Exhibit 10.17
EXECUTION COPY
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT (this
“ Agreement ”) is made as of May 12, 2006,
between Sensata Technologies, Inc., a Delaware corporation (the
“ Company ”), and Richard D. Dane (“
Executive ”).
In consideration of the mutual
covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Employment . The Company
shall employ Executive, and Executive hereby accepts employment
with the Company, upon the terms and conditions set forth in this
Agreement for the period beginning on the date hereof and ending as
provided in paragraph 4 hereof (the “ Employment
Period ”).
2. Position and Duties
.
(a) During the Employment Period,
Executive shall serve as the Vice President, Worldwide
Manufacturing, of the Company and shall have the normal duties,
responsibilities, functions and authority of the Vice President,
Worldwide Manufacturing, subject to the power and authority of the
Company’s Board of Directors (the “ Board
”), in consultation with the Company’s Chief Executive
Officer (the “ Chief Executive Officer ”), to
expand or limit such duties, responsibilities, functions and
authority and to overrule actions of officers of the Company.
During the Employment Period, Executive shall render to Parent and
its Subsidiaries administrative, financial and other executive and
managerial services that are consistent with Executive’s
position as the Board may from time to time direct.
(b) Executive shall report to the
Chief Executive Officer and the Board, and Executive shall devote
his full business time and attention (except for vacation periods
consistent with past practice and reasonable periods of illness or
other incapacity) to the business and affairs of Parent and its
Subsidiaries. In performing his duties and exercising his authority
under the Agreement, Executive shall support and implement the
business and strategic plans approved from time to time by the
Board and shall support and cooperate with Parent’s and its
Subsidiaries’ efforts to expand their businesses and operate
profitably and in conformity with the business and strategic plans
approved by the Board. So long as Executive is employed by the
Company, Executive shall not, without the prior written consent of
the Board, perform other services for compensation. Unless
otherwise agreed by Executive, Executive’s place of work
shall be in the greater Attleboro, Massachusetts metropolitan area,
except for travel reasonably required for Company
business.
(c) For purposes of this Agreement,
“ Subsidiaries ” shall mean any corporation or
other entity of which the securities or other ownership interests
having the voting power to elect a majority of the board of
directors or other governing body are, at the time of
determination, owned by Parent, directly or through one or more
Subsidiaries.
(d) For purposes of this Agreement,
“ Affiliate ” shall mean with respect to Parent
and its Subsidiaries, any other Person controlling, controlled by
or under common control with Parent or any of its Subsidiaries and,
in the case of a Person which is a partnership, any partner of the
Person.
(e) For purposes of this Agreement,
“ Person ” shall mean an individual, a
partnership, a corporation, a limited liability company, an
association, a joint stock company, a trust, a joint venture, an
unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
(f) For purposes of this Agreement,
“ Parent ” shall mean Sensata Technologies
Holding B.V., a private limited company incorporated under the laws
of the Netherlands.
3. Compensation and Benefits
.
(a) During the Employment Period,
Executive’s base salary shall be $199,140.00 per annum and
shall be subject to review by the Board, after consultation with
the Chief Executive Officer, on an annual basis commencing
January 1, 2007 (as adjusted from time to time, the “
Base Salary ”), which salary shall be payable by the
Company in regular installments in accordance with the
Company’s general payroll practices (in effect from time to
time). In addition, during the Employment Period, Executive shall
be entitled to participate in all of the Company’s employee
benefit programs for which senior executive employees of Parent and
its Subsidiaries are generally eligible (assuming Executive and/or
his family meet the eligibility requirements of those benefit
programs), as well as the benefit programs listed on Annex A
, which are currently in effect in addition to employee benefit
programs for which executive employees of Parent and its
Subsidiaries are generally eligible (the “ Senior
Executive Benefits ”). The Company may in its sole
discretion change the Senior Executive Benefits at any time;
provided that, the Company shall maintain the benefits set forth on
Annex A for a period of 12 months after the date
hereof.
