall delivery of a notice of non-renewal by the Companies be
deemed a termination without Cause. Notwithstanding the foregoing,
if the Expiration Date occurs and this Agreement terminates
pursuant to this Section 3 because the Companies have
delivered notice of non-renewal of this Agreement , the obligations
of Executive under Section 8 (Noncompetition) shall
terminate on such Expiration Date; provided , however
, that the obligations of Executive under Section 8
(Noncompetition) shall survive such Expiration Date and be
enforceable thereafter during the Noncompete Period (as defined in
Section 8 ) in the event the Companies elect, in their
sole and absolute discretion, to pay Executive the severance
benefits described in Section 5(a) of this Agreement
(in which event the Executive shall execute and deliver the release
contemplated therein). The date that the Employment Period is
terminated for any reason is referred to herein as the “
Termination Date .”
4. Base
Salary and Benefits .
(a)
Base Salary . During the Employment Period,
Executive’s base salary shall be Four Hundred Twenty Five
Thousand dollars ($425,000) per year (the “ Base
Salary ”). The Base Salary shall be reviewed annually.
The Base Salary shall not be reduced prior to the Expiration Date,
and after any increase of such Base Salary approved by the Board,
the term “Base Salary” in this Agreement shall refer to
the Base Salary as so increased. The Base Salary shall be payable
in regular installments in accordance with the Companies’
general payroll practices.
(b)
Performance Bonus . In addition to the Base Salary,
Executive shall be eligible for a maximum annual incentive target
bonus payment of Seventy Five percent (75%) of his Base Salary (a
“ Performance Bonus ”), in accordance with the
Companies’ bonus performance plan approved by the Board in
its sole discretion.
(c)
Expenses . The Companies will reimburse Executive for all
reasonable travel and other business expenses incurred by Executive
during the Employment Period in connection with the performance of
his duties and obligations under this Agreement, subject to
Executive’s compliance with such limitations and reporting
requirements with respect to expenses as may be established by the
Companies from time to time.
(d)
Other Benefits . During the Employment Period, Executive
will be entitled to participate in all compensation or employee
benefit plans or programs and receive all benefits and perquisites
for which salaried employees of the Companies generally are
eligible under any plan or program now or established later by the
Companies on the same basis as other senior executives of the
Companies. Nothing in this Agreement will preclude the Companies
from amending or terminating any of the plans or programs
applicable to salaried employees or senior executives as long as
such amendment or termination is applicable to all salaried
employees or all senior executives, as the case may be. Executive
shall be entitled to four weeks of paid vacation each year, which
may be taken in accordance with the Companies’ vacation
policy.
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(e)
Indemnification . To the fullest extent permitted by law and
the certificates of incorporation of the Companies, the Executive
(and his heirs, executors and administrators) shall be indemnified
by the Companies and their successors and assigns. The obligations
of the Companies pursuant to this Section shall survive the
termination of the Employment Period.
(a)
Termination without Cause or for Good Reason . If, prior to
the Expiration Date, the Employment Period is terminated by the
Companies without Cause or by the Executive for Good Reason,
(i) Executive shall be entitled to receive for the Severance
Period (A) his annual Base Salary as in effect immediately
prior to the Termination Date paid in the same manner and in the
same installments as previously paid and (B) to the extent
permitted by such plans as in effect on the Termination Date, at
the Companies’ expense the continuation of medical and dental
benefits through the Severance Period and (ii) Executive (or
his estate) shall be entitled to receive (A) all earned or accrued
but unpaid Base Salary, reimbursement of expenses and any other
benefits to which Executive is entitled through the Termination
Date, (B) any Performance Bonus that was earned, but not paid,
as of, and pro rated through, the Termination Date, and
(C) all amounts or benefits to which Executive is entitled
under any applicable employee-benefit plan or arrangement of the
Companies in which Executive was a participant during his
employment with the Companies, in accordance with the terms of such
plan or arrangement and (iii) notwithstanding any provision to
the contrary in the Equity Incentive Plan or Executive’s
award agreements related thereto, all of Executive’s
outstanding equity awards under the Equity Incentive Plan shall
immediately vest and be released from all forfeiture restrictions
thereon. When used herein, the “ Severance Period
” means the 12-month period from and after the Termination
Date. The Companies’ obligations under this
Section 5(a) shall be subject to the condition that
Executive deliver a complete release in favor of the Companies and
their respective Subsidiaries, affiliates, officers, directors,
employees, principals and attorneys, in form and substance
satisfactory to the Companies.
