EMPLOYMENT AGREEMENT
This Agreement is made by and between TRIMAS CORPORATION, a
Delaware
corporation ("Company") and EDWARD SCHWARTZ (hereinafter
"Executive"), effective
January 1, 2006 ("Effective Date"). In order to induce Executive to
serve as its
President of Transportation Accessories Group, Company enters into
this
Agreement with Executive to set out the terms and conditions that
will apply to
Executive's employment with Company during the term of this
Agreement. Executive
is willing to accept such employment and assignment and to perform
services on
the terms and conditions hereinafter set forth. It is therefore
hereby agreed by
and between the parties as follows:
SECTION 1 - EMPLOYMENT.
(a)
Scope. Company employs Executive as its President of Transportation
Accessories Group. In this capacity, Executive shall report to the
President and Chief Executive Officer ("CEO"). Executive accepts
employment in accordance with this Agreement and agrees to devote
his full business time and efforts to the performance of his duties
and responsibilities hereunder.
(b)
Other Activities. Nothing in this Agreement shall preclude
Executive
from engaging in charitable and community affairs or managing any
passive investment (i.e., an investment with respect to which
Executive is in no way involved with the management or operation of
the entity in which Executive has invested) to the extent that such
activities do not conflict with any provision of this Agreement,
provided that Executive shall not, without the prior approval of
the
Board of Directors of Company (the "Board"), serve as a director or
trustee of any other corporation, association or entity, or own
more
than two percent (2%) of the equity of any publicly traded entity.
SECTION 2 - TERM OF AGREEMENT. This Agreement shall govern the
terms of
Executive's employment from the Effective Date until the earlier of
the date
that is six (6) months following the date on which Company gives
written notice
to Executive of termination of the Agreement or the date that
either party
terminates Executive's employment under this Agreement. Executive
shall not be
guaranteed employment during the six (6) month period following any
notice of
termination of this Agreement ("Notice Period"). If employment
terminates during
a Notice Period, the rights and obligations of the parties shall be
governed by
the terms of this Agreement, notwithstanding that a notice of
termination was
given. The termination of this Agreement shall not be a termination
of those
provisions of this Agreement which by their terms survive the
termination of
this Agreement.
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SECTION 3 - COMPENSATION.
(a)
Salary. Company shall pay Executive at the rate of Three Hundred
and
Thirty thousand dollars ($330,000) per annum ("Base Salary"). Base
Salary shall be payable in accordance with the ordinary payroll
practices of Company and shall be subject to all applicable
federal,
state and local withholding and reporting requirements. Base Salary
may be adjusted by the CEO during the term of this Agreement.
(b)
Annual Value Creation Plan ("AVCP"). Executive shall be eligible to
participate in the AVCP, a copy of which has been provided to
Executive, subject to all the terms and conditions of such plan, as
such plan may be modified from time to time.
SECTION 4 - EMPLOYEE BENEFITS.
(a)
Employee Retirement Benefit Programs, Welfare Benefit Programs,
Plans and Practices. Company shall provide Executive with coverage
under any retirement benefit programs, welfare benefit programs,
plans and practices, that Company makes available to its senior
executives, in accordance with the terms thereof, as such programs,
plans and practices may be amended from time to time in accordance
with their terms.
(b)
Vacation. Executive shall be entitled to twenty (20) business days
of paid vacation each calendar year, which shall be taken at such
times as are consistent with Executive's responsibilities
hereunder.
Vacation days shall be subject to Company's general policies
regarding vacation days, as such policies may be modified from time
to time.
(c)
Perquisites. During Executive's employment hereunder, Company shall
provide Executive, subject to review and approval by the CEO, with
such additional perquisites as are generally available to
similarly-situated executives.
(d)
Stock Options. Executive shall be eligible to participate in the
TriMas Corporation 2002 Long Term Equity Incentive Plan in
accordance with the terms and conditions of such plan and any grant
agreements thereunder.
SECTION 5 - EXPENSES. Subject to prevailing Company policy or such
guidelines as may be established by the CEO or his delegee, Company
will
reimburse Executive for all reasonable expenses incurred by
Executive in
carrying out his duties.
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SECTION 6 - TERMINATION OF EMPLOYMENT. Executive remains an
employee-at-will, subject to the terms of this Agreement, and his
employment may
be terminated by either party at any time for any reason by written
notice. If
employment terminates during the term of this Agreement, this
Agreement shall
govern the rights and responsibilities of the parties upon such
termination. If
employment terminates after this Agreement has terminated, this
Agreement shall
not apply except to the extent of those provisions that by their
nature survive
the term of this Agreement.