(b) During the Employment Period,
the Company shall reimburse Executive for all reasonable business
expenses incurred by him in the course of performing his duties and
responsibilities under this Agreement, which business expenses are
consistent with the Company’s policies in effect from time to
time with respect to travel, entertainment and other business
expenses, subject to the Company’s requirements with respect
to reporting and documentation of such expenses.
(c) In addition to the Base Salary,
Executive shall be eligible to earn an annual bonus (“
Annual Bonus ”) in an amount equal to a certain
percentage of the Base Salary then in effect, which percentage
shall be determined by the Chief Executive Officer, after
consultation with and approval by the Board, and is based upon the
achievement by Parent and its Subsidiaries of financial and other
objectives established each year by the Board. An Annual Bonus, if
any, will be earned as of February 1 and paid to Executive by
the Company on or before March 15 th of the fiscal year following the
fiscal year to which such Annual Bonus relates.
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4. Term .
(a) The Employment Period shall end
on the first anniversary of the date hereof, but shall
automatically be renewed on the same terms and conditions set forth
herein (as modified from time to time by the parties hereto) for
additional one-year periods beginning on the first anniversary of
the date hereof and on each successive anniversary date, unless the
Company or Executive gives the other party written notice of the
election not to renew the Employment Period at least 90 days prior
to any such renewal date; provided that, the Employment Period
shall terminate prior to such date immediately upon
Executive’s resignation (with or without Good Reason, as
defined below), death or Disability (as defined below) or upon the
Company’s termination of Executive’s employment
(whether with Cause (as defined below) or without
Cause).
(b) If the Employment Period is
terminated (1) by the Company without Cause (other than as a
result of Executive’s Disability) or (2) upon
Executive’s resignation with Good Reason, Executive shall be
entitled to (i) his Base Salary through the date of
termination, (ii) any bonus amounts to which Executive is
entitled determined by reference to years that ended on or prior to
the date of termination, (iii) an amount equal to one year of
Executive’s then current Base Salary plus an amount
equal to the average of the Annual Bonus paid to Executive in
respect of each of the two years immediately preceding the
termination of Executive’s employment, and (iv) running
concurrently with his COBRA period, continued participation
throughout the Severance Period (as defined below) in all health
and dental benefit plans in which Executive was entitled to
participate immediately prior to the termination of
Executive’s employment (or the Company shall arrange to make
available to Executive benefits substantially similar to those
which Executive would otherwise have been entitled to receive over
such period if Executive’s employment had not been
terminated) on the same terms and conditions (including employee
contributions toward premium payments) under which Executive was
entitled to participate immediately prior to his termination, in
each case if and only if Executive has executed and delivered to
the Company a general release substantially in the form of
Exhibit A attached hereto and only if Executive does not
breach the provisions of paragraphs 5, 6 and 7 hereof. The amounts
payable pursuant to clause (iii) of this paragraph 4(b)
shall be payable in regular installments over 12 months (the
“ Severance Period ”) in accordance with the
Company’s general payroll practices.
(c) If the Employment Period is
terminated (1) by the Company with Cause, (2) due to
Executive’s death or Disability or (3) by
Executive’s resignation without Good Reason, Executive shall
be entitled to receive (i) his Base Salary through the date of
termination and (ii) any bonus amounts to which Executive is
entitled determined by reference to years that ended on or prior to
the date of termination.
(d) Except as otherwise expressly
provided herein, Executive shall not be entitled to any other
salary, bonuses, employee benefits or compensation from the Company
or its Subsidiaries after the termination of the Employment Period
and all of Executive’s rights to salary, bonuses, employee
benefits and other compensation hereunder which would have accrued
or become payable after the termination of the Employment Period
(other than vested retirement benefits accrued on or prior to the
termination of the Employment Period or other amounts owing
hereunder as of the date of such termination that have not yet been
paid) shall cease upon such termination, other than those expressly
required under applicable law (such as COBRA).
