EX-10.12
Employment Agreement
EXHIBIT 10.12
EXECUTION COPY
EMPLOYMENT AGREEMENT
(LARRY J. BEARD)
EMPLOYMENT AGREEMENT (the "AGREEMENT") dated December 23, 2004 by
and
between COOPER-STANDARD AUTOMOTIVE INC. (the "COMPANY") and LARRY
J. BEARD (the
"EXECUTIVE").
WHEREAS, the CSA Acquisition Corp. ("CSA"), the parent company of
the
Company, has entered into the Stock Purchase Agreement among Cooper
Tire &
Rubber Company, Cooper Tyre & Rubber Company UK Limited and the
Company dated as
of September 16, 2004 (the "PURCHASE AGREEMENT");
WHEREAS, effective upon, and subject to the occurrence of, the
Closing
on the Closing Date (each as defined in the Purchase Agreement),
the Company
desires to employ Executive on the terms set forth in this
Agreement and the
Executive desires to accept and continue such employment with the
Company under
the terms of this Agreement.
NOW THEREFORE, in consideration of the premises and mutual
covenants
herein and for other good and valuable consideration, the parties
agree as
follows:
1. Effectiveness/Term of Employment.
a. This Agreement constitutes a binding obligation of the
parties as of the date hereof; provided that notwithstanding any
other provision
of this Agreement, the operative provisions of this Agreement shall
become
effective only upon the occurrence of the Closing on the Closing
Date (as each
such term defined in the Purchase Agreement) (such date being
hereinafter
referred to as the "EFFECTIVE DATE"). In the event the Purchase
Agreement is
terminated for any reason without the Closing having occurred, or
if the Closing
fails to occur on or prior to March 31, 2005, this Agreement shall
be terminated
without further obligation or liability of either party.
b. Subject to the provisions of Section 7 of this Agreement,
Executive shall be employed by the Company for a period commencing
on the
Effective Date and ending on December 31, 2007 (the "EMPLOYMENT
TERM") on the
terms and subject to the conditions set forth in this Agreement;
provided,
however, that commencing with December 31, 2007 and on each
December 31
thereafter (each an "EXTENSION DATE"), the Employment Term shall be
automatically extended for an additional one-year period, unless
the Company or
Executive provides the other party hereto 60 days prior written
notice before
the next Extension Date that the Employment Term shall not be so
extended.
2. Position.
a. During the Employment Term, Executive shall serve as the
Company's President, Global Fluid Division. In such position,
Executive shall
have such duties and authority as is customarily associated with
such position
at other privately held companies similar to the Company and shall
have such
duties, consistent with Executive's position, as may
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be assigned from time to time by the Chief Executive Officer of the
Company (the
"CEO") or the Board of Directors of the Company (the "BOARD").
b. During the Employment Term, Executive will devote
Executive's full business time and best efforts to the performance
of
Executive's duties hereunder and will not engage in any other
business,
profession or occupation for compensation or otherwise which would
conflict or
interfere with the rendition of such services either directly or
indirectly,
without the prior written consent of the Board; provided that
nothing herein
shall preclude Executive, subject to the prior approval of the
Board, from
accepting appointment to or continue to serve on any board of
directors or
trustees of any business corporation or any charitable
organization; provided in
each case, and in the aggregate, that such activities do not
conflict or
interfere with the performance of Executive's duties hereunder or
conflict with
Section 8.
3. Base Salary. During the Employment Term, the Company shall pay
Executive a base salary at the annual rate of $315,000, payable in
regular
installments in accordance with the Company's usual payment
practices. Executive
shall be entitled to such increases in Executive's base salary, if
any, as may
be determined from time to time by the compensation committee of
the Board,
based upon the recommendation of the CEO. Executive's annual base
salary, as in
effect from time to time, is hereinafter referred to as the "BASE
SALARY."
4. Bonus Incentives. With respect to each full fiscal year during
the
Employment Term, Executive shall be eligible to earn an annual
bonus award (an
"ANNUAL BONUS") of forty-five percent (45%) of Executive's Base
Salary (the
"TARGET") based upon and subject to the achievement of annual
performance
targets established by the Board (or a committee thereof) within
the first three
months of each fiscal year during the Employment Term. In addition,
during the
Employment Term, Executive shall be entitled to participate in such
long-term
cash incentive plans and programs of the Company as are generally
provided to
the Company's other senior executives.
5. Employee Benefits. During the Employment Term, Executive shall
be
entitled to participate in the Company's employee benefit plans
(other than
annual bonus and long-term incentive programs, which are addressed
in Section 4)
as in effect from time to time (collectively "EMPLOYEE BENEFITS"),
on the same
basis as those benefits are generally made available to other
senior executives
of the Company; provided that in any event, Executive shall be
provided health,
life and disability and retirement and fringe benefits that are
substantially
comparable in the aggregate to the level of such benefits provided
to Executive
by Cooper Tire & Rubber Company, immediately prior to the
Effective Date;
provided further that the Company may reduce such level of benefits
to the
extent such reduction applies to at least half of the senior
executives of the
Company.