(b)
Death or Disability . In the event of the death or
Disability of Executive during the Employment Period, the
Companies’ obligation to make payments or provide any other
benefits under this Agreement shall cease as of the date of death
or Disability of Executive; provided that (i) Executive
(or his estate) shall be entitled to receive (A) all earned or
accrued but unpaid Base Salary, reimbursement of expenses and any
other benefits to which Executive is entitled through the
Termination Date, (B) any Performance Bonus that was earned,
but not paid, as of, and pro rated through, the Termination Date,
and (C) all amounts or benefits to which Executive is entitled
under any applicable employee-benefit plan or arrangement of the
Companies in which Executive was a participant during his
employment with the Companies, in accordance with the terms of such
plan or arrangement and (ii) notwithstanding any provision to
the contrary in the Equity Incentive Plan or applicable award
agreements, Executive’s outstanding equity awards granted on
January 25, 2005 and August 30, 2006 shall immediately
vest in their entirety and be released from all forfeiture
restrictions thereon.
(c)
Other Termination . If the Employment Period is terminated
by the Companies for Cause or by Executive for any reason other
than Good Reason, Executive shall not be entitled to any severance
payments and all of Executive’s benefits shall cease to
be
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effective
immediately as of the Termination Date (except as required by law).
All of Executive’s rights to fringe benefits and bonuses
hereunder (if any) which accrue or become payable after the
termination of the Employment Period shall cease upon such
termination; provided that Executive (or his estate) shall
be entitled to receive (x) all earned or accrued but unpaid
Base Salary, reimbursement of expenses and any other benefits to
which Executive is entitled through the Termination Date,
(y) any Performance Bonus that was earned, but not paid, as
of, and pro rated through, the Termination Date, and (z) all
amounts or benefits to which Executive is entitled under any
applicable employee-benefit plan or arrangement of the Companies in
which Executive was a participant during his employment with the
Companies, in accordance with the terms of such plan or
arrangement.
(d)
Other Benefits . Except as required by law or as
specifically provided in this Section 5 , the
Companies’ obligation to make any payments or provide any
other benefits hereunder shall terminate automatically as of the
Termination Date.
(e)
Termination of Severance . If Executive breaches any of the
provisions of Sections 6 through 9 hereof, the
Companies shall no longer be obligated to make any additional
payments or provide any other benefits pursuant to this
Section 5 .
(f)
Pro Rated Performance Bonus . If Executive shall be entitled
to any pro rated Performance Bonus pursuant to Section 5
(a), (b) or (c) , the Companies shall not be required to
make payment to Executive of such pro rated Performance Bonus until
such time that the Companies make payment of similar bonuses to
other participants in the Companies’ bonus performance plan
after the completion of the fiscal year in which the bonuses were
earned.
6.
Confidential Information . Executive acknowledges that the
information, observations and data (including without limitation
trade secrets, know-how, research plans, business, accounting,
distribution and sales methods and systems, sales and profit
figures and margins and other technical or business information,
business, marketing and sales plans and strategies, cost and
pricing structures, and information concerning acquisition
opportunities and targets nationwide in or reasonably related to
any business or industry in which any the Companies or their
respective Subsidiaries is engaged) disclosed or otherwise revealed
to him, or discovered or otherwise obtained by him or of which he
becomes aware, directly or indirectly, while employed by the
Companies or their Subsidiaries (including, in each case, those
obtained prior to the date of this Agreement) concerning the
business or affairs of the Companies or any of their respective
Subsidiaries (collectively, “ Confidential Information
”) are the property of the Companies or their respective
Subsidiaries, as the case may be, and agrees that the Companies
have a protectable interest in such Confidential Information.
Therefore, Executive agrees that he shall not (during his
employment with the Companies or at any time thereafter) disclose
to any unauthorized person or use for his own purposes any
Confidential Information without the prior wri
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