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(e) Executive is under no obligation
to mitigate damages or the amount of any payment provided for
hereunder by seeking other employment or otherwise, and the Company
shall have no right of offset for any amounts received by Executive
from other employment; provided that, notwithstanding anything to
the contrary herein, Executive’s coverage under the
Company’s health and dental benefit plans will terminate when
Executive becomes eligible under any employee benefit plan made
available by another employer covering health and dental benefits.
The Executive shall notify the Company within thirty (30) days
after becoming eligible for any such benefits.
(f) The Company may offset any
amounts Executive owes Parent and its Subsidiaries against any
amounts Parent and its Subsidiaries owe Executive
hereunder.
(g) For purposes of this Agreement,
“ Cause ” shall mean, with respect to Executive,
one or more of the following: (i) the indictment for a felony
or other crime involving moral turpitude or the commission of any
other act or any omission to act involving fraud with respect to
Parent or any of its Subsidiaries or any of their customers or
suppliers; (ii) any act or any omission to act involving
dishonesty or disloyalty which causes, or in the good faith
judgment of the Board would be reasonably likely to cause, material
harm (including reputational harm) to Parent or any of its
Subsidiaries or any of their customers or suppliers; (iii) any
(A) repeated abuse of alcohol or (B) abuse of controlled
substances, in either case, that adversely affects
Executive’s work performance (and, in the case of clause (A),
continues to occur at any time more than 30 days after Executive
has been given written notice thereof) or brings Parent or its
Subsidiaries into public disgrace or disrepute; (iv) the
failure by Executive to substantially perform duties as reasonably
directed by the Board or Executive’s supervisor(s), which
non-performance remains uncured for 10 days after written notice
thereof is given to Executive; (v) willful misconduct with
respect to Parent or any of its Subsidiaries, which misconducts
causes, or in the good faith judgment of the Board would be
reasonably likely to cause, material harm (including reputational
harm) to Parent or any of its Subsidiaries; or (vi) any breach
by Executive of paragraph 5, 6 or 7 of this Agreement or any other
material breach of this Agreement or the Management Equity Plans
(as defined below).
(h) Executive will be “
Disabled ” only if, as a result of his incapacity due
to physical or mental illness, Executive is considered disabled
under the Company’s long-term disability insurance
plans.
(i) For purposes of this Agreement,
“ Good Reason ” shall mean if Executive resigns
from employment with the Company and its Subsidiaries prior to the
end of the Employment Period as a result of one or more of the
following reasons: (i) any reduction in Executive’s Base
Salary or bonus opportunity, without Executive’s prior
consent, in either case other than any reduction which (A) is
generally applicable to senior leadership team executives of the
Company and (B) does not exceed 15% of Executive’s Base
Salary and bonus opportunity in the aggregate; (ii) any
material breach by Parent or any of its Subsidiaries of any
agreement between such Persons and Executive; (iii) a change
in Executive’s principal office without
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Executive’s prior consent to a location
that is more than 50 miles from Executive’s principal office
on the date hereof; or (iv) delivery by the Company of a
notice of non-renewal of the Employment Period; provided that, any
such reason was not cured by the Company to Participant’s
reasonable satisfaction within 30 days after delivery of written
notice thereof to the Company; further provided that, in each case
written notice of an Executive’s resignation with Good Reason
must be delivered to the Company within 30 days after Executive has
actual knowledge of the occurrence of any such event in order for
Executive’s resignation with Good Reason to be effective
hereunder.
(j) For purposes of this Agreement,
“ Management Equity Plans ” shall mean the 2006
Management Securities Purchase Plan of Sensata Investment Company
S.C.A. and the 2006 Management Option Plan of Parent, along with
any Award Agreements (as defined therein) and any attachments
thereto, as amended from time to time.
5. Confidential Information
.
(a) Executive acknowledges that the
continued success of Parent and its Subsidiaries and Affiliates,
depends upon the use and protection of a large body of confidential
and proprietary information. All of such confidential and
proprietary information now existing or to be developed in the
future will be referred to in this Agreement as “
Confidential Information ”. Confidential
Inf