6. Business Expenses. During the Employment Term, reasonable
business
expenses incurred by Executive in the performance of Executive's
duties
hereunder shall be reimbursed by the Company in accordance with
Company
policies.
7. Termination. The Employment Term and Executive's employment
hereunder may be terminated by either party at any time and for any
reason;
provided that Executive will be
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required to give the Company at least 60 days advance written
notice of any
resignation of Executive's employment. Notwithstanding any other
provision of
this Agreement, the provisions of this Section 7 shall exclusively
govern
Executive's rights upon termination of employment with the Company
and its
affiliates.
a. By the Company For Cause or By Executive Resignation
Without Good Reason.
(i) The Employment Term and Executive's employment hereunder may
be terminated by the Company for Cause (as defined in Section
7(a)(ii) and shall
terminate automatically upon Executive's resignation without Good
Reason (as
defined in Section 7(c)); provided that Executive will be required
to give the
Company at least 60 days advance written notice of a resignation
without Good
Reason.
(ii) For purposes of this Agreement, "CAUSE" shall mean:
(A) During the period from the Effective Date through and
including the second anniversary of the Effective Date, the meaning
specified in the Cooper Tire & Rubber Company Change in Control
Severance Pay Plan (as in effect on September 16, 2004); and
(B) During the period after the second anniversary of the
Effective Date, (I) the Executive's willful failure to perform
duties
or directives which is not cured following written notice, (II) the
Executive's commission of a (x) felony or (y) crime involving moral
turpitude, (III) the Executive's willful malfeasance or misconduct
which is demonstrably injurious to the Company or its affiliate, or
(IV) material breach by the Executive of the restrictive covenants,
including, without limitation, Sections 8 and 9 hereof and any
non-compete, non-solicitation or confidentiality provisions to
which
the Executive is bound.
(iii) If, during the Employment Term, Executive's employment is
terminated by the Company for Cause or Executive resigns without
Good Reason,
Executive shall be entitled to receive:
(A) the Base Salary through the date of termination;
(B) any Annual Bonus earned but unpaid as of the date of
termination for any previously completed fiscal year;
(C) reimbursement for any unreimbursed business expenses
properly incurred by Executive in accordance with Company policy
prior
to the date of Executive's termination; and
(D) such Employee Benefits, if any, as to which Executive
may be entitled under the employee benefit plans of the Company
(the
amounts described in clauses (A) through (D) hereof being referred
to
as the "ACCRUED RIGHTS").
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Following such termination of Executive's employment by the Company
for Cause or resignation by Executive without Good Reason, except
as set forth
in this Section 7(a)(iii), Executive shall have no further rights
to any
compensation or any other benefits under this Agreement.
b. Disability or Death.
(i) The Employment Term and Executive's employment hereunder
shall terminate upon Executive's death and may be terminated by the
Company if
Executive becomes physically or mentally incapacitated and is
therefore unable
for a period of six (6) consecutive months or for an aggregate of
nine (9)
months in any twenty-four (24) consecutive month period to perform
Executive's
duties (such incapacity is hereinafter referred to as
"DISABILITY"). Any
question as to the existence of the Disability of Executive as to
which
Executive and the Company cannot agree shall be determined in
writing by a
qualified independent physician mutually acceptable to Executive
and the
Company. If Executive and the Company cannot agree as to a
qualified independent
physician, each shall appoint such a physician and those two
physicians shall
select a third who shall make such determination in writing. The
determination
of Disability made in writing to the Company and Executive shall be
final and
conclusive for all purposes of the Agreement.
(ii) Upon termination of Executive's employment hereunder during
the Employment Term for either Disability or death, Executive or
Executive's
estate (as the case may be) shall be entitled to receive:
(A) the Accrued Rights; and
(B) a pro rata portion of any Annual Bonus, if any, that
Executive would have been entitled to receive pursuant to Section 4
hereof in such year based upon the percentage of the fiscal year
that
shall have elapsed through the date of Executive's termination of
employment, payable when such Annual Bonus would have otherwise
been
payable had Executive's employment not terminated.
Following Executive's termination of employment due to death or
Disability, except as set forth in this Section 7(b)(ii), Executive
shall have
no further rights to any compensation or any other benefits under
this
Agreement.
c. By the Company Without Cause or Resignation by Executive
for Good Reason.
(i) The Employment Term and Executive's employment hereunder may
be terminated by the Company without Cause or by Executive's
resignation for
Good Reason.
(ii) For purposes of this Agreement,
(A) "GOOD REASON" shall mean (i) a substantial diminution in
Executive's position or duties; adverse change in reporting lines;
or
assignment of duties materially inconsistent with Executive's
position; (ii) any reduction in Executive's Base Salary or Annual
Bonus opportunity; (iii) any reduction in Executive's long-
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term cash incentive compensation opportunities, other than
reductions
generally affecting other senior executives participating in the
applicable long-term incentive compensation programs or
arrangements;
(iv) the failure of the Company to pay Executive any compensation
or
benefits when due hereunder; (v) relocation of Executive's
principal
place of work in excess of fifty (50) miles from Executive's
current
principal place of work or (vi) any material breach by the Company
of
the terms of the Agreement; provided that none of the events
described
in this Section 7(c)(ii)(A) shall constitute Good Reason unless the
Company fails to cure such event within 10 calendar days after
receipt
from Executive of written notice of the event which constitutes
Good
Reason.
(B) "CHANGE OF CONTROL" shall mean the occurrence of any of
the following events after the Effective Date: (i) the sale or
disposition, in one or a series of related transactions, of all or
substantially all of the assets of CSA to any "person" or "group"
(as
such terms are defined in Sections 13(d)(3) and 14(d)(2) of the
Exchange Act) other than Permitted Holders or (ii) any person or
group, other than Permitted Holders, is or becomes the "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange
Act),
directly or indirectly, of greater than or equal to 50% of the
total
voting power of the voting stock of CSA, including by way of
merger,
consolidation or otherwise, except where one or more of Cypress
Merchant Banking Partners II L.P., Cypress Merchant Banking II
C.V.,
55th Street Partners II L.P., Cypress Side-By-Side LLC, GS Capital
Partners 2000, L.P., GS Capital Partners 2000 Offshore, L.P., GS
Capital Partners 2000 GmbH & Co. Beteiligungs KG, GS Capital
Partners
2000 Employee Fund, L.P. and Goldman Sachs Direct Investment Fund
2000, L.P. (collectively, the "SPONSORS") and/or their respective
affiliates, immediately following such merger, consolidation or
other
transaction, continue to have the ability to designate or elect a
majority of the Board of Directors of CSA (or the board of
directors
of the resulting entity or its parent company). For purposes of
this
Agreement, "Permitted Holder" shall mean, as of the date of
determination, any and all of (x) an employee benefit plan (or
trust
forming a part thereof) maintained by (A) the Company or its
affiliate
or (B) any corporation or other person of which a majority of its
voting power of its voting equity securities or equity interest is
owned, directly or indirectly, by the Company or its affiliate and
(y)
the Sponsors and any of their respective affiliates.
Notwithstanding
that a transaction or series of transactions does not constitute a
Change of Control, with respect to Executive it shall be deemed to
be
a Change of Control for purposes of Executive's entitlement's
hereunder if clause (i), above, is satisfied in respect of the
business or division in which Executive is principally engaged. For
the avoidance of doubt, a Change of Control pursuant to the
immediately preceding sentence shall not apply to Executive if his
employment is not primarily with and for the business or division
that
is sold.
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(iii) If during the Employment Term Executive's employment is
terminated by the Company without Cause (other than by reason of
death or
Disability) or Executive resigns for Good Reason, Executive shall
be entitled to
receive, subject to Executive's execution (without subsequent
revocation) of a
release of claims substantially in the form of Exhibit A (the
"RELEASE"):
(A) Termination On or Prior to the Second Anniversary of the
Effective Date. If such termination of employment occurs on or
prior
to the second anniversary of the Effective Date, the Accrued
Rights,
but no further payments or benefits pursuant to the terms of this
Agreement; provided, however, that Executive shall be entitled
(albeit
without duplication of amounts payable in respect of the Accrued
Rights) to the payments and benefits provided under the Cooper Tire
&
Rubber Company Change in Control Severance Pay Plan (the "EXISTING
CHANGE IN CONTROL SEVERANCE PLAN"), subject to the terms thereof;
provided, further, that the Existing Change in Control Severance
Plan
shall be deemed amended such that (i) references to the "Company"
and
the "Employer" shall be deemed to be references to Cooper-Standard
Automotive Inc., except that references to the "Company" for
purposes
of the definition of Change in Control (as defined in the Existing
Change in Control Severance Plan) shall be deemed amended to be
references to CSA Acquisition Corp., (ii) the provisions relating
to
accelerated vesting and cash-out of equity securities will not
apply
to equity securities of the Company or its affiliates, (iii) the
grantor trust ("RABBI TRUST") funding requirements applicable to
the
Change in Control (as defined in the Existing Change in Control
Severance Plan) resulting from the transactions contemplated by the
Purchase Agreement will be satisfied by Cooper & Tire Rubber
Company,
rather than the Company, and any claims for severance or
termination
benefits will be made against the rabbi trust first and
exclusively,
except to the extent there are not sufficient assets in the trust,
in
which event the remaining balance will be payable by the Company,
(iv)
Executive will waive any claims or rights Executive has to
termination
or severance benefits thereunder, other than as a result of the
termination of Executive's employment during the Severance Period
(as
defined in the Existing Change in Control Severance Plan) (x) by
the
Company without Cause (as defined in the Existing Change in Control
Severance Plan) or (y) by Executive for Good Reason (as defined
herein); and (v) the Existing Change in Control Severance Plan
shall
not apply to any Change in Control occurring after the Effective
Date
(i.e., "Change in Control" as defined in the Existing Change in
Control Severance Plan shall not include any transaction regarding
the
Company which occurs after the Effective Date) (it being understood
that Executive will be covered solely by the New Change of Control
Severance Plan (as defined in Section 7(c)(iii)(C)) wi
