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COOPER-STANDARD AUTOMOTIVE INC | CSA Acquisition Corp. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
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EXHIBIT 10.16 EXECUTION COPY EMPLOYMENT AGREEMENT (PAUL C. GILBERT) EMPLOYMENT AGREEMENT (the "AGREEMENT") dated December 23, 2004 by and between COOPER-STANDARD AUTOMOTIVE INC. (the "COMPANY") and PAUL C. GILBERT (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, NVH 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 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 $290,000, 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 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"). 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- 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. (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)) with respect to any Change of Control that occurs after the Effective Date). (B) Termination Prior to a Change of Control and After the Second Anniversary of the Effective Date. If such termination of employment occurs prior to a Change of Control and after the second anniversary of the Effective Date, then:






