EXHIBIT 10.14
EMPLOYMENT AGREEMENT
THOMAS H. MADDEN
EMPLOYMENT AGREEMENT (the "Agreement") dated July
21, 2005 by
and between Affinia Group Inc. (the "Company") and Thomas H. Madden
(the
"Executive").
The Company desires to continue to employ
Executive and to
enter into an agreement embodying the terms of such employment;
Executive desires to continue to be employed by
the Company
and enter into such an agreement;
In consideration of the premises and mutual
covenants herein
and for other good and valuable consideration, the parties agree as
follows:
1. Term of Employment. Subject to the provisions
of Section 7
of this Agreement, Executive shall be employed by the Company for a
period
commencing on May 1, 2005 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
automatically be extended for an additional one year period, unless
the Company
or Executive provides the other party hereto 90 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 Chief Financial Officer. In such position, Executive
shall have
such duties and authority as shall be determined from time to time
by the Board
of Directors of the Company (the "Board") and the Chief Executive
Officer of the
Company. If requested, Executive shall also serve as a member of
the Board
without additional compensation.
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 $275,000, 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 in the sole
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discretion of the Board. Executive's annual base salary, as in
effect from time
to time, is hereinafter referred to as the "Base Salary."
4. Annual Bonus. 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 eighty percent (80%) of Executive's Base
Salary (the
"Target Annual Bonus") upon the achievement of performance goals
established by
the Board. Executive may be entitled to greater Annual Bonus for
performance in
excess targeted performance goals or a lesser Annual Bonus for
performance which
does not meet such targeted performance goals, in each case in the
discretion of
the Board.
5. Employee Benefits. During the Employment Term,
Executive
shall generally be entitled to participate in the Company's
employee benefit
plans (other than any severance plan) 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.
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 30 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 below) and
shall
terminate automatically upon Executive's resignation without Good
Reason (as
defined in Section 7(c)).
(ii) For purposes of this Agreement, "Cause"
shall mean (A)
the Executive's continued failure to perform such Executive's
duties (other than
as a result of total or partial incapacity due to physical or
mental illness)
which is not cured for a period of 10 days following written notice
by the
Company or its affiliates to the Executive of such failure, (B)
conviction or
plea of guilty or no contest to a (x) felony, or (y) crime
involving moral
turpitude or the property or business of the Company or its
affiliates, (C)
willful malfeasance or willful misconduct in performance of duties
to the
Company or its affiliates, or (D) Executive's breach of the
provisions of
Sections 8 or 9 of this Agreement.
(iii) If Executive's employment is terminated
by the Company
for Cause, or if 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;
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(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").
(ii) Upon termination of Executive's employment
hereunder
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, "Good
Reason" shall
mean (A) the failure of the Company to pay or cause to be paid
Executive's Base
Salary or Annual Bonus, when due hereunder or a reduction in the
Base Salary or
Target Annual Bonus from the levels set forth in Sections 3 and 4,
respectively
(other than any across the board reduction in Base Salary and/or
Annual Bonus of
15% or less which similarly affects the four other highest paid
executive
officers of the Company as of the date hereof, to the extent they
are then
employed by the
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Company) (B) any substantial and sustained diminution in
Executive's title,
authority or responsibilities from those described in Section 2
hereof or (C)
any relocation of Executive's principal place of employment by more
than 50
miles from the Company's current offices in Ann Arbor, Michigan,
without
Executive's consent; provided that either of the events described
in clauses (A)
and (B) of this Section 7(c)(ii) shall constitute Good Reason only
if the
Company fails to cure such event within 30 days after receipt from
Executive of
written notice of the event which constitutes Good Reason;
provided, further,
that "Good Reason" shall cease to exist for an event on the 60th
day following
the later of its occurrence or Executive's knowledge thereof,
unless Executive
has given the Company written notice thereof prior to such date.
(iii) If Executive's employment is terminated
by the Company
without Cause (other than by reason of death or Disability) or if
Executive
resigns for Good Reason, Executive shall be entitled to receive:
(A) the Accrued Rights;
(B) subject to Executive's continued
compliance with the
provisions of Sections 8 and 9, an amount equal to 1.5
times the sum of
(x) Base Salary and the Average Bonus (as defined below)
paid as
follows: (i) the amount equal to 1 times the sum of Base
Salary and the
Average Bonus shall be paid in equal monthly installments
for 12 months
following the date of such termination of employment and
(ii) the
amount equal to 0.5 times the sum of Base Salary and the
Average Bonus
shall be paid on the first anniversary of the date of such
termination
of employment in a lump sum cash payment; provided that
the aggregate
amount described in this clause (B) shall be reduced by
the present
value of any other cash severance or termination benefits
payable to
Executive under any other plans, programs or arrangements
of the
Company or its affiliates. "Average Bonus" shall mean an
amount equal
to the average of the Annual Bonuses paid to Executive
hereunder for
the two most recently completed fiscal years preceding
Executive's
termination of employment (or if there has been one, but
less than two
completed fiscal years during the Employment Term, an
amount equal to
the average of the Annual Bonus hereunder for the
preceding completed
fiscal year and the annual bonus (excluding any special
non-recurring
bonuses or retention incentive payments) paid to Executive
in respect
of calendar year 2004 from Dana Corporation (including any
pro-rata
annual bonus paid to Executive by the Company for the part
of 2004 in
which Executive was employed by the Company) (the "2004
Annual Bonus")
or if there have been no previously completed fiscal years
during the
Employment Term, then an amount equal to the 2004 Annual
Bonus).
(C) 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; and
(D) continued medical and dental coverage at
the
Company's cost (comparable to such coverage provided by
the Company to
active executives of the Company) for a period of 18
months after the
date of such termination; provided that
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if the Company is unable to provide such coverage to
Executive under
the terms of its medical and dental plans for any portion
of such
period, the Company may in lieu of providing such coverage
pay to
Executive an amount equal to the premium that would
otherwise be paid
by active executives for such coverage during such period
(without
giving effect to any Company subsidy).
(iv) If Executive's employment is terminated by
the Company
without Cause (other than by reason of death or Disability) or if
Executive
resigns for Good Reason, in each case, within twenty-four months
following a
Change of Control (as defined in the Affinia Group Holdings Inc.
2005 Stock
Incentive Plan), Executive shall be entitled to receive, in
addition to the
payments and benefits set forth in Section 7(c)(iii), a lump sum
cash payment
equal to the excess, if any, of (A) the product of (x) 1.5 times
(y) the Target
Annual Bonus over (B) the product of (x) 1.5 times (y) the Average
Bonus.
For purposes of this Section 7(c), in the event
such
termination of employment occurs as a result of a resignation by
Executive for
Good Reason due to a reduction in Executive's Base Salary or Target
Annual Bonus
pursuant to Section 7(c)(ii)(A), the references to Base Salary and
Target Annual
Bonus in Sections 7(c)(iii) and 7(c)(iv) shall be deemed to be
references to
Executive's Base Salary and Target Bonus immediately before such
reduction.
Following Executive's termination of employment
by the Company
without Cause (other than by reason of Executive's death or
Disability) or by
Executive's resignation for Good Reason, except as set forth in
this Section
7(c)(iii), or Section 7(c)(iv) if applicable, Executive shall have
no further
rights to any compensation or any other benefits under this
Agreement.
d. Expiration of Employment Term.
(i) In the event either party elects not to
extend the
Employment Term pursuant to Section 1, unless Executive's
employment is earlier
terminated pursuant to paragraphs (a), (b) or (c) of this Section
7, Executive's
termination of employment under this Agreement (whether or not
Executive
continues as an employee of the Company thereafter) shall be deemed
to occur on
the close of business on the day immediately preceding the next
scheduled
Extension Date and Executive shall be entitled to receive:
(A) if Executive is the party that elected
not to extend
the Employment Term, Executive shall be entitled to
receive the (x)
Accrued Rights and (y) commencing upon the date of
Executive's
termination of employment with the Company (which, for the
avoidance of
doubt, may occur after the expiration of the Employment
Term), subject
to Executive's continued compliance with the provisions of
Section 8
and 9, an amount equal to 1 times the Base Salary
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