(a)
Termination Without Cause or for Good Reason. If Executive's
employment is terminated during the term of this Agreement by
Company for any reason other than Cause (as defined in Section 6(c)
hereof), Disability (as defined in Section 6(e) hereof) or death,
or
if Executive's employment is terminated by Executive for Good
Reason
(as defined in Section 6(a) (2) hereof), then Company shall pay
Executive the Severance Package. Termination of employment after
this Agreement has terminated shall not be a termination under this
Section 6(a). Likewise, a termination by Executive without Good
Reason shall be a termination under Section 6(b) below and not a
termination under this Section 6(a).
(1)
For purposes of this Agreement, "Severance Package" shall
mean:
(A)
Base Salary continuation for twelve (12) months at
Executive's annual Base Salary rate in effect on the
date of termination, subject to all applicable federal,
state and local withholding and reporting requirements.
These salary continuation payments shall be paid in
accordance with usual Company payroll practices;
(B)
An amount equal to the Average Bonus. For purposes of
this Agreement, "Average Bonus" shall be the average of
the annual bonuses paid to Executive by Company for the
last three full annual bonus terms, or such shorter
period as Executive has participated in Company's bonus
program, provided that if Executive has not completed a
full year of service under this Agreement, the Average
Bonus shall be determined based on Executive's level of
participation in the AVCP for the year of termination
with the payout rate determined by reference to the
average bonus, stated as a percentage of base salary,
paid to similarly-situated executives in the preceding
three full years. The Average Bonus shall be paid in
equal installments over the twelve (12) month period
described in Section 6(a)(1)(A) above, subject to the
same withholding and reporting requirements. In
addition, Executive shall receive the bonus for the most
recently completed bonus term if a bonus has been
declared for Executive for such term but not paid, and a
pro rata bonus for the year of termination through the
date of termination equal to the Average Bonus,
multiplied by a fraction the numerator of which is the
number of days that Executive was employed during such
bonus term and the denominator of which is 365. The
prorated bonus shall be paid in a single sum within ten
(10) days of the termination of Executive's employment
with Company. Any unpaid bonus shall be
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paid in accordance with customary practices for payment
of bonuses under AVCP; and
(C)
Continuation of medical benefits under Company group
benefits (including health, dental and prescription
plans), as defined by the plan documents, until the
earlier of twelve (12) months following Executive's
termination of employment or the date on which Executive
becomes eligible to receive any medical benefits under
any plan or program of any other employer; provided,
that Executive timely elects to continue group health
coverage under COBRA and subject to Company's COBRA
policies. Executive will be charged and responsible for
payment of the COBRA premium equal to the employee
portion of the premium for the selected coverage that
Executive would have paid if Executive continued to be a
Company employee. Company will pay the employer-portion
of the medical coverage. After the stated continuation
period, Executive will be responsible for 100% of the
COBRA premiums.
Any obligation to pay any portion of premium cost under
this item may be settled, at Company's discretion, by a
lump-sum payment of any remaining premiums.
In connection with the Severance Package, Executive shall
cease to be an active participant under Company retirement
programs and other benefit plans pursuant to the terms of
those plans. No amounts paid under this Agreement shall
constitute compensation for purposes of any such retirement
plan. Executive's rights to any accrued and vested benefits
under a qualified retirement plan shall be determined in
accordance with the applicable plan document.
Except as stated in this Section 6(a) (1), Executive shall not
be entitled to any other benefit or compensation from Company.
(2)
For purposes of this Agreement, a termination of employment by
Executive for "Good Reason" shall be a termination by
Executive following the occurrence of any of the following
events unless Company has cured as provided below:
(A)
A material and permanent diminution in Executive's
duties or responsibilities;
(B)
A material reduction in the aggregate value of Base
Salary and bonus opportunity; or
(C)
A permanent reassignment of Executive to another primary
office, or a relocation of Company office that is
Executive's primary office, unless Executive's primary
office following such reassignment or
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relocation is within thirty-five (35) miles of
Executive's primary office before the reassignment or
relocation or Executive's permanent residence on the
date of the reassignment or relocation.
Executive must notify Company of any event constituting Good
Reason within one hundred twenty (120) days after Executive
becomes aware of such event or such event shall not constitute
Good Reason for purposes of this Agreement provided that
Company shall have fifteen (15) days from the date of such
notice to cure the Good Reason event. Executive cannot
terminate his employment for Good Reason if Cause exists at
the time of such termination. A termination by Executive
following cure shall not be a termination for Good Reason. A
failure of Executive to notify Company after the first
occurrence of an event constituting Good Reason shall not
preclude any subsequent occurrences of such event (or similar
event) from constituting Good Reason.
