Exhibit 10.3
COMMERCIAL VEHICLE GROUP, INC
CHANGE IN CONTROL & NON-COMPETITION
AGREEMENT
This Agreement is made as of this 22
nd day
of May, 2007, by and between Kevin R. L. Frailey
(“Executive”) and Commercial Vehicle Group, Inc., a
Delaware corporation with its principal office at 6530 W. Campus
Oval, New Albany, Ohio 43054, its subsidiaries, successors and
assigns (the “Company”).
Recitals
A. The Company is engaged in the
business of developing, manufacturing, and marketing of interior
systems, vision safety solutions and other cab-related products for
the global commercial vehicle market, including the heavy-duty
(Class 8) truck market, the construction market and other
specialized transportation markets and in connection therewith
develops and uses valuable technical and nontechnical trade secrets
and other confidential information which it desires to
protect.
B. You will continue to be
employed as an executive officer of the Company.
C. The Company considers your
continued services to be in the best interest of the Company and
desires, through this Agreement, to assure your continued services
on behalf of the Company on an objective and impartial basis and
without distraction or conflict of interest in the event of an
attempt to obtain control of the Company.
D. You are willing to remain in
the employ of the Company on the terms set forth in this
agreement.
Agreement
NOW, THEREFORE, the parties agree as
follows:
1. Consideration
. As consideration for your entering into this Agreement and your
willingness to remain bound by its terms, the Company shall
continue to employ you and provide you with access to certain
Confidential Information as defined in this Agreement and other
valuable consideration as provided for throughout this Agreement,
including in Sections 3 and 4 of this Agreement.
2. Employment
.
(a) Position .
You will continue to be employed as Executive Vice President,
Business Development reporting to the President and Chief Executive
Officer [or board of directors] of the Company. You shall continue
to perform the duties, undertake the responsibilities and exercise
the authority customarily performed, undertaken and exercised by
persons employed in similar executive capacities.
- 1 -
(b) Restricted
Employment . While employed by the Company, you shall
devote your best efforts to the business of the Company and shall
not engage in any outside employment or consulting work without
first securing the approval of the Company’s Board of
Directors. Furthermore, so long as you are employed under this
Agreement, you agree to devote your full time and efforts
exclusively on behalf of the Company and to competently,
diligently, and effectively discharge your duties hereunder. You
shall not be prohibited from engaging in such personal, charitable,
or other nonemployment activities that do not interfere with your
full time employment hereunder and which do not violate the other
provisions of this Agreement. You further agree to comply fully
with all policies and practices of the Company as are from time to
time in effect.
3. Compensation
.
(a) Your
compensation will be continued at your current annual base rate
(“Basic Salary”), payable in accordance with the normal
payroll practices of the Company. Your base salary may be increased
from time to time by action of the Board of Directors of the
Company. You will also be eligible for a cash bonus under a
performance bonus plan which is determined annually by the Board of
Directors of the Company.
(b) You
will be entitled to receive stock options and to purchase shares of
the common stock of the Company pursuant to the terms of the
Company’s Equity Incentive Plan or other plan adopted by the
Board of Directors of the Company from time to time. If a
“Change in Control,” as defined in
Section 9(e)(v), shall occur (i) in which the Company
does not survive as a result of such Change in Control or
substantially all of the assets of the Company are sold as a result
of such Change in Control, and (ii) in which the surviving
entity does not assume the obligations of your outstanding stock
options upon the Change in Control, then all outstanding stock
options issued to you prior to the Change in Control will be
immediately vested upon such Change of Control and such options
will be exercisable for a period of at least 12 months from
the date of the Change in Control.
(c) Subject
to applicable Company policies, you will be reimbursed for
necessary and reasonable business expenses incurred in connection
with the performance of your duties hereunder or for promoting,
pursuing or otherwise furthering the business or interests of the
Company.
4. Fringe
Benefits . You will be entitled to receive employee
benefits and participate in any employee benefit plans, in
accordance with their terms as from time to time amended, that the
Company maintains during your employment and which are made
generally available to all other executive management employees in
like positions. This includes medical and dental insurance, life
insurance, disability insurance, supplemental medical insurance and
401(k) plan including all executive benefits as approved by the
Board of Directors’ Compensation Committee. It is agreed that
the Company will pay any necessary COBRA payments on your behalf
due to any break in medical coverage for any reason, including
pre-existing conditions.
5.
Reserved.
- 2 -
6. Confidential
Information .
(a) As
used throughout this Agreement, the term “Confidential
Information” means any information you acquire during
employment by the Company (including information you conceive,
discover or develop) which is not readily available to the general
public and which relates to the business, including research and
development projects, of the Company, its subsidiaries or its
affiliated companies.
(b) Confidential
Information includes , without limitation, information of a
technical nature (such as trade secrets, inventions, discoveries,
product requirements, designs, software codes and manufacturing
methods), matters of a business nature (such as customer lists, the
identities of customer contacts, information about customer
requirements and preferences, the terms of the Company’s
contracts with its customers and suppliers, and the Company’s
costs and prices), personnel information (such as the identities,
duties, customer contacts, and skills of the Company’s
employees) and other financial information relating to the Company
and its customers (including credit terms, methods of conducting
business, computer systems, computer software, personnel data, and
strategic marketing, sales or other business plans). Confidential
Information may or may not be patentable.
(c) Confidential
Information does not include information which you learned
prior to employment with the Company from sources other than the
Company, information you develop after employment from sources
other than the Company’s Confidential Information or
information which is readily available to persons with equivalent
skills, training and experience in the same fields or fields of
endeavor as you. You must presume that all information that is
disclosed or made accessible to you during employment by the
Company is Confidential Information if you have a reasonable basis
to believe the information is Confidential Information or if you
have notice that the Company treats the information as Confidential
Information.
(d) Except
in conducting the Company’s business, you shall not at any
time, either during or following your employment with the Company,
make use of, or disclose to any other person or entity, any
Confidential Information unless (i) the specific information
becomes public from a source other than you or another person or
entity that owes a duty of confidentiality to the Company
and (ii) twelve months have passed since the specific
information became public. However, you may discuss Confidential
Information with employees of the Company when necessary to perform
your duties to the Company. Notwithstanding the foregoing, if you
are ordered by a court of competent jurisdiction to disclose
Confidential Information, you will officially advise the Court that
you are under a duty of confidentiality to the Company hereunder,
take reasonable steps to delay disclosure until the Company may be
heard by the Court, give the Company prompt notice of such Court
order, and if ordered to disclose such Confidential Information you
shall seek to do so under seal or in camera or in such other manner
as reasonably designed to restrict the public disclosure and
maintain the maximum confidentiality of such Confidential
Information.
(e) Upon
Employment Separation, you shall deliver to the Company all
originals, copies, notes, documents, computer data bases, disks,
and CDs, or records of any kind that reflect or relate to any
Confidential Information. As used herein, the term
“notes” means written or printed words, symbols,
pictures, numbers or formulae. As used throughout this
- 3 -
Agreement, the term “Employment Separation” means the
separation from and/or termination of your employment with the
Company, regardless of the time, manner or cause of such separation
or termination.
7. Inventions
.
(a) As
used throughout this Agreement, the term “Inventions”
means any inventions, improvements, designs, plans, discoveries or
innovations of a technical or business nature, whether patentable
or not, relating in any way to the Company’s business or
contemplated business if the Invention is conceived or reduced to
practice by you during your employment by the Company. Inventions
includes all data, records, physical embodiments and intellectual
property pertaining thereto. Inventions reduced to practice within
one year following Employment Separation shall be presumed to have
been conceived during employment.
(b) Inventions
are the Company’s exclusive property and shall be promptly
disclosed and assigned to the Company without additional
compensation of any kind. If requested by the Company, you, your
heirs, your executors, your administrators or legal representative
will provide any information, documents, testimony or other
assistance needed for the Company to acquire, maintain, perfect or
exercise any form of legal protection that the Company desires in
connection with an Invention.
(c) Upon
Employment Separation, you shall deliver to the Company all copies
of and all notes with respect to all documents or records of any
kind that relate to any Inventions.
8. Noncompetition and
Nonsolicitation .
(a) By
entering into this Agreement, you acknowledge that the Confidential
Information has been and will be developed and acquired by the
Company by means of substantial expense and effort, that the
Confidential Information is a valuable asset of the Company’s
business, that the disclosure of the Confidential Information to
any of the Company’s competitors would cause substantial and
irreparable injury to the Company’s business, and that any
customers of the Company developed by you or others during your
employment are developed on behalf of the Company. You further
acknowledge that you have been provided with access to Confidential
Information, including Confidential Information concerning the
Company’s major customers, and its technical, marketing and
business plans, disclosure or misuse of which would irreparably
injure the Company.
(b) In
exchange for the consideration specified in Section 1 of this
Agreement — the adequacy of which you expressly acknowledge
— you agree that during your employment by the Company and
for a period of twelve (12) months following Employment
Separation, you shall not, directly or indirectly, as an owner,
shareholder, officer, employee, manager, consultant, independent
contractor, or otherwise:
(i)
Attempt to recruit or hire, interfere with or harm, or attempt to
interfere with or harm, the relationship of the Company, its
subsidiaries or affiliates, with any person who is an employee,
customer or supplier of the Company, it subsidiaries or
affiliates;
- 4 -
(ii)
Contact any employee of the Company for the purpose of discussing
or suggesting that such employee resign from employment with the
Company for the purpose of becoming employed elsewhere or provide
information about individual employees of the Company or personnel
policies or procedures of the Company to any person or entity,
including any individual, agency or company engaged in the business
of recruiting employees, executives or officers; or
(iii)
Own, manage, operate, join, control, be employed by, consult with
or participate in the ownership, management, operation or control
of, or be connected with (as a stockholder, partner, or otherwise),
any business, individual, partner, firm, corporation, or other
entity that competes or plans to compete, directly or indirectly,
with the Company, its products, or any division, subsidiary or
affiliate of the Company; provided, however, that your
“beneficial ownership,” either individually or as a
member of a “group” as such terms are used in
Rule 13d of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”), of not more than two percent (2%) of the voting stock
of any publicly held corporation, shall not be a violation of this
Agreement.
9. Termination of
Employment .
(a)
Termination Upon Death or Disability. Your employment will
terminate automatically upon your death. The Company will be
entitled to terminate your employment because of your disability
upon 30 days written notice. “Disability” will
mean “total disability” as defined in the
Company’s long term disability plan or any successor thereto.
In the event of a termination under this Section 9(a), the
Company will pay you only the earned but unpaid portion of your
Basic Salary through the termination date.
(b)
Termination by Company for Cause. An Employment Separation
for Cause will occur upon a determination by the Company that
“Cause” exists for your termination and the Company
serves you written notice of such termination. As used in this
Agreement, the term “Cause” shall refer only to any one
or more of the following grounds:
(i)
Commission of an act of dishonesty involving the Company, its
business or property, including, but not limited to,
misappropriation of funds or any property of the Company;
(ii)
Engagement in activities or conduct clearly injurious to the best
interests or reputation of the Company;
(iii)
Willful and continued failure substantially to perform your duties
under this Agreement (other than as a result of physical or mental
illness or injury), after the Board of Directors of the Company
delivers to you a written demand for substantial performance that
specifically identifies the manner in which the Board believes that
you have not substantially performed your duties;
(iv)
Illega
|
