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Exhibit 10.16
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 Martha Sullivan
(" 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
Chief Operating Officer of the Company and shall have the normal
duties, responsibilities, functions and authority of the Chief
Operating Officer, 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 her 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 her duties and exercising her 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 $248,640.00 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 her 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 her 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) her 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 her 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 her
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) her
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 her 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; (iv) delivery by the Company of a notice
of non-renewal of the Employment Period; or (v) a material
diminution in Executive’s job responsibilities without
Executive’s prior consent; 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 Information will be interpreted as broadly as possible
to include all information of any sort (whether merely remembered
or embodied in a tangible or intangible form) that is
(i) related to Parent’s or its Subsidiaries’ or
Affiliates’ current or potential business and (ii) is
not generally or public
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