(b)
Voluntary Termination by Executive. If Executive terminates his
employment with Company without Good Reason, then Company shall pay
Executive his accrued unpaid Base Salary through the date of
termination and the AVCP award for the most recently completed year
if an award has been declared for such year but not paid. The
accrued unpaid Base Salary amounts payable under this Section 6(b)
shall be payable in a lump sum within ten (10) days of termination
of employment. Any accrued unpaid bonus amounts payable under this
Section 6(b) shall be payable in accordance with customary
practices
for payment of bonuses under AVCP. No prorated bonus for the year
of
termination shall be paid. Any other benefits under other plans and
programs of Company in which Executive is participating at the time
of Executive's termination of employment shall be paid,
distributed,
settled, or shall expire in accordance with their terms, and
Company
shall have no further obligations hereunder with respect to
Executive following the date of termination of employment.
(c)
Termination for Cause. If Executive's employment is terminated for
Cause, Company shall pay Executive his accrued but unpaid Base
Salary through the date of the termination of employment, and no
further payments or benefits shall be owed. The accrued unpaid Base
Salary amounts payable under this Section 6(c) shall be payable in
a
lump sum within ten (10) days of termination of employment. As used
herein, the term "Cause" shall be limited to:
(1)
Executive's conviction of or plea of guilty or nolo contendere
to a crime constituting a felony under the laws of the United
States or any state thereof or any other jurisdiction in which
Company conducts business;
(2)
Executive's willful misconduct in the performance of his
duties to Company;
(3)
Executive's willful and continued failure to follow the
instructions of the Board or the CEO; or
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(4)
Executive's willful and/or continued neglect of duties (other
than any such neglect resulting from incapacity of Executive
due to physical or mental illness);
provided, however, that Cause shall arise under items (3) or (4)
only following ten (10) days written notice thereof from Company
which specifically identifies such failure or neglect and the
continuance of such failure or neglect during such notice period.
Any failure by Company to notify Executive after the first
occurrence of an event constituting Cause shall not preclude any
subsequent occurrences of such event (or a similar event) from
constituting Cause.
(d)
Termination Following a Change of Control. Notwithstanding any
provision of Section 2 to the contrary, upon the occurrence of a
Change of Control (as defined below), the Notice Period required to
terminate this Agreement shall continue until the later of the date
that is six (6) months from the date of such notice or the third
anniversary of such Change of Control. In the event Executive's
employment with Company terminates by reason of a Qualifying
Termination (as defined below) within the three (3) years after a
Change of Control, then, in lieu of the Severance Package, and
subject to the limitations described in Section 7 below, Company
shall provide Executive the following termination benefits:
(1)
Termination Payments. Company shall pay Executive:
(A)
A single sum payment equal to two hundred percent (200%)
of Executive's annual Base Salary rate in effect on the
date of termination, subject to all applicable federal,
state and local withholding and reporting requirements.
This single-sum payment shall be paid within ten (10)
days of termination of employment;
(B)
An amount equal to two hundred percent (200%) of the
Average Bonus, as that term has been defined above. In
addition, Executive shall receive the bonus for the most
recently completed bonus term if a bonus has been
declared for such term but not paid, and a pro rata
bonus for the year of termination through the date of
termination equal to the Average Bonus, multiplied by a
fraction the numerator of which is the number of days
that Executive was employed during such bonus term and
the denominator of which is 365. The prorated bonus for
the final year shall be paid as a single sum within ten
(10) days of termination of employment. Any unpaid bonus
shall be paid in accordance with customary practices for
payment of bonuses under AVCP.
All payments under this Section 6(d), however, are subject to
the timing rules, calculations and adjustments described in
Sections 7 and 8.
(C)
Medical Benefits Continuation. Continuation of medical
benefits under Company group benefits (including health,
dental and
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prescription plans), as defined by the plan documents,
until the earlier of twenty four (24) months following
the Qualifying Termination or the date on which
Executive becomes eligible to receive any medical
benefits under any plan or program of any other
employer; provided, that Executive timely elects to
continue group health coverage under COBRA and subject
to Company's COBRA policies. Executive will be charged
and responsible for payment of the COBRA premium equal
to the employee portion of the premium for the selected
coverage that Executive would have paid if Executive
continued to be a Company employee. Company will pay the
employer-portion of the medical coverage. After the
stated continuation period, Executive will be
